SALE OF GOODS ACT, 1930

By: Ishita shah

Goods
Existing Goods means those goods which are already in existence and which is physically present in some persons ownership & possession.
Specific Goods Those goods which are identified agreed upon at the time of Contract of sale. Ex.- Painting, ring etc. Generic Goods Goods which are not specifically identified but they are indicated by descreption at time of sale.

1.

2.

Future Goods Those goods which are to be manufactured or product after a contract of sale is made. Contingent Goods Those goods whose acquisition depends on contingency which may happen or may not happen.

Sale
Transfer of goods from buyer to seller. Immediate payment or delivery is not necessary Payment and delivery may be done at a future date. Ownership of goods must be transferred immediately

CONTRACT OF SALE
A CONTRACT OF SALE OF GOODS IS A CONTRACT WHEREBY THE SELLER TRANSFERS OR AGREES TO TRANSFER THE PROPERTY IN GOODS TO THE BUYER FOR A PRICE.

ESSENTIALS OF A VALID SALE

PROPERTY- General Vs. Special property MOVABLE GOODS
1. Existing goods
Specific goods Generic goods

2. Future goods

PRICE PARTIES ALL ESSENTIALS OF VALID CONTRACT

AGREEMENT TO SELL
Where the transfer of the property in the goods is to take place at a future time or subject to some conditions thereafter to be fulfilled, the contract is said to be agreement to sell. It can be a sale when the time elapses or the conditions, subject to which the property in the goods is to be transferred are fulfilled.

SALE AND AGREEMENT TO SELL

SALE 1. Executed contract 2. Jus in rem (gives rights to the buyer to enjoy the goods as against the world) 3. Property passes immediate 4. Entitled to sue for price and right to lien, stoppage in transit & re-sale 5. Risk of loss of buyer 6. Insolvency of buyer-must deliver goods to official assignee & can claim ratable dividend for price 7. Insolvency of seller-buyer is entitled to receive the goods from the official assignee AGREEMENT TO SELL 1. Executory contract 2. Jus in personnam (gives a right to the buyer against the seller to sue for damages) 3. Property passes later 4. Entitled to sue for damages 5. Risk of loss is of seller 6. Insolvency of buyer-seller may refuse to deliver 7. Insolvency of seller-buyer can claim ratable dividend.

Conditions and warranties

What is Condition?
A condition is a stipulation essential to the main purpose of the contract, breach of which gives rise to a right to treat the contract as broken.

 What is Warranty?

A Warranty is a stipulation collateral to the

main purpose of the contract the breach of which

gives rise to a claim for damages but not to a

right to reject the goods and treat the contract as broken.

Difference : conditions and warranties

CONDITION WARRANTY (1) A Condition is a term or a A Warranty is a secondary stipulation. stipulation basic to the contract. Its It is not an essential elements of breach is the breach of contract. contract.

(2) In case of a breach the buyer gets Here buyer can not reject the goods right to reject the goods. but can claim damage only. (3) Here, the aggrieved party has an Here there is no such option. option to regard the breach of condition as a breach of warranty. (4) It directly goes to the root of the It is collateral to the main purpose of contract the contract.

Implied condition
1) 2) Condition as to title: The person selling the goods must have ownership of the goods and therefore has a right to sale the goods. Sales by description: Goods should be same as per the sample or description. Where the buyer has not seen the goods, where he has seen but relies on what was stated to him, packing Sale by sample: Goods should be according to samples. The buyer must be given an opportunity to compare sample and actual goods. The goods should be free from defects. Condition as to quality or fitness Condition as to merchantability : means goods should by such as are commercially saleable under the description by which they are known in the market at their full value. Condition implied by custom Condition as to morality

3) 4) 5) 6) 7)

Implied warranties
Warranty of quiet possession Warranty as to quiet possession free from burden:
The goods shall be free from any charge or encumbrances in favor of any third party not declared or known to the buyer before or at the time when the contract is made.

Warranty to disclose dangerous nature of goods

CAVEAT EMPTOR (BUYER BEWARE)

The buyer must take care of his own interest while purchasing the goods. He purchase them at his own risk and has to rely on his own skill and judgment when he make purchases.

EXCEPTION:
If the seller has made a false representation relating to goods. When the seller has deliberately concealed a defect. In the case of goods bought by description from seller who deals in that class of goods, there is an implied condition that the goods shall be of merchantable quality. Where the goods are ordered from specific purpose. The buyer relies on the skill or judgment of the seller, there is an implied condition that the goods shall be reasonably fit for purpose.

SALE BY NON-OWNERS
No one can pass or transfer a better title than he himself possesses
1. 2. 3. 4.
5. 6. 7. 8.

TITLE BY ESTOPPEL SALE BY MERCANTILE AGENT SALE BY ONE OF SEVERAL JOINT OWNERS SALE OF GOODS BY A PERSON IN POSSESSION OF GOODS UNDER A VOIDABLE CONTRACT SALE BY SELLER IN POSSESSION AFTER SALE SALE BY BUYER IN POSSESSION AFTER AGREEMENT TO SELL SALE BY AN UNPAID SELLER SALE IN MARKETOVERT- UNDER ENGLISH LAW

DELIVERY OF GOODS
Voluntary transfer of possession of goods from one person to other person.

TYPES OF DELIVERY:-

1) ACTUAL DELIVERY
when goods are physically handover by the seller to buyer.
2) SYMBOLIC DELIVERY when the goods are bulky and incapable of actual delivery, the delivery may be symbolic. 3) CONSTRUCTIVE DELIVERY When delivery made without any change in actual possession of goods. Here there is only an acknowledgement by the person in possession that he hold them on behalf of another.

RULES OF DELIVERY
Delivery & payment: Delivery of goods and payment of price must be the concurrent conditions. Delivery to be made to buyer: Delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery. Part delivery: Delivery of goods in parts in order to deliver whole amount.

 Buyer to apply deliver: Seller is not bound to apply for goods unless buyer for delivery. Mode of delivery: Mode of delivery is depend upon the contract between the parties. It may be actual, symbolical or constructive Place and time of delivery: Delivery of good must be made at place and time specified and places is specified the place will be, the place of contract and reasonable time

 Goods with third party: When the goods are with third party at the time of sale there is no delivery of goods until third party acknowledge that he holds the goods on his behalf. Cost of delivery: Generally all expenses before the delivery of the goods are to be borne by seller and all expenses after the delivery of goods are to be borne by buyer.

 Installment delivery: Unless agreed, the seller is not bound to delivery the goods in installment and if he does not, buyer is not bound to accept. Delivery of wrong quantity: Wrong quantity may be either short delivery, excess or mixed delivery. Goods delivered at distant place-CIF, FOB, ExShipment

Rights and duties of buyer

Rights: To receive the delivery of goods Opportunity to examine the goods To sue the seller for damages for non-delivery of goods To recover the amount of paid, if the seller fail to deliver the goods To sue seller for damages for breach of warranty. Duties: To pay for the goods and take delivery their of. To compensate the seller for any loss by his refusal to take delivery.

Rights and duties of seller

Rights To receive the price of goods To receive compensation To receive reasonable charge for custody of good To sue the buyer for damages, for refusing to accept the good. Duties To deliver the goods in buyer demand To compensate buyer in case he breach the contract. To refund the amount in case he failed to deliver the good. To compensate the buyer in case of delivery of wrong quantity.

UNPAID SELLER
RIGHTS OF AN UNPAID SELLER

WHERE THE PROPERTY IN THE GOODS HAS PASSED

WHERE THE PROPERTY IN THE GOODS HAS NOT PASSED

LIEN

STOPPAGE IN TRANSIT

RESALE

WITHHOLDING DELIVERY

OTHER RIGHTS

LIEN- RIGHT TO RETIAN

The unpaid seller of goods, who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases:

1. Where the goods have been sold without any stipulation as to credit 2. Where the goods have been sold on credit and the term of credit has expired. Therefore, during currency of credit right cannot be exercised 3. Where the buyer become insolvent and the seller is in possession of the goods.

TERMINATION OF LIEN
1. When seller delivers the goods to a goods carrier or other bailee for the purpose of transmission without reserving the right of disposal of goods; 2. When the buyer or his agent lawfully obtains possession of goods; 3. When the seller waives his right of lien

Rights of stoppage in transit

Definition:Rights of stoppage in transit is the right of stopping goods transit after unpaid seller has left the possession of goods. He can repossess such goods, so long as they are in transit.

Available: The buyer become insolvent. The goods are in transit. The negotiable instrument given by buyer is dishonored. Termination: When buyer pays full price. If buyer obtain delivery of goods before appointed destination. If carrier holds good on behalf of buyer. When part goods are deliver to buyer then remainder of goods may be stop in transit.

Rights of re-sale
Definition:The unpaid seller can re-seller the goods, - where the goods are of a perishable nature. - where he gives notice to the buyer of his intention to re-sell the goods and still buyer does not pay within reasonable time.

Rights against buyer

Right of withholding delivery:
When the property in goods has not passed to the buyer, and unpaid seller has a right of withholding delivery which is similar to the right of lien.

Other rights:
The seller has the following rights against the buyer personally, - Sue the buyer for the price of the goods. - The seller may sue the buyer for refusing to accept the goods. - Recover interest from the buyer where there is specific agreement to that effect.

SUITS FOR BREACH OF THE CONTRACTS

REMEDIES FOR BREACH OF CONTRACT OF SALE

SUIT FOR PRICE

SUIT FOR DAMAGES

REMEDIES FOR BREACH OF THE CONTRACTS

REMEDIES AVAILABLE TO THE SELLER Suit for price : Where under a contract of sale, the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms to the contract, the seller may sue him for the price of the goods. Suit for damages : (1) For non-acceptance : Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for the damages for non acceptance. The measure of the damages is according to the provisions of section 73 of The Indian contract Act , depending upon the available market for the goods.

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(2) For repudiation of the contract :
Where the buyer repudiates the contract before the date of delivery, the seller may either treat the contacts as subsisting and wait till the date of delivery, or he may treat the contract as rescinded and sue for the damages for the breach.

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REMEDIES AVAILABLE TO THE BUYER
Suit for damages for non-delivery of the goods : Where the seller wrongfully neglects or refuse to deliver the goods of the buyer, the buyer may sue the seller for non delivery. Suit for specific performance Suit for breach of warranty : Where there is a breach of warranty by the seller, the buyer may : (1) set up against the seller, the breach of warranty or diminution of the price (2) sue the seller for damages for the breach of warranty. Suit for repudiation of the contract anticipatory breach: Where the seller repudiates the contract before the date of delivery, the buyer may either treat the contract as subsisting and wait till the day of delivery.