Sales of Goods Act, 1930


A sale is an absolute contract. A sales contract consists of an offer to sell or buy goods for a price and acceptance of that offer. The contract can be either written or oral.

Section 4(1) defines a contract of sale as under:

A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a price.

There may be a contract of sale between one part – owner and another.

The Sale of Goods Act, 1930 came into force on 1st July, 1930 and extends to the whole of India except the state of Jammu and Kashmir. It does not affect rights, interest, obligations and titles acquired before the commencement of the Act. The Act deals with sale but not mortgage or pledge of the goods.


The essentials to constitute such a contract are:

 1. It is a contract between the two parties, one known as the seller and the other the buyer.

2. The subject – matter of a contract is goods.

3. The seller should transfer or agree to transfer (ownership), in the goods to the buyer.

4. The transfer of property (ownership) in the goods from the seller to the buyer is for consideration known as price.

Caveat Emptor:

Caveat Emptor means “Let the buyer beware.” When a buyer purchases goods or any commodity displayed by the seller and some defect is found in it, the seller cannot be held responsible for it. It is the duty of the buyer to satisfy the seller about the selected product. If the goods or products are not according to his requirements or are defective, then the seller cannot be held responsible for it. The buyer has used his own skills and judgments while selecting the products.

Section 16 of the Sale of Goods Act, 1930 describes this doctrine.

It specifies that “subject to the provisions of the Act or of any other law that is being enforced in the time, there will be available no implied warranty or condition for the quantity of the goods or for the fitness as to the purpose of the buyer under the contract of sale.”

Case law:

Re Andrew Yule & Co. AIR 1932 Cal 879:140 I.C.877

 The buyer ordered for hessian cloth without specifying the purpose for which he wanted the same. It was in fact need for packing. Because of unusual smell, it was unsuitable for the purpose. It was held that the buyer had no right to reject the same, even if it did not suit his purpose.


A purchases a horse from B. a needs the horse for riding but he does not mention this to B. The horse is not suitable for riding but is suitable only for being driven in a carriage. A can neither reject the horse nor can be claim any compensation from B.

Andhra Sugars Ltd vs. State of A.P. AIR 1968 S.C.599


If any can grower offered to sell his sugarcane to be a factory in a certain zone, the factory was bound to accept the offer under the Andra Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1961.


It was held that in such a case, even though to make there was legal compulsion for the factory to make the agreement, the validity of agreement was not affected on ground of absence of free consent and such an agreement being a contract of sale within the meaning of section 4 of the Sale of Goods Act, the state could validly impose purchase tax on the purchase of sugarcane.


A contract for the sale of immovable property is a contract laying down that the ‘Sale’ of such property shall take place on the terms settled between the parties in the said contract. Such contract for sale does not create any interest in or charge on such immovable property. The contract for sale does not result in any transfer of ownership. However a sort of obligation is created in respect of the ownership of the property.

Aishwarya Says:

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