CAIIB · BRBL

CONTRACT OF SALE

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.

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What is a 'contract of sale' under the Sale of Goods Act, 1930?

A contract of sale is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price, encompassing both a 'sale' and an 'agreement to sell'.

What are the essential elements of a valid contract of sale under the Sale of Goods Act, 1930?

Competent parties, goods, price, and transfer of ownership.

What is the key distinction between a 'sale' and an 'agreement to sell' under the Sale of Goods Act?

In a 'sale', property in goods passes to the buyer immediately, whereas in an 'agreement to sell', the transfer of property is to take place at a future time or subject to conditions to be fulfilled.

Can a contract of sale be made orally or must it be in writing?

It can be oral, written, or partly both; no specific form required.

When does an 'agreement to sell' become a 'sale' under the Sale of Goods Act, 1930?

An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in goods is to be transferred.

What is the meaning of 'earnest money' in a contract of sale of goods?

Part payment given as security to confirm the contract.

What are 'goods' as defined under the Sale of Goods Act, 1930?

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 severed before sale.

What is the doctrine of 'caveat emptor' in the Sale of Goods Act?

Buyer beware — buyer must verify goods before purchase.

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