Delivery means the voluntary transfer of possession from one person to another (S.2(2)). Delivery is distinct from the passing of property: possession may pass without ownership, and ownership may pass without possession. Sections 31 to 39 regulate how, where and when delivery is to be made.
Legal Framework
| Provision | Subject | Key Rule |
|---|---|---|
| S.2(2) | Delivery defined | Voluntary transfer of possession from one person to another |
| S.31 | Duties of seller and buyer | Seller to deliver, buyer to accept and pay, in accordance with the contract |
| S.32 | Payment and delivery are concurrent conditions | Unless otherwise agreed, the seller must be ready to deliver on payment and the buyer ready to pay on delivery |
| S.33 | Mode of delivery | Delivery may be by anything which puts the goods in the buyer's possession or in that of a person authorised to hold them for him |
| S.34 | Effect of part delivery | Part delivery in progress of the whole has the same effect as delivery of the whole; part delivery with intent to sever does not |
| S.35 | Buyer to apply for delivery | The seller need not deliver until the buyer applies for delivery, apart from any express contract |
| S.36 | Rules as to delivery | Place, time, third party possession, expenses |
| S.37 | Delivery of wrong quantity | Consequences of short delivery, excess delivery, and delivery mixed with other goods |
| S.38 | Instalment deliveries | The buyer is not bound to accept delivery by instalments unless otherwise agreed |
| S.39 | Delivery to a carrier or wharfinger | Delivery to a carrier for transmission to the buyer is prima facie delivery to the buyer |
Concurrent Conditions (S.32)
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.
Why the obligations are made concurrent: Neither party should be required to perform first and thereby take the credit risk of the other. Making the obligations simultaneous means each can insist on performance by the other as the condition of his own, which is why a seller may refuse delivery against an unpaid buyer and a buyer may refuse payment against an undelivered seller.
Modes of Delivery (S.33)
| Mode | Meaning | Example |
|---|---|---|
| Actual delivery | Physical transfer of the goods | Handing over a machine |
| Symbolic delivery | Transfer of the means of control | Handing over keys to a godown, or a document of title |
| Constructive delivery | Acknowledgment by a person in possession that he now holds for the buyer | Warehouseman attorning to the buyer |
Attornment: Where goods are in the possession of a third person, there is no delivery until that person acknowledges to the buyer that he holds the goods on the buyer's behalf (S.36(3)). This acknowledgment is called attornment.
Rules as to Delivery (S.36)
| Question | Rule |
|---|---|
| Place of delivery | Whether the buyer must collect or the seller must send depends on the contract. Apart from agreement, goods sold are to be delivered at the place where they are at the time of sale, and goods agreed to be sold at the place where they are at the time of the agreement, or if not then in existence, where they are manufactured or produced |
| Time of delivery | Where the seller is bound to send the goods but no time is fixed, he must send them within a reasonable time |
| Goods in a third party's possession | No delivery until that person acknowledges holding on the buyer's behalf |
| Hour of demand or tender | A demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour |
| Expenses of delivery | Unless otherwise agreed, expenses of putting the goods into a deliverable state are borne by the seller |
Delivery of Wrong Quantity (S.37)
| Situation | Buyer's options |
|---|---|
| Short delivery (S.37(1)) | Reject the goods, or accept them and pay at the contract rate |
| Excess delivery (S.37(2)) | Accept the contract quantity and reject the rest, reject the whole, or accept the whole and pay at the contract rate |
| Goods mixed with goods of a different description (S.37(3)) | Accept the goods which are in accordance with the contract and reject the rest, or reject the whole |
Facts: A quantity of cotton seed was sold. The ship discharged part of the contract quantity at the port, then left to discharge other cargo elsewhere, returning about a fortnight later with the balance.
Issue: Was the buyer bound to accept the balance delivered after such an interruption, or could he keep the part delivered and reject the rest?
Held: The buyer was entitled to retain the portion delivered, paying for it at the contract rate, and to reject the balance. He was not bound to accept a delivery so interrupted, because he had contracted for delivery of the whole and not for a fragmented delivery.
Relevance: The leading authority on short delivery under S.37(1) and on the buyer's right not to accept a broken delivery.
Instalment Deliveries (S.38)
Unless otherwise agreed, the buyer is not bound to accept delivery by instalments.
Where the contract does provide for delivery by stated instalments to be separately paid for, and one party breaches in respect of one or more instalments, whether the breach is a repudiation of the whole contract or a severable breach depends on:
| Factor | Relevance |
|---|---|
| The terms of the contract | Whether the instalments were intended to be severable |
| The proportion the breach bears to the whole | A breach affecting a large share suggests repudiation |
| The likelihood of repetition | A breach likely to recur suggests repudiation |
Why the Act refuses to lay down a mechanical rule: Instalment contracts range from a single delivery split for convenience to a long term supply arrangement of many separate consignments. Treating every default as repudiation would let a buyer escape a substantially performed contract on a minor failure; treating none as repudiation would trap a party in a contract the other has effectively abandoned. The proportion and probability of repetition test keeps the response proportionate.
Delivery to a Carrier (S.39)
Where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier for the purpose of transmission to the buyer is prima facie deemed to be delivery to the buyer.
Seller's Duties on Sending Goods
| Duty | Provision | Consequence of breach |
|---|---|---|
| Make a reasonable contract with the carrier | S.39(2) | The buyer may decline to treat delivery to the carrier as delivery to himself, or hold the seller liable in damages |
| Give notice enabling the buyer to insure sea transit | S.39(3) | The goods are at the seller's risk during the sea transit |
Facts: Goods were shipped under a contract where the buyer had sufficient information to effect insurance himself. A question arose whether the seller had failed in his duty to give notice enabling the buyer to insure.
Held: Where the buyer already has all the information necessary to insure the goods, the seller's failure to give formal notice does not shift the risk. The purpose of the notice requirement is to enable insurance, and it is satisfied where the buyer is in fact in a position to insure.
Relevance: Establishes that the S.39(3) duty is purposive. Cite where a seller has omitted formal notice but the buyer could nonetheless have insured.
Illustrations
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Concurrent conditions: A tenders goods and demands payment; B demands delivery before paying. Under S.32 neither can insist on performance first. Each must be ready to perform simultaneously.
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Symbolic delivery: A sells B goods stored in a locked godown and hands over the keys. This is symbolic delivery under S.33, effective without physically moving the goods.
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Attornment required: A sells B goods lying with a warehouseman. There is no delivery until the warehouseman acknowledges to B that he holds the goods on B's behalf (S.36(3)).
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Buyer must apply for delivery: A contract fixes no delivery date and does not require the seller to send the goods. B never asks for them and later sues for non-delivery. Under S.35 the claim fails, since the seller was not bound to deliver until B applied.
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Short delivery: A contracts to deliver 100 tonnes and delivers 70. Under S.37(1) B may reject the whole, or accept the 70 tonnes and pay at the contract rate.
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Interrupted delivery: Part of a consignment is discharged, the balance arriving a fortnight later. Applying Behrend and Co Ltd v Produce Brokers Co Ltd (1920), B may keep the part delivered and reject the balance, not having contracted for a fragmented delivery.
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Excess delivery: A delivers 120 tonnes against a contract for 100. Under S.37(2) B may accept 100 and reject 20, reject the whole, or accept all 120 and pay at the contract rate for the excess.
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No obligation to accept instalments: A contract for 300 units silent as to instalments. A tenders 100 units and proposes to deliver the rest over two months. Under S.38(1) B may refuse, being entitled to a single delivery of the whole.
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Unreasonable contract with the carrier: A sends fragile goods by an unsuitable open truck without securing them, when a covered vehicle was available at similar cost. The goods are damaged. Under S.39(2) B may refuse to treat delivery to the carrier as delivery to himself, or claim damages.
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Notice for sea transit: A ships goods by sea without notifying B of the shipment details. Under S.39(3) the goods remain at A's risk during the sea transit, unless, applying Wimble, Sons and Co v Rosenberg and Sons (1913), B already had the information needed to insure.
Recall Check
- Why does S.32 make delivery and payment concurrent conditions?
- What is attornment, and why is it necessary where goods are held by a third party?
- What factors determine whether default in one instalment repudiates the whole contract?
Key Cases
Behrend and Co Ltd v Produce Brokers Co Ltd (1920) Behrend and Co v Produce Brokers Co 1920
Issue: Whether a buyer must accept the balance of a consignment delivered after a substantial interruption.
Rule: A buyer who contracted for delivery of the whole is not bound to accept a fragmented delivery.
Held: The buyer could retain the part delivered at the contract rate and reject the balance.
Wimble, Sons and Co v Rosenberg and Sons (1913) Wimble Sons and Co v Rosenberg and Sons 1913
Issue: Whether a seller's failure to give notice enabling insurance shifted the risk where the buyer already had the necessary information.
Rule: The S.39(3) duty is purposive; it is satisfied where the buyer is in fact in a position to insure.
Held: The absence of formal notice did not place the risk on the seller.
Distinctions
| Basis | Delivery | Passing of Property |
|---|---|---|
| What transfers | Possession | Ownership |
| Governing provisions | S.31 to S.39 | S.18 to S.26 |
| Can occur without the other | Yes, possession may pass without ownership | Yes, ownership may pass without possession |
| Determines risk | No | Yes, under S.26 |
| Basis | Actual Delivery | Symbolic Delivery | Constructive Delivery |
|---|---|---|---|
| Mechanism | Physical handing over | Transfer of the means of control | Acknowledgment by a possessor |
| Example | Handing over goods | Keys or documents of title | Warehouseman's attornment |
| Provision | S.33 | S.33 | S.36(3) |
| Basis | Short Delivery (S.37(1)) | Excess Delivery (S.37(2)) |
|---|---|---|
| Buyer may reject the whole | Yes | Yes |
| Buyer may accept what conforms | Yes, paying at the contract rate | Yes, rejecting the excess |
| Buyer may accept everything | Not applicable | Yes, paying at the contract rate for the excess |
Flashcards
How is delivery defined in the Act?
Under S.2(2), the voluntary transfer of possession from one person to another.
What does S.32 provide about delivery and payment?
Unless otherwise agreed, they are concurrent conditions; the seller must be ready to deliver on payment and the buyer ready to pay on delivery.
Name the three modes of delivery.
Actual delivery, symbolic delivery, and constructive delivery by attornment.
When are goods in a third party's possession delivered to the buyer?
Only when that person acknowledges to the buyer that he holds the goods on the buyer's behalf (S.36(3)).
Must a seller deliver before the buyer asks?
No. Under S.35, apart from express contract, the seller is not bound to deliver until the buyer applies for delivery.
What are the buyer's options on short delivery?
Reject the goods, or accept them and pay at the contract rate (S.37(1)).
Is a buyer bound to accept delivery by instalments?
No, unless otherwise agreed (S.38(1)).
Is delivery to a carrier delivery to the buyer?
Prima facie yes, under S.39(1), provided the seller makes a reasonable contract with the carrier and, for sea transit, gives notice enabling insurance.
Exam Scenario
Problem: Nikhil contracts to sell Ojas 500 steel coils at Rs. 60,000 per coil, delivery "as required by the buyer," with nothing said about instalments or place of delivery. The coils are lying in a public warehouse. Nikhil informs the warehouseman of the sale but the warehouseman gives no acknowledgment to Ojas. Nikhil then, without any request from Ojas, tenders 200 coils at Ojas's factory and demands payment for them. When Ojas refuses, Nikhil ships the remaining 300 by sea to Ojas's port without informing him of the shipment, and they are damaged in a storm. Advise Ojas.
Step 1: Rule out any delivery of the warehouse coils
Apply S.36(3). Where goods are in the possession of a third person, there is no delivery until that person acknowledges to the buyer that he holds them on the buyer's behalf.
Informing the warehouseman is not enough. Attornment to Ojas is required, and none was given, so no delivery of those coils has occurred.
Step 2: Show that Ojas was entitled to refuse the 200 coils
Three provisions answer the tender, and all three favour Ojas.
| Provision | Rule | Application to these facts |
|---|---|---|
| S.35 | Apart from express contract, the seller need not deliver until the buyer applies for delivery | Delivery was "as required by the buyer" with no date fixed, and Ojas never applied |
| S.38(1) | The buyer is not bound to accept delivery by instalments unless otherwise agreed | The contract is silent on instalments, so Ojas may insist on a single delivery of all 500 |
| S.32 | Delivery and payment are concurrent conditions | Nikhil could not demand payment for a delivery Ojas was not obliged to accept |
Ojas was therefore entitled to refuse the 200 coils and cannot be treated as in default for doing so.
Step 3: Place the sea transit loss on Nikhil under S.39(3)
Where the goods are sent by a route involving sea transit, the seller must give notice enabling the buyer to insure. Nikhil gave none.
The consequence is that the goods were at Nikhil's risk during the sea transit, so the storm damage falls on him.
Consider Wimble, Sons and Co v Rosenberg and Sons (1913) as the possible answer: if Ojas already had all the information necessary to insure, the absence of formal notice would not shift the risk. On these facts Ojas was not even told of the shipment, so he could not have insured, and the exception does not assist Nikhil.
Step 4: Note that the 300 coils repeat the earlier defects
Shipping the balance unrequested compounds the S.35 and S.38 difficulties, since Ojas had not applied for delivery of these coils either.
Telling the warehouseman is not attornment. S.36(3) requires the acknowledgment to run to the buyer. A seller's notice to the bailee achieves nothing.
"As required by the buyer" cuts against the seller. It engages S.35, so Nikhil was neither bound nor entitled to deliver before Ojas applied.
Silence on instalments favours the buyer. S.38(1) presumes a single delivery of the whole. Do not assume part performance must be accepted.
Delivery to a carrier under S.39(1) is only prima facie delivery to the buyer. It is displaced where the seller breaches S.39(2) or S.39(3), so handing the coils to the shipper did not put the risk on Ojas.
Do not read Wimble too widely. The S.39(3) duty is purposive, but the exception needs the buyer to be in a position to insure. A buyer never told of the shipment is not.
Conclusion. Ojas is not liable for the 200 coils and bears no loss on the 300 damaged coils. He remains entitled to require a single delivery of the full 500 in a deliverable state when he applies for it.
See Also
- Rights and Duties of Seller and Buyer : the correlative duties to deliver and to accept which these rules give content to.
- Passing of Property in Goods : why delivery does not determine ownership or risk.
- Rights of Unpaid Seller : the seller's remedies where the buyer refuses to accept a proper delivery.