Definition and essential characteristics of goods under the Sale of Goods Act, 1930.
## Definition of Goods
Section 2(7) of the Sale of Goods Act, 1930 defines goods as "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 or under the contract of sale."
Key elements: - Movable property (not immovable/land) - Excludes actionable claims (e.g., debts, patents) - Excludes money (in the sense of legal tender) - Can include growing crops and grass if agreement to sever exists
## Categories of Goods
Existing goods: Goods that are owned or possessed by the seller at the time of contract. Further subdivided into: - Specific goods: Identified and agreed upon at the time of contract (e.g., "my car bearing registration XY-01-AB") - Ascertained goods: Identified after contract but from a larger bulk (e.g., "100 bags of cement from the 500-bag consignment at my warehouse") - Generic/unascertained goods: Not identified; described by kind only (e.g., "100 bags of cement" without specifying source)
Future goods: Goods to be manufactured, produced, or acquired by the seller after formation of contract (e.g., "next harvest's wheat crop").
## Goods vs. Non-Goods: Legal Distinctions
| Item | Classification | Why? | |------|---|---| | Land and building | Non-goods | Immovable property | | Crops growing on land (with severance agreement) | Goods | Movable if agreement to sever | | Money as legal tender | Non-goods | Excluded by definition | | Share certificate | Goods | Actionable claims excluded; but certificate itself is goods | | Growing timber (severable) | Goods | Capable of being severed | | Patents, debts | Non-goods | Actionable claims |
## Common Exam Applications
Identification in sale contracts: - Buyer claims goods are "not as described" → must first establish whether item qualifies as "goods" - Dispute over growing crops → critical whether severance agreement existed at contract formation
Transfer of property analysis: - Generic goods require ascertainment before property passes (Section 23) - Specific goods → property may pass at contract formation if intended (Section 20)
## Common Mistakes
- Confusing actionable claims with goods: A share certificate *is* goods; the right to the share (claim) is not
- Misunderstanding "growing crops": Only goods if agreement to sever exists *before or at contract formation*—not post-contract severance
- Treating future goods as existing goods: Affects when property/title transfers and seller's obligations
## Worked Example
Scenario: A farmer agrees in writing to sell 50 bags of his wheat "from the next harvest" to a trader. Three months later, the wheat is harvested and 50 bags are set aside. One month after that, the buyer refuses to accept.
Analysis: - At contract formation: Future goods (not yet in existence) - On harvest and segregation: Ascertained goods (identified from bulk) - Property transfer: Only occurs when goods are ascertained *and* intention is shown (Section 23) — likely when segregated with buyer's knowledge
Conclusion: Contract is valid despite goods being future goods at formation. Buyer's refusal after ascertainment may constitute breach.