Classification of Goods under the Sale of Goods Act, 1930

Understand Goods and their Classification

Key formulas to remember

Goods (Section 2(7))

Goods = every kind of moveable property − actionable claims − money

Includes stock and shares, growing crops, grass, and things attached to land agreed to be severed before sale or under the contract.

Existing goods (Section 6(1))

Existing goods = goods owned or possessed by the seller at the time of contract

Possession alone is enough, for example goods held by an agent or on consignment.

Future goods (Section 2(6))

Future goods = goods to be manufactured, produced or acquired by the seller after the contract is made

A present sale of future goods operates only as an agreement to sell (Section 6(3)).

Contingent goods (Section 6(2))

Seller's acquisition of goods depends on a contingency that may or may not happen

The Act allows such contracts. 'Contingent goods' is the usual exam label.

Specific goods (Section 2(14))

Specific goods = goods identified and agreed upon when the contract of sale is made

Unascertained goods are not so identified.

Goods perished before contract (Section 7)

Specific goods perished without seller's knowledge at contract time → contract void

The goods must no longer answer to their description.

Goods perished after agreement to sell (Section 8)

Specific goods perish without fault of either party, before risk passes → agreement avoided

Applies to an agreement to sell. Fault means wrongful act or default.

Unascertained goods (Section 18)

No property passes in unascertained goods until they are ascertained

Goods may become ascertained by unconditional appropriation (Section 23).

How to solve Goods and their Classification questions

1. 1Check that the item is 'goods': moveable, and not money or an actionable claim. Growing crops and shares qualify.
2. 2Ask whether the seller owns or possesses the goods at the time of the contract. If yes, they are existing goods. If the seller will make or acquire them later, they are future goods.
3. 3If the seller's acquisition depends on an uncertain event, label them contingent goods.
4. 4Ask whether the goods were identified and agreed at the time of contract. If yes, they are specific goods. If only described by kind or quantity, they are unascertained.
5. 5For future goods, note that a present sale only operates as an agreement to sell.
6. 6If goods have perished, find the timing: before the contract, or after the agreement but before risk passes.
7. 7Check knowledge and fault: did the seller know, and was either party at fault?
8. 8State the result: contract void (Section 7), agreement avoided (Section 8), or no effect if the conditions are not met.

Quickest way: Two-question MCQ filter

Common mistakes in Goods and their Classification

• Treating future goods and contingent goods as the same thing.

  Both involve goods the seller does not yet have.

  Fix: Future goods are simply acquired later. Contingent goods depend on an event that may or may not happen.

• Saying a present sale of future goods is a completed sale.

  Students read 'sale' and ignore the rule in Section 6(3).

  Fix: Remember it operates only as an agreement to sell.

• Mixing up existing/future with specific/unascertained.

  Both are classifications of goods, so they blur together.

  Fix: The first pair is about the seller's ownership timing. The second pair is about identification at contract time.

• Applying Section 7 and Section 8 to the wrong timing.

  Both deal with goods perishing and use similar words.

  Fix: Section 7 is perishing before the contract is made. Section 8 is perishing after an agreement to sell but before risk passes.

• Ignoring fault in Section 8.

  Students focus only on the destruction of goods.

  Fix: The agreement is avoided only if the goods perish without fault of the seller or buyer.

• Applying the perishing sections to unascertained goods.

  Students forget the word 'specific' in both sections.

  Fix: Both sections apply to specific goods only.

Worked examples