1. Section 2(g) of the Act defines goods as every kind of moveable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.
2. Sale and agreement to sell: Section 4 of the Act brings out the difference between ‘sale’ and ‘agreement to sell’. 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 contract of sale between one part-owner and another (section 4(1)). Hence, when under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. Thus, an agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred. Also, a contract of sale may be made in writing or by word of mouth, or partly in writing and partly by word of mouth or may be implied from the conduct of the parties (section 5(2)). Thus, credit sale is also a ‘sale’. A verbal contract or contract by conduct of parties is valid. E.g. putting goods in basket in super market. A sale requires transfer of ownership of property. Thus, if goods are given for hire, lease, hire purchase or pledge, it does not constitute sale.
3. Conditions and warranty: A condition as defined under section 12(b) is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. Whereas, a warranty as defined under section 12(c) is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a right to a claim for damages but not a right to reject the goods and treat the contract as repudiated. Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition or elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the contract as repudiated (section 13).
4. Principle of ‘Caveat Emptor’: The principle of ‘Let the buyer beware’ is of importance while considering contracts of sale of goods. Generally, the buyer is expected to be careful while purchasing the goods and seller is not liable for any defects in goods sold by him. Section 16 embodies this principle and states that subject to provisions of Sale of Goods Act and any other law, there is no implied condition or warranty as to quality or fitness of goods including their state or condition for any particular purpose. But it is also to be seen that section 14 imposes an implied warranty from the seller’s side that the buyer shall enjoy a good title over the goods and that they shall be free from any charge or encumbrances.
5. For a sale to take place, transfer of property (i.e. legal ownership) in goods from seller to buyer is required. Hence, when there is contract of sale of unascertained goods, property cannot pass unless goods are ascertained (section 18). When there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred (section 19(1)). It is to be noted that when property passes, the risk also passes with them. Hence, the goods remain at the seller's risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer, the goods are at the buyer's risk whether delivery has been made or not (section 26).
6. The Act stipulates that it is the duty of the seller to deliver the goods and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale (section 31). Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing to pay the price in exchange for possession of the goods (section 32). Further, ‘Acceptance’ does not mean mere receipt of goods. It means that the buyer is satisfied that the goods are delivered in a state as per terms of contract. Where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conform*ity with the contract (section 41(1)). Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract (section 41(2)).
7. The Act confers certain rights and duties complimentary to the seller and buyer. An unpaid seller’s remedy lies in approaching the court.
8. After goods are sold and property is transferred to buyer, the only remedy with an unpaid seller is to approach Court, if the buyer does not pay. Seller has no right to take forceful possession of goods from buyer, once property in goods is transferred to him. However, the Act gives some rights to seller if his dues are not paid.
9. Chapter 6 of the Act provides suits for breach of contract. Section 55 provides that where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods (remedy for unpaid seller). Section 56 provides that where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for non-acceptance. Section 57 lays down that when the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery. The principle of specific performance with respect to Specific relief Act, 1877 is given under section 58 in a suit for breach of contract. Section 59 provides remedy for breach of warranty and stipulates that the buyer may either sue for damages for breach of warranty or he may oblige the seller to reduce the price owing to breach of warranty. Nothing in this Act shall affect the right of the seller or the buyer to recover interest or special damages in any case whereby law interest or special damages may be recoverable, or to recover the money paid where the consideration for the payment of it has failed.
10. Auction sale is special mode of sale. This type of sale is open to public after making public announcement. Buyers assemble and make offers on the spot. Person offering to pay highest price gets the goods. Usually, an auctioneer is appointed to conduct such auction. In an auction sale, the sale is said to be complete when the hammer falls or in any other decided manner. A right to bid may be reserved expressly by or on behalf of the seller. When the sale is not notified to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid himself or to employ any person to bid at such sale, or for the auctioneer knowingly to take any bid from the seller or any such person; and any sale contravening this rule may be treated as fraudulent by the buyer. If the seller makes use of pretended bidding to raise the price, the sale is voidable at the option of the buyer (section 64).
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