Delivery & Price

Price against Delivery

Unless specifically agreed otherwise, the duty of the seller to deliver the goods and the duty of the buyer to pay the price, are simultaneous. The seller must stand ready, willing and able to give possession of the goods for the price and the buyer must stand ready willing and able to pay the price in return for possession of the goods. The duty of each is dependent upon the other being ready, willing and able in the manner above.

The Sale of Goods Act provides that the above mutual obligations of the buyer and seller are conditions.  This means that failure by either side to perform, allows the other person to terminate the contract and claim for damages.  Alternatively, he may elect to affirm the contract, waive the breach and/or seek damages or interest.

These presumptions can be easily displaced by the agreement of the parties, to the contrary.  Credit is commonly provided so that the payment and delivery obligations are not simultaneous.


Delivery Possession and Title

The Sale of Goods Act provides default rules in relation to delivery, which may be modified. Delivery has a special meaning in this context and does not refer to the transportation of goods from A to B.  Delivery is the transfer of possession of goods. It is the yielding or giving of possession.  It may happen at the seller’s premises and may not necessarily imply transportation to the buyer’s premises.

Ownership/title to the goods may, or may not pass with their possession. Ownership will commonly transfer with possession. Under the default rules, it commonly transfers and vests in advance of delivery of possession of the goods.  Equally, the passing of ownership may be postponed. The delivery of possession has considerable legal significance. Possession of goods gives significant rights, apart from the issue of transfer of ownership.


The Required or Conforming Goods

The seller is obliged to deliver the goods in accordance with the terms of the contract.  They must be delivered to the agreed place at the right time and in the right amount.  If specific ascertained goods are contracted to be sold, they must be delivered.  If unascertained (i.e.  generic) goods are to be provided, then conforming goods must be delivered.

When the goods are delivered in accordance with the terms of the contract, the buyer must accept delivery.  If the buyer does not do so, the seller may sue for non-acceptance, provided that the goods are delivered in conformity with the contract.


Methods of Delivery

Delivery may occur by physical handing over of the goods or by delivery of control of them.  Where the goods are held by a third party and this accords with the terms of the contract, delivery may be satisfied by the third party acknowledging that he holds the goods for the buyer, rather than the seller.

The seller may be obliged to remit the goods to the buyer.  Where a transporter is the seller’s agent, this is not sufficient delivery.  Unless otherwise agreed, the seller is bound to make a reasonable contract with the carrier on behalf of the buyer.  In this case, delivery of possession takes place when the goods pass to the carrier.

Where the goods are already in the buyer’s possession in some other capacity, for example, on loan or as a bailee in another context, delivery may be notional. In this case, there is a change in the capacity in which the buyer/ bailee holds the goods.

Where there are title documents to goods, the principal example being the bill of lading, the transfer of the title documents constitutes a transfer of the goods.  It gives custody and legal control of the goods to the buyer.


Delivery Issues

In international sales, it is common to specify the place of delivery.  See the separate sections on international sales and the terminology in relation to the place of delivery. In particular, the INCOTERMS are shorthand descriptions for defined obligations in respect of the place and other aspects of delivery, as well as other matters, relevant to the sale of goods.

The cost of delivery of the goods is generally borne by the seller. This is the default position. The goods must be put in a deliverable state.  Where this is to be done depends on the place of delivery. Commonly, the contract provides for delivery to or at a particular point.  All costs of delivery up to this point, are to the seller’s account

In the absence of agreement otherwise, the place of delivery is the seller’s place of business.  If he has no place of business, then it is his residence.  It is a matter for the buyer to transport the goods to these premises. If, however, the goods are known by both parties to be at a particular third location, then the presumption is that this place is the place of delivery.

Where the contract allows for the goods to be sent to the buyer, there is a presumption that delivery to the carrier constitutes so-called “constructive “delivery.  This is the case regardless of who nominates the carrier.


Claim for Non-Delivery

If the seller does not deliver the goods, the buyer can sue for non-delivery.  If the price has been paid, the buyer can recover it.  If the goods which are delivered do not conform to the contract’s requirements, the buyer may be entitled to reject them or retain them and sue for breach.

If the goods are not delivered, the buyer may sue for non-delivery.  Where the goods agreed to be sold are specific, a court may grant an order for the specific delivery of the goods.  Most commonly, goods are not unique and compensation only is granted for non-delivery.


Time for Delivery

The time for delivery may be specified in the contract.  It may be a fixed time or it may be during a certain period.  When no specific date of delivery is fixed, it must be delivered at a reasonable time. Where no fixed time of day is provided, the goods must be delivered at a reasonable hour.

What constitutes a reasonable period for delivery will depend on the circumstances.  This may be determined by the existing practice between the parties or by custom or the nature of goods.

Where goods are delivered late, the buyer may sue the seller for damages for late delivery.  If the contract provides that delivery is to be at a specific time, or that time is to be of the essence, the buyer may reject the goods and sue for compensation in the case of late delivery.

The Sale of Goods Act provides that the question of whether time is of the essence or not is one for the contract.  The courts often hold that time is presumed to be of the essence. Even if time is of the essence, the buyer may choose to waive the breach and sue for compensation only or alternatively waive the breach entirely.

The buyer may waive his right to terminate the contract if he leads the seller to believe he will continue to perform it. Where a buyer waives a strict time obligation, he may give reasonable notice of a new date and make time of the essence once again.  Reasonable notice of the new date must be given.


Quantity

The default position is that the exact quantity and amount of goods must be delivered.  Under the Sale of Goods Act, the buyer may reject an incorrect quantity, other than in the case of a trifling or minimal deviation.  Similarly, the buyer is not obliged to accept the goods in instalments, unless he specifically so agrees. The rights of the buyer to reject goods of the wrong quantity may be varied by the usage in a particular trade, by an agreement to the contrary or by a course of dealing.

Where less than the requested quantity is delivered, the buyer may reject the goods delivered or accept the amount delivered and pay a proportionate amount.  In either case, the buyer is entitled to sue for compensation unless he waives that right.  This is a claim for non-delivery.

Where a greater than agreed amount is delivered, the buyer may reject the whole.  Alternatively, he may accept the amount delivered and reject the rest.  He may, alternatively accept the whole, and pay for them at the contract rate with a proportionate price increase,

Where conforming goods are supplied together with non-conforming or other goods, the above options apply. The whole may be rejected.  Alternatively, the conforming goods may be accepted and the rest rejected.  In this context, the description applies to the broad description of the goods rather than incidental or alleged defects.


Acceptance and Breach

It does not necessarily follow that because the buyer has a right to reject the goods, that the contract is terminated.  This will depend on the interpretation of the contract.  In some cases, the seller may be entitled to redeliver conforming goods.

The buyer is obliged to accept the goods and pay for them in accordance with the terms of the contract.  If the buyer fails to accept or fails to pay the price, the seller has a statutory right under the Sale of Goods Act to sue for the price or for non-acceptance.  Where the buyer fails to take delivery, the seller can sue for damages for failure to take delivery.

A buyer accepts the goods, if he indicates acceptance or does anything inconsistent with the seller’s ownership or if he retains them, without rejecting them other than for good reason.  If the buyer wrongfully rejects the goods, he breaches the contract.

Acceptance and delivery are separate events.  Each can happen without the other.  The buyer has a duty to accept and take delivery of the goods.  If the buyer is in breach, the seller may be entitled to compensation for storage costs, redelivery etc.


Price

The buyer’s obligation to pay is subject to the terms of the contract.  The price will generally be agreed or specified.  If no price is specified, a reasonable price must be paid. It is possible that the non-existence of a price means that there is no contract.  This Sale of Goods provisions requiring payment of a reasonable price, pre-suppose a contract.

Payment of the price requires payment of the whole price.  It is not good consideration under contract law to offer part of the price, instead of the whole price due.  However, payment of a lesser price combined with some other variation of the contract may constitute good consideration and may be permissible

Payment by cash is presumed to be required.  Payment by other means such as a cheque, credit card, debit card may be agreed, expressly or impliedly.

The place of payment may be specified.  The seller’s place of business is normally the place of payment.  The buyer is obliged to seek out the seller.


Time for Payment

If the time for payment is specified in the contract, it is a matter of interpretation as to whether the time of payment is of the essence.  The presumption is that time is not of the essence.

Where payment is made late, the seller will be entitled to interest or damages for late payment.  There are statutory provisions providing for payment of interest on commercial debts.

Late payment does not generally entitle the seller to terminate the contract.  He may be able to terminate for non-acceptance. He may be entitled to terminate if he gives notice of his notice to resell and the buyer does not tender the price within a reasonable time or if the goods are perishable.

If payment is due before delivery, the seller may withhold delivery until payment.  The seller may have a lien if the goods are in the possession of the buyer.  There may be a right to a stoppage in transit for the seller where the buyer becomes insolvent.


Delivery in Consumer Sales

Where the buyer deals as consumer, the general provision by which the seller is bound to send the  goods within a reasonable time in the absence of specific provision otherwise, does not apply. Unless the parties otherwise agree, the seller shall deliver the goods by transferring the physical possession or custody or control of the goods to the buyer without undue delay and not later than 30 days from the conclusion of the contract.

If the seller does not deliver the goods at the time agreed with the buyer, the buyer may require the seller to make the delivery, within an additional period of time appropriate to the circumstances. This provision does not apply if

  • the seller has refused to deliver the goods;
  • if delivery of goods within the time frame agreed with the buyer is essential taking into account all the relevant circumstances at the time of conclusion of the contract; or
  • if the buyer has informed the seller prior to conclusion of the contract that delivery on a specified date is essential.

Where the seller fails to deliver the goods

  • within the additional period of time for delivery afforded  above,
  • by the date specified by the buyer (as an essential date), or
  • by the agreed date where delivery of the goods by that date is essential taking into account all the relevant circumstances at the time of the contract, the buyer may treat the failure as a breach of a condition of the contract which entitles the buyer to repudiate the contract.

If the buyer repudiates the contract, in accordance with the above provision, the seller shall without due delay reimburse all sums paid under the contract..


References and Sources

Irish Texts

Brian Doolan, A Casebook on Irish Business Law (1989)

Henry Ellis, Modern Irish Commercial and Consumer Law (2004)

Michael Forde, Commercial Law, 3rd Edition (2005)

Linehan, Irish Business and Commercial Law (1995)

McCormack, Reservation of Title 1990 (1994)

Patrick O’Reilly (ed.), Commercial and Consumer Law  (Statutes) (2000)

Sean Quinn (ed.), Statutes Revised on Commercial Law, 1695-1913 (1994)

Fidelma White, Commercial Law (2003) (2nd Ed 2012)

Fidelma White, Commercial and Economic Law In Ireland (2011)

Vincent Grogan, Thelma King and Edward J. Donelan, Sale of Goods and Supply of Services: A Guide to the Legislation (Law Society of Ireland, 1983)

Paul Anthony McDermott, Contract Law (Butterworths, Dublin, 2001)

2011 Report of the Sales Law Review Group,

UK texts

Atiyah and Adam’s Sale of Goods 13th Ed (2016)

Bridge, Benjamin’s Sale of Goods 9th Ed (2015);

Bridge, The Sale of Goods 3rd Ed (2014)

Blackstones’ Statutes Commercial and Consumer Law 2017

Goode on Commercial Law 5th Ed 2017

Legislation

Sale of Goods Act 1893

Sale of Goods and Supply of Services Act 1980

Electronic Commerce Act 2000

Criminal Justice (Theft and Fraud Offences) Act 2001 (50/2001)

International Carriage of Goods by Road Act 1990 (13/1990)

European Union (Consumer Information, Cancellation and Other Rights) Regulations 2013 (S.I. No. 484 of 2013)

European Communities (Certain Aspects of the Sale of Consumer Goods and Associated Guarantees) Regulations 2003 (S.I. No. 11 of 2003)