Report No. 61
1.6. No property passed in hire-purchase and building contracts.-
Since the expression "sale of goods" in the Constitution, State List, entry 54, has the same meaning as in the Sale of Goods Acts1, a hire-purchase agreement is not a sale2, as no property passes in such transaction until the option to purchase is exercised and the other terms of the agreement fulfilled3. Similarly, in a building contract which is entire and indivisible, there is no "sale" of goods4. It is a contract of works5, involving skill and labour, and not directly pertaining to the transfer of property in goods in specie. Consignments of goods by a principal to his agent is also not a sale, there being no passing of property for a price6 from one person to another.
1. Para. 1.4, supra.
2. K.L. Johar & Co. v. Dy. C.T.O., AIR 1965 SC 1082 (1089): (1965) 2 SCR 112.
3. See Chapter 1B, infra (Hire-purchase).
4. State of Madras v. Gannon Dunkerley & Co., AIR 1958 SC 560 (677): 1959 SCR 379.
5. See Chapter 1A, infra (Works Contract).
6. See Chapter 2, infra (Consignments).