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Sale of Goods Act,1930

Business Law, By: Harshit Mehta

Definition of Sale of Goods


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. [section 4(1)].
A future transfer of good will be agreement to sale

Business Law, By: Harshit Mehta

Essentials of a contract of sale


1. 2. 3. 4. Two parties sec.2(1) Goods sec.2(7) Transfer of property sec.2(11) Price sec.2(10)

It should be a Contract

Business Law, By: Harshit Mehta

GOODS Sec.2(7)
Any movable property o/t actionable claims , money & Shares. Growing crops also excluded & Grass. Things attached to the land are also included

Business Law, By: Harshit Mehta

Classification of goods
GOODS

1) EXISTING GOODS

2) FUTURE GOODS

3) CONTINGENT GOODS

A) SPECIFIC GOODS

B) ASCERTAINED GOODS

C) UNASCERTAINED GOODS

Business Law, By: Harshit Mehta

1. Existing goods { sec. 6(1)} :- goods owned and possessed by the seller at the time of making the contract of sale.

Specific Goods sec. 2(14):- Goods identified and agreed upon at the time of the making of the contract of sale. Ascertained Goods :- goods identified in accordance with the agreement after the contract of sale is made. Unascertained goods:- goods which are not specifically identified at the time of contract of sale (goods defined by the description)

2. Future goods sec. 2(6):- means goods to be manufactured or produced or acquired by the seller after making the contract of sale 3. Contingent Goods sec. 6(2):- there may be a contract for the sale of goods, the acquisition of which by the seller depends upon a contingency which may or may not happen. Business Law, By: Harshit Mehta

Difference
Sale
Immediate transfer of property from buyer to seller Existing goods only Loss falls on buyer Seller can not re-sell the goods General property If the buyer becomes insolvent, the seller should return the goods to Official Receiver appointed by court. If the seller becomes insolvent ,the buyer can receive the goods by Official Receiver.

Agreement to sale
Transfer of property takes place in future. Future goods also included. Loss falls on seller. Seller can re-sell the goods. Particular property. If the buyer becomes insolvent ,the seller can hold the goods with him.
If the seller becomes insolvent, the buyer only gets dividend & not the goods.

Business Law, By: Harshit Mehta

Conditions
Condition is essential to the main purpose of contract A contract of sale cannot be fulfilled unless the condition to it, is fulfilled. In case of breach of condition, the aggrieved party can reject the contract

Warranty
Warranty is collateral to the main purpose of contract. The main contract can be fulfilled even if the warranty is not fulfilled. In case of breach of warranty, the aggrieved party can only claim for damages.

Breach of condition can be treated as breach of warranty if the aggrieved party is happy with compensation.

Breach of warranty can not be treated as breach of condition.

Business Law, By: Harshit Mehta

When conditions become warranty (sec.13)


1. Voluntary waiver of condition (Sec. 13(1)) 2. Acceptance of goods by the buyer (sec. 13(2)) 3. By impossibility (sec. 13(3))

Business Law, By: Harshit Mehta

Remedies available to the buyer on breach of condition


If the condition is broken: 1. Buyer can cancel/repudiate the contract and reject the goods. 2. Treat the breach of condition as breach of warranty and claim the damages. 3. In 2nd case- he have the rights to recover the damages only. 4. No remedy is available when fulfillment of condition is excused by law by reason of impossibility.

Business Law, By: Harshit Mehta

TRANSFER OF PROPERTY

Business Law, By: Harshit Mehta

Doctrine of nemo dat quod non habet - Sec 27


The above maxim ie.quote means-: No one can give something which he does not possess.

If the seller has no title to the goods which are sold ,the buyer of such goods also does not acquire the title of goods though he has purchased the goods & acted honestly.

Business Law, By: Harshit Mehta

UNPAID SELLER (SEC. 45) 1. When the whole price has not been paid 2. When a bill of exchange has been issued and conditions of payment has been dishonoured 3. Whole of the price has not been paid 4. when a bill of exchange or other negotiable instruments has been received towards payment and that has been dishonoured.
Ex. A sold certain goods to B for Rs. 2000. and B paid 1500 and failed to pay the balance. Here A is Unpaid seller. Ex. A sold goods to B for 500. B made payment by cheque, and cheque was dishonoured.
Business Law, By: Harshit Mehta

Rights of Unpaid Seller


Rights of unpaid seller Against the goods Against the buyer personally

Where the property in the goods has passed

Where the property in the goods has not passed

Suit for price (sec. 55)

Suit for damages Sec.(56)

Repudiation of contract Sec.(60)

Suit for interest Sec.(61 )

Lien (sec.47)

Withholding delivery (sec. 46(2))

Stoppage in transit (Sec. 50)

Stoppage in transit

Resale Sec.(54)

Business Law, By: Harshit Mehta

Remedies for breach of contract of sale


Remedies to seller: 1. Suit for price Sec.(55) 2. Suit for damages for non performance of goods Sec.(56) 3. Suit for damages for repudiation of contract Sec.(60) 4. Suit for interest Sec.(61) Remedies to buyer: 1. Suit for damages for non delivery of goods Sec.(57) 2. Suit for damages for repudiation of the contract Sec.(60) 3. Suit for specific performance Sec.(58) 4. Suit for breach of warranty Sec.(59) 5. Suit for interest Sec.(61)

Business Law, By: Harshit Mehta