1. cHApter:- 4 Performance of the Contract… Submitted to: Submitted by:
Miss Falak Khanna
Submitted by:
Arshpinder Kaur(2303)
Arashpreet Kaur(2361)

2. What is performance to the Contract?
Performance to the Contract of sale means that the parties to the contract i.e., the buyers and the sellers fulfil their part of the obligation.
1. Seller performs by delivering goods to buyer
Seller
Buyer
2.Buyer performs by accepting the goods and making the payments

3. Modes of delivery:
Actual or physical delivery: When goods are actually given by one person to the another is called as actual or physical delivery of goods.
Example: A ordered with B on for supply of 100 bags of sugar . B delivered the bags to A on This is known as Physical delivery of goods.
(B)Symbolic Delivery: Such a delivery is there when there is no actual transfer of the goods from one hand to another but some symbol representing those goods in transfer from one person to another so that the transferee is able to have control over the goods.

4. Example: Handing over the keys of warehouse to the
buyer is a symbolic delivery of goods to the buyer.
(C) Constructive Delivery: In some cases the
goods may be delivered by some other mode in which
either physical delivery of goods is done is nor symbolic,
but still an act delivers the goods in custody of the
other person.
Example: A sold a car to the buyer but on request of
he retained the car until buyer look it. Held, the
delivery has been made. Now the seller holds car as an
agent of buyer and not as an owner.

5. Such a delivery may take place in any of the following ways:
Seller having possession as bailee: A
seller after selling the goods to the buyer may still hold the possession of some goods on respect by the buyer. The point to note is that before contract of sale the seller was holding the possession as the owner of the goods, but after the contract of sale he holds the same goods as an agent of the buyer or as a bailee for the buyer.
Buyer may have a possession as a bailee: A buyer may be already having the possession of goods before the contact of sale with the consent of the seller . Now after the sale, the seller and buyer agree that from now onwards, the buyer shall

6. have the goods s the owners of goods hence the goods
have been delivered.
3. third party having possession: Where a
third person having the possession of goods of seller at
the time of contract of sale acknowledges to the buyer
that he holds the goods on his buyers behalf, this is called
a constructive delivery. But all the three parties i.e., the
buyer, the seller and the third party must have mutual
consent to such delivery.

7. Performance of contract happens:
On delivery of goods by the seller (Section 31): Delivery of goods means voluntary transfer of possession from one person to another. The performance on the part of the seller means that the seller means that the seller must deliver the goods i.e., hand over the possession of goods to the buyer. The seller may deliver the goods before or after transferring the ownership rights in the goods. Until the seller gives the possession of goods the contract is not said to be performed by the seller. Infact U/S 31,it is the duty of the seller to deliver the goods according to the contract of sale of goods. Delivery of goods is done when:
1. One person who has the possession of goods;

8. 2. transfer the possession of goods to another person;
3. such transfer of possession is done voluntarily.
4. Delivery of goods is not necessarily done by only
physically giving the goods or handing over the goods
by seller to buyers, it may be done by any act by which
the good are put in the possession of the buyer.
2. On acceptance and payment by buyer:
The second step in the performance of the contract is
done by the buyer. U/S 31, it is the duty of the buyer to
duly accept the goods so delivered by the seller and
thereby pay for the same goods. In case the buyer does
not accept the goods, it shall amount to breach of the
contract for non acceptance.

9. Rules regarding the delivery of goods
Delivery of goods as agreed upon: The
seller and the buyer mutually decide upon when goods must be delivered, how payment is to made and when payment is to be made. As decided mutually, the goods must be delivered according to the terms of the contract.
Modes of delivery: U/S 33 the goods must be put in the possession of the buyers or the authorized agent of the buyer. Delivery can be:
Actual delivery
Symbolic delivery
Constructive delivery

10. Payment and delivery are concurrent:
U/S 32, unless otherwise agreed the delivery of goods and payment of price must be concurrent.
Effect of part delivery: When the goods are delivered partly, the effect of such part delivery can be taken differently depending on 2 issues:
Part delivery in progress of the whole delivery: When the goods partly delivered were so delivered in the progress of the delivery of the whole goods, then it shall have the same effect as the delivery of whole goods would have on passing of the property
Part delivery made to severe it from the whole: Where the goods partly delivered where made intentionally to severe the part from the whole, then the part delivery shall operate as delivery of that part and not whole delivery.

11. Buyer must apply for delivery: U/S 35
unless otherwise agreed between the parties, the seller is not bound to deliver the goods until the buyer applies for delivery. In other words if, the buyer never applied for delivery of goods and the seller did not deliver the goods, then the buyer can not hold seller liable for non-delivery of goods.
Place of delivery: U/S 36(1) the place of delivery of goods in decided upon as following:
the goods must be delivered at the place which has been mutually decided between the parties.
If the parties have not decided upon the place of delivery then:
1. For a contract of sale, the goods should be delivered at the place where they are at the time of contract of sale.
2. For an agreement of sell, the good should be delivered at the

12. place where they are at the time of agreement to sell
For future goods, the place of delivery is the place at which
they are manufactured or produced.
Time of delivery: U/S36(2) where under the contract
of sale the seller is bound to send the goods to the buyer, but no time was fixed as when to send the goods, then the seller must send the goods within the reasonable time and reasonable hours.
Goods in the possession of a third party:
U/S 36(3) when the goods re in the possession of a third party, and the seller delivers the goods by informing the third party that now the third party holds goods for the buyer and not the seller. Then such delivery shall not be operative unless such third party acknowledges to the buyer that he holds the goods on his behalf.

13. Expenses of delivery: U/S 36(5) all the expenses
for putting the goods in deliverable state shall be duty of the seller. Deliverable state is the condition of goods in which the buyer can easily take away the delivery of goods. This is the reason that the price or the goods includes the cost of the goods and all such expenses that shall be incurred upto the place of delivery of goods.
Delivery of wrong Quantity: U/S 37 it is the duty of the seller to deliver the goods according to the terms of the contract. Therefore the seller must deliver the right quality of goods in right quality, size, color, description etc. But the act laid the following rules

14. DELIVERY OF LESS QUANTITY
The seller must deliver the correct quality of goods . Where the seller delivers lesser quality than contracted for then the buyer can either reject the goods or keep and make payment of only that quality of goods.
DELIVERY OF LARGER QUANTITY
When the goods delivered by the seller are in larger quantity than contracted for, then the buyer has the following remedies:
the buyer may accept the contracted quantity, pay for it and reject the excess quantity; or
the buyer may reject the whole quantity ; or
the buyer may accept the whole quantity and pay for it.
EXAMPLE – The buyer placed an order for 90 litres of kerosene oil, but the buyer delivered 120 litres. The buyer accepted the 90 litres and rejected the 30 litres. The seller sued buyer for the breach of non – acceptance. Held, the buyer was not liable as it was his right to keep the contracted quantity and reject the rest.

15. DELIVERY OF MIXED QUANTITY
Where the seller delivers to the buyer the goods which he contracted to deliver but mix with some other goods of some other description, then the buyer has the following remedies :
the buyer may accept the goods which are as per the description given in the contract and reject the other goods ( which are not as per the description) ; or
the buyer may reject the whole lot.
EXAMPLE – A buyer contracted to buy 35 racing horses from the seller. The seller sent 15 cart horses and 20 race horses. Now the buyer may either keep 20 race horses and reject 15 cart horses or he may reject the all.

16. DELIVERY THROUGH INSTALMENTS (SECTION 38) :
Where the parties to the contract agree upon mutually that the delivery of goods shall be made through instalments, then it should be done as agreed upon.
But where nothing was agreed upon for the delivery by instalments then the buyer is not bound to accept the delivery of goods through installments.
Example: A buyer agree to buy 25 parcels of antique furniture to be delivered through ship in the February-March shipment. The seller however shipped 15 parcels in March and 10 parcels in April. The buyer rejected the entire 25 parcels. The seller sued the buyer for non-acceptance. Held, the buyer could reject the entire lot as it was never agreed upon to deliver parcels through instalments.

17. Delivery by instalments to be separately paid for.
The parties may have agreed upon that the goods shall be delivered by instalments, and each instalments shall be separately paid for. In such a situation, where a seller commits breach by not delivering one of the instalments or by making defective delivery or the buyer may commit breach in accepting the instalment, the remedy available to the aggrieved party shall depend on the two factors:
Quantitative proportion of the breach committed as to whole contract ;
Degree of probability of the repetition of the breach.
(Option 1) REPUDIATE THE WHOLE CONTRACT :
Where it appears that the breach committed is in substantial quantitative proportion as to the whole contract and it also appears that the defaulting party may commit breach repetitively, then the aggrieved party can REPUDIATE THE WHOLE CONTRACT.
(OPTION 2) REPUDIATE THE RESPECTIVE INSTALMENT ONLY :
Where it appears that the breach committed is a severable one and the failure to perform a part of the contract shall not affect the performance of the whole contract, then the aggrieved party may REPUDIATE ONLY THAT PART.

18. EXAMPLES:
In Moti Lal V. The Netha Cooperative Spinning Mills Ltd., there was a contract for the supply of 500 bales of cotton of certain variety. The first instalment of 50 bales was supplied and accepted but the buyers rejected the second instalment of 50 bales as they were adulterated with waste cotton mix and the cotton was of inferior quality, and asked the seller not to supply the further goods. It was held that the buyer was justified in repudiate the whole contract. Moreover, the sellers were not entitled to claim any damages, as they did not tender any further instalments within the contract period but agreed to the repudiation of the contract made by the buyer.
In Aryavart Overseas Private Ltd., New Delhi v. M/S Kay Aar Biscuits Private Ltd., Delhi, there was a contract for a huge quantity of biscuits, and while the sellers were yet to supply biscuits of value of about 1.5 crores, the buyers fail to pay in time a sum of about 55,000 is respect of earlier supplies. The buyer, however , assured further payment in time. Under these circumstances, it was held that the breach of contract on the part of buyers in regard to non payment of about 55,000 did not entitle the sellers to treat the whole contract as repudiated. The contract did not stand discharged and the liability of the sellers to make further supplies of biscuits did not cease. Now if the seller refuses to supply further then, Refusal to make further supplies amounted to breach of contract on part of sellers.

19. (12) DELIVERY TO CARRIER OR WHARFINGER (SECTION 39)
‘WHARF’ is an area used for loading and unloading goods in ship and a ‘WHARFINGER’ is an owner or keeper of wharf. When the goods are delivered by the seller to a carrier or wharfinger of the buyer, then the rules contained in Section 39 are used, which are as follows:
Delivery to carrier is delivery to buyer. U/S 39(1) where according to the terms of the contract, the seller is to deliver the goods to a carrier, there the delivery of the goods to carrier is equivalent to delivery of goods to buyer. Therefore, once the goods have been delivered to the carrier, the property is goods passes to the buyer and in case goods suffer some loss, then the buyer shall be liable.
Contract with carrier must. U/S 39(2) when the seller is to deliver the goods to the carrier he must form a contract with the carrier on behalf of the buyer. Such a contract is essential so as to save the seller from any loss that may occur to goods when the goods were in the custody of the carrier. In such a situation, the buyer may decline to treat the delivery of goods to carrier as delivery to himself.
Delivery through sea route. U/S 39(3) where the goods are sent by the seller to the buyer through the sea transit then it is the duty of the seller to intimate the buyer that the goods need insurance. If the seller fails to do so, and the goods suffer some loss, then the loss shall be born by the seller.

20. (13) DELIVERY AT A DISTANT PLACE (SECTION 40 ) : If the seller at his own risk agree to deliver the goods at a place other then where they are at the time of the contract, and the goods deteriorate in the course of transit, then on such a situation the loss of deterioration of goods during transit shall be borne by the buyer. Therefore the deterioration of goods that happens during the transit period is the responsibility of the buyer as per law, as the goods are delivered to a distant place on request by the buyer. EXAMPLE: In Bull v. Robinson, the seller sent hoop iron from Staffodshire the place of its manufacture, to Liverpool. The iron was cleaned and bright when it was developed but become rusted before it reached its destination. It was held that the seller was not responsible for such deterioration. Perishable Goods: U/S 40 where the goods are perishable and are delivered to distant place then they must be merchantable goods both at the time when they were dispatched by the seller and during the transit period also. EXAMPLE: In Beer v. Walker, the rabbits when dispatched from London were sound but unfit for human food when they reached Brighton. It was held that the buyer was entitled to reject the rabbits.

21. (14) DELIVERY OF GOODS SUBJECT TO EXAMINATION (SECTION 41)
U/S 41 the buyer is being given the right to examine the goods properly before taking the delivery of goods. Unless he is given an opportunity to examine the goods before taking the delivery of goods, he shall not accept the goods. Where the buyer takes the delivery of goods, even then he is not said to have accepted the goods unless he is given an opportunity to examine the goods. But if the seller gave a reasonable opportunity to the buyer to examine the goods, but later goods are found not according to the contract, the seller shall not stand liable.
EXAMPLE:
Heilbutt v.Hickson (1872)
A contract of Sale of boots for use of the French army was made. Delivery under the contract was made to the buyers at a wharf in London and the boots were sent on by them to Lille ;there to be delivered to the French authorities. The boots contained paper in the soles, a defect which rendered them useless for military purposes but could not be disclosed by any examination which was practicable at wharf in London. When the French authorities examined the samples at Lille, they discovered that they contained paper and the French authorities accordingly rejected all the boots and were entitled to recover the money which they had paid for them.

22. (15) ACCEPTANCE COMPLETE ON DELIVERY
(SECTION 42)
The buyer is said to have accepted the goods when:
The buyer intimates expressly that he has accepted the goods ;or
The buyer does something, which implies he has accepted the goods (such as he pledges the goods, or resell them or consumes them) ;or
The buyer retains the goods and does not reject and return them.
EXAMPLE:
Bernstein v. Pamson Motors (Golders Green Limited ) (1987 )
A buyer purchased a new car, drove it for 140 miles, the car was with him since 3 weeks before it broke off due to seizure of camshaft. It was held that the buyer had a reasonable time to examine the car and try out the car. Now that the car broke off after expiry of reasonable time does not mean that the buyer had accepted the car and therefore he cannot reject it.

23. (16) BUYER NOT BOUND TO RETURN REJECTED GOODS (SECTION 43)
When the buyer rejects the goods then:
He must intimate about the rejection of goods to the seller.
It is not the duty of the buyer to send them back to the seller at his own expense.
It is the duty of the seller to take away the rejected goods.
(17) LIABILITY OF BUYER FOR REJECTING OR REFUSING DELIVERY (SECTION 44)
Where:
The property in goods (Ownership rights ) had passed to the buyer ; and
The buyer must have accepted the goods ; and
Now the seller offers to deliver the goods ; but
The buyer refuses to take the delivery of goods.
Then , the buyer shall be liable to the seller for any loss due to his refusal to take delivery of goods.

24. The end
Thank you