Sections 6-8 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 6 to 8 sit under the sub-heading "Subject-matter of contract". Section 6 says what kind of goods a contract of sale may cover: existing goods owned or possessed by the seller, or future goods. Sections 7 and 8 deal with what happens when specific goods perish, or are so damaged that they no longer answer to their description, before the contract or before the risk passes.
Goods may be existing or future, and a contract may depend on a contingency. A present sale of future goods operates as an agreement to sell. If specific goods have, without the seller's knowledge, perished at the time of the contract, the contract is void (section 7). If specific goods perish without any fault of seller or buyer after an agreement to sell but before the risk passes to the buyer, the agreement is avoided (section 8).
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. The terms "specific goods" and "future goods" are defined in section 2: specific goods are "identified and agreed upon at the time a contract of sale is made", and future goods are "goods to be manufactured or produced or acquired by the seller after the making of the contract of sale". The difference between a sale and an agreement to sell comes from section 4. A contract that depends on the existence of particular goods should be read closely before signing; our contract review team does this for supply and trading agreements.
Section 6(1): existing or future goods
"The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or future goods." Existing goods are those the seller already owns or has possession of. Future goods are the second category. Both can be the subject of a contract of sale.
Section 6(2): goods that depend on a contingency
"There may be a contract for the sale of goods the acquisition of which by the seller depends upon a contingency which may or may not happen." The seller does not own the goods yet, and whether he will get them depends on something that may or may not happen. The Act allows such a contract. For the general law of contingent contracts, see Sections 31-33 of the Indian Contract Act, 1872.
Example (the writer's own, not printed in the Act): Kapoor Traders agrees to sell to Raman Exports 1,000 kg of a spice that Kapoor expects to buy at an auction next week, if the auction takes place and Kapoor's bid is accepted. The acquisition depends on a contingency. Section 6(2) says such a contract may be made.
Section 6(3): present sale of future goods
"Where by a contract of sale the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods." The seller cannot transfer property today in something he does not yet have. The contract is therefore treated as an agreement to sell, with the transfer of property to follow, as section 4(3) and 4(4) provide.
Example (the writer's own): On 1 January, Singh Tailors says to Meera Boutique: "I sell you the 50 shirts I shall stitch in February." The words sound like a present sale, but because the shirts are future goods the contract operates as an agreement to sell.
Section 7: specific goods that had already perished
"Where there is a contract for the sale of specific goods, the contract is void if the goods without the knowledge of the seller have, at the time when the contract was made, perished or become so damaged as no longer to answer to their description in the contract."
Four conditions run together:
- a contract for the sale of specific goods;
- the goods have perished or become so damaged as no longer to answer to their description in the contract;
- this was so at the time when the contract was made; and
- the seller was without knowledge of it.
If all four are met, the contract is void. The text does not say what happens if the seller did know; it is silent. For a general statement of the effect of impossibility, see Section 56 of the Indian Contract Act, 1872, which is a separate law that applies under section 3 of this Act so far as it is not inconsistent.
Example (the writer's own): On Monday, Naidu Cold Storage sells the 40 specific crates of strawberries in its Chamber 3 to Lopes Caterers. Unknown to Naidu, a power failure on Sunday night spoiled the whole chamber, and the fruit no longer answers to its description. Section 7 treats the contract as void.
Section 8: perishing after the agreement to sell but before risk passes
"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 or become so damaged as no longer to answer to their description in the agreement before the risk passes to the buyer, the agreement is thereby avoided."
The conditions again are four:
- an agreement to sell specific goods (not a completed sale);
- the goods subsequently perish or become so damaged that they no longer answer to their description;
- this happens without any fault on the part of the seller or buyer (section 2(5) defines "fault" as wrongful act or default); and
- it happens before the risk passes to the buyer.
Then the agreement is "avoided". The words "before the risk passes to the buyer" send the reader to section 26, which says when goods are at the seller's risk and when at the buyer's, and to the rules on passing of property in Chapter III.
Example (the writer's own): Verma Furniture agrees to sell a specific, made-to-order table to Sethi Hotels, property and risk to pass on delivery next month. A fire at no one's fault destroys the table in Verma's workshop. The risk had not passed to Sethi Hotels. Under section 8, the agreement is avoided.
Comparison table
| Point | Section 6 | Section 7 | Section 8 |
|---|---|---|---|
| Kind of goods | existing or future | specific | specific |
| Kind of contract | sale; present sale of future goods is an agreement to sell | contract of sale of specific goods | agreement to sell specific goods |
| Moment of perishing | not applicable | at the time the contract was made | after the agreement, before risk passes |
| Seller's knowledge | not applicable | seller without knowledge | not mentioned; "without any fault" of seller or buyer |
| Effect | contract allowed | contract is void | agreement is avoided |
Drafting pointers
- Name the goods precisely. The difference between specific and future goods drives sections 6 to 8.
- If goods are not yet in existence or not yet in the seller's hands, say so and expect the contract to operate as an agreement to sell.
- State who bears the risk and from when. Section 8 turns on whether the risk has passed, and section 26 says "unless otherwise agreed" in its opening words.
- The text of these sections does not say what happens when the goods are only partly lost or when the loss is due to fault; do not assume a rule that is not printed.
Need help with a contract for goods yet to be made or acquired?
If your supply contract covers goods not yet produced, or goods that may be lost before delivery, we can review and vet the contract to make sure the risk and description clauses say what you intend.
Key takeaways
- A contract of sale may cover existing goods or future goods, and goods whose acquisition depends on a contingency.
- A present sale of future goods operates as an agreement to sell.
- Section 7: a contract for specific goods that had already perished without the seller's knowledge is void.
- Section 8: an agreement to sell specific goods is avoided if the goods perish without fault of either party before the risk passes to the buyer.
- Both sections speak of goods that "no longer answer to their description" as well as goods that perish.
Read next
- Section 4 of the Sale of Goods Act, 1930: sale and agreement to sell
- Sections 9-10 of the Sale of Goods Act, 1930: ascertainment of price and agreement to sell at valuation
- Section 26 of the Sale of Goods Act, 1930: risk passes with property
- Sections 31-33 of the Indian Contract Act, 1872: contingent contracts
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.