BUSINESS LAW & BUSINESS LAW & TAXATIONTAXATION

MBA 13 BATCH 1 MBA 13 BATCH 1

SAJIDA PARVEEN 40SAJIDA PARVEEN 40

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Sale of Goods Sale of Goods Act, 1930Act, 1930

LEARNING OUTCOMESLEARNING OUTCOMES History of Sales of goods Act 1930History of Sales of goods Act 1930

Goods & their classificationGoods & their classification

Performance of contract Performance of contract

Essential features of Sale of goods ActEssential features of Sale of goods Act

Sale & Agreement to saleSale & Agreement to sale

Condition & warrantyCondition & warranty

Unpaid sellerUnpaid seller

End of TransitionEnd of Transition

ConclusionConclusion

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HISTORICAL REVIEWHISTORICAL REVIEW

The law relating to sale and purchase of goods The law relating to sale and purchase of goods

as the Sale of Goods Act. as the Sale of Goods Act.

This act came into force in 1This act came into force in 1stst July 1930. July 1930.

The provisions of the Contract Act still apply to The provisions of the Contract Act still apply to

contracts of sale of goods except where the contracts of sale of goods except where the

Sale of Goods Act, 1930 specifically provides Sale of Goods Act, 1930 specifically provides

for the contrary.for the contrary.

SALE OF GOODS ACTSALE OF GOODS ACT

A contract of sale is a legal contract an exchange of goods, services or property to be exchanged from seller to buyer for an agreed upon value in money paid or the promise to pay same.

It is a specific type of legal contract.

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GoodsGoodsGoods means every kind of movable Goods means every kind of movable

property other than: property other than:

Actionable claims and money. Actionable claims and money.

Things attached to or forming part of the Things attached to or forming part of the

land.land.

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CLASSIFICATION OF GOODS CLASSIFICATION OF GOODS

Goods may be…..Goods may be…..

1. Existing GoodsGoods which either owned or possessed by Goods which either owned or possessed by the seller at the time of contract of sale.the seller at the time of contract of sale.

2. Specific GoodsMeans goods identified and agreed upon at Means goods identified and agreed upon at the time a contract of sale is made.the time a contract of sale is made.

CLASSIFICATION OF GOODS CLASSIFICATION OF GOODS

3.Future Goods:Means goods to be manufactured or produced or Means goods to be manufactured or produced or acquired by the seller after making of the contract of acquired by the seller after making of the contract of sale.sale.

4. Contingent GoodsThe goods the acquisition of which by the seller The goods the acquisition of which by the seller depends upon a contingent event which may or may depends upon a contingent event which may or may no happen. no happen.

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PERFORMANCE OF CONTRACTPERFORMANCE OF CONTRACTWho must perform?Sec.37: “The parties to a contract must either

perform, or offer to perform their respective promises,

unless such performance is dispensed with or excused under the provisions of this Act, or of any other law.”

Representative’s Liability: Promises bind the legal representative of the deceased promisor.

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Tender of Performance Tender of Performance

It is the duty of the seller to deliver the goods and It is the duty of the seller to deliver the goods and of the buyer to accept and pay for them. of the buyer to accept and pay for them.

Delivery may be made by doing anything that Delivery may be made by doing anything that shall be treated as delivery, or shall be treated as delivery, or

which has the effect of putting the goods in the which has the effect of putting the goods in the possession of the buyer, or possession of the buyer, or

of any person authorized to hold them on his of any person authorized to hold them on his behalf. behalf.

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Essential Features of Sale Essential Features of Sale Of Goods Act (1930) Of Goods Act (1930)

Bilateral ContractBilateral Contract

Money ConsiderationMoney Consideration

GoodsGoods

Passing of PropertyPassing of Property

Essential Elements of a ContractEssential Elements of a Contract

BILATERAL CONTRACTBILATERAL CONTRACT

There must be 2 distinct parties i.e., a buyer and a seller.

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Money ConsiderationMoney Consideration

The consideration for the contract of sale, called price, must be money.

The buyer shall pay the seller The buyer shall pay the seller a reasonable price.a reasonable price.

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GoodsGoodsGoods which form the subject matter of the contract of sale must

be movable. ExamplesStocks and sharesGrowing cropsEquipments

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Passing Of PropertyPassing Of Property

There must be a transfer of general There must be a transfer of general property as distinguished from special property as distinguished from special property in goods from the seller to the property in goods from the seller to the buyer.buyer.

If A own certain goods, he has general If A own certain goods, he has general property in the goods. If he pledges property in the goods. If he pledges them with B, B has special property in them with B, B has special property in the goods.the goods.

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Essential Elements of A Valid Essential Elements of A Valid CONTRACTCONTRACT

A contract is made by an offer to buy or sell goods for a price and the acceptance of such offer.

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SALE & AGREEMENT TO SALE & AGREEMENT TO SALESALE

Property in the goods is transferred from the seller to the buyer- sale

Transfer of the property in the goods is to be taken place at some future date or after fulfillment of some condition,

-AGREEMENT TO SALE

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SALE VS AGREEMENT TO SALESALE VS AGREEMENT TO SALE

1. Ownership is with the buyer

2. Executed contract3. Sue for price, in case

of breach4. Goods lost by

accident then loss falls on the buyer.

1. Ownership is with the seller

2. Executory contract3. Sue for damages

only, in case of breach

4. Goods lost by accident then loss

falls on the Seller.

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SALE AGREEMENT TO SALE

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Conditions and WarrantiesConditions and WarrantiesCONDITIONCONDITION“A condition is a agreed essential to the main “A condition is a agreed essential to the main purpose of the contract, the breach of which purpose of the contract, the breach of which gives rise to a right to treat the contract as gives rise to a right to treat the contract as repudiated”. repudiated”.

WARRANTYWARRANTY“A warranty is agreed collateral to the main “A warranty is agreed collateral to the main purpose of the contract, the breach of which purpose of the contract, the breach of which gives rise to only claim for damages but not to a gives rise to only claim for damages but not to a right to reject the goods and treat the contract as right to reject the goods and treat the contract as repudiated”. repudiated”.

DIFFERENCE BETWEEN CONDITION & DIFFERENCE BETWEEN CONDITION & WARRANTYWARRANTY

CONDITIONCONDITION

1.1. A condition is agreement (in a A condition is agreement (in a contract), which is essential to contract), which is essential to the main purpose of the contract.the main purpose of the contract.

2.2. A breach of condition gives the A breach of condition gives the aggrieved party a right to sue for aggrieved party a right to sue for damages as well as the right to damages as well as the right to repudiate the contract.repudiate the contract.

3.3. A breach of condition may be A breach of condition may be treated as a breach of warranty treated as a breach of warranty in certain circumstances.in certain circumstances.

WARRANTYWARRANTY

1.1. A warranty is a agreement, A warranty is a agreement, which is only collateral or which is only collateral or subsidiary to the main purpose of subsidiary to the main purpose of the contract. the contract.

2.2. A breach of warranty gives only A breach of warranty gives only the right to sue for damages. the right to sue for damages. The The contract cannot be repudiatedcontract cannot be repudiated. .

3.3. A breach of warranty cannot be A breach of warranty cannot be treated as a breach of condition.treated as a breach of condition.

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Unpaid Seller Unpaid Seller

The seller of goods is deemed to be an The seller of goods is deemed to be an "unpaid" seller –"unpaid" seller –

when the whole of the price has not been when the whole of the price has not been paid or tendered; orpaid or tendered; or

when a bill of exchange or other negotiable when a bill of exchange or other negotiable instruments has been received as instruments has been received as conditional payment, conditional payment,

the conditions has not been fulfilled by the conditions has not been fulfilled by reason of the dishonor of the instrument or reason of the dishonor of the instrument or otherwise. [Sec 45(1)]otherwise. [Sec 45(1)]

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When Transit comes To An When Transit comes To An EndEnd

Rejection by buyerRejection by buyer If the goods are rejected by the buyer, and the If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of carrier or other bailee continues in possession of them, the transit is not at an end. them, the transit is not at an end.

Wrongful refusal to deliver Wrongful refusal to deliver Where the carrier wrongfully refuses to deliver the Where the carrier wrongfully refuses to deliver the goods to the buyer or his agent, the transit is at an goods to the buyer or his agent, the transit is at an end.end.

Part delivery Part delivery Where the goods have been delivered in part, the Where the goods have been delivered in part, the seller may stop the remainder of the goods, unless seller may stop the remainder of the goods, unless the part delivery shows an agreement to give up the part delivery shows an agreement to give up the possession of the whole.the possession of the whole.

RETURNING FAULTY GOODSRETURNING FAULTY GOODS

If you buy a product that turns out to be faulty, you can choose to reject it which means you can give it back and get a refund.

But, the law only gives you a reasonable time to do this – what's reasonable depends on the product and how obvious the fault is.

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TOP TIPTOP TIP

To get a refund on a faulty item, you need to

reject it and return it within a reasonable time after purchase - usually

three to four weeks.2424

CONCLUSION….SALE OF CONCLUSION….SALE OF GOODS ACTGOODS ACT

All goods must be:

* As described *Of satisfactory quality *Fit for purpose

*If they are not the seller is in the breach of contract and you have a claim under the Sale of Goods Act (1930).

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THANKYOU!!THANKYOU!!

QUESTIONS??QUESTIONS??

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