Section 2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 2 is the dictionary of the Sale of Goods Act, 1930. This article covers the definitions that decide what is sold and by whom to whom: "goods", "buyer", "seller", "price", "property", "quality of goods", "specific goods", "future goods" and the link to the Indian Contract Act, 1872. The remaining definitions are in a second article.
Section 2 opens with the words "unless there is anything repugnant in the subject or context", so each definition gives way if the context requires. "Goods" means every kind of moveable property other than actionable claims and money, and it includes stock and shares, growing crops, grass and things attached to land that are agreed to be severed. "Price" is the money consideration for a sale of goods. "Property" means the general property in goods, not merely a special property. A seller and a buyer are persons who sell, buy or agree to do so.
How to read section 2
This article follows the consolidated text of the Act consulted (latest amendment shown: Act 28 of 1993); later amendments should be checked in the official text. Section 2 begins: "In this Act, unless there is anything repugnant in the subject or context,—". That phrase tells you the meanings below apply throughout the Act, but a section whose own words point somewhere else prevails. Fifteen clauses follow. The clauses on delivery, deliverable state, document of title, fault, insolvent and mercantile agent are covered in the second article on section 2.
The parties: clauses (1) and (13)
- Section 2(1): "buyer" "means a person who buys or agrees to buy goods".
- Section 2(13): "seller" "means a person who sells or agrees to sell goods".
Notice that both definitions cover the person who has only agreed to buy or sell. Someone does not need to have completed the transaction to be a buyer or seller under the Act. This matters when the Act later speaks of the duties of the seller and buyer, or of an unpaid seller. Getting these labels right in a written contract is part of agreement drafting.
Section 2(7): "goods"
The definition has two halves.
What it covers: "every kind of moveable property". What it leaves out: "actionable claims and money". What it expressly 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".
So land itself is not described as goods. Only things attached to, or forming part of, land are covered, and then only if they "are agreed to be severed before sale or under the contract of sale". For the treatment of immovable property under another law, see our post on sale of immovable property under Section 54 of the Transfer of Property Act, 1882; for what an actionable claim is, see actionable claims under Section 130 of the Transfer of Property Act, 1882. Example (the writer's own, not printed in the Act): Kavita Orchards agrees to sell the mango crop standing on its trees to Anwar Fruits, to be picked by Anwar's team. "Growing crops" are included in the definition. On the other hand, a promise to hand over a sum of cash in exchange for something is not a sale of goods, because "money" is outside the definition.
Section 2(10): "price"
"Price" means "the money consideration for a sale of goods". Two points follow from the words. The price is money, and it is the consideration for the sale. For the general idea of consideration, see consideration under Section 2(d) of the Indian Contract Act, 1872. How the price is fixed is dealt with in sections 9 and 10, taken up in a later article.
Section 2(11): "property"
"Property" means "the general property in goods, and not merely a special property". In this Act, "property" is therefore a word for ownership in the goods, as opposed to a narrower interest. Chapter III, which begins at section 18, asks when the property passes from the seller to the buyer. The definition is the reason that question is not about who has the goods in his hands.
Section 2(12): "quality of goods"
"Quality of goods" "includes their state or condition". The word "includes" means a buyer's complaint about condition, and not only about grade, can be a question of quality. The conditions as to quality in section 16 use this word.
Sections 2(14) and 2(6): specific goods and future goods
- "Specific goods" means "goods identified and agreed upon at the time a contract of sale is made".
- "Future goods" means "goods to be manufactured or produced or acquired by the seller after the making of the contract of sale".
The two definitions turn on time. If, at the time of the contract, particular goods are identified and agreed, they are specific. If the seller will still manufacture, produce or acquire them after the contract, they are future goods. Both ideas are used in sections 6 to 8 (existing and future goods) and in sections 20 to 23 on when property passes.
Example (the writer's own): On 1 March, Deepak Motors agrees to sell to Lata Transport the second-hand truck registered in its yard, chassis number as written in the contract. Those are specific goods. On the same day, Deepak Motors also agrees to sell 20 trucks it will assemble over the next four months. Those are future goods.
Section 2(15): terms defined in the Contract Act
Section 2(15) says that "expressions used but not defined in this Act and defined in the Indian Contract Act, 1872 (9 of 1872), have the meaning assigned to them in that Act." That is the word-level companion of section 3, which was explained in the article on sections 1 and 3.
Table: the definitions at a glance
| Clause | Term | What the text says |
|---|---|---|
| 2(1) | buyer | a person who buys or agrees to buy goods |
| 2(13) | seller | a person who sells or agrees to sell goods |
| 2(7) | goods | every kind of moveable property other than actionable claims and money, with stock and shares, growing crops, grass and things agreed to be severed |
| 2(10) | price | the money consideration for a sale of goods |
| 2(11) | property | the general property in goods, and not merely a special property |
| 2(12) | quality of goods | includes their state or condition |
| 2(14) | specific goods | goods identified and agreed upon at the time a contract of sale is made |
| 2(6) | future goods | goods to be manufactured, produced or acquired by the seller after the contract |
| 2(15) | other expressions | meaning assigned in the Indian Contract Act, 1872 |
Why drafters should care
Whether goods are specific or future affects the rules in sections 6 to 8 and 18 to 23, so the description of the goods in a contract should say which they are.
Need help with a contract that describes goods?
If your contract has to describe goods that do not yet exist, or goods bought as a standing crop or as shares, we can draft or review the agreement so that the description matches the section 2 terms.
Key takeaways
- "Goods" excludes actionable claims and money; it includes stock and shares, growing crops, grass and things agreed to be severed from land.
- Buyer and seller include a person who only agrees to buy or sell.
- "Price" is the money consideration; "property" is the general property in goods.
- Specific goods are identified and agreed at the time of the contract; future goods come into existence or into the seller's hands after it.
- Terms not defined in this Act but defined in the Indian Contract Act, 1872 take their meaning from that Act.
Read next
- Section 2 of the Sale of Goods Act, 1930: delivery, document of title, mercantile agent and insolvent
- Section 4 of the Sale of Goods Act, 1930: sale and agreement to sell
- Sections 6-8 of the Sale of Goods Act, 1930: existing or future goods and goods that perish
- Section 2 of the Indian Contract Act, 1872: consideration
Disclaimer: Based on the consolidated text of the Sale of Goods Act, 1930 consulted on 2 October 2026, whose latest amendment shown is Act 28 of 1993. It explains the words of the statute only; later amendments and the way courts apply these sections should be checked. This article is general information, not legal advice; check the official text before acting.