Buyer, Seller and Goods: Definitions and Classification of Goods

Three terms anchor every rule in this Act, and the Act itself defines all three with precision.

Buyer — Section 2(1) of the Act defines a buyer as "a person who buys or agrees to buy goods." Notice that this definition covers a person even before the sale is complete — someone who has only AGREED to buy is still a "buyer" for the purposes of the Act.

Seller — Section 2(13) defines a seller, in exactly parallel language, as "a person who sells or agrees to sell goods." Again, a person who has only agreed to sell — not yet actually sold — still counts as a "seller."

Goods — Section 2(7) gives the Act's central definition: "'goods' means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale." Three points are worth pulling out of this definition:

• Goods must be movable property — this is why the Act specifically EXCLUDES money (the medium of exchange itself, not something bought and sold) and actionable claims (a debt or claim which can only be recovered by a suit, such as money owed under a promissory note — this is enforced through the Transfer of Property Act, not the Sale of Goods Act).
• Stock and shares are expressly INCLUDED, even though they may feel intangible — the Act treats them as goods.
• Things attached to land (growing crops, grass, trees, or even machinery fixed to a building) are goods ONLY if the contract itself provides that they are to be severed (cut away/detached) from the land before the sale, or under the contract of sale — standing timber sold to be felled and removed is goods; land sold together with the timber still standing on it as part of the immovable property is not.

Classification of Goods

Section 6 of the Act divides goods, at the moment the contract is made, into two broad categories, each of which is then further divided.

1. Existing goods — goods owned or possessed by the seller at the time the contract of sale is made. Existing goods are further split into:

• Specific goods — Section 2(14) defines these as goods "identified and agreed upon at the time a contract of sale is made" — e.g. "this particular second-hand car, registration number WB-06-AB-1234."
• Unascertained goods — goods not specifically identified at the time of contract, but described only generically or by a fraction of a larger stock — e.g. "10 quintals of rice out of the 100 quintals lying in my godown." Until a specific 10 quintals is set aside for this particular buyer, the goods remain unascertained.
• Ascertained goods — this term is not itself separately defined in Section 6, but is well established in practice and in judicial interpretation: it describes unascertained goods that later become identified and set aside (appropriated) for a particular contract, AFTER the contract has already been made. The moment 10 specific quintals are weighed out and earmarked for this buyer, the goods move from "unascertained" to "ascertained."

2. Future goods — Section 2(6) defines future goods as goods to be manufactured, produced, or acquired by the seller only AFTER the contract of sale is made — e.g. a manufacturer agreeing to sell 500 units of a product that has not yet been manufactured. A contract for the sale of future goods operates, in law, only as an agreement to sell (never as a sale) — this connects directly to the next section's central distinction. …