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

Pooja, a dealer in Chennai, sells a machine to Qadir for Rs 5,00,000 and orally agrees that the sale is on credit. Qadir argues the sale is void because there is no written contract. Which statement is correct under the Sale of Goods Act, 1930?

The sale is valid. A contract of sale of goods can be oral, written, partly both, or implied from conduct. The Act imposes no writing or registration requirement based on value, so Qadir's argument fails and the credit sale of the machine stands.

  1. AThe sale is void because values above Rs 50,000 must be in writing
  2. BThe sale is valid, as a contract of sale may be made in writing, by word of mouth, or partly both, or implied from conductCorrect
  3. CThe sale is valid only if registered
  4. DThe sale is voidable at Qadir's option

Explanation

The Act says a contract of sale may be made in writing or by word of mouth, or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties. No writing or registration is required for sale of movable goods regardless of value. The value-based writing rule in option A does not exist.

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