SALE OF GOODS ACT, 1930
CHAPTER III
CHAPTER IV
CHAPTER V
RIGHTS OF UNPAID SELLER AGAINST THE GOODS
CHAPTER VI
SUITS FOR BREACH OF THE CONTRACT
CHAPTER VII MISCELLANEOUS
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64A.
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Sale of Goods Act, 1930*
[3 OF 1930]1
An Act to define and amend the law relating to the sale of goods. WHEREAS it is expedient to define and amend the law relating to the sale of goods; It is hereby enacted as follows:
CHAPTER I PRELIMINARY
Short title, extent and commencement.
1. (1) This Act may be called the 2[***] Sale of Goods Act, 1930. 3[(2) It extends to the whole of India 4[***]].
(3)It shall come into force on the first day of July, 1930. Definitions.
2. In this Act, unless there is anything repugnant in the subject or context,
(1)“buyer” means a person who buys or agrees to buy goods;
(2)“delivery” means voluntary transfer of possession from one person to another;
(3)goods are said to be in a “deliverable state” when they are in such state that the buyer would under the contract be bound to take delivery of them;
(4)“document of title to goods” includes a bill of lading, dock-warrant, warehouse-keeper’s certificate, wharfingers’ certificate, railway receipt, 5[multimodal transport document,] warrant or order for the delivery of
*Dated 15-3-1930.
1.The Act has been extended to Berar by the Berar Laws Act,1941, w.e.f. 1-8-1941; Dadra and Nagar Haveli by the Dadra and Nagar Haveli by Laws Regulation, 1963, w.e.f. 1-7-1965; to Goa, Daman and Diu by the Goa, Daman and Diu (Laws) No. 2 Regulation 1963, w.e.f. 29-5-1964; to Pondicherry by the Pondicherry (Extension of Laws) Act, 1968,w.e.f. 24-5-1968; to Lakshadweep by the Laccadive, Minicoy and Amindivi Islands (Laws) Regulation, 1965, w.e.f. 1-10-1967.
2.Word “Indian” omitted by the Indian Sale of Goods (Amendment) Act,1963, w.e.f. 22-9-1963.
3.Substituted by the Adaptation of Laws Order,1950, w.e.f. 26-1-1950.
4.Words “except the State of Jammu and Kashmir” omitted by the Jammu and Kashmir Reorganisation Act, 2019, w.e.f. 31-10-2019.
5.Inserted by the Multimodal Transportation of Goods Act, 1993, w.r.e.f. 16-10-1992.
goods and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented;
(5) “fault” means wrongful act or default;
(6) “future goods” means goods to be manufactured or produced or acquired by the seller after the making of the contract of sale;
(7) “goods” means every kind of movable 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;
(8) a person is said to be “insolvent” who has ceased to pay his debts in the ordinary course of business, or cannot pay his debts as they become due, whether he has committed an act of insolvency or not;
(9) “mercantile agent” means a mercantile agent having in the customary course of business as such agent authority either to sell goods, or to consign goods for the purposes of sale, or to buy goods, or to raise money on the security of goods;
(10) “price” means the money consideration for a sale of goods;
(11) “property” means the general property in goods, and not merely a special property;
(12) “quality of goods” includes their state or condition;
(13) “seller” means a person who sells or agrees to sell goods;
(14) “specific goods” means goods identified and agreed upon at the time a contract of sale is made; and
(15) expressions used but not defined in this Act and defined in the Indian Contract Act, 1872 (9 of 1872), have the meanings assigned to them in that Act.
COMMENTS
SECTION NOTES
Section 2 does not define “Sale”. That term is defined by Section 4. Clauses (1) to (14) of Section 2 define certain terms and expressions used in this Act. In any provision in which any such term or expression is used, it will be understood in the sense in which it is so defined in this section, except when the definition in this section is repugnant in the subject or context of the provision.
2.1 Goods [Section 2(7)]
The term “goods” means every kind of movable property.
The term “goods” specifically 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
The term “goods” does not include actionable claims and money
Goods may be “specific goods” [See Section 2(14)] and “future goods” [See Section 2(6)]
2.2 Buyer [Section 2(1)]
“buyer” means a person who buys or agrees to buy goods;
2.3 Seller [Section 2(13)]
“seller” means a person who sells or agrees to sell goods;
2.4 Price [Section 2(10)]
“Price” means the money consideration for a sale of goods;
2.5 Property [Section 2(11)]
“Property” means the general property in goods, and not merely a special property
2.6 Quality of goods [See Section 2(12)]
“Quality of goods” includes their state or condition;
2.7 Seller [See Section 2(13)]
“Seller” means a person who sells or agrees to sell goods;
2.8 Delivery [See Section 2(2)]
“Delivery” means voluntary transfer of possession from one person to another
2.9 Deliverable State [See Section 2(3)]
Whether the goods are in a “deliverable state” depends on the contract terms between the buyer and seller.
Deliverable state means that the goods are in a state in which the buyer would be obliged to take delivery of them as per the terms of the contract.
2.10 Document of title to goods [See Section 2(4)]
“Document of title to goods” includes a bill of lading, dock warrant, warehouse keeper’s certificate, wharfingers’ certificate, railway receipt, multimodal transport document, warrant or order for the delivery of goods any other document used in the ordinary course of business as proof of the possession or control of goods, any other document authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented;
2.11 Mercantile agent [Section 2(9)]
“Mercantile agent” means an agent having in the customary course of business as such agent the authority to sell goods, or
to consign goods for the purposes of sale, or to buy goods, or to raise money on the security of goods;
2.12 Words and expressions used in this Act but not defined in this Act
The expressions used but not defined in this Act but defined in the Indian Contract Act, 1872 shall have the meaning assigned to them in that Act.
CASE LAWS
Lottery Tickets as Actionable Claims - The Supreme Court reaffirmed that under section 2(7) of the Sale of Goods Act, a lottery ticket does not qualify as “goods.” It held that a lottery ticket represents an actionable claim—a right to a conditional benefit contingent upon the draw of a prize—and is excluded from the definition of goods under both the Sale of Goods Act and sales tax statutes. This distinction prevents such claims from being subjected to sales tax.— State of Kerala v. Prabhavathy Thankamma AIR 2009 SC (Supp) 2831.
Standing Timber as Goods - The Supreme Court held that standing timber agreed to be severed before sale or under the contract of sale qualifies as “goods” under section 2(7) of the Sale of Goods Act. It clarified that things attached to the land may be regarded as goods if the contract explicitly provides for their severance before or at the time of sale. This interpretation aligned with the expression “sale of goods” under Entry 54 of List II in the Seventh Schedule of the Constitution, confirming that such transactions are taxable as sales of goods.— State of Maharashtra v. Champalal Kishanlal Mohota AIR 1971 SC 908.
Distinction Between Sale and Exchange - The Supreme Court clarified that under section 4 of the Sale of Goods Act, a sale requires money as consideration, distinguishing it from an exchange or barter where the consideration is other goods. In this case, the Court held that the transaction involving the transfer of a cinema business in exchange for preference shares did not qualify as a sale, as there was no monetary consideration. Thus, the provisions relating to sales in the Income Tax Act were inapplicable, emphasizing the importance of money consideration as an essential element in a sale.— Commissioner of Income-tax, Andhra Pradesh v. Motors and General Stores (P.) Ltd. AIR 1968 SC 200.
Application of provisions of Act 9 of 1872.
3. The unrepealed provisions of the Indian Contract Act, 1872 (9 of 1872), save insofar as they are inconsistent with the express provisions of this Act, shall continue to apply to contracts for the sale of goods.
COMMENTS
SECTION NOTES
The provisions of the Indian Contract Act, 1872, shall apply to contracts for the sale of goods insofar as they are not inconsistent with the express provisions of this Act.
CHAPTER II
FORMATION OF THE CONTRACT
Contract of sale
Sale and agreement to sell.
4. (1) 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.
