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Sale of Goods Laws

Common Questions on Sale of Goods Law

1. What is Sale of Goods Law?
2. What Laws are Applicable on Sale of Goods Law?
3. What is the Importance of Sale of Goods Act?

What is Sale of Goods Law?

Sale of Goods Laws are a kind of sub-branch of the Contract laws. These laws aim at facilitating the event of selling of goods in accordance with the relevant legal principles and ideas in mind. Barring the state of Jammu & Kashmir, this law is actionable to the whole of India.

Laws applicable on Sale of Goods Law-

• Indian Sale of Goods Act 1930
• Indian Contracts Act, 1872

What Indian Sale of Goods Act, 1930 says-

• There must be a buyer & a seller w.r.t the contract which should be related to goods, i.e., movable property for this act to be applicable
• All the essential elements of a Contract as per the Indian Contract Act are applicable here as well.
• As per Section 2(7) of the Act, ‘goods’ refers to every kind of movable property apart from actionable claims & money (stocks & shares inclusive).

Rights of Unpaid Seller-

• Right of Lien – legal right of retaining possession of goods until the due consideration is received [Section 46(1)(a) and Section 47 to 49]
• Right of Stoppage in Transit – seller has the right of preventing the transit of goods and reacquire possession until he receives the due consideration [Section 50 to 52]. He can do so even when the buyer becomes insolvent prior to the expiry of the initial credit period granted.
• Right to Re-Sale – failure of providing the due consideration on part of the buyer within a reasonable time allows the unpaid seller for re-sale of his goods if the concerned goods are of a perishable nature, or if seller provided notice to buyer about his intention to resale despite which the buyer did not pay the due consideration, or if the seller expressly reserved his Resale rights.

The seller can also opt for resale if he had exercised his Right of Lien/ his right of stopping the transit but has to provide a notice to the buyer about the intention of re-sale to which he must respond to in a reasonable time. The seller may, on failure of the original buyer paying the due consideration, opt for re-sale and sue the original buyer for damages which may have occurred due to the breach of contract on the buyer’s part. [Section 54(2) of the Act]

• Right of Withholding Delivery – when goods haven’t passed to the buyer and are still in seller’s possession he may retain the possession till he is paid. It is similar to the concept of ‘Right to Lien’.
• Suit for Price- As per Section 55 of the Act, unpaid seller has the right to sue the buyer for price. As per Section 56 of the Act, the seller may sue for damages regarding ‘non-acceptance’ when the buyer wrongfully neglects or refuses to pay for the goods.

Rights of Buyer-

• As per Sections 31 & 32, he has the claim to the delivery of goods as per the agreed terms. He can reject goods if they don’t match the description provided for as per the agreement.
• As per Section 41, buyer has the right of enjoying reasonable opportunity of the inspection of concerned goods.
• As per Section 57, the buyer can sue the seller in the event of the seller refusing or wrongfully neglecting the delivery of goods.