History and Importance of the Act
The law as to the sale of goods was originally contained in sections 76 to 123 of the Indian Contract Act, 1872. The development of modern business relations found the Indian Contract Act inadequate to meet the complexities of growing mercantile transactions as Contract Act contained only simple and elementary rules relating to the sale of goods. As a result sections 76 to 123 were separated from Contract Act and a separate Act, The Sale of Goods Act was formed in the year 1930. Basic requirements of contract i.e. offer and acceptance, mutual consent, parties competent to contract; free consent, lawful object, consideration etc. apply to contract of Sale of Goods also.
In trade and commerce, sale and purchase of goods are very common transactions. These transactions may appear to be very simple, but the possibilities of complications are always there. Therefore knowledge of basic principles of sale and purchase is very essential for all the concerned parties as well as for the entire community.
The Sale of Goods Act contains the basic principles as well as the legal framework of transactions of sale and purchase.