THE SALE OF GOODS ACT, 1930

1. Buyer - sec. 2(1) of 1930 Act defines as a person who either purchases or agrees to
purchase certain products. The buyer appears as one of the parties in the contract of sale.
2. Seller - sec. 2(13) of 1930 Act defines as a person who either sells or agrees to sell
certain products. The seller appears as one of the parties in the contract of sale.
3. Goods - sec. 2(7) of 1930 Act defines Goods as:
1. It is a moveable property (except for money and actionable claims)
2. Stocks and shares
3. Growing crops, grass, standing timber
4. The things that are attached to the land but are agreed to be severed before the
sale. For example, if a resort is offering complimentary food along with
lodging and customers do not want to take the food. Then the rebate on food is
not applicable as the food was not part of the sale.
Types of Goods
Sec. 6 of 1930 Act explains in detail all types of goods in the Sale of Goods Act. There are
mainly three categories of goods:
1. Existing Goods - If the goods exist physically at the time of contract and the seller is
in legal possession of the goods, then it is termed as existing goods. They are further
divided into three types:
1. Specific Goods - sec. 2(14) of 1930 Act defines goods that are identified and
agreed to be transferred, at the time of making the contract.
For example - ‘A’ wants to sell a Bike of a certain model and year of manufacture, and ‘B’
agrees to buy the bike. Here the bike is a specific good.
2. Ascertained Goods – These types of goods are identified by judicial
interpretation and not by law. Any good where the whole or part of the good
is identified and marked for sale at the time of the contract comes under
ascertained goods. These goods are earmarked for sale.
3. Unascertained Goods – Those goods are not specifically identified for sale, at
the time of the contract, fall under the category of unascertained goods.
For example, there is a bulk of 1000 quinols of wheat out of which 500 quinols are agreed to
be sold. Here the seller can choose the goods from the bulk and is not specified.
 2. Future Goods – sec. 2(6) of 1930 Act defines that the goods which do not exist at the
time of contract but are supposed to be produced, acquired, or manufactured by the
seller are called future goods.
For example – ‘A’ sells chairs and ‘B’ wants 300 chairs of a specific design which
‘A’ agrees to manufacture at a future date. Here chairs are future goods.
3. Contingent Goods - sec. 6(2) of 1930 Act provides that a contingent good which is a
kind of future good, but it is dependent on the happening (or the absence of) certain
conditions.
For example - ‘X’ has agreed to sell 100 mangoes from his farm to ‘Y’ at a future
date. But this sale depends on the fact whether the trees in ‘X’s farm give a yield of
100 mangoes by the date of the contract.

Delivery
Delivery of goods defines u/s. 2(2) of 1930 Act which describes the process of transferring
the possession of goods from one person to another. The person receiving the goods could
either be the buyer or another person authorized by the buyer to receive the goods. There are
different types of delivery of goods as described below:
 Actual Delivery – If the commodity/goods is handed over directly to the buyer or the
person authorized by the buyer then it is called an actual delivery.
 Constructive Delivery – When the transfer of goods is done without any change in
possession, then it is a constructive delivery. It means that the seller, even after selling
the goods, holds them as bailee for the buyer.
 Symbolic Delivery – The goods are not delivered but a symbolic means of obtaining
possession is involved.
For example - handing over the keys of a warehouse where the goods are stored is a
symbolic delivery. Such delivery is usually done when the goods are bulky or heavy.

Contract of Sale of Goods

As per sec. 4(1) of 1930 Act, Contract of sale of goods is a contract whereby the seller
transfers or agrees to transfer the property in goods to the buyer for a price. There
may be a contract of sale between one part-owner and another.
(2) A contract of sale may be absolute or conditional.
(3) 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, but where the transfer of the property
 in the goods is to take place at a future time or subject to some condition thereafter to
be fulfilled, the contract is called an agreement to sell.
(4) An agreement to sell becomes a sale when the time elapses or the conditions are
fulfilled subject to which the property in the goods is to be transferred.

Essential Elements:
- There must be at least two parties. (Bilateral Contracts)
- The subject matter of the contract must be goods.
- A price in money should be paid or promised.
- A transfer of property in goods from seller to the buyer must take place.
- It must be absolute or conditional.
- All other essentials of a valid contract must be present.

Difference between Sale and Agreement to Sell

S. Sale Agreement to Sell

No.
1 It is an executed contract. It is an executory contract.
2 Property in goods is transferred from Transfer of property in goods takes
seller to buyer when the contract is place at some future date.
made.
3 Seller cannot resell the goods as the Seller can further resell the goods
property is with the buyer. as the property in good remains
with him.
4 Risks passes to the buyer, as he Risks is with the seller as he
becomes the owner. remains the owner.
5 Breach on part of buyer, seller can sue Breach on part of buyer, seller can
for the price and damages both. sue for damages only and not for
the price.
6 Sale is contract plus conveyance. It is pure and simple agreement.
7 If goods are destroyed then loss If goods are destroyed by accident,
will be of Buyer. loss will fall on seller.

Difference between Sale and Bailment

 S. Sale Bailment
No.
1 Property in goods is transferred from There is only transfer of possession
seller to buyer. of goods from bailor to bailee.
2 Consideration is the price in terms of Consideration may be gratuitous or
money. non-gratuitous.
3 Buyer may use the goods in any way Bailee can use the goods only
he likes. according to the bailor’s direction.

Difference between Sale and Contract for work and labour

Sale Contract for Work and Labour

1 Property in goods is transferred from It is a contract for performing some
the seller to the buyer. work and not for transferring the
property in goods.
2 It involves the delivery of goods. It involves exercise of skill and
labour in rendering some work. It
involves “the uses by means of
money consideration”.

Difference between Sale and Hire Purchase Agreement

S. Sale Hire Purchase Agreement

No.
1 Property in goods is transferred to the The goods pass to the hirer upon
buyer immediately at the time of payment of the last instalment.
contract.
2 Position of buyer is that of owner of Position of hirer is that of a bailee
goods. till he pays the last instalment.
3 Buyer cannot terminate the contract Hirer may terminate the contract
and is bound to pay the price of the by
goods. returning the goods to owner
 without any liability to pay the
remaining instalments.
4 Seller takes the risk of any loss Owner takes no such risk for if
resulting from the buyer’s insolvency. hirer fails to pay the instalment, he
has the right to take back the
goods.

Sec. 7 - Goods perishing before making of contract

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 contract.

Sec. 8 - Goods perishing before sale but after agreement to sell

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 avoided.

Conditions and Warranties - Sec. 11 to 17

In a contract of sale, the subject matter is ‘goods. The condition is the fundamental
stipulation of the contract of sale whereas Warranty is an additional stipulation.
Condition
Certain terms, obligations, and provisions are imposed by the buyer and seller while entering
into a contract of sale, which needs to be satisfied, which are commonly known as
Conditions. There are two types of conditions, in a contract of sale which are:
 Expressed Condition: The conditions which are clearly defined and agreed upon by
the parties while entering into the contract.
 Implied Condition: The conditions which are not expressly provided, but as per law,
some conditions are supposed to be present at the time making the contract. However,
these conditions can be waived off through express agreement. Examples of implied
conditions are:
o The condition relating to the title of goods u/s. 14.
o Condition concerning the quality and fitness of the goods u/s. 16.
 o Condition as to wholesomeness.
o Sale by sample u/s. 17
o Sale by description u/s. 15
Warranty
A warranty is a guarantee given by the seller to the buyer about the quality, fitness
and performance of the product. It is an assurance provided by the manufacturer to the
customer that the said facts about the goods are true.
A warranty can be for the lifetime or a limited period. It may be either expressed, i.e., which
is specifically defined or implied, which is not explicitly provided but arises according to the
nature of sale like:
 Warranty related to undisturbed possession of the buyer.
 The warranty that the goods are free of any charge.
 Disclosure of harmful nature of goods.
 Warranty as to quality and fitness

Difference between Conditions and Warranties u/s. 12

BASIS CONDITION WARRANTY

Meaning A requirement or event that should be A warranty is an assurance given by
performed before the completion of the seller to the buyer about the
another action. state of the product that the
prescribed facts are genuine.
Definition Sec. 12 (2) of 1930 Act Sec. 12 (3) of 1930 Act
Purpose Condition is basic for the formulation of It is a written guarantee for assuring
the contract the party
Breach Termination of contract Claim damages for the breach
Violation Violation of condition can be regarded Violation of warranty does not
as a violation of the warranty affect the condition
Remedy Repudiate the contract as well as claim Claim damages only
damages
Implied Condition
There are several implied conditions are described in sec. 14 to 17 of 1930 Act. Unless
otherwise agreed, these implied conditions are assumed by the parties as if it is incorporated
in the contract itself.

Implied condition as to title u/s. 14

In every contract of sale, the basic essential implied conditions on the part of the seller are
that-
1. he has the title to sell the goods.
2. in case of an agreement to sell, he will have the right to sell the goods at the time
of performing the contract.
Consequently, if the seller has no title to sell the given goods, the buyer may refuse or reject
those goods. He is also entitled to recover the full price paid by him.
In Rowland v. Divall - the party bought a second-hand motor car from the petitioner and paid
for the same. After six months, he was deprived of it as the seller had no title to sell the car. It
was observed that the aggrieved party is entitled to recover the money.

Implied condition as to Sale by description u/s. 15

Where there is a contract of sale of goods by description, there is an implied condition
that goods delivered by seller shall correspond with such description. If the goods do not
correspond with the description, the buyer is not bound to accept and pay for the goods.
In the contract of sale, there is an implied condition that the goods should be in
conformity with the description. The buyer has the option to either accept or reject the goods
which do not conform with the description of the good.

Illustration: Where Ram buys a new car which he thinks to be new from “B” and the car is
not new. Ram’ can reject the car.

Implied condition as to Sale by sample as well as a description u/s. 15

Where the goods are sold by sample as well as by description the implied condition is
that the bulk of the goods supplied must correspond both with the sample and the description.
In case the goods correspond with the sample but do not tally with the description or vice
versa, the buyer can repudiate the contract.
 In a sale by sample as well as description, the goods supplied must be in accordance
with both the sample as well as the description.
Implied conditions as to quality or fitness u/s. 16
There is an implied condition as to the reasonable quality or fitness of goods if:
a) The particular purpose for which goods are required must have been disclosed by the buyer
to the seller.
b) The buyer must have relied upon the seller’s skill or judgment of the seller to select the
best goods and
c) The seller has ordinarily been dealing in those goods.
However, there is no implied condition where:
a) The buyer has not disclosed to the seller any abnormal circumstances or
b) The buyer buys a specified article under its patent or other trade name and
c) Buyer has not relied upon the skill and judgment of seller.

Illustration: A purchased sugar sack from B which was dam aged by ants. The condition of
merchantability is broken here and it is unfit for use. The buyer has the right to examine the
goods before accepting it. But a mere opportunity without an actual examination would not
suffice to deprive the buyer of his rights. If the examination does not reveal the defect but
within a reasonable time period the goods are found to be defective, he may repudiate the
contract even if he approves the goods.

Implied condition as to sale by sample u/s. 17

In a contract of sale by sample, there may be following implied conditions:
1. the actual products would correspond with the sample with respect to the quality,
size, colour etc.
2. the buyer gets a reasonable opportunity to compare the goods with the sample.
3. Further, the goods are free from any defect rendering them unmerchantable.

Illustration; A company sold certain shoes made of a special kind of sole by sample sale for
the French Army. Later when the bulk was delivered it was found that they were not made
from the same sole. The buyer was entitled to the refund of the price and damages.
Implied condition as to merchantable quality
Merchantable quality means that the goods should be resalable in the market under
the particular description by which they are known. They are not merchantable if they have
defects which make them unfit for ordinary use, or are such that a reasonable person knowing
of their condition would not buy them. Where the goods are bought be description from a
seller who deals in that type of goods, there is an implied condition that the goods shall be
merchantable quality.

Implied Condition as to wholesomeness

In a contract of sale of provisions and eatables, there is an implied condition that the
goods shall be wholesome or sound, i.e. goods should be fit for human consumption.

Warranty
Warranty is the additional stipulation and a written guarantee that is collateral to the
main purpose of the contract. The effect of a breach of a warranty is the aggrieved party
cannot repudiate the whole contract however, can claim for the damages. Unlike in the case
of breach of condition, in the breach of warranty, the buyer cannot treat the goods as
repudiated.

Kinds of Warranty
1. Expressed Warranty
The warranties which are generally agreed by both the parties and are inserted in the
contract, it is said to be expressed warranties.
2. Implied Warranty
Implied warranties are which the parties assumed to have been incorporated in the
contract of sale despite the fact that the parties have not specifically included them in the
contract. Subject to the contract, the following are the implied warranties in the contract of
sale:
 Warranty as to undisturbed possession
Sec. 14 (2) of 1930 Act provides that there is an implied warranty that the buyer shall
enjoy the uninterrupted possession of goods. As a matter of fact, if the buyer having got
possession of the goods, is later disturbed at any point, he can sue the seller for the breach of
warranty.
Illustration: ‘X’ purchased a second-hand bike from ‘Y’. Unknown to the fact that the bike
was a stolen one, he used the bike. Later, he was compelled to return the same. ‘X’ is entitled
to sue ‘Y’ for the breach of warranty.

 Warranty as to freedom from Encumbrances

As per Sec. 14 (3), the goods shall be free from any charge or encumbrances that are in
favour of any third party not known to the buyer. But if it is proved that the buyer is known
to the fact at the time of entering into the contract, he will not be entitled to any claim.
Illustration: ‘A’ pledges his goods with ‘C’ for a loan of Rs. 20000 and promises him to give
the possession. Later on, ‘A’ sells those goods to ‘B’. ‘B’ is entitled to claim the damages if
he suffers any.

 Implied warranty to disclose Dangerous nature of the goods sold

If the goods sold are inherently dangerous or likely to be dangerous and the buyer is
not aware of the fact, it is the duty of the seller to warn the buyer for the probable danger. If
there would be a breach of this warranty, the seller will be liable.
Illustration: ‘A’ purchases a horse from ‘B’ if the horse is violent and it is the duty of the
seller to inform ‘A’ about the probable danger. While riding the horse, ‘A’ was inflicted with
serious injuries. ‘A’ is entitled to claim damages from ‘B’.

Sec. 18 of 1930 Act - Where there is a contract for sale of unascertained goods, no property in
the goods is transferred to the buyer unless and until the goods are ascertained.

Passing of Property - Sec. 19 to 25

There are four primary rules that govern the passing of property:
 Specific or Ascertained Goods u/s. 19 to 22
 Passing of Unascertained Goods u/s. 23
 Goods sent on approval or “on sale or return” u/s. 24
 Transfer of property in case of reservation of the right to disposal u/s. 25

Passing of Ascertained Goods

Sec. 19 of 1930 Act deals with the passing of specified goods.
Sub-section (1): In a contract for the sale of specific or ascertained goods, the parties to the
contract are intend to transfer the property at the time mentioned in the contract.
Sub-section (2): To ascertaining the intention of the parties, the terms of the contract, the
conduct of the parties, and the circumstances of the case are considered.
Sub-section (3): Sec. 20 to 24 of 1930 Act, contain rules to ascertain the intention of the
parties.

Sec. 20 of 1930 Act relates to Specific goods in a deliverable state. It states that if the contract is
unconditional for the sale of specific goods in a deliverable state, then the property in the goods
passes to the buyer the moment the contract is made. It is immaterial whether the time of
payment of price or delivery of the goods or both is postponed.
Illustration: ‘P’ goes to an electronics store and buys a television set. He asks the shopkeeper to
deliver it to his house. The shopkeeper agrees. The television immediately becomes the property
of ‘P’.

Sec. 21 of 1930 Act provides that specific goods to be put into a deliverable state. A contract for
the sale of goods where the seller has to do something before the goods are ready for delivery.
In such cases, the passing of property happens only after the seller does the things and informs
the buyer.
Illustration: ‘P’ buys a laptop from an electronics store and asks for a home delivery. The
shopkeeper agrees to it. However, the laptop does not have a Windows operating
system installed. The shopkeeper promises to install it and call ‘P’ before making the delivery.
In this case, the property transfers to ‘P’ only after the shopkeeper has installed the OS making
the laptop ready for delivery.

Sec. 22 of 1930 Act states that specific goods are in a deliverable state but the seller has to do
something to ascertain the price. A contract of sale of goods which are in a deliverable state but
the seller has to do something like weight, measure, test, or perform any other act on the goods
to ascertain the price. In such cases, the property does not pass until the seller does the act and
informs the seller.

Passing of property in Unascertained Goods u/s. 23

The property in unascertained or future goods does not pass until the goods are
ascertained.
The property in unascertained or future goods sold by description passes to the buyer
when goods of that description and in a deliverable state are unconditionally appropriated.
 If there is a sale of a quantity of goods out of a large quantity. The property will pass
on the appropriation of the specified quantity by one party with the assent of the other.
Delivery by the seller of the goods to a carrier or other buyer is sufficient to pass the
property in the goods.

Essentials of Appropriation of goods:

 A contract for the sale of unascertained or future goods exists
 The goods conform to the quality and description stated in the contract
 They are in a deliverable state
 The goods are unconditionally appropriated to the contract either by delivery to
the buyer of his agent or the carrier
 The appropriation is made by the buyer with the assent of the seller or the seller
with the assent of the buyer
 The assent can be express or implied
 The assent can be given before or after the appropriation

Sec. 24 of 1930 Act - Goods sent on approval or on “sale or return”

When a seller sends good to a buyer on approval basis or on terms similar to ‘on sale or
return’, the property passes to the buyer only when:
 The buyer communicates his approval to the seller or does an act which signifies
acceptance of the transaction.
 He does not give his approval or acceptance to the seller but accepts the goods
without giving notice of rejection. There are two possibilities here:
o A time has been fixed for the return of goods - if the approved time
has elapsed, then the property is passed to the buyer.
o A time has not been fixed for the return of goods - the property is
passed to the buyer once a reasonable time has elapsed.
 The buyer does something to the goods which signifies acceptance of goods. For
example, he sells the goods or pledges it.

Passing of risk u/s. 26

The general rule is that unless otherwise agreed the goods remain at the seller’s risk
until the property is transferred to the buyer, but when the property is transferred to the buyer,
the goods are at the buyer’s risk whether delivery has been made or not.
 Rule is known as Resperit Demino - the loss falls on the owner. But the parties may
agree that risk will pass at the time different from the time when ownership is passed. The
seller may agree to be responsible for the goods even after the ownership is passed to the
buyer or vice versa.
Exceptions to the above general rule:
(i) If there is agreement between the parties.
(ii) If the delivery of goods is delayed either due to buyer’s or seller’s default,
goods are at risk of party in default.
(iii) Trade customs

CAVEAT EMPTOR
The term caveat emptor is a Latin word which means “let the buyer
beware”. - It implies that while purchasing the goods, the buyer must be
cautious. This principle states that at the time of buying goods, the buyer must
make reasonable examination of the goods to satisfy himself that the goods are
suitable for his purpose.
Section 6 provides that there is no implied warranty or condition as to the quality
or fitness for any particular purpose for which the goods are supplied under a
contract of sale. In simple words, it is not the seller’s duty to give to the buyer the
goods which are fit for a suitable purpose of the buyer. It is up to the buyer to
make proper selection of goods according to his needs. 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.

Exceptions to the Doctrine of Caveat Emptor

(1) Where the seller makes a false representation and the buyer relies on it.
(2) When the seller actively conceals a defect in the goods which is not visible on
a reasonable examination of the same.
(3) When the buyer, relying upon the skill and judgement of the seller, has
expressly or impliedly communicated to him the purpose for which the goods are
required. (4) Where goods are bought by description from a seller who deals in
goods of that description.
TRANSFER OF TITLE U/S. 27 to 30
“Nemo dat quad non habet” - No one can give a better title than he himself has. A
sale is a contract plus a conveyance. As a conveyance it involves transfer of title of goods
from the seller to the buyer. If the seller’s title is defective, the buyer’s title will also be
defective. A person can only transfer what he has. No one can transfer a better title to the
goods than he himself possesses.
Exceptions - In each of the following cases, a person who is not an owner, can give to the
transferee a valid title to the goods:
1. Transfer of title by estoppel u/s. 27
When the true owner of the goods by his conduct or words or by any act or omission
leads the buyer to believe that the seller is the owner of the goods or has the authority to sell
them, he cannot afterwards deny the seller’s authority to sell. The buyer in such a case gets a
better title than that of the seller.
Illustration: ‘O’ who is the true owner of the goods, causes the buyer ‘B’ to believe that ‘S’
has the authority to sell the goods. ‘O’ cannot afterwards question the seller’s want of title on
the goods.
Sale by a mercantile agent [Proviso to Sec. 27]
Sale of goods by a mercantile agent gives a good title to the purchaser even in cases
where the agent acts beyond his authority, provided the following conditions are satisfied
(i) The agent is in possession of the goods or of a document of title to the goods.
(ii) Such possession is with the consent of the owner.
(iii) The agent sells the goods in the ordinary course business.
(iv) The purchaser acts in good faith and has no notice that the agent had no authority
to sell.

2. Sale by one of several joint owners u/s. 28

It is enabling a co-owner to sell not only his own share but also of his other co-
owners. 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 from
such joint owner provided the buyer acts in good faith and without notice that the seller had
no authority to sell.
Sec. 28 lays down three conditions for validating a sale by one of co-owners:
(a) He must be in sole possession by permission of his co-owners.
(b) The purchaser acts in good faith i.e. with honesty.
(c) The purchaser had no notice at the time of the contract of sale that the seller had no
authority to sell.
Illustration: X, Y & Z own certain truck in common. X is in possession of the truck by
permission of his co-owners. X sells the truck to A. A purchase bona fide. The property in the
truck is transferred to A.

3. Sale of goods obtained under a voidable agreement u/s. 29

When the seller of goods has obtained possession thereof under a voidable agreement
but the agreement has not been rescinded at the time of sale, the buyer obtains a good title to
the goods, provided he buys them in good faith and without notice of the seller’s defect of
title. The goods have been obtained under a voidable agreement, not under a void or illegal
agreement. If the original agreement is of no legal effect (void ab-initio) the title to the goods
remains with the true owner and cannot be passed on to anybody else.

4. Sale by the seller in possession of goods after sale u/s. 30(1)

A second sale by the seller remaining in possession of the goods will give a good title
to the buyer acting in good faith and without notice. Three conditions should be fulfilled
under this exception:
(a) The seller must continue in possession of the goods or of the documents of title to the
goods as seller. Possession as a hirer or bailee of the goods from the buyer after delivery of
the goods to him will not do.
(b) The goods must have been delivered or transferred to the buyer or the documents of title
must have been transferred to him.
(c) Good faith and absence of notice of the previous sale on the part of the second buyer.

5. Sale by buyer in possession of goods over which the seller has some rights u/s. 30(2)
A sale by the buyer of goods in which the property has not yet passed to him. When
goods are sold subject to some lien or right of the seller (for example for unpaid price) the
buyer may pledge, or otherwise dispose of the goods to a third party and give him a good
title, provided the following conditions for sell, are satisfied:
(i) The first buyer is in possession of the goods or of the documents of title to the
goods with the consent of the seller.
(ii) Transfer is by the buyer or by a mercantile agent acting for him.
 (iii) The person receiving the same acts in goods faith and without notice of any lien
or other right of the original seller.

6. Sale by an unpaid seller u/s. 54

An unpaid seller of goods can, under certain circumstances, re-sell the goods. The
purchaser of such goods gets a valid title of the goods.

7. Sale under the Contract Act

(a) A pawnee may sell the goods of pawner if the latter makes a default of his dues. The
purchaser under such a sale gets a good title u/s. 176 of 1872 Act.
(b) A finder of goods can sell the goods under certain circumstances. The purchaser gets a
good title u/s. 169 of 1872 Act.
(c) Sale by an Official Receiver of Liquidator of the company will give the purchaser a valid
title.

Performance of Contract of Sale

Sec. 31 to 44 of the Sale of Goods Act, 1930 state the rules and regulations that govern the
Sale of goods and their delivery.

Definition of Delivery
Under Section 2 (2) of the Sale of Goods Act, 1930, the delivery meaning has been stated as
“voluntary transfer of possession of goods from one person to another.” The transfer of goods
from one person to another will be considered a delivery under a Sale of goods act only
when:
 The transfer of goods is voluntary
 The transfer is not done using theft, fraud or force
 Mere possession of good does not constitute a valid delivery of goods

Duty of the Buyer and the Seller

Sec. 31 of 1930 Act provides that “It is the duty of the seller to deliver the goods and
the buyer to accept and pay for them, in accordance with the terms of the Contract of Sale.”

Payment and Delivery are Concurrent

 Sec. 32 of 1930 Act provides that the payment and delivery of goods are concurrent
conditions. The seller of the goods should be ready to make the delivery of goods in
exchange for a payment and the buyer must be ready to make the payment for the delivery of
goods unless agreed otherwise.

Delivery
Sec. 33 of 1930 Act provides that the delivery of goods can be done by putting the
goods in the possession of the buyer or any other person authorized by the buyer to hold the
goods on his behalf.

Partial Delivery of Goods

Sec. 34 of 1930 Act provides that partial delivery of goods made as progress towards
full delivery has the same effect as full delivery, to pass the property in the goods. Partial
delivery done with the intent of severing it from the whole does not constitute the delivery of
the remaining goods.

Buyer Must Apply for Delivery

Sec. 35 of 1930 Act provides that the buyer of the goods must apply to the seller for
the delivery of goods unless otherwise stated in the terms, where terms of delivery meaning
are the conditions mentioned in the Contract.

Rules Regarding the Delivery of Goods u/s. 36

Mode of delivery - Actual or constructive or symbolic mentioned u/s. 33 of 1930 Act
Seller in possession – A seller of goods may, after sale, hold the goods as buyer’s
bailee.
Buyer in possession – At times, the buyer may already be in possession of the goods
but only after the sale is completed, he will become the owner and thereafter hold the
goods on his own account.
Third party in Possession - If the goods have a third party at the time of Sale, then
the third party must acknowledge to the buyer that the goods are being held on his
behalf.

Place of Delivery
Both the buyer and the seller must agree to terms of delivery, express or implied, at the time
of drawing up the Contract of Sale. If no such terms and conditions have been specified in the
Contract:
 Delivery of goods to be sold is done at the place where they are at the time of Sale
 Delivery of goods to be sold is made at the place at which they are at the time of the
agreement to sell. If the goods are not in existence at that time, they are delivered to
the place of manufacture.

Time of Delivery
If the time of delivery of goods has not been specified in the Contract, it must be made within
a reasonable time. The demand for delivery must be made at a reasonable hour unless
otherwise specified in the Contract.

Delivery Expenses
The expenses incurred for putting the goods in a deliverable state must be borne by the seller
unless otherwise stated in the Contract.

Delivery of Wrong Quantity of Good u/s. 37

Goods for delivery means the goods sent by the seller at the time of delivery. If the
seller sends a lesser or a larger quantity of the goods for delivery than what is specified in the
Contract, the buyer has a right to reject the delivery of goods. If the buyer delivers a mix of
goods where some parts are not as per the Contract, the buyer has the right to reject the goods
that are not by the Contract.

Instalment Deliveries u/s. 38

When there is a contract for the sale of goods to be delivered by stated instalments
which are to be separately paid for, and either the buyer or the seller commits a breach of
contract, it depends on the terms of the contract whether the breach is a repudiation of the
whole contract or a severable breach merely giving right to claim for damages.

Rights of unpaid seller against the goods

Sec. 45 to 54 of the Sale of Goods Act, 1930 states about the rights of unpaid seller
against the goods.
Sec. 45 - Definition of unpaid Seller
Seller is deemed to be an unpaid seller, when, (1) whole of the price has not been paid
or tendered and seller had an immediate right of action for the price, (2) bill of exchange or
other negotiable instrument was given as payment, but the same has been dishonoured, unless
this payment was an absolute and not a conditional payment.

Sec. 46 - Rights of Unpaid Seller

• Right of lien or retention.
• Right of stoppage in transit.
• Right of resale.
• Right to withhold delivery.

Right of Lien or Retention u/s. Sec. 47 - 49 & 54

It can be exercised on the goods for the price while he is in possession until the
payment of price of such goods. It can be exercised in following cases:
(i) Where goods have been sold without any stipulation as to credit.
(ii) Where goods have been sold on credit but the term of credit has expired.
(iii) Where buyer becomes insolvent.
This right depends upon physical possession. It can only be exercised for the non-payment of
price. Under sec. 49 of 1930 Act, this right is terminated under following circumstances:
a. Where he delivers goods to carrier or bailee for the purpose of transmission to buyer
without reserving the disposal right.
b. Where buyer or his agent lawfully obtains possession of goods.
c. Where seller has waived the right of lien.
d. By estoppel.

Right of Stoppage in Transit u/s. 50 to 52

It means right to stop the further transit of goods, to resume possession and to hold the
same till the price is paid. It can be exercised in following cases:
(i) Seller must be unpaid.
(ii) He must have parted with the possession of goods.
(iii) Goods are in transit.
(iv) Buyer has become insolvent.
(iv) Right is subject to provisions of the Act.
Goods are deemed to be in transit from the time they are delivered to carrier or other bailee-
for transmission, until buyer or his agent takes delivery of them. This right is lost under
following cases:
(i) Buyer taking delivery
(ii) Acknowledgment by carrier
(iii) Delivery to ship
(iv) Wrong denial to deliver by carrier
(v) Sub sale
(vi) Goods in possession of ship’s master acting as buyer’s agent.

Right of Resale u/s. 54

It can be exercised in following cases:
a. Where the goods are of perishable nature, buyer need not be informed of the
intention of resale.
b. Where he gives notice to the buyer of his intention to resell the goods, the buyer
does not within a reasonable time pay or tender the price.
c. Where the right is expressly reserved in the contract.
If no notice has been given to the buyer of intention to re-sell, unpaid seller cannot claim any
damages and buyer will be entitled for all profits.
Unpaid seller can recover from buyer the balance amount (if any) on resale.
If notice has been given to buyer, then profits origin out of sale of goods won’t be shared with
buyer. Only seller will hold the samples.

Rights to Withhold Delivery

It is exercised if the property in goods has not passed to the buyer. It is in additions to
above 3 rights. However, if the property has not been passed the unpaid seller has a right of
withholding delivery similar to and co-extensive with his rights of lien and stoppage in
transit.

Suit for Breach of the contract u/s. 55 to 61

Chapter VI of the Sale of Goods Act deals with regard to suits for the Breach of a Contract. It
shall be divided roughly, into 3 parts
Seller’s Remedies against Buyer
1. Suit for Price u/s. 55
 2. Damages for non-acceptance u/s. 56
Buyer’s remedies against Seller
1. Damages for non-delivery u/s. 57
2. Specific Performance u/s. 58
3. Remedy for breach of warranty u/s. 59
Remedies available to both buyer and seller
1. Suit for repudiation of contract before date or anticipatory breach u/s. 60
2. Interest by way of damages and special damages u/s. 61

Auction Sale u/s. 64

It is a mode of selling property by inviting bids publicly and the property is sold to the
highest bidder. It is a public sale where goods are offered to be taken by bidders. Auctioneer
is only an agent of seller. Following rules apply:
a. When goods are put up for sale in lots, each lot is treated to be the subject of a
separate contract of sale.
b. Sale is complete when the auctioneer announces its completion by fall of hammer
or in another customary manner.
c. Right to bid may be reserved expressly by or on behalf of seller.
d. If such right is not reserved, it is not lawful for the auctioneer knowingly to take
any bid from seller.
e. Sale may be notified to be subject to a reserve or upset price.
f. If seller makes use of pretended bidding to raise the price, sale is voidable at the
buyer's option.