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CMA Intermediate · Business Laws and Ethics · Sale of Goods Act, 1930

Sharma Traders sells a consignment of rice to Kapoor Stores. The written contract says that Sharma Traders will give delivery only after receiving full payment, and that Kapoor Stores must pay in advance. Kapoor Stores offers payment but Sharma Traders refuses to deliver until it is paid. Which statement is correct?

The express agreement is valid. Section 32 makes delivery and payment concurrent only unless otherwise agreed, and Section 62 lets implied rights and duties be varied by express agreement, so the parties' advance-payment arrangement governs and the contract is not void.

  1. AThe contract is void because it departs from Section 32
  2. BThe express agreement is valid because concurrent payment and delivery apply only unless otherwise agreedCorrect
  3. CSection 32 overrides the express term and delivery must be simultaneous
  4. DThe term is valid only if the buyer consents again at the time of delivery

Explanation

Section 32 begins with the words 'unless otherwise agreed', so the parties may vary the position by express agreement. Section 62 also allows implied rights and duties to be negatived or varied by express agreement. The advance-payment term therefore stands, and the contract is not void.

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