Classification of Goods under the Sale of Goods Act, 1930

Introduction

The Sale of Goods Act, 1930 classifies goods based on their existence, identification, and certainty. This classification is important to determine when ownership passes and what rights and duties arise between buyer and seller. It also helps in resolving disputes relating to delivery, risk, and performance.

Meaning / Definition

Goods are defined under Section 2(7) as every kind of movable property except actionable claims (claims that can be enforced through a legal action) and money. It includes stocks, shares, growing crops, grass, and things attached to land which are agreed to be separated before sale.

Movable property refers to property that is not permanently attached to land. The key factor is severability (ability to separate from land).

Modes or Types

Existing Goods

Existing goods are goods that are in existence and owned or possessed by the seller at the time of the contract (Section 6).

Specific Goods

Specific goods are goods identified and agreed upon at the time of the contract (Section 2(14)).

Example: A agrees to sell his car with a specific registration number.

Ascertained Goods

Ascertained goods are goods selected from a larger group after the contract is made.

Example: Out of 500 apples, 200 are separated for sale.

Unascertained Goods

Unascertained goods are not specifically identified at the time of the contract.

Example: One bag of sugar out of 100 bags in a warehouse.

Future Goods

Future goods are goods to be manufactured, produced, or acquired by the seller after the contract is made (Section 2(6)).

• There is no present sale
• It is always an agreement to sell

Example: Sale of next season’s crops.

Contingent Goods

Contingent goods are a type of future goods where acquisition depends on an uncertain event (Section 6(2)).

Example: Goods arriving in a ship, subject to arrival of the ship.

Important Case Law

• Tata Consultancy Services v. State of Andhra Pradesh
  Software recorded on a medium is goods due to its marketability.

• Commissioner of Sales Tax v. Madhya Pradesh Electricity Board
  Electricity is goods as it can be transmitted and delivered.

• Sunrise Associates v. Government of NCT of Delhi
  Lottery tickets are actionable claims and not goods.

• State of T.N. v. Thiru Murugan Bros
  Incomplete film is treated as goods.

• M/s Mukesh Kumar Aggarwal & Co. v. State of M.P.
  Timber is goods as it can be severed from land.

Distinction / Comparison

Specific / Ascertained vs Unascertained Goods

• Specific / Ascertained Goods
  Identified at the time of contract
  Ownership can pass immediately

• Unascertained Goods
  Not identified at the time of contract
  Ownership passes only after identification

Future Goods vs Contingent Goods

• Future Goods
  Will definitely come into existence

• Contingent Goods
  May or may not come into existence (depends on event)

Practical Example

A agrees to sell 100 bags of rice from his warehouse.

• If specific bags are identified → specific goods
• If not identified → unascertained goods

A agrees to sell mangoes to be grown next year → future goods

A agrees to sell goods arriving by a particular ship → contingent goods

Summary

• Goods include all movable property except money and actionable claims
• Goods are classified into existing, future, and contingent goods
• Existing goods may be specific, ascertained, or unascertained
• Future goods always create an agreement to sell
• Contingent goods depend on uncertain events
• Classification is important for transfer of ownership and risk