Performance of contract under sale of goods act

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PERFORMANCE OF CONTRACT –
Sale of Goods Act
Prepared by
Dr.Sangeetha R
Assistant Professor
Department of Commerce (IB)
Hindusthan College of Arts and Science,
Coimbatore

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PERFORMANCE OF CONTRACT
 Introduction
 Delivery of Goods
(i) Rules as to delivery of goods
(ii) Acceptance of Delivery
(iii) Buyer’s Liability of Rejecting, Neglecting or Refusing Delivery
 Right and Duties of the Buyer

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Performance of Contract – Introduction
 Performance of a contract of sale means as regards the seller, delivery of
the goods to the buyer, and as regards the buyer, acceptance of the delivery
of the goods and payment for them in accordance with the terms of the
contract of sale (Sec.31)
 A contract of sale always involves reciprocal promises, the seller promising
to deliver the goods and the buyer promising to accept and pay for them.
 In the absence of a contract to the contrary they are to be performed
simultaneously and each party should be ready and willing to perform his
promise before he can call upon the other to perform his promise.

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Delivery of Goods
 Delivery means voluntary transfer of possession of goods from one person
to another [ Sec.2(2)].
 Delivery of Goods sold may be made by doing anything which the parties
agree shall be treated as delivery or which has the effect of putting the
goods in the possession of the buyer or his agent (Sec. 33)
Delivery of goods may be actual, symbolic or consecutive.
1. Actual delivery:
(i) Where the goods are handled over by the seller to the buyer or his duly
authorised agent, the delivery is said to be actual.
(ii) Delivery of goods may also be made by doing anything which has the
effect of putting the goods in the possession of the buyer (Sec.33).

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2. Symbolic delivery :
(i) Where the goods are ponderous or bulky and incapable of actual delivery,
e.g., haystack in a meadow, the delivery may be symbolic, Handling over of
the key of a warehouse to the buyer is symbolic delivery of the goods to the
buyer and is as effective as actual delivery, even though there is no change
in the possession of the goods.
3. Constructive delivery or delivery by attornment :
(i) Where a third person (e.g., a bailee) who is in possession of the goods of the
seller at the time of the sale acknowledges to the buyer that he holds the goods
on his behalf, there takes place a delivery by attornment or constructive
delivery [Sec.36(3].
This may happen in the following cases :
(a) Where the seller in possession of the goods agrees to hold them on behalf of

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of the buyer.
(b) Where the is in possession of the goods and the seller agrees to the buyers
holding the goods as owner.
(c) Where a third person in possession of the goods acknowledge to the buyer
that he holds them on his behalf.
Example : A sells to B 10 bags of wheat lying in ‘C’s godown. ‘A’ gives an order to
‘C’, asking him to transfer the goods to ‘B’. ‘C’ assents to such order and transfers
the goods in his books to ‘B’. This is a delivery by attornment.

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Rules as to delivery of Goods
1) Unless otherwise agreed, delivery of the goods and payment of the price are
concurrent conditions.
2) A delivery of part of the goods, in progress, of the delivery of whole, amounts
to, for the purpose of passing the property in such goods, as a delivery of the
whole.
3) Apart from any express contract, the seller of goods is not bound to deliver
them until the buyer applies for delivery.
4) The place of delivery is the place at which they are at the time of the sale.
5) If the goods are in possession of a third party, there is no delivery until such
third party acknowledges to the buyer that he holds the goods on his behalf.

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6) Where the seller is bound to send the goods to the buyer but no time
for sending them is fixed, they must be sent within a reasonable time.
7) Expenses of making delivery are borne by the seller and expenses of
obtaining delivery by the buyer.
8) If the seller send to the buyer a larger or a smaller quantity of goods
than he ordered, the buyer may (a) reject the whole, or (b) accept the
whole, or (c) accept the quantity he ordered and reject the rest.
9) If the seller delivers, with the goods ordered, goods of a wrong
description, the buyer may accept the goods ordered and reject the rest or
reject the whole.
10) Unless otherwise agreed, the goods are not to be delivered by
installments.

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Acceptance of delivery [Sec.42]
 Receipt of goods by the buyer does not necessarily result in acceptance of
goods by him under, and in performance of, the contract of sale.
 Acceptance is something more than mere receipt or taking possession of the
goods by the buyer.
Buyer’s Liability for rejecting, neglecting or refusing delivery
Buyer’s liability in case of rejection of goods (Sec 43)
Buyer’s liability for neglecting or refusing delivery of goods (Sec.44)

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RIGHT AND DUTIES OF THE BUYER
Rights of the buyer
1. Right to have delivery as per contract (Sec. 31 and Sec.32)
2. Right to reject the goods (Sec. 37)
3. Right to repudiate [Sec. 38(1)]
4. Right to notice of insurance [Sec.38(1)]
5. Right to examine (Sec 41)
6. Rights against the seller for breach of contract
(i) Suit for damages (Sec.57)
(ii) Suit for Price
(iii)Suit for specific performance (Sec.58)
(iv) Suit for breach of warranty
(v) Repudiation of contract before due date (Sec.60)
(vi) Suit for Interest [Sec. 61(2)(b)]

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Duties of the buyer
1. Duty to accept the goods and pay for them in exchange for possession (Sec.
31 and 32).
2. Duty to apply for delivery (Sec.35)
3. Duty to demand delivery at a reasonable hour [Sec.36(4)]
4. Duty to accept instalment delivery and pay for it [ Sec.38(2)]
5. Duty to take risk of deterioration in the course of transit (Sec.40)
6. Duty to intimate the seller where he rejects the goods (Sec.43)
7. Duty to take delivery (Sec.44)
8. Duty to pay Price (Sec.55)
9. Duty to pay damages for non-acceptance (Sec.56)