Sale of Goods Act (SOGA) 1930
Section 2(7)– goods means all kinds of moveable properties.
eg— grass, part of land or attached to land, shares, Machinery etc
Money is not a good neither actionable claims.
Actionable Claim is a plain unsecured debt which can be claimed by a person against another person and which can be taken in civil courts. eg money borrowed without any mortgage.
Topics covered in Act are
- concept of sale of goods
- conditions resulting from sale
- delivery of goods
- passing of property and other obligations of parties involved
- transfer of ownership
Essential elements for contract of a sale
- 2 or more than 2 parties
- Agreement to transfer the ownership of goods
- subject of contract must be goods
- Price should be discussed and agreed
- It can be absolute or condition
- Compliant to Indian Contract Act 1872
Sale–when a contract is executed/implemented/made into practice it becomes sale,transfer of ownership occurs.
Agreement to sale–Transfer of goods or services happens on future date based on fulfillment of certain condition.
Document of title of goods —receipt, railway ticket etc which makes you entitle to avail the services today or a later date.
Goods can be classified as 1.existing 2.Future 3.Contingent
Mode of payment of Price
- Earnest Money–Payment in advance for any services or goods
- Taxation—Change in tax rates will affect amount or price to be paid, while this can be excluded if sale of agreement is made between parties.
Warranties vs contract
warranties are intended to be fundamental in nature eg. quality of goods–breach of those will be equivalent to breach of contract
Implied warranties eg buyer will have possession of goods
Contract are special/inferior or subsidiary bindings by the parties, breach of those will not end contract but then party committing this will be liable to pay the damage.
Implied contract–goods will be of better quality
Possession and ownership of goods are different things.
Sections 18 to 25 lay down the rules which determine when property passes from the seller to the buyer–
- Specific or ascertained goods:
Specific goods in a deliverable state
Specific goods not in a deliverable state
- Un Ascertained or future goods
- Unconditional appropriation
- Mode of appropriation
- Seller reserving the right of disposal
Section 26 says unless stated or agreed risk of the goods remains of sellers before the property is not transferred to buyer.
Transfer of ownership is delivery, Section 33 provides that delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorized to hold them on his behalf. Therefore, any other act, in addition to transfer of physical possession, which the parties agree to treat as equivalent thereto, has the effect of delivery.
Rights of an unpaid seller
Sale of goods is contract between buyer and seller where one has rights to take goods and other has right for consideration and legal obligation to fulfill.If buyer fails to pay for services seller have rights to exercise
If seller is not paid or is not paid with negotiable amount or services these rights apply
(i) Rights under the Ss.73-74 of the Indian Contract Act, 1872, i.e., to recover damages for breach of contract
(ii) Rights under the Sale of Goods Act, 1930: (a) rights against the goods; (b) rights against the buyer personally
Rights against goods are—
1 Right to keep goods under possession until debt is not recovered
2. Right to stoppage in transit—Subject to the provisions of this Act, when the buyer of goods becomes insolvent, the unpaid seller who has parted with the possession of the goods has the right of stopping them in transit, that is to say, he may resume possession of the goods as long as they are in the course of transit, and may retain them until payment or tender of the price.
3. Rights of resale of goods
Rights against buyers are—
1.Sue the buyers for non payment of price
2.can file a suit for claim of interest
Even buyer has the rights against the seller for breach of contract which are
Asking for damages for non-delivery
Right of recovery of the price
Specific performance as mentioned in contract
Suit for breach of condition or warranty
Anticipatory breach—a declaration by the promising party to a contract, that he or she does not intend to live up to his or her obligations under the contract.
Recovery of interest for the amount paid
Doctrine of Caveat Emptor: Let the buyer beware:: Buyer is purchasing at his own risk
A doctrine that often places on buyers the burden to reasonably examine property before purchase and take responsibility for its condition. Especially applicable to items that are not covered under a strict warranty.
The basic premise that the buyer buys at his/her own risk and therefore should examine and test a product himself/herself for obvious defects and imperfections. Caveat emptor still applies even if the purchase is “as is” or when a defect is obvious upon reasonable inspection before purchase. Since implied warranties and consumer protections have come upon the legal landscape, the seller is held to a higher standard of disclosure than “buyer beware” and has responsibility for defects which could not be noted by casual inspections.