Sections 20-22 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.
Sections 20, 21 and 22 are the first three of the rules, mentioned in section 19(3), for finding when property passes in specific goods. Section 20 covers specific goods in a deliverable state under an unconditional contract. Section 21 covers goods the seller must first put into a deliverable state. Section 22 covers goods in a deliverable state that the seller must weigh, measure or test to ascertain the price.
Under an unconditional contract for specific goods in a deliverable state, property passes when the contract is made, and it does not matter that payment or delivery is postponed (section 20). Where the seller must do something to put the goods into a deliverable state, property does not pass until it is done and the buyer has notice (section 21). Where the seller must weigh, measure, test or do some other act to ascertain the price, property does not pass until it is done and the buyer has notice (section 22).
Reading note
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. Under section 19(3), sections 20 to 24 are rules for ascertaining the parties' intention "unless a different intention appears"; see the article on sections 18 and 19. "Specific goods" are goods identified and agreed upon at the time the contract is made (section 2(14)), and goods are in a "deliverable state" when the buyer would under the contract be bound to take delivery of them (section 2(3)); both are explained in the articles on section 2. A contract that states in terms when ownership passes avoids the need to rely on these rules, which is the point of careful agreement drafting.
Section 20: specific goods in a deliverable state
"Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed."
The rule needs three features:
- an unconditional contract;
- for specific goods; and
- the goods are in a deliverable state.
If all three are present, the property passes to the buyer when the contract is made. The closing words say it is immaterial whether payment, delivery or both are postponed. So a buyer can own the goods on the day of the contract although he has not paid and the goods are still with the seller.
Example (the writer's own, not printed in the Act): On 2 September, Bhasin Auto sells a particular tractor, chassis as stated, to Patil Farms. The contract is unconditional and the tractor is ready to be taken. Payment is due in 30 days and delivery in 15 days. Under section 20 the property passes on 2 September, the day the contract is made. (Who bears the loss before delivery is a separate question, answered in section 26.)
Section 21: the seller must put the goods into a deliverable state
"Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done and the buyer has notice thereof."
Here the elements are:
- a contract for the sale of specific goods;
- the seller is bound to do something to the goods to put them into a deliverable state; and
- the result: the property does not pass until (i) the thing is done and (ii) the buyer has notice of it.
Two conditions apply together. It is not enough that the seller has finished the work; the buyer must also have notice.
Example (the writer's own): Kulkarni Fabricators agrees to sell Meena Industries a specific machine, "after Kulkarni has fitted the new motor". Until the motor is fitted and Meena Industries is told so, the property does not pass under section 21.
Section 22: weighing, measuring or testing to ascertain the price
"Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done and the buyer has notice thereof."
The goods are already in a deliverable state, so section 20 would otherwise apply. The difference is that the seller is bound to weigh, measure, test or do some other act or thing with reference to the goods for the purpose of ascertaining the price. Until that act is done and the buyer has notice of it, property does not pass.
The words "for the purpose of ascertaining the price" matter. The act in question is tied to fixing the price, not to improving the goods. This links with section 9, on how the price is determined, covered in Sections 9-10.
Example (the writer's own): Chauhan Scrap sells to Hegde Metals "the heap of copper scrap in Yard B, price per kg after weighing at our weighbridge". The heap is specific and ready to take; the seller must weigh it to fix the price. Under section 22 the property does not pass until the weighing is done and Hegde Metals has notice of the result.
The three sections compared
| Section | Situation | When property passes |
|---|---|---|
| 20 | unconditional contract, specific goods, deliverable state | when the contract is made; postponed payment or delivery is immaterial |
| 21 | seller bound to do something to put the goods into a deliverable state | when the thing is done and the buyer has notice |
| 22 | goods deliverable, but seller bound to weigh, measure, test or do some other act to ascertain the price | when the act is done and the buyer has notice |
Notice that "unconditional" appears in section 20 only; sections 21 and 22 speak of what the seller is "bound" to do. Notice too that the phrase "the buyer has notice thereof" appears in both sections 21 and 22 but not in section 20.
How to use these rules
A simple way to work through them is to ask three questions in order.
- Are the goods specific? If not, go back to section 18 and, later, to section 23.
- Are they in a deliverable state under the contract? If not, section 21 may apply.
- Does the seller have to weigh, measure or test to fix the price? If yes, section 22 applies.
If the answers lead to none of the three, or if the contract says something different, the opening principle in section 19 still governs: the property passes when the parties intend it to pass, "unless a different intention appears" being the words of section 19(3).
Because these sections decide ownership, they interact with risk. Section 26 says that, unless otherwise agreed, goods remain at the seller's risk until the property is transferred. See Section 26.
Drafting pointers
- Name the event. If property is to pass on payment, delivery or inspection, say so; sections 20 to 22 are default rules only.
- Give notice in writing. Sections 21 and 22 depend on the buyer having notice. A dated written notice leaves no doubt.
- Mark the goods. Identify specific goods by serial number, lot or location.
- Separate the price check from the transfer. If weighing or testing is to fix the price, say whether the parties intend property to pass before or after it.
Need help fixing the moment of ownership?
If your contract leaves it open whether ownership passes on signing, on finishing work, or after weighing, we can draft the agreement to say exactly when the goods become the buyer's.
Key takeaways
- Section 20: unconditional contract, specific goods in a deliverable state, property passes when the contract is made.
- Section 21: property passes only after the seller has done what is needed to put the goods into a deliverable state and the buyer has notice.
- Section 22: property passes only after the seller has weighed, measured or tested to ascertain the price and the buyer has notice.
- All three are rules for finding intention, which a different intention can displace.
- Name the event and give written notice.
Read next
- Sections 18-19 of the Sale of Goods Act, 1930: goods must be ascertained and property passes when intended
- Section 23 of the Sale of Goods Act, 1930: unascertained goods, appropriation and delivery to carrier
- Section 26 of the Sale of Goods Act, 1930: risk passes with property
- Sections 9-10 of the Sale of Goods Act, 1930: ascertainment of price
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.