LAW OF SALE OF GOODS

Performance of Contract of Sale of Goods

1
PERFORMANCE OF THE CONTRACT
The performance of a contract of sale means the performance of duties by the
seller and the buyer as per terms of the contract. The parties to a contract must
include the terms in the contract regarding time, place of delivery, modes of
delivery, payment of price etc. If the contract is silent in this regard, the
following rules shall apply, delivery being the focus of it.

1.SELLER AND BUYER (SEC.31)

It is the duty of the seller to deliver the goods to the buyer. Subsequently, it is
the duty of the buyer to accept and pay for them in accordance with the terms
of the contract of sale.

For example, A sells a bicycle to B for £100. It is the duty of A to deliver the
bicycle to B and B is responsible to pay the price to A and accept delivery.
2
PERFORMANCE OF THE CONTRACT
2. PAYMENT AND DELIVERY (Sec.32)
Unless otherwise agreed, delivery of the goods and payment of the price are
concurrent conditions. The seller must be ready to deliver the goods to the
buyer in exchange for the price and the buyer must be willing to pay the price
in exchange for possession of the goods simultaneously.
For example, A sells sugar to B for £20. A shall deliver the sugar when B is ready
to pay the price. B shall pay when A delivers the sugar.

3. MODE OF DELIVERY (Sec.33)

S.2(2) defines delivery as “voluntary transfer of possession from one person to
another”
Delivery of goods sold may be made by doing anything which the parties agree or
putting the goods in the possession of the buyer or his duly authorized agent.
For example, B purchases 50 bags of cement from A and asks him to deliver it to a
construction site. Here, delivery shall be completed when A brings the cement
to the construction site.
3
PERFORMANCE OF THE CONTRACT
4. PART DELIVERY (Sec.34)
When a part delivery is made in progress of the whole delivery, it is
treated as the whole. The ownership in the whole of the goods passes
to the buyer. But when part delivery is made with intention of
separating it from whole, it is not treated as delivery of the whole.
Examples:
S sold 5 bales of cotton to B. B received 1 bale and paid for it but refused
to accept the remaining 4 bales. Held: it was a part of delivery
(Mitchell Ried Co. vs. Balder Dass)
5. APPLY FOR DELIVERY (Sec.35)
The seller is not bound to deliver the goods to the buyer unless the buyer applies
for delivery
For example, A sells a car to B. A is not bound to deliver the car unless B asks for
delivery.

4
 PERFORMANCE OF THE CONTRACT
6. PLACE OF DELIVERY [Sec.36(1)]
The goods must be delivered at the place specified in the contract. If the pace of
delivery is not specified, the following rules shall apply.
a) In sale, the goods must be delivered at the place at which they are at the time of
sale.
b) In agreement to sell, the goods must be delivered at the place where they are at
the time of the agreement to sell.
c) In future goods, the goods must be delivered at the place at which they are
manufactured or produced.
For example, A contracts to supply bricks to B at Bahria University. A is bound to
supply bricks at the same address.
7. TIME OF DELIVERY [Sec.36(2)]
When the time of the delivery is specified in the contract, the goods must be delivered
within a the specified time. If there is no specified time, the goods must be
reasonable time. The reasonable time depends upon the circumstances of each
case.
For example, A promises to sell and deliver the rice within 5 days. A is bound to do so
else he is guilty of breach of contract.
5
PERFORMANCE OF THE CONTRACT
8. POSSESSION BY THIRD PARTY [Sec.36(3)]
When goods at the time of sale are in possession of a third person, there is no
delivery by the seller to the buyer unless such third person acknowledges to
the buyer that he holds the goods on his behalf.
For example, A stores his goods in B’s godown. A sells goods to X and gives
him receipt to take delivery from B. B hands over the goods to X, making
it a valid delivery.
9. EXPENSES OF DELIVERY [S.36(5)]
The expenses of putting up goods into deliverable state be borne by the seller.
For example, A sells a computer to B. A shall bear the the expense of packing
the computer.

6
PERFORMANCE OF THE CONTRACT

10. WRONG DELIVERY (Sec.37)

A seller must deliver the goods in accordance with the terms of the contract. In
case of wrong delivery, the buyer can reject the goods. It may be either short
delivery, excess delivery, or mixed delivery.
If the buyer accepts the goods so delivered he shall pay for them at the contract
rate.
For example, A buys 40 bottles of Pepsi from B. B sends 50 bottles. A may
accept 40 bottles and reject the rest or accept all 50 and pay according to
contract rate.
11. EXAMINING THE GOODS (Sec.41)
When the seller delivers the goods to the buyer, he is bound to give a reasonable
opportunity to the buyer to examine the goods to ascertain whether they are
in accordance with the contract.
For example, A sells bricks to B. B must be given reasonable time to check the
goods and see if they match the description/sample mentioned in the contract.

7
PERFORMANCE OF THE CONTRACT
12. ACCEPTANCE OF DELIVERY (Sec.42)
The buyer is deemed to have accepted the goods in the following circumstances:
1) When he informs the seller that he has accepted the goods
2) When he does any act, in relation to the goods, which shows that he has
accepted the goods
3) When, after a lapse of reasonable time, he retains the goods without
intimating the seller that he has rejected them.
For example, A buys rice from B. Upon delivery, he does not reject them.
After a reasonable time, it shall be assumed that A has accepted the
goods.

13. REJECTION OF GOODS (Sec.43)

When the goods are delivered to the buyer and he refuses to accept them,
having the right to do so, he is not bound to return them to the seller. He
must inform the seller that he has accepted the goods.
For example, A supplied wrong goods to B. B can reject the goods and does
not return. It is upto A to recover the goods

8
PERFORMANCE OF THE CONTRACT
14. REFUSAL TO TAKE DELIVERY (Sec.44)
When the seller is ready to deliver the goods and requests the buyer to take
delivery, and the buyer does not take delivery of goods within reasonable time,
the buyer is liable for damages suffered by the seller arising out of non-
receiving of goods.
For example, C sold and delivered a car to S. S refused to take delivery. C then
sold the car to X and suffered a loss. Held that C could claim damages from S.
(Charter vs. Sullivan)

9
PERFORMANCE OF THE CONTRACT

RIGHTS OF BUYER
A buyer has the following rights in a contract of sale of goods
1. RIGHT TO TAKE DELIVERY
It is the right of the buyer to take delivery of goods according to the terms of
contract
2. RIGHT TO REJECT
If the seller sends to the buyer a larger or smaller quantity of goods against the
contract, the buyer may accept or reject the whole or accept a part of goods
and reject the rest.
3. RIGHT TO NOTICE OF INSURANCE
When the goods are sent by the seller by sea route, the buyer has the right to be
informed by the seller so that he may insure the goods.
4. RIGHT TO EXAMINE
The buyer has a right to examine the goods, which he has not previously examined,
before accepting them.
10
PERFORMANCE OF THE CONTRACT
5. RIGHT TO SUE FOR DAMAGES
When the seller refuses to deliver the goods to the buyer, the buyer can sue the
seller for damages caused.
6. RIGHT TO SUE FOR PRICE
If the buyer has paid the price and the goods are not delivered, he can recover
the amount.
7. RIGHT TO SUE FOR PERFORMANCE
The buyer may sue the seller for specific performance of the contract. If the
goods are specific, the court may order for the performance of contract.
8. RIGHT TO SUE FOR BREACH OF WARRANTY
When there is a breach of warranty by seller, the buyer cannot reject the
goods. Instead he can sue for damages only.

11
 PERFORMANCE OF THE CONTRACT
DUTIES OF BUYER
1. DUTY TO APPLY FOR DELIVERY
It is the duty of the buyer to apply for delivery of goods.
2. DUTY TO TAKE RISK OF DETERIORATION
When the seller agrees to deliver the goods at his own risk at a place other than where the
goods were when they were sold, the buyer shall take a risk of deterioration in the
goods.
3. DUTY TO INFORM SELLER
It is the duty for buyer to inform seller if he has rejected the goods.
4. DUTY TO TAKE DELIVERY
It is the duty of the buyer to take the delivery of the goods within a reasonable time.
5. DUTY TO PAY THE PRICE
When the ownership in goods passes to the buyer, it is the duty of the buyer to pay the price
according to the contract.
6. DUTY TO PAY FOR DAMAGES
When the buyer refuses to accept the goods, he will have to compensate the seller in case of
non-acceptance of the goods.
12