Sale of Good Act, 1930

11. ESSENTIALS OF A VALID SALES
CONTRACT
 Two parties:
There must be two distinct parties i.e. a buyer and a seller.
 Goods:
Goods which form the subject matter of the contract of sale
must be movable.
 Price:
The consideration of the contract of sale, called price, must
be money.
Hence in nutshell a contract is made by an offer to buy or sell
goods for a price and the acceptance of such offer.

12. basis sale Agreement to
sell
1. payment Immediate Ownership is to be
payment is not given at a future
necessary and can date.
be done at a future
date.
2 contract Its an executed Its an executory
contract contract
3.Right on goods Jus-in-rem Jus-in-personam
4.risk There is a risk There is no risk.
because the goods
passes to the buyer
without payment

13. CONDITION
 It 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. In
addition, he may maintain an action for damages for
loss suffered, if any, on the footing that the whole
contract is broken and the seller is guilty of non-
delivery.
 EXAMPLE-P , goes to R , a horse dealer, and says, I
want a horse which can run at a speed of
30km.perhour . The horse dealer points out a
particular horse and says , this will suit you. P buys
the horse . Later on P finds that the horse can run
only at a speed of 20km./hr . There is a breach of
condition,P can repudiate the contract , return the
horse to R and get back the price.

14. WARRANTY
 A warranty is a stipulation collateral to the purpose of the
contract, the breach of which gives the aggrieved party a
right to sue for damages only ,and not to avoid the
contract
 EXAMPLE-
 Assume that a farmer ,intending to plant no-till soybeans
,approaches a seller to buy her biocide . Assume further
that the buyer requests a particular herbicide mix but the
seller suggests a less expensive mix . If the chemicals fail
to kill crabgrass and the farmer has a low yield of
soybeans , the farmer could sue the seller for breach of
the warranty of fitness for a particular purpose because
the seller knew what the farmer required

15. The rights and
duties of Buyer and
Seller

20. Unpaid Seller
Unpaid Seller
Seller to whom the full price of the goods
sold has not been paid.
As per section 45 of Sale of Goods Act
(1) When the whole of the price has not been paid
(2) When a bill of exchange or other negotiable
instrument has been received as conditional payment
and the condition on which it was received has not
been fulfilled by reason of dishonour of the
instruments or otherwise

21. Rights of Unpaid Seller
(1) Rights Against Goods
 Where the ownership of goods is transferred to buyer
(2) Rights Against Buyer
 Where the ownership of goods is not transferred to
buyer.

22. Rights Against Goods
1. Right of Lien
 Right to retain possession of goods until payment of
price
 It can be exercised when
 Goods have been sold without any
stipulation as to credit
 Goods sold on credit but the term of
credit has expired
 Buyer becomes insolvent

23. Continued
2. Right of stoppage in transit
Right of stopping the goods in transit after the unpaid seller
has parted with the goods.
Exercised when:
 when buyer becomes insolvent
 Goods are in transit
Only for the payment of price of the
goods

24. Continued
3.Right of Re-sale
The unpaid seller can re-sale the goods when
 The goods are of perishable nature
 Seller gives notice to the buyer of
his intention to re-sale the goods
 Seller has reserved his rights of
resale

25. Rights Against Buyer
1. Suit for price
 The buyer fails to pay the price of goods
 The seller can file a suit against the buyer for recovery of
the price.
2.Suit for Damages for Non-Acceptance
 The seller is ready to deliver the goods to the buyer
 But the buyer wrongfully neglects or refuses to accept the
goods and pay for them.

26. Continued
3. Repudiation of contract before due date
 When the buyer puts an end to the contract before due
date of delivery of goods, the seller may either
 Treat the contract as subsisting and
wait till the date of delivery of goods
 Treat the contract as repudiated and
bring the legal action against the buyer
for the recovery of the damages.

27. Continued
4. Suit for Interest
 Specific agreement between buyer and seller
 Regarding interest on the price of goods from the date on
which payment becomes due
 The seller can recover interest from the buyer

28. Caveat emptor means ‘LET THE BUYER BEWARE’
EXCEPTIONS TO THE DOCTRINE OF CAVEAT EMPTOR
 In case of misrepresentation by seller.
 In case of concealment of latent defect.
 In case of sale by description.
 In case of sale by sample.
 In case of sale by description
and sample.
 Fitness for a particular purpose

29. EXAMPLES
 Ex. Pigs were sold subject to all faults and these pigs
being infected caused typhoid to other healthy pigs of
the buyer, it was held that the seller was not bound to
disclose that the pigs were unhealthy. The rule of the law
being caveat emptor.