Rights and Duties of Buyer and Seller | Law Optional Notes for UPSC PDF Download

Introduction

• The Sales of Goods Act 1930 details the responsibilities and rights of both buyers and sellers in transactions involving goods.
• This act is crucial for overseeing the fairness and legality of contracts related to the sale of goods. It ensures that such transactions adhere to legal standards and principles. It's important to remember that contracts falling under this act are also subject to the regulations outlined in the Indian Contract Act.
• Additionally, the Transfer of Property Act governs the rights and duties of buyers and sellers involved in transactions related to immovable property. On the other hand, the Sales of Goods Act specifically addresses the rights and obligations of buyers and sellers in sales contracts.

Definition of a Buyer

• A buyer, whether an individual, organization, or entity, acquires goods or services by exchanging payment. In commercial settings, a buyer seeks to purchase products or services from a seller or supplier.
• Buyers typically initiate transactions, express interest in goods or services, negotiate terms, and ultimately make purchases. Buyers can include consumers buying goods for personal use, businesses obtaining raw materials or finished products for resale or production, or any entity requiring services to fulfill specific needs. Essentially, a buyer actively engages in acquiring goods or services through market transactions.

Who is a Seller?

• A seller refers to an individual, organization, or entity involved in selling goods or services to potential buyers.
• In commercial settings, the seller is the party that offers products or services with the intention of exchanging them for monetary payment or other forms of consideration.
• Sellers are commonly responsible for responding to buyer inquiries, negotiating terms, and finalizing sales transactions.
• Examples of sellers include individuals operating small businesses, manufacturers creating goods, retailers vending products to consumers, and service providers delivering various services.
• A seller actively engages in providing goods or services in return for value within market-based transactions.

What are the Rights and Duties of Buyer and Seller?

• Buyers and sellers have specific rights and duties outlined in the Sale of Goods Act 1930.
• This act serves as a fundamental framework for commercial transactions, ensuring fairness and clarity.

Rights and Duties of Buyer

Rights of Buyer

These are the rights of the buyer as per the Sale of Goods Act, 1930:

• Right to Delivery of Goods as per Contract: The buyer has the right to receive the goods as per the terms and conditions specified in the contract, ensuring timely and exact delivery.
• Right to Reject Non-Conforming Goods: If the delivered goods do not meet the specified description, quality, or quantity, the buyer can reject them, safeguarding against substandard or inadequate products.
• Right to Repudiate the Contract in the Absence of Agreement for Instalments: If the seller delivers goods in instalments without prior agreement, the buyer can repudiate the contract to avoid unexpected or unauthorized deliveries.
• Right to Be Informed and Arrange for Insurance: If goods are to be sent via sea route, the seller must inform the buyer, allowing them to arrange for insurance coverage to mitigate the risk of damage during transit.
• Right to Examine Goods for Conformity: The buyer has the right to inspect the goods to ensure they meet the contractual specifications before accepting them, protecting against receiving faulty or non-conforming products.
• Right to Sue for Price Recovery: If the seller fails to deliver the goods as agreed, the buyer can file a lawsuit to recover the price already paid for the goods.
• Right to Sue for Damages for Non-Delivery: If the seller wrongfully refuses to deliver the goods, the buyer can seek damages for any losses incurred due to the non-delivery.
• Right to Sue for Specific Performance: The buyer can approach the court to compel the seller to fulfil their contractual obligations if they fail to do so voluntarily.
• Right to Sue for Breach of Warranty or Condition: The buyer can sue the seller for damages in case of breach of warranty or condition, ensuring that they are compensated for any deviations from the contract terms.
• Right to Sue for Interest on Breach of Contract: In cases of breach of contract where a refund is necessary, the buyer can claim interest as compensation for the breach, providing additional financial restitution.

Duties of Buyer

• Duty to Accept Delivery of Goods: When the seller is ready to deliver the goods as per the contract, it is the buyer's duty to accept them promptly, acknowledging receipt and compliance with the terms.
• Duty to Pay the Price for Possession: The buyer must pay the agreed price to obtain possession of the goods, ensuring fair compensation for the seller.
• Duty to Apply for Delivery: It is the buyer's responsibility to formally apply for the delivery of the goods, initiating the process of receiving them as per the contract.
• Duty to Demand Delivery at Reasonable Hour: The buyer can demand delivery at a reasonable hour to ensure convenience and proper arrangement for receipt.
• Duty to Accept Goods in Installments: If the contract allows for delivery in instalments, the buyer must accept each delivery and make payments accordingly, adhering to the agreed schedule.
• Duty to Bear the Risk of Deterioration in Transit: If goods are transported to a location other than where they were sold, the buyer assumes the risk of any deterioration or damage during transit.
• Duty to Inform Seller of Refusal or Rejection: If the buyer refuses or rejects the goods, they must inform the seller promptly, allowing for appropriate action.
• Duty to Take Delivery within a Reasonable Time: Upon tender of delivery by the seller, the buyer must accept the goods within a reasonable timeframe to prevent unnecessary delays.
• Duty to Pay the Price as Property Passes: When the property in the goods passes to the buyer, they must pay the agreed price, aligning with the transfer of ownership.
• Duty to Pay Damages for Non-Acceptance: If the buyer fails to accept the goods, they may be liable to pay damages to the seller as compensation for losses incurred.

Rights of Seller

These are the rights of the seller as per the Sale of Goods Act, 1930:

• Right to Reserve Disposal of Goods: The seller can retain control and ownership of the goods until specific conditions are met, safeguarding their interests.
• Right to Assume Buyer’s Acceptance: Under certain circumstances, the seller may assume that the buyer has accepted the goods, facilitating smoother transactions.
• Right to Deliver Goods upon Buyer’s Application: The seller is obligated to deliver the goods only upon formal application by the buyer, ensuring timely delivery.
• Right to Deliver Goods in Installments: If the agreement allows, the seller can deliver the goods in instalments, providing flexibility in fulfilling the contract.
• Right to Exercise Lien and Retain Possession: The seller can exercise a lien on the goods and retain possession until full payment of the price is received, protecting their interests.
• Right to Stop Goods in Transit: If the buyer fails to make payment, the seller can stop the goods while they are in transit and resume possession until the price is paid, ensuring payment before delivery.
• Right to Resell Goods under Certain Circumstances: In specific situations such as buyer’s default, the seller can resell the goods and claim damages for losses incurred, mitigating potential losses.
• Right to Withhold Delivery when Property has not Passed: If the property in the goods has not passed to the buyer, the seller can withhold delivery until transfer of ownership conditions are met, aligning delivery with ownership transfer.
• Right to Sue for Price: If the buyer fails to make payment as per the contract terms, the seller has the right to sue for the price, seeking legal recourse for unpaid dues.

By exercising these rights, the seller can ensure fair and equitable transactions, protect their interests, and uphold the terms of the contract, promoting transparency and accountability in commercial dealings.

Duties of Seller

• Duty to Arrange for Transfer of Property: Ensure legal requirements for transfer of ownership are met.
• Duty to Appropriate and Conform Goods to the Contract: Provide goods that meet specified requirements.
• Duty to Pass Absolute and Effective Title: Provide clear ownership of the goods without any disputes.
• Duty to Deliver Goods as per Contract Terms: Comply with agreed delivery date, location, and other conditions.
• Duty to Put Goods in Deliverable State: Prepare goods for delivery according to contract specifications.
• Duty to Deliver Goods in a Timely Manner: Deliver goods within specified or reasonable time frames.
• Duty to Bear Expenses of Delivery: Cover costs related to preparing and transporting goods for delivery.
• Duty to Deliver Agreed Quantity: Provide the exact quantity of goods specified in the contract.
• Duty to Deliver Goods in Installments per Buyer’s Desire: Deliver goods in installments if agreed upon, as per buyer's request.
• Duty to Arrange for Insurance during Transmission: Arrange for insurance of goods while in transit to protect against damage or loss.
• Duty to Inform Buyer about Goods Sent via Sea Route: Notify the buyer promptly if goods are being sent via sea route, allowing them to obtain insurance coverage.

Rights and Duties of Buyers and Sellers in Commercial Transactions

Buyers

• Right to Receive Goods: Buyers have the entitlement to receive goods as per the agreed contract terms. This ensures that they get what they paid for.
• Reject Non-Conforming Goods: If the goods received do not meet the specifications outlined in the contract, buyers have the right to refuse acceptance.
• Seek Damages for Breach: In case of a breach of contract by the seller, buyers have the legal right to seek compensation for any losses incurred.
• Pay Agreed Consideration: Buyers are obligated to pay the agreed-upon price for the goods they are purchasing.
• Apply for Delivery: Buyers must formally request the delivery of the purchased goods within the stipulated time frame.
• Accept Goods Promptly: It is the duty of buyers to accept the goods within a reasonable period after delivery.

Sellers

• Right to Payment: Sellers have the right to receive payment for the goods they have supplied as per the contract.
• Delivery in Instalments: Sellers may deliver goods in parts or instalments as agreed upon in the contract.
• Exercise Lien and Stop Goods in Transit: Sellers can retain possession of the goods until payment is received and, in certain circumstances, stop goods in transit.
• Transfer Property: It is the duty of sellers to transfer ownership of the goods to the buyer upon delivery.
• Deliver Goods as Agreed: Sellers must ensure that the goods delivered conform to the specifications outlined in the contract.
• Ensure Conformance to Contract Terms: Sellers are responsible for ensuring that the goods supplied meet the quality and quantity requirements specified in the contract.

Both buyers and sellers are governed by the Sale of Goods Act and the Indian Contract Act, which establish guidelines for fair and ethical interactions in commercial transactions.