JAIIB LRAB Unit 46 - Meaning and Essentials Of a Contract Of Sale

MEANING OF CONTRACT OF SALE OF GOODS

A contract of sale of goods is a contract under which the seller transfers or agrees to transfer the property in goods to the buyer for a price. When the property in the goods is transferred from the seller to the buyer, the contract is called a sale.

FEATURES OF CONTRACT OF SALE OF GOODS

(a) Bilateral: contract: A sale involves two persons - The buyer and the seller.

(b) Money consideration: The consideration for a sale of goods must be money, called the price

payable for the transfer of goods. It cannot be a barter, where goods are exchanged for goods.

(c) Moveable property: The Sale of Goods Act covers only the sale of moveable goods and not immoveable property like land and building. The contracts relating to transfer of immoveable property are governed by the Transfer of Property Act and not Sale of Goods Act.

(d) No particular form: The Sale of Goods Act does not make it mandatory to enter into written contracts for the sale of goods. However, if any particular law provides for sale of certain types of goods to be done by a contract in writing, then that law has to be complied and the contract has to be in writing.

The contract may be oral or written or can be implied by the conduct of the parties. A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer.

The contract may provide for:

• Immediate delivery of the goods immediate payment of the price.
• For the delivery or payment by instalments.
• Postponement of delivery or payment.