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Unit 12: Law of Sales of Goods

12.2 Goods and their Classifi cation Notes

12.2.1 Meaning of Goods

‘Goods’ means every kind of movable property, other than actionable claims and money; and
includes stocks and shares, growing crops, grass and things attached to or forming part of the
land which are agreed to be severed before sale or under the contract of sale. Thus, things like
trade marks patents, copyright, goodwill, water, gas, electricity are all goods and therefore, may
be the subject matter of a contract of sale. In general, it is only the movables, i.e., things which
can be carried from one place to another that form ‘goods’. Landed property, therefore, does not
constitute goods.

12.2.2 Classification of Goods

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.

12.3 Definitions of Contract of Sales

Definition (S. 2)

Buyer: “Buyer” means a person who buys or agrees to buy goods.
Seller: “Seller” means a person who sells or agrees to sell goods.
Delivery: “Delivery” means voluntary transfer of possession from one person to another.
Deliverable State: Goods are said to be I a deliverable state when they are in such state that the
buyer would, under the contract, be bound to take delivery of them.
Document of title to goods: “Document of title to goods” includes a bill of lading, clock warrant,
warehouse-Keeper’s certifi cate, wharfi nger’s certificate, railway receipt, warrant or order for the

delivery of goods, and any other document used in the ordinary course of business as proof of

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