When goods are sold, a sale of goods contract is created. Within that contract, different duties are imposed on the parties to it (that is, the seller and the buyer). If any of the parties fails to carry out his or her duties under the terms of the contract, such omission attracts adverse consequences. The performance of a sale of goods contract has three dimensions. These are evident in the provision of section 27 of the Sale of Goods Act 1893 which provides that it is the duty of the seller to deliver the goods and that the buyer is to accept and pay for them, in accordance with contract of sale. Thus, the three elements in the performance of a sale of goods contract are: the delivery of the goods by the seller; the acceptance of the goods by the buyer; and the payment for the goods by the buyer. These three elements need not follow the order in which they have been listed above. Each of these three elements deserves further consideration.
[Click on each button below to reveal more text!]
Delivery is the voluntary transfer of the seller’s possession of good to a buyer or someone else involved in the transaction between the seller and the buyer (for example, a carrier). In essence, such transfer may be in four forms. These are:
- Physical delivery: This involves the physical handing-over of the goods to the buyer.
- Constructive delivery: This involves the handing-over to the buyer a means of access to the goods. In other words, it is not the physical goods that are handed-over to the buyer. This is the case where what is handed-over to the buyer are the keys to the warehouse where the goods are.
- Symbolic delivery: This involves the handing-over of something that symbolises the goods. This is typically the case where the document of title in respect of the goods is handed-over to the buyer. Another situation is the handing-over of a bill of lading in respect of shipped goods to the buyer which will enable the buyer to receive the goods on the arrival of the ship carrying the goods.
- Delivery by attornment: In this case, the goods are with a third party. In such a situation, delivery can be said to have occurred when the third party acknowledges to the buyer that he is in possession of the goods and acknowledges the buyer’s ownership of the goods.
It is noteworthy that the Sale of Goods Act 1893 provides for some rules which regulate the delivery of goods in a contract for sale of goods. These rules are the subject-matter of another article [see here]. Suffice it to state that these rules cover such matters as the time of delivery; place of delivery; delivery of wrong quantity; mixed delivery; delivery by instalment; and delivery to a carrier.
The buyer is obligated to accept the goods when they are delivered. In this context, acceptance involves the buyer taking possession of the goods. This may be by express statement. If the buyer refuses to take delivery of the goods at the stipulated time, that does not automatically permit the seller to selling off the goods to another person unless the delay of the buyer in taking delivery of the goods is unreasonable. Thus, it may be contended that time of the acceptance may not be the essence to the contract.
It is noteworthy that a buyer may reject the goods delivered to him. A valid excuse for this is where the goods delivered are not those ordered or if the goods are damaged. For a rejection to be effective, it must be communicated to the seller. In such circumstances, the buyer is not obliged to physically send the rejected goods back to the seller. It is sufficient if he clearly communicates to the seller the fact of his rejecting the goods delivered.
In addition to accepting the goods, the buyer is under a duty to pay the price for the goods he has bought. Where payment for the goods has been made by the buyer, in the absence of a contrary intention, he is entitled to take possession of the goods, if he has not already done so.
We have reviewed the three components of the performance of a sale of goods contract. These elements are what should occur when a sale of goods contract is said to have been performed. That is to say, for such a contract to be said to have been performed by the parties, the seller must deliver the goods to the buyer; the buyer must accept the goods delivered to him and must pay for the goods delivered by the seller. These elements are as contemplated by section 27 of the Sale of Goods Act 1893 which provides that the seller must deliver the goods and the buyer must accept and pay for them. Nevertheless, it is noted that the sequence of the occurrence of these events need not follow the order of delivery, acceptance, and payment. In some cases, payment may occur before delivery is made. Also, it was noted that there are some more specific rules governing delivery which are the focus of another article [see here].