PERFORMANCE OF THE

CONTRACT
Chapter IV Sale of Goods Act 1957 deals with the physical
performance of the terms of the contract which includes delivery
and acceptance.

Section 31 SOGA 1957

It is the duty of the seller to deliver the goods, and of the buyer
to accept and pay for them in accordance with the terms of the
contract of sale

Section 32
Unless otherwise agreed, delivery of the goods and payment of
the price are concurrent conditions, that is to say, the seller must
be ready and willing to give possession of the goods to the buyer
in exchange for the price, and the buyer shall be ready and willing
to pay the price in exchange for possession of the goods.
 Delivery of The Goods
Section 2 of SOGA 1957
delivery means ‘voluntary transfer of possession from one
person to another ’.

Section 33
Delivery of goods may be made by doing anything which
has the effect of putting the goods in the possession of the
buyer or of any person authorized to hold them on his
behalf.

If the seller wrongfully neglects or refuses to deliver the

goods to the buyer, the buyer may sue the seller for
damages for non-delivery.
Section 35 of Sale of Goods Act 1957
‘Apart from any express contract, the seller of goods is not
bound to deliver them until the buyer applies for delivery’

Section 36 (3)
‘Where the goods at the time of sale are in the possession
of a third person, there is no delivery by seller to buyer
unless and until such third person acknowledges to the
buyer that he holds the goods on his behalf.’
Provided that nothing in this section shall affect the
operation of the issue or transfer of any document of title
to goods.
 Place of Delivery
Section 36(1) SOGA 1957
‘Whether it is for the buyer to take possession of the goods or for the
seller to send them to the buyer is a question depending in each case
on the contract, express or implied, between the parties. Apart from
any such contract, goods sold are to be delivered at the place at which
they are at the time of the sale, and goods agreed to be sold are to be
delivered at the place at which they are at the time of the agreement to
sell, or, if not then in existence, at the place at which they are
manufactured or produced.’
Section 36(5)
Unless otherwise agreed, the expenses of and incidental to putting the
goods into a deliverable state shall be borne by the seller.

When the seller agrees to deliver the goods at his own risk at a place
other than that where they are sold, the buyer shall, unless otherwise
agreed, take any risk of deterioration in the goods necessarily incident
to the course of transit.
Time of Delivery
Section 36(1) SOGA 1957
‘Where under the contract of sale the seller is bound to
send the goods to the buyer, but no time for sending
them is fixed, the seller is bound to send them within a
reasonable time.’

However, what is deemed ‘reasonable’ time is a question

of fact. Demand or tender of delivery may be treated as
ineffectual unless made at a reasonable hour. What is
‘reasonable’ hour again a question of fact.
Delivery of Wrong Quantity
Section 37 of the Sale of Goods Act imposes on the seller
a strict duty to deliver the correct quantity of goods and of
the type described without contamination of other goods.

A failure by the seller to do so amounts to a breach of

condition.

This section is an exemplication of section 15 SOGA 1957

requiring goods sold to correspond with description.
Section 37(1) SOGA 1957
Where the seller delivers to the buyer a quantity of
goods less than he contracted to sell, the buyer may
reject them, but if the buyer accepts the goods so
delivered he shall pay for them at the contract rate.

Case-Harland and Wolff Ltd vs J Burstall & Co (1901)

84 LT 324
There was a contract of 500 loads of timber. It was
held that delivery of 470 loads would have been non-
performance of the contract entitling the buyer to
reject.
Section 37(2) SOGA 1957
‘Where the seller delivers to the buyer a quantity of goods
larger than he contracted to sell, the buyer may accept the
goods included in the contract and reject the rest, or he may
reject the whole. If the buyer accepts the whole of the goods
so delivered he shall pay for them at the contract rate.’

Section 37(3) SOGA 1957

‘Where the seller delivers to the buyer the goods he
contracted to sell mixed with goods of a different description
not included in the contract, the buyer may accept the goods
which are in accordance with the contract and reject the rest,
or may reject the whole.’

Section 37(4) SOGA 1957

This section is subject to any usage of trade, special
agreement or course of dealing between the parties.
Instalment Delivery

Section 38(1) SOGA 1957

‘Unless otherwise agreed the buyer of goods is not bound
to accept delivery thereof by instalments.’

There are no doubt circumstances in which it can be inferred

from the contract quantity and the time allowed for
shipment that the sellers are entitled to ship in more than
one load, and therefore entitled to deliver in separate loads.
But the general rule is that the seller must deliver in one
load.
Case-Behrend & Co Ltd vs Produce
Brokers Co Ltd (1920) 3 KB 530

Fact :
Where the sellers agreed to sell a quantity of cutton seed
ex the Port Inglis in London.
The ship discharged a small part of the cargo in London,
and then left for Hull she discharged other goods.
Fourteen days later, she returned to London and discharged
the remainder of the cotton seed which was the subject of
the sale.

Held :
the buyers were entitled to reject the later delivery while
retaining the earlier one.
Section 38(2) SOGA 1957

‘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.’
 Case-Hammer & Barrow vs Coca-
Cola (1962) NZLR 723
Fact :
Coca-Cola purchased 200,000 yo-yos, to be delivered in
instalments. They were to be used in conjunction with an
advertisement programme by Coca-Cola. Of the first 85,000 yo-yos
delivered, 65,000 were returned as defective. Coca-Cola attempted
to rescind the contract.

Issue :
Whether the breach was sufficiently serious to permit Coca-Cola to
rescind the agreement.

Held :
the breach affected 80 per cent of delivered yo-yos, and considering
the cost of the promotion, which would be ruined by defective yo-
yos, Coca-Cola were justified in rescinding the contract.
Delivery to Carries or Wharfingers

Section 39(1) SOGA 1957

“ Where in pursuance of a contract of sale, the seller is
authorized or required to send the goods to the buyer,
delivery of the goods to a carrier, whether named by the
buyer or not, for purpose of transmission to the buyer, or
delivery of the goods to a wharfinger for safe custody, is
prima facie deemed to be a delivery of the goods to the
buyer.”

The effect of this provision is that delivery to a carrier or to

a wharfinger for sale custody would constitute performance
by the seller of his obligation to deliver the goods. This also
implies that the buyer’s concurrent obligation to pay the
price becomes operative.
Section 39(2) SOGA 1957
‘Unless otherwise authorized by the buyer, the seller shall
make such contract with the carrier or wharfinger on
behalf of the buyer as may be reasonable having regard to
the nature of the goods and the other circumstances of
the case. If the seller omits so to do, and the goods are
lost or damaged in course of transit or whilst in the
custody of the wharfinger, the buyer may decline to treat
the delivery to the carrier or wharfinger as a delivery to
himself, or may hold the seller responsible in damages.’

By this provision where the seller is bound to make a

contract of carriage, his failure to do so on the proper
terms or on those terms usual in the trade, is treated as a
breach of contract. Thus, the seller is bound to make
reasonable contract. What is reasonable contract ‘appears
to depend on what is usual in the trade in question’.
Section 39(3) SOGA 1957
‘Unless otherwise agreed, where goods are sent by the
seller to the buyer by a route involving sea transit, in
circumstances in which it is usual to insure, the seller
shall give such notice to the buyer as may enable him to
insure them during their sea transit, and if the seller
fails so to do, the goods shall be deemed to be at his
risk during such sea transit.’

The subsection makes reference to sea transit only, and

it does appears that it is so restricted. Carriage by air or
land would be excluded unless it is accepted that
coverage can be extended by analogue.
Buyer’s right to examine the goods

Section 41 SOGA 1957

(1) Where goods are delivered to the buyer which he has
not previously examined, he is not deemed to have
accepted them unless and until he has had a reasonable
opportunity of examining them for the purpose of
ascertaining whether they are in conformity with the
contract
(2) Unless otherwise agreed, when the seller tenders
delivery of goods to the buyer, he is bound, on request,
to afford the buyer a reasonable opportunity of examining
the goods for the purpose of ascertaining whether they
are in conformity with the contract.
Acceptance
‘Acceptance’ in contracts of sale of goods refer to
performance of the contract and transfer of ownership.
According to section 42 of Sale of Goods Act, the buyer
is deemed to have accepted the goods in the following
circumstances.
1. When he intimates to the seller that he has
accepted them.
2. When the goods have been delivered to him and he
does any act in relation to them that is inconsistent
with the ownership of the goods by the seller.
3. When, after the lapse of a reasonable time, he
retains the goods without intimating to the seller
that he has rejected them.
 Case-M G Sheth & ORS vs Lam
Thye Co Ltd (1954) 20 MLJ
230
Fact :
There was a sale of Indian titles by description B.Y.M.H Brand
First Class Roofing Tiles and Ridges (Feroke Size). The goods
shipped by the appellants did not correspond with the
description. When the goods arrived, the respondent s wrote
a letter of complaint. Meanwhile, the goods were taken from
the ship in a lighter. Some were landed in Butterworth and
the rest were taken to Alor Setar where they were delivered
to a sub-purchaser.

Held :
The respondents’ dealing with the consignment constituted an
acceptance, and were confined to their remedy in damages.
Case-Ganda Edible Oils Sdn Bhd v
Transgrain B V (1988) 1 MLJ 428
Fact :
The parties had entered into a contract for the purchase of 500
metric tons of palm oil. The respondents shipped about 481
metric tons instead on 29 March 1984. The appellants rejected
the shipment on 13 April 1984.

Issue :
Whether there was implied acceptance since there was a delay
in rejection of the goods.

Held:
the appellants had accepted the goods by acquiescence,
applying section 37(1) of the Sale of Goods (Malay States)
Ordinance 1957 read with section 42 of the said Ordinance.
Section 43 SOGA 1957-Buyer not bound to return rejected goods
‘Unless otherwise agreed, where goods are delivered to the buyer
and he refuses to accept them, having the right so to do, he is not
bound to return them to the seller, but it is sufficient if he intimates
to the seller that he refuses to accept them.’

Section 44 SOGA 1957-Liability of buyer for neglecting or refusing

delivery of goods
‘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 such request, take delivery of the goods, he is
liable to the seller for any loss occasioned by his neglect or refusal to
take delivery, and also for a reasonable charge for the care and
custody of the goods’

Section 56 SOGA 1957

‘where the buyer wrongfully neglects or refuses to accept and pay for
the goods, the seller may sue him for damages for non-acceptance. ‘