Fundamentals of Business Laws and Business Communication · Sale of Goods Act, 1930

Performance of the Contract of Sale: Delivery Rules and Duties

Updated 10 October 2026 · Fact-checked

Performance of a contract of sale means the seller delivers the goods and the buyer accepts them and pays the price, as the contract requires. Delivery is the voluntary transfer of possession. To solve questions, identify the type of delivery, the place and time rules, the quantity delivered, and whether the buyer has accepted.

Understand Performance of the Contract

A contract of sale is performed when both sides do their part. The seller must deliver the goods. The buyer must accept them and pay for them. This is the duty laid down in Section 31 of the Sale of Goods Act, 1930.

Delivery means the voluntary transfer of possession from one person to another. It can happen in three ways. In actual delivery, the goods are physically handed over. In constructive delivery, the person holding the goods (such as a warehouse keeper) agrees to hold them for the buyer. In symbolic delivery, the means of control is handed over, for example the key of the godown or the document of title.

Unless the parties agree otherwise, delivery and payment are concurrent conditions. The seller must be ready to deliver against payment, and the buyer must be ready to pay against delivery. The buyer must also ask for delivery. The seller need not take the goods to the buyer on his own unless the contract says so.

The Act then sets rules for place, time, part delivery, wrong quantity, instalments and carriers. It also covers acceptance. The buyer is not treated as having accepted the goods until he has had a fair chance to examine them. If the buyer rightly rejects the goods, he need not send them back. Telling the seller of the refusal is enough.

If the buyer neglects or refuses to take delivery after being asked, the seller can claim a reasonable charge for looking after the goods. The seller can also sue for breach where the refusal amounts to repudiation.

Key formulas to remember

Duty of seller and buyer: Seller: deliver goods | Buyer: accept goods and pay price; Section 31. This is subject to the terms of the contract.
Payment and delivery: Delivery and payment = concurrent conditions; Unless otherwise agreed, the seller must be ready to deliver against payment, and the buyer must be ready to pay against delivery.
Place of delivery: Goods are delivered where they are at the time of sale; If the goods are to be made later, the place is where they are made. Applies when no other place is agreed.
Time of delivery: No time fixed and seller must send goods → reasonable time; What is reasonable is a question of fact. Demand or tender must be made at a reasonable hour.
Goods held by a third party: No delivery until the third party acknowledges that he holds the goods for the buyer; This is how constructive delivery is completed.
Delivery of less quantity: Buyer may reject, or accept and pay at the contract rate; Subject to trade usage, special agreement or course of dealing.
Delivery of more quantity: Accept the contracted quantity and reject the rest | reject all | accept all and pay at the contract rate; The buyer has three choices.
Mixed goods of a different description: Accept the goods that match and reject the rest | reject all; Applies when the goods contracted for are mixed with goods not covered by the contract.
Instalment delivery: Buyer is not bound to accept delivery by instalments; This holds unless otherwise agreed.
Delivery to a carrier: Delivery to a carrier for transmission to the buyer = prima facie delivery to the buyer; The seller must make a reasonable contract with the carrier.
Acceptance by the buyer: Intimation of acceptance | act inconsistent with the seller's ownership | keeping goods beyond a reasonable time without intimating rejection; Any one of the three is acceptance.
Buyer rightly rejects: No duty to return the goods; telling the seller of refusal is enough; This applies when the buyer is entitled to reject.

How to solve Performance of the Contract questions

Use the same order for every question on performance. Most questions are fact-based and turn on one rule.

1Identify who is the seller and who is the buyer, and what the contract says. Agreed terms override the default rules.
2Find the issue: type of delivery, place, time, quantity, instalments, carrier, examination or acceptance.
3Check whether delivery and payment were concurrent, and whether the buyer applied for delivery.
4If the quantity is wrong, name the case: less, more, or mixed goods. Then list the buyer's options.
5If the buyer keeps or uses the goods, check for acceptance by intimation, by an inconsistent act, or by keeping them too long.
6If the buyer rejects rightly, remember he need not return the goods. If he refuses delivery wrongly, think of the seller's charges and damages.
7For numbers, multiply the quantity accepted by the contract rate, and compute nothing for the rejected part.
8Match the result with the options and eliminate the ones that break a rule.

Quickest way: Three-question shortcut

When to use it: Use this for scenario MCQs where goods are delivered in the wrong quantity or the buyer is deciding whether to accept.

Ask: was the quantity right? If less, the buyer may reject or accept and pay the contract rate. If more, he has three choices.
Ask: did the buyer accept? Intimation, an inconsistent act, or silent keeping beyond a reasonable time all count.
Ask: is anything agreed otherwise? If yes, the contract wins over the default rule.
Discard options saying the buyer must return rejected goods, must accept instalments, or may pay a lower rate for extra goods.

Common mistakes in Performance of the Contract

Saying the buyer must return rejected goods to the seller.
It feels natural that rejected goods go back.
Fix: The buyer who rightly refuses need not return them. Intimating the refusal to the seller is enough.
Thinking that on excess delivery the buyer must accept or reject everything.
Students remember only the two options for short delivery.
Fix: For excess goods there are three options: take the contract quantity and reject the rest, reject all, or accept all and pay at the contract rate.
Treating a payment or delivery duty as one-sided.
Students assume the seller must always deliver first.
Fix: Unless otherwise agreed, delivery and payment are concurrent. Both must be ready at the same time.
Assuming the buyer must take delivery by instalments.
Instalment sales are common in daily life.
Fix: The buyer is not bound to accept instalments unless the contract says so.
Assuming the buyer has accepted the goods merely because he took possession.
Taking goods and accepting them sound the same.
Fix: The buyer is not deemed to have accepted until he has had a reasonable chance to examine them. Acceptance needs intimation, an inconsistent act, or keeping the goods too long.
Applying the default rules even when the contract says otherwise.
Students memorise the rules without the phrase 'unless otherwise agreed'.
Fix: Read the facts first. A trade usage, special agreement or course of dealing overrides the default rule.

Worked examples

Example 1

Meena Traders agrees to buy 100 bags of rice at ₹2,000 per bag from Kisan Foods. Kisan Foods delivers 120 bags. Which of these is NOT open to Meena Traders? (a) Accept 100 bags and reject 20 bags (b) Reject all 120 bags (c) Accept all 120 bags and pay ₹2,400 per bag for the extra 20 (d) Accept all 120 bags and pay at the contract rate

Show the solution

This is delivery of a larger quantity than contracted.
The buyer has three options: accept the contracted quantity and reject the rest, reject the whole, or accept the whole and pay at the contract rate.
Option (a) is the first choice, (b) is the second, and (d) is the third.
Option (c) asks for a higher rate than the contract rate, which the Act does not allow.

Answer: Option (c) is not open to Meena Traders. If she accepts all 120 bags, she pays at the contract rate: 120 × ₹2,000 = ₹2,40,000.

Example 2

Ravi agrees to buy 500 notebooks at ₹40 each from a Pune wholesaler. The wholesaler delivers only 400 notebooks. Ravi keeps them and tells the wholesaler he accepts them. How much must Ravi pay?

Show the solution

Delivery is of less quantity than contracted.
The buyer may reject, or accept the lesser quantity and pay at the contract rate.
Ravi has accepted the 400 notebooks, so he must pay at the contract rate of ₹40.
Amount = 400 × ₹40 = ₹16,000.

Answer: Ravi must pay ₹16,000. He is not required to pay for the 100 notebooks that were not delivered.

Exam tips

Most questions give a short fact pattern with a wrong quantity. Decide first if it is less, more or mixed, then pick the matching option.
Watch for the phrase 'unless otherwise agreed'. If the facts show an agreement, the default rule does not apply.
Learn the three ways of acceptance as a list. Many options differ only in one of them.
Remember that rejected goods need not be returned. This is a favourite true or false option.
Keep delivery and payment distinct from transfer of property. Performance is about handing over and paying, not about who owns the goods.

Practice questions from Sale of Goods Act, 1930

Performance of the Contract in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Performance of the Contract: frequently asked questions

What are the types of delivery under the Sale of Goods Act?

Delivery can be actual, constructive or symbolic. Actual delivery is the physical handing over. Constructive delivery is where the person holding the goods agrees to hold them for the buyer. Symbolic delivery is where the means of control, such as a key or a document of title, is handed over.

What are the duties of the seller and the buyer?

The seller must deliver the goods. The buyer must accept them and pay the price. Unless the contract says otherwise, delivery and payment are concurrent conditions.

What happens if the seller delivers a wrong quantity of goods?

If the quantity is less, the buyer may reject the goods or accept them and pay at the contract rate. If it is more, the buyer may accept the contracted quantity and reject the rest, reject all, or accept all and pay at the contract rate. If goods of a different description are mixed in, the buyer may accept those that match and reject the rest, or reject all.

When is a buyer said to have accepted the goods?

The buyer accepts when he tells the seller he accepts, when he does an act inconsistent with the seller's ownership, or when he keeps the goods beyond a reasonable time without telling the seller he rejects them. He is not deemed to accept until he has had a reasonable chance to examine them.