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The Sale of Goods Act, 1930 deals with the transfer of movable goods through sale. It defines important terms such as sale, goods, buyer, seller, delivery, and document of title to goods. This act outlines the essentials of a contract of sale, including the condition and warranty. It also discusses the concept of an unpaid seller.
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THE SALE OF GOODS ACT, 1930
INTRODUCTION • The Sale of Goods Act, 1930, deals with only one kind of transfer namely – Sale. • This Act deals with Sale of Movable Goods. • This Act does not deal with: • Exchange • Hire Purchase • Contract For Labour
DEFINITIONS • SALE- 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 (Sec.4). • GOODS -Goods means every kind of movable property, i.e. property of every description (except immovable property), actionable claims and money and includes stock and shares, growing crops, grass and things attached to or forming part of the land (e.g. growing trees, machinery fixed or embedded in earth), which were agreed to be severed before sale or under the contract of sale (Sub S.7).
BUYER - Buyer means a person who buys or agrees to buy goods (Sub S.1). • SELLER-Seller means a person who sells or agrees to sell goods (Sub S.13). • DELIVERY-Delivery means a voluntary transfer of possession by one person to another (Sub S.2). • DOCUMENT OF TITLE TO GOODS-S.2(4) defines document of title to goods as a document which is regarded in the ordinary course of trade and commerce as an evidence of the possession of control of goods represented by it or which authorises or purports to authorise the possessor of such a document, by endorsement of delivery, to transfer or receive goods represented by it.
ESSENTIALS OF CONTRACT OF SALE The following elements must co-exist so to constitute a sale of goods:- • There must be atleast two parties. • The subject matter of the contract must necessarily be goods. • A price in money (not in kind) should be paid or promised. • A transfer of property in goods from seller to buyer must take place. • A contract of sale may be absolute or conditional. • All other essential elements of a valid contract must be present in the contract of sale.
CONDITION • The Act defines condition as a stipulation essential to main purpose of contract, the breach of which gives rise to treat the contract as repudiated. • Eg:A buys from B hair oil advertised as pure coconut oil. The oil turns out to be mixed with herbs. A can return the oil and claim the refund of price.
WARRANTY • The Act defines a warranty as stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages. But not a right to reject the goods and treat the contract as repudiated. • Eg:A, while selling his car to B, stated that the car gives a mileage of 12 km/l of petrol. The car gives only 10 km/l mileage. B cannot reject the car as it is a breach of warranty.
EXPRESS CONDITION: These conditions are expressly mentioned by the contracting parties. If there is a conflict between expressed and implied condition, expressed condition shall prevail.
EXPRESS WARRANTY: Expressed warranties are stipulations which are specifically laid down by the contracting parties.
UNPAID SELLER • According to Section 45(1) of the Act “a seller 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 has been received towards price and the instrument gets dishonoured.” • Following conditions must be fulfilled before a seller can be deemed to be an unpaid seller:- • He must be unpaid and price must be due. • He must have an immediate right of action for the price. • A bill of exchange or other negotiable instrument has been received and the same has been dishonoured.
