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CA Foundation · Business Laws · The Sale of Goods Act, 1930

Mohan Traders sold 50 bags of cement to Suresh. The contract is silent on who must bring the goods or pay first. Mohan says he will hand over the goods only after Suresh pays. Under the Sale of Goods Act, 1930, what is the position?

Unless the parties agree otherwise, delivery of goods and payment of price are concurrent conditions. Mohan can therefore refuse to deliver until Suresh is ready and willing to pay, and Suresh can likewise refuse to pay until Mohan is ready and willing to deliver.

  1. ADelivery and payment are concurrent conditions, so Mohan may refuse to deliver until Suresh is ready and willing to payCorrect
  2. BMohan must deliver first, because payment can be demanded only after delivery
  3. CSuresh must pay in advance, because the seller always has a right to prepayment
  4. DNeither party may insist on anything until a written agreement is made

Explanation

Unless otherwise agreed, the seller's duty to deliver and the buyer's duty to pay are concurrent conditions, like an exchange. So Mohan need not part with the goods unless Suresh is ready and willing to pay. The option saying delivery must come first reverses this rule.

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