Meaning of Contract of Sale of Goods

A contract of sale of goods is a legally binding agreement between two parties, the seller and the buyer, whereby the seller agrees to transfer the ownership of goods to the buyer for a price. The goods must be movable property, which means that they can be physically moved from one place to another.

The essential elements of a contract of sale of goods are as follows:

  • Offer and acceptance: There must be an offer by the seller and an acceptance by the buyer.
  • Consideration: There must be something of value given by each party to the contract.
  • Intention to create legal relations: Both parties must intend to enter into a legally binding contract.
  • Subject matter: The subject matter of the contract must be goods that are movable property.
  • Price: There must be a price for the goods.

Here are some MCQs on the meaning of contract of sale of goods:

  1. Which of the following is not an essential element of a contract of sale of goods?
    • Offer and acceptance.
    • Consideration.
    • Intention to create legal relations.
    • Title to the goods.
    • The answer is (d). Title to the goods is not an essential element of a contract of sale of goods. The seller simply needs to have the right to sell the goods.
  2. A seller agrees to sell a car to a buyer for $10,000. The buyer pays $5,000 as a down payment and agrees to pay the remaining $5,000 in six months. Is this a valid contract of sale of goods?
    • Yes, this is a valid contract of sale of goods.
    • No, this is not a valid contract of sale of goods because the price has not been fully paid.
    • The answer is (a). This is a valid contract of sale of goods because there is an offer and acceptance, consideration, intention to create legal relations, and a subject matter (the car). The fact that the price has not been fully paid does not invalidate the contract.
  3. A seller agrees to sell a car to a buyer. The buyer takes delivery of the car but refuses to pay the price. Can the seller sue the buyer for breach of contract?
    • Yes, the seller can sue the buyer for breach of contract.
    • No, the seller cannot sue the buyer because the buyer has not accepted the goods.
    • The answer is (a). The buyer has accepted the goods by taking delivery of them. The buyer is therefore liable to pay the price.