Sales of goods contracts are the most common commercial contracts and require two parties (a buyer and seller), goods that are movable property, and a monetary price. They can be either a sale, where property is immediately transferred, or an agreement to sell, where transfer occurs later or with conditions. Contracts for the sale of goods by description imply that the goods match the description, while contracts for sale by both description and sample imply that the goods match both the description and sample in quality and are free from defects not apparent in the sample. Failure to meet these implied conditions, such as selling shirting containing an excessive and undisclosed amount of clay not evident in the sample, constitutes a breach of contract.
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Sales of goods contract
1. Sales of goods contract
They are the most common of all the commercial contracts. They are subject to the general legal
principles applicable to all the contracts such as, offer & its acceptance, consideration. The
essentials for a sales of good contact to be valid are-
Two parties:
There must be 2 distinct parties i.e., a buyer and a seller
Goods:
Goods which form the subject matter of the contract of sale must be movable.
Price:
The consideration for the contract of sale, called price, must be money
Sales of goods contract distinguish sales and agreement to sell. Property in the goods is
transferred from the seller to the buyer- sale. A contract is made by an offer to buy or sell goods
for a price and the acceptance of such offer.
Transfer of the property in the goods is to be taken place at some future date or after fulfillment
of some condition -AGREEMENT TO SALE.
Sales of good contract define condition and warranty, expressed and implied conditions and
warranties, condition as to title.
Sales by description
In sale by description there is an implied condition that the goods shall correspond with
description.
This means “if you contract to sell peas, you cannot oblige the party to take beans.”
Hence if the description of the article tendered is different then the buyer may not buy the
goods.
SALE BY DESCRIPTION AND SAMPLE
If the sale is by sample as well as by description, it is not sufficient that the bulk of goods
corresponds with the sample, if the goods do not also correspond with the description.
This means goods must match with the description and sample.
2. In case of a contract for the sale of goods by description the implied condition is that the goods shall
correspond with the description.
In case the sale is by sample as well as with the description. The sales office should therefore be careful to
see that when it supplies goods which have been sold by description, the goods supplied do correspond to
the description as mentioned in the contract. In case of a sale by sample the following conditions are
implied.
(a) That the bulk shall correspond with the sample in quality,
(b) that the buyer shall have a reasonable opportunity of comparing the bulk with the sample, and
(c) that the goods shall be free from any defect, rendering them unmerchantable which would not be
apparent on reasonable examination of the sample.
In one case a manufacturer offered to sell a certain kind of shirting according to sample and the shirting was
sized to a very large extent with China clay, which fact was not apparent on a reasonable examination of the
sample. The buyer on ordering the goods, afterwards discovered this defect which rendered the goods
unmerchantable (i.e. Unsaleable in the market as goods of that description). It was held that seller was
guilty of breach of the third implied condition set out above.