Definition and Types of Goods of Sales of Goods Act, 1930
by Goods form the subject matter of a contract of sale under the Sale of Goods Act, 1930. According to the Act, only goods can be bought and sold through a contract of sale. The classification of goods is important because different legal rules apply to different types of goods regarding ownership, transfer, risk, and delivery. The Act classifies goods into various categories such as existing goods, future goods, contingent goods, specific goods, and unascertained goods.
Definition of Goods (Section 2(7)):
According to Section 2(7) of the Sale of Goods Act, 1930, goods mean every kind of movable property other than actionable claims and money. The term 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. Goods may be tangible or intangible movable property capable of ownership and transfer. Immovable property such as land and buildings is not included within the definition. Goods constitute the essential subject matter of every contract of sale under the Act.
Types of Goods
1. Existing Goods
Existing goods are goods that are owned or possessed by the seller at the time the contract of sale is made. These goods are already in existence and available for sale when the agreement is entered into. According to the Sale of Goods Act, 1930, existing goods may be specific, ascertained, or unascertained. Since the goods already exist, ownership can pass immediately or at a future date depending on the terms of the contract. Examples include goods displayed in a shop or products stored in a warehouse. Existing goods are the most common subject matter of sale transactions.
2. Specific Goods
Specific goods are goods that are identified and agreed upon at the time the contract of sale is made. They are separately distinguished from other goods of the same description. According to Section 2(14) of the Sale of Goods Act, 1930, specific goods are goods identified and agreed upon when the contract is formed. Since the goods are clearly identified, there is no uncertainty regarding the subject matter. For example, a particular car with a specified registration number or a particular painting selected by the buyer constitutes specific goods. Ownership can pass according to the contract terms.
3. Ascertained Goods
Ascertained goods are goods that become identified and appropriated to the contract after the agreement is made. The Act does not expressly define ascertained goods, but they are distinguished from unascertained goods through subsequent identification. These goods are selected from a larger bulk and earmarked for a particular buyer. For example, if a buyer agrees to purchase 100 bags of rice from a stock of 1,000 bags and those 100 bags are later separated, they become ascertained goods. Ownership generally passes only after the goods have been identified and appropriated to the contract.
4. Unascertained Goods
Unascertained goods are goods that are not specifically identified at the time the contract is made. They form part of a larger quantity and are not separated or earmarked for a particular buyer. For example, an agreement to purchase 50 litres of oil from a tank containing 5,000 litres involves unascertained goods. Ownership in such goods does not pass to the buyer until the goods are ascertained and appropriated to the contract. This classification is important because transfer of property and risk depends upon the identification of the goods involved.
5. Future Goods
According to Section 2(6) of the Sale of Goods Act, 1930, future goods are goods that will be manufactured, produced, acquired, or obtained by the seller after making the contract of sale. These goods do not exist or are not owned by the seller at the time of the contract. A contract relating to future goods operates as an agreement to sell rather than an immediate sale. For example, a farmer agreeing to sell next season’s crop or a manufacturer agreeing to supply products yet to be produced involves future goods. Ownership passes only when the goods come into existence.
6. Contingent Goods
Contingent goods are a type of future goods whose acquisition by the seller depends upon the occurrence or non occurrence of an uncertain event. The seller does not presently own the goods and may acquire them only if the specified contingency occurs. For example, A agrees to sell to B goods expected to arrive on a ship from another country. If the goods do not arrive, the contract may become ineffective. Contingent goods involve uncertainty regarding availability. Therefore, the transfer of ownership depends upon the happening of the event upon which the contract is contingent.
7. Movable Goods
Movable goods are goods that can be transferred from one place to another without affecting their nature or value. According to Section 2(7) of the Sale of Goods Act, 1930, the term goods generally includes movable property except actionable claims and money. Examples include machinery, furniture, vehicles, books, electronic devices, and stock. Movable goods form the primary subject matter of contracts of sale. Since they can be physically or legally transferred, they are capable of ownership transfer under the Act. The law relating to sale mainly applies to movable goods.
8. Intangible Goods
Intangible goods are movable properties that do not have a physical existence but possess value and can be transferred. Examples include shares, stocks, patents, trademarks, copyrights, and goodwill. The definition of goods under Section 2(7) includes stock and shares, thereby recognizing certain intangible properties as goods. These goods can be bought, sold, and transferred according to law. Although they cannot be physically possessed like tangible goods, they have commercial value and ownership rights. Intangible goods play an important role in modern business and commercial transactions.