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Definition
Contract of Sale is a contract between buyer &
seller intending to exchange property in goods
for a price.
According to Sec 4 (1):
A Contract of Sale of goods is a contract where
by the seller transfers or agree to transfer the
property in the goods to the buyer for a price.
Essential Elements
Elements
1. Two parties: To form a contact, there must be at least two parties. So in a
contract of sale also there must be two parties i.e a seller & a buyer. One
person cannot act both as a seller & a buyer.
2. The subject matter of the contract must be goods: so goods means every
kind of moveable property other than actionable claims & money; & includes
stocks , shares, growing crops, grass &things attached to or forming a part of
the land, are the goods.
3. Price : A price in money ( not in kind ) should be paid or promised. Money
means currency in circulation. goods are sold for consideration which may be
in the form of partly in money n partly of goods.
4. Transfer of property: Here property means ownership. A transfer of property
in goods from seller to the buyer must take place. Property (ownership) is of
two types :
a). General property.
b) Special property.
5. Contract: It is a contract between a buyer & the seller
Sale
Agreement to Sale
Transfer of property
In an agreement to
sale , the property of
goods is not transferred
immediately
Subsequent loss
Meaning
Sec 2(7) goods means every kind of moveable
property other than actionable claims & money &
includes stocks , shares, growing crops , grass &
things attached to or forming part of land which are
agreed to be revered before sale or under the contract
of sale
Kinds of goods
Existing goods
Contingent goods
future goods
1. Existing goods: Existing goods are those goods which are owned &
possessed by the seller at the time of sale. only existing goods can be sold.
It is divided further as :
a) Specific goods
B) Ascertained goods
C) Unascertained goods
2. Future goods : it means goods to be manufactured or produced or
acquired by the seller after making the contact of sale. In other words these
are those goods which are not existing at the time of contract of sale.
3. Contingent goods: These are those goods the acquisition of which by
seller depend upon contingency which may or may not happen.
Conditions
A Condition is a stipulation which is essential to the
main purpose of the contract , the breach of which
gives right to put an exist to the contract and to claim
damages. Sec 12 (2)
Example: b asked a car dealer to suggest him a suitable
car for touring purpose. The dealer suggested to buy a
Buggatti car B accordingly purchased the car but
found it unfit for the purpose. Hence the car was not
suitable for the purpose , so B could return the car &
get back the price
Warranties
A Warranties is a stipulation collateral to the main purpose of
the contract, the breach of which gives rise to a claim for
damages but not a right to reject the goods and treat the
contract as repudiated. Sec 12(3)
A Warranty is not regarded as the very basis of a contract or
its foundation. Hence a breach of warranty does not give the
aggrieved party, a right to reject the goods and repudiate the
contract. The party will have to accept the goods but can
claim the damages for the breach of warranty.
Condition
Warranties
As to Purpose
As to treatment
A breach of condition
may be treated as a
breach of warranty
A breach of warranty
cannot be treated as a
breach of condition
A breach of warranty
give a right to claim
damages & a right to
repudiate the contract
As to Breach
Implied Conditions
Implied conditions & warranties are those which
are presumed by the law to be present in the
contract. In other words they, are Implied
when not being expressly provided for.
It should be noted that an implied conditions
may be negated by an express agreement
Implied Warranties
Exceptions:
the important exceptions to this rule are as follows: