Performance of the Contract of Sale under Sections 31 to 36 of the Sale of Goods Act, 1930: The Duties of Seller and Buyer, Concurrent Conditions, Modes of Delivery, Part Delivery, and the Rules as to Place and Time

Chapter IV of the Act deals with performance. Its starting point is simple: the seller must deliver the goods and the buyer must accept and pay for them, in accordance with the contract. Unless the parties agree otherwise, delivery and payment are concurrent conditions, so each must be ready to perform when the other is. Sections 33 to 36 then fill in what delivery means, what happens on part delivery, whether the buyer must ask for the goods, and where, when and at whose expense delivery is to be made. Almost every rule is a default that the contract may vary.

1. The Duties and Their Relationship

Sections 31 and 32, Sale of Goods Act, 1930

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

32. Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing to pay the price in exchange for possession of the goods.

📖 Morton v. Lamb, (1797) 7 TR 125

Facts: A buyer of corn sued the seller for failing to deliver it, but did not allege that he had been ready and willing to pay for it on delivery.

Held: The claim failed. Where delivery and payment were to take place together, the buyer could not complain of non-delivery without showing that he had been ready and willing to pay. The two obligations were mutual and dependent.

Ratio: Where delivery and payment are concurrent conditions, a party suing for non-performance must show that he was ready and willing to perform his own part. Section 32 states the rule.

The parties may vary the order. In a credit sale the seller must deliver first; in a prepaid order the buyer must pay first. Section 5(1) expressly allows them to provide for immediate or postponed delivery and payment, or payment by instalments.

The two duties, their concurrence, three modes of delivery, and the rules in Sections 34 to 36

2. What Delivery Means: Section 33

Section 33, Sale of Goods Act, 1930

Delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorised to hold them on his behalf.

Actual delivery: physically handing the goods to the buyer or his agent.
Symbolic delivery: handing over something that gives control, such as the keys of the store where the goods are kept, or a document of title.
Constructive delivery: a change in the capacity in which goods are held without any physical movement, as where a warehouse keeper holding the seller's goods agrees to hold them for the buyer. Section 36(3) requires such an acknowledgment from a third party in possession.

📖 Farina v. Home, (1846) 16 M & W 119

Facts: Goods lay in a warehouse, and the seller gave the buyer a warrant issued by the warehouse keeper. The buyer did not present it, and the warehouse keeper never acknowledged holding the goods for him. The question was whether the goods had been delivered.

Held: There had been no delivery. The warrant was merely a token of an authority to receive possession. Until the warehouse keeper attorned to the buyer, by acknowledging that he held the goods on the buyer's behalf, possession had not passed.

Ratio: Where goods are held by a third party, there is no delivery to the buyer until that party acknowledges that he holds them for the buyer, save where a true document of title is transferred.

3. Part Delivery and Application for Delivery

Section 34: a delivery of part of the goods, in progress of delivery of the whole, has the same effect for passing property as delivery of the whole; but a delivery of part with an intention of severing it from the whole does not operate as delivery of the rest.
Section 35: apart from an express contract, the seller is not bound to deliver until the buyer applies for delivery. Delivery is ordinarily a matter of the buyer collecting, unless the contract requires the seller to send.

4. Place, Time, Hour and Expense: Section 36

Whether the buyer collects or the seller sends depends on the contract, express or implied.
Place: apart from any contract, goods sold are to be delivered at the place where they are at the time of sale; goods agreed to be sold, where they are at the time of the agreement, or if not then in existence, where they are manufactured or produced.
Time: where the seller must send the goods but no time is fixed, he must send them within a reasonable time.
Third party in possession: there is no delivery until that person acknowledges to the buyer that he holds the goods on the buyer's behalf, subject to the effect of a document of title.
Reasonable hour: a demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour, which is a question of fact.
Expense: unless otherwise agreed, the expense of putting the goods into a deliverable state is borne by the seller.

5. The Position Stated Shortly

Section 31: the seller must deliver, and the buyer must accept and pay, in accordance with the contract.
Section 32: unless otherwise agreed, delivery and payment are concurrent conditions.
Morton v. Lamb: a party suing for non-performance must show he was ready and willing to perform.
Section 33: delivery may be actual, symbolic or constructive.
Farina v. Home: there is no delivery of goods held by a third party until he attorns to the buyer.
Section 34: part delivery counts as delivery of the whole unless intended to sever.
Section 35: the seller need not deliver until the buyer applies, unless the contract says otherwise.
Section 36: place, time, hour and expense of delivery are fixed by default rules.