Question: What are the essential elements of the contract of sale of goods?

Answer: the essential elements of a contract for the sale of goods are described below: 1. Movable goods: the sale of goods act deals only with movable goods, excepting actionable claims and money. This act does not apply to immovable properties. 2. Movable goods for money: There must be a contract for the exchange of movable goods for money. Therefore in a sale there must be money-consideration. An exchange of goods for goods is not sale. But it has been held that if any exchange is made partly for goods and partly for money, the contract is one of sale. 3. Two parties: Since a contract of sale involves a change of ownership, it follows that the buyer and seller must be different person. A sale is bilateral contract. A man cannot buy or sale goods to himself. To this rule there is one expectation provided for in section 4(1) of the sale of good act. A part-owner can sell goods to another part-owner. Therefore a partner may sell goods to his firm may sell goods to a partner. 4. Formation of the contract of sale: A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. The contract may provide for the immediate payment of the price or both, or for the delivery or payment or both shall be postponed. 5. Method of forming the contract: Subject to the provision of any law for the time being in force, a contract of sale may be in writing or by word of mouth, or may be implied from the conduct of the parties. 6. The terms of contract: the parties may agree upon any term concerning the time, place, and mode of delivery. The terms may be of two types: essential or nonessential. Essential terms are called conditions, non-essential terms are called Warranties. The sale of goods act provides that in absence of a contract to the contrary, certain conditions and warranties are to be implied in all contracts of sale. 7. Other essential elements: A contract for the sale of goods must satisfy all essential elements necessary for the formation of valid contract, e.g., the parties must be competent to contract, there must be free consent, there must be consideration, the object must be lawful etc.

Page 1 of 2 Question: Difference between a promissory note and bill of exchange.

Answer: The difference between a promissory note and bill of exchange are given below: Number of parties: In promissory note there are two parties- the maker and the payee. In a bill of exchange there are three parties- the drawer, the drawee, and the payee. Promise and order: In a promissory note there is a promise to pay. In a bill of exchange there is an order to pay. Acceptance: a promissory note is signed by the person liable to pay; therefore, no acceptance is necessary. A bill of exchange except in certain eases requires to be accepted by the drawee before it is binding upon him. Liability: The maker of promissory note is primary liable on the instrument. The drawee of a bill is liable only when the drawee does not accept the instrument or pay the more due. Relationship: In a promissory note the maker stands in immediate relationship to the payee. In a bill of exchange a drawee stands in immediate relationship with the acceptor and to the payee. The drawer of a bill of exchange stands in immediate relation with the acceptor. The maker of a promissory note, bill of exchange or cheque stands in immediate relation with the payee and the indorser with his indorse. Others signers may by immediate relation with a holder. Notice: In a case of non payment or non-acceptance of bill, notice must be given to all person liable to pay. This is called the notice of dishonor. In the case of a promissory note, notice of dishonor to maker is not necessary. Protest: In case of dishonor, a foreign bill must be protested if such a protest is necessary according to law of place where it is drawn. In case of dishonor of promissory note, protest is not necessary.

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