Performance of the Contract under Sale of Goods Act, 1930
Performance of the Contract under Sale of Goods Act, 1930
The Sale of Goods Act, 1930 governs contracts where goods are sold and bought. Once a valid contract of sale is made, it must be performed by the parties according to its terms. The Act lays down rules about how and when performance must be done.
Key Aspects of Performance:
Delivery of Goods by the Seller (Section 31 & 32)
The seller must deliver the goods as agreed in the contract.
Delivery can be actual (physical handing over) or constructive (e.g., handing over documents that give possession).
If time for delivery is fixed by contract, it must be strictly followed; otherwise, it should be within a reasonable time.
Payment of Price by the Buyer (Section 29 & 30)
The buyer must pay the price as agreed, either at the time of delivery or as per contract terms.
If the time of payment is not fixed, payment must be made when the goods are delivered.
Buyer’s Right to Examine the Goods (Section 35)
The buyer is entitled to examine the goods to verify conformity with the contract before accepting.
If goods are rejected within reasonable time after inspection, the buyer is not bound to accept or pay.
Acceptance of Goods (Section 36)
Acceptance can be express or implied (by doing something inconsistent with rejection, or keeping the goods without objection).
Once accepted, buyer is liable to pay.
Delivery and Payment Conditions (Section 38 & 39)
Delivery of goods is at the seller’s place unless otherwise agreed.
If goods are delivered to the buyer or carrier, the risk passes to the buyer.
Payment is generally made at the time and place of delivery unless otherwise agreed.
Performance Where Goods Are to Be Put into a Deliverable State (Section 33)
If goods require some action (e.g., packaging or preparation), the seller must perform such action before delivery.
Seller’s Right of Lien and Stoppage (Section 47 & 50)
Seller may retain possession of goods if the buyer fails to pay (right of lien).
Seller can stop goods in transit if buyer becomes insolvent.
Summary Table: Performance of Contract under Sale of Goods Act, 1930
| Aspect | Seller’s Obligations | Buyer’s Obligations |
|---|---|---|
| Delivery of Goods | Deliver goods as per contract (time, place, quality) | Accept goods and pay price |
| Payment of Price | Receive payment when due | Pay price at delivery or as agreed |
| Inspection of Goods | N/A | Right to examine before acceptance |
| Acceptance | N/A | Accept or reject goods within reasonable time |
| Condition of Goods | Put goods into deliverable state if needed | N/A |
| Risk Transfer | Risk passes on delivery or as per contract | Bears risk after delivery or as agreed |
| Lien and Stoppage | Right to retain goods for unpaid price | Risk losing goods if insolvent |
Practical Implications:
The contract performance must be in good faith and according to agreed terms.
Failure by seller to deliver or buyer to pay may lead to breach and remedies.
Buyer should inspect goods timely and communicate acceptance or rejection.
Seller’s rights protect them from buyer’s insolvency or non-payment. Do write to us if you need any further assistance.
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