[1] Sale of Goods Act, 1930

SALE OF GOODS ACT, 1930

INTRODUCTION
Before the enactment of The Sale of Goods Act, 1930 the relating to sale and
purchase of goods were regulated by the Indian Contract Act, 1872.

In 1930, Sections 76 to 123 of the Indian Contract Act, 1872 were repealed and a
separate Act called “The Indian Sale of Goods Act, 1930” was passed.

It came into force on 1st July, 1930. With effect from 22nd September, 1963 the
word ‘Indian’ was also removed.

Now the present Act is called ‘The Sale of Goods Act, 1930. This act extends to
the whole of India.

Definition of Contract of Sale: [Sec. 4(1)]

“A contract of sale of goods is a contract where by the seller transfers or agrees to

transfer the property in the goods to the buyer for a price”.

ESSENTIAL OF CONTRACT OF SALE:

1. There must be at two parties' buyer and seller. Since a person Cannot buy
from and sell to himself.
2. Transfer or Agreement to transfer the ownership of goods.
3. Subject matter of goods must necessarily be goods.
4. The consideration is price i.e. money. Goods received against goods are not
a sale but it is called barter.
5. A contract of sale may be unconditional or conditional.
6. All other essentials of a valid contract must be present i.e. parties of contract
must be competent to enter into contract;
7. consent of parties shall be free; object shall be lawful and so on.

Definition
 [2] Sale of Goods Act, 1930

Sale of Goods Act, 1930 defines the terms which have been frequently used in the
Act,
A) Buyer and Seller: ‘Buyer' means a person who buys or agrees to buy goods
[Section 2(1)]. Not only the person who buys but also the one who agrees to
buy is a buyer

B) 'Seller'. Similarly, a 'seller' means not only a Person who sells but also a person
who agrees to sell.

C) Goods and other related terms:

"Goods" (Section 2(7))

Goods means every kind of movable property other than actionable claims and
money; and includes stock and shares, growing crops, grass and things attached to
or forming part of the land which are agreed to be severed before sale or under the
contract of sale.
Money means current money and it includes rare and old coins
Debt due to a man from another is an actionable claim and cannot be sold as
goods, although it can be assigned.

Other Also
Goods than
Means every kind Includes
Actionable claims Stock & shares
of movable
property
Money in
circulation
Growing Crops

Grass, and

Things attached to
or forming part of
land which agreed
to be severed
 [3] Sale of Goods Act, 1930

CLASSIFICATION OF GOODS

Goods

Existing Goods Future Goods Contingent Goods

Specific

Ascertained

Unascertained

1. Existing goods:
Goods owned and possessed by the seller at the time of the making of the contract
of sale are called existing goods.

The existing goods can be further classified as under:

(a) Specific goods.
(b) Ascertained goods.
(c) Unascertained goods.

(a) Specific goods:

“Specific goods” are those goods which are identified and agreed upon at the time
of contract of sale is made. It is essential that the goods are identified and separated
from the other goods.
Example: In the case of sale of one table out of 25 tables, goods shall be specific if
the table is selected before the contract of sale is made.

(b) Ascertained goods:

Ascertained goods are identified after the contract of sale as per the terms decided.
Ascertained goods may be further classified as apportioned goods and unportioned
goods. Even the goods are same, the identity of goods in packets, lots or otherwise
has to be allotted to a specific buyer. Goods are normally apportioned by the seller
 [4] Sale of Goods Act, 1930

and the buyer agrees. Buyer can himself apportion goods with consent of the seller.
However, all goods has to be ascertained and apportioned before transfer of
possession.

(c) Unascertained goods:

When the goods are not separately identified or ascertained at the time of making a
contract of sale, are known as unascertained goods. When the buyer does not select
the goods for him from a lot of goods, but are defined or indicated only by
description, we call them unascertained goods.

Example: Sale of 25 chairs for an office out of a lot of 200 such chairs of the same
design and quality, the goods are unascertained till 25 particular chairs are
selected. When the required 25 chairs are selected out of the lot, the goods are said
to be ascertained goods for the contract of sale.

2. Future Goods:

It means goods to be manufactured or produced or acquired by the seller after

making of the contract of sale. A contract to sell oil not yet pressed from seeds in
his possession is a contract for the sale of future goods.

Example: X agrees to sell to Y all the apples which will be produced in his garden
next year. This is an agreement for the sale of future goods.

3. Contingent Goods:

These are a type of future goods, the acquisition of which by the seller depends
upon a contingency which may or may not happen. Goods which might be
expected to come into existence, as
(a) goods to arrive (b) future crops (c) the eggs.
Such contracts give no right of action if the contingency does not happen.
However, all goods has to be ascertained and apportioned before transfer of
possession.

Delivery [Sec. 2(2)]:

Delivery means voluntary transfer of possession from one person to another.

Document of Title to goods [Sec. 2(4)]:

 [5] Sale of Goods Act, 1930

It includes bill of lading, dock warrant, warehouse keeper’s certificate,

wharfinger’s certificate, railway receipt, warrant or order for the delivery of goods
and any other document used in the ordinary course of business as proof of the
possession or control of goods.

Price: [Sec. 2(10)]

Price means the money consideration for a sale of goods.

Property: [Sec. 2(11)]

Property means the general property in goods and not merely a special property

Differences between Sale and Agreement to Sell:

“Where under a contract of sale the property in the goods is transferred from the
seller to the buyer, the contract is called a sale” - [Sec. 4(3) of The Sale of Goods
Act, 1930]. Also called agreement of sale.

“Where the property in the goods (legal ownership of goods) is to be transferred to

the buyer at some future date or on the fulfilment of a certain conditions, the
contract of sale is called an agreement to sell” - [Sec. 4(3) of The Sale of Goods
Act, 1930].

Sale Agreement to sell

1 In case of sale the property The ownership of the goods is
transfers from seller to the buyer transferred to the buyer at some
immediately. future date.

2 It is an executed contract. It is an executory contract.

3 It creates right in rem. It creates right in personam.

4 The buyer is responsible for any The seller is responsible for any
loss or destruction of the goods loss or destruction of goods even if
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even if the goods are in the the goods are in the possession of
possession of the seller. the buyer.

5 The seller cannot resale the goods. In this case, if the subsequent buyer
takes in good faith and for
consideration, he gets a good title.
The original buyer may only sue
the seller for damages.

6 If goods are destroyed, the loss The loss will be borne by the seller
will be borne by the buyer even even though the goods may be in
though they may be in possession possession of the buyer.
of the seller.

7 If the buyer becomes insolvent Seller may refuse to deliver the

before payment is made, the seller goods to the official receiver
has to deliver the goods to
the official receiver unless he has
lien on them.

8 If the seller becomes insolvent The buyer cannot claim the goods.
after payment of price, the buyer He can only claim rateable dividend
can claim the goods from the for the amount paid by him.
official receiver.

9 Sale is liable for sales tax. Agreement to sell is not liable for
GST. It is liable for GST when it is
ripens in to sale.
 [7] Sale of Goods Act, 1930

Doctrine of Caveat Emptor

The term Caveat Emptor is a Latin word which means ‘let buyer be aware’. This
principle underlines the concept that it is for the buyer to satisfy himself that the
goods which he is purchasing are of the quality required by him.
It is a fundamental principle of law of sale of goods and implies that the seller is
under no obligation to point out the defects in his own goods. The buyer must take
care while purchasing the goods and if he makes a wrong selection, he cannot
blame the seller if the goods turn out to be defective or do not serve his purpose.
However the doctrine of Caveat Emptor does not mean that the buyer must take a
chance, it only means he must take care.
However this rule is not without any exception. With the passage of time this
doctrine has been considered to be too unreasonable to the buyers. Hence the law
in section 16 recognized certain exceptions to the rule.

Following are the conditions to be satisfied: -

 If the buyer had made known to the seller the purpose of his purchase, and
 the buyer relied on the seller's skill and judgement, and
 Seller’s business to supply goods of that description (Section 16)

The doctrine is however subject to following exceptions as provided in section 16

of the Act.

1. Fitness as to quality or use: Where the buyer makes known to the seller the
particular purpose for which the goods are required. so as to show that he relies
on the seller's skill or judgment and the goods are of a description which is in
the course of seller's business to supply, it is the duty of the seller to supply
such goods as are reasonably fit for that purpose Section 16 (1)

2. Goods purchased under patent or brand name: In case where the goods are
purchased under its patent name or brand name, there is no implied condition
that the goods shall be fit for any particular purpose (Section 16(1))

3. Goods sold by description: Where the goods are sold by description there is an
implied condition that the goods shall correspond with the description (Section
15). If it is not so then seller is responsible.
 [8] Sale of Goods Act, 1930

4. Goods of Merchantable Quality: Where the goods are bought by description

from a seller who deals in goods of that description there is an implied
condition that the goods shall be of merchantable quality. The rule of Caveat
Emptor is not applicable. But where the buyer has examined the goods this rule
shall apply if the defects were such which ought to have not been revealed by
ordinary examination [Section 3 16(2)].

5. Sale by sample: Where the goods are bought by sample, this rule of Caveat
Emptor does not apply if the bulk does not correspond with the sample [Section
17].

6. Goods by sample as well as description: Where the goods are bought by

sample as well as description, the rule of Caveat Emptor is not applicable in
case the goods do not correspond with both the sample and description or either
of the condition (Section 15).

7. Trade Usage: An implied warranty or condition as to quality or fitness for a

particular purpose may be annexed by the usage of trade and if the seller
deviates from that, this rule of Caveat Emptor is not applicable [Section 16(3)]

8. Seller actively conceals a defect or is guilty of fraud: Where the seller sells
the goods by making some misrepresentation or fraud and the buyer relies on it
or when the seller actively conceals some defect in the goods so that the same
could not be discovered by the buyer on a reasonable examination, then the rule
of Caveat Emptor will not apply. In such a case the buyer has a right to avoid
the contract and elain damages.

Conditions and Warranties

At the time of selling the goods, a seller usually makes certain statements or
representations with a view to induce the intending buyer to purchase the goods.
Such representations are generally about the nature and quality of goods, and about
their fitness for buyer's purpose.
Condition and warranty (Section 12): A stipulation in a contract of sale with
reference to goods which are the subject thereof may be a condition or a warranty.
[Sub-section (1)]
 [9] Sale of Goods Act, 1930

A condition is a stipulation essential to the main purpose of the contract, the breach
of which gives rise to a right to treat the contract as repudiated'. [Subsection (2)]
A warranty is a stipulation collateral to the main purpose of the contract, the breach
of which gives rise to a claim for damages but not to a right to reject the goods and
treat the contract as repudiated- [Sub-section (3)]
Whether a stipulation in a contract of sale is a condition or a warranty depends in
each case on the construction of the contract. A stipulation may be a condition,
though called a warranty in the contract. [Sub-section (4)]
Sl No. Basis of Condition Warranty
Distinction
1 Value A Condition is a A Warranty is a
stipulation which is stipulation which is
essential to the main collateral to the main
purpose of the purpose of the contract.
contract.
2 Rights The aggrieved partly The aggrieved party can
can repudiate the claim damages only in
contract of sale in case case of breach of a
there is a breach of a warranty.
condition
3 Treatment A breach of condition A breach of a warranty
may be treated as a cannot be treated as a
breach of a warranty. breach of a condition.
This would happen
where the aggrieved
party is contended
with damages only.

Conditions and Warranties may be either expressed or implied:

When terms of contract expressly provide for them, they are known as express
conditions or warranties. Implied conditions and warranties are incorporated in
every contract of sale unless the circumstances show a different intention.

Types of Implied Conditions and Implied Warranties:

 [10] Sale of Goods Act, 1930

Implied Conditions:
Implied conditions are those that the law incorporates into the contract unless the
parties agree to the contrary. Sections 14 to 17 of the Sale of Goods Act lay down
implied conditions. They are as follows, Condition as to –

(i) Condition as to title:

In every contract of sale, there is an implied condition that the seller has the right
to sell the goods. This condition is called “condition as to title”. If a person sells
goods without having title to it, the buyer is entitled to reject the goods and can
recover the purchase price from the seller.

(ii) Condition as to description:

Where goods are sold by description, there is an implied condition that the goods
shall correspond with the description. If they are not, the buyer may reject them or
accept them and claim damages.

(iii) Condition as to sample:

Where goods are sold by sample, there is an implied condition:

 [11] Sale of Goods Act, 1930

a) that the bulk of the goods shall correspond with the sample in quality.
b) that the buyer shall have a reasonable opportunity of comparing the bulk with
the sample, and
c) that the goods shall be free from latent defects. Defects which are not
discoverable on reasonable examination.

(iv) Condition as to description and sample:

Where the goods are sold by sample as well as by description, there is an implied
condition that the goods shall correspond both with the sample and with the
description. If the goods supplied correspond only with the sample and not with the
description or vice versa, the buyer is entitled to reject the goods.
Example:
A seller undertakes to supply 100 tons of Java sugar warranted to be equal to the
sample. The sugar when supplied corresponds to the sample but is not Java sugar.
The buyer can repudiate the contract.

(v) Condition as to fitness or quality:

As a general rule in a contract of sale, there is no implied condition as to quality, or

fitness of the article for any particular purpose. It is the buyer’s duty to select the
goods of his requirement. If subsequently the goods are found unsuitable for his
purpose, the seller will not be responsible. But there is implied condition as to
quality or fitness of goods for the purpose of the buyer under the following
conditions:

a) Where the buyer has made known to the seller the particular purpose for
which he needs the goods.
b) The buyer should rely on the skill and judgement of the seller.
c) Where the consent of buyer was obtained by the seller by fraud or
misrepresentation.

(vi) Conditions as to merchantability:

Merchantability means “acceptability in the market”. In a contract of sale, there is
an implied condition that the goods purchased are of merchantable quality. A
watch that will not keep time and a pen that will not write cannot be regarded as
merchantable.
 [12] Sale of Goods Act, 1930

(vii)Condition as to wholesomeness:
This condition is implied only in a contract of sale of eatables and provisions. In
such cases, the goods supplied must not only answer to description and be
merchantable but also be wholesome. In other words, the goods must be free from
any defect which makes them unfit for human consumption.

Implied Warranties:
1. Warranty of quiet possession:

In a contract of sale, there is an implied warranty that the buyer shall have and
enjoy quiet possession of the goods. In case the buyer is in any way disturbed, he
has a right to sue the seller for damages. Such a situation arises when the seller’s
title to goods is defective.

2. Warranty of freedom from encumbrances:

There is an implied warranty on the part of the seller that goods shall be free from
any charge or encumbrance in favour of any third party. Where there is a breach of
this implied warranty, the remedy of the buyer is to sue for damages.

3. Warranty as to fitness:

An implied warranty or condition as to quality or fitness for a particular purpose

may be annexed by the usage of trade.

4. Warranty of disclosing the dangerous nature of goods to the ignorant

buyer:

The third implied warranty on the part of the seller is that in case the goods sold
are of dangerous in nature, he must warn the ignorant buyer of the probable
danger. If there is a breach of this warranty, the buyer is entitled to claim
compensation for the injuries caused to him.
 [13] Sale of Goods Act, 1930

RIGHTS OF UNPAID SELLER

The seller who has not received the whole of the price of the goods sold is called
an “unpaid seller”. According to Section 45, the seller of goods is deemed to be an
unpaid seller:
(a) When the whole of the price has not been paid, or
(b) When a bill of exchange or other negotiable instrument has been received as
conditional payment, and the same has been dishonoured.
A seller who has been partly paid is also an unpaid seller.

Rights of an unpaid seller:

According to the Sale of Goods Act the unpaid seller has the following rights.

A. Rights against the goods

B. Rights against the buyer

Rights against the goods:

1.Right of Lien: [Sec. 47]

Lien is a right to retain possession of goods until payment of price. According to

section 47(1) an unpaid seller can exercise the right of lien in the following cases:
i. Where the goods have been sold without any stipulation as to credit.
ii. Where the goods have been sold on credit, but the period of credit has expired.
iii. Where the buyer becomes insolvent.

Conditions for the exercise of lien:

The following are the conditions precedent to the exercise of the lien.
a) The ownership must have passed to the buyer.
b) The goods must be in the possession of the seller.
c) The whole or part of the price must remain unpaid.

2. Right of stoppage of goods in transit: [Sec. 50]

 [14] Sale of Goods Act, 1930

The right of stoppage in transit is a right of stopping the goods, while they are in
transit and retaining the possession until payment of the price. This right is
conferred on the seller by Section 50 of the Act. This right can be exercised under
the following cases:
i. the seller must be an unpaid seller.
ii. the goods must be in-transit
iii. the buyer must have become insolvent.
iv. the property in the goods must have passed from the seller to the buyer.

3. Right of Re-sale: [Sec. 54]

An unpaid seller who has exercised either the right of lien or the right of stoppage-
in-transit can resell such goods. The right to resell the goods is called ‘right of
resale’. This right is conferred by section 54. An unpaid seller can exercise the
right of resale in the following cases:
i. where the goods are of a perishable nature,
ii. where the seller expressly reserves the right of resale in case the buyer makes a
default in the payment of price.
iii. where the seller has exercised his right of lien or stoppage in transit, and gives
notice to the buyer of his intention to resell the goods.

B. Rights against the buyer personally:

An unpaid seller in addition to his rights against the goods, has the following rights
against the buyer personally.

1. Suit for price: [Sec. 55]

Where the property in goods has passed to the buyer, and the buyer wrongfully
neglects or refuses to pay the price, the seller can sue the buyer for price.

2. Suit for damages for non-acceptance: [Sec. 56]

Where the buyer wrongfully neglects or refuses to accept and pay for the goods,
the seller can sue him for damages for non-acceptance of the goods.

3. Suit for repudiation:

 [15] Sale of Goods Act, 1930

Where the buyer repudiates the contract before the date of delivery, the seller may
wait till the date of delivery or may treat the contract as cancelled and sue for
damages for breach.

4. Suit for interest: [Sec. 61]

Where there is specific agreement between the seller and the buyer regarding
interest on the price of goods, the seller may claim it from the date when payment
becomes due. If there is no specific agreement, the interest is payable from the date
notified by the seller to the buyer.
 [16] Sale of Goods Act, 1930

Transfer of Ownership
It is essential to determine the exact point of time at which the Property in the
goods is transferred in Favor of the buyer. The term Property in goods means the
ownership of the goods. The term transfer of property means the transfer of
ownership from seller to buyer so as to constitute the buyer the real owner of the
goods.
Sections 18 to 25 of the Sale of Goods Act, determine when the property passes
from the seller to the buyer.

Passing of Property
The primary rules for ascertaining when the property in goods passes from seller to
buyer may be summarized as follows:

(A) Goods must be ascertained

As per section 18 in a contract for sale of unascertained goods, the property in the
goods does not pass to the buyer unless and until the goods are ascertained.

Example: Under a contract B was entitled to cut teak trees of more than 12 inches
girth. The stumps of trees after cutting had to be 3 inches high. It was held that
property in the timber that was cut could pass to B when the trees
were felled. Till the trees were felled, they were not ascertained.

(B) Intention of the parties for such transfer

As per section 19(2) in a contract for the sale of specific or ascertained goods the
property in them is transferred to the buyer at such time as the parties to the
contract intended to be transferred. The intention of the parties is ascertained from
the terms of the contract, the conduct of the parties and the circumstances of the
case. When intention of the parties cannot be ascertained, rules contained in
sections 20-24 are required to be applied for ascertaining the time of transfer of
property which are discussed here under:

(I) Specific goods

(i) Specific goods in a deliverable state (Sec 20).
 [17] Sale of Goods Act, 1930

In an unconditional contract for the sale of specific goods in a deliverable state, the
property in the goods passes to the buyer when the contract is made, and it is
immaterial whether the time of payment of the price or the time of delivery of the
goods, or both, is postponed. Goods are said to be in deliverable state when they
are in such a state that the buyer would under the contract is bound to take delivery
thereof.

(ii) Specific goods to be put into a deliverable state (Sec 21)

Where there is a contract for the sale of specific goods and the seller is bound to do
something to the goods for the purpose of putting them into a deliverable state, the
property does not pass until such thing is done and the buyer has notice thereof.

(iii) Specific goods in a deliverable state, when the seller has to do something
thereto in order to ascertain price (Sec 22)

If there is a contract for the sale of specific goods in a deliverable state, but the
seller is bound to weigh, measure, test or do some other act or thing with reference
to the goods for the purpose of ascertaining the price, the property does not pass
until such act or thing is done and the buyer has notice thereof.

(II) Unascertained goods (Sec 23)

Where there is a contract for the sale of unascertained goods, no property in the
goods is transferred to the buyer unless and until the goods are ascertained.
The rules in respect of passing of property of unascertained goods are as follows:
✓ Goods of the description in deliverable state
✓ Delivery to the carrier for transmission
1. Sale of unascertained goods by description [Section 23(1)]: Where there is a
contract for the sale of unascertained or future goods by description and goods
of that description and in a deliverable state are unconditionally appropriated to
the contract, either by the seller with the assent of the buyer or by the buyer
with the assent of the seller, the property in the goods thereupon passes to the
buyer. Such assent may be expressed or implied, and may be given either before
or after the appropriation is made.
 [18] Sale of Goods Act, 1930

2. Delivery to the carrier [Section 23(2)]: Where, in pursuance of the contract,

the seller delivers the goods to the buyer or to a carrier or other bailee (whether
named by the buyer or not for the purpose of transmission to the buyer and does
not reserve the right of disposal, he is deemed to have unconditionally
appropriated the goods to the contract.

(III) Goods on approval or ‘on sale or return’ (Sec 24)

In order to push up the sales generally there is a practice of sending goods to the
customer with the clear-cut understanding that he has option to approve or return
the goods within a given period. This type of sales is known as “approval on sale
or return”.
When goods are delivered to the buyer on approval or on sale or return-or other
similar terms, the property therein passes to the buyer –
a. when he signifies his approval or acceptance to the seller or does any other
act adopting the transaction:
b. if he does not signify his approval or acceptance to the seller but retains the
goods without giving notice of rejection, then, if a time has been fixed for
the return of the goods, on the expiration of such time, and, if no time has
been fixed, on the expiration of a reasonable time: or
c. He does something to the good which is equivalent to accepting the goods
e.g. he pledges or sells the goods.

RISK PRIMA FACIE PASSES WITH PROPERTY (SECTIONS 26)

According to section 26, unless otherwise agreed, the goods remain at the seller's
risk until the property therein is transferred to the buyer, but when the property
therein is transferred to the buyer, the goods are at the buyer's risk whether delivery
has been made or not:

THE AFORESAID RULE IS, HOWEVER, SUBJECT TO TWO

QUALIFICATIONS:
(i) If delivery has been delayed by the fault of the seller or the buyer, the
goods shall be at the risk of the party in default, as regards loss which
might not have arisen but for the default.
(ii) The duties and liabilities of the seller or the buyer as bailee of goods for
the other party remain unaffected even when the risk has passed
generally
 [19] Sale of Goods Act, 1930

Effect of Destruction of Goods

Goods perishing before making of contract (Sec 7) – Where there is a contract
for the sale of specific goods, the contract is void if the goods without the
knowledge of the seller have, at the time when the contract was made, perished or
become so damaged as no longer to answer to their description in the contract.

Goods perishing before sale but after agreement to sell (Sec 8) – Where there is
an agreement to sell specific goods, and subsequently the goods without any fault
on the part of the seller or buyer perish or become so damaged as no longer to
answer to their description in the agreement before the risk passes to the buyer, the
agreement is thereby void. Sec (7 & 8) are applicable only in case of specific
goods and not uncertain/generic goods

Example A contracted to purchase 30 tones of apple juice from B. Deliveries were

to be made in weekly truckload. B crushed the apples and put the juice in casks for
delivery. A delayed the taking of delivery as a result juice got deteriorated in
quality. It was held that the property in goods has passed on to A. Accordingly the
loss will be borne by A only.

Sale by person not the owner (or) Nemo dat qui habet

In normal course, a buyer may assure that the seller is the owner of the goods or
having authority form the owners to sell the goods. Generally, the owner alone can
transfer property in goods “Nemo dat qui habet” means that no one can give what
he himself does not have. It means a non-owner cannot make valid transfer of
property in goods.
Though this doctrine seeks to protect the interest of real owners, but in the interest
of the trade and commerce there must be some safeguard available to a person who
acquired such goods in good faith for value; accordingly, the Act provides the
following exceptions to this doctrine which seeks to protect the interest of bonafide
buyers.

1. Sale by a Mercantile Agent: A sale made by a mercantile agent of the

goods for document of title to goods would pass a good title to the buyer in
the following circumstances: namely:
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a. If he was in possession of the goods or documents with the consent of

the Owner:
b. If the sale was made by him when acting in the ordinary course of
business as a mercantile agent; and
c. If the buyer had acted in good faith and has at the time of the contract
of sale, no notice of the fact that the seller had no authority to sell
(Proviso to Section 27).

2. Sale by one of the joint owners (Section 28): If one of several joint owners
of goods has the sole possession of them by permission of the co-owners, the
property in the goods is transferred to any person who buys them of such
joint owner in good faith and has not at the time of the contract of sale notice
that the seller has no authority to sell.

3. Sale by a person in possession under voidable contract: A buyer would

acquire a good title to the goods sold to him by a seller who had obtained
possession of the goods under a contract voidable on the ground of coercion,
fraud, misrepresentation or undue influence provided that the contract had
not been rescinded until the time of the sale (Section 29).

4. Sale by one who has already sold the goods but continues in possession
thereof: If a person has sold goods but continues to be in possession of them
or of the documents of title to them, he may sell them to a third person, and
if such person obtains the delivery thereof in good faith and without notice
of the previous sale, he would have good title to them, although the property
in the goods had passed to the first buyer earlier. A pledge or other
disposition of the goods or documents of title by the seller in possession are
equally valid [Section 30(1)].

5. Sale by buyer obtaining possession before the property in the goods has
vested in him: Where a buyer with the consent of the seller obtains
possession of the goods before the property in them has passed to him, he
may sell, pledge or otherwise dispose of the goods to a third person, and if
such person obtains delivery of the goods in good faith and without notice of
the lien or other right of the original seller in respect of the goods, he would
get a good title to them (Section 30(2)).

However, a person in possession of goods under a 'hire purchase agreement

 [21] Sale of Goods Act, 1930

which gives him only an option to buy is not covered within the section
unless it amounts to a sale.

6. Effect of Estoppel: Where the owner is estopped by the conduct from

denying the seller's authority to sell, the transferee will get a good title as
against the true owner. But before a good title by estoppel can be made it
must be shown that the true owner had actively suffered or held out the other
person in question as the true owner or as a person authorized to sell the
goods.

7. Sale by an unpaid seller: Where an unpaid seller who had exercised his
right of lien or stoppage in transit resells the goods, the buyer acquires a
good title to the goods as against the original buyer [Section 54 (3)]

8. Sale under the provisions of other Acts:

a. Sale by an Official Receiver or Liquidator of the Company will give
the purchaser a valid title.
b. Purchase of goods from a finder of goods will get a valid title under
circumstances (Section 169 of the Indian Contract Act, 1872)
c. A sale by Pawnee can convey a good title to the buyer (Section 176 of
the Indian Contract Act, 1872)

Performance of the Contract of Sale

 [22] Sale of Goods Act, 1930

Performance of a contract involves two things timely delivery on the part of the
seller and payment of the price as per the terms of contract by the buyer. Unless
otherwise agreed, delivery of the goods and payment of the price are concurrent
conditions, that is to say, the seller shall be ready and willing to give possession of
the goods to the buyer in exchange for the price, and the buyer shall be ready and
willing to pay the price in exchange for possession of the goods.

DELIVERY

Delivery means voluntary transfer of possession from one person to another

(Section 2(2)).
As a general rule, delivery of goods may be made by doing anything, which has the
effect of putting the goods in the possession of the buyer, or any person authorized
to hold them on his behalf.

Forms of delivery: Following are the kinds of delivery for transfer of possession:
Delivery of goods
Voluntary transfer of possession by one person to another
(i) Actual delivery: When the goods are physically delivered to the buyer.
(ii) Constructive delivery: When it is effected without any change in the
custody or actual possession of the thing as in the case of delivery by
attornment (acknowledgement) eg.. where a warehouseman holding the
goods of A agrees to hold them on behalf of B, at A's request.
(iii) Symbolic delivery: When there is a delivery of a thing in token of a
transfer of something else, i.e., delivery of goods in the course of transit
may be made by handing over documents of title to goods. like bill of
lading or railway receipt or delivery orders or the key of a warehouse
containing the goods is handed over to buyer.

Rules Regarding Delivery of goods (Section 33-41)

The Sale of good Act, 1930 prescribes the following rules of delivery of goods:
(i) Delivery (Section 33): Delivery of goods sold may be made by doing
anything which the parties agree shall be treated as delivery or which has the
effect of putting the goods in the possession of the buyer or of any person
authorized to hold them on his behalf.
 [23] Sale of Goods Act, 1930

(ii) Effect of part delivery: A delivery of part of goods, in progress of the

delivery of the whole has the same effect, for the purpose of passing the
property in such goods, as a delivery of the whole: but a delivery of part of the
goods, with an intention of severing it from the whole does not operate as a
delivery of the remainder. (Section 34)

(iii) Buyer to apply for delivery: Apart from any express contract the seller of
goods is not bound to deliver them until the buyer applies for delivery
(Section 35)

(iv) Place of delivery: Whether it is for the buyer to take possession of the goods
or for the seller to send them to the buyer is a question depending in each case
on the contract, express or implied, between the parties. Apart from any such
contract, goods sold are to be delivered at the place at which they are at the
time of the sale, and goods agreed to be sold are to be delivered at the place at
which they are at the time of the agreement to sell or if not then in existence,
at the place at which they are manufactured or produced [Section 36(1)]

(v) Time of delivery: Where under the contract of sale the seller is bound to send
the goods to the buyer, but no time for sending them is fixed, the seller is
bound to send them within a reasonable time. [Section 36(2)]

(vi) Goods in possession of a third party: Where the goods at the time of sale are
in possession of a third person, there is no delivery unless and until such third
person acknowledges to the buyer that he holds the goods on his behalf.
Provided that nothing in this section shall affect the operation of the issue or
transfer of any document of title to goods. [Section 36(3)]

(vii)Time for tender of delivery: Demand or tender of delivery may be treated as

ineffectual unless made at a reasonable hour. What is reasonable hour is a
question of fact. [Section 36(4)].
 [24] Sale of Goods Act, 1930

(viii) Expenses for delivery: The expenses of and incidental to putting the goods
into a deliverable state must be borne by the seller in the absence of a contract
to the contrary. [Section 36(5)].

(ix) Delivery of wrong quantity (Section 37): Where the seller delivers to the
buyer a quality of goods less than he contracted to sell, the buyer may reject
them, but if the buyer accepts the goods so delivered, he shall pay for them at
the contract rate. [Sub-section (1)]

(x) Instalment deliveries: Unless otherwise agreed, the buyer is not bound to
accept delivery in instalments. The rights and liabilities in cases of delivery by
instalments and payments thereon may be determined by the parties of
contract. (Section 38)

(xi) Delivery to carrier: Subject to the terms of contract, the delivery of the goods
to the carrier for transmission to the buyer is prima facie deemed to be
delivery to the buyer. [Section 39(1)]

(xii)Deterioration during transit: Where goods are delivered at a distant place,

the liability for deterioration necessarily incidental to the course of transit will
fall on the buyer, though the seller agrees to deliver at his own risk. (Section
40)

(xiii) Buyer's right to examine the goods: Where goods are delivered to the
buyer, who has not previously examined them, he is entitled to a reasonable
opportunity of examining them in order to ascertain whether they are in
conformity with the contract. Unless otherwise agreed, the seller is bound, on
request, to afford the buyer a reasonable opportunity of examining the goods.
(Section 41)

Rule related to Acceptance of Delivery of Goods (Section 42):

Analysis: Acceptance is deemed to take place when the buyer –
d. intimates to the seller that he had accepted the goods; or
 [25] Sale of Goods Act, 1930

e. does any act to the goods, which is inconsistent with the ownership of the
seller; or
f. retains the goods after the lapse of a reasonable time, without intimating
to the seller that he has rejected them.

Buyer not bound to return rejected goods (Section 43): Unless otherwise
agreed, where goods are delivered to the buyer and he refuses to accept them,
having the right so to do, he is not bound to return them to the seller, but it is
sufficient if he intimates to the seller that he refuses to accept them.

Liability of buyer for neglecting or refusing delivery of goods (Section 44):

When the seller is ready and willing to deliver the goods and requests the buyer to
take delivery, and the buyer does not within a reasonable time after such request
take delivery of the goods, he is liable to the seller for any loss occasioned by his
neglect or refusal to take delivery and also for a reasonable charge for the cure and
custody of the goods.
Provided further that nothing in this section shall affect the rights of the seller
where the neglect or refusal of the buyer to take delivery amounts to a repudiation
of the contract.