12th Standard Commerce — The Sale of Goods Act, 1930 Online Test
Chapter 21 of 12th Commerce explains the Sale of Goods Act, 1930: the essential elements of a contract of sale, the difference between sale and agreement to sell, types of goods, rules for transfer of ownership, conditions and warranties with their implied forms, and the rights of an unpaid seller against the goods and the buyer.
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About The Sale of Goods Act, 1930
Medium ~45 min study
The Sale of Goods Act, 1930 is the first chapter of Unit 8 in the Tamil Nadu State Board Class 12 Commerce book. Before 1930, contracts for the sale of goods came under the Indian Contract Act, 1872, whose general principles still apply.
The lesson builds the law step by step: what makes a contract of sale, how a sale differs from an agreement to sell, which things count as goods, and the exact moment at which ownership passes from seller to buyer. It then separates conditions from warranties and closes with the rights of an unpaid seller.
This page gathers the five book-back one mark questions, with answers checked against the book's key and the lesson, plus additional questions on every section, each with a short explanation.
What you'll learn
- Define a contract of sale and list its essential elements.
- Distinguish a sale from an agreement to sell.
- Classify goods as existing, future or contingent, with examples.
- State when ownership passes for specific, unascertained and approval goods.
- Distinguish conditions from warranties and name the implied ones.
- Explain who an unpaid seller is and describe his rights.
Before you start
- The meaning of a valid contract from the Indian Contract Act, 1872.
- Basic ideas of buyer, seller, price and ownership.
- The meaning of a negotiable instrument such as a cheque or bill of exchange.
Topics covered in this chapter
The Sale of Goods Act, 1930 explained
What this lesson covers
Contract of sale
The seller transfers or agrees to transfer the ownership of goods to the buyer for a price. The essential elements are two parties, transfer of property, goods, price, and the inclusion of both sale and agreement to sell.
Sale and agreement to sell
- Sale: ownership passes at once; an executed contract; risk falls on the buyer.
- Agreement to sell: ownership passes later or on conditions; an executory contract; risk stays with the seller.
Types of goods
Goods exclude money, actionable claims and immovable property. They are existing (specific, ascertained, unascertained), future or contingent goods.
Transfer of ownership
Rules differ for specific goods, unascertained goods (ascertainment, appropriation, delivery to carrier) and goods sent on approval or on sale or return.
Conditions and warranties
A condition is essential to the main purpose; a warranty is collateral. Implied conditions cover title, description, sample, fitness, merchantability, wholesomeness and trade usage; implied warranties cover quiet possession, freedom from encumbrance and dangerous goods.
Unpaid seller
Rights against the goods are lien, stoppage in transit and resale; rights against the buyer personally are suits for price, damages for non-acceptance, cancellation before the due date and interest.
Common mistakes to avoid
- Treating possession as ownership. Property in goods means ownership; possession is only custody.
- Calling a barter a sale. Without a money price there is no sale.
- Counting dividend due or a fixed deposit receipt as goods. They are actionable claims.
- Thinking breach of a warranty lets the buyer cancel the contract. It gives damages only.
- Listing sale by sample as an implied warranty. It is an implied condition.
- Assuming lien survives after the buyer lawfully obtains possession. It is lost then.
Test yourself on these with the practice test, then check the worked reasoning in the solved MCQs.
Frequently asked questions
What is a contract of sale of goods?
It is a contract by which the seller transfers or agrees to transfer the property, that is the ownership, in goods to the buyer for a price. The term covers both a sale and an agreement to sell.
How is a sale different from an agreement to sell?
In a sale ownership passes to the buyer immediately, the contract is executed, and the buyer bears the risk of loss. In an agreement to sell ownership passes later or on fulfilment of conditions, the contract is executory, and the seller bears the risk.
What is not included in goods?
Money, actionable claims and immovable property are excluded. Actionable claims include a debt secured by mortgage, a fixed deposit receipt, dividend due on shares and a claim for future rent.
What are contingent goods?
Contingent goods are goods whose acquisition by the seller depends on an event that may or may not happen. They are a part of future goods, for example basmati rice to be supplied only if it is obtained from Pakistan.
What is the difference between a condition and a warranty?
A condition is essential to the main purpose of the contract; its breach lets the party cancel the contract and claim damages. A warranty is collateral; its breach gives only a claim for damages.
Who is an unpaid seller?
A seller is an unpaid seller when the whole price has not been paid or when a bill of exchange or other negotiable instrument given to him has been dishonoured. A seller who has received only part of the price is also unpaid.
Last updated 16 October 2026