What is contract of sale of goods?

Ans: Firstly if we define the questions above, then it is like, contract which means legally enforceable and valid agreement, sale means transfer of ownership and goods means product. More accurately, under a contract of sale, a seller/ vendor in the capacity of the owner, or part-owner of the goods, transfer the ownership in goods to the buyer for an agreed upon value in money ( or something carry equal value as money)  called the price, paid or promise to exchange any specific consideration.

Which are the essential elements of a contract of sale?

Ans: Essential elements of a contract of sale can be define as-

1.       Goods: According to the act, the subject matter of a contract of sale must be goods. Moreover, property which is moveable, legally enforceable and gained by proper consideration (i.e.money/equal value as money) is recognized as goods. On the other hand, immoveable property is enforceable under, ‘Transfer of Property Act’.

2.       Price: Buyer have to pay some consideration/price (Must be money) for receiving ownership of the goods. Moreover accordingly, consideration in a contract of sale has necessarily to be in money. whatever, the consideration by the party can be partly in money and partly in valued up goods as well.

3.       Two parties: simply, every contract and agreement require two or more parties. So naturally, a contract of sale of goods is bilateral in nature and property in the goods has to transfer from one to another party by exchanging actual consideration. There must be a buyer and seller for valid and legally enforceable contract.

4.       Transfer of ownership: Transfer of ownership is another element of contract of sale. In every contract of sale, there must be an agreement between two parties for transferring ownership. Basically, here property means the general property in goods not just a specific property.

5.       All essentials of a valid contract: For establishing a valid and legally enforceable contract, there must have to present all elements.(i.e. proper consideration, free consent, lawful object, subject matter, goods etc). without any mentioned point contract would invalid.

6.       Includes both a ‘a sale’ and Án agreement to sell’ – It may sound similar but there have differences in these two terms. The term ‘a sale’ means an executed or absolute contract. On the other hand, the term ‘a contract of sale’ can be define as merely an offer, to buy or sell goods for a price, which will be enforceable after accepting following offer. However, according to the Section 4(1) contract whereby the seller transfers or agrees to transfers the property in goods to the transfers the property in goods to the buyer for a price.There may idea be a contract of sale between on partner and another.

So, subject matter of contract of sale of goods is ‘goods’. Let’s know more about the subject matter-

The Act defines ‘goods’ in Section 2(7) as, goods mean every kind of moveable property other than actionable claims and money; and it includes electricity, water, gas, stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be served before sale or under the contract of sale;

Further, goods can be define as-

1)      Existing Goods: Simply, goods which is ready to sale. In other words, the goods which is referred to in the contract of sale are termed as existing goods if they are present/fully exist at the time of the contract. i.e. Regal , a furniture brand is Bangladesh. They sale readymade product/existing good. According to the sec 6 of the sale of good Act, the existing goods are those which are in the legal possession or are owned by the seller at the time of the formation of the contract of sale. Moreover, exiting goods can be more specifically defined as:

a)      Specific Goods-  Section 2 (14) of the Act, describe as- these are those goods that are ‘’identified and agreed upon’’ when the contract of sale is formed.

b)      Ascertained Goods- Basically, this type of goods are not defined by the judicial interpretation. This term is used for specific goods that have been selected from a larger set of goods.

c)       Unascertained Goods- Basically these goods are opposite of ascertained goods. In other words, These type of goods are not specifically identified but have rather been left to be selected from a larger group.

2)      Future Goods: According to the Act, section2 (6), future goods have been defined as the goods that will either be manufactured or produced or acquired by the seller to the time the contract of sale is made. Moreover, future goods is one of the example of agreement to sell.

3)      Contingent Goods: Contingent goods are basically a subtype of future goods because contingent goods the actual sale is to done in the future.

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