What is a contract of sale of goods? Explain its essential features.

In simple words, a contract of sale of goods is a contract whereby a seller transfers the ownership in goods to buyer or agrees to transfer it to the buyer for a price. Section 4 of the Sale of Goods Act defines a contract of sale as a contract whereby the seller transfers  or agrees to transfer the property in goods to the  buyer  for a price.

Essentials of a Contract of Sale of Goods. The analysis of the definition of a Contract of Sale reveals the following essential features:

Two Parties: Being a contract, it would naturally have two parties the seller and the buyer. A person cannot buy the goods from himself, ‘Seller’ means a person who sells or agrees to sell goods. ‘Buyer’ means a person who buys or agrees to buy goods.

Transfer of property: General property means all ownership rights of goods. The seller must transfer or agree to transfer the general property in goods to the buyer. The object of a contract of sale must be the transfer of ownership in goods from one party to another.

Goods: The subject -matter of the contract of sale must be.`goods’. ‘Goods’ means every kind of movable property including stock and shares, growing crops, grass or things attached to land but agreed to be severed from land before sale. Immovable property cannot be the subject -matter of a contract of sale of goods.

Price: Price means the money consideration for sale of goods. The goods must be sold for some price. Where goods are exchanged for goods, it is barter and not a sale. However, there is nothing to prevent the consideration being partly in money and partly in goods.

Essential elements of a valid contract: All essential elements of a valid contract like, agreement, free consent, competence of parties, consideration, etc., must be present in a contract of sale because a contract of sale is just like any other contract.

Contract of sale includes both “Sale and Agreement to Sell”. A contract of sale may be absolute or conditional. Where the contract of sale is exercised i.e., the property in goods is passed from the seller to the buyer is called sale but where the contract is executory, .i.e., the transfer of the property in goods is to take place at a further date or subject to some condition thereafter to be fulfilled, it is an agreement to sell.