80 Sale of Goods Act, 1930
80.1 Background
The Sale of Goods Act, 1930 governs the sale of movable goods in India. It was carved out of the Indian Contract Act, 1872 (originally Sections 76–123) and made into a separate statute on 1 July 1930. It is based on the English Sale of Goods Act, 1893 (kapoor2023?).
80.2 Definition of Sale (Sec. 4)
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”. Two situations:
| Dimension | Sale | Agreement to Sell |
|---|---|---|
| Property | Transferred immediately | Transferred at a future date or on conditions |
| Type of contract | Executed | Executory |
| Risk | Passes with property to buyer | Stays with seller |
| Remedy on breach | Suit for price; damages | Damages only |
| Insolvency of buyer | Seller can recover only proportional dividend | Seller may refuse to deliver |
80.3 Essentials of a Contract of Sale
| Essential | Working content |
|---|---|
| Two parties | Seller and buyer |
| Goods | Movable property only — Sec. 2(7) |
| Price | Money consideration |
| Transfer of property | Ownership passes |
| All essentials of a valid contract | Free consent, capacity, lawful object |
| Includes both sale and agreement to sell | Sec. 4 |
80.4 Types of Goods (Sec. 6)
| Type | Working content |
|---|---|
| Existing goods | In existence and owned / possessed by seller |
| Future goods | To be manufactured, produced or acquired |
| Specific goods | Identified and agreed upon |
| Ascertained goods | Identified after the contract is made |
| Unascertained / Generic | Not specifically identified |
| Contingent goods | Acquisition depends on a contingency |
80.5 Conditions and Warranties (Sections 11–17)
| Dimension | Condition | Warranty |
|---|---|---|
| Importance | Essential to main purpose | Collateral to main purpose |
| Breach effect | Right to repudiate + damages | Damages only |
| Section | 12(2) | 12(3) |
A condition may be waived or treated as a warranty (Sec. 13).
80.6 Implied Conditions and Warranties
| Implied condition | Section |
|---|---|
| As to title | 14(a) |
| Sale by description | 15 |
| Sale by sample | 17 |
| Sale by description and sample | 15 + 17 |
| Quality / fitness for purpose | 16(1) |
| Merchantable quality | 16(2) |
| Wholesomeness | (eatables) |
| Implied warranty | Section |
|---|---|
| Quiet possession | 14(b) |
| Free from encumbrances | 14(c) |
| Disclosure of dangerous nature | — |
80.7 Caveat Emptor — Sec. 16
Caveat emptor — “let the buyer beware”. The buyer is responsible for examining goods. Exceptions:
- Buyer makes known the purpose; seller is in business of supplying.
- Sale by description — must match.
- Sale by sample — must correspond.
- Merchantable quality.
- Fraud or misrepresentation.
80.8 Transfer of Property (Sec. 18–25)
The Act distinguishes property (ownership) from possession. The general rules:
| Rule | Working content |
|---|---|
| Specific or ascertained goods | Property passes when parties intend (Sec. 19) |
| Unconditional sale of specific goods in deliverable state | At time of contract (Sec. 20) |
| Specific goods to be put in deliverable state | When seller does so and buyer is informed (Sec. 21) |
| Sale of unascertained / future goods | When goods are ascertained and unconditionally appropriated (Sec. 23) |
| Sale on approval / on return | When buyer signifies acceptance (Sec. 24) |
| Reservation of right of disposal | Seller retains until conditions met (Sec. 25) |
80.9 Risk Follows Property (Sec. 26)
Unless agreed otherwise, risk passes with property — res perit domino. So even if goods are still in seller’s hands but property has passed, loss falls on the buyer.
80.10 Doctrine of Nemo Dat Quod Non Habet (Sec. 27)
“No one can give a better title than he has” — a buyer from a non-owner gets no title. Exceptions (Sec. 27–30):
- Sale by mercantile agent.
- Sale by joint owner.
- Sale by person in possession after sale.
- Sale by buyer in possession before payment.
- Sale by unpaid seller (Sec. 54).
- Estoppel.
80.11 Performance and Delivery (Sec. 31–44)
Delivery may be:
| Mode | Working content |
|---|---|
| Actual | Physical transfer |
| Constructive | Acknowledgement that goods are held for buyer |
| Symbolic | Transfer of means of obtaining (e.g., key to warehouse) |
80.12 Unpaid Seller and Rights (Sec. 45–54)
An unpaid seller (Sec. 45) is one to whom the whole price has not been paid or tendered. The unpaid seller has rights against the goods and against the buyer:
| Against | Right |
|---|---|
| Against goods | Lien on goods (Sec. 47); Stoppage in transit (Sec. 50–52); Resale (Sec. 54); Withholding delivery |
| Against buyer | Suit for price (Sec. 55); Suit for damages (Sec. 56); Suit for repudiation (Sec. 60); Suit for interest |
80.13 Auction Sale (Sec. 64)
In an auction sale:
- Sale is complete on fall of the hammer.
- Bid may be retracted before that moment.
- Reserve price may be specified.
- Pretended bidding by seller is fraudulent.
80.14 Exam-Pattern MCQs
Q1. Which of the following is not an essential of a contract of sale?
A. Two parties — seller and buyer B. Goods (movable property) C. Money consideration D. Immovable property as the subject
Answer: D. Sale of immovable property is governed by the Transfer of Property Act 1882, not the Sale of Goods Act.
Q2. Match each type of goods with its definition:
| Type | Definition | ||
|---|---|---|---|
| (i) | Existing goods | (a) | Acquisition depends on a contingency |
| (ii) | Future goods | (b) | Identified after the contract |
| (iii) | Ascertained goods | (c) | In existence and owned by seller |
| (iv) | Contingent goods | (d) | To be manufactured or acquired |
A. (i)-(c), (ii)-(d), (iii)-(b), (iv)-(a) B. (i)-(a), (ii)-(b), (iii)-(c), (iv)-(d) C. (i)-(b), (ii)-(c), (iii)-(d), (iv)-(a) D. (i)-(d), (ii)-(a), (iii)-(c), (iv)-(b)
Answer: A.
Q3. A condition under the Sale of Goods Act:
A. Is collateral to the main purpose; breach gives only damages B. Is essential to the main purpose; breach gives right to repudiate plus damages C. Is the same as a warranty D. Cannot be waived
Answer: B. Condition (Sec. 12(2)) — essential; breach allows repudiation.
Q4. Match each implied condition with its section:
| Implied condition | Section | ||
|---|---|---|---|
| (i) | As to title | (a) | 17 |
| (ii) | Sale by description | (b) | 16(1) |
| (iii) | Fitness for purpose | (c) | 14(a) |
| (iv) | Sale by sample | (d) | 15 |
A. (i)-(c), (ii)-(d), (iii)-(b), (iv)-(a) B. (i)-(a), (ii)-(b), (iii)-(c), (iv)-(d) C. (i)-(d), (ii)-(c), (iii)-(b), (iv)-(a) D. (i)-(b), (ii)-(c), (iii)-(d), (iv)-(a)
Answer: A.
Q5. Caveat emptor means:
A. Let the seller beware B. Let the buyer beware C. Buyer first D. Seller first
Answer: B. Let the buyer beware — examine before purchase (Sec. 16, with exceptions).
Q6. Under nemo dat quod non habet:
A. A buyer from a non-owner generally gets no title B. A buyer always gets a good title C. The seller always retains title D. Only mercantile agents can transfer title
Answer: A. No one can give a better title than he has (Sec. 27, with exceptions).
Q7. Arrange the following in chronological order:
- Property passes for unascertained goods on appropriation
- Risk passes with property
- Specific goods in deliverable state — property at time of contract
- Sale on approval — property when buyer accepts
A. (iii), (i), (iv), (ii) B. (i), (ii), (iii), (iv) C. (iv), (iii), (ii), (i) D. (ii), (i), (iv), (iii)
Answer: A. Sec. 20 (specific) → Sec. 23 (unascertained) → Sec. 24 (approval) → Sec. 26 (risk).
Q8. Match each unpaid-seller right with its target:
| Right | Target | ||
|---|---|---|---|
| (i) | Lien on goods | (a) | Suit |
| (ii) | Stoppage in transit | (b) | Against goods (when in seller’s possession) |
| (iii) | Resale | (c) | Against goods (when with carrier) |
| (iv) | Suit for price | (d) | Sale of goods after notice |
A. (i)-(b), (ii)-(c), (iii)-(d), (iv)-(a) B. (i)-(a), (ii)-(b), (iii)-(c), (iv)-(d) C. (i)-(c), (ii)-(d), (iii)-(b), (iv)-(a) D. (i)-(d), (ii)-(a), (iii)-(c), (iv)-(b)
Answer: A.
- Sale of Goods Act 1930 governs movable goods. Carved out of ICA 1872; based on English SGA 1893.
- Sale vs Agreement to Sell: property transferred immediately vs in future.
- Goods classification: existing, future, specific, ascertained, unascertained, contingent.
- Conditions — essential; breach → repudiate + damages. Warranties — collateral; breach → damages only.
- Implied conditions: title (14a), description (15), sample (17), fitness (16-1), merchantability (16-2). Implied warranties: quiet possession (14b), free from encumbrance (14c).
- Caveat emptor (Sec. 16) — buyer beware; with exceptions.
- Transfer of property: Sec. 18–25. Specific goods in deliverable state — at time of contract (20). Unascertained goods — on appropriation (23). Sale on approval — on acceptance (24). Risk passes with property (26).
- Nemo dat quod non habet (Sec. 27) — buyer from non-owner gets no title; exceptions for mercantile agents, joint owners, possession-after-sale, etc.
- Unpaid seller rights — against goods: lien, stoppage in transit, resale; against buyer: suit for price, damages, interest, repudiation.