Applicability & Definition Under Section 2: The Sale of Goods Act, 1930 Notes

Applicability & Definition Under Section 2: The Sale of Goods Act, 1930 Notes- Prolawctor



  • This act extends to whole of India, except the State of Jammu and Kashmir.
  • This act came into force w.e.f. 1 July 1930.
  • The ‘contract of sale’ includes both a sale as sell as an agreement to sell.
  • The word Indian was omitted the title of the Act in 1963 (22 sept.)
  • This Act does not deal with the sale of immovable property.
  • The transaction relating to immovable properties, e.g., the sale, lease, gifts, etc.,    are governed by a separate Act known as ‘Transfer of Property Act, 1882’. This Act is beyond the scope of this book.

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Definition Under Section 2: The Sale of Goods Act, 1930 Notes

  • Buyer – Sec 2 (1)
    A person, who buys or agrees to buy the goods.
  • Delivery Sec (2)
    It means voluntary transfer of possession from one person to another.
  • Delivery State Sec 2(3)
    Goods are said to be in delivered state, when they are in such state that the Buyer would be bound to take the delivery of them in accordance with the contract.
  • Documents of title to Goods 2(4)
    A document of the title to goods may be described as any document used as proof of the possession or control of goods, authorizing or purporting to authorize, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented.

Section 2(4) of the Sale of Goods Act, 1930 recognizes the following as documents of title to goods:

  • Bill of lading,
  • Dock warrant,
  • Warehousekeeper’s certificate,
  • Wharfinger’s certificate,
  • Railway receipt,
  • Multi – modal transport document,
  • Warrant or order for the delivery of goods, and
  • Any other document used in the ordinary course of business as document of title (as described in the preceding paragraph).

Document of Title v. Document showing the title :
A document of title enables a person named therein to transfer the property by mere endorsement and delivery, whereas a document showing title does not confer any right to transfer by way of endorsement and delivery.

For example, a share certificate shows that the person named therein is entitled to the shares represented by it, but does not allow transfer of the shares by mere endorsement and delivery of the certificate.

Goods – Sec 2 (7)

  • Goods mean every kind of movable property.
  • Other than actionable claims and money, and it includes.
  • stock and shares, growing crops, grass and things attached to or forming part of   land which are agreed to be severed before sale or under the contract of sale.
  • You may notice that ‘money’ and ‘actionable  claims’  have  been  expressly  excluded from the term ‘goods’. ‘Money’ means the legal tender. ‘Money’ does not include old coins and foreign currency. They can, therefore, be sold or bought as goods. Sale and purchase of foreign currency is, however, also regulated by the foreign Exchange Management Act,
  • Actionable claims’, like debts, are things which a person cannot make use of, but which can be claimed by him by means of a legal action. Actionable claims cannot be sold or purchased like goods, they can only be assigned, as per the provisions of Transfer of property Act.
  • Grass, growing crops, trees to be cut and their log wood to be delivered, malba of a building to be demolished, etc. are goods. Similarly, things like goodwill, copyright, trade mark, patents, water, gas electricity are all goods and may be the subject matter of a contract of sale.

Seller – Sec 2 (13)

  • A person, who sells or agrees to sell the goods,.

Agreement to sell

  • Where transfer of property in goods takes place at future date.


  • Where transfer of property in goods takes place at the time of contract.

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