Rights and Duties of the Buyer & Seller | The Sale of Goods Act, 1930

The article 'Rights and Duties of the Buyer & Seller' aims to dissect the intricacies of the Sale of Goods Act, shedding light on the rights and responsibilities inherent in buyer-seller relationships within the Indian context.

Introduction

The buyer under this Act of Indian Sale of Goods has rights like the ability to reject items that do not meet specifications, get delivery of the goods in accordance with the contract, and pursue damages for breach of contract. Similarly, the seller's obligations include delivering the items according to the terms of the contract and making sure the good quality products are delivered, giving the buyer ownership of the goods.

In addition, the Act lays out certain obligations for the buyer the need to inspect the items upon delivery, accept and pay for the goods, and give the seller the essential information. The seller in response is responsible for assuring that the items are of merchantable quality, adhering to the terms of the contract, and disclosing any material faults in the goods. In general, the act of 1930 seeks to provide an equitable and well-balanced framework for the safeguarding of the rights of buyers and sellers while encouraging openness, responsibility, and mutual trust in business dealings conducted within the Indian territory.

Rights and Duties of the Buyer 

Rights

Right to receive good quality products (Section 37):

First, if the products are delivered in less quantity than agreed, the buyer has the right to reject the goods; nevertheless, if the customer accepts the items, he will be responsible for paying the agreed-upon price.

Second, the buyer may accept the products as specified in the contract and reject the other items. He even has the option to reject the item as a whole, if the seller delivers to the buyer more goods than he agreed to sell. If the customer accepts all the items, he will be responsible for paying for the agreed-upon items.

Third, the buyer may accept the items that are in the goods that are in line with the contract and reject the rest or may reject the goods that are agreed to sell combined with goods of a different type that were not included in the contract.

Fourth, any custom of trade, special agreement, or course of dealing between the parties must apply to the interpretation of the provisions of this section.

Deliveries in instalments (Section 38): the buyer of goods is not required to accept the delivery of goods in instalments unless agreed to, if the contract is made for the sale of goods to be delivered in specified instalments that must be paid for separately, and either the seller fails to deliver the goods or delivers in a defective manner with regard to one or more instalments, or the buyer neglects to take the delivery of the goods or refuses to pay for one or more instalments,  whether the breach of contract constitutes a repudiation of the entire contract or separate breaches that gives rise to a claim for damages is based on the circumstances of each case and the terms of the contract,

Duties

• In compliance with the conditions of the sale agreement, the seller is responsible for the delivery of items and the buyer has the responsibility of accepting the items and paying for them. (Section 31)
• The buyer has the obligation to pay the agreed price for the products to be in his possession. This monetary commitment guarantees the seller to be fairly compensated for the items supplied.
• Apart from any express contract, the supplier of products is not required to deliver them until the buyer requests delivery. (Section 35)
• If a demand or delivery tender is not made at a fair hour, the section deems it ineffective. It is a matter of fact as to what constitutes a fair hour. [Section 36 (4)]
• The buyer shall accept such deliveries and make payments according to the contract if it permits the delivery of goods in instalments. This responsibility makes sure the buyer follows the specified terms for payment and delivery. [Section 38(2)]
• Unless otherwise agreed, the buyer shall assume any risk of decline in the goods that is inevitably incident to the course of transit where the seller of goods agrees to deliver them at his own risk at a location other than that where they are when sold. (Section 40)
• the buyer shall pay the agreed-upon amount when the property in the goods is transferred to the buyer, according to the contract. This obligation guarantees the seller receives fair remuneration and is consistent with the transfer of ownership. (Section 55)
• the seller may file a lawsuit to claim for the damages if the buyer willfully fails to accept the products or refuses to pay for them. (Section 56)

RIGHTS AND DUTIES OF THE SELLER

Rights

when goods are delivered to the buyer under terms such as “on sale or return” or other similar arrangements, the property is passed on to the buyer (Section 24):

a. at the time the buyer implies to the seller that he approves or accepts the goods, or when he takes any other action that adopts the transaction;

b. if the buyer does not indicate to the seller that he approves or accepts the goods without providing notice of rejection, then, if a time has been set for their return, on the expiration of such time, and, in the absence of time set, on the expiration of a reasonable amount of time.

in cases where a contract is made for the sale of particular items or if goods are later added to the contract, as per the terms of the agreement the seller is required to withhold disposal of the goods unless a number of requirements are met. In such cases, the property in the goods does not pass to the buyer until the seller’s requirements are met, even after they are delivered to the buyer, a carrier, or another bailee for the purpose of being shipped to the buyer. [Section 25 (1)]

the Act permits the unpaid seller of products in possession to keep the goods till full payment is done [Section 47(1)]:

a. where the products had been offered without any credit agreement;

b. in the event that the products were sold on credit, but the credit period has passed;

c. wherein the purchaser becomes insolvent.

when he is holding the goods as the buyer's agent or bailee, the seller may nevertheless use his right of sale.

the seller is entitled to resell the products and seek damages for any losses suffered under circumstances, such as the buyer’s default. This right protects the seller from possible damages and guarantees that they can make up their losses by reselling. (Section 54)

Duties

• The seller is responsible for arrangements for the buyer to acquire ownership of items. This involves making certain that the contract is followed and that all legal conditions for the ownership transfer are met.
• the seller is required to deliver the goods according to the conditions stated in the agreement. This entails adhering to the location, date, and other requirement that have been set forth. (Section 31)
• the seller is required to deliver the products within the terms of the contract, or within a reasonable amount of time during a reasonable time. This guarantees on-time delivery of items to the buyer. [Section 36(2)]
• As per the contract, the seller is required to provide the goods in the agreed-upon quantity. This guarantees that the buyer will receive the precise number of items that they committed to buy. [Section 37(1)]
• Unless the buyer specially instructs, the seller will enter into an agreement on the buyer’s behalf with the carrier or wharfinger that is reasonable in the light of the nature of the goods and other relevant factors. The buyer may refuse to accept the transfer or he may hold the seller liable for damages if the seller fails to do so and the items are lost or damaged during transportation or while in the wharfinger’s possession. [Section 39(2) ]

Conclusion

the Sale of Goods Act, 1930 in India serves as a pivotal piece of legislation that outlines the rights and duties of both buyers and sellers, fostering a fair and transparent business environment within the country. While the Act lays down comprehensive provisions, there is a growing need to align with international standards and contemporary global trade practices to ensure India's integration into the global marketplace. By considering amendments that address cross-border transactions, emphasize international arbitration mechanisms, and incorporate recognized trade terms like Incoterms, India can strengthen its commercial framework and foster greater trust and collaboration in international trade.

Reference

[1] The Sale of Goods Act, 1930, Available Here

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