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Report No. 61

1.3. Definition of "Sale" in the Sale of Goods Act.-

The Constitution does not define the expression 'sale". In the Sale of Goods Act1, a contract of sale is defined as follows:-

"A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another".

The Act makes it clear that "a contract of sale may be absolute or conditional2."

The difference between a "sale" and an "agreement to sell" is also laid down in the Act4. "Where, under a contract of sale, the property in the goods is transferred from the seller to the buyer the contract is called a sale, but where the transfer of the property in the goods is to rake place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell."

As to when the agreement ripens into a sale, the Act provides:3

"An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is transferred."

Passing of property thus plays an important part in the concept of sale of goods under the Act.

1. Section 4(1), Sale of Goods Act, 1930.

2. Section 4(2), Sale of Goods Act, 1930.

3. Section 4(3), Sale of Goods Act, 1930.



Certain Problems connected with Powers of the States to Levy a Tax on the Sale of Goods and with the Central Sales Tax Act, 1956 Back




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