MEANING AND TYPES OF GOODS

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Q.5      Explain the meaning and types of goods?

Ans:    MEANING AND TYPES OF GOODS

Meaning of Goods [Section 2(7)]

Goods means every kind of moveable property other than actionable claims and money, and includes the following:

(a)        Stock and Shares

(b)        Growing crops, grass and thing attached to or forming part of the land, which are agreed to be served before sale or under the Contract of Sale.

EXAMPLES OF GOODS

Old rare coins, stock, shares, debentures, goodwill, patents, trademark, copyright, water, gas, electricity, grass, growing crops, trees to be cut and their log wood delivered etc.

Things excluded from the term ‘goods’: The term ‘goods’ does not include the following:

(a)        Actionable claim, which means a claim to any debt or any beneficial interest in movable property not in possession- Such claims cannot be sold or purchased like goods, they can only be assigned, e.g. a debt due from one person to another;

(b)        Money, which means the legal tender and not the old rare coins;

(c)        Immovable property.

 

TYPES OP GOODS [Section 6]

The goods, which form the subject of a contract of sale, may be classified into following categories as shown in fig.

 

(a)        Existing Goods

Existing goods mean the goods, which are either owned or possessed by the seller at the time of contract of sale. The existing goods may be specific or ascertained or unascertained as follows:

(i)         Specific Goods (Section 2(14)1

These are the goods, which are identified and agreed upon at the time when a contract of sale is made- For example, a specified TV, VCR, Car, Ring.

(ii)        Ascertained Goods

Goods are said to be ascertained when out of a mass of unascertained goods, the quantity extracted for is identified and set aside for a given contract. Thus, when part of the goods lying in bulk are identified and earmarked for sale, such goods are termed as ascertained goods.

(iii)       Unascertained Goods

These are the goods, which are not identified and agreed upon at the time when a contract of sale is made. e.g. goods in tock or lying in lots.

EXAMPLE

X goes to a Suzuki car showroom where 10 Suzuki cars have been displayed. X agrees to buy one Suzuki car 800CC and the seller agrees to sell. Here, 10 cars will be classified as under:

(i)         10 cars are uncertained goods before the identification of a particular car to be sold.

(ii)        9 cars are unascertained goods after the identification of 1 particular car to be sold. Such one particular car to be sold is an ascertained goods.

(iii)       1 particular car identified and agreed upon at the time when the contract of sales made is specific goods and other 9 cars are unascertained goods.

(b)        Future Goods [section 2(6)1]

Future goods mean goods to be manufactured or produced or acquired by the seller after the making of the contract of sale. There can be an agreement to sell only. There can be no sale in respect of future goods because one cannot sell what he does not possess.

EXAMPLE

X agrees to sell to Y all the crops to be grown at his farm inHyderabadduring the year 2,000 season for a sum of Rs. 1,000/=. This is an agreement to sell future goods and not a sale.

 

Notes:

(i)         The contracting parties are not discharged on non-acquisition or non-production of future goods.

(ii)        The future goods are neither in existence nor in possession of the seller at-the time of contract of sale whereas the unascertained goods are in existence and in possession of the seller at the time of contract of sale.

 

(c)        Contingent Goods [Section 6(2)]

These are the goods the acquisition of which by the seller depends upon a contingency, which may or may not happen.

Example

X agrees to sell to Y all the crops to be grown at Zs farm in Hyderabad during the years 2,000 season for a sum of Rs. 1,00,000/= if Z sells the same to X. this is an agreement to sell contingent goods because the availability of crops depends on its sale by Z.

Notes: The contracting parties are discharged on non-acquisition of contingent goods.

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