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CA Foundation · Business Laws · The Sale of Goods Act, 1930

Asha Jewellers hands over a gold chain to Bhavna and receives in exchange a diamond ring owned by Bhavna, with no money changing hands. Under the Sale of Goods Act, 1930, this transaction is:

It is not a contract of sale. The Act requires the price to be money consideration, and swapping goods for goods is barter. Even if the values are equal, the absence of a money price keeps the transaction outside the Sale of Goods Act, 1930.

  1. AA contract of sale, because goods are exchanged for goods
  2. BA contract of sale only if the values of the two items are equal
  3. CNot a contract of sale, because it is a barter and there is no money priceCorrect
  4. DA contract of sale only if it is in writing

Explanation

A sale needs money consideration as price. Exchange of goods for goods is barter, which falls outside the Act. Option B is wrong because equal value does not turn barter into a sale.

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