This PPT is an introduction to Sale of Goods Act, 1930. It is useful for BA.LLB, BBA.LLB as well as LLB. and BAF. students. For in-depth study, students should refer to textbooks and reference books.

1. SALE OF GOODS ACT, 1930
GUEST LECTURE AT SNDT UNIVERSITY, MUMBAI
BY SHRADDHA PANDIT IN 2023
VISITING FACULTY & DOCTORAL CANDIDATE AT NMIMS, MUMBAI

2. ACADEMIC PROFILE
• SHRADDHA PANDIT has qualified Maharashtra SET 2023 exam in first attempt. She is currently pursuing
PhD in Law at KMPSOL, NMIMS, Mumbai. She has completed her LLM in Criminal Law and Administration. In
addition, she has also completed a Post-Graduate Diploma in IPR and a Diploma in German. She has taught
subjects such as IPR, Hindu Law, Contract law, Public International Law, Gender Studies, Law and Medicine,
Jurisprudence, English, etc. as an Assistant Professor of Law at colleges affiliated to University of Mumbai
and SNDT Women’s University. Having stood as a Class Topper throughout school, college and law course,
she has also participated in numerous international Faculty Development Programs (FDPs), conferences,
summer schools and workshops.
• She has completed MOOCs taught by University of Exeter, UK, University of Padova, Italy and University of
Delhi. Organising the One Day Workshop on Vulnerable Sections of Society in December 2022 which was
funded by ICSSR gave her new insights into the world of law and social sciences. Her name featured in the
newspapers for the Dehradun Literature Festival in 2022 and the National Advocacy Workshop in 2020. She
represented her college at the Indo-German Exchange Program in 2013. She has also published numerous
articles, research papers in peer reviewed and UGC Care journals and blogs.

3. INTRODUCTION
• During the British rule in India, as India was not an independent sovereign
country, but a colony of the British empire, several laws which were passed by the
Parliament in the UK were brought to India and implemented here. For example,
The Indian Contract Act, 1872, which governed and still governs the law relating
to contracts, agreements and mercantile transactions.
• The Indian Contract Act has some provisions for sale of goods, until a new Act
was passed, namely the Sale of Goods Act, 1930 and the corresponding sections
of the Contract Act were removed.

4. • This 1930 Act was largely based upon the English Sale of Goods Act, 1893. It
came into force on 1st July, 1930.
• There are two types of transfer of property:
1) Movable – Goods – Sale of Goods Act, 1930
2) Immovable – Real estate/ Land – Transfer of Property Act, 1882

5. • So if you wish to sell your goods/products, you need to refer to the Sale of Goods
Act, 1930 and not TOPA, 1882 as it deals with immovable property only.

6. GOODS DEFINED
The 1930 Act defines Goods as-
"goods" means every kind of moveable 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.

10. HOW SHOULD THE GOODS BE?
• The 1930 Act defines Deliverable State as-
• 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.

11. HOW IS A CONTRACT OF SALE OF GOODS MADE?
• The 1930 Act explains -
• 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.
• 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.

12. ESSENTIALS OF CONTRACT OF SALE
 There must be atleast 2 (or more parties) to the sale.
Transfer of Property of Goods should take place or atleast the Agreement to
transfer the property of goods.
With transfer of possession of property, transfer of ownership of property also
takes place.
The subject matter of contract must be goods and not real estate.
Consideration involved is price of goods (money). No barter exchange is possible
in todays’ times.

13. The contract may be in writing or done verbally (orally).
The contract must be done between adults, minors cannot enter into contract.
The contract cannot be done by an insane person, it has be done between parties
of sound mind.
The contract must be done by free consent of both parties, that is without
coercion, undue influence, death threat, fraud, mistake or misrepresentation.

14. TYPES OF GOODS
• Existing Goods
• Goods which are physically in existence and which are in seller’s ownership or
possession at the time of entering the contract, are called existing goods.
• Eg. A, a supplier, enters into a contract with B, a shopkeeper, for selling the
existing stock of notebooks with him for the Academic Year 23-24.
• Future Goods
"future goods" means goods to be manufactured or produced or acquired by the
seller after the making of the contract of sale.
• Eg. A, a farmer, agrees to sell to B, a shopping mall, all the crops that his farm will
yield during the coming year. This is a contract for sale of future goods.

15. • Contingent Goods
• This type of goods are based on the possibility or contingency in the future, that
is the seller may or may not acquire the goods in the future.
• Eg. X contracts with Y and agrees to supply to him Spanish saffron which will be
brought by a ship from Spain to Mumbai. It is a contract for sale of contingent
goods. If the ship sinks, the contract becomes impossible to perform and
therefore, void and the seller is not liable.
• Goods can also be either perishable goods or durable goods.
• Eg. Fruits are perishable goods, whereas furniture or electronics are durable
goods.

16. PROHIBITED GOODS
• There are certain products or commodities which cannot be termed as “goods” in
the eyes of law as they are prohibited goods and cannot be allowed to be bought
or sold as per the 1930 Act.
• Eg. Radioactive substances, drugs, things of an obscene nature, which can be
derogatory to women, children or which may hurt religious sentiments of the
public, products made from animals or certain rare species of animals or birds,
etc.

17. SOME MORE DEFINITIONS
• The "buyer" means a person who buys or agrees to buy goods.
• "seller" means a person who sells or agrees to sell goods.
• “delivery" means voluntary transfer of possession from one person to another.
• "mercantile agent" means a mercantile 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.
• "price" means the money consideration for a sale of goods.
• "quality of goods" includes their state or condition.
• "specific goods" means goods identified and agreed upon at the time a contract
of sale is made.

18. • The contract for sale includes:
• Sale and an Agreement to Sale
• Where the seller transfers the ownership rights to the buyer immediately on
making the contract, it is a “Contract for Sale” or “Sale”.
• But, where the ownership rights are to pass on from the seller to the buyer at a
future date upon satisfaction of certain conditions is called “Agreement to Sale”.

20. RISK PRIMA FACIE PASSES WITH PROPERTY.
• 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.
• Provided that, where delivery has been delayed through the fault of either buyer or seller,
the goods are at the risk of the party in fault as regards any loss which might not have
occurred but for such fault.

22. CAVEAT EMPTOR
• A basic and vital principle of the law relating to Sale of goods is “Caveat Emptor”
which means “Let the buyer beware”. It is the duty of the buyer to be careful while
purchasing goods of the seller.
• It is the duty to the seller to deliver the goods and of the buyer to accept and pay
for them, in accordance with the terms of the contract of sale.

23. SALE OF STOLLEN GOODS
• The general rule is of law is based on “Nemo dat quod non habet”, which means a
person cannot transfer a better title to another person than he himself possesses.
• If anyone is selling stollen goods, it can be a void contract and also punishable
under the law of the land.
• In “Farguharson Bros. v. King & Co.” (1902), a person found a gold ring, and
having been unable to trace its rightful owner, he sold it to X, who bought it as he
did not know that the ring was a lost one. Under these circumstances, the true
owner is entitled to cover the ring from X.

24. CONDITION & WARRANTY
• The 1930 Act defines Condition and Warranty as
• “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.”
• “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.”

26. AUCTION SALE
• Auction sale. —In the case of a sale by auction—
• Where goods are put up for sale in lots, each lot is prima facie deemed to be the
subject of a separate contract of sale;
• the sale is complete when the auctioneer announces its completion by the fall of
the hammer or in other customary manner; and, until such announcement is
made, any bidder may retract his bid;
• a right to bid may be reserved expressly by or on behalf of the seller and, where
such right is expressly so reserved, but not otherwise, the seller or any one
person on his behalf may, subject to the provisions hereinafter contained, bid at
the auction;

27. • where the sale is not notified to be subject to a right to bid on behalf of the
seller, it shall not be lawful for the seller to bid himself or to employ any person
to bid at such sale, or for the auctioneer knowingly to take any bid from the seller
or any such person; and any sale contravening this rule may be treated as
fraudulent by the buyer;
• the sale may be notified to be subject to a reserved or upset, price;
• if the seller makes use of pretended bidding to raise the price, the sale is
voidable at the option of the buyer.
• (Welcome movie – Majnu Bhai’s painting is sold at an public auction)

28. RIGHTS OF THE UNPAID SELLER
• There are 3 rights provided to the unpaid seller:
• Unpaid Seller’s Right of Lien
• Right of Stoppage of Goods in Transit
• Right of Re-sale

29. UNPAID SELLER DEFINED
• The seller of goods is deemed to be an "unpaid seller" within the meaning of this
Act—
• (a) when the whole of the price has not been paid or tendered;
• (b) when a bill of exchange or other negotiable instrument has been received as
conditional payment, and the condition on which it was received has not been
fulfilled by reason of the dishonour of the instrument or otherwise.
• The term "seller" includes any person who is in the position of a seller, as, for
instance, an agent of the seller to whom the bill of lading has been endorsed, or a
consignor or agent who has himself paid, or is directly responsible for, the price.

30. UNPAID SELLER’S RIGHT OF LIEN
• Subject to the provisions of this Act, the unpaid seller of goods who is in
possession of them is entitled to retain possession of them until payment or
tender of the price in the following cases, namely:
• a) where the goods have been sold without any stipulation as to credit;
• (b) where the goods have been sold on credit, but the term of credit has expired;
• (c) where the buyer becomes insolvent.

31. • The seller may exercise his right of lien notwithstanding that he is in possession
of the goods as agent or bailee for the buyer.
• Eg. Mr. A was the owner of specific goods. A sold those goods to B, and took a
cheque of Rs.25,000. The cheque got dishonoured. Mr. A can exercise his right of
lien over the goods. He can sue B for non-payment and non-performance of his
part of the contract. Mr. A can therefore, not deliver the goods to B.

32. RIGHT OF STOPPAGE OF GOODS IN TRANSIT
• When the buyer of goods becomes insolvent, the unpaid seller who has parted
with the possession of the goods has the right of stopping them in transit, that is
to say, he may resume possession of the goods as long as they are in the course
of transit, and may retain them until payment or tender of the price.

33. RIGHT OF RE-SALE
• Where the goods are of a perishable nature, or where the unpaid seller who has
exercised his right of lien or stoppage in transit gives notice to the buyer of his
intention to re-sell, the unpaid seller may, if the buyer does not within a
reasonable time pay or tender the price, re-sell the goods within a reasonable
time and recover from the original buyer damages for any loss occasioned by his
breach of contract.
• In “Buchanan v. Audale” (1875), the court has tried to analyze the term,
“reasonable time”, that is if a re-sale is carried on in a hurried manner, without
proper advertisement and without giving the buyer reasonable time to respond
or pay the price, such a re-sale would not be valid.

34. REMEDIES FOR BREACH OF CONTRACT
• Where the seller wrongfully neglects or refuses to deliver the goods to the buyer,
the buyer may sue the seller for damages for non-delivery
• Specific performance of the contract
• Suit for anticipatory breach
• Suit for special damages

35. THANK YOU
• References:
• Sale of Goods Act, 1930 (Bare Act)
• Law of Sale of Goods by Avatar Singh (Eastern Book Company) available on Amazon.in:
https://www.amazon.in/Eastern-Companys-Goods-Avtar-Singh/dp/9351455572
• Do connect on:
• Shraddha Pandit
• Linkedin https://in.linkedin.com/in/shraddha-pandit-1267591a6