The law relating to sale of goods is contained in the Sale of Goods Act, 1930, which came into force on 1st July 1930. The Act contains sixty-six Sections and extends to the whole of India except the State of Jammu and Kashmir. A few minor amendments in the Act were made by Sale of Goods (Amendment) Act, 1963.
The general provisions of the Indian Contract Act continue to be applicable to the contract of sale of goods in so far as they are not inconsistent with the express provisions of Sale of Goods Act (Sec. 3).
Thus, for example, the provisions of the Contract Act relating to capacity of the parties, free consent, agreements in restraint of trade, wagering agreements and measure of damages continue to be applicable to a contract of sale of goods.
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ADVERTISEMENTS:
But the definition of consideration stands modified to the extent that in a contract of sale of goods consideration must be by way of ‘price,’ i.e., only money consideration [Sees. 2(10) and 4],
A contract of sale of goods results, like any other contract, by an offer by one party and its acceptance by the other. Thus, it is a consensual transaction.
The parties to the contract enjoy unfettered discretion to agree to any terms they like relating to delivery and payment of price, etc.
ADVERTISEMENTS:
The Sale of Goods Act does not seek to fetter this discretion. It simply lays down certain positive rules of general application for those cases where the parties have failed to contemplate expressly for contingencies which may interrupt the smooth performance of a contract of sale, such as the destruction of the thing sold, before it is delivered or the insolvency of the buyer, etc. The Act leaves the parties free to modify the provisions of the law by express stipulations.