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CMA Intermediate · Business Laws and Ethics · Sale of Goods Act, 1930

Under the Sale of Goods Act, 1930, a contract of sale of goods is called an 'agreement to sell' when:

A contract of sale is an agreement to sell when the transfer of property in the goods is to happen at a future time or after some condition is fulfilled. If property passes at once under the contract, it is a sale instead.

  1. Athe property in the goods passes to the buyer at the time the contract is made
  2. Bthe transfer of property in the goods is to take place at a future time or subject to a condition yet to be fulfilledCorrect
  3. Cthe price is paid in instalments after delivery of the goods
  4. Dthe contract is made only by word of mouth

Explanation

Under Section 4(3), where property passes at the time of the contract it is a sale, but where transfer is to take place at a future time or subject to a condition to be fulfilled later, it is an agreement to sell. Option A describes a sale. Instalment payment and oral form do not decide the character of the contract.

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