CA Foundation Exam June 2023 » CA Foundation Study Material » Business Laws » The Sale of Goods Act 1930

The Sale of Goods Act 1930

It is an overview of the Sale of Goods Act 1930. It discusses the Sale of Goods Act 1930 with examples, sections, and particular definitions.

The Indian Contract Act of 1872 governed the sale and purchase of products until 1930. Sections 76 to 123 of the Indian Contract Act were abolished in 1930, and a new act named the Sale of Goods Act 1930 happened in their place. It went into effect on July 1, 1930. Section 4 of the Sale of Goods Act 1930 defines a contract of sale as a contract in which the seller can transfer or agrees to transfer the seller’s goods to the party buying in exchange for a fee. You can also try the Sale of Goods Act 1930 mock tests to better understand the subject and check your knowledge. 

Essentials of a sale contract

  • There must be two parties present, the buyer and the seller. 
  • There must be a transfer of goods or property. 
  • There must be a price for the goods.
  • The contract should be a valid contract according to the conditions.
  • Contract of sale includes both sale and sell agreement. 

Difference between sale and agreement to sale

  • In the case of a sale, the ownership is now with the buyer, but it is with the seller in the case of a sale agreement.
  • Sale-executed contract but sell agreement- executory contract.
  • Sale-Risk of loss on buyer. Sell agreement- Risk of loss on the seller. 
  • Sellers can’t resell the goods in case of sale. However, in a sales agreement, the seller can sell goods to a third party.
  • The sale happens for specific and existing goods. Sell agreement happens for unascertained or future goods. 
  • In the case of a sale, if there is a breach of a contract, the seller has the right to sue for the price of the goods, but there is no such scope in the case of a sale agreement. Therefore, he has the right to sue for damages only.

Types of goods

  • Existing Goods: This refers to goods that exist at the time of the contract of the sale, i.e., goods that the seller owns or already owns.
  • Specific or Ascertained Goods: These are identified and agreed upon goods when making the contract of the sale.
  • Generic / Unidentified Goods: This refers to goods that are not specified but described.
  • Future Goods: This refers to goods the seller will make, produce, or acquire after signing the sale contract.
  • Contingent Goods: It signifies the goods the purchases of which by the seller rely upon a contingency that may or may not arise.

The Fixing of the price

The essence of a sale contract is the price, which is the monetary compensation for the sale of commodities.

The seller decides the price of a good in the below mentioned ways: 

  • By the parties themselves at the time of contracting, or 
  • By a third party.
  • Maybe decided by the course of the parties’ dealings, or
  • The contract can determine in some way,

CONDITIONS & WARRANTIES under the Sale of Goods Act, 1930

The Sale of Goods Act, 1930 important questions include crucial concepts like conditions and warranties. A stipulation is a condition if it constitutes the basic foundation of the contractor is essential to the contract’s primary purpose. The affected party has the right to treat the contract as repudiated if the condition is violated. If the vendor fails to meet a requirement, the buyer can treat the contract as breached, refuse the products, and collect the payment if they have already paid for them. He can also sue for damages due to the violation of the contract.

Warranties: A warranty is a term that is ancillary to the contract’s core purpose, i.e., it is a secondary promise. A breach of warranty has the consequence of preventing the afflicted party from repudiating the contract and allowing them only to seek damages. As a result, if a vendor fails to honour a guarantee, the customer must accept the products and file a claim for damages.

Conclusion

To gain a piece of in-depth knowledge, the Sale of Goods Act 1930 mock tests are beneficial for a student. There are some tricky and overlapping areas of law in the contract, property laws, and this act. So, it is crucial to understand the rule of law under the Sale of Goods Act 1930 with examples. The article has discussed the fixing of price and the essentials of sale deed, caveat emptor doctrine, auction of sale, etc. The Sale of Goods Act 1930 important questions can also include areas like transfer of ownership, transfer of title, and delivery has a further scope of the study.