What is the Sale of Goods?

Earlier times, there was a barter system of exchange of goods that is commodity exchange. With the advancements of other things, the sale of goods system has also changed and currencies came into existence. People then started exchanging goods against the currencies.  

The sale of goods refers to the exchange or supply of goods against the currencies. There are two parties involved in this transaction, the seller and the buyer. The seller is the one who sells the goods and the buyer is the one who buys the goods 

As globalization spread across the globe, there was a need for some law for the system of exchange of goods that is the sale of goods, with the increase in the demand for many goods, the market has also expanded. As the supply of goods among various nations are emerging. 

Goods Act 1979  

The sale of goods Act 1979 was first introduced in the United Kingdom. This rule regulates the contract of sale of goods. A bill was passed to regulate the transactions involved in the sale of goods. It is an agreement that helps both buyer and seller to preserve their rights 

Functions of Goods Act 1979  

This Act specifically defines the true meaning of buyer and seller. The buyer is the one who wants to buy something and the seller is the one who wants to sell that good which the buyer wants to buy. It acts as a remedy for misconduct and misfunctions in the delivery of the goods. 

It is a contract that has certain rules stated the agreement between the buyer and the seller in which the seller agrees to transfer specific goods in exchange for some price and the buyer agrees to pay that price. 

• There are some legal rules prescribed in the sale of goods Act 1979. 
• It includes a sales contract which is a transaction between buyer and seller. 

The law imposed responsibility on the seller in order to protect the rights of the buyers. This also helps to eliminate any misconduct in the sale transaction. The sale of goods act helps to make many rules and regulations in the sale of goods.  

Section 12 of the goods act states the right of the seller.  According to this law, the seller has the right to sell the goods. If in case goods are not in good condition the seller loses the right to sell. The law also states that if the buyer wants to return the goods the seller is responsible to return the goods and return the money to the buyer.  

Price: the price of the goods is fixed by the seller after the valuation. The valuation is done by a third party. If the price is not fixed through a third party such valuation as per the law should be avoided. 

The price of a product depends on the cost occurred in the production of the goods to be sold. 

The price paid by the buyer should be reasonable. A reasonable price is decided by the current market situation. In the implied conditions, the price charged for specific goods should be compared with the price of other similar goods in the market. 

Conditions and Warranties 

If the sale is subject to fulfillment of any condition by the seller, the buyer may waive the condition or may elect to treat a breach of warranty. The buyer has the right to reject the contract and goods if the conditions and warranty specified in the sale contract are not fulfilled. 

• Goods to be sold: according to the sale of goods act the goods which are to be sold should match the advertising done through various sources. It should fulfill the purpose and function. There should be no defects in the goods which are to be sold. Goods sold should match the condition and warranty prescribed in the contract. If the goods sold do not match the contract, the buyer has the right to raise the complaint and reject the contract. 

• Breach of contract: the agreement lays down arrangements for breach of contract for both seller as well as the buyer. 
• For the seller: if a buyer after completion of the transaction that is delivery of the goods, rejects to pay the decided amount or if the buyer damages the product and wants to return and get a refund from the seller, the seller, in this case, has the right to sue the buyer and recover damages or unpaid amount 
• For the buyer: when there is a breach of contract for the seller’s side, for example, if the seller delivers a faulty or damaged product or the product different from what it told, or a product which does not meet its functions, the buyer, in this case, has the right to sue the seller and recover the loss due to transaction. 

A buyer has the right to raise a complaint in case if the seller refuses to return the goods and gives a refund if the goods are not in good condition or defective.  

• Transfer of property in goods: no property in the goods is transferred to the buyer unless the goods are ascertained. This case applies where there is a contract of unascertained goods. The goods are said to be transferred from the seller to the buyer when the ownership of the goods is different from possession of goods. That is physical custody or control of goods. 
• International Sale of goods: CISG is also known as Vienna Convention. CISG is designed to facilitate international trade and remove legal barriers among contracting states. CISG regulates the duties and obligations of commercial transaction parties. The law enables the efficiency of contract formation, remedies, and breach of contract at the international level. The deliverable state is bound to follow certain rules. 

It was drafted in the year 1968 which was the continuation of sale of goods Act 1930. 

Consumer Rights Act 2015: Consumer Rights Act 2015 was introduced in the parliament of the UK. The main purpose of this act was to give consumers some rights so that they can file complaints against the cheat and fraud or misconduct done by the seller. This act includes the right to return faulty goods for a refund, replacement, and repair. The act also includes new rules regarding digital purchases. This act is into three subparts: 

1. Part one includes consumer contracts for goods, digital content 
2. Part two includes unfair terms and conditions involved in the transaction 
3. Part two includes other miscellaneous provisions. 

Content and Applications 

This topic is significant in the professional exams for both undergraduate and graduate courses, especially for  

• BA in Economics 
• Bachelor of Commerce
• Master of Commerce
• MBA