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Contract of Sale of Goods and Hire-Purchase 1. Meaning and Definition of Contract of Sale The law relating to sale of goods is governed by the Sale of Goods Act, 1930 , which is based on the principles of the Indian Contract Act, 1872 . Section 4(1) – Definition “A 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.” 2. Essential Elements of a Contract of Sale To be a valid sale, the following conditions must be satisfied: (i) Two Parties – Seller and Buyer There must be two distinct parties – a seller (who sells) and a buyer (who buys). A person cannot buy his own goods. Example: If a partner buys goods from the firm, it is valid since the firm and partner are legally distinct. (ii) Transfer of Property (Ownership) The most important feature of a sale is the transfer of ownership (property in goods) from seller to buyer. The transfer may be immediate (in a sale) or in future ...