Rights and Duties of Buyer and Seller

Introduction

Understanding the rights and duties of buyers and sellers is essential for anyone involved in commercial transactions. The Sale of Goods Act, of 1930, lays down clear guidelines to ensure fair and equitable exchanges of goods, protecting both parties and maintaining transparency in the marketplace. Here, we’ll explore the rights and duties of buyers and sellers under this legislation in a conversational and humanized manner.

Who is a Buyer?

A buyer is someone who purchases goods or services in exchange for payment. Whether you’re a consumer buying a product for personal use, a business acquiring raw materials for production, or any entity seeking specific services, you are a buyer. You initiate the transaction, negotiate terms, and ultimately make the purchase.

Who is a Seller?

A seller is an individual or entity that provides goods or services in exchange for payment. This could be anyone from a small business owner to a large manufacturer. The seller responds to buyer inquiries, negotiates terms, and completes the sale, ensuring the goods or services meet the buyer’s needs.

Rights of the Buyer

Under the Sale of Goods Act, of 1930, buyers have several rights to protect their interests:

Right to Delivery of Goods as per Contract

Buyers are entitled to receive goods that match the contract’s terms and conditions. Sections 31 and 32 ensure that delivery is timely and exact.

Right to Reject Non-Conforming Goods

If the delivered goods don’t meet the agreed-upon description, quality, or quantity, buyers can reject them (Section 37).

Right to Repudiate for Unapproved Instalments

Without a prior agreement, buyers can repudiate the contract if goods are delivered in instalments (Section 38(1)).

Right to Be Informed of Insurance Arrangements

For goods sent via sea, the seller must inform the buyer to arrange for insurance (Section 39(3)).

Right to Examine Goods

Buyers can inspect goods to ensure they meet the contract specifications (Section 41).

Right to Sue for Price Recovery

If the seller fails to deliver the goods, buyers can sue to recover the price paid.

Right to Sue for Non-Delivery Damages

Buyers can seek damages if the seller neglects or refuses to deliver goods (Section 57).

Right to Sue for Specific Performance

Buyers can approach the court to compel the seller to fulfil their contractual obligations.

Right to Sue for Breach of Warranty or Condition

Buyers can sue for damages if there’s a breach of warranty or condition (Sections 59 and 60).

Right to Sue for Interest

In case of a contract breach requiring a refund, buyers can claim interest as compensation (Section 61).

Duties of the Buyer

Buyers also have specific duties to uphold their end of the contract:

Duty to Accept Delivery

Buyers must accept goods delivered per the contract terms (Section 31).

Duty to Pay the Price

Buyers must pay the agreed price for the goods.

Duty to Apply for Delivery

Buyers should formally apply for the delivery of goods (Section 35).

Duty to Demand Delivery at a Reasonable Hour

Buyers have the right to demand delivery at a reasonable time (Section 36(4)).

Duty to Accept Installment Deliveries

If agreed upon, buyers must accept goods delivered in instalments (Section 38(2)).

Duty to Bear Transit Risks

For goods delivered elsewhere, buyers bear the risk of deterioration during transit (Section 40).

Duty to Inform Seller of Rejection

If rejecting goods, buyers must inform the seller (Section 43).

Duty to Accept Timely Delivery

Buyers must accept goods within a reasonable timeframe after the seller’s tender delivery (Section 44).

Duty to Pay upon Transfer of Property

Buyers must pay the price when the property in the goods passes to them (Section 55).

Duty to Compensate for Non-Acceptance

Buyers must pay damages for non-acceptance of goods (Section 56).

Rights of the Seller

Sellers have rights to ensure they receive payment and can protect their interests:

Right to Reserve Disposal

Sellers can retain control of goods until certain conditions are met (Section 25(1)).

Right to Assume Acceptance

Under certain circumstances, sellers can assume buyer acceptance (Section 24).

Right to Deliver on Application

Sellers must deliver goods only upon the buyer’s application (Section 35).

Right to Deliver in Installments

If agreed, sellers can deliver goods in instalments (Section 39(1)).

Right to Exercise Lien

Sellers can retain possession of goods until payment is received (Section 47(1)).

Right to Stop Goods in Transit

If the buyer defaults on payment, sellers can stop goods in transit (Sections 49(2) and 50).

Right to Resell Goods

Sellers can resell goods and claim damages if the buyer defaults (Section 54).

Right to Withhold Delivery

Sellers can withhold delivery if ownership hasn’t been transferred (Section 46(2)).

Right to Sue for Price

Sellers can sue for the price if the property in the goods has passed to the buyer or if the price is due (Section 55).

Duties of the Seller

Sellers must also fulfil certain duties to complete the sale:

Duty to Transfer Property

Sellers must arrange for the transfer of property in goods to the buyer.

Duty to Conform Goods to Contract

Sellers must ensure goods meet the contract specifications.

Duty to Deliver on Time

Sellers must deliver goods within the specified or reasonable time (Section 36(2) and (4)).

Duty to Bear Delivery Expenses

Sellers cover the costs of preparing goods for delivery (Section 36(5)).

Duty to Deliver Agreed Quantity

Sellers must deliver the exact quantity of goods agreed upon (Section 37(1)).

Duty to Arrange Insurance

For goods in transit, sellers must arrange for insurance (Section 39(2)).

Duty to Inform for Sea Route Deliveries

Sellers must inform buyers about goods sent via sea to enable insurance arrangements (Section 39(3)).

Conclusion

The rights and duties of buyers and sellers under the Sale of Goods Act, of 1930, ensure fairness and transparency in commercial transactions. Buyers have the right to receive goods as per the contract and seek damages for breaches, while sellers have the right to receive payment and take action if buyers default. Both parties must fulfil their contractual obligations to maintain a balanced and ethical marketplace.

By understanding these rights and duties, buyers and sellers can navigate commercial transactions more effectively, ensuring that both parties are protected and that the sale process is smooth and efficient.

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Frequently Asked Questions (FAQs)

1. What happens if the delivered goods do not match the description or quality specified in the contract?

The buyer can reject the goods under Section 37 of the Sale of Goods Act, 1930, and request a replacement or refund.

2. Can the buyer refuse to accept goods delivered in instalments?

Yes, if there was no prior agreement for instalment deliveries, the buyer can refuse them according to Section 38(1).

3. What are the seller’s rights if the buyer fails to make the payment on time?

The seller can retain possession of the goods, stop them in transit, resell them, and sue the buyer for the price as per Sections 47(1), 49(2), 50, 54, and 55.

Also Read: Difference Between Sale and Agreement to Sell

Reference: advocatekhoj.com