SALE OF GOODS ACT

Group Members : -

Rohit Dhoundiyal Mandar Kundaikar Rohit Koli Roshani Bharati Suchit Agawane

Introduction

Sale of Goods Act came into force on 1st July, 1930.

Initially was a part of Indian Contract Act, but later these sections were deleted.

Sale of Goods Act is complementary to Indian Contract Act.

Basic requirements of Contract Act i.e. offer & acceptance, mutual consent, competent parties, free consent etc; apply to Contract of Sale of Goods Act.

The scope of this Act is only a regards movables other than actionable claims and money.

IMPORTANT LEGAL TERMS

U/S – 2(1) Buyer is :

“ A person who buys or agrees to buy ”.

U/S – 2(13) Seller is :

“ A person who sells or agrees to sell ”.

U/S – 2(7) Goods as :

“ Every kind of moveable property other than actionable claim and money; and includes stocks & shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale ”.

CONTRACT OF SALE

U/S – 4(1)

“Contract of sale is a contract whereby, a seller transfers or agrees to transfer the property or goods to the buyer for a price”.

ESSENTIALS OF A CONTRACT OF SALE

Sale of Goods Act

Number of Parties

Goods

Transfer of Parties

Price

Absolute or Conditional

Form

Essentials of a Contract

AGREEMENT OF SALE

U/S – 4(3) Agreement of Sale states :

“Where under a contract of sale 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 called an agreement to sell”.

DISTINCTION

CRITERIA SALE AGREEMENT TO SELL

Definition As specified before As specified before

Transfer of ownership

Takes Immediately Future time or subject to fulfilment of some conditions

Type of contract Executed Executory

Transfer of Risk Immediately Transfers Doesn’t Transfers

Right of seller against buyer’s

Breach

Seller can sue the buyer for the price, even though the goods are

in his possession

Seller can sue the buyer for damages even though the goods are in the

possession of the buyer

Right of buyer’s against seller’s

Breach

Can sue the seller for the damages and can sue the 3rd

party who bought those goods for goods.

Buyer can sue the seller for the damages only.

CONDITIONS

U/S – 12(2) Condition is :

“A stipulation essential to the main purpose of the contract, the breach of which gives rise to a treat the contract as repudiated”.

Hence, from the definition it is clear that condition is an representation forming the core of the contract. And if it is not true, the buyer can terminate the contract.

E.g. ‘A’ buys from ‘B’, a hair oil advertised as a pure coconut oil. The oil turns out to be mixed with herbs. ‘A’ can return the oil and claim the refund price

Types of Condition

Express Conditions Implied Conditions

as to title

as to description

as to sample

as to quality

WARRANTIES

U/S – 12(3) 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 repudiated”.

Warranty is only a collateral or subsidiary stipulation, hence breach of a warranty will give a right only to claim damages from the seller but not a right to reject the goods.

Types of Warranty

Implied Warranty

As to quiet possession

As to freedom from encumbrance

Disclose dangerous nature

of goods

Express Warranty

UNPAID SELLER

U/S – 45 Unpaid Seller is :

“One who has not been paid or tendered the whole of the price or one who receives a bill of exchange or other negotiable instrument as conditional payment and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise”.

Rights of an Unpaid Seller

Against goods

Where the property in goods has passed to the buyer

Right on Lien

Right of stoppage in transit

Right of resale

Where the property in goods has not passed to the buyer

Withholding delivery of

goods

Other remedies

SALE BY AUCTION

Auction sale means a public sale where the intending buyers come together at a particular place and quote the price at which they are willing to buy the goods.

The price at which the person is offering is called ‘Bid’ and the person offering the price is called the ‘Bidder’.

Goods is sold to the highest bidder.

RULES REGARDING SALE BY AUCTION

A contract of sale is complete when the auctioneer announces its completion by the fall of the hammer.

The bidder may withdraw the bid before the announcement of the completion of sale.

The seller has the right to sell the goods subject to “Reserve price”. Reserve price is the minimum price below which the auctioneer will not sell the goods.