A sale of goods is a "contract by which the seller transfers or agrees to transfer the property in goods to the buyer for money consideration called the price". Or we can say a sale of goods contract governs the business relationship between a buyer and a seller of goods.
In order to constitute a sale of goods under the legislation, the consideration must be money, the price is fixed during the course of negotiations between the parties and the contract of sale must be in relation to goods (or chattels) rather than land or buildings. The agreement need not be in writing, but is sound practice to do so to avoid uncertainty and the terms of the sale contract, such as the time of delivery, the price, standard of goods, whether they have been sold subject to a description, whether they may be returned, and whether a retention of title is intended to apply to the goods sold under the contract.
The ownership of goods passes at different times, depending upon the type of goods sold in the sale of goods contract, and are different for specific and named goods, unascertained goods and future goods. The time the ownership (i.e. title) passes in sales of goods is important as the owner of the goods bears the risk in the event that the goods are destroyed or they perish. In some instances the contract may be able to be avoided in its entirety.

Published in Contract Drafting
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