Contracts of sale are those contracts that act as proof of the transfer of ownership of any object from one person to another in exchange for a price. The Sale of Goods Act India came up amidst the British Raj. The Sale of Goods Act 1930 was a law enacted in colonial, pre-Independence India for the benefit of merchants in India. The act relates to contracts for the sale of goods for all the states of India except for Jammu & Kashmir. Contracts of sale include the agreement on the part of the buyer as well as that of the seller.
Elements of the Sales of Goods Act India 1930
While trying to understand the Sale of Goods Act, it is imperative to understand the key terms used in the Act. These include the two parties (i.e., the buyer and the seller), the mercantile agent, goods, price, and the transfer of general property.
Let’s discuss these various elements to understand better.
As mentioned before, the two parties in the Sale of Goods Act 1930 are the buyers and the sellers.
A buyer is a person who is willing to or has agreed to buy a good.
A seller is a person who is willing to or has agreed to sell a good.
There has to be an agreement between these two parties for there to be a sale as per the Sale of Goods Act 1930. You can note here that a sale need not have gone through for the contract to designate a buyer as a buyer, and a seller as a seller; the contract is enough to assign these roles to the parties.
Rather than the buyer and supplier negotiating between themselves, a third-party agent can be used to coordinate the specifics of the contract on behalf of these parties. This third-party agent is called the mercantile agent, and they come in the form of brokers, auctioneers, and others.
The primary purpose of establishing a buyer and a seller is so that there is an agreement about the good which is supposed to be for sale. These goods need to be clearly defined in the sale contract as per the Sales of Good Act.
In differing words, the contract states that any movable property which is listed within a contract, which is to go through the transfer of ownership as per the contract (except for money and actionable claims), is considered a good.
The Act only recognises movable property like growing crops, stocks, shares, vehicles, among others. Immovable property such as land is not under the jurisdiction of this particular Act.
The goods for sale may be either existing, future goods, or contingent goods. Existing goods are those which are already in existence when the contract is formed. Future goods refer to goods that will be produced after the creation of the contract. Contingent goods are an extension of future goods, but they have contingency clauses within the contract of sale.
The price must most certainly be included in the contract; otherwise, the contract is deemed redundant. A sale is defined by the exchange of ownership of a good between two parties at a specific price, and thus it is a critical element of the Sale of Goods Act India. A transfer of ownership of goods can only be done with the payment or promise of fulfilment of the price mentioned in the contract.
There are two ways in which the price can be paid by the sales contract. The Sale of Goods Act 1930 says that the payment must be made either in the form of full cash, or part of it with the promise to pay the rest of it later.
The price mentioned in the contract should be pre-decided by the parties at hand.
Transfer of General Property
The transfer of general property is differentiated from the transfer of specific property. General property refers to any property owned by a seller, whereas specific property refers to the property the seller is transferring the ownership of to someone else through a sales contract. The Sale of Goods Act 1930 looks only at the transfer of general property.
Important Topics covered Under the Sales of Goods Act 1930
The Sale of Goods Act of 1930 governs contracts or agreements relating to the sale of goods. Except for the state of Jammu & Kashmir, this act took effect on July 1, 1930, throughout India. Vedantu provides you with complete guidance to study. The Sale of Goods Act 1930 – Elements and Transfer of General Property. Let's go through some of the act's key terminology and sections.
Important Term Definitions
Sale and Purchase Agreement
Calculation of the Price
Condition and Warranty Concept
Conditions (Express and Implied)
Warranties, both express and implied
The Caveat Emptor Doctrine
Part 1 of the property transfer process
Part 2 of Property Transfers
Transfer of Ownership
Performance of a Sales Contract
Unpaid Seller's Rights Against Goods
Unpaid Seller's Rights Against Buyer