Sale of Goods Act 1930, Essentials of Contract of Sale Goods, Classification of Goods

The Sale of Goods Act, 1930 is a central law that governs the sale of goods in India. It defines the rights, duties, and liabilities of buyers and sellers of goods and provides a legal framework for resolving disputes related to the sale of goods.

Key provisions of the Act:

• Definition of “Goods“: The Act defines “goods” as every kind of movable property other than actionable claims, money, and securities.
• Contract of Sale: A contract of sale is defined as a contract in which the seller transfers or agrees to transfer the ownership of goods to the buyer for a price. A contract of sale may be absolute or conditional.
• Conditions and Warranties: The Act makes a distinction between conditions and warranties in a contract of sale. A condition is a term of the contract that is essential to the contract and the breach of which gives the other party the right to terminate the contract. A warranty, on the other hand, is a term of the contract that is not essential to the contract, and the breach of which gives the other party the right to claim damages but not to terminate the contract.
• Transfer of Property: The Act provides rules for the transfer of property in goods. Generally, the property in the goods passes from the seller to the buyer when the parties intend it to pass. The Act also provides rules for the transfer of property in specific cases, such as the sale of goods on approval, sale by description, and sale of goods in transit.
• Performance of the Contract: The Act provides rules for the performance of the contract, including delivery of goods, payment of price, and acceptance of goods. The Act also provides remedies for breach of contract, including the right to terminate the contract, claim damages, and sue for specific performance.
• Unpaid Seller: The Act defines an unpaid seller as a seller who has not received the full price of the goods or a bill of exchange or other negotiable instrument in exchange for the goods. The Act provides the unpaid seller with various rights, including the right to stop the goods in transit, the right of lien, and the right of resale.
• Rights of Buyer and Seller: The Act provides various rights to both the buyer and the seller. For example, the buyer has the right to reject the goods if they do not conform to the contract, and the seller has the right to sue the buyer for the price of the goods if the buyer breaches the contract.

Essentials of Contract of Sale Goods

A contract of sale is a legally binding agreement between two parties, where one party (the seller) agrees to transfer ownership of goods to the other party (the buyer) in exchange for payment. Here are some essential elements of a contract of sale of goods:

• Offer and Acceptance: The contract begins with an offer made by the seller and an acceptance by the buyer. The offer can be made through various means, such as advertisement, quotation, or negotiation.
• Mutual Consent: Both parties must enter into the contract with free consent, without any coercion, undue influence, fraud, or misrepresentation.
• Goods: The subject matter of the contract must be specific goods that are identified or agreed upon by both parties. The goods must be in existence or capable of being produced or acquired by the seller.
• Price: The contract must specify the price or method of determining the price of the goods. The price can be fixed, variable, or determined at a later date.
• Payment: The buyer must agree to pay the price of the goods in exchange for the ownership of the goods.
• Delivery: The seller must agree to deliver the goods to the buyer, either physically or through a third-party carrier. The time and place of delivery must be agreed upon by both parties.
• Title and Risk: The ownership or title of the goods must pass from the seller to the buyer upon delivery. The risk of loss or damage to the goods also passes from the seller to the buyer upon delivery, unless otherwise specified in the contract.
• Warranties: The seller may provide certain warranties or guarantees regarding the quality, fitness, or performance of the goods.
• Conditions and Implied Terms: Certain conditions and implied terms may be implied into the contract by law or custom, such as the right to quiet enjoyment, the seller’s duty to transfer ownership, and the buyer’s duty to accept and pay for the goods.
• Remedies for Breach: The contract must specify the remedies available to both parties in case of a breach of the contract, such as termination, damages, specific performance, or injunction.

Classification of Goods

The Sale of Goods Act, 1930, classifies goods into different categories based on their nature and characteristics.

The classification of goods is important in determining the rights and obligations of the parties under the contract, such as the passing of ownership, delivery, and payment.

Classifications of Goods under the Act:

• Existing Goods: These are goods that are owned or possessed by the seller at the time of the contract.
• Future Goods: These are goods that are not owned or possessed by the seller at the time of the contract, but are expected to be acquired or produced in the future.
• Specific Goods: These are goods that are identified and agreed upon by both parties at the time of the contract, such as a specific model of a car.
• Ascertained Goods: These are specific goods that have been identified and agreed upon by both parties, and have been set apart or separated from other goods.
• Unascertained Goods: These are goods that have not been identified or agreed upon by both parties at the time of the contract.
• Contingent Goods: These are goods whose ownership or transfer is dependent on the occurrence of a certain event, such as the delivery of goods to a carrier for transportation.
• Goods on Approval or Sale or Return: These are goods that are delivered to the buyer for inspection or approval, with an option to return the goods or purchase them at a later date.
• Stipulated Goods: These are goods that are specifically mentioned or stipulated in the contract, such as a certain quantity or type of goods.