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

Sharma Traders agreed to sell 100 bags of cement to Ravi. The contract says nothing about when payment is due or when delivery is to be made. Sharma Traders is ready and willing to deliver the cement, but Ravi refuses to pay on the spot. Under the Sale of Goods Act, 1930, what is the legal position?

Unless the parties agree otherwise, delivery and payment are concurrent conditions. Sharma Traders need not hand over the cement unless Ravi is ready and willing to pay, and Ravi need not pay unless the seller is ready to deliver. Credit is not presumed, and silence on payment terms does not void the contract.

  1. ADelivery and payment are concurrent conditions, so Sharma Traders need not deliver unless Ravi is ready and willing to payCorrect
  2. BSharma Traders must deliver first and claim the price later, because credit is presumed
  3. CRavi may take delivery now and pay within a reasonable time
  4. DThe contract is void because it is silent on payment terms

Explanation

Under the Act, unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions. The seller must be ready and willing to give possession in exchange for the price, and the buyer must be ready and willing to pay in exchange for possession. So Sharma Traders can lawfully withhold delivery until Ravi pays. Credit is not presumed.

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