Section 38 of The Sale of Goods Act, 1930
Instalment deliveries.
- (1)Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by instalments.
- (2)Where there is a contract for the sale of goods to be delivered by stated instalments which are to be separately paid for, and the seller makes no delivery or defective delivery in respect of one or more instalments, or the buyer neglects or refuses to take delivery of or pay for one or more instalments, it is a question in each case depending on the terms of the contract and the circumstances of the case, whether the breach of contract is a repudiation of the whole contract, or whether it is a severable breach giving rise to a claim for compensation, but not to a right to treat the whole contract as repudiated.
Summary
- By default, a buyer is not required to accept their goods in instalments or parts.
- If a contract specifically allows for instalments with separate payments, rules for breaches are more complex.
- If a seller fails to deliver or delivers bad goods in one instalment, it depends on the contract whether the whole deal is cancelled.
- Similarly, if a buyer fails to pay for or receive one instalment, the circumstances decide if the seller can end the whole contract.
- A breach might just be a severable breach, meaning the rest of the contract continues and the injured party just gets compensation.
Practical examples
FAQ
1. Am I forced to accept my order in parts under the Sale of Goods Act?
No, Section 38 of the Sale of Goods Act, 1930, states that unless otherwise agreed, a buyer is not bound to accept delivery by instalments.
2. If one instalment is bad, can I cancel the whole contract under the Sale of Goods Act?
It depends. Section 38 of the Sale of Goods Act, 1930, says it is a question of the contract terms and circumstances whether it is a total cancellation or just a claim for money.
3. What happens if a buyer misses one payment for an instalment under the Sale of Goods Act?
Under Section 38 of the Sale of Goods Act, 1930, this could either be seen as ending the whole contract or just a minor breach requiring compensation, depending on the case facts.
Test yourself
1.Under Section 38 of the Sale of Goods Act, 1930, when is a buyer bound to accept delivery in instalments?
2.According to Section 38 of the Sale of Goods Act, 1930, if an instalment contract is breached, what determines if the whole contract can be treated as ended?
3.Under Section 38 of the Sale of Goods Act, 1930, if a buyer refuses to take delivery of one instalment in a multi-part contract, what can happen?