Performance of contract of sale

The performance of a contract of sale involves various obligations and duties that both the seller and the buyer must fulfill for the transaction to be completed satisfactorily. The Sale of Goods Act, 1930, in India, outlines these responsibilities in detail, ensuring that there is clarity and fairness in commercial transactions involving the sale of goods.

Duties of the Seller

• Delivery of Goods:

The seller is required to deliver the goods to the buyer as per the terms of the contract. This involves making the goods available to the buyer at the designated location and time, in the correct quantity and quality, and in a deliverable state.

• Transfer of Property:

The seller must ensure that the property in the goods is transferred to the buyer, giving the buyer the right to own, use, and dispose of the goods as they see fit, subject to the terms of the contract.

• Transfer of Title Free from Encumbrances:

The seller should ensure that the title transferred to the buyer is free from any charges or encumbrances, unless explicitly agreed upon.

Duties of the Buyer

• Acceptance of Delivery:

The buyer is obligated to accept the goods when they are delivered in accordance with the contract. This involves taking physical possession of the goods and acknowledging that the delivery fulfills the contract terms.

• Payment:

The buyer must pay the price for the goods as stipulated in the contract. The payment should be made at the time and place agreed upon in the contract, and in the absence of such agreement, payment is to be made at the time and place of delivery.

Delivery of Goods

• Place of Delivery:

The place for the delivery of goods is determined by the contract. In the absence of such a stipulation, the goods are to be delivered at the place where they are at the time of the sale.

• Time of Delivery:

If the contract specifies a time for delivery, the goods must be delivered accordingly. In contracts where time is not specified, the delivery should be made within a reasonable time.

• Delivery in Installments:

Unless otherwise agreed, the goods must be delivered in a single delivery, and payment is to be made accordingly. Delivery by installments may be allowed if the contract so specifies or if it is customary in the trade.

• Expenses of Delivery:

The cost of putting the goods into a deliverable state is generally borne by the seller unless there is an agreement to the contrary.

Acceptance of Goods

• Examination of Goods:

The buyer has the right to examine the goods on delivery to ensure they conform to the contract. The examination should be done within a reasonable time after delivery.

• Acceptance:

Acceptance of the goods by the buyer occurs when the buyer intimates to the seller that the goods are accepted, does something in relation to the goods that is inconsistent with the ownership of the seller, or retains the goods without intimation of rejection within a reasonable time.

Payment

• Manner of Payment:

The payment is to be made in the manner prescribed in the contract. If not specified, it should be made in cash.

• Time of Payment:

Unless agreed otherwise, the payment is due on the delivery of the goods. If the goods are to be delivered at a different time from that of payment, payment is to be made at the time agreed upon.

Remedies for Breach

Both the seller and the buyer have specific remedies available to them in case of a breach of the contract by the other party. These include the right to sue for damages, the right to repudiate the contract, and specific performance, among others.