2Sec 4(3)A contract of sale of goods is a contract, whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a price
31.There must be at least 2 parties 2. Transfer or agreement to transfer the ownership of goods should take place3. Subject matter: Goods4. Consideration: Price5. May be absolute or conditional6. All other essentials of a valid contract must be present
4Seller can sue the buyer for price of goods. SL.NO.SALEAGREEMENT TO SELL1.Executed ContractExecutory Contract2.Seller can sue the buyer for price of goods.Seller can only sue for damages with reference to the price that was payable at a stated date.3.In case of loss of goods, the loss will fall on the buyer, even if goods are in possession of seller. Risk is associated with ownership.Loss to be owned by the seller even if goods are in possession of the buyer.4.In case buyer pays the price & the seller thereafter becomes an insolvent, the buyer can claim the goods from official receiver or assignee.Buyer cannot claim the goods, but only rateable dividend for the price paid5.Buyer recovers in solvent without paying the price; the seller will have to deliver the goods to official assignee or receiver except where he has lien on the goods.Seller can refuse to deliver the goods to the official assignee or receiver.
5Conditions and Warranties in sales contract Condition: A condition is a stipulation which is essential to the main purpose of the contract. It goes to the root of the contract.Warranty: A warranty is a stipulation which is collateral to the main purpose of the contract. It is not of such vital importance as a condition.
6SL.NO.CONDITIONWARRANTY1.A condition is a stipulation (in a contract) which is essential to the main purpose of the contractA warranty is a stipulation which is only collateral or subsidiary to the main purpose of the contract2.A breach of condition gives the aggrieved party a right to sue for damages as well as the right to repudiate the contractA breach of warranty gives only the right to sue for damages. The contract cannot be repudiated3.A breach of condition may be treated as a breach of warranty in certain circumstancesA breach of warranty cannot be treated as a breach of condition
7Contract of guaranteeThe person who gives the guarantee is called the ‘Surety’The person for whom the guarantee is given is called as ‘principal debtor’The person to whom the guarantee is given is called the as “creditor”
8Unpaid seller Sec 45(1) 1. He must be unpaid and the price is due. 2. He must have an immediate right of action for the price3. A bill of exchange or other negotiable instrument was received but the same has been dishonored.
9Rights of an unpaid seller: Against the goods 1. Right to lien (to retain the possession2. Right of stoppage in transit3. Right of resale : With or without noticeAgainst the buyer personally:1. Right to sue for the price2. Right to sue for damages
10Buyer’s Rights against Seller 1. Damages for Non Delivery (Sec.57)2. Specific Performance (Sec.58)3. Remedy for breach of Warranty (59)
11Doctrine of ‘caveat emptor’ Exceptions:Where the seller makes a false representation and the buyer relies on that representationSeller actively conceals a defect in the goods, so that on a reasonable examination the same could not be discoveredBuyer makes known to the seller, the purpose for which he is buying the goods and the seller should know to sell the goods of that description