Sale of Goods Act, 1930 — Exam-Ready Cheatsheet
Every Foundation attempt pulls 3–5 MCQs from this Act. Master the sale vs agreement-to-sell distinction, conditions vs warranties, and unpaid seller's rights.
Last reviewed: 25 April 2026
Scope and definitions
- •Applies to 'goods' — every kind of movable property except money and actionable claims (Sec 2(7)).
- •Goods: existing, future, or contingent.
- •Parties: seller and buyer. Price: money consideration for goods.
Sale vs Agreement to Sell (Sec 4)
- •Sale: property in the goods passes to the buyer immediately. Executed contract. Risk passes to buyer.
- •Agreement to sell: property passes at a future time or on fulfilment of a condition. Executory contract. Risk stays with seller.
- •When conditions are met, an agreement to sell becomes a sale.
Conditions and warranties (Sec 11–17)
- •Condition — essential stipulation; breach lets buyer repudiate contract + claim damages.
- •Warranty — collateral stipulation; breach allows only damages (no repudiation).
- •A condition can be waived or reduced to a warranty; then buyer can only claim damages.
- •Implied conditions: title, sale by description, merchantable quality, fitness for purpose, sale by sample.
- •Implied warranties: quiet possession, freedom from encumbrance.
Transfer of property (Sec 18–25)
- •General rule: property passes when the parties intend it to pass (Sec 19).
- •Specific/ascertained goods: property passes at the time of contract (if unconditional).
- •Unascertained goods: property passes only when goods are ascertained AND unconditionally appropriated.
- •Nemo dat quod non habet (Sec 27): a non-owner cannot pass good title. Exceptions: mercantile agent sale, estoppel, unpaid seller's sale, sale under court order.
Unpaid seller (Sec 45–54)
- •Definition: seller who hasn't received the whole price OR has received a conditional payment (like a dishonoured cheque).
- •Rights against the goods (even if buyer already has property): lien, stoppage in transit, resale.
- •Rights against the buyer personally: suit for price, suit for damages, interest.
- •Lien: right to retain possession until paid. Lost if goods are delivered to the carrier without reserving the right.
- •Stoppage in transit: reclaim goods still in transit if buyer becomes insolvent.
Must know before the exam
- ★'Caveat emptor' applies — BUT implied conditions of merchantability and fitness for purpose protect the buyer in most cases.
- ★Risk prima facie passes with property (Sec 26). If goods are destroyed before property passes, seller bears the loss.
- ★Delivery symbolic (e.g., handing over keys to a warehouse) is valid delivery.
- ★If buyer wrongfully refuses to accept goods, seller can sue for damages for non-acceptance (Sec 56).
Common mistakes & fixes
- ✗ Treating a breach of warranty as reason to cancel the contract.
- ✓ Only a CONDITION breach lets you repudiate. Warranty breach → damages only.
- ✗ Assuming the unpaid seller loses his lien the moment the buyer gets property.
- ✓ Lien depends on POSSESSION, not property. Seller still in possession = still has lien.
Lock it in with practice
Reading without practising is the #1 reason people forget in the exam. Solve a quick set while this is fresh.