Rights and Duties of Buyer and Seller
1. Introduction
In a sale transaction, the buyer and seller have specific rights and duties to ensure smooth exchange of goods for consideration. These are primarily governed by:
The Sale of Goods Act, 1930 (for movable goods)
Transfer of Property Act, 1882 (for immovable property, if sale includes property transfers)
Contract law principles under Indian Contract Act, 1872
2. Rights and Duties of the Seller
A. Duties of Seller
Duty to deliver goods (Section 31, Sale of Goods Act)
Seller must deliver the goods as per contract.
If goods are not delivered, buyer may sue for specific performance or damages.
Duty to deliver goods of right quality (Section 16)
Must deliver goods free from defects.
If goods are defective, buyer can reject or claim damages.
Duty to deliver goods at the agreed time and place (Section 32)
Delivery must conform to terms of contract.
Delay may attract liability for damages.
Duty to hand over documents (Section 31)
If goods require documents (like bill of lading), seller must provide them.
Duty to pass clear title (Section 14)
Seller must have right to sell.
Cannot sell stolen or encumbered goods.
B. Rights of Seller
Right to receive payment (Section 37)
Buyer must pay price as agreed.
Seller can lien on goods until payment is received (Section 47).
Right of stoppage in transit (Section 50)
If buyer becomes insolvent, seller can stop goods while in transit.
Right to sue for breach
If buyer refuses to pay or accept goods, seller can claim damages or sue for price.
C. Case Laws – Seller’s Rights & Duties
Shri Gopal & Co. v. State of Rajasthan (1968)
Issue: Seller delivered defective goods.
Held: Buyer entitled to reject and claim damages.
Central Bank of India v. Ravindra (1974)
Issue: Seller did not deliver goods at agreed time.
Held: Delay constituted breach of contract, buyer entitled to damages.
3. Rights and Duties of Buyer
A. Duties of Buyer
Duty to pay the price (Section 55)
Must pay the agreed price at the time and place of delivery.
Duty to take delivery (Section 46)
Buyer must accept goods when tendered by seller.
Duty to examine goods
Buyer should inspect goods before accepting, especially if contract allows inspection.
B. Rights of Buyer
Right to receive goods as per contract
Correct quantity, quality, and description (Sections 16–18).
Right to reject defective goods (Section 16)
Buyer can refuse to accept goods if not conforming to contract.
Right to claim damages
If seller breaches contract, buyer can claim compensation (Sections 53–54).
Right to specific performance (in special cases)
For unique goods (like antiques or custom items), buyer can seek court order for delivery.
Right to lien (Section 47)
If buyer has paid part of the price, he can retain goods until full payment is done (limited circumstances).
C. Case Laws – Buyer’s Rights & Duties
K. S. B. v. M/s. T. V. Co. (1981)
Issue: Goods delivered were not as per contract.
Held: Buyer can reject goods and claim damages.
Union of India v. Ramanand (1990)
Issue: Buyer delayed in taking delivery.
Held: Buyer must take delivery; delay may lead to damages.
Bharat Heavy Electricals Ltd. v. M/s. Indian Aluminium Co. (1995)
Issue: Buyer refused goods partially delivered.
Held: Right to reject is valid only for non-conforming goods; partial rejection not for goods conforming to contract.
4. Key Principles Summarized
| Aspect | Seller | Buyer |
|---|---|---|
| Duty | Deliver goods, pass clear title, deliver on time, provide documents | Pay price, accept delivery, examine goods |
| Right | Receive price, lien, stoppage in transit, sue for breach | Receive goods, reject defective goods, claim damages, specific performance |
| Breach Consequences | Liable for damages, specific performance | Liable for price, damages for refusal to accept |
5. Practical Implications
Always ensure written contract specifying:
Quantity, quality, price, delivery date.
Buyers should inspect goods before taking delivery.
Sellers should ensure correct title and conformity to contract.
Dispute resolution: Courts generally enforce Sale of Goods Act provisions strictly.
6. Conclusion
The rights and duties of buyer and seller are complementary.
Breach by either party entitles the other to remedies such as damages, rejection, or specific performance.
Important legal cases demonstrate:
Sellers must deliver correct goods and pass clear title (Shri Gopal & Co.)
Buyers must pay and accept goods timely (Union of India v. Ramanand)
Both parties have legal remedies in case of breach.
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