Detailed description of Sale of Goods Act, 1930 in India. It is a part of Business Law and Mercantile Law taught in various courses of Commerce.

2. INTRODUCTION

3. “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.”

4. TWO PARTIES
GOODS
PRICE
TRANSFER OF GENERAL PROPERTY
ESSENTIAL ELEMENTS OF A VALID CONTRACT

5. Contract
of Sale
Sale
Agreement
to sell

6. Basis Sale Agreement to sell
Transfer of
Property
Immediate transfer of
property from seller to
buyer.
Property is transferred at a
future time or subject to
certain conditions.
Types of Goods Sale of existing and specific
goods only.
Sale of future and contingent
goods.
Risk of Loss Loss falls on buyer Loss falls on seller
Consequences of
Breach
If there is a breach of
contract by the buyer, the
seller can sue for the price
even though the goods are
still in his possession.
If there is a breach of contract
by the buyer, the seller can
sue for damages and not for
the price even though the
goods are still in possession
of the buyer.

7. CONDITIONS AND
WARRANTIES

8. CONDITION
 A condition is a stipulation essential to the main
purpose of the contract, the breach of which gives
the aggrieved party a right to repudiate the contract
itself.
WARRANTY
 A warranty is a stipulation collateral to the main
purpose of the contract, the breach of which gives
the aggrieved party a right to sue for the damages
only and not to avoid the contract itself.

9. Basis CONDITIONS WARRANTY
Nature Essential to the
main purpose of
the contract
Collateral to the
main purpose of
the contract
Rights in
Case of
Breach
The aggrieved
party can
terminate the
contract.
The aggrieved
party can claim
damages only.
Treatment A breach of
condition can be
treated as breach
of warranty.
A breach of
warranty cannot
be treated as
breach of
condition.

10. WHEN BREACH OF CONDITION IS TO BE
TREATED AS BREACH OF WARRANTY
 Voluntary Waiver by Buyer
 Acceptance of goods by Buyer

11. CONDITIONS
 Condition as to title.
 Condition in a sale by description.
 Condition in a sale by sample.
 Condition in a sale by sample as well as by
description.
 Condition as to fitness or quality.
 Condition as to merchantability.
 Condition as to wholesomeness.

12. WARRANTIES
 Warranty of quiet possession.
 Warranty of freedom from encumbrances.
 Warranty of disclosing the dangerous nature
of goods to the ignorant.

13. TRANSFER OF
PROPERTY

14. DEFINITION
 The phrase “transfer of property in goods”
means transfer of ownership of the goods.
“Property in goods” is different from
possession of goods. Possession refers to
custody over the goods. So the property in
goods may pass from the seller to the buyer
but the goods may be in possession of the
seller either as unpaid seller or as a bailee
for the buyer.

15. IMPORTANCE OF KNOWING THE
EXACT TIME OF PASSING OF PROPERTY
 Risk prima facie passes with property
 Action against third party
 Suit for price
 Insolvency of the seller or the buyer

16. RULES REGARDING TRANSFER OF
PROPERTY
 Transfer of property in specific good
- When goods are in deliverable state
- When goods have to be put into a deliverable
state.
- When the goods have to be measured etc. to
ascertain price.
- When goods are delivered on approval.
 Transfer of Property is unascertained on future
goods

17. TRANSFER OF TITLE BY NON-OWNERS
 An unauthorized sale by a mercantile agent.
 Sale by a joint owner
 Sale by person in possession under voidable
contract.
 Sale by seller in possession after sale
 Sale by buyer in possession after agreement to buy
 Resale by an unpaid seller

18. RIGHTS OF
UNPAID SELLER

19. UNPAID SELLER (SEC. 45)
A seller of goods is deemed to be an unpaid seller
when:
 The whole of the price has not been paid or
tendered.
 A bill of exchange or other negotiable
instrument received but dishonored.

20. RIGHTS OF AN UNPAID SELLER
AGAINST THE GOODS
Right of Lien (Sec.47-49)
Right of Stoppage in Transit
(Sec.50-52)
Right of Resale (Sec.54)
AGAINST THE BUYER
PERSONALLY
Suit for Price (Sec.55)
Suit for Damages (Sec.56)
Suit for Interest (Sec.61)

21. AUCTION SALE

22. AUCTION SALE
 In an auction sale, the auctioneer invites bids
from prospective purchasers and sells the goods
to the highest bidder.
There are various rules relating to an auction sale
contained in Section 64.

23. 1. Where goods are put up for sale in lots, each lot
is prima facie deemed to be the subject of a
separate contract of sale.
2. The sale is complete when the auctioneer
announces its completion by the fall of the
hammer.
3. The seller or any one person on his behalf can bid
at the auction.

24. 1. The sale may be notified to be subject to a
reserved or upset price, a price below which the
auctioneer will not sell.
2. A knock-out agreement between intending
buyers not to bid against each other is not illegal.
3. The auctioneer cannot sell goods on credit or
accept payment by means of bills of exchange.
4.
5.
6.