The Sale of Goods Act, 1930

Topics: Contract, Contract law, Warranty Pages: 96 (19221 words) Published: April 8, 2014
chapter – 2
Introduction  
The Law relating to this statute was contained in the
Chapter VII of the Indian Contract Act, 1872. Subsequently,
it was separated with the Indian Sale of Goods Bill, which
received its assent on 15th, March 1930. It came into force
on the 1st of July, 1930 as the Indian Sale of Goods Act,
1930. In due course, the word “Indian” was omitted by the Indian Sale of Goods (Amendment) Act, 1963 (33 of 1965)
and it became “The Sale of Goods Act, 1930”.
This Act lays down special provisions governing the
contract of sale of goods but it does not altogether render
the general law of contract inapplicable. The provisions
of the Contract Act, in so far as they are inconsistent
with the express provisions of Sales of Goods Act, shall
apply to contracts for the sale of goods, e.g., provisions
regarding the capacity of parties, legality of contract,
etc. The Sale of Goods Act, 1930 deals with the ‘sale’ but not with ‘mortgage’ or ‘pledge’, which comes within the purview of the Transfer of Property Act, 1882 and the
Indian Contract Act, 1872 respectively. Secondly, the Act
deals with ‘goods’ but not with all movable property, e.g., actionable claims and money. Provisions relating to sale of
immovable property and the transfer of actionable claims
are contained in the Transfer of Property Act, 1882.
In this chapter, we shall study the provisions of the Act in the following order:
Unit 1- Formation of the Contract of Sale.
Unit 2- Conditions and Warranties.
Unit 3- Transfer of Ownership and Delivery of Goods.
Unit 4- Unpaid Seller.

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

chapter – 2
The SALE OF
GOODS ACT,
1930

Unit 1
Formation of the
Contract of Sale

© The Institute of Chartered Accountants of India

The Sale of goods act, 1930
Learning objectives
After reading this, the students shall be able to understand ™™

Definitions of certain terms.

™™

Meaning of contract of sale.

™™

Distinctions of sale from other similar contracts.

™™

Formalities of contract of sale.

™™

Subject matter of contract of sale.

™™

Ascertainment of price for the contract of sale.

™™

Stipulation as to time.

Sale of goods is one of the specific forms of contracts recognized and regulated by law in India. Sale is a typical bargain between the buyer and seller. The Sale of Goods Act, 1930 leaves the parties to modify the provisions of the law by express stipulations. However, in some places this freedom is severely restricted or negativated.

2.1Definitions:
Section 2 of the Sale of Goods Act, 1930 defines the terms which have been frequently used in the Act, which are as follows –
(a)
Buyer and Seller: ‘Buyer’ means a person who buys or agrees to buy goods [Sub Section (1)] ‘Seller’ means a person who sells or agrees to sell goods [Sub Section (13)]. The two terms, ‘buyer’ and ‘seller’ are complementary and represent the two parties to a contract of sale of goods. Both the terms are, however, used in a sense wider than their common meaning. Not only the person who buys but also the one who agrees to buy is a buyer. Similarly, a ‘seller’ means not only a person who sells but also a person who agrees to sell. (b) Goods and other related terms:

(i)
"Goods” means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land, which are agreed to be severed before sale or under the contract of sale; [Sub Section (7)]. This is a wider definition than contained in the English law, which does not consider ‘stock’ and ‘shares’ as goods, though it includes a ship. ‘Actionable claims’ are claims, which can be enforced only by an action or suit, e.g., debt. A debt is not a movable property or goods. Even the Fixed Deposit Receipts (FDR) are considered as goods under Section...
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