Meaning and Essentials of a Contract of Sale: Jaiib/DBF Paper 3 (Module D), Unit-7

Meaning and Essentials of a Contract of Sale: Jaiib/DBF Paper 3 (Module D), Unit-7

Dear bankers,

As we all know that is Meaning and Essentials of a Contract of Sale for JAIIB Exam. JAIIB exam conducted twice in a year. So, here we are Meaning and Essentials of a Contract of Sale (Unit-7), Commercial Laws with Reference to Banking Operations (Module D), Legal & Regulatory Aspects of Banking -Paper 3.

♦Contract Of Sale Of Goods

A contract of sale of goods is a contract under which the seller transfers or agrees to transfer the property in goods to the buyer for a price. When the property in the goods is transferred from the seller to the buyer, the contract is called a sale.

 Features Of Contract Of Sale Of Goods

(a) Bilateral contract: A sale involves two persons – The buyer and the seller.

(b) Money consideration: The consideration for a sale of goods must be money, called the price payable for the transfer of goods. It cannot be a barter, where goods are exchanged for goods.

(c) Moveable property: The Sale of Goods Act covers only the sale of moveable goods and not immoveable property like land and building. The contracts relating to transfer of immoveable property are governed by the Transfer of Property Act and not Sale of Goods Act.

(d) No particular form: The Sale of Goods Act does not make it mandatory to enter into written contracts for the sale of goods. However, if any particular law provides for sale of certain types of goods to be done by a contract in writing, then that law has to be complied and the contract has to be in writing.

The contract may be oral or written or can be implied by the conduct of the parties. A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer.

The contract may provide for:

  • Immediate delivery of the goods immediate payment of the price.
  • For the delivery or payment by instalments.
  • Postponement of delivery or payment.

♦Distinction Between a sale and An Agreement to sell

SALE AGREEMENT TO SELL
In the contract of sale, the exchange of goods takes place immediately. In the agreement to sell the parties agree to exchange the goods for a price depending on the fulfilment of certain conditions at a future specified date.
The nature in the sale is absolute. The nature of the agreement to sell is conditional.
It is an executed contract. It is an executory contract.
Transfer of risk takes place immediately. Transfer of risk doesn’t take place, until and unless the goods are transferred.
The right to sell remains with the buyer The right to sell remains with the seller.
Here the seller has the right to sue for the price. Here the seller has the right to sue for damages.
It creates a right in rem. It creates a right in personam.
The seller has no right to resell. The seller has the right to resell the same goods if the conditions are not fulfilled.
On the off chance that the products are annihilated, the misfortune is borne by the buyer despite the fact that the merchandise is in the ownership of the seller. The loss falls on the seller despite the fact that the merchandise is in the ownership of the buyer.

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