What is Goods? Types of Goods

The subject matter in sales of goods is ‘goods’. I have already explained what we mean by Goods. Let us know about its classification.

Goods may be classified into

1.        Existing goods;

2.        Future goods; and

3.        Contingent goods

1.  Existing goods: At the time of sales if the goods are physically in existence and are in possession of the seller the goods are called ‘Existing Goods’. Existing goods can be classified into ‘specific or unascertained.’

(a)  Specific goods. Goods identified and agreed upon at the time of the making of the contract of sale are called ‘specific goods’ [Sec. 2(14)]. It may be noted that in actual practice the term ‘ascertained goods’ is used in the same sense as ‘specific goods,’ For example, where A agrees to sell to B a particular radio bearing a distinctive number, there is a contract of sale of specific or ascertained goods.

(b)Unascertained goods. The goods, which are not separately identified or ascertained at the time of the making of the contract, are known as ‘unascertained goods.’ They are indicated or defined only by description. For example, if A agrees to sell to B one bag of sugar out of the lot of one hundred bags lying in his godown; it is a sale of unascertained goods because it is not known which bag is to be delivered. As soon as a particular bag is separated from the lot for delivery, it becomes ascertained or specific goods.

The distinction between ‘specific’ or ‘ascertained’ and ‘unascer­tained’ goods is important in connection with the rules regarding ‘transfer of property’ from the seller to the buyer.

2.  Future goods: Future goods are goods to be manufactured or produced or yet to be acquired by seller. There cannot be present sale in respect future goods because the property cannot pass.

Example

(a)    A agrees to sell to B all the milk that his cow may yield during the coming year. This is a contract for the sale of future goods.

(b)X agrees to sell to Y all the mangoes, which will be produced in his garden next year. It is contract of sale of future goods, amounting to ‘an agreement to sell.’

3.    Contingent Goods: Though a type of future goods, these are the goods the acquisition of which by the seller depends upon a contingency, which may or may not happen [Sec. 6 (2)].

Example

A agrees to sell specific goods in a particular ship to B to be delivered on the arrival of the ship. If the ship arrives but with no such goods on board, the seller is not liable, for the contract is to deliver the goods should they arrive.

Do you know what would happen if the goods are perished?

Effect of Pershing of Goods

The first we must know what we mean by perishing of goods.

‘Pershing’ means not only physically destruction of goods but it also covers:

(a)  Damage to goods so that the goods have ceased to exist in the commercial sense, i.e., their merchantable character as such has been lost (although they are not physically destroyed), e.g., where cement is spoiled by water and becomes almost stone or where sugar becomes sharbat and thus are unsaleable as cement or sugar;

(b) Loss of goods by theft (Barrow Ltd. Vs Phillips Ltd. );

(c)  Where the goods have been lawfully requisitioned by the government (Re Shipton, Anderson & Co.).

You must note that it is only the perishing of specific and ascertained goods that affect the sales. In the case of unascer­tained goods, their perishing does not affect the contract. Where A agrees to sell to B ten bales of Egyptian cotton out of 100 bales lying in his godown and the bales in the godown are completely destroyed by fire, the contract does not become void. A must supply ten bales of cotton after purchasing them from the market or pay damages for the breach.

What is Goods? Types of Goods

Rights of an Unpaid Seller against the goods

Essential Features of Right of Stoppage of Goods in Transit

Who is an Unpaid Seller? Characteristics of an Unpaid Seller  Buyers wrong is unforgivable in purchase  Rules regarding transfer of title on sale  What are the benefits of a Bonded Warehouse?  Effect of Pershing of Goods  Documents to Title To Goods  Who are the Common Carriers?  Difference between Common Carriers and Private Carriers ============================================================================== This site is mainly dedicated for Students of Law Schools, Law Universities, Students of Higher Education in Law, Admission in Law Schools, Scholars in Law, Students of Bar-at-Law, Law admission information, College of Law, Law Notes, Law Training, Law Tuition,  Law Study Guidelines, Business Law, Students of ACCA, CIMA, CFA,CA,ICWA,CPA