THE SALE OF GOODS ACT 1930 | Pakistan Law Reports

THE SALE OF GOODS ACT, 1930 (III OF 1930) [15th March, 1930] An Act to define and amend the law relating to the sale of goods. Preamble. Whereas it is expedient to define and amend the law relating to the sale of goods; CHAPTER I PRELIMINARY 1. Short title, extent and commencement. (1) This Act may be called the Sale of Goods Act, 1930. (2) It extends to the whole of Pakistan. (3) It shall come into force on the first day of July, 1930. 2. Definitions. In this Act, unless there is anything repugnant in the subject or context, (1) “buyer” means a person who buys or agrees to buy goods; (2) “delivery” means voluntary transfer of possession from one person to another; (3) “goods are said to be in a deliverable state” when they are in such state that the buyer would under the contract be bound to take delivery of them; (4) “document of title of goods”, includes a bill of lading, dock‑warrant, warehouse‑keeper’s certificate, wharfinger’s certificate, railway receipt, warrant or order for the delivery of goods and any other document used in ordinary course of business as proof of the possession or control of goods, or authorizing or purporting to authorize, either by endorsement or be delivery, the possessor of the document to transfer or receive goods thereby re‑presented; (5) “fault” means wrongful act or defaulter; (6) “future goods” means goods to be manufactured or produced or acquired by the seller after the making of the contract of sale; (7) “goods” means every kind of movable property other than actionable claims and money and includes electricity, water, gas, stock and shares, growing crops, gross and things attached to or forming part of the land which are agreed to be served before sale or under the contract of sale; (8) a person is said to be “insolvent who has ceased to pay his debts in the ordinary course of business, or cannot pay his debts at they become due, whether he has committed an Act of insolvency or not; (9) “mercantile agent” means a mercantile agent having in the customary course of business, as such agent authority either to sell goods, or to consign goods for the purposes of sale, or to buy goods, or to raise money on the security of goods; (10) “price” means the money consideration for a sale of goods; (11) “property” means the general property in goods, and not merely a special property; (12) “quality of goods” includes their state or condition; (13) “seller” means a person who sell or agrees to sell goods; (14) “specific goods” means goods identified and agreed upon at the time a contract of sale is made; and (15) expression used not defined in this Act and defined in the Contract Act, 1872, have the meanings assigned to them in that Act. 3. Application of provisions of Act IX of 1872. The unrepealed provisions of the‑ Contract Act, 1872, save in so far as they are inconsistent with the expression provisions of this Act, shall continue to apply to contracts for the sale of goods. CHAPTER II FORMATION OF THE CONTRACT Contract of Sale 4. Sale and agreement to sell. (1) A contract of sale of goods is a contract. whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part‑owner and another. (2) A contract of sale may be absolute or conditional. (3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. (4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred. Formalities of the Contract 5. Contract of sale how made. (1) A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. The contracts may provide for the immediate delivery of the goods or immediate payment of the price or both, or for the delivery or payment by instalments, or that the delivery or payment or both shall be postponed. (2) Subject to the provisions of any law for the time being in force, a contract of sale may be made in writing or by word of mouth, or partly in writing and partly be word of mouth or may be implied from the conduct of the parties. Subject‑matter of Contract 6. Existing or future goods. The goods which from the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or future goods. (2) There may be a contract for the sale of goods the acquisition of which by the seller depends upon a contingency which may not happen. (3) Where by a contract of sale the seller purports to effect a present sale of future goods, the contract operate as an agreement to sell the goods. Subject‑matter of Contract 7. Goods perishing are making of contract. Where there is a contract for the sale of specific goods, the contract is void if the goods without the knowledge of the seller have at the time when the contract was made, perished or become so damaged as no longer to answer to their description in the contract. 8. Goods perishing before sale but after agreement to sell. Where there is an agreement to sell specific goods, and subsequently the goods without any fault on the part of the seller or buyer perish or become so damaged as no longer to answer to their description in the agreement before the risk passes to the buyer, the agreement is thereby avoided. The Price 9. Ascertainment of Price. (1) 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. (2) Where the price is not determined in accordance with the foregoing provisions, the buyer shall pay the seller a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case. 10. Agreement to sell at valuation. (1) Where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party and such third party cannot or does not make such valuation, the agreement is thereby avoided: Provided that, if the goods or any part thereof have been delivered to, and appropriated, by the buyer, he shall pay a reasonable price therefor. (2) Where such third party is prevented from making the valuation by the fault of the seller or buyer, the party not in fault may maintain a suit for damaged against the party in fault. Conditions and Warranties 11. Stipulations as to time. (1) Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract. 12. Condition and warranty. (1) A stipulation in contract of sale with reference to goods which are the subject thereof may be a condition or a warranty. (2) A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. (3) A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to. a right to reject the goods and treat the contract as repudiated. (4) Whether a stipulation is a contract of sale is a condition or a warranty depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract. 13. When condition to be treated as warranty. (1) Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition or elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the contract as repudiated. (2) Where a contract of sale is not severable and the buyer has accepted the goods or part thereof. the breach of any condition to be fulfilled by, the seller can only be treated as a breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is a term of the contract, express or implied, to that effect. (3) Nothing in this section shall affect the case of any condition or warranty fulfillment of which is excused by law by reason of impassibility of otherwise. 14. Implied undertaking as to title, etc. In a contract of sale, unless the circumstances of the contract are such as to show a different intention there it‑‑ (a) an implied condition on the part of the seller that in the case of a sale, he has a right to sell the goods and that, in the case of an agreement to sell, be will have a right to sell the goods at the time when the property is to pass; (b) an implied warranty that the buyer shall have and enjoy quire possession of the goods; (c) an implied warranty that, the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to. the buyer before or at the time when the contract is made. 15. Sale by description. Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description; and if the sale is by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. 16. Implied conditions as to quality of fitness. Subject to the provisions of this Act and of any other law for the time being in force, there is no implied warranty or condition as to the quality follows:‑‑ (1) Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so s to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller s business to supply (whether he is the manufacturer of producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose: Provided that, in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose. (2) Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality: Provided that, if the buyer has examined the goods, there shall be an implied condition as regards defects which such examination ought to have revealed (3) An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade. (4) An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith. 17. Sale by sample. (1) A contract of sale is a contract for sale by sample where there is a term in the contract, express or implied, to that effect.