Performance of Contract of Sale, Sale of Goods Act' 1930

Sale of Goods Act' 1930 Notes
Business Laws Notes B.Com 1st & 2nd Sem CBCS Pattern 

Meaning of Performance of Contract of sale

Chapter IV of the Act describes the procedure for performance of the contract of sales. Section 31 provides that it is the duty of the seller to deliver the goods and the buyer to accept and pay for them, in accordance with the terms of the contract. The performance of contract involves the following:

1. Payment and delivery are concurrent conditions:

Section 32 provides that the delivery of the goods and payment of the price are concurrent conditions unless otherwise agreed. The seller shall be ready and willing to give the possession of the goods to the buyer in exchange for the price. The buyer shall be ready and willing to pay the price in exchange for the possession of the goods.

2. Delivery: 

Section 33 provides that the delivery of goods sold may be made

a) By doing anything which the parties agree; or

b) Which has the effect of putting the goods in the possession of the buyer or of any person authorized to hold them on his behalf;

Section 35 provides that the seller of goods is not bound to deliver them until the buyer applies for the delivery apart from any express contract.

Rules as to delivery: Rules for the delivery as detailed below:

a.       Part delivery: A delivery of part of goods, in progress of the delivery of the whole, has the same effect as a delivery of the whole for the purpose of passing the property in such goods. If a delivery of part of the goods is done with an intention of severing it from the whole, then it does not operate as a delivery of the reminder.

b.       Place of delivery: In the absence of an agreement, express or implied, the goods sold are to be delivered at the place at which they are at the time of sale. The goods agreed to be sold are to be delivered at the place at which they are at the time of the agreement to sell, or if not then in existence, at the place at which they are manufactured or produced.

c.       Time of Delivery: Where under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time.

d.       Delivery by third party: Where the goods at the time of sale are in the possession of a third person, there is no delivery by seller to buyer unless until such third person acknowledges to the buyer that he holds the goods on his behalf.

e.       Expenses on delivery: Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state shall be borne by the seller.

f.        Delivery of wrong quantity: The transfer of goods, in a sale, is expected to be delivered as agreed to in the contract. If there is variation in the quantity of goods delivered, the buyer may reject the whole or accept the part of the goods delivered and reject the rest. If the buyer accepts the goods so delivered he shall pay for them at the contract rate;

g.       Installment deliveries: The buyer of the goods is not bound to accept the delivery of goods by installments unless otherwise agreed to between both the parties.

h.      Delivery to carrier or wharfingers: If the seller is authorized or required to send the goods to the buyer, through a carrier whether it is named by the buyer or not or delivery of the goods to a wharfinger for safe custody, the delivery of goods to such a carrier or wharfinger shall be deemed to be a delivery of the goods to the buyer.

3) Buyer’s right of examining the goods: 

According to Section 41, the buyer is having right to examine the goods, which have not been examined by him previously before acceptance. The examination of the goods by the buyer is for the purpose of ascertaining whether they are in conformity with the contract. The seller is also bound to afford an opportunity to the buyer for examining the goods.

4) Acceptance: 

Section 42 provides that the buyer is deemed to have accepted the goods:

a)       When he intimates to the seller that he has accepted them; or

b)      When the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller; or

c)       When, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them.

5) Return of rejected goods: 

Section 43 provides that where goods are delivered to the buyer and he refuses to accept them, the buyer is not bound to return them to the seller. It is sufficient if he intimates to the seller that he refuses to accept them.

6) Liability of the buyer: 

Section 44 provides that where the seller is ready and willing to deliver the goods and requests the buyer to take delivery and the buyer does not within a reasonable time take delivery of the goods he is liable to the seller any loss occasioned by his neglect or refusal to take delivery and also for a reasonable charge for the care and custody of the goods.