Page 138 - DCOM103_COMMERCIAL_LAW

Unit 13: Law of Sales of Goods

13.4.2 Classification of Goods Notes

Goods may be classified as existing, future and contingent. Existing goods are those which are
owned or possessed by the seller at the time of the contract (Sec.6). Instances of goods possessed
but not owned by the seller are sales by agents and pledges. Existing goods may be either

(a) specific or ascertained; or (b) generic and unascertained. Specific goods means goods

identified and agreed upon at the time a contract of sale is made [Sec.2(14)]. Ascertained goods,
though normally used as synonym for specifi c goods may be intended to include goods which
have become ascertained subsequently to the formation of the contract. Generic or unascertained
goods are goods indicated by description and not specifi cally identifi ed.
Example: Anthony, who owns a TV show room, has 20 TV sets and agrees to sell any one
of them to Bharti. The contract is for unascertained goods, since which particular TV set shall
become the subject matter of sale is not individualised at the time of the contract of sale.
Future goods means goods to be manufactured or produced or acquired by the seller after making
the contract of sale [Sec.2(6)].

Example: Kulkarni agrees to sell future crop of a particular agricultural field in the next

season. This is an agreement to sell future goods.
Contingent goods are the goods the acquisition of which by the seller depends upon a contingency
which may or may not happen [Sec.6(2)]. Contingent goods are a part of future goods.

Example: Alka agrees to sell to Bhola a certain painting only if Chetan, its present owner,

sells it to her. This painting is classified as contingent goods.
13.5 Meaning of Price

13.5.1 Meaning

Price means the money consideration for the sale of goods. Price is an integral part of a contract
of sale. If price is not fi xed, or is not capable of being fi xed, the contract is void ab initio. As to
how the price is to be fixed Secs.9 and 10 lay down certain rules. According to Sec.9, the price may

(i) either be fixed by the contract, or (ii) agreed to be fixed in a manner provided by the contact,

e.g., by a valuer, or (iii) determined by the course of dealings between the parties.
Example: In a particular trade, there is a usage to deduct discount in determining the
price. The usage is implied by the course of dealings between the parties.
13.5.2 Mode of Payment of the Price

The seller is not bound to accept any kind of payment – except in legal tender money unless there
is an agreement express or implied to the contrary or unless the seller is estopped from disputing
the mode of payment. Thus, he is not bound to accept payment by cheque.

Earnest money also known as deposit, it is paid by the buyer in advance as security for the due
performance of his part of the contract. It is not paid as part payment of price. If the transaction
goes through, the earnest money is adjusted against the price. But if the sale goes off through
buyer’s fault, the deposit unless otherwise agreed is forfeited to the seller; and where it goes off
by the seller’s default he must return the earnest money.

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