Sales of Goods Act:
The Sale of Goods Act 1979 is an Act of the United Kingdom which regulates contracts in which
goods are sold and bought. The Sale of Goods Act performs several functions.
A contract of sale is a legal contract an exchange of goods, services or property to be exchanged
Essentials elements of a Contract of Sale
The following six features are essential elements of any contract of sale of goods.
Goods
Price
Two parties
Transfer of ownership
All Essentials of a Valid Contract of Sale
Includes both a ‘sale‘ and ‘an agreement to sell‘
1. Two Parties: A contract of sale of goods is bilateral in nature wherein property in the
goods has to pass from one party to another. One cannot buy one’s own goods.
2. Goods: The subject matter of a contract of sale must be goods. Every kind of movable
property except actionable claims and money is regarded as ‘goods’. Contracts relating to
services are not considered as contract of sale. Immovable property is governed by a separate
statute, ‘Transfer of Property Act’.
3. Transfer of ownership: Transfer of property in goods is also integral to a contract of sale.
The term ‘property in goods’ means the ownership of the goods. In every contract of sale,
there should be an agreement between the buyer and the seller for transfer of ownership. Here
property means the general property in goods, and not merely a special property.
4. Price: The buyer must pay some price for goods. The term ‘price’ is ‘the money
consideration for a sale of goods’. Accordingly, consideration in a contract of sale has
necessarily to be in money. Where goods are offered as consideration for goods, it will not
amount to sale, but it will be called barter or exchange, which was prevalent in ancient times.
Similarly, if a person offers the goods to somebody else without consideration, it amounts to
a gift or charity and not sale. In explicit terms, goods must be sold for a definite amount of
money, called the price. However, the consideration can be partly in money and partly in
valued up goods. Furthermore, payment is not necessary at the time of making the contract of
sale.
5. All essentials of a Valid contract: A contract of sale is a special type of contract,
therefore, to be valid, it must have all the essential elements of a valid contract, viz., free
consent, consideration, competency of contracting parties, lawful object, legal formalities to
be completed, etc. A contract of sale will be invalid if important elements are missing. For
instance, if A agreed to sell his car to B because B forced him to do so by means of undue
influence, this contract of sale is not valid since there is no free consent on the part of the
transferor.
6. Includes both a ‘Sale’ and ‘An Agreement to Sell’: The ‘contract of sale’ is a generic
term and includes both sale and an agreement to sell. The sale is an executed or absolute
contract whereas ‘an agreement to sell’ is an executory contract and implies a conditional
sale.
Transfer of Ownership
The word “Property in the Goods” means the legal ownership or title to the goods. Sale of goods
involves transfer of ownership or property from the seller to the buyer. It is necessary to determine the time at
which the ownership of the goods is transferred to the buyer.
In a contract of sale, ownership transfers from the supplier to the buyer as follows:
specific goods ie goods that are identified and agreed
- the buyer takes ownership when the contract is made, irrespective of payment or delivery
future goods ie goods that are to be manufactured or acquired on the buyer’s behalf
- the buyer takes ownership when he receives the goods allocated, or notice of their
delivery
unascertained goods ie goods defined by description or by sample from a larger
consignment
- the buyer takes ownership when he receives the goods allocated, or notice of their
delivery
Conditions and Warranties
A condition is a stipulation essential to the main purpose of the contract, the breach of which
gives rise to right to treat the contract as repudiated.
A warranty is a stipulation collateral to the main purpose of the contract, the breach of which
gives rise to a claim for damages but not to a right to reject the goods and treat the contract as
repudiated.
THE CARRIAGE OF GOODS ACT
1. This Act may be cited as the Carriage of Goods Act
PART I. Carriage of Goods by Land
* In this Part “carrier” means any person or corporation engaged in the business of a common carrier of
goods €or hire, whether by land or by sea, from one part of the Island to another.
* For the purposes of this Act every office, warehouse, receiving house or other place, which shall be
used or appointed by any carrier as aforesaid for the receiving of parcels and packages to be conveyed
as aforesaid, shall be deemed and taken to be the receiving house, warehouse or office, of such carrier.
* Nothing in this Act contained shall extend or be Specid construed to annul, or in anywise affect, any
special contract affected. between any such carrier and any other parties for the conveyance of goods
and merchandise.
PART II. Carriage of Goods by Sea
* Subject to the provisions of this Part the rules contained in the Schedule shall have effect in relation to
and in connection with the carriage of goods by sea in ships carrying goods from any port in this Island
to any other port whether in or outside of this Island.
* There shall not be implied in any contract for the carriage of goods by sea to which the rules apply any
absolute undertaking by the carrier of the goods to provide a sea-worthy ship.
* Every bill of lading or similar document of title issued in this Island which contains or is evidence of any
contract to which the rules apply shall contain an express statement that it is to have effect subject to
the provisions of the said rules as applied by this Act.
PART │││. Carriage of Goods by Air
The air carrier is liable under the convention for delay and for the loss of or damage to the
goods, provided that the occurrence that caused the prejudice took place during the carriage by
air. The carrier is relieved from liability if he proves that he had taken all the necessary measures
to avoid the damage or that it was impossible for him to take such measures. Unlike carriers by
land and by water, the air carrier is not bound to prove the actual cause of the damage and that
the damage was not attributable to his fault. If the cause of the damage remains unknown, there
is no recovery. Contractual provisions tending to relieve the carrier from liability are null and
void, except those concerning limitation of liability for loss or damage attributed to
the inherent vice of the goods. Provisions tending to increase the liability of the carrier, however,
are valid.
