Page 133 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes 8. Installment delivery: The buyer is not bound to accept delivery by instalment, unless
otherwise agreed.

Example: In a contract of sale of 25 tons of pepper, “October-November shipment’ the
seller ships 20 tons in November and 5 tons in December. The buyer may refuse the whole.

Where there is a contract for the sale of goods to be delivered by stated installments which
are to be separately paid for; and either buyer or seller commits a breach of contract, it is
a question depending on the terms of the contract and circumstances of the case whether
the breach is a repudiation of the whole contract or a severable breach merely giving a
right to claim for damages (s.38).
Generally, a failure to deliver or pay for one installments does not amount to repudiation
or breach of the whole contract. But where the breach is such as to lead to a reasonable
influence that similar breaches will be committed with reference to the subsequent
installments also, the other party is entitled to treat the whole contract as repudiated.

Example: Zafar sells to Yaseen 1,500 tons of meat and bone meat of a specified quality to
be shipped 125 tons monthly in equal weekly installments. After about half the meat has been
delivered and paid for, Yaseen discovers that it is not of the contract quality and, therefore,
refuses to take further deliveries. Yaseen has a right to do so as he is not bound to take the risk
of having put upon him further deliveries of goods which do not conform to the contract.

9. Delivery to the carrier or wharfinger (s.39): The delivery of goods by the seller to a carrier
for transmission to buyer or to wharfinger for safe custody is prima facie deemed to be a
delivery of the goods to the buyer unless the right of disposal has been retained by the
seller.
The seller is bound to make with the carrier or wharfinger such a contract of carriage as
properly protects the interest of the buyer except where the contract provides otherwise.
If he fails to do so, he is liable in damages to the buyer or the buyer may refuse to treat
delivery to the carrier as delivery to himself. As regards insurance, the seller’s duty is only
to give sufficient notice to the buyer to enable him to insure the goods, unless goods are
sent c.i.f. (cost, insurance and freight) or ex-ship.
10. Where goods are delivered to a buyer, which he has not personally examined, he is not
deemed to have accepted them, unless he has reasonable opportunity of examining them
and assenting whether they conform to the contract. The provision, will however, be
irrelevant where the parties agree otherwise (s.41).

Example: A seller gives notice to the buyer that the contract goods are lying at a certain
store house and are ready for delivery against payment of price. The buyer, when he goes to the
store house, is only shown two closed casks which are said to contain the goods. This is not a
valid offer of delivery by the seller as no sufficient opportunity has been given to the buyer to
inspect the goods.
11. Buyer not bound to return the rejected goods: Unless otherwise agreed, when the goods
are delivered to a buyer on sale or return basis and the buyer refuses to accept them, he is
not bound to return them to the seller, but it is his duty to inform the seller that he has
refused them; otherwise after lapse of a reasonable time, he will be deemed to have
accepted them (s.43).

12. Liability of the buyer: When the seller is ready and willing to deliver the goods and
requests the buyer to take delivery and the buyer does not, within a reasonable time after

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