Sale of Goods Act, 1930
What the exam tests
The Sale of Goods Act, 1930 tests sale versus agreement to sell, conditions and warranties, passing of property and risk, delivery, and the unpaid seller's remedies.
Core rules
- Section 4 defines a contract of sale: transfer of property in goods for a price. A sale transfers property immediately; an agreement to sell is future or conditional. Goods include movable property except actionable claims and money (s 2(7)).
- Conditions are essential to the main purpose; a breach gives the right to repudiate. Warranties are collateral; breach gives damages (s 12). Implied conditions and warranties include title, sale by description, merchantability and fitness for purpose where the buyer relies on the seller's skill (ss 14-17). Caveat emptor applies subject to these exceptions.
- Property passes when parties intend (s 19); for specific goods in a deliverable state, property passes when the contract is made (s 20). For unascertained goods, appropriation is needed (s 23). Risk prima facie follows property (s 26), except delay by either party.
- The unpaid seller has lien (ss 47-49), stoppage in transit (ss 50-52) and resale (s 54), plus a suit for price or damages.
Worked example
A agrees to sell 100 bags from a bulk lot. Before ascertainment, the warehouse burns. No property had passed because the goods were unascertained and not appropriated; the loss is generally the seller's, subject to the terms.
Traps
- Saying risk always follows delivery.
- Treating every term as a condition.
- Ignoring the notice requirement for resale.
- Applying caveat emptor where the buyer made known the purpose and relied on the seller.