Section 5(1) states: "A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer."

This reaffirms the basic principles of contract law.

• Modes of Making a Contract of Sale [Section 5(2)]:

• • In writing.
• • By word of mouth (oral).
• • Partly in writing and partly by word of mouth.
• • May be implied from the conduct of the parties.
• • No particular form is necessary.

• Key points from Section 5(1):

• • It may provide for immediate delivery and immediate payment.
• • It may provide for immediate delivery but payment postponed.
• • It may provide for immediate payment but delivery postponed.
• • It may provide for delivery or payment by instalments.
• • It may provide that both delivery and payment shall be postponed.

Subject-Matter of Contract (Sections 6-8)

These sections deal with the goods themselves.

1. Existing or Future Goods (Section 6):

• • As discussed under "Goods," the subject matter can be existing goods (owned or possessed by the seller) or future goods.
• • A purported present sale of future goods operates as an agreement to sell [Section 6(3)].

2. Goods Perishing Before Making of Contract (Section 7):

• • Where there is a contract for the sale of specific goods, and the goods, without the knowledge of the seller, have perished at the time when the contract was made, the contract is void.
• • Explanation: This is based on the doctrine of res extincta (the thing is destroyed). If the subject matter doesn't exist at the time of contracting, there's no contract.
• • "Perished" includes not only physical destruction but also where the goods have lost their commercial value or are no longer fit for the purpose for which they were intended.
• • Illustration: A agrees to sell his unique antique vase to B. Unknown to both, the vase was shattered in an earthquake hours before the contract was signed. The contract is void.

3. Goods Perishing Before Sale but After Agreement to Sell (Section 8):

• • Where there is an agreement to sell specific goods, and subsequently, the goods without any fault on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement is thereby avoided.
• • Explanation: This covers cases where the goods perish between the agreement to sell and the actual sale. If the risk hasn't passed, the contract is discharged.
• • Illustration: A agrees to sell his racehorse to B next week. Before the sale, the horse dies naturally without any fault of A or B. The agreement is avoided, and B does not have to pay.