Sale of Goods Act, 1930 – First Unit Detailed Analysis
1. Introduction
- Before 1930, contracts relating to sale of goods were part of the Indian Contract Act, 1872.
- To give more clarity, the Sale of Goods Act, 1930 was enacted and came into force on 1st July 1930.
- Based on English Sale of Goods Act, 1893.
- It governs only contracts of sale of goods (not barter, not services, not immovable property).
2. Meaning of Sale (Section 4)
- Contract of Sale = An agreement where seller transfers or agrees to transfer ownership in goods to buyer for a price.
- Two forms:
- Sale – Immediate transfer of ownership.
- Agreement to Sell – Transfer at a future date or on condition.
Case Law: Rowland v. Divall (1923) – Seller sold a stolen car. Since ownership never passed, buyer got refund.
3. Essential Elements of a Contract of Sale
- Two parties – Seller and buyer must be different persons.
- Case: Bharat Petroleum Corp. v. Great Eastern Shipping – A person cannot sell goods to himself.
- Goods – Subject matter must be movable goods (Sec. 2(7)).
- Price – Consideration must be in money, not barter.
- Transfer of Ownership – Ownership of goods must pass.
- Valid Contract – Must fulfill conditions of Indian Contract Act, 1872.
4. Definitions (Important Sections)
- Goods (Sec. 2(7)) – Every kind of movable property (not actionable claims or money). Includes stock, crops, etc.
- Case: UOI v. Delhi Cloth Mills – electricity is "goods."
- Price (Sec. 2(10)) – Money consideration for sale.
- Specific Goods (Sec. 2(14)) – Goods identified at time of contract.
- Future Goods (Sec. 2(6)) – Goods to be manufactured or acquired later.
- Document of Title (Sec. 2(4)) – Documents like bill of lading, warehouse receipt used to transfer ownership.
5. Types of Goods
- Existing Goods – already owned by seller.
- Future Goods – yet to be produced.
- Contingent Goods – acquisition depends on uncertain event.
👉 A. Abdul Rahman v. State Trading Corp. (1960) – Sale of future goods is only “agreement to sell,” not actual sale.
6. Distinction – Sale vs. Agreement to Sell
| Sale | Agreement to Sell |
|---|---|
| Ownership transferred immediately | Ownership transferred later |
| Risk passes to buyer | Risk remains with seller |
| Buyer can sue for goods | Only damages can be claimed |
👉 Case: Varley v. Whipp (1900) – Machine described as "new" but was second-hand. Since goods didn’t match description, agreement was void.
7. Formalities of a Contract of Sale (Sec. 5)
- Contract can be made in writing, by word of mouth, or implied from conduct.
- Delivery of goods and payment of price may be immediate, by installments, or deferred.
8. Conditions and Warranties (Secs. 12–17)
- Condition: Essential term → breach = rejection of goods.
- Warranty: Secondary term → breach = damages only.
👉 Wallis v. Pratt (1911) – Seeds supplied were different from contract → breach of condition.
9. Doctrine of Caveat Emptor (Sec. 16)
- Rule: “Let the buyer beware.” Buyer must check goods himself.
- Exceptions: reliance on seller’s skill, trade usage, goods by description/sample.
👉 Ward v. Hobbs (1878) – Seller sold pigs "with all faults," no liability.
👉 Kendall v. Lillico (1969) – Buyer relied on seller’s skill for animal feed, seller liable.
10. Performance of Contract (Secs. 31–44)
- Seller’s duty: Deliver goods.
- Buyer’s duty: Accept goods and pay price.
- Delivery may be actual, symbolic, or constructive.
👉 Great Northern Railway v. Swafield (1874) – Wrong delivery = seller still responsible.
11. Unpaid Seller’s Rights (Secs. 45–54)
- Against Goods – Lien, stoppage in transit, resale.
- Against Buyer – Suit for price, damages, interest.
👉 M/S Jute & Gunny Brokers v. Union of India (1961) – Seller can stop goods in transit if buyer insolvent.
12. Nature and Scope
- The Act covers:
- Formation of contract of sale.
- Types of goods and conditions/warranties.
- Transfer of property and risk.
- Rights of unpaid seller.
- Performance and remedies.
Conclusion
The Sale of Goods Act, 1930 is a specialized branch of contract law focusing on sale transactions. It balances buyer’s rights, seller’s protections, and remedies. Perfect 👍 You want me to give you detailed case law analysis under the Sale of Goods Act, 1930 (first unit) so you can use them in your LLB exam answers. I’ll explain facts, issues, judgment, and principle in easy exam language.
Important Case Laws under Sale of Goods Act, 1930 – First Unit
1. Rowland v. Divall (1923)
- Facts: Buyer bought a car from seller. Later it was found that the seller had no ownership (car was stolen).
- Issue: Can buyer recover price even though he used the car for some months?
- Judgment: Court held buyer entitled to refund. Since seller had no ownership, property never passed.
- Principle: Condition as to title (Sec. 14) – Seller must have ownership; otherwise contract is void.
2. Varley v. Whipp (1900)
- Facts: Buyer purchased a second-hand machine described as "new." On delivery, it was old and used.
- Issue: Was it a sale or only an agreement to sell?
- Judgment: Court held that since goods didn’t match description, the buyer could reject them.
- Principle: Sale by description (Sec. 15) – Goods must correspond with description.
3. Wallis v. Pratt (1911)
- Facts: Seller agreed to supply "English sainfoin seed." He delivered different seed. Buyer sowed them and got useless crop.
- Judgment: Court held this was breach of condition, not mere warranty. Buyer could reject.
- Principle: If goods don’t correspond with description, buyer may repudiate contract.
4. Ward v. Hobbs (1878)
- Facts: Seller sold pigs "with all faults" and gave no warranty. Pigs had disease. Buyer sued.
- Judgment: Court held seller not liable because he disclosed "as they are."
- Principle: Doctrine of Caveat Emptor (Sec. 16) – Buyer must examine goods unless exceptions apply.
5. Kendall v. Lillico (1969)
- Facts: Buyer purchased animal feed from seller. The feed turned out poisonous and animals died. Buyer relied on seller’s skill.
- Judgment: Court held seller liable as buyer relied on seller’s expertise.
- Principle: Exception to Caveat Emptor – Reliance on seller’s skill and judgment.
6. A. Abdul Rahman v. State Trading Corporation of India (1960)
- Facts: Contract for sale of "future goods." Buyer later sued for delivery.
- Judgment: Court held that sale of future goods is not a "sale" but only an agreement to sell.
- Principle: Sec. 4(3) – Future goods cannot be sold, only promised for future.
7. UOI v. Delhi Cloth Mills (1963)
- Facts: Issue was whether electricity is "goods."
- Judgment: Supreme Court held electricity is capable of abstraction, consumption, and sale, so it is goods.
- Principle: Goods (Sec. 2(7)) include all movable property.
8. Great Northern Railway v. Swafield (1874)
- Facts: Goods were sent by railway to wrong place. Railway became involuntary bailee.
- Judgment: Seller still responsible until goods delivered correctly.
- Principle: Performance of contract (Sec. 31–44) – Seller must ensure proper delivery.
9. M/S Jute & Gunny Brokers v. Union of India (1961)
- Facts: Buyer became insolvent. Seller tried to stop goods while in transit.
- Judgment: Court upheld seller’s right of stoppage in transit.
- Principle: Rights of Unpaid Seller (Sec. 45–54) – Seller can stop goods in transit if buyer insolvent.
10. Bharat Petroleum Corp. Ltd. v. Great Eastern Shipping Co. Ltd.
- Facts: Question was whether a person can sell goods to himself.
- Judgment: Court held no sale possible without two different parties.
- Principle: Essentials of sale – must be between buyer and seller (Sec. 4).
How to Write in Exam
- Always mention Section → Facts → Judgment → Principle.
- Example:
In Rowland v. Divall (1923), the seller sold a car but had no ownership. Court held buyer entitled to refund, as seller breached Sec. 14 (title condition). Thus, a valid sale requires the seller to have ownership.
Comments
Post a Comment