What do you mean by 'delivery'? Discuss the rules regarding delivery of goods

Meaning of Delivery

Delivery involves the transfer of possession, but this transfer must be voluntary — the word "voluntary" is significant because it excludes any transfer procured through fraud, duress, coercion, or a criminal offence. Possession obtained by a thief is not delivery within the meaning of the Act, since the entire concept presupposes honest dealing on both sides. Section 33 defines delivery in broad terms — it may be effected by doing anything which the parties agree shall be treated as delivery, or which has the effect of putting the goods into the possession of the buyer or of any person authorised to hold them on his behalf.

Modes of Delivery

Delivery may be actual, symbolic, or constructive, depending on how possession is transferred.

Actual delivery occurs when the goods themselves are physically handed over to the buyer. The statutory illustration of a seller in Mumbai placing containers of garments on board a ship for a buyer in the USA shows actual delivery being effected the moment the containers are placed on board.

Symbolic delivery occurs through the handing over of a key or a similar symbol that gives complete access to the goods, without the goods themselves changing location. Delivery of the key to a godown containing specific goods sold constitutes delivery, but delivery of a key that does not, in fact, grant complete access — for instance, where the seller retains the key to an outer enclosure — does not amount to delivery at all.

Constructive delivery occurs where there is a change in legal possession without any change in actual physical custody, and takes place in three recognised situations — by attornment. First, the seller, though remaining in physical possession after the sale, may acknowledge that he now holds the goods as bailee for the buyer. Second, the buyer, already in possession before the sale as bailee for the seller, may thereafter hold the goods in his own right as owner. Third, a third party such as a warehouseman, previously holding goods as bailee for the seller, may attorn to the buyer, agreeing to hold them thereafter on the buyer's behalf. This was demonstrated in Elmore v. Stone, where a seller, at the buyer's request, kept a sold horse at his own livery stable but moved it to a different stable — the court held that a valid delivery had nonetheless occurred. Crucially, where a warehouseman is involved, the assent of all three parties — seller, buyer, and the bailee — is essential to complete the transfer; the illustration of the wharfinger who transferred oil into the buyer's name in his books, but where the buyer never consented to make the wharfinger his bailee, shows that delivery fails without this tripartite assent.

Delivery may also be made symbolically through the transfer of documents of title, such as a bill of lading or railway receipt, particularly for goods in transit — a lawful transfer of a bill of lading operates as delivery of the goods themselves, since while goods are at sea, no other mode of dealing with them is practically possible. This principle was applied by the Privy Council in Ramdas v. Amarchand, holding that possession of goods covered by a railway receipt may be transferred by endorsement of that receipt, entitling the last endorsee to delivery.

Rule on Part Delivery

Section 34 provides that a delivery of part of the goods, made in progress of delivering the whole, operates as a delivery of the whole for purposes of passing property, but a delivery of part with the intention of severing it from the remainder does not operate as delivery of the rest. This distinction turns entirely on the parties' intention, gathered from the surrounding circumstances of each transaction. The illustration of a ship's captain who begins discharging cargo and hands over part of it to the buyer, in progress of unloading the whole, shows a valid constructive delivery of the entire cargo. By contrast, where a buyer of a stack of firewood merely obtains the seller's leave to remove some of it, this does not have the legal effect of delivering the whole.

Buyer Must Apply for Delivery

Section 35 lays down that, apart from any express agreement, the seller is not bound to deliver the goods until the buyer applies for delivery. This rule, drawn from the earlier Contract Act, has been found practically useful — a buyer who has never demanded delivery has no cause of action against the seller for non-delivery. This obligation, however, does not arise where the seller has already committed an anticipatory breach by unjustifiably refusing to perform before the delivery date arrives, since demanding delivery in such circumstances would be an idle formality.

General Rules as to Delivery — Section 36

Section 36 lays down a comprehensive set of default rules, all subject to contrary agreement between the parties.

• Mode and place of delivery: Whether the buyer must collect the goods or the seller must send them depends on the contract, express or implied, between the parties; absent such agreement, goods already existing are to be delivered at the place where they were located at the time of sale, and future goods at their place of manufacture.

• Time of delivery: Where the seller is bound to send the goods but no time is fixed, delivery must be made within a reasonable time, this being treated thereafter as though the parties had themselves fixed that specific time.

• Goods with a third person: Where goods are in the possession of a third party such as a warehouseman, there is no delivery to the buyer until that third party acknowledges holding the goods on the buyer's behalf.

• Demand at reasonable hour: Any demand or tender of delivery is ineffectual unless made at a reasonable hour, a question determined by the facts of each case.

• Expenses of delivery: Unless otherwise agreed, the expenses of putting the goods into a deliverable state must be borne by the seller.

Delivery of Wrong Quantity — Section 37

Section 37 addresses three distinct situations of quantity mismatch. Where the seller delivers less than contracted, the buyer may reject the goods altogether, but if he accepts them, he must pay at the contract rate — as where a buyer accepted 420 out of 500 contracted maunds of rice after having them weighed, and was bound to pay for the quantity accepted. Where the seller delivers more than contracted, the buyer may accept the contracted quantity and reject the excess, or reject the whole consignment, paying at the contract rate only if he accepts everything delivered — illustrated by a buyer of two dozen bottles of wine who received five dozen and was entitled to reject the whole. Where the seller delivers the contracted goods mixed with goods of a different description not included in the contract, the buyer may accept the conforming goods and reject the rest, or reject everything — as in the case of Ruabon coal mixed with other coal during delivery, rendering the entire consignment a bad delivery. All these rules remain subject to any established trade usage, special agreement, or prior course of dealing between the parties.

Instalment Deliveries — Section 38

Section 38 provides that, unless otherwise agreed, a buyer is not bound to accept delivery by instalments. Where a contract does provide for delivery and payment by separate instalments, and either party defaults with respect to one or more instalments, whether this constitutes a repudiation of the entire contract or merely a severable breach giving rise to a claim for compensation depends on the terms of the contract and the surrounding circumstances of each case. This was illustrated where a buyer's refusal to pay for one instalment, standing alone, was held not automatically to repudiate the whole contract, requiring the court to examine all circumstances before determining whether repudiation of the entire agreement had truly occurred.

Delivery to a Carrier or Wharfinger — Section 39

Section 39 provides that where the seller is authorised to send goods to the buyer, delivery to a carrier — whether named by the buyer or not — for onward transmission, or delivery to a wharfinger for safe custody, is prima facie deemed to be delivery to the buyer. This provision effectively makes the carrier the buyer's agent for the purpose of taking delivery, though the buyer retains his right to examine and reject the goods on arrival. The seller, however, bears a duty to make a reasonable contract of carriage having regard to the nature of the goods; if he neglects this duty and the goods are lost or damaged in transit, the buyer may decline to treat delivery to the carrier as delivery to himself, and may instead hold the seller liable in damages. Additionally, where goods are sent by a route involving sea transit and it is usual to insure them, the seller must give the buyer sufficient notice to allow him to arrange insurance — failing which, the goods are deemed to remain at the seller's risk during the sea transit.

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