What is a Contract of Sale of Goods?

According to the provision of Section 4(1) of the Sale of Goods Act, 1930, a Contract of Sale of Goods is “A contract where the seller transfers or agrees to transfer the property in goods to the buyer for a price.” A contract of sale can also be established between one part-owner and another. Sales of Goods Act, 1930 also specifies that a contract of sale may be either absolute or conditional.

According to the provisions of Section 4(3) of the Sale of Goods Act, 1930; Sale means “Where under a contract of sale, the property in the goods is immediately transferred at the time of making the contract from the seller to the buyer, the contract is called a sale.” It refers to an Absolute Sale.

According to the provisions of Section 4(3) of the Sale of Goods Act, 1930 “An agreement to sell is when the transfer of the property in the goods is agreed to take place at a future time, or it is to take place with subject to fulfillment of some condition.”

Almost every type of business somewhere or the other involves the sale and purchase of goods as part of its business operation. In some cases, sales and purchases are made to support the main business framework, and in some cases, sales and purchases are the main business. Businesses often enter into a contract of sale to sell their commodities to other parties. The Sale of Goods Act, 1930 is an umbrella act that governs all forms of sales. A sale is a general contract wherein the seller or owner of particular goods transfers or agrees to transfer the goods to a buyer at an agreed price. The Sale of Goods Act has been codified and made as a separate enactment to contain the provisions relating to the sale of goods, as this was earlier contained under the provisions of Sections 76 to 123 of the Indian Contract Act, 1872. As per Section 2 of the Sale of Goods Act, 1930 “A contract of sale is a term that includes both sale and agreement to sell and is characterized by an offer to buy goods for a price or an offer to sell goods for a price, and acceptance of the offer.”

Geeky Takeaways:

• Every individual, whether a businessman or a common man, who deals in the transaction of goods regularly, must understand the important terms of the Sale of Goods Act, 1930.
• India is one of the largest economies that has adequate measures to ensure the safety of its business.
• The sale of commodities is one of the most important types of contract under the law in India.
• This act was passed because the provisions of the contract act were found to be inadequate to deal with new situations that were arising due to an increase in mercantile situations.