Delivery : Meaning, Modes & Rules (Sale of Goods Act)

What is Delivery?

Delivery of goods means the seller has delivered the goods to the buyer at his agreed-upon place of delivery, and the buyer has paid the price and accepted the goods delivered. The transfer of ownership is fundamental to a contract of sale. Under a contract of sale, there are three types of transfers: the passing of property, the delivery of goods, and the passing of risk. Delivery can also be seen as the last covered mile in a contract of sale, and the contract gets discharged by the performance of both the seller and the buyer.

Geeky Takeaways:

• The transfer of ownership is central to a contract of sale.
• Sales of goods in 1930 established provisions regarding the delivery of goods.
• Delivery initiates the discharge of the contract through the performance of both parties.
• Delivery of goods may be of three types; i.e., actual, symbolic, and constructive.
• Rules regarding the delivery of goods as covered under the Sales of Goods Act 1930 are covered under sections 33–41.

What is Delivery under Sale of Goods Act 1930?

As provided under Section 2(2), delivery is the voluntary transfer of possession from one person to another. Physical possession is unimportant for delivery purposes. The buyer should be placed in a situation where he may exercise his entitlement to the products. Delivery of goods sold may be accomplished by doing anything that the parties agree will be viewed as delivery or that has the effect of placing the products in the custody of the buyer or any person authorized to keep them on his behalf.

Consequently, if ownership is obtained in an unjust manner, the commodities are not delivered. Delivery of goods sold may be done by doing anything that the parties agree shall be considered as delivery, or by putting the items in the custody of the buyer or any person authorized to keep them on his behalf.

For example, Aman contracts with Raman to buy 200 units of shoes. Raman agreed to deliver the shoes to Aman’s warehouse on 1/4/24 during business hours. On 1/4/24, Raman delivered the goods to Aman’s warehouse. Aman accepted the goods and paid the price for 200 units of shoes. This is a simple example of delivery between two parties.

Modes of Delivery under Sale of Goods Act 1930

Delivery of goods is of three types:

1. Actual Delivery: It is known as physical delivery and occurs when the seller or his or her authorized agency physically hands over the goods to the buyer or his or her agent, who is allowed to take possession of them. For example, A, the vendor of a car, passes it over to B, the buyer; this is an example of real delivery of goods.

2. Symbolic Delivery: When the items are too large and heavy to physically hand over to the customer, they might be delivered by signifying or delivering a symbol instead. The things themselves are not supplied in this case, but rather the means of acquiring control of them. For example, providing the keys to the warehouse where the goods are held, the keys to a purchased automobile to the buyer, or a bill of lading that entitles the holder to collect the items upon the arrival of the ship.

3. Constructive Delivery: In this scenario, no physical or symbolic delivery is done. In constructive delivery, the party who is in possession of the items acknowledges that he/she retains the goods for the benefit and disposal of the purchaser. Constructive delivery is also known as attornment.

Rules as to Delivery of Goods

1. Delivery: The parties may agree to regard anything as delivery if it results in the items being in the buyer’s or authorized representative’s possession.

2. Effect of Part Delivery (Section 34): Delivering a portion of goods while the whole is being delivered has the same implications as passing the property. However, delivering a portion of goods with the objective of severing it from the whole does not operate as a delivery of the remainder.

3. Buyer Must Apply for Delivery (Section 35): The seller of goods is not bound to deliver the goods until the buyer applies for delivery, informing the time and place of delivery, apart from the case of an express contract.

4. Delivery Locations [Section 36(1)]: Whether the buyer takes ownership of the products or the seller sends them to the buyer is determined by the written or implicit contract between the parties. Aside from any such contract, commodities sold are to be delivered at the location at which they are at the time of the sale, and goods agreed to be sold are to be delivered at the place at which they are at the time of the agreement to sell, or not then in existence, at the location where they are made or produced.

5. Time of Delivery [Section 36(2) & (4)]: If the seller is required to transmit products to the buyer but the time is not specified in the contract, they must send them within a reasonable time frame.

6. Goods Held by a Third Party: Where the products are in the custody of a third party at the time of sale, no delivery occurs until and unless such third party acknowledges to the buyer stating that the goods are possessed on his behalf. This clause, however, has no bearing on the procedure of issuing or transferring any document of title to goods.

7. Time for Tender of Delivery: Delivery must be made within a reasonable time frame or it may be considered ineffective. What constitutes an acceptable hour is an issue of fact.

8. Expenses for Delivery [Section 36(5)]: The seller is responsible for all expenses related to preparing the items for delivery, unless a contract states otherwise.

9. Delivery of Incorrect Amount (Section 37): If the seller delivers to the buyer a number of goods smaller than he committed to sell, the buyer may reject them; nevertheless, if the buyer accepts the products as provided, he must pay for them at the contract rate. When the seller delivers to the customer more products than he agreed to sell, the buyer has the option of accepting the commodities contained in the contract and rejecting the remainder, or rejecting the entire transaction. If the buyer approves all of the products supplied, he will pay for them at the negotiated rate.

10. Installment Deliveries (Section 38): The buyer of goods is not required to accept delivery in installments, except in the case when the same has been agreed between the both parties. The contracting parties may decide their rights and obligations in circumstances of installment delivery and payments.

11. Delivery to Carrier (Section 39): According to the contract, delivering goods to the carrier for transmission to the buyer is considered delivery to the buyer.

12. Deterioration During Transport: When products are sent to a remote location, the buyer is responsible for any deterioration that occurs during transit, even if the seller agrees to deliver at their risk.

Acceptance of Delivery by a Buyer

As established under Section 42 of the Sales of Goods Act 1930, acceptance occurs when the buyer: 

• Informs the seller that they have accepted the goods.
• Acts inconsistently with the seller’s ownership, or
• Retains the goods after a reasonable time without informing the seller of rejection.

Conclusion

The transfer of ownership is fundamental to a contract of sale. Under a contract of sale, there are three types of transfers: the passing of property, the delivery of goods, and the passing of risk. Delivery of goods means the seller has delivered the goods to the buyer at his agreed-upon place of delivery, and the buyer has paid the price and accepted the goods delivered. The act has established the rules of delivery, which are to be followed by both the seller and the buyer and adhere to the provision to create a healthy contract between them. There can be three types of delivery: actual, symbolic, and constructive.

Delivery: Meaning and Modes of Delivery- FAQs

Which act covers the provisions regarding the delivery of goods?

The Sales of Goods Act of 1930 covers the provisions regarding delivery in India.

If a seller hands over the keys of a warehouse containing goods to the buyer, it results in which mode of delivery?

In this case, it is a symbolic delivery. As the items are too large and heavy to physically hand over to the customer, they might be delivered by signifying or delivering a symbol instead.

Under what specific condition are goods at the risk of the party?

Goods are at the risk of the party when ownership of the goods exists with the party.

What is the appropriation of goods?

Appropriation of goods means:

(a) Separate the sold products from other items.

(b) Place the sold goods in appropriate containers.

(c) Deliver the goods to the carrier or bailee for transmission to the customer without retaining the right to dispose.

What does ‘Nemo dat quad non habet’ mean?

Nemo dat quad non habet means One cannot give what one does not have.