Skip to content

CMA Foundation · Fundamentals of Business Laws and Business Communication · Sale of Goods Act, 1930

Meera Traders orally agrees to sell 50 bags of rice to Kapoor Stores for a price, with delivery to be made after 30 days and payment in two instalments. Which statement is correct under the Act?

The contract can be valid. Section 5 allows delivery or payment to be postponed or made in instalments, and permits a contract of sale to be made by word of mouth, subject to any other law in force. None of these features makes it invalid.

  1. AThe contract is invalid because delivery is postponed
  2. BThe contract is invalid because it is not in writing
  3. CThe contract is invalid because payment is by instalments
  4. DThe contract can be valid, as it may be oral and may provide for postponed delivery and instalment paymentCorrect

Explanation

Section 5(1) permits delivery or payment by instalments or postponed. Section 5(2) allows a contract of sale to be made by word of mouth, subject to any other law in force. So postponed delivery, instalments and oral form do not invalidate it.

Did you get it right without looking?

One question tells you little. A timed set on Sale of Goods Act, 1930 shows your real accuracy, how long you take and where you lose marks.

Practise Sale of Goods Act, 1930Free diagnostic mock

More Sale of Goods Act, 1930 questions