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SALE OF GOODS ACT

Ministry of Law and Justice

Act nº 3 of 1930


  • Chapter I
  • Chapter II
  • Chapter III
  • Chapter IV
  • Chapter V
  • Chapter VI
  • Chapter VII
  • Act nº 3 of 1930

Preamble

THE SALE OF GOODS ACT, 1930

[Act, No. 3 of 1930 ]1

[ 15 th March, 1930 ]

PREAMBLE

An Act to define and amend the law relating to the sale of goods.

whereas it is expedient to define and amend the law relating to the sale of goods; It is hereby enacted as follows:--

1. For Statement of Objects and Reasons and for Report of Special Committee, see Gazette of India, 1929, Pt. V, p. 163 ; for Report of Select Committee, see Gazette of India, 1930, Ft. V . p . 1 . The Act has been extended to Berar by Act 4 of 1941, to Dadra and Nagar Haveli by Reg. 6 of 1963, sec. 2 and Sch. I (w .e.f . 1 - 7 - 1965 ); to Goa, Daman and Diu by Reg. 11 of 1963, sec. 3 and Sch.; to Pondicherry by the Pondicherry (Extension of Laws) Act, 1968, sec. 3 and Sch.; and to Lakshadweep by Reg. 8 of 1965, sec. 3 and Sch. (w .e.f . 1 - 10 - 1967 ).


Chapter I

Section 1. Short title, extent and commencement

(1) This Act may be called the 1 [***] Sale of Goods Act, 1930.

2 [(2) It extends to the whole of India 3 [except the State of Jammu and Kashmir].]

(3) It shall come into force on the 1st day of July, 1930.

1. The word "Indian" omitted by Act 33 of 1963, sec. 2 (w.e.f. 22-9-1963).

2. Substituted by the A.O. 1950, for sub-section (2).

3. Substituted by Act 3 of 1951, sec. 3 and Sch., for "except Part BStates."


Section 2. Definitions

In this Act, unless there is anything repugnant in the subject or context,--

(1 ) "buyer" means a person who buys or agrees to buy goods;

(2 ) "delivery" means voluntary transfer of possession from one person to another;

(3 ) goods are said to be in a "deliverable state" when they are in such state that the buyer would under the contract be bound to take delivery of them;

(4 ) "document of title to goods" includes a bill of lading, dock-warrant, warehouse keeper's certificate, wharfingers' certificate, railway receipt, 1 [multimode transport document,] 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, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented;

(5 ) "fault" means wrongful act or default;

(6 ) "future goods" means goods to be manufactured or produced or acquired by the seller after the making of the contract of sale;

(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;

(8 ) a person is said to be "insolvent" who has ceased to pay hi s debts in the ordinary course of business, or cannot pay hi s debts as they become due, whether he has committed an act of insolvency or not;

(9 ) "mercantile agent" means a me rcantile agent having in the customary course of business as such agent authority either to sell goods, or to consign goods for the purposes of sale, or to buy goods, or to raise money on the security of goods;

(10 ) "price" means the money consideration for a sale of goods;

(11 ) "property" means the general property in goods, and not mere ly a special property;

(12 ) "quality of goods" includes their state or condition;

(13 ) "seller" means a person who sells or agrees to sell goods;

(14 ) "specific goods" means goods identified and agreed upon at the time a contract of sale is made; and

(15 ) expressions used but not defined in this Act and defined in the Indian Contract Act, 1872 ( 9 of 1872 ), have the meanings assigned to them in that Act.

1 . Inserted by Act 28 of 1993, sec. 31 and Sch.(w.e.f. 16-10-1992).


Section 3. Application of provisions of Act 9 of 1872

The unrepealed provisions of the Indian Contract Act, 1872, save in so far as they are inconsistent with the express provisions of this Act, shall continue to apply to contracts for the sale of goods.

Chapter II

Section 4. Sale and agreement to sell

Contract of Sale

(1) 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. 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.

Section 5. Contract of sale how made

Formalities of the contract

(1) A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. The contract may provide for the immediate delivery of the goods or immediate payment of the price or both, or for the delivery or payment by instalments, or that the delivery or payment or both shall be postponed.

(2) Subject to the provisions of any law for the time being in force, a contract of sale may be made in writing or by word of mouth, or partly in writing and partly by word of mouth or may be implied from the conduct of the parties.

Section 6. Existing or future goods

(1) The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or future goods.

(2) There may be a contract for the sale of goods the acquisition of which by the seller depends upon a contingency which may or may not happen.

(3) Where by a contract of sale the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods.

Section 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.

Section 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.

Section 9. Ascertainment of price

(1) The price in a contract of sale may be fixed by the contract or may be left to be fixed in manner thereby agreed or may be determined by the course of dealing between the parties.

(2) Where the price is not determined in accordance with the foregoing provisions, the buyer shall pay the seller a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case.

Section 10. Agreement to sell at valuation

(1) Where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party and such third party cannot or does not make such valuation, the agreement is thereby avoided:

Provided that, if the goods or any part thereof have been delivered to, and appropriated by, the buyer, he shall pay a reasonable price therefor.

(2) Where such third party is prevented from making the valuation by the fault of the seller or buyer, the party not in fault may maintain a suit for damages against the party in fault.

Section 11. Stipulations as to time

Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract.

Section 12. Condition and warranty

(1) A stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition or a warranty.

(2) 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.

(3) 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.

(4) 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.