TAMIL NADU NATIONAL LAW UNIVERSITY, TIRUCIHRAPALLI

Submitted for the internal assessment for the course of

B.A., LL.B (Hons.) – Third Semester
Academic Year: 2020-2021

Subject: Law of Contracts II

“Time as an essence of Sale Contracts” : A study through Sale

Contracts

Course Faculty: Prof.. , Submitted By:

Assistant Professor (Law), Ms. Juanita Roch, (BA0190026)
TNNLU
 DECLARATION

I JUANITA ROCH , Register Number BA0190026 , hereby declare that this

Research Paper / Research Project work entitled “TIME AS AN ESSENCE OF

SALE CONTRACTS” : A STUDY THROUGH SALE CONTRACTS has been

originally carried out by me under the guidance and supervision of

MS. AMMAKANNU. SE, Assistant Professor (Law) , Tamil Nadu National Law

University, Tiruchirappalli - 620 027. This work has not been submitted either in

whole or in part of any Degree / Diploma at any University.

Place : Tiruchirappalli

Date : 06.11.2020
 TABLE OF CONTENTS

1. INTRODUCTION…………………………………………….……………………….....7

2. CONDITIONS AND WARRANTIES ……………………...…………….………...

…...8

2.1. THE CONCEPT OF WILLS (WASIYAT) ………...………………......................…8

2.2. FORMALITIES OF A WILL……………………...……………………..…..………9

2.3. CAPACITY TO MAKE A WILL…………………………………….………………9

3. STIPULATION AS TO TIME…………………………………………………….

…....10

3.1. DELIVERY OF GOODS……………………..……………………………..………11

3.2. PAYMENT OF THE PRICE….

……………………………………………………..11

4. OBLIGATION OF THE SELLER……………….……………………………….……

14

5. CONCLUSION…………….……………………………….……………….……………
4
 CHAPTER 1
Introduction
One of the unexceptional characteristics of sale of goods is the clause, “time is of the
essence”. Time has always played a crucial role in contracts involving“sale of goods.”In
contracts“for the sale of goods,”time is associated predominately two aspects, (i) in relation
to delivery of goods and (ii) in relation to“payment of price.”“As regards to the time fixed for
the delivery of goods is usually held “to be the essence of the contract.”“A seller's failure to
hit a delivery date is usually considered a material breach of the contract even without a "time
is of the essence" provision.”
Hence, if the seller makes a delay of the time fixed for delivery then the contract is
held to be“voidable at the option of the buyer.” In contrary to this concept, the general rule in
respect to the time fixed for the payment of price, “time is not deemed to be of the essence of
the contract”. This is because if the buyer misses the payment dates, a late payments can
always attract heavy interests on the due amount. Thus, it proves that time plays an extremely
important role in sale of goods contract.
This research aims at studying the basic principles regarding contracts involving sale
of goods based on the“Sale of Goods Act, 1930”(SGA) and analysing the essence of time in
such contracts. The research aims to analyse the stipulation as to time in contracts involving
sale of goods and to study the obligation of the seller in concern to the time of delivery. It
also aims at understanding time as the subject matter in distinguishing“sale and agreement”to
sell essence of time in the transfer of ownership and delivery of goods.
The phrase “time is the essence” urges the parties involved in the agreement to fulfill
the requirements in the stipulated time agreed on by them. Moreover the very conception of
considering time as an important essence of the contract involving sale of goods is to
safeguard both the seller and the buyer, if at all anyone fails to meet the limit. When a sale is
fixed and a particular promise is to be performed on an particular date, it the responsibility of
the promisor to carry out the contract before exceeding the usual business timings. Here the
buyer gets a upper hand of the situation if the delay was caused by the seller.
He may even reject the goods on the grounds of it being delivered beyond the
stipulated time by the seller. Time is definitely an essence of a contract involving sale of
goods. The failure of discharging a contract in the stipulated time would defeat the very
purpose of the contract, i.e., strays away from the very motive of such a contract. In short, if a
party to contract fails to fulfil the performance of the same at the stipulated time decided by
both the parties, then the other party could choose to avoid the contract as such.
Time is the most fundamental characteristics of a valid contract. Determined by
various circumstances, time could, in some instances, make the “terms and conditions” of a
contract and yet in other circumstances plays the most important role of “reasonable time.”
The concept of reasonable time has always been a question in the study of contracts. When in
a contract, there is not any specific time mentioned for the performing a contract then it
assumed to be performed inside the range of “reasonable time.”
A contract cannot be performed in accordance to the convenience of one party, i.e.,
the contract should be performed in accordance to the time stipulated by both the parties and

5
in the “specified manner and time.”If the parties fail to mention the specified time in the
contract then it is deemed to be performed within the reasonable time limit.

Meaning and Scope of Time

The duration or the limit within which a contract must be performed could be understood as
the time in a contract.

6
 CHAPTER 2

Conditions and Warranties

The contract for the sale of goods has an overwhelming application in the business
world and is a special type of ownership in the corporate field. These contracts were part of
the Indian Contract Act, 1872, and are now regulated under the Sale of Goods Act, 1930.
Notwithstanding explicit laws, the rule is established in the Indian Contract Act of 1872, even
as the game plan for the selling of products was usually utilized and an uncommon institution
was required. The particular provisions of the Indian Contract Act are actually correlative to
one another, implying that all laws are relevant to agreements of offer.

Whenever we buy products such as computer devices, and other electronic gadgets

etc., we ask the vendor to ensure the warranty so that regardless of whether the item is
discovered to be flawed after buy, we can rapidly supplant or fix the item since we are
stressed over the guarantee time frame. So as to choose the cure for which the gatherings can
seek after in case of an infringement by any side, the words "Condition" and "Warranty" are
set out in the agreement of offer. Here, in this paper, we will address the Sale of Goods Act,
1930, and perceive how these terms are depicted in relation to the act, along with their
variations and their legitimateness.

The basic aim for the subsuming of conditions and warranties in a contract involving sale of goods
under the Sale of Goods Act, is to safeguard the interest of the consumer in regard to issues
pertaining to:
the time pertaining to payment and “the delivery of goods”
 “the time pertaining to the payment and the “delivery of goods”.
 “the right to turn down the goods and pass up the contract and “even claim damages in
certain situations.”
 “protection of title and possession of goods purchased.”
 “merchantability and fitness of goods, for the purpose of their sale;”
 “Correspondence of the goods sold with the description or sample as offered by the seller.”

Section 12 of the Article defines condition as “as a stipulation essential to the main purpose of
the contract, the breach of which gives rise to a right to treat the contract as repudiated.” Certain
conditions must be met with as needed by the agreement of offer or by whatever agreement. The
contract all in all depends relying on the prerequisite that it depends on a fundamental precondition,
on the other hand, an assurance that the vender embraces to fix or supplant in case of any flaw in the
item, is known as a warranty.
Sections 11 to 17 of the Sale of Goods Act spread out the guidelines identifying with
the Conditions and Warranties of the goods. Section 12 of the Act draws a qualification
between a condition and a warranty. The understanding of the clause is what the assessment
of a condition or warranty relies on. Rather than the shape of the term used in it, it should be
the function on which the interpretation is based.

7
 With regards to the Sale of Goods Act, 1930, a condition is an establishment of the
whole contract and an essential part for playing out the contract. To regard the agreement as
repudiated there should be a break of the conditions that gives the privilege to the aggrieved
party. If the vendor fails to comply with the condition, the purchaser may refuse to receive
the products or may repudiate to the contract. The client can also reclaim the costs and even
look for harms on the off chance that he has just paid in case of a penetrate of the contract.

“For example, Sohan wants to purchase a horse from Ravi, which can run at a speed
of 50 km per hour. Ravi shows a horse and says that this horse is well suited for you. Sohan
buys the horse. Later on, he finds that the horse can run only at a speed of 30 km/hour. This is
a violation of condition, since the buyer's condition is not met. Additionally, the conditions
can be delegated as follows.

Expressed Condition
The word reference value of the phrase is defined as an assertion in a legal agreement that
states that something must be performed or occurs in the contract. Those conditions which are
integral to the validity of the contract and which are integrated into the contract at the request
of all parties are to be conveyed as conditions.

Implied Condition
There may be a few inferred conditions that are agreed by the parties of different forms of
sales contracts. State for instance the suspicion during sale by portrayal or sale by test.
Sections 14 to 17 of the Sale of Goods Act, 1930 defines Implied conditions. Implied
conditions are viewed as expected by the parties as though it is joined in the contract itself,
Unless in any case concurred.
 Implied condition as to title
 Implied condition as to the description
 Implied condition as to sale by sample
 Implied condition as to Sale by sample as well as a description

Warranty
A composed guarantee that is security and an extra specification to the principle reason for
the contract is called Warranty. The wronged party does not repudiate the whole contract in
the case of a violation of the warranty, but may, if applicable, promise damages. In relation to
the penetration of the condition, the consumer cannot treat the goods as repudiated in the
violation of the warranty.

Kinds of Warranty:
 Expressed Warranty
Warranties that are usually accepted by the both sides and are used in the contract when
warranties are to be conveyed.

8
 Implied Warranty
The warranties entered into are those which the parties have agreed to have been included in
the contract of offer, despite the fact that the parties have not expressly remembered them for
the contract.

 Warranty as to undisturbed possession

 Warranty as to freedom from Encumbrances
 Implied warranty to disclose Dangerous nature of the goods sold

9
 CHAPTER 3

Stipulation As to Time

Time of Payment and Delivery of Goods

“ ”

Section 11 of the Act puts down that generally time is not of significance to the
contract of sale, however it relies on the regards to a contract whether any type of stipulation
is of significance to the contract of sale or otherwise. Appropriately, in a purchase, if the
purchaser falls short to pay in time, the seller would certainly not be qualified to renounce the
contract unless he certainly specifies so in the contract.

In Sundara Bayamma v. Venkateswara & Co.,1 the court has held that if the parties regard the
advance payment as a crucial element of the agreement and the actual payment of the
advance takes place only after the offer has been withdrawn, there will be no enforceable
agreement. The timing of payment cannot remain central to the contract if the seller
acquiesces to the delay in payment. If the customer/buyer approves the postponed supply of
goods without objection, exact same is the instance in Burn & Co. Ltd. v. Morvi State 2, there
was an agreement regarding supply of wagons as well as the remittance of the rate was to be
made in three phases. The buyer was unable to fulfil the payment at the 2nd phase, yet the
distributor still provided the part of the wagons. After such a conduct of the vendor, the hold-
up in settlement was declined as a ground for rescission of the contract.

In Hind Techno Machines (P)Ltd. v. Jaipur Wire Industries (P)Ltd.3 there was hold-up
in shipments of the goods yet the customer remained to approve them without objection at the
ideal time. The customer was, consequently, regarded to have actually renounced his right to
demand hold-up as well as therefore repudiate the contract. In yet another case, it has actually
been observed that whether “time of delivery” of items is of significance or of essence to a
contract relies on the conditions of each situation and is peculiar for each concerned case.

The factor for this is that a "mercantile contract is not always an isolated transaction"
yet a part of chain of occasions and also consequently any kind of gap in shipment might lead
to damage to the purchaser/buyer. In such a circumstance,“delay in delivery of goods”runs as
an injury to the purchaser and the time would certainly be of significance to the contract.
Thus, time becomes an essence of the contract. This was put forward by the judgement on
Orissa Textile Mills v. Ganesh Das.4 In cases where the“time for the performance of
contract”iis extended or held forth then in such circumstances, that very extension of the time
becomes an essence to the concerned contract.5

1
AIR 1955 N O C (Andh.) 5825.
2
(1926) 30Cal WN 145.
3
(1988) 2 Raj LR 56.
4
AIR 1961 Pat 107.
5
British Paints (India) Ltd. v. Union ofIndia, AIR 1971 Cal. 39

10
 CHAPTER 4

Obligation of the Seller

11
 CHAPTER 5

Conclusion

12
 BIBLIOGRAPHY
Primary Sources
1. The Sale of Goods Act, 1930.
2.
Secondary Sources
3. Mulla, The Sale of Goods Act & The Indian Partnership Act (11th edn, Lexis Nexis 2019).
4. John Edmund Syannard, ‘SO WHAT IF TIME IS OF THE ESSENCE?’ (2005) SJLS
114,136.

5. Alok Kumar, ‘LAW OF SALE OF GOODS’ (2011) 5 JILI 395, 397.

6. Majlinda Belegu, ‘Time of Goods Delivery, Fulfilment of an Obligation by Seller’ (2014)

1 ESJ <
https://www.researchgate.net/publication/313837393_TIME_OF_GOODS_DELIVERY_
FULLFILMENT_OF_AN_OBLIGATION_BY_SELLER> accessed 27 September 2020.

7. Saradamani Kandappan v. Rajalakshmi And Others (2011) 12 SCC 18.

8. K Abdukhadar v Plantation Corpn of Kerala Ltd, Kottayam AIR 1983 Ker 1 (time was
held not to be of essence of the contract:
see [95.127] and following).
9.

13