Summary of the Sale of Goods Act, 1930:
The expressions used in the Sale of Goods Act, 1930 and defined in the Contract Act, 1872 have the meanings assigned to them in the Contract Act. The general provisions of the Indian Contract Act continue to apply for the sale of goods in so far as they are not inconsistent with the express provisions of the Sale of Goods Act. The Sale of Goods Act applies only to movables other than actionable claims and money and it does not apply to immovable which are governed by the Transfer of Property Act, 1882. Actionable claim means, “Choose in action.”
Formation of Contract of Sale:
- An offer to sell or buy goods and acceptance of such offer.
- Provision for delivery of goods. Delivery may be immediate, simultaneous, by installments, or in the future.
- Provision for payment of the price. Payment of price may be immediate, simultaneous, by installments, or in the future.
Difference between an agreement to sell and sale:
|Sale||Agreement to Sell|
|1.Nature of Contract:
Executed Contract- One of the parties has already performed his part of the contract.
Executed Contract- Both the parties have to perform their mutual promises.
|2.Creation of Right:
Sale creates a jus-in-rem a right against the whole world, i.e. ownership right.
It creates a jus-in-person am, i.e. personal right only.
|3.Passing of Property:
Property in the goods passes to the buyer with the risk.
Property and risk do not pass to the buyer.
|4.Remedies in case of Breach of Contract:
Seller is entitled to sue for the price of the goods and also has a right of lien, stoppage-in-transit, and resale.
The seller has the right only to sue for damages for non-performance of the contract.
The loss will be borne by the buyer even if the possession of goods is with the seller.
The seller will have to pay for the loss since the ownership of the Goods has not passed to the buyer.
Implied Conditions and Warranties:
Conditions and warranties may be expressly stated in the terms of the contract or may be implied from the circumstances.
1. Warranty as to Title
- Implied condition as to title: An implied condition on the part of the seller that, in the case of a sale, he has a right to sell the goods that are to say he has a title to the goods at the time of making the contract of sale. If the seller has no title, and the buyer has to give up the goods to the real owner, the buyer is entitled to a return of price.
- Implied warranty of quiet possession: In every contract of sale, unless the circumstances of the contract are such as to show a different intention, there is an implied warranty that the buyer shall enjoy possession of the goods. If there is a breach of this warranty, the seller is liable to the buyer in damages.
- Implied warranty that goods are free from encumbrances: There is an implied warranty on the part of the seller that the goods are free from any charge. If the goods are afterward found subject to a charge in favor of a third party, the seller is liable to the buyer in damages.
- Sale by Description Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description, and, if the sale is by sample as well as by description it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. This section applies to unascertained goods, future goods, and also specific goods.
- Sale by Sample:
The following are the implied conditions in a sale by sample:
- that the bulk of the goods correspond with the sample in quality.
- That the buyer shall have a reasonable opportunity of comparing the goodsThe with the sample.
- That the goods shall be free from any defect rendering them unmerchantable, which would not be apparent.
4.Implied Conditions as to quality or fitness:
- The buyer makes known to the seller the particular purpose for which the goods are required.
- The buyer relies upon the seller’s skill or judgment.
- In the case of a contract for the sale of a specific article under its patent or another trade name, there is no implied condition as to its fitness for any particular purpose.
- An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.
- An express warranty or condition does not negative a warranty or condition implied by this Act.
Express Condition and Warranty:
In the absence of implied condition or warranty as to the quality and fitness of goods, the buyer can always protect himself by express term as to quality and fitness in the contract itself.
A hire-purchase agreement is a contract whereby the owner of the goods lets them on hire to another person called hirer or hire purchaser on payment of rent to be paid in installments and upon an agreement that when a certain number of such installments is paid the property in the goods will pass to the hirer. The hirer may return the goods at any time without any obligation to pay rent. A hire-purchase agreement is not a contract of sale but only a bailment and the property in the goods remains in the owner during the continuance of the bailment, in other words, it is bailment plus an agreement to sell. The agreement is a Contract of sale. The hirer must not be compelled to exercise the option.
Author: Shreya Potdar,
S.N.D.T LAW COLLEGE