Indian Sale of Goods Act, 1930

The Indian Sale of Goods Act, 1930 is a provision in the Indian Judicial system wherein the setting of a contract is made possible and a seller agrees to transfer the title in the goods to the buyer for a consideration. The Act has been borrowed heavily from the United Kingdom’s “Sale of Goods Act,1893”. The Indian Act is applicable all over India (except for Jammu and Kashmir), and the amendment on 23rd September 1963, renamed the Act to Sale of Goods Act, 1930. The act is still in force in India and used in Bangladesh as well.

Sale of Goods Act, 1930 constitutes a lot of things in it, they are defined under Section 2 of the Act as follows-

  • Contract – A contract of sale is said to be an offer to buy a good for a price, or an offer to sell a good for a price, and the acceptance of the offer.
    • The contract can provide specific clauses which will describe the delivery, payment, the contract of sale will be made in writing, or by speech or partly in written and speech, or just be implied by both the parties (Section 5 sub clause 2).
  • Goods- These are every kind of movable property other than actionable claims and money, they also include future goods (manufactured, produced or acquired). If by a contract of sale, the seller purports to affect a present sale of future goods, the contract operates as an agreement to sell the goods.
  • Sale of goods- A contract whereby the seller agrees to transfer the property of goods to the buyer for a price. There may be a contract of sale between one part owner and another.
  • Mercantile Agent- This type of agent has the customary course of business as agent authority wherein he is allowed to either sell goods, to consign good for the purpose of sale, to buy goods, or to raise money on the security of goods.
  • Buyer- The person who agrees to buy a good.
  • Delivery- Voluntary transfer of property from one person to another.
  • Documentation of goods
  • Bill of lading dock warrant
  • Warehouse keeper’s certificate
  • Wharfingers’ certificate,
  • Railway receipt,
  • RC book of car,
  • Multimodal transport document,
  • Warrant or order for the delivery of goods, and
  • Any other document used in the ordinary course of business as proof of possession or control of goods, or authorising or seeming to authorise the possessor of the document to transfer or receive items thereby represented, either by endorsement or by delivery.
  • Damage- Goods will be termed as damaged only when they no longer answer to the needs of contract, neither the seller not the buyer has the knowledge about such damage.
  • Violation- A wrongful act by default is termed as violation.


The act further defines the term sale and agreement to sell, as-

A contract for the sale of goods is one in which the seller transfers or agrees to transfer the seller’s property in goods to the buyer in exchange for a price. A contract of sale between one part-owner and another may exist.

A contract can be absolute or conditional.

The contract is called a sale when the property in the goods is passed from the seller to the buyer under a contract of sale, but an agreement to sell when the property in the goods is transferred at a later time or subject to some condition that must be met afterward.

When the time period for transferring the property in the goods expires or the criteria for transferring the property are met, the agreement to sell becomes a sale.

For the above mentioned to work, the following has to be fulfilled-

A contract is required. In such a contract, the seller sells or agrees to transfer the buyer’s property in goods in exchange for a price. A sale between one part-owner and another is possible. A selling contract might be unconditional or conditional. If the items are already in existence at the time of the agreement, it is a contract of sale; otherwise, it is an agreement to sell.


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