Sale of goods important legal terms

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Definition of sale of goods:-

The Sale of Goods Act, 1930, according to sections 1 & 2 commands the contracts relating to the sale of goods. It refers to the whole of India except the State of Jammu & Kashmir. The contracts for the sale of goods are subjected to the general laws of the law describing to contracts i.e. the Indian Contract Act. A contract for the sale of goods has, however, several peculiar characteristics such as transfer of ownership of the goods, delivery of goods rights and duties of the buyer and seller, remedies for breach of contract, conditions, and warranties mentioned under a contract for the sale of goods, etc. These characteristics are the subject matter of the provisions of the Sale of Goods Act, 1930.

The sale of good deed controls the functioning of any sale happening between two parties. It’s not necessary for every sale that happens in the country. However, any sale that includes a bill is said to exercising a sale of goods deed.

Buyer- A person who buys or accepts to buy the goods given up for sale.

Seller- A person who sells or allows to sell goods in his property for a consideration.

Delivery- Optional transfer of goods from one person to another.


Legal Validation terms of deed-


Sale of goods deed can be written on both non-judicial stamp paper and common paper. This is a deed that does not have many severe requirement rules. In some cases, even signs are not necessary, e.g., the bills you get at stores do not contain the signature of the seller, but it is still a valid sale of goods deed.

If the sale is supposed to happen in the future, it is then called an Agreement for Sale and it needs the signature of both parties.

1. Create a Sale of Goods Deed by filling in details of the party’s concerned buyer and seller. While you fill the details, assure that the following clauses are involved-

  • Classification of goods
  • Classification of the consideration
  • Terms and provisions of both parties
  • Importance of breach
  • Period for which the deed is valid

2. Evaluate your records once you are done.

3. Once the payment is completed, print the document and place signatures of involved parties at the bottom. Some sale deeds do not need signatures or seals of any kind.


The remedies under the sale of goods act-

The remedies under the Indian sale of Goods Act are devised for the security of the interest of both buyer and seller. ‘Buyer’, as described in Section 2(1) of the Act, means a person who buys or agrees to buy goods, and ‘Seller’ means, according to Section 2(13), a person who sells or accepts to sell goods.

The term ‘goods’ has been described in Section 2(7) of the Act: ‘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 divided before sale or following contract of sale.

  • Seller’s Remedies against Buyer – Sections 55 and 56
  • Buyer’s remedies against Seller – Sections 57, 58 and 59
  • Remedies available to both buyer and seller – Sections 60 and 61



The remedies probable to the seller under the law related to the Sale of Goods Act may be classified into 2 parts

(A) Remedies upon the buyer individually.

(B) Remedies upon the goods sold.


(A) Remedies upon buyer individually

(1) Suit for payment.

(2) Suit for losses for non-acceptance.


  1. Suit for payment
The due seller has a relief under Section 55 by way of suit for price toward the purchaser, when:

(1)(a) There is a contract of sale of goods, and

(b) The property in the goods has transferred to the buyer, and

(c) The buyer wrongfully ignores or declines to pay for the goods according to the contract.

(2) Even if the property in the Goods has not transferred to the buyer and the goods have not been appropriated to the contract, the seller can petition the buyer for the price of the assets if the buyer illegally ignores or denies to pay, provided under a contract of sale the price is payable on a particular day irrespective of performance.

Where in a case before the Supreme Court the property in the goods had given to the buyer on transfer of the goods to the Railways and the seller being thereafter not liable for decline of the goods in transition, it was held that the seller was entitled to gain the agreed price without any deduction for the deterioration. This is one of the most important features of the Law related to the Sale of Goods Act.


  1.  Suit for losses for non-acceptance

Section 56 of the Act gives that where the buyer wrongfully neglects or effuses to accept and pay for the goods, the seller may petition him for losses for non-acceptance. This section does not give as to how damages for non-acceptance are to be assessed. It describes another aspect of the Law related to the Sale of Goods Act.

The principles for assessment of damages are laid down in Section 73 and 74 of the Indian Contract Act, 1872, and the same principles would be both relevant. Where the goods are simply saleable n the market, the principle involved is that the buyer has to pay to the seller the loss that the seller has provided on reselling the goods on the date of the breach of contract committed by the buyer. Whether the seller resells the goods or not, the type of damages will be the variety in the market and contract rates on the day of breach.



Remedies against goods sold are accessible only to an unpaid seller under the Law relevant to Sale of Goods Act. Section 45 of the Sale of Goods Act defines due seller as a seller to whom the whole of the price has not been paid or given or to whom a cheque or some other negotiable instrument was given for the value and the same has been dishonoured.

Under Section 46 of the Act, the unpaid seller of goods has the back remedies toward the goods agreed to be sold:

(a) Right of Lien.

(b) Right of Stoppage in Transit.

(c) Right of Resale.

(a) Right of Lien


Related sections-

  • Section 2
  • Section 55, 56
  • Section 57, 58 59
  • Section 60, 61


Benefits of sale contracts:-

1) Minimizes Risks

A sales contract is always beneficial as it decreases the risks of loss and the company getting sued. A proportion of risk decreases by mentioning terms of a particular agreement clearly and get it signed from all the important parties. Doing this will provide you ground to take legal action in the failure of meeting situations specified in the contract.

2) Clarity

Besides decreasing risks of the lawsuit, contracts are useful to give clarity to employees and both seller and buyer. The sales contract contains all the important aspects related to contracts and expectations from each party. Contracts make both parties stay faithful to what they have agreed on while writing a contract and avoid risks of the lawsuit.


For Related Action= “Thelegalbank” Jaipur, Rajasthan, India, 302021.


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