Overview of the Sales of Goods Act

Aug 24, 2024

Sales of Goods Act, 1930

Introduction

  • Origin: Initially a part of the Indian Contract Act, 1872.
  • Enforcement Date: Effective from 1st July 1930
  • Scope: Applies to the whole of India except Jammu & Kashmir.
  • Objective: To define the rights of buyers and sellers in the context of a contract of sale.

Key Definitions

Buyer

  • Definition: A person who buys or agrees to buy goods.
  • Includes:
    • Someone who buys directly.
    • Someone who agrees to buy in the future.

Seller

  • Definition: A person who sells or agrees to sell goods.
  • Includes:
    • Someone who sells directly.
    • Someone who promises to sell in the future.

Goods

  • Definition: Any kind of movable property, excluding immovable property.
  • Includes:
    • Stocks and shares.
    • Growing crops, grass, and things attached to land.
  • Excludes:
    • Actionable claims or money.

Types of Goods

  1. Existing Goods: Goods that are present at the time of the contract.
  2. Future Goods: Goods that are to be manufactured or acquired in the future.
  3. Contingent Goods: Goods whose acquisition depends on uncertain events.

Classification of Existing Goods

  • Specific Goods: Identified goods at the time of the contract.
  • Unascertained Goods: Goods not specifically identified at the time.

Delivery Types

  • Actual Delivery: Physical delivery of goods.
  • Constructive Delivery: Delivery by acknowledgment without physical transfer.
  • Symbolic Delivery: Delivery by means of a symbol or token.

Rights of Buyers and Sellers

Rights of the Buyer

  1. Suit for Price: Buyer can sue for the price if the seller fails to deliver.
  2. Specific Performance: Buyer can request the court to enforce the contract.
  3. Damages: Buyer can claim damages for breach of contract.

Rights of the Seller

  1. Right of Lien: Seller can retain possession of goods until payment is made.
  2. Right of Stoppage in Transit: Seller can stop goods in transit until payment is received.
  3. Right to Resell: If payment is not received, seller can resell the goods.

Auction Sale

  • Definition: Selling property by inviting bids from the public.
  • Completion of Sale: Completed when the auctioneer announces it by the fall of the hammer.
  • Reserve Price: Minimum price set for bidding.

Effect of Tax Changes

  • If tax rates increase or decrease, the buyer bears the burden of tax changes.

Important Legal Principles

  • NeMo dat quod non habet: No one can give what they do not have.
  • Right of Stoppage and Lien: Rights of sellers are not affected by the buyer's subsequent actions unless specified.

Conclusion

  • The Sales of Goods Act provides a framework for transactions, defining the rights and obligations of buyers and sellers.