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

Mehul gifts his old scooter to his nephew Kunal, who accepts it and takes delivery. No money is paid or promised. Under the Sale of Goods Act, 1930, this transaction is:

The transaction is not a contract of sale because there is no price. A sale needs property in goods to be transferred for a money consideration. A gift transfers property without a price, so the Sale of Goods Act, 1930 does not apply to it.

  1. AA contract of sale, because property in the goods passes to Kunal
  2. BNot a contract of sale, because there is no priceCorrect
  3. CA contract of sale, because delivery has been made
  4. DAn agreement to sell, because the price is to be paid later

Explanation

A contract of sale requires the transfer of property in goods for a price, meaning money consideration. A gift has no price, so the Act does not treat it as a sale. Option A is wrong because passing of property alone is not enough without a price.

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