Performance of the Contract of Sale

SUBMITTED BY-

BHAVIK JAIN

PROGRAMME – BBA LLB, SEMESTER-II

DIVISION- B

PRN- 23010224078

OF

SYMBIOSIS LAW SCHOOL, NOIDA

SYMBIOSIS INTERNATIONAL (DEEMED UNIVERSITY)

In

March, 2024

UNDER THE GUIDANCE OF

-Dr. Sneha Singh

(ASSISTANT PROFESSOR)

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TABLE OF CONTENTS

S.NO Particular Page No.

1. Introduction 3

2. Research Questions 4

3. Descriptive Analysis 4-6

4. Case Laws 6-7

5. Conclusion 7-8

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INTRODUCTION

The performance of the contract of sale constitutes the basis for the commercial law and
practice in our country, building an essence for the trade practices worldwide. At its
foundation, a contract of sale defines the rights and duties of a buyer and a seller and their
performance with respect to setting the framework for the exchange of products or services
for monetary consideration. These are the dynamic transactions that flow across the nation
which lays down the economy of country directly and indirectly facilitating the flow of goods
and services across markets and fostering trust within business transactions.

Exploring the concept of performance of the contract sale of needs to be examined through
various dimensions which is duly entailed within the section 31 1 of the Sale of Goods Act,
1930 stated as “It is the duty of the seller to deliver the goods and the buyer to accept and
pay for them, in accordance with the terms of the Contract of Sale”, which stipulates that
sellers bear the responsibility to deliver goods while buyers are obligated to accept and make
payment as per the terms outlined in the contract of sale. This provision underscores the
fundamental duties of both parties, emphasizing the importance of adhering to contractual
terms for the successful performance of sales contracts . To begin, contractual performance
includes adhering to the parties' agreed-upon terms and conditions, which include quality
standards, delivery timetables, and payment methods. Secondly, market dynamics
significantly influence the execution of sale contracts, including fluctuations in supply and
demand, pricing mechanisms, and competitive pressures. Moreover, legal frameworks
governing sales transactions play a crucial role in ensuring compliance, enforcing obligations,
and providing recourse in case of disputes.

Therefore, the performance of the contract sale of abridges the intricate interplay between
legal, economic, and relational factors. The mechanism does not only involves sale and
purchase of goods and services but also fosters accountability, transparency, and stability
within commercial ecosystems. This research project seeks to unravel the complexities
surrounding contract performance, shedding light on its implications for businesses,
consumers, and the broader socio-economic landscape.

RESEARCH QUESTIONS

1
Sale of Goods Act, 1930, §31, No. 10, Acts of Parliament, 1949 (India).

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Q1) what are the most common challenges and obstacles faced in the performance of sales
contracts, and how can they be mitigated?

Q2) Can a Contract Entered into by the Guardian of an Infant in Respect of Sale or
Purchase of Immoveable Property be Specifically Enforced?2

Q3) what are the financial imputations that would take place at the time of non-performance
of the delayed performance of sales contracts for businesses?

DESCRIPTIVE ANALYSIS

The performance of contracts of sale is a multifaceted aspect of commercial transactions that

encompasses various legal, economic, and relational dimensions. Analysing this topic
requires delving into the intricacies of buyer-seller interactions, market dynamics, legal
frameworks, and the broader implications for businesses and consumers alike.

The performance of sale contracts is a vital aspect of commercial law, underpinning the
smooth functioning of markets and fostering trust between buyers and sellers. Legal
principles surrounding the performance of sale contracts are shaped by contract law, which
provides a framework for interpreting and enforcing the terms of agreements between parties.
This summary will explore key legal aspects related to the performance of sale contracts,
including contractual obligations, remedies for breach, and relevant case law.

Contractual performance entails the fulfilment of obligations outlined in the sale contract.
These obligations typically include the delivery of goods or services, adherence to quality
standards, and payment of the agreed-upon price. Certain case laws let us delve deeper into
into how courts interpret and enforce these obligations. One such relevant case 3 of Hadley v
Baxendale (1854)3, the court established the principle of foreseeability in assessing damages
for breach of contract. This principle holds that damages can only be awarded for losses that
were reasonably foreseeable by the parties at the time of contracting. Therefore, sellers may
be liable for damages resulting from delays in delivery if such delays were foreseeable and
within the contemplation of the parties.

2
(1948) 61 LW (JS) 79
3
9 Exch 341

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The resolution for breaches in sale contracts is contingent upon the specific circumstances
and magnitude of the breach. Typical courses of action include seeking damages, pursuing
specific performance, or opting for contract termination. Damages are frequently used as the
primary solution when there is a breach of contract. The purpose of damages is to provide
compensation to the party that did not breach the contract for any harm or losses they have
incurred due to the breach. On the other hand, specific performance is a different type of
remedy that involves requiring the party that breached the contract to fulfil their obligations
as outlined in the agreement. This remedy is usually sought when damages alone are
insufficient to adequately compensate the non-breaching party for the losses they have
suffered. Termination of the contract is another remedy for breach of sale contracts. This
remedy allows the non-breaching party to end the contract and seek damages for any losses
suffered as a result of the breach.

The relevant answer to the second research question examines the enforceability of contracts
for the purchase or sale of immovable property involving minors, highlighting the historical
precedents and legal complexities surrounding this issue. It begins by stating that such
contracts are prima facie unenforceable unless found to be for the benefit of the minor, as
established by the Privy Council's ruling in Mir Sarwarjan v. Fakhruddin Mahomed
Chowdhuri (39 Cal 232)4. This principle, reinforced by subsequent judicial interpretations,
underscores the inability of guardians to bind minors to contracts for immovable property.

Despite dissenting views, including Justice Devadoss's stance in Kasivasi Chidambara

Swamigal v. Ramakrishna Reddiar, the Privy Council's rulings have consistently upheld the
principle that guardians lack the authority to bind minors to such contracts. Exceptions exist,
such as contracts entered into by joint family managers or those incorporated into court
decrees.

Legislative intervention through the Transfer of Property Amendment Act of 1929 introduced
Section 53-A5, providing legal sanction to the doctrine of part performance and safeguarding
minors' interests in property transactions. Furthermore, the Privy Council's interpretation of
Section 53-A establishes that contracts entered into by guardians for the benefit of minors can
be specifically enforced, marking a departure from previous jurisprudence.

4
(1907)ILR 34CAL163

5
Transfer of Property Amendment Act, 1929, §53-A, No. 10, Acts of Parliament, 1949 (India).

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In summary, the text provides a comprehensive overview of the legal complexities
surrounding contracts for the sale of immovable property involving minors, emphasizing the
overarching principle that such contracts are unenforceable unless deemed beneficial to the
minor.

On the other hand, the delayed performance of sales contracts poses significant financial risks
for both parties involved. When a seller fails to deliver goods on time, buyers may incur extra
expenses in sourcing alternatives or face production delays, impacting their profitability.
Moreover, delayed deliveries strain business relationships and jeopardize future
opportunities.

The Sale of Goods Act, 1930, offers remedies for breaches in such contracts. Section 54 6
enables buyers to treat the contract as void due to late deliveries and seek damages for
resulting losses. These damages encompass various financial burdens directly caused by the
delay.

Furthermore, Section 55 permits buyers to demand specific performance if the goods hold
unique importance. This provision empowers courts to compel sellers to fulfill their
contractual obligations promptly.

A notable case, Hochster v. De La Tour (1853) 2 E & B 678 7, illustrates these principles.
Hochster successfully sued De La Tour for damages when the latter reneged on an
employment contract, securing compensation for lost opportunities during the contract's
breach.

CASE LAWS

It is necessary to cite relevant case laws in this research project for reference. These are –

 The case of Robinson v Harman (1848)8, the court held that damages should aim to
put the innocent party in the position they would have been in had the contract been

6
Sale of Goods Act, 1930, §54, No. 10, Acts of Parliament, 1949 (India).
7
(1853) 2 E & B 678
8
1 Exch 850 (Jan. 18, 1848)

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 performed. Therefore, sellers who fail to deliver goods as promised may be required
to compensate buyers for any financial losses incurred as a result of the breach.

 In the case of Beswick v Beswick (1968) 9, the court granted specific performance to
the plaintiff, requiring the defendant to transfer shares as agreed under a sale contract.
Therefore, sellers who fail to deliver goods as promised may be compelled by the
court to fulfill their obligations under the contract.

 In the case of Hochster v De La Tour (1853) 10, the court held that a buyer could
terminate a contract for the sale of services before the agreed-upon start date if the
seller repudiated the contract. Therefore, buyers may have the right to terminate sale
contracts if sellers indicate an intention not to perform their obligations.

CONCLUSION

In conclusion, the performance of a contract of sale is a critical aspect of any business

transaction. It ensures that both parties fulfill their obligations and achieve the desired
outcomes. The quality of content and performance in a contract of sale is of utmost
importance as it directly impacts customer satisfaction, business reputation, and long-term
success.
One key element of a successful contract of sale is the delivery of goods or services that meet
or exceed customer expectations. High-quality products and services not only satisfy
customers but also enhance their trust in the seller. By providing accurate descriptions,
specifications, and representations of the offerings, sellers can establish clear communication
and avoid any misunderstandings or disputes.
Additionally, the performance of a contract of sale involves adherence to agreed-upon
timeframes. Timely delivery is crucial as it demonstrates the seller's commitment to their
obligations and allows the buyer to plan and utilize the purchased goods or services
effectively. Any delays in delivery can result in customer dissatisfaction, financial losses, and
potential damage to the seller's reputation.

9
[1967] UKHL 2, [1968] AC 58
10
(1853) 2 E&B 678

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Moreover, the provision of after-sales support is an essential component of a contract of sale.
Sellers should offer assistance and address any issues or concerns that may arise after the
sale. This includes providing warranties, repair services, or replacements for defective or
damaged goods. By offering reliable after-sales support, sellers can build customer loyalty,
enhance their reputation, and foster long-term relationships.
Furthermore, technology plays an increasingly significant role in the performance of a
contract of sale. Businesses can leverage digital platforms and tools to streamline their
processes, improve efficiency, and enhance the overall quality of their offerings. This
includes utilizing e-commerce platforms, customer relationship management systems, and
inventory management software to ensure smooth and effective sales operations.