Sales of Goods Act 1930: Scope of Act

Sale of Goods Act, 1930 is a key piece of legislation that governs contracts relating to the sale and purchase of goods in India. It defines the rights, duties, remedies, and liabilities of both buyers and sellers, ensuring that transactions involving movable property are carried out fairly and legally.

Historical Background:

Originally, the law relating to the sale of goods was part of the Indian Contract Act, 1872 (Chapter VII). In order to provide clarity and a separate legal framework, it was carved out and enacted as a distinct law on 1st July 1930. The Act is largely based on the English Sale of Goods Act, 1893 and applies to the whole of India.

Scope of the Act:

The Act governs only movable goods, not immovable property or services. It applies to all forms of sale contracts, whether oral or written. It covers:

• Conditions and warranties

• Transfer of property

• Performance of the contract

• Rights of an unpaid seller

• Remedies for breach of contract

Key Definitions under the Act:

1. Goods: Every kind of movable property other than actionable claims and money. Includes stock, shares, crops, etc.

2. Buyer: A person who buys or agrees to buy goods.

3. Seller: A person who sells or agrees to sell goods.

4. Contract of Sale: An agreement where the seller transfers or agrees to transfer the ownership of goods to the buyer for a price.

5. Price: The money consideration for the sale of goods.

Types of Goods:

1. Existing Goods: Owned or possessed by the seller at the time of contract.

2. Future Goods: To be manufactured or acquired by the seller after the contract.

3. Contingent Goods: Depend on the occurrence or non-occurrence of a future event.

Essentials of a Valid Contract of Sale:

• Involves two parties: buyer and seller

• Transfer of ownership (immediate or future)

• Movable goods as subject matter

• Price as monetary consideration

• Voluntary consent and lawful object

Transfer of Ownership:

Ownership of goods passes from seller to buyer when:

• Goods are ascertained

• The contract is unconditional

• Delivery is complete or as agreed

This is crucial because risk follows ownership—once the property is transferred, the buyer bears the risk of loss or damage.