The Sale of Goods Act, 1930

What it does

The Act is the law of the contract of sale of goods. It was taken out of the Indian Contract Act, 1872, which it supplements, and it applies the general law of contract to sales except where it says otherwise. A contract of sale is one by which the seller transfers or agrees to transfer the property in goods to the buyer for a price. If the property passes at once, it is a sale. If it is to pass later or on a condition, it is an agreement to sell.

The Act classifies the terms of the contract. A condition goes to the root of the contract, and breach lets the buyer treat the contract as repudiated. A warranty is collateral to the main purpose, and breach gives a claim for damages only. The Act then implies terms. In a sale there is an implied condition that the seller has a right to sell, an implied warranty of quiet possession and freedom from encumbrance, and, in a sale by description, an implied condition that the goods correspond with the description. Where goods are bought by sample, or by description from a seller who deals in goods of that description, there are implied conditions as to quality and fitness in the circumstances the Act sets out.

It deals with when property passes, and with it, risk. Property passes when the parties intend it to pass, and the Act gives rules for finding that intention where the contract does not say. It deals with delivery, acceptance and payment, and with the rights of an unpaid seller against the goods, including the right of lien and of stoppage in transit. It deals with the remedies of both parties: the seller's suit for the price, and the buyer's claim for non-delivery or breach of warranty.

Who it binds

Parties to a contract for the sale of goods, which are movable property other than actionable claims and money. A contract for work and labour, a contract of service and a sale of land fall outside it. The parties can, within limits, contract out of the implied terms by express agreement.

What has changed, and when

The Act has been amended only lightly since 1930 and stays close to its original form, which followed the English Sale of Goods Act. A reader is working with a statute whose basic rules have been applied for close to a century, and the decided cases on the implied terms are the guide to their reach.

What turns on it in practice

The practice area on this site for contracts and procurement covers the drafting, review and negotiation of commercial contracts and procurement documentation across the supply chain, and the Act is the background to every supply contract that does not displace it. Three points recur. The first is the time and place at which property and risk pass, which a supply contract should state rather than leave to the Act. The second is the status of a term as a condition or a warranty, and so whether late or defective delivery lets the buyer reject the goods or only claim damages. The third is the unpaid seller's rights, which matter when a buyer becomes insolvent.

A contract with a Government buyer adds its own conditions. The Defence Procurement Manual 2025, for instance, fixes liquidated damages for late delivery in its standard conditions, and a supplier has to read those against the Act's default remedies.