Sale of Goods Act,1930

Performance of Contract

Introduction

What is a Contract?

->A contract is an agreement made between two or more parties which the law will enforce. Section 2(h) defines contact as an agreement enforceable by law.

What is performance of a contract of sale?

->Performance of a contract of sale means as regards the seller, the delivery of 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.

Contd..
A contract of sale involves reciprocal promises. If the contract contains any special terms as to delivery and acceptance, these must be complied with. If there are no terms in the contract to this effect, delivery of the goods and payment of the price are concurrent conditions.

Delivery Of Goods
Delivery means voluntary transfer of possession of goods from one person to another. Delivery of goods may be: Actual delivery Symbolic delivery Constructive delivery or delivery by attornment.

Rules as to delivery of goods

Mode of delivery Delivery and payment concurrent conditions Effect of part delivery Buyer to apply for delivery Place of delivery Time of delivery Goods in possession of a third party Cost of delivery Delivery of wrong quantity Installment deliveries Delivery to a carrier or wharfinger

Acceptance of delivery
Receipt of goods by the buyer doesnt 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..

Buyers liability

In case of rejection of goods:

Unless

otherwise agreed, where goods are delivered to the buyer and he rejects them, he is not bound to return them to the seller. If the seller refuses to take away the goods, the buyer comes the bailee of the goods and may charge for keeping them.

For neglecting or refusing the delivery of goods:-

When the seller is ready and willing to deliver the goods and requests the buyer to take delivery, and the buyer does not , within a reasonable time after such request, takes delivery of the goods, he is liable to the seller for: (a) Any loss occasioned by his neglect or refusal to take delivery. (b) A reasonable charge for the care and custody of the goods. Where the neglect or refusal of the buyer to take delivery amounts to repudiation of the contract, the seller may sue for price and for damages.

Rights of the buyer

Right

to have delivery as per contract Right to reject the goods Right to repudiate Right to notice of insurance Right to examine Rights against the seller for breach of contract: (a) Suit for damages (b) Suit for price (c) Suit for specific performance (d) Suit for breach of warranty (e) Repudiation of contract before due date (f) Suit for interest

Duties of the buyer

Duty to accept the goods and pay for them in exchange for possession Duty to apply for delivery Duty to demand delivery at a reasonable hour Duty to accept installment delivery and pay for it Duty to take risk of deterioration in the course of transit Duty to intimate the seller where he rejects the goods Duty to take delivery Duty to pay price Duty to pay damages for non-acceptance

RIGHTS OF AN UNPAID SELLER

Who is an unpaid seller?

A seller of goods is deemed to be an unpaid seller when: The whole of the price has not been paid or tendered A bill of exchange or other negotiable instrument has been received as a conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonor of the instrument or otherwise.

Rights of an unpaid seller against the goods

Right

of Lien Right of stoppage in transit Right of re-sale

Difference between right of lien and right if stoppage in transit

Right of Lien (a) Right of Lien can be exercised when the buyer is able to pay but does not pay. (b) It can be exercised on goods which are in actual or constructive possession of the seller. Right of stoppage in transit (a) The unpaid sellers right to stop the goods in transit arises only when the buyer is insolvent. (b) It can be exercised when the goods are in the possession of a middleman between the sellers who has parted with the possession of the goods and the buyer who has not yet acquired the possession.

(c) It comes to an end when the possession of the goods is surrendered by the seller.
(d) It is to retain possession.

(c) It commences when the goods have left the possession of the seller and continues until the buyer or his agent has acquired their possession.
(d) It is to regain or resume possession.

Effect of sub-sale or pledge by buyer

The unpaid sellers right of lien or stoppage in transit is not affected by any sale or pledge of the goods which the buyer may have made, unless the seller has assented to it. But this right is defeated if he has transferred a document of title to goods to the buyer, and the buyer transfers it by way of sale to a person who takes it in good faith and for consideration.

Contd..

(a) (b) (c) (d)

Right of withholding delivery Rights of an unpaid seller against the buyer personally: Suit for price Suit for damages for non-acceptance Repudiation of contract before due date Suit for interest

Remedies for breach of contract of sale

Sellers

suits: Suit for price (Sec. 55) Suit for damages for non-acceptance of the goods (Sec. 56) Suit for damages for repudiation of contract by the buyer before due date (Sec. 60) Suit for interest [Sec 61 (2)(a)]

Auction Sales
A sale

by auction is a public sale where different intending buyers try to outbid each other. His relationship with the owner of the goods is governed by the general principles of the law relating to agency.

Rules of auction sales

The law on auction sales is contained in Sec. 64 of the Sale of Goods Act. According to it, in the case of a sale by auction the following rules apply: Goods put up for sale lots Completion of sale Right of seller to bid Sale not notified subject to a right to a bid Reserve price Use of pretended bidding Knock out or agreement not to bid against each other

Damping
It is an illicit act dissuading the intending purchaser from bidding By pointing out defects in the goods. By doing some other act so that the intending purchaser is not in a position to have proper estimate of the price of the good. By scaring the intending purchaser away by some other device. Damping is illegal and entitles the auctioneer to withdraw the property from the auction.