Sale of Goods Act, 1930

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THE SALE OF GOODS ACT, 1930 
 
 
 
CONTENTS 
CHAPTER I 
 
PRELIMINARY 
1.  Short title, extent and commencement 
2.  Definitions 
3.  Application of provisions of Act IX of 1872 
_____ 
CHAPTER II 
 
FORMATION OF THE CONTRACT 
 
Contract of Sale 
4.  Sale and agreement to sell 
Formalities of the Contract 
5.  Contract of sale how made 
Subject-matter of Contract 
6.  Existing or future goods 
7.  Goods perishing before making of contract 
8.  Goods perishing before sale but after agreement to sell 
9.  Ascertainment of price 
10.  Agreement to sell at valuation 
Conditions and Warranties 
11.  Stipulations as to time 
 
 

 
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12.  Condition and warranty 
13.  When condition to be treated as warranty 
14.  Implied undertaking as to title, etc. 
15.  Sale by description 
16.  Implied conditions as to quality or fitness 
16A.  Seller to inform buyer of defect in goods sold 
17.  Sale by sample 
_____ 
CHAPTER III 
 
EFFECTS OF THE CONTRACT 
 
Transfer of Property as between Seller and Buyer 
18.  Goods must be ascertained 
19.  Property passes when intended to pass 
20.  Specific goods in a deliverable state 
21.  Specific goods to be put into a deliverable state 
22.  Specific goods in a deliverable state, when the seller has to do anything thereto in order to 
ascertain price 
23.  Sale of unascertained goods and appropriation Delivery to carrier 
24.  Goods sent on approval or “on sale or return” 
25.  Reservation of right of disposal 
26.  Risk prima facie passes with property 
Transfer of Title 
27.  Sale by person not the owner 
28.  Sale by one of joint owners 
29.  Sale by person in possession under voidable contract 
30.  Seller or buyer in possession after sale 
_____ 
 
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CHAPTER IV 
 
PERFORMANCE OF THE CONTRACT 
31.  Duties of seller and buyer 
32.  Payment and delivery are concurrent conditions 
33.  Delivery 
34.  Effect of part delivery 
35.  Buyer to apply for delivery 
36.  Rules as to delivery 
37.  Delivery of wrong quantity 
38.  Instalment deliveries 
39.  Delivery to carrier or wharfinger 
40.  Risk where goods are delivered at distant place 
41.  Buyer’s right of examining the goods 
42.  Acceptance 
43.  Buyer not bound to return rejected goods 
44.  Liability of buyer for neglecting or refusing delivery of goods 
_____ 
CHAPTER V 
 
RIGHTS OF UNPAID SELLER AGAINST THE GOODS 
45.  “Unpaid seller” defined 
46.  Unpaid seller’s rights 
Unpaid Seller’s Lien 
47.  Seller’s lien 
48.  Part delivery 
49.  Termination of lien 
Stoppage in Transit 
50.  Right of stoppage in transit 
 
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51.  Duration of transit 
52.  How stoppage in transit is effected 
Transfer by Buyer and Seller 
53.  Effect of sub-sale or pledge by buyer 
54.  Sale not generally rescinded by lien or stoppage in transit 
_____ 
CHAPTER VI 
 
SUITS FOR BREACH OF THE CONTRACT 
55.  Suit for price 
56.  Damages for non-acceptance 
57.  Damages for non-delivery 
58.  Specific performance 
59.  Remedy for breach of warranty 
60.  Repudiation of contract before due date 
61.  Interest by way of damages and special damages 
_____ 
CHAPTER VII 
 
MISCELLANEOUS 
62.  Exclusion of implied terms and conditions 
63.  Reasonable time a question of fact 
64.  Auction sale 
64A.  In contracts of sale amount of increased or decreased duty or tax to be added or deducted 
65.  [Repealed]  
66.  Savings 
 
_____ 
 
 
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THE SALE OF GOODS ACT, 1930 
1ACT NO. III OF 1930 
[15th March, 1930] 
An Act to define and amend the law relating to the sale of goods 
 WHEREAS it is expedient to define and amend the law relating to the sale of goods ; 
 It is hereby enacted as follows:— 
CHAPTER I 
 
PRELIMINARY 
 1. Short title, extent and commencement.___(1) This Act may be called the 2[*]Sale of Goods 
Act, 1930. 
 3[(2) It extends to the whole of Pakistan.] 
 (3) It shall come into force on the first day of July, 1930. 
 2. Definitions. In this Act, unless there is anything repugnant in the subject or context,___ 
 (1) “buyer” means a person who buys or agrees to buy goods; 
 (2) “delivery” means voluntary transfer of possession from one person to another ; 
 
 (3)  goods are said to be in a “deliverable state” when they are in such state that the buyer would 
under the contract be bound to take delivery of them ; 
 
 (4) “document of title to  goods” includes a bill of lading, dock -warrant, warehouse keeper’s 
certificate, wharfingers’ certificate, railway receipt, warrant or order for the delivery of goods and any 
other document used in the ordinary course of business as proof of the possession or control of goods, 
or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the 
document to transfer or receive goods thereby represented ; 
 
 (5) “fault” means wrongful act or default ; 
 
 
 
 
 
 (6) “future goods” means goods to be manufactured or produced or acquired by the seller after 
the making of the contract of sale; 
 
 (7) “goods” means every kind of moveable property other than actionable claims and money ; 
and includes 4[electricity, water, gas,] stock and shares, growing crops, grass and things attached to or 
forming part of the land which are agreed to be served before sale or under the contract of sale; 
 
1This Act has been applied to Phulera in the Excluded Area of Upper Tanawal to the extend the A ct is applicable in the N. -W. F.P., subject to certain 
modifications, and also extended to the Excluded Area of Upper Tanawal (N.-W. F. P.) other than Phulera with effect from such date and subject to such 
modifications as may be notified, see N.-W. F. P. (Upper Tanawal) (Excluded Area) Laws Regulations, 1950. 
This Act also extended to the Leased Areas of Baluchistan, see the Leased Areas (Laws) Order, G. G. O. III of 1950 ; and applied in the Federated Areas 
of Baluchistan, see Gazette of India, 1937, Pt. I, p. 1499. 
2Repealed by the Federal Laws (Revision and Declaration) Act, 1951(Act No. XXVI OF 1951), s.3 and 2nd Sch. 
3Subs. by Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI OF 1960), s.3 and 2nd Sch. (w. e. f. the 14th October, 1955). 
4Ins. by Ordinance No. XLVII OF 1962, s. 2. 
 
 
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 (8) a person is said to be “insolvent” who has ceased to pay his debts in the ordinary course of 
business, or cannot pay his debts as they become due, whether he has committed an act o f insolvency 
or not ; 
 (9) “mercantile agent” means a mercantile agent having in the customary course of business as 
such agent authority either to sell goods, or to consign goods for the purposes of sale, or to buy goods, 
or to raise money on the security of goods ; 
 (10) “price” means the money consideration for a sale of goods ; 
 (11) “property” means the general property in goods, and not merely a special property ; 
 (12) “quality of goods” includes their state or condition ; 
 (13) “seller” means a person who sells or agrees to sell goods; 
 (14) “specific goods” means goods identified and agreed upon at the time a contract of sale is 
made ; and 
 (15) expressions used but not defined in this Act and defined in the Contract Act, 1872, (IX of 
1872), have the meanings assigned to them in that Act. 
 3. Application of provisions of Act IX of 1872. ___The unrepealed provisions of the Contract 
Act, 1872, save in so far as they are inconsistent with the express provisions of this Act, shall continue 
to apply to contracts for the sale of goods. 
_____ 
CHAPTER II 
 
FORMATION OF THE CONTRACT 
Contract of Sale 
 4. Sale and agreement to sell.___(1) 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. 
 (2) A contract of sale may be absolute or conditional. 
 (3) 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 take place 
at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement 
to sell. 
 (4) 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 to be transferred. 
Formalities of the Contract 
 5. Contract of sale how made.___(1) 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 the immediate delivery of 
the goods or immediate payment of the price or both, or for the delivery or payment by instalments, or 
that the delivery or payment or both shall be postponed. 
 
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 (2) Subject to the provisions of any law for the time being in force, a contract of sale may be 
made in writing or by word of mouth, or partly in writing and partly by word of mouth or  may be 
implied from the conduct of the parties. 
Subject-matter of Contract 
 6. Existing or future goods.—(1) The goods which form the subject of a contract of sale may 
be either existing goods, owned or possessed by the seller, or future goods. 
 (2) There may be a contract for the sale of goods the acquisition of which by the seller depends 
upon a contingency which may or may not happen. 
 (3) Where by a contract of sale the seller purports to effect a present sale of future goods, the 
contract operates as an agreement to sell the goods. 
 7. Goods peris hing before making of contract. ___Where there is a contract for the sale of 
specific goods, the contract is void if the goods without the knowledge of the seller have, at the time 
when the contract was made, perished or become so damaged as no longer to answer to their description 
in the contract. 
 8. Goods perishing before sale but after agreement to sell.___Where there is an agreement to 
sell specific goods, and subsequently the goods without any fault on the part of the seller or buyer 
perish or become so damaged as no longer to answer to their description in the agreement before the 
risk passes to the buyer, the agreement is thereby avoided. 
The Price 
 9. Ascertainment of Price. ___(1) The price in a contract of sale may be fixed by the contract 
or may be left to be fixed in manner thereby agreed or may be determined by the course of dealing 
between the parties. 
 (2) Where the price is not determined in accordance with the foregoing provisions, the buyer 
shall pay the seller a reasonable price. What is a reasonable price is a question of fact dependent on the 
circumstances of each particular case. 
 10. Agreement to  sell at valuation. ___(1) Where there is an agreement to sell goods on the 
terms that the price is to be fixed by the valuation of a third party and such third party cannot or does 
not make such valuation, the agreement is thereby avoided : 
 Provided that, if the goods or any part thereof have been delivered to, and appropriated by, the 
buyer, he shall pay a reasonable price therefor. 
 (2) Where such third party is prevented from making the valuation by the fault of the seller or 
buyer, the party not in fault may maintain a suit for damages against the party in fault. 
Conditions and Warranties 
 11. Stipulations as to time. ___Unless a different intention appears from the terms of the 
contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale. 
Whether any other stipulation as to time is of the essence of the contract or not depends on the te rms 
of the contract. 
 
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 12. Condition and warranty.___(1) A stipulation in a contract of sale with reference to goods 
which are the subject thereof may be a condition or a warranty. 
 
 (2) A condition is a stipulation essential to the main purpose of the contract, the breach of which 
gives rise to a right to treat the contract as repudiated. 
 
 (3) A warranty is a stipulation collateral to the main purpose of the contract, the breach of which 
gives rise to a claim for damages but not to a right to reject the go ods and treat the contract as 
repudiated. 
 
 
 
 
 
 
 
 
 (4) Whether a stipulation in a contract of sale is condition or a warranty depends in each case 
on the construction of the contract. A stipulation may be a condition, though called a warranty in the 
contract. 
 
 13. When condition to be treated as warranty. ___(1) Where a contract of sale is subject to 
any condition to be fulfilled by the seller, the buyer may waive the condition or elect to treat the breach 
of the condition as a breach of warranty and not as a ground for treating the contract as repudiated. 
 
 (2) Where a contract of sale is not severable and the buyer has accepted the goods or part 
thereof, 1[* * *] the breach of any condition to be fulfilled by the seller can only be treated as a breach 
of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless 
there is a term of the contract, express or implied, to that effect. 
 
 (3) Nothing in this section shall affect the case of any condition or warranty fulfilment of which 
is excused by law by reason of impossibility or otherwise. 
 
 
 14. Implied undertaking as to title, etc. ___In a contract of sale, unless the circums tances of 
the contract are such as to show a different intention there is― 
 
 
(a)  an implied condition on the part of the seller that, in the case of a sale, he has a 
right to sell the goods and that, in the case of an agreement to sell, he will have 
a right to sell the goods at the time when the property is to pass ; 
 
 
(b)  an implied warranty that the buyer shall have and enjoy quiet possession of the 
goods ; 
 
 
(c)  an implied warranty that the goods shall be free from any charge or 
encumbrance in favour of any third party not declared or known to the buyer 
before or at the time when the contract is made. 
 
 
 
 
 15. Sale by description.___Where there is a contract for the sale of goods by description, there 
is an implied condition that the goods shall correspond with the description ; and, if the sale is by 
sample as well as by description it is not sufficient that the bulk of the goods correspo nds with the 
sample if the goods do not also correspond with the description. 
 
 
 16. Implied conditions as to quality or fitness.___Subject to the provisions of this Act and of 
any other law for the time being in force, there is no implied warranty or condition as to the quality or 
fitness or any particular purpose of goods supplied under a contract of sale, except as follows :― 
 
 (1) Where t he buyer, expressly or by implication, makes known to the seller the particular 
purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or 
judgment, and the goods are of a description which it is in the course of the seller’s business to supply 
(whether he is the manufacturer of producer or not), there is an implied condition that the goods shall 
be reasonably fit for such purpose :     
                 Provided that, in the case of a contract for the sale of a sp ecified article under its patent or 
other trade name, there is no implied condition as to its fitness for any particular purpose. 
1Omitted by Ordinance No. XLVII OF 1962, s.3. 
 
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 (2) Where goods are bought by description from a seller who deals in goods of that description 
(whether he is the manufacturer or producer or not), there is an implied condition that the goods shall 
be of merchantable quality : 
 Provided that, if the buyer has examined the goods, there shall be no implied condition as 
regards defects which such examination ought to have revealed. 
 (3) An implied warranty or condition as to quality or fitness for a particular purpose may be 
annexed by the usage of trade. 
 (4) An express warranty or condition does not negative a warranty or condition implied by this 
Act unless inconsistent therewith. 
 
 1[16A. Seller to inform buyer of defect in goods sold. ―Notwithstanding anything contained 
in section 16, and save where the parties have entered into an agreement to the contrary, the seller shall 
be under an obligation to inform the buyer of any defect in the goods sold at the time of the contract, 
except in a case where the defect is obviously known to the buyer.] 
 17. Sale by sample. ___(1) A contract of sale is a contract for sale by sample where th ere is a 
term in the contract, express or implied, to that effect. 
 (2) In the case of a contract for sale by sample there is an implied condition___ 
(a)  that the bulk shall correspond with the sample in quality ; 
(b)  that the buyer shall have a reasonable opportunity of comparing the bulk with 
the sample ; 
(c)  that the goods shall be free from any defect, rendering then, unmerchantable, 
which would not be apparent on reasonable examination of the sample. 
_____ 
 
CHAPTER III 
 
EFFECTS OF THE CONTRACT 
Transfer of Property as between Seller And Buyer 
 18. Goods must be a scertained.___Where there is a contract for the sale of unascertained 
goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained. 
 19. Property passes when intended to pass. ___(1) Where there is a contract for the sale of 
specific or ascertained -goods the property in them, is transferred to the buyer at such time as the parties 
to the contract intend it to be transferred. 
 (2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms 
of the contract, the conduct of the parties and the circumstances of the case. 
 
 
1Ins. by Act No XVIII OF 1994, s.2. 
 
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 (3) Unless a different intention appears, the rules contained in sections 20 to 24 are rules for 
ascertaining intention of the time at which the property in the goods is to pass to the buyer. 
 20. Specific goods in a deliverable state. ___Where there is an unconditional contract for the 
sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the 
contract is made, and it is immaterial whether the time of payment of the price or the time of delivery 
of the goods, or both, is postponed. 
 21. Specific goods to be put into a deliverable state.___Where there is a contract for the sale 
of specific goods and the seller is bound to do something to the goods for the purpose of putting them 
into a deliverable state,  the property does not pass until such thing is done and the buyer has notice 
thereof. 
 22. Specific goods in a deliverable state, when the seller has to do anything there to in 
order to ascertain price. ___Where there is a contract for the sale of specific goods in a deliverable 
state, but the seller is bound to weigh, measure, test or do some other act or thing with reference to the 
goods for the purpose of ascertaining the price, the property does  not pass until such act or thing is 
done and the buyer has notice thereof. 
 23. Sale of unascertained goods and appropriation. ___(1) Where there is a contract for the 
sale of unascertained or future goods by description and goods of that description and in a deliverable 
state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer 
or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. 
Such assent may be express or implied, and may be given either before or after the appropr iation is 
made. 
 (2) Delivery to carrier.___Where, in pursuance of the contract, the seller delivers the goods to 
the buyer or to a carrier or other bailee  (whether named by the buyer or not) for the purpose of 
transmission to the buyer, and does not reserve the right of disposal, he is deemed to have 
unconditionally appropriated the goods to the contract. 
 24. Goods sent on approval or “on sale or return”.___When goods are delivered to the buyer 
on approval or “on sale or return” or other similar terms, the property therein passes to the buyer___ 
(a)  when he signifies his approval or acceptance to the seller or does any other act 
adopting the transaction ;  
(b)  if he does not signify his approval or acceptance to the seller but retains the goods 
without giving notice of rejection, then, if a time has been fixed for the return of the 
goods, on the expiration of such time, and, if no time has been fixed, on the expiration 
of a reasonable time. 
 25. Reservation of right of disposal .___(1) Where there is a contract for the sale of specific goods or 
where goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or 
appropriation, reserve the right of disposal of the goods until certain conditions ar e fulfilled. In such case, 
notwithstanding the delivery of the goods to a buyer, or to a carrier or other bailee for the purpose of transmission 
to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are 
fulfilled. 
       1[(2) Where goods are shipped or are dispatched by railway and are by the bill of lading or by railway receipt 
deliverable to the order of the seller or his agent the seller is prima facie deemed to reserve the right of disposal.] 
1Subs. by Ordinance No. XLVII OF 1962, s.4 
 
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                                                                    (3) Where the seller of goods draws on the buyer for the price and transmits the bill of exchange 
and 1[bill of lading or railway receipt] to the buyer together, to secure acceptance or payment of the 
bill of exchange, the buyer is bound to return the 1[bill of lading or railway receipt] if he does not 
honour the bill of exchange and if he wrongfully retain s the 1[bill of lading or railway receipt] the 
property in the goods does not pass to him. 
 26. Risk prima facie passes with property. ___Unless otherwise agreed, the goods remain at 
the seller’s risk until the property therein is transferred to the buyer, but when the property therein is 
transferred to the buyer, the goods are at the buyer’s risk whether delivery has been made or not : 
 Provided that, where delivery has been delayed through the fault of either buyer or seller, the 
goods are at the risk of t he party in fault as regards any loss which might not have occurred but for 
such fault : 
 Provided also that nothing in this section shall affect the duties or liabilities of either seller or 
buyer as a bailee of the goods of the other party. 
Transfer of Title 
 27. Sale by person not the owner.___Subject to the provisions of this Act and of any other law 
for the time being in force, where goods are sold by a person who is not the owner thereof and who 
does not sell them under the authority or with the conse nt of the owner, the buyer acquires no better 
title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from 
denying the seller's authority to sell : 
 Provided that, where a mercantile agent is, with the consent of the owner, in possession of the 
goods or of a document of title to the goods, any sale made by him, when acting in the ordinary course 
of business of a mercantile agent, shall be as valid as if he were expressly authorised by the owner of 
the goods to make the same; provided that buyer acts in good faith and has not at the time of the 
contract of sale notice that the seller has not authority to sell. 
 28. Sale by one of joint owners. ___If one of several joint owners of goods has the sole 
possession of them b y permission of the co -owners, the property in the goods in transferred to any 
person who buys them of such joint owner in good faith and has not at the time of the contract of sale 
notice that the seller has not authority to sell.  
 29. Sale by person in possession under voidable contract. ___When the seller of goods has 
obtained possession thereof under a contract voidable under section 19 or section 19A of the Contract 
Act, 1872 (IX of 1872), but the contract has not been rescinded at the time of the sale , the buyer 
acquires a good title to the goods, provided he buys them in good faith and without notice of the seller’s 
defect of title. 
 30. Seller or buyer in possession after sale. ___(1) Where a person, having sold goods, 
continues or is in possession of the goods or of the documents of title to the goods, the delivery or 
transfer by that person or by a mercantile agent acting for him, of the goods or documents of title under 
any sale, pledge or other disposition thereof to any person receiving the same in good faith and without 
notice of the previous sale shall have the same effect as if the person making the delivery or transfer 
were expressly authorised by the owner of the goods to make the same. 
 
1Subs. by Ordinance No. XLVII OF 1962, s.4. 
 
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 (2) Where a person, having bought or agreed to buy goods, obtains, with the consent of the 
seller, possession of the goods or the documents of title to the goods, the delivery or transfer by that 
person or by a mercantile agent acting for him, of the goods or documents of title under any sale, 
pledge or other disposition thereof to any person receiving the same in good faith and without notice 
of any lien or other right of the original seller in respect of the goods shall have effect as if such lien 
or right did not exist. 
_____ 
CHAPTER IV 
 
PERFORMANCE OF THE CONTRACT 
 31. Duties of seller and buyer. ___It is the duty of the seller to deliver the goods and of the 
buyer to accept and pay for them, in accordance with the terms of the contract of sale. 
 32. Payment and delivery are concurrent conditions.___Unless otherwise agreed, delivery of 
the goods and payment of the price are concurrent conditions, that is to say, the seller shall be ready 
and willing to give possession of the goods to the buyer in exchange for the price, and the buyer shall 
be ready and willing to pay the price in exchange for possession of the goods. 
 33. Delivery.___Delivery of goods sold may be made by doing anything which the parties agree 
shall be treated as delivery or which has effect of putting the goods in the possession of the buyer or 
of any person authorised to hold them on his behalf. 
 34. Effect of part delivery. ___A delivery of part of goods, to progress of the delivery of the 
whole, has the same effect, for the purpose of passing the property in such goods, as a delivery of the 
whole; but a delivery of part of the goods, wit h an intention of severing it from the whole, does not 
operate as a delivery of the remainder. 
 35. Buyer to apply for delivery.___Apart from any express contract, the seller of goods is not 
bound to deliver them until the buyer applies for delivery. 
 36. Rule as to delivery.___(1) Whether it is for the buyer to take possession of the goods or for 
the seller to send them to the buyer is a question depending in each case on the contract, express or 
implied, between the parties. Apart from any such contract, goods sold are to be delivered at the place 
at which they are at the time of the sale, and goods agreed to be sold are to be delivered at the place at 
which they are at the time of the agreement to sell, or if not then in existence, at the place at which 
they are manufactured or produced. 
 (2) Where under the contract of sale the seller is bound to send the goods to the buyer, but no 
time for sending them is fixed, the seller is bound to send them within a reasonable time. 
 (3) Where the goods at the time of sale are in the possession of third persons, there is no delivery 
by seller to buyer unless and until such third person acknowledges to the buyer that he holds the goods 
on his behalf : 
 Provided that nothing in this section shall affect the operation of  the issue or transfer of any 
document of title to goods. 
 (4) Demand or tender of delivery may be treated as ineffectual unless made at a reasonable 
hour. What is a reasonable hour is a question of fact. 
 
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 (5) Unless otherwise agreed, the expenses of and i ncidental to putting the goods into a 
deliverable state shall be borne by the seller. 
 37. Delivery of wrong quantity. ___(1) Where the seller delivers to the buyer a quantity of 
goods less than he contracted to sell, the buyer may reject them, but if the buyer accepts the goods so 
delivered he shall pay for them at the contract rate. 
 (2) Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, 
the buyer may accept the goods included in the contract and reject the rest, or 1[, if the goods delivered 
are such that it is difficult or time consuming to separate the quantity contracted for,] he may reject the 
whole. If the buyer accepts the whole of the goods so delivered, he shall pay for them at the contract 
rate. 
 (3) Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of 
a different description not included in the contract, the buyer may accept the goods which are in 
accordance with the contract and reject the rest, or may reject the whole. 
 (4) The provisions of this section are subject to any usage of trade, special agreement or course 
of dealing between the parties. 
 38. Installment deliveries.___(1) Unless otherwise agreed, the buyer of goods is not bound to 
accept delivery thereof by installments. 
 (2) Where there is a contract for the sale of goods to be delivered by stated instalments which 
are to be separately paid for, and the seller makes no delivery or defective delivery in respect of one or 
more instalments, or the buyer neglects or refuses to take delivery of or pay for one or more instalments, 
it is a question in each case depending on the terms of the contract and the circumstances of the case, 
whether the breach of contract is a repudiation of the whole contract, or whether it is a severable breach 
giving rise to a claim for compensation, but not to a right to treat the whole contract as repudiated. 
 39. Delivery to carrier or wharfinger. ___(1) Where in pursuance of a contract of sale, the 
seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether 
named by the buyer or not, for the purpose of transmission to the buyer, or delivery of the goods to a 
wharfinger for safe custody, is prima facie deemed to be a delivery of the goods to the buyer. 
 (2) Unless otherwise authorised by the buyer, the seller shall make such contract with the carrier 
or wharfinger on behalf of the buyer as may be reasonable having regard to the nature of the goods and 
the other circumstances of the case. If the seller omits so to do, and the goods are lost or damaged in 
course of transit or whilst in the custody of the wharfinger, the buyer may decline to treat the delivery 
to the carrier or wharfinger as a delivery to himself, or may hold the seller responsible in damages. 
 (3) Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving 
sea transit, in circumstances in which it is unsual to insure, the seller shall give such notice to the buyer 
as may enable him to insure them during their sea transit, and if the seller fails so to do, the goods shall 
be deemed to be at his risk during such sea transit. 
 40. Risk where goods are delivered at distant place.___Where the seller of goods agrees to deliver 
them at his own risk at a place other than that where they are when sold, the buyer shall, nevertheless, unless 
otherwise agreed, take any risk of deterioration in the goods necessarily incident to the course of transit.  
1Ins. by Act No. XVIII OF 1994, s. 3. 
 
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 41. Buyer’s right of examining the goods.___(1) Where goods are delivered to the buyer which 
he has not previously examined, he is not deemed to have accepted them unless and until he has had a 
reasonable opportunity of examining them for the purpose of ascertaining whether they are in 
conformity with the contract. 
 (2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, 
on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of 
ascertaining whether they are in conformity with the contract. 
 42. Acceptance.___The buyer is deemed to have accepted the goods when he intimates to the 
seller, that he has accepted them, or when the goods have been delivered to him and he does any act in 
relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a 
reasonable time, he retains the goods without intimating to the seller that he has rejected them. 
 43. Buyer not bound to return rejected goods. ___Unless otherwise agreed, where goods are 
delivered to the buyer and he refuses to accept them, having the right so to do, he is not bound to return 
them to the seller, but it is sufficient if he intimates to the seller that he refuses to accept them. 
 44. Liability of buyer for neglecting or refusing delivery of goods.___When the seller is ready 
and willing to deliver the goods and requests the buyer to take delivery, and the buyer does not within 
a reasonable time after such request take delivery of the goods, he is liable to the seller for any loss 
occasioned by his neglect or refusal to take delivery, and also for a reasonable charge for the care and 
custody of the goods : 
 Provided that nothing in this section shall affect the rights of the seller where the neglect or 
refusal of the buyer to take delivery amounts to a repudiation of the contract. 
_____ 
CHAPTER V 
 
RIGHTS OF UNPAID SELLER AGAINST THE GOODS 
 45. “Unpaid seller” defined. ___(1) The seller of goods is deemed to be an “unpaid seller” 
within the meaning of this Act___ 
(a)  when the whole of the price has not been paid or tendered ; 
(b)  when a bill of exchange or other negotiable instrument has been received as 
conditional payment, and the condition on which it was received has not been 
fulfilled by reason of the dishonour of the instrument or otherwise. 
 (2) In this Chapter, the term “seller” includes any person who is in the position of a seller, as, 
for instance, and agent of the seller to whom the bill of lading has been indorsed, or a consignor or 
agent who has himself paid, or is directly responsible for, the price. 
 46. Unpaid seller’s rights.___(1) Subject to the provisions of this Act and of any law for the 
time being in force, notwithstanding that the property in the goods may have passed to the buyer, the 
unpaid seller of goods, as such, has by implication of law___ 
(a)  a lien on the goods for the price while he is in possession of them ; 
(b)  in case of the insolvency of the buyer a right of stopping the goods in transit 
after he has parted with the possession of them ; 
 
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(c)  a right of re-sale as limited by this Act. 
 (2) Where the property in goods has not passed to the buyer, the unpaid seller has, in addition 
to his other remedies, a right of withholding delivery similar to and co-extensive with his rights of lien 
and stoppage in transit where the property has passed to the buyer. 
Unpaid seller’s Lien   
 47. Seller’s lien.___(1) Subject to the provisions of this Act, the unpaid seller of goods who is 
in possession of them is entitled to retain possession of them until payment or tender of the price in the 
following cases, namely :___ 
 
(a)  where the goods have been sold without any stipulation as to credit ; 
 
(b)  where the goods have been sold on credit, but the term of credit has expired ; 
 
(c)  where the buyer becomes insolvent. 
 
 (2) The seller may exercise his right of lien notwithstanding that he is in possession of the goods 
as agent or bailee for the buyer. 
 
 48. Part delivery. ___Where an unpaid seller has made part delivery of the goods, he may 
exercise his right of lien on th e remainder, unless such part delivery has been made under such 
circumstances as to show an agreement to waive the lien. 
 
 49. Termination of lien.___(1) The unpaid seller of goods loses his lien thereon― 
 
(a)  when he delivers the goods to a carrier or other bailee for the purpose of 
transmission to the buyer without reserving the right of disposal of the goods ; 
 
(b)  when the buyer or his agent lawfully obtains possession of the goods ; 
 
(c)  by waiver thereof. 
 
 (2) The unpaid seller of goods, having a lien thereon, does not lose his lien by reason only that 
he has obtained a decree for the price of the goods. 
 
Stoppage in Transit 
 
 50. Right of stoppage in transit. ___Subject to the provisions of this Act, when the buyer of 
goods becomes insolvent, the unpaid seller who has parted with the possession of the goods has the 
right of stopping them in transit, that is to say, he may resume possession of the goods as long as they 
are in the course of transit, and may retain them until payment or tender of the price. 
 
 51. Duration of transit.___(1) Goods are deemed to be in course of transit from the time when 
they are delivered to a carrier or other bailee for the purpose of transmi ssion to the buyer, until the 
buyer or his agent in that behalf takes delivery of them from such carrier or other bailee. 
 
 (2) If the buyer or his agent in that behalf obtains delivery of the goods before their arrival at 
the appointed destination, the transit is at an end. 
 
 (3) If, after the arrival of the goods at the appointed destination, the carrier or other bailee  
acknowledges  to  the buyer  or  his  agent  that  he holds  the goods  on  his  behalf  and  continues in  
 
 
 
 
 
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possession of them as bailee for the buyer or his agent, the transit is at an end and it is immaterial that 
a further destination for the goods may have been indicated by the buyer. 
 
 (4) If the goods are rejected by the buyer and the carrier or other bailee continues in possession 
of them, the transit is not deemed to be at an end, even if the seller has refused to receive them back. 
 (5) When goods are delivered to a ship chartered by the buyer, it is a question depending on 
the circumstances of the particular case, whether they are in the possession of the master as a carrier 
or as agent of the buyer. 
 (6) Where the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his 
agent in that behalf, the transit is deemed to be at an end. 
 (7) Where part delivery of the goods has been made to the buyer or his agent in that behalf, the 
remainder of the goods may be stopped in transit, unless such part delivery has been given in such 
circumstances as to show an agreement to give up possession of the whole of the goods. 
 52. How stoppage in transit is effected. ___(1) The unpaid seller may exercise his right of 
stoppage in transit either by taking actual possession of the goods, or by giving notice of his claim to 
the carrier or other bailee in whose possession the goods are. Such notice may be given either to the 
person in actual possession of the goods or to his principal. In the latter case the notice, to be effectual, 
shall be given at such time and in such circumstances that the principal, by the exercise of reasonable 
diligence, may communicate it to his servant or agent in time to prevent a delivery to the buyer. 
 (2) When notice of stoppage in transit is given by the seller to the carrier or other bailee in 
possession of the goods, he shall re -deliver the goods to, or according to the directions of, the seller. 
The expenses of such re-delivery shall be borne by the seller. 
Transfer by Buyer and Seller 
 53. Effect of sub -sale or pledge by buyer. ___(1) Subject to the provisions of this Act, the  
unpaid seller’s right of lien or stoppage in transit is not affected by any sale or other disposition of the 
goods which the buyer may have made, unless the seller has assented thereto : 
 Provided that where a document of title to goods has been issued or lawfully transferred to any 
person as buyer or owner of the goods, and tha t person transfers the document to a person who takes 
the document in good faith and for consideration, then, if such last mentioned transfer was by way of 
sale, the unpaid seller’s right of lien or stoppage in transit is defeated, and, if such last mentioned 
transfer was by way of pledge or other disposition for value, the unpaid seller’s right of lien or stoppage 
in transit can only be exercised subject to the rights of the transferee. 
 (2) Where the transfer is by way of pledge, the unpaid seller may require the pledge to have the 
amount secured by the pledge satisfied in the first instance, as far as possible, out of any other goods 
or securities of the buyer in the hands of the pledgee and available against the buyer. 
 54. Sale not generally rescinded by li en or stoppage in transit .___(1) Subject to the  
provisions of this section, a contract of sale is not rescinded by the mere exercise by an unpaid seller 
of his right of lien or stoppage in transit. 
 (2) Where the goods are of a perishable nature, or where the unpaid seller who has exercised 
his right of lien or stoppage in transit gives notice to the buyer of his intention to re -sell, the unpaid 
seller may, if the buyer does not within a reasonable time pay or tender the price, re -sell the goods 
 
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within a reasonable time and recover from the original buy er damages for any loss occasioned by his 
breach of contract, but the buyer shall not be entitled to any profit which may occur on the re -sale. If 
such notice is not given, the unpaid seller shall not be entitled to recover such damages and the buyer 
shall be entitled to the profit, if any, on the re-sale. 
 (3) Where an unpaid seller who has exercised his right of lien or stoppage in transit re-sells the 
goods, the buyer acquires a good title thereto as against the original buyer, notwithstanding that no 
notice of the re-sale has been given to the original buyer. 
 (4) Where the seller expressly reserves a right of re-sale in case the buyer should make default, 
and, on the buyer making default, re-sells the goods, the original contract of sale is thereby rescinded, 
but without prejudice to any claim which the seller may have for damages. 
_____ 
CHAPTER VI 
 
SUITS FOR BREACH OF THE CONTRACT 
 55. Suit for price.___(1) Where under a contract of sale the property in the goods has passed to 
the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of 
the contract, the seller may sue him for the price of the goods. 
 (2) Where under a contract of sale the price is payable on a day certain irrespective of delivery 
and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price 
although the property in the goods has not passe d and the goods have not been appropriated to the 
contract. 
 56. Damages for non acceptance.___Where the buyer wrongfully neglects or refuses to accept 
and pay for the goods, the seller may sue him for damages for non-acceptance. 
 57. Damages for non -delivery.___Where the seller wrongfully neglects of  refuses to deliver 
the goods to the buyer, the buyer may sue the seller for damages for non-delivery. 
 58. Specific performance.___Subject to the provisions of Chapter II of the Specific Relief Act, 
1877 (I of 1877), in any suit for breach of contract to deliver specific or ascertained goods, the Court 
may, if it  thinks fit, on the application of the plaintiff, by its decree direct that the contract shall be 
performed specifically, without giving the defendant the option of retaining the goods on payment of 
damages. The decree may be unconditional, or upon such terms and conditions as to damages, payment 
of the price or otherwise, as the Court may deem just, and the application of the plaintiff may be made 
at any time before the decree. 
 
 
 
 
 
59. Remedy for breach of warranty.___(1) Where there is a breach of warranty by the seller, or where 
the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach 
of warranty, the buyer is not by reason only of such breach of Warranty entitled to reject the goods ; 
but he may___ 
 
 (a)  set up against the seller the breach of warranty in diminution or extinction of the 
  price ; or 
 (b)  sue the seller for damages for breach of warranty. 
 (2) The fact that a buyer has set up a breach of warranty in diminution of extinction of the price 
does not prevent him from suing for the same breach of warranty if he has suffered further damage. 
 
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 60. Repudiati on of contract before due date. ___Where either party to a contract of sale 
repudiates the contract before the date of delivery, the other may either treat the contract as subsisting 
and wait till the date of delivery, or he may treat the contract as rescinded and sue for damages for the 
breach. 
 61. Interest by way of damages and special damages. ___(1) Nothing in this Act shall affect 
the right of the seller or the buyer to recover interest or special damages in any case where by law 
interest or special damages may be recoverable, or to recover the money paid where the consideration 
for the payment of it has failed. 
 (2) In the absence of a contract to the contrary, the Court may award interest at such rate as it 
thinks fit on the amount of the price___ 
(a)  to the seller in a suit by him for the amount of the price ―from the date of the 
tender of the goods or from the date on which the price was payable ;  
(b)  to the buyer in a suit by him for the refund of the price in a case of a breach of        
the contract on the part of the seller ___from the date on which the payment was 
made. 
_____ 
CHAPTER VII 
 
MISCELLANEOUS 
 62. Exclusion of implied  terms and conditions. ___Where any right, duty or liability would 
arise under a contract of sale by implication of law, it may be negatived or varied by express agreement 
or by the course of dealing between the parties, or by usage, if the usage is such as to bind both parties 
to the contract. 
 63. Reas onable time a question of fact. ___Where in this Act any reference is made to a 
reasonable time, the question what is a reasonable time is a question of fact. 
 64. Auction sale.___In the case of a sale by auction.___ 
 (1) where goods are put up for sale in lots, each lot is prima facie deemed to be the subject of 
a separate contract of sale ; 
            (2) the sale is complete when the auctioneer announces its completion by the fall of the hammer 
or in other customary manner ; and, until such announcement is made, any bidder may retract his bid ; 
 (3) a right to bid may be reserved expressly by or on behalf of the seller and, where such right 
is expressly so reserved, but not otherwise, the seller or any one person on his behalf may, subject to 
the provisions hereinafter contained, bid at the auction ; 
 (4) where the sale is not notified to be subject to a right  to bid on behalf of the seller, it shall 
not be lawful for the seller to bid himself or to employ and person to bid at such sale, or for the 
auctioneer knowingly to take any bid from the seller or any such person ; and any sale contravening 
this rule may be treated as fraudulent by the buyer ; 
 (5) the sale may be notified to be subject to a reserved or upset price ; 
 
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 (6) if the seller makes use of pretended bidding to raise the price, the sale is voidable at the 
option of the buyer. 
 1[64A. In contracts of sale amount of increased or decreased duty or tax to be added or 
deducted.___In the event of any duty of customs or exci se 2[or tax] on any goods  being imposed, 
increased, decreased or remitted after the making of any contract for the sale of such  goods without 
stipulation 2[as to the payment of duty or tax where the duty or tax] was not  chargeable at the time of 
the making of the contract, or for the sale of such goods 2[duty-paid or tax-paid where duty or tax] was 
chargeable at that time,___ 
 
(a)  if such imposition or increase so takes effect that 2[the duty or tax or increased 
duty or tax], as the case may be, or any part thereof, is paid, the seller may add 
so much to the contract price as will be equivalent to the amount paid 2[in respect 
of such duty or tax or increase of duty or tax], and he shall be entitled to be paid 
and to sue for and recover such addition, and   
(b)  if such decrease or remission so takes effect that the decreased duty 2[or tax] 
only or no duty 2[or tax], as the case may be, is paid, the buyer may deduct so 
much from the contract price as will be equivalent to t he decrease of duty 2[or 
tax] or remitted duty 2[or tax], and he shall not be liable to pay, or be sued for 
or in respect of, such deduction.] 
 
 
 
 
 2[Explanation.___The word “tax” in this section means the tax payable under the Sales Tax Act, 
1951 (III of 1951).] 
 
 65. 3[Repealed] 
 
 66. Savings.___(1) Nothing in this Act or in any repeal effected thereby shall affect or be deemed 
to affect___ 
 
(a)  any right, title, interest, obligation or liability already acquired, accrued or 
incurred before the commencement of this Act, or 
(b)  any legal proceedings or remedy in respect of any such right, title, interest, 
obligation or lability, or 
(c)  anything done or suffered before the commencement of this Act, or 
(d)  an enactment relating to the sale of goods which is not expressly repealed by 
this Act, or 
(e)  any rule of law not inconsistent with this Act. 
 (2) The rules of insolvency relating to contracts for the sale of goods shall continue to apply 
thereto, notwithstanding anything contained in this Act. 
 (3) The provisions of this Act relating to contracts of sale do not apply to any transaction in the 
form of a contract of sale which is intended to oper ate by way of mortgage, pledge, charge or other 
security.                                                   _____ 
Date: 20-08-2024 
  
1Ins. by Act No. XLI OF 1940, s. 2. 
2Ins. and Subs. by Act. No. V OF 1956, s.2. 
3Repealed by the Repealing Act No. I of 1938, s. 2 and Schedule.