The Sale of Goods Act 1930 Text Book Solutions

Dear Class 12 Samacheer Kalvi students, here are the text book solutions for Chapter 21, The Sale of Goods Act 1930 in Commerce for your reference.

I. Choose the Correct Answers:

II. Very Short Answer Questions:

1. What is a contract of sale of goods?

Contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property (ownership) of the goods to the buyer for a price.

2. List down the essential elements of a contract of sale.

Following essential elements are necessary for a contract of sale.

(1) Two Parties
(2) Transfer of Property
(3) Goods
(4) Price
(5) Includes both ‘Sale’ and ‘Agreement to Sell’

3. What is meant by goods?

Goods means every kind of movable property other than actionable claim and money. Actionable claim means debt secured by a mortgage of immovable property. Goods includes shares, stocks, growing crops, grass, things attached to the land or forming part of the land agreed to be cut off from the land before sale, goodwill, copyright, trade mark, patents, water, gas, electricity, power etc., under the contract of sale.

4. What is a Contingent Goods?

Contingent goods are the goods, the acquisition of which by the seller depends upon a contingency (an event which may or may not happen). Contingent goods are a part of future goods. Eg. ‘A’ agrees to sell a particular painting work, provided he gets it from ‘C’. In this case, the painting work represents contingent goods.

III. Short Answer Questions:

1. Discuss in detail about existing goods.

Existing goods are those owned or possessed by the seller at the time of contract of sale. Goods possessed even refer to sale by agents or by pledgers. Existing goods may be either

(i) Specific Goods
(ii) Ascertained Goods
(iii) Generic or Unascertained Goods

Specific goods denote goods identified and agreed upon at the time of contract of sale. Ascertained goods refers to goods which become ascertained subsequent to the formation of the contract. Unascertained or Generic goods are goods which are not identified and agreed upon at the time of contract of sale.

2. Discuss the implied conditions and warranties in sale of goods contract.

In every contract of sale, there are certain expressed and implied conditions and warranties. Implied conditions means conditions which can be inferred from or guessed from the context of the contract.

Following are the implied conditions:

1. Conditions as to Title
2. Conditions as to Description
3. Sale by Sample
4. Conditions as to Quality or Fitness
5. Conditions as to Merchantability
6. Condition as to Wholesomeness
7. Condition Implied by Trade Usage

Following are the Implied Warranties:

(i) Quiet Possession
(ii) Free from Any Encumbrances
(iii) Warranty in the case of Dangerous Goods

IV. Long Answer Questions:

1. Explain in detail the elements of Contract of sale.

Following essential elements are necessary for a contract of sale.

(1) Two Parties

A contract of sale involves two parties – the seller and the buyer. The buyer and the seller should be two different persons. If a person buys his own goods, there is no sale. On the dissolution of partnership when the surplus assets including goods were distributed among the partners, the court held that it was not a sale attracting sales tax. The partners were themselves joint owners of the goods and they could not be both sellers and buyers. However, there is one exception. When the goods of a person are sold in execution of a decree, he himself may buy the goods to retain their ownership.

(2) Transfer of Property

To constitute sale, the seller must transfer or agree to transfer the ownership in the good to the buyer. A mere transfer of possession does not amount to sale.

(3) Goods

The subject matter of contract of sale must be goods. It excludes money, actionable claims and immovable property. The term ‘goods’ includes every kind of movable property, stocks and shares, growing crops etc. Goodwill, trademarks, copy rights, patent rights etc., are all also regarded as goods.

(4) Price

The monetary consideration for the goods sold is called price. If goods are exchanged for goods, it is only barter and not a sale. But if goods are sold partly for goods and partly for money, the contract is one of sale.

(5) Includes both ‘Sale’ and ‘Agreement to Sell’

The term contract of sale includes both sale and agreement to sell. If the property in goods is transferred immediately to the buyer it is called a sale. On the other hand, if the transfer of property takes place at a future date or on fulfilment of certain conditions, it is called ‘an agreement to sell’.

2. Distinguish between Conditions and Warranty.