A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another.
Before the introduction of Sale of Goods Act, 1930 laws governing the sales were sections 76 to 123 of the Indian Contract Act 1872. As the businesses around the country grew, the laws present at that time dealing with them were found inadequate to handle the new trends and challenges in front of them.
Thus, Sale of Goods Act 1930 was introduced with the objective of balancing the rights, duties, claims and expectations arising in the process of transferring of property from one person to another i.e of buyers and sellers.
The way of formation of a contract for a sale of goods, its prerequisite, conditions, etc all is mentioned in this Act. But what happens when after agreeing to buy/sell some goods buyer/seller refuses at the last moment or doesn’t deliver the good or doesn’t accept the goods or to put it simply doesn’t do the agreed task.
It can be concluded that non performance of the duties by buyer or seller as per the terms of contracts regarding the sale of any good results in breach of contract which will in turn violate the rights of buyers or sellers.
To protect these rights Sale of Goods Act provides for several remedies which can be used by buyers and sellers to compensate their losses by claiming the loss or damage caused by the other party by the way of breach.
The Sale of Goods Act, 1930 is a law of govern the sale of movable property i.e. goods. The act in elaboralely lays down :
1. Conditions of a valid sale in the eyes of law.
2. Rights and duties of buyer and seller.
3. Express and implied conditions and warranties under a contract of sale.
All kinds of goods, except for immovable property, are sold through sales contracts under the Sales and Goods Act. Available goods for sale can be either existing, future or contingent goods.
Existing goods refer to those which have already been produced and are ready to be sold. Future goods refer to those goods which are agreed to be produced and only then paid for through the contract. Contingent goods are a sort of extension to future goods, where the sale depends on the ability of the producer to supply the buyer with that good, which may not always be the case.
Sale of goods is one of the specific form of contracts recognised and regulated by law in India. The law relating to such contract is contained in the sale of Goods Act, which was enacted in 1930, it is substantially based on the English Sale of Goods Act 1893, Initially this was a part of Indian Contract Act.
In a highly industrialised and commercial economy, sale of various product or goods take different forms and are also processed in a wide manner. Even the word ‘goods’ will need considerable understanding as this word does not include any or every product which is actually sold in the economy.According, The Sale of Goods Act, 1930, was enacted to enable the parties to know their mutual rights and obligation in transaction involving sale or purchase of goods.The provisions of the Contract Act, insofar as they are inconsustent with the express provision of sale of Goods Act, shall apply to contract for the sale of goods e g. provisions relating the capacity of parties legality of contract etc.
The Act also helps to understand validity or otherwise of transaction and the remedies available to the agrieved party. It may be specifically noted that in the Economy “Services” are also sold and purchased. But sale or purchase of goods of services does not fall within the scope of the Sale of Goods Act, as they are not goods. For example : if a building is sold it will not be considered as a sale of goods. In the complex relationship between parties in sale / purchase transactions there is considerable scope of misunderstanding, fraud etc. and as such possibilities of disputes are many.
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