by In the context of the Sale of Goods Act, 1930, the term “goods” refers to every kind of movable property, excluding actionable claims and money. This includes tangible and intangible items that can be bought and sold in the course of business. The Act provides a comprehensive definition under Section 2(7), which encompasses goods that are existing, future, or contingent in nature.
Existing goods are those that are already owned and possessed by the seller at the time of the contract. These can be specific (identified and agreed upon), ascertained (determined after the agreement), or unascertained (not specifically identified at the time of contract). Future goods refer to goods that will be manufactured or acquired by the seller after the contract is made. Contingent goods are a subset of future goods, the acquisition of which depends upon a particular event.
Goods can be of various types: consumer goods, capital goods, raw materials, or finished products. They also include electricity, gas, water (if packaged), growing crops, and things attached to or forming part of the land (if agreed to be severed).
The concept of goods is vital in distinguishing a contract of sale from other contracts like services or immovable property. Only when the subject matter is classified as “goods” under the Act does the Sale of Goods Act, 1930 apply, making this definition crucial for determining the legal framework and remedies in case of disputes.
Features of Goods:
- Movable Property
Goods under the Sale of Goods Act refer exclusively to movable property. They exclude immovable property such as land and buildings. Movable property includes physical objects that can be touched and transferred, like furniture, machinery, and vehicles. Additionally, certain items such as gas, water, and electricity are treated as goods if they are supplied in measurable form. This feature ensures that only tangible, transferable items fall under the definition of goods, helping to distinguish them from immovable assets and intangible rights.
- Existing, Future, and Contingent Goods
Goods may be classified as existing, future, or contingent. Existing goods are physically present and owned by the seller at the time of the contract. Future goods are those the seller plans to manufacture or acquire after the contract is formed. Contingent goods are future goods whose acquisition depends on uncertain events. This classification is vital in defining the parties’ rights and obligations. For example, a contract involving future goods is more likely to have conditions regarding delivery time and production risks.
- Tangibility
One core feature of goods is their tangibility, meaning they can be perceived by the senses. This includes both physical presence and measurable forms like electricity or gas when supplied in defined quantities. This feature distinguishes goods from services or rights, which are intangible. Tangibility ensures that goods can be handled, inspected, and evaluated before or during the sale process, adding to their marketability and aiding legal enforcement of sale contracts.
- Capable of Ownership and Transfer
Goods must be capable of being owned and transferred from one party to another. This ownership implies the right to use, sell, or dispose of the item. A valid sale involves not only physical possession but legal ownership being passed from seller to buyer. This feature ensures that a buyer obtains a lawful claim to the item and that the seller has the right to sell it. Intangible claims or illegal goods do not fulfill this requirement under the Act.
- Excludes Money and Actionable Claims
The definition of goods excludes money and actionable claims. Money, being a standard medium of exchange, is not treated as a good. Similarly, actionable claims like debts, insurance claims, or shares do not constitute goods under the Act because they represent rights enforceable by legal action, not physical items for sale. This feature ensures the focus remains on the sale of tangible or clearly defined movable property, differentiating sale contracts from financial transactions or legal claims.
- Subject to Transfer of Ownership
A key feature of goods is that they are subject to transfer of ownership through a sale. The essence of a contract of sale is the seller transferring property (ownership) in the goods to the buyer for a price. This ownership transfer is legally significant because it determines risk, liability, and the buyer’s right to claim or use the goods. The exact time of ownership transfer may vary based on the contract terms, but it remains a central element in identifying the item as a good.
