1.1. Buyer, seller & Goods and the essential elements of a contract of a sale

of goods.

Buyer:"Buyer means a person who buys or agrees to buy goods. Sec 2(1)

Seller: Seller means a person who sells or agrees to sell goods.

Goods: The term goods means 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

served before sale or under the contract of sale.

1.2. Discuss the essential elements of a contract of a sale of goods.

1. Movable Goods: The Sale of Goods Act deals only with movable goods,

excepting actionable claims and money. This Act does not apply to immovable

properties.

2. Movable Goods for Money: There must be a contract for the exchange of

movable goods for money. Therefore in a sale there must be money

consideration

3. Two Parties: Since a contract of sale involves a change of ownership, it

follows that the buyer and the seller must be different persons.

4. Offer and acceptance: A contract of sale is made by an offer to buy or sell

goods for a price and the acceptance of such offer.

5. Promise for payment: The price in a contract of sale may be fixed by the

contract or may be left to be fixed in manner thereby agreed or may be

determined by the course of dealing between the parties.

6. Formation of the contract of sale: A contract of sale is made by an offer to

buy or sell goods for a price and the acceptance of such offer.

7. Method of forming the contract: Subject to the provision of any law for the

time being in force, a contract of sale may be in writing, or by word of mouth,

or may be implied from the conduct of the parties.

1

8. The terms of contract: The parties may agree upon any term concerning the

time, place, and mode of delivery. The terms may be of two types: essential and

non-essential. Essential terms are called Conditions, non-essential terms are

called Warranties.

9. Other essential elements: A contract for the sale of goods must satisfy all

the essential elements necessary for the formation of a valid contract. There

must be free consent, there must be consideration, the object must be lawful etc.

1.3. Delivery: Mode of Delivery: Rules regarding delivery.

Delivery: Delivery is transfer of possession from seller to the buyer. It is the

duty of seller to deliver the goods in accordance with the terms and conditions

of the contract. In a contract of sale delivery of goods is an essential element.

According to sec. 2(2), “Delivery means a voluntary transfer of possession from

one person to another.”

1.4. Mode of Delivery:

(a) Actual delivery: Actual delivery means physical transfer of goods by the

seller to the buyer. The delivery may be made by the agent of the seller to the

agent of the buyer.

(b) Symbolic delivery: If goods are not physically handed over to the buyer but

means of obtaining possession of goods is delivered. Where the goods are

bulky, it is usual for the seller to give symbolic delivery.

(c) Constructive delivery: When there is a change in the legal character

without any visible change in actual and visible custody. It is called constructive

delivery. In place of actual or symbolic delivery, the goods may be delivered

without any change in their actual or visible custody.

For example, where the goods at the time of sale are in possession of a third

person and such third person acknowledges to the buyer that he holds the goods

on his (buyer's) behalf; the delivery is called constructive delivery.

2

1.5. Discuss the Rules regarding delivery.

Following are the important rules regarding the delivery of goods.

1. Delivery Ways: When goods are sold then delivery can be made by

symbolic, actual or constructive way. It depends upon the parties that

which way they adopt.

2. Time of Delivery: The seller should deliver the goods on a specified

date. If the time is not fixed then delivery should be within a reasonable

time.

3. Payment and Delivery: Both the actions should be at the same time.

The buyer should make the payment and seller should deliver the goods in

exchange of payment at the same time, just like the cash sale on the

customer of a super stores.

4. Place of Delivery: A delivery of goods should be at a specified place

mentioned in the contract.

5. Delivery Expenses: The expenses of putting the goods into deliverable

state must be borne by the seller, otherwise as the parties agree.

6. Delivery to Carrier: When seller is required to send the goods to the

buyer, the delivery to carrier is considered delivery to the buyer.

7. Defective Delivery: A buyer can reject or accept the defective and

wrong delivery. In case of rejection buyer is not bound to return it to the

seller.

8. Good in the Custody of Third Party: If the seller’s goods are in the

custody of the third party, the delivery is not possible until the third party

agrees to hand over the sold goods to the buyer on behalf of the seller.

9. Delivery in Installments: The buyer is not bound to receive the goods

in installments but if the buyer and seller are agreed then the delivery of

goods may be made in installments.

3

10. Buyer Should Apply for Delivery: It is the duty of the buyer that he

should apply for the delivery of goods. The seller is not bound to supply

the goods without the demand of the buyer. If seller fails to supply the

goods on demand then he will be held responsible.

11. Partial Delivery Effect: If some portion of the goods has been made

with the intention of delivering the rest of goods then the ownership of the

whole goods is deemed to pass to the buyer as some portion is delivered.

12. Refusal of Buyers Liability: When seller is ready to sell the goods.

While buyer is not ready to accept the delivery, then buyer will be liable to

the seller for the loss arising due to his refusal.

13. Delivery by whom and to whom: It is the duty of the seller to deliver

the goods and of the buyer to accept and pay for the goods delivered.

14. Mode of delivery: The delivery may be actual, symbolic or

constructive. The parties may agree to any mode of delivery expressly or

impliedly.

17. Liability of buyer: The buyer is liable to the seller for any loss

occasioned by his neglect or refusal to take delivery, and also for a

reasonable charge for the care and custody of the goods.

18. Examining the goods: The buyer has the right to examine the goods

for the purpose of ascertaining whether they are in conformity with the

contract.

4