In the partial fulfilment for the requirement of the project on the subject of

Contracts of B.A.LL.B (Hons.) Third trimester.

TOPIC: DELIVERY IN A CONTRACT OF SALE

Submitted to: Submitted By:-

Ms. Neha Sharma Harsh Patidar

2018BALLB46

Jyotiranjan Mallick

2018BALLB89

Mohit Tekam

2018BALLB31
 ACKNOWLEDGEMENT

This paper has been made possible by the support of many people who guided me in all
well-being. I would like to acknowledge and extent my heartfelt gratitude to Vice Chancellor
(Dr.) V. Vijaykumar and Ms. Neha Sharma for guiding me throughout the working of this
paper into a coherent whole by providing helpful insight and sharing their brilliant expertise.
I would also like to thank the official of the Gyan Mandir library, NLIU for helping me to
find the appropriate research material for this study. I am deeply indebted to my parents,
seniors and friends for all the moral support and encouragement throughout the path.
 CERTIFICATE

This is to certify that the research paper titled –‘DELIVERY IN A CONTRACT OF SALE’
has been prepared and submitted by Harsh Patidar, Jyotiranjan Mallick and Mohit Tekam
who are currently pursuing their B.A. LL.B (Hons.) at National Law Institute University..
It is also certified that this is original research report and this paper has not been submitted
to any other university, nor published in any journal.

DATE:-

Signature of the Student Signature of the Researcher

Supervisor
INTRODUCTION

According to Section 2 (2) of the Sale of Goods Act, 1930, delivery means voluntary
transfer of possession of goods from one person to another. Hence, if a person takes
possession of goods by any unfair means, then there is no delivery of goods.
Also according to Section 33 of the 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 any
person authorized to hold them on his behalf.
The section 2(2) reproduces section 90 of the Contract Act 1, with the addition of the words
‘which the parties agree shall be treated as delivery’. These words may cover cases which
were left open by the original section. It may be agreed that the goods may be delivered to a
third party nominated by the buyer. Thus, where the buyer of a motor car requested the seller
to deliver it directly to a sub-purchaser from the buyer, and it was so delivered, it was held
that the buyer had obtained the constructive possession of the vehicle. In the transactions
involving C.I.F (Cost, Insurance and Freight) contracts2, the banker does not act as agent of
either the buyer or the seller, and neither the delivery of invoice etc nor the receipt of money
by the seller amounts to delivery of goods to the buyer.

Where the parties had agreed that delivery of the goods would be made by the seller at the
godowns of the buyer and the goods were to be despatched by railway at the seller’s risk and
though there was token delivery by surrendering the railway receipt and signing the delivery,
it was held that there was no real delivery to the consignee, for the goods had not been
unloaded and were still under the control and custody of the railway. Where there is a dispute
regarding delivery of the goods, the plaintiff who sues for price is bound to prove the fact of
delivery. Further, delivery of goods may be made by doing anything which the parties agree
shall be taken as delivery. Where a seller agreed to place a horse at a liverty, the removal of
the horse to that place was a delivery. 3 Again, delivery may be made by doing anything
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. Delivery may be either actual or symbolic or
constructive.

• ACTUAL DELIVERY
Also known as ‘physical delivery’. Actual delivery takes place when the goods are physically
handed over by the seller or his/her authorized agent to the buyer or his/her agent authorized
to take possession of the goods.
For example, A, the seller of a car hands it over to B, the buyer; it is a case of actual delivery
of the goods.

• SYMBOLIC DELIVERY

Where the goods are bulky and heavy and it is not possible to physically hand them over to
the buyer, delivery thereof may be made by indicating or giving a symbol. Here the goods
itself are not delivered, but the means of obtaining possession of goods is delivered. A
Symbolic delivery takes place where, for example, the seller hands over to the buyer the key
of the godown where the goods are. 4

1
Sale of Goods.— [Rep. by the Sale of Goods Act, 1930 (3 of 1930) sec. 65]
2
These are those contracts where the seller pays the cost of the insurance and transport of the goods to the
destination; legal delivery occurs when the goods cross the ship's rail in the port of shipment.
3
Elmore v. Stone,(1809):10 RR 578
4
Hilton v. Tucker,(1888)39 Ch D 669
 • CONSTRUCTIVE DELIVERY

In this case neither physical nor symbolic delivery is made. In constructive delivery the
individual possessing the products recognizes that he holds the merchandise for the benefit
of, and at the disposal of the purchaser. Constructive delivery is also called attornment.5
Constructive delivery may be affected in the following three ways.

i. Where the seller, after having sold the goods, agrees to hold them as bailee for the
buyer
ii. Where the buyer, who is already in possession of the goods as bailee of the seller,
holds them as his own, after the sale, and
iii. Where a third party, for example, a carrier/transporter, who holds the goods, as bailee
for the seller, agrees and acknowledges holding them for the buyer

PART DELIVERY

Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien
on the remainder, unless such part delivery has been made under such circumstances as to
show an agreement to waive the lien.6

EFFECTS OF PART DELIVERY

A delivery of part of goods, in progress of the delivery of the whole, has the same effect, for
the purpose of passing the property in such goods, as a delivery of the whole; but a delivery
of part of the goods, with an intention of severing it from the whole, does not operate as a
delivery of the remainder. The effect of the provision is that the delivery of a part of the
goods amounts to a delivery of the whole for the purpose of passing the property provided
that a part of the goods are delivered in progress of the delivery of the whole.
Thus where the assignee of a bankrupt buyer of wheat intercepted the ship and took
delivery of a part of it and ordered the rest to be taken to the destination that was held to be a
delivery of the whole of the goods at the intermediate port. Similarly, where a wharfinger was
ordered to deliver the goods to the buyer and the buyer weighed and took away a part of them
that was held to be a delivery of the whole. Where a part of the goods is delivered with the
intention of severing it from the whole, that does not amount to a delivery of the whole of the
goods. Thus where, on sale of a stack of hay, the buyer was permitted to cut and remove a
part of the stack that did not amount to delivery of the whole, as the permission related only
to a part of the goods. Similarly, where there was sale of 4 bales of goods, to be paid for on
delivery, the buyer received one and paid for it, and, refused to receive the others owing to
bad quality, it was held that the delivery of one bale did not amount to delivery of all the four
bales and, therefore, the seller’s remedy was for breach of contract and not for the price. 7

1. Mitchell Reid And Co. vs Buldeo Doss Khettry:

This case in particular deals with the concept of effects of part delivery as follow-

5
Attornment happens when the goods are in the custody of a third person who, in accordance with the seller’s
order, acknowledges to hold them on the buyer’s behalf and the buyer has assented to it, or accepts rent for the
goods from the buyer.
6
a right to keep possession of property belonging to another person until a debt owed by that person is
discharged
7
Mitchell Reid And Co. vs Buldeo Doss Khettry on 13 June, 1887
FACTS:

A contract was entered into between the plaintiffs and the delendant, by which the defendant
agreed to buy, or in form acknowledged that he had bought, from the plaintiffs the goods
described as follows, namely, "the goods or any part thereof that may be in a merchantable
condition hereunder particularly specified, at the price with certain marks and with certain
conditions such as, the most important of which are these; the purchaser agreed to pay for the
goods before or on delivery, deducting certain discount, or to grant promissory notes at the
option of the sellers, and to take delivery within five days. There is a further clause expressly
authorizing the sellers to resell in case of default. The document has been held to be, and the
defendant assume it rightly, a document relating to the sale of five specified bales, described
not only by their marks, but by the particular numbers on the bales. But, after five bales had
been previously sold, and the defendant took delivery of one bale and paid for it, but refused
to take delivery of the remaining four bales. The suit was brought by the sellers for the price
of the four bales refused. The defendant sets up as his defence, to justify his having refused to
take delivery of four bales that the goods in the bales were not according to contract.

ISSUES:

1. Is the defendant (the buyer) entitled to reject the goods under the circumstances stated?

2. Is the defendant entitled to raise the defence raised by him in this suit?

HELD:

The court held that the there was the intention of the buyer to severed a part of the contract
and with this intention, the buyer entered the contract. So, the buyer can reject the goods
under the circumstances as there was no contract of sale exists. Further, the defendant is not
entitled to raise the defence raised by him in this suit as contact was about ascertained goods.

RULES AS TO DELIVERY

There are many rules and definitions governing the law on sales in sections 31 to 40 of the
Sale of Goods Act, 1930. As it is the duty of the seller to deliver the goods and the buyer to
pay for them and accept them, as per the terms of the contract and the law on sales. So, the
seller has to be willing to give possession of the goods to the buyer in exchange for the price.
The following rules are as follow:

1. Place of delivery [Section 36 (1)]

Whether it is for the buyer to take possession of the goods or for the seller to send
them is a question that depends on the intention of the parties as expressed in their
contract. In the absence of any contract to the contrary, goods sold are to be delivered
at the place at which they are at the time of sale. In the case of an agreement to sell,
the goods are to be delivered at the place where they are at the time of the agreement,
or if the goods are not then in existence, at the place where they are manufactured or
produced. In the absence of any express or implied contract to the contrary, the goods
sold or agreed to be sold are to be delivered at the place at which they are at the time
of sale or of the agreement to sell. But where there is an implied agreement that the
goods should be delivered at a particular place, the court at that place has jurisdiction
to entertain a suit for the breach of contract.
 2. Time of Delivery [Section 36 (2)]

Where the seller is bound to send the goods to the buyer, but no time for sending them
is fixed, the seller is bound to send them within a reasonable time. If the seller fails to
do so he will be guilty of breach even if the delivery is subsequently prevented by the
intervention of war or some Government order. 8

3. Goods in possession of a third party [Section 36 (3)]

Where the goods are in the possession of a third person, there is no delivery unless
and until such third person acknowledges to the buyer that he holds the goods on his
behalf. Once the third person does this that amounts to delivery to the buyer and,
therefore, the third person cannot afterwards refuse to deliver on the ground that the
goods have to be paid for or that the buyer has become insolvent.

4. Time for tender of delivery [Section 36 (4)]

Goods sold must be demanded by the buyer at a reasonable hour. Similarly, the seller
should tender them at a reasonable hour. “What is the reasonable hour is a question of
fact.” In Startup v. Macdonald 9, following circumstances were there:

Startup v. Macdonald:

FACTS:

A contract stated that 10 tons of oil were to be delivered to the defendant within the
last 14 days of March. The claimant delivered the oil at 8.30pm Saturday March 31st.
The defendant refused to accept the delivery because of the lateness of the hour.

ISSUES:

• Whether the goods were delivered at a reasonable hour?

• Whether the defendant can refuse to accept the delivery?

HELD:

The claimant had tendered performance within the agreed contractual period and was
thus liable for damages for non acceptance of the delivery.

5. Expenses for delivery [Section 36 (5)]

Unless otherwise agreed, the expenses of and incidental to putting the goods into a
deliverable state shall be bear by the seller.

8
Where, however, late deliveries are accepted by the party without any protest at the time, or without reserving
the right to sue, the buyer would be deemed to have waived the right to claim compensation.
9 (1843) 6 Man & G 593