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Sale of Goods Act, 1930

Q. Define ‘Sale’. What are its essentials?

Ans: - According to Section 4 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 the goods to the buyer for a price.’

The term ‘Contract of sale’ is a generic term and includes both a sale and an agreement to sell. Where under a contract of sale, the property in the goods is transferred from the seller to the buyer (i.e. at once), the contract is called a ‘sale’ but where the transfer of the property in the goods is to take place at a further time or subject to some condition thereafter to be fulfilled, the contract is called an ‘agreement of sell’. [Section 4(3)].

An agreement to sell becomes a sale when the time elapses or the condition, subject to which the property in the goods is to be transferred, is fulfilled. [Section 4(4)].


The essentials of a contract of sale are:-

1. Numbers of parties – In a contract of sale, minimum two parties are necessary namely the seller and buyer. Sale involves transfer of ownership from one to another.

2. Goods – The subject matter of a contract of sale must be goods. Goods mean every kind of movable property other than actionable claims and money. Transfer of immoveable property is not regulated by the Sale of goods Act.

3. Price – The consideration for a contract of sale is price. Price means money consideration. If it is anything other than money, it will not be sale. But if the exchange is made partly for goods and partly for price, it will still amount to sale. However, the price may be paid or promises to be paid.

4. Transfer of property – In a contract of sale, there must be transfer of property, from the seller to the buyer.

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