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 the price known as contract of sale. There may be a contract of sale between one part owner and another. Sec. 2(4).
From the above-mentioned definition, we find that it is a contract in which the seller sells or agrees to sell’ the property in goods to the buyer for a price which may be fixed or not and the transfer of property in goods may take place at the time of the contract or it may take place at some future time.
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When we analyze the definition of contract of sale, we find that a transaction becomes a contract of sale if it has the following essential features.
An offer and acceptance is an essential element of a contract of sale. It is made by an offer to buy or to sell goods for a price and the acceptance of such offer is compulsory.
The existence of seller and buyer is necessary for a contract of sale. There must be two parties to a contract of sale, i.e. the seller and the buyer. The seller should either transfer or agree to transfer the property in goods to the buyer.
The consideration of contract must be in the shape of a price. Any contract without a price will not be a contract of sale. It may be a contract of bailment or gift etc.
The subject matter of the contract of sale is formed by goods which may be existing goods, owned or possessed by the seller, or future goods which are produced after the contract of sales is made.
If the goods have perished without the knowledge and fault of the seller before the execution of the contract of sales, the contract will become void.
A contract of sales may be made in writing or by words of mouth or partly in writing and partly by words of mouth or may be implied from the conduct of the parties.
The property in goods for which a contract of sale is made must actually pass from the seller to the buyer.
If the possession of the goods sold is not transferred from the seller to the buyer, then it cannot be a sale but it will be an agreement to sell.
Under the contract of sales, property means the general property in goods and not special property. In general property, we only include movable goods and not immovable.
A Contract of sales may provide for immediate delivery of the goods or immediate payment of the price or both, or for the delivery or payment or both shall be postponed.
The price of goods in a contract of sales may be fixed or left to be fixed in a manner thereby agreed or may be determined by the course of dealing: between the parties.
If the price is not determined in accordance with the foregoing provisions, the buyer shall pay to the seller reasonable price which depends on the circumstances of each particular case.
From the above-mentioned provisions we find that in a contract of sales, the price of goods may be fixed at the same time when a contract of sales is made or it may be determined at some future date.
So, there can be a contract of sales through no mentioning buying or selling price is made.
If the price is not mentioned at the time, the contract of sale is made then the price is determined ‘in the ordinary course of dealing between the parties.
If it is not So, determined, the buyer will pay to the seller a reasonable price for the goods and what is a reasonable price, it is a question of fact depends on the circumstances of each particular case.