Law of Sale of Goods Act 1930 Notes

LAW OF SALE OF GOODS ACT, 1930 Lecture Notes

INTRODUCTION  Till 1930, 1930, transactions relating relating to sale and purchase of goods were were regulated ! the Indian Indian Contract "ct, 1#$%& 1#$%& In 1930, 'ections $( to 1%3 of the Indian Contract "ct, 1#$% were repealed and a separate "ct called )The Indian 'ale of *oods "ct, "ct, 1930 was passed& It ca+e into force force on 1 st ul!, 1930& -ith e.ect fro+ fro+ %% nd 'epte+er, 19(3, the word )Indian/ was also re+oed&& Now, the present re+oed present "ct "ct is called called )The 'ale of *ood "ct, "ct, 1930/& 1930/& This "ct etends to the whole of India ecept the 'tate of a++u and 2ash+ir&

"ccording to 'ection 3, the proisions of the Indian Contract "ct, 1#$%, still continue to appl! to contracts for the sale of goods ecept where )The 'ale of *oods "ct/, 1930 proides for the contrar!&

eaning of contract of 'ale "ccording to 'ection 4516 of the 'ale of *oods "ct, 1930, 7Contract of sale of goods is a contract where! where! the seller transfers transfers or agrees to transfer transfer the propert! in goods to the u!er for a price8& )Contract of 'ale/ is a generic ter+ which includes oth a sale as well as an agree+ent to sell&

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;ssential ;le+ents of Contract of 'ale  The aforesaid de of loss of goods ta>es place 4:

=u!er does not get such right to enAo! the goods& It onl! creates Aus in persona+ 5Right against the person6&

 Transfer of ris> of loss of goods does not ta>e place

& Rights of seller against the u!er/s reach

i++ediatel! ecause ownership is transferred& "s a result, in case of destruction of goods, the loss shall e orne ! the u!er een though the goods are in the possession of the seller&

ecause ownership is not transferred& "s a result, in case of destruction of goods, the loss shall e orne ! the seller een though the goods are in the possession of the u!er&

'eller can sue the u!er for the price een though the goods are in his possession&

'eller can sue the u!er for da+ages een though the goods are in the possession of the u!er&

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(& Rights of u!er against the seller/s reach

=u!er can sue the seller for da+aged and can sue the third part! who ought those goods, for goods&

=u!er can sue the seller for da+ages onl!&

$& ;.ect of insolenc! of seller haing possession of goods

=u!er can clai+ the =u!er cannot clai+ the goods goods fro+ the ocial een when he has paid the receier or assignee price ecause the ownership ecause the ownership has not transferred to the u!er& of goods has transferred  The u!er who has paid the to the u!er& price can onl! clai+ rateale diidend&

#& ;.ect of insolenc! of the u!er efore pa!ing the price

'eller +ust delier the goods to the ocial receier or assignee ecause the ownership of goods has transferred to the u!er& Ee can onl! clai+ rateale diidend for the unpaid price&

'eller can refuse to delier the goods unless he is paid full price of the goods ecause the ownership has not transferred to the u!er&

eaning of *oods 'ection %5$6: *oods +eans eer! >ind of +oale propert! other than actionale clai+s and +one!, and includes the followingB 5a6 'toc> and shares 56 *rowing crops, grass and thing attached to or for+ing part of the land which are agreed to e sered efore sale or under the Contract of 'ale&

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Type of Goods

 T!pes of *oods

;isting goods +ean the goods which are either owned or possessed ! the seller at the ti+e of contract of sale& Future goods 'ection %5(6: Future goods +ean goods to e +anufactured or produced or acGuired ! the seller after the +a>ing of the contract of sale&  These are the goods the acGuisition of which ! the seller depends upon a contingenc! which +a! or +a! not happen&

CONDITIONS AND WARRANTIES It is usual for oth seller and u!er to +a>e representations to each other at the ti+e of entering into a contract of sale& 'o+e of these representations are +ere opinions which do not for+ a part of contract of sale& -hereas so+e of the+ +a! eco+e a part of contract of sale& Representations which eco+e a part of contract of sale are ter+ed as stipulations which +a! ran> as condition and warrant! e&g& a +ere co++endation of his goods ! the seller doesn/t eco+e a stipulation and gies no right of action of the u!er against the seller as such representations are +ere opinion on the part of the seller& =ut where the seller assu+es to assert a fact of which the

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u!er is ignorant, it will a+ount to a stipulation for+ing an essential part of the contract of sale&

eaning of 'tipulation 'ection 1%516: " stipulation in a contract of sale of goods +a! e a condition or warrant! 'ection 1%516:&

eaning of Condition 'ection 1%5%6: " condition is a stipulation 5a6 -hich is essential to the +ain purpose of the contract, and 56  The reach of which gies the aggrieed part! a right to ter+inate the contract&

eaning of -arrant! 'ection 1%536: " warrant! is a stipulation 5a6 -hich is collateral to the +ain purpose of the contract, and 56  The reach of which gies the aggrieed part! a right to clai+ da+ages ut not right to reAect goods and to ter+inate the contract&

-hen condition to e treated as warrant! 'ection 13: In the following three case, a reach of a condition is treated as a reach of a warrant!B 5a6 -here the u!er waies a conditionB once the u!er waies a condition, he cannot insist one its fulnowledge that the seller had no authorit! to sell&

5c6 'ale ! a person in possession under oidale contract

5i6 The seller +ust e in possession of goods under a contract oidale uMs 19 or 19" of Indian Contract& "ct, 1#$% on ground of coercion, undue inuence, +isrepresentation of fraud& 5ii6 The goods +ust hae een sold 1(:

efore the contract is rescinded& 5iii6 The u!er +ust hae ought the goods in goods faith& 5i6 The u!er +ust hae no >nowledge that the seller/s title is defectie&

5d6 'ale ! seller in possession after sale 'ection 30516:

5i6 The seller +ust e in possession of goods or of a docu+ent of title to the goods, in the capacit! of a seller and not in an! other capacit! such as ailee& 5ii6 The u!er +ust hae ought the goods in good faith& 5iii6 The u!er +ust hae no >nowledge aout the preious sale&

5e6 'ale ! a u!er in possession efore the transfer of ownership 'ection 305%6:

5i6 The u!er +ust e in possession of the goods or a docu+ent of title to the goods, with the consent of the original seller and +ust hae ought or agreed to u! the goods& 5ii6 The new u!er +ust hae ought the goods in good faith& 5iii6 The new u!er +ust hae no >nowledge aout an! lien or other right of the original seller in respect of good&

"n unpaid seller +ust hae eercised his right of lien or stoppage in transit&

5f6 "n unpaid seller 'ection

5i6 The owner cannot e found with 1$:

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reasonale diligenceH or 5ii6 The owner, if found refuse to pa! the lawful charges of e use of pretended idding to raise the price, the sale is oidale at the option of the u!er 'ec& (45(6:& 2noc> out or agree+ent not to id against each other& -here a group of persons for+ a co+ination to preent co+petition etween the+seles at an auction and arrange that onl! one of the+ will id& %:

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL LLLLLLLLLLLLLLLLLLL ?reious Uniersit! Kuestions 1& De and laourQ 10& Is a contract for wor> and laour coered under the 'ale of *oods "ct, 1930Q 11& De