Duties of the seller and the buyer under a contract of sale

The rule. Performing a contract of sale means two things: the seller delivers the goods, and the buyer accepts them and pays the price, each as the contract's terms require (s. 31). Unless the parties agree otherwise, delivery and payment are concurrent conditions: the seller must be ready and willing to hand over possession in exchange for the price, and the buyer ready and willing to pay in exchange for possession (s. 32). Neither can insist that the other perform first, and neither can sue the other without showing his own readiness to perform. The contract's own terms come first; the rules below apply where the contract is silent.

Delivery. Delivery is the voluntary transfer of possession from one person to another (s. 2(2)); what matters is that the buyer is placed in a position to deal with the goods, not physical handing over, and possession taken by unfair means is not delivery. It may be made by anything the parties agree shall count as delivery, or by anything that puts the goods in the possession of the buyer or a person authorised to hold them for him (s. 33). It is of three kinds: actual (the goods themselves are handed over, as when a dealer hands a customer the keys and the scooter); symbolic (a means of control is handed over, such as the key of the warehouse holding the goods); and constructive (the person holding the goods acknowledges that he now holds them for the buyer, as when a cold-storage operator agrees to hold the seller's potatoes for the buyer; the issue or transfer of a document of title to the goods, such as a warehouse receipt, also operates without that acknowledgement, under the proviso to s. 36(3)).

Duties of the seller.

1. To deliver as agreed (ss. 31, 33): by an agreed mode, or one that puts the goods in the buyer's possession. A part delivery made in progress of delivering the whole counts as delivery of the whole for passing property; a part severed from the whole does not (s. 34).
2. Not bound to deliver until asked (s. 35): apart from an express contract, the seller need not deliver until the buyer applies for delivery.
3. At the right place (s. 36(1)): where the contract does not say, goods sold are delivered where they are at the time of sale, and goods agreed to be sold where they are when the agreement is made or, if not then in existence, where they are made or produced.
4. In time, and at a reasonable hour (s. 36(2), (4)): where the seller must send the goods and no time is fixed, within a reasonable time; a demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour.
5. Through a third party who holds the goods (s. 36(3)): there is no delivery until that person acknowledges to the buyer that he holds the goods for him. Proviso: this does not affect the operation of the issue or transfer of any document of title to the goods.
6. At his own expense (s. 36(5)): unless otherwise agreed, the seller bears the cost of putting the goods into a deliverable state.
7. The right quantity (s. 37): if less is delivered, the buyer may reject it, or accept and pay at the contract rate; if more, he may accept the contracted quantity and reject the rest, or reject the whole, paying at the contract rate for whatever he keeps; if the right goods come mixed with goods of a different description, he may accept those that match the contract and reject the rest, or reject the whole. These rules yield to trade usage, special agreement or course of dealing. Our example: a mill orders 50 bales of cotton and receives 60; it may keep 50 and reject 10, or refuse all 60.
8. Not by instalments unless agreed (s. 38); delivery to a carrier for sending to the buyer is, prima facie, delivery to the buyer (s. 39(1)); and where goods are delivered at a distant place, the buyer bears any deterioration necessarily incidental to the transit, even if the seller agreed to deliver at his own risk (s. 40).

Duties of the buyer.

1. To apply for delivery (s. 35): unless the contract provides otherwise, it is for the buyer to ask for delivery, since the seller is not bound to deliver until he does.
2. To accept goods that conform to the contract (ss. 31, 41, 42): he may first examine goods he has not examined before, to see that they match the contract, and the seller must give him a reasonable opportunity to do so on request (s. 41). He is deemed to accept them when he tells the seller so, does an act inconsistent with the seller's ownership, or keeps them beyond a reasonable time without saying that he rejects them (s. 42). Where he rightly refuses goods, he need not send them back; it is enough to tell the seller that he refuses them (s. 43).
3. To take delivery when asked (s. 44): if the seller is ready and willing to deliver and asks the buyer to take delivery, and the buyer does not do so within a reasonable time, he is liable for the loss his neglect or refusal causes and for a reasonable charge for the care and custody of the goods; and where his neglect or refusal amounts to a repudiation of the contract, the seller's rights for that repudiation are unaffected (proviso to s. 44).
4. To pay the price as the contract provides, being ready and willing to pay against possession, since payment and delivery are concurrent conditions (ss. 31, 32). Our example: where a furniture maker agrees to deliver a wardrobe "cash on delivery", the buyer must have the price ready when the wardrobe arrives, and the maker need not leave it without payment.

Conclusion. Sections 31 and 32 set the frame: the seller's duty to deliver and the buyer's duties to accept and pay are performed as the contract provides, and, unless agreed otherwise, at the same time. Sections 33 to 44 fill in what the contract leaves out: how, where, when and in what quantity the goods are delivered, and how the buyer applies for, examines, accepts or rejects and takes delivery of them.