The Sale of Goods Act 1930

What Is The Sale of Goods Act 1930?

Contracts of sale are those contracts which 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.

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Two Parties

As mentioned before, the two parties in the Sale of Goods Act 1930 are the buyers and the sellers.

  1. Buyer is the person who is willing to or has agreed to buy a good.

  2. Seller is the 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.

Mercantile Agent

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.

Goods

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.

Price

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 in accordance with 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.

FAQs (Frequently Asked Questions)

Q1. What are the Kinds of Goods that can be Sold through Contracts under the Sales of Goods Act 1930?

Ans: All kinds of goods, except for immovable property, are sold through sales contracts under the Sales and Goods Act. Available goods for sale can be either existing, future or contingent goods.


Existing goods refer to those which have already been produced and are ready to be sold. Future goods refer to those goods which are agreed to be produced and only then paid for through the contract. Contingent goods are a sort of extension to future goods, where the sale depends on the ability of the producer to supply the buyer with that good, which may not always be the case.

Q2. What does the Sale of Goods Act Entail?

Ans: The Sale of Goods Act India is an act that was formulated for smooth sales of different goods between different buyers and sellers in India, with the exception of Jammu & Kashmir. The act was passed amidst India’s colonial era, in the year 1930, to make buyer-seller relations easier.


The Act looks at formulating sales contracts for the transfer of movable property between two willing parties, at a price decided by these parties themselves. The act encompasses a wider range of clauses and exceptions and a very important law in Indian business circle


The essentials of sales contracts under the Sales of Good Act are the two parties (buyer and seller), the goods for sale, the price for which the goods will be sold, and the transfer of general property.