1) Meaning & Definition

      According to Section 4(1) of the Sale of Goods Act 1930,  A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another. A contract of sale may be absolute or conditional.

  • Seller / Vendor : According to Section 2(13) of the Sale of Goods Act 1930 "seller" means a person who sells or agrees to sell goods. and,
  • Buyer / Purchaser : "buyer" means a person who buys or agrees to buy goods [Section 2(1) of S.O.G.A 193]

Contract between Seller and Buyer is called 'Contract of Sale.

2) Essential Elements of Contract of Sale -

  To constitute a Contract of Sale, the following ingredients are to be satisfied  :

(i) Two parties :

       To constitute a Contract of Sale, there must be at least two parties one Seller and another Buyer.  buyer and seller must be two different persons because a person cannot buy his own goods.

(ii) Agreement between them :

      To constitute a contract of sale there should be an agreement between seller and buyer. It can be express or implied.

(iii) There must be Goods : 

     To constitute a contract of sale there must be goods. Goods has been in Section 2(7) of 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 or under the contract of sale.

See >>>> Meaning, Definition and Kinds of Goods

(iv) There must be Transfer of goods from seller to buyer : 

       There must be Transfer of goods from seller to buyer.Transfer of goods from seller to buyer  is the most essential element of contract of sale.

(v) There must be lawful consideration

      Consideration is necessary for the one formation of a contract. It means "something return". It is the price paid for contract. It must be Lawful. A contract without consideration is void. A contract of Sale cannot be complete without some consideration .In a contract of Sale consideration must be some price.


See also

1) Kinds of Agents

2) Remedies for Breach of a Contract

3) What is bailment and What are the Duties of Bailee ?

4) Duties and Liabilities of Bailor (Indian Contract Act 1872)

5) Distinction / Difference between Sale and Agreement to Sell


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