The obligations of the parties, being contractual in nature, are governed by the general law of contracts. Each in accordance with his contract is bound to perform, unless by some act or failure to act on the part of the other his obligation is discharged and his performance excused.
The obligation of the seller is to furnish the goods, as agreed upon, the buyer to pay therefor. Yet the performance of each will be conditioned upon the performance of the other according to the terms of the contract. The seller may be bound to deliver the goods on credit, or if it is a cash sale, he need not deliver at all, but only make tender, unless he receives the price. So, if the seller is to deliver at a place, he cannot perform by making delivery or tender elsewhere unless the buyer waives that obligation. Certain particular obligations are briefly noted.
A contract of sale must be performed within the time stated, unless strict compliance is waived by the other party.
Under the general law of contracts we note that time is of the essence of a mercantile contract; or in other words, that a contract must be performed or performance tendered, within the time stated, or, if none is stated, then within a reasonable time. The other party may accept a belated performance, or may refuse to accept it. If he accepts a tardy performance the question arises whether he may reserve his right to such damages as are occasioned by the breach.
If goods arrive late the buyer may usually accept them and still claim damages for the delay. His acceptance will not in itself amount to a waiver of his right to his damages if by such delay he has sustained any. Yet the evidence in a particular case might show a waiver; as where, knowing all the facts he had voluntarily paid the full price; or, where he had made no protest or objection.
Stipulations as to place are material in a contract of sale, and performance must be tendered at such place, unless strict compliance is waived.
Each party must perform at the place agreed upon. If goods are at a distance from the buyer, and are to be furnished later or upon order, it is usually implied that the seller is to deliver them to a carrier. The carrier is thus made the agent of the buyer rather than the agent of the seller and, as has been seen, title then passes and the risk during transportation is upon the buyer. It requires a special undertaking on the part of the seller to make him liable to deliver to the buyer's place of business in the sense that the carrier is his agent. Where the buyer is at the place where the goods are located and there is no agreement to the contrary expressed or implied from custom or otherwise, the seller is under no obligation to deliver.
The seller is bound to deliver the amount purchased and the buyer must accept that amount. The buyer need not accept either a larger or smaller amount. If a smaller amount is received he is bound to pay for it at the contract rate, subject, however, to his damages, if any.
(a) Seller must deliver proper quantity.
It is not requisite in contracts to sell that any certain amount be ordered. It need only be capable of reduction to certainty. But there must be in a contract to sell that mutuality required in all contracts. One cannot be bound unless the other is bound. Therefore an agreement by one to sell at a certain price all such goods as another may desire, is not a contract at all. It may be an offer which the other may accept until withdrawn; but it may be withdrawn at any time. On the other hand a promise by one to sell and another to buy all that the buyer may require during a certain period is good, even though it cannot be absolutely stated that the buyer will require any such goods during that season; for the buyer has foregone his right to purchase elsewhere and this constitutes the consideration for the seller's promise.82
The quantity that is tendered must be the quantity that was agreed upon; the seller is not obliged to take less; and he cannot be obliged to take more unless given by way of good measure.
(b) Use of words "about," "more or less," etc.
Where a contract is made to sell a certain quantity of goods as for instance, 40,000 tons of coal; and the quantity is recited with the qualifying words "more or less" or "about" or of equivalent meaning the recital of quantity is material and such qualifying words provide for merely slight variations.83
82. See Subject Contracts in this Series.
Where a contract is made to sell certain specific identified goods and the quantity is recited with qualifying words "about" or "more or less" or of equivalent meaning, the recital of quantity is by way of identification or description and not material in the absence of bad faith. Thus if one should sell all the corn then standing unhar-vested in a certain field "being about 10,000 bushels" and there were actually only 7,500 bushels, both parties would be bound, the recited quantity being a mere estimate.84
(c) Quantity to be delivered in installments.
Where the quantity is to be delivered in installments, very difficult questions in respect to performance often arise. If the first installment is not delivered at all or in an insufficient amount, has the buyer a right to regard the contract as broken and himself discharged from further performance? Where goods are to be shipped in installments, this may amount to several contracts, or it may be one contract whose performance is divisible. This depends on the facts of each case. Concerning this subject, the text of the Uniform Sales Act is as follows:
"Section 45 (1) Unless otherwise agreed the buyer of goods is not bound to accept delivery thereof by installments.
(2) When there is a contract to sell goods to be delivered by stated installments which are to be separately paid for, and the seller makes defective deliveries in respect of one or more installments, it depends in each case on the terms of the contract and the circumstances of the case, whether the breach of contract is so material as to justify the injured party in refusing to proceed further and sue for damages for breach of the entire contract, or whether the breach is severable, giving rise to a claim for compensation, but not to a right to treat the whole contract as broken."
83. Moore v. U. S., 190 U. S. 157.
84. Robinson v. Noble's Adm'rs, 33 U. S. 181.
This is one of the difficult questions in the law of sales. It may be said that the fact that goods are deliverable in installments does not make the contract a severable one, and therefore a breach in respect to one installment may amount to a breach of the entire contract; and further it may be said that in any sale for deliveries by installment, a deliberate refusal to deliver the first installments justifies a belief on the part of the buyer that there is to be a breach in respect to later installments, and he may act accordingly. But beyond this, we can only say, in the words of the Sales Act, "it depends in each case on the terms of the contract and the circumstances of the case." 85
Delivery to the carrier is delivery to the buyer in all cases in which the seller is authorized or notified to deliver to a carrier, unless the seller is bound as a part of his undertaking to get the goods to a certain place.
We have seen that title passes upon delivery to carrier except in certain instances. In those cases in which title will pass upon delivery to a carrier, such delivery amounts to performance by the seller. Therefore, the loss of the goods by the carrier, their delay in transportation, their depreciation after shipment are matters which the buyer must have out with the carrier, assuming the seller is not in default in any manner.
85. See Norrington v. Wright, 115 U. S. 188, as a leading case on this subject.
Example 29. A sold coffee to B to be loaded by A on cars at Canton, Ohio, for shipment to B, at Pittsburg. The coffee was lost in transportation. A sues B for the price. Conceding the title passed at Canton, B must pay the price, and look to the carrier for his remedy if any.86
The buyer who has not examined the goods before delivery, has after delivery a right to a reasonable opportunity to examine them to determine whether they conform to the contract.
As a buyer has a right to reject goods which do not conform to the terms of the bargain, he has a right to know whether they are in accordance with the contract. The law therefore gives him the right to examine the goods, or, if a test is necessary, to make a reasonable test before it can be said that he has accepted them. If he will not exercise his right, then he must be deemed to have accepted the goods. What constitutes a reasonable time in which to examine depends on the circumstances.
Example 30. P sold vanilla to Z, a candy manufacturer. Z used a considerable portion, when a fair test could have been made by use of a few ounces. Z then sought to return the balance as of poor quality. Held, that Z had a right to test, but his use in this case was unreasonable and amounted to an acceptance, precluding his right to reject.87
86. Dannemiller v. Kirkpatrick, 201 Pa. 218, 50 Atl. 928; see also Pittsburgh Co. v. Cudahy Co., 260 Pa. 135, 103 Atl. 548.
The buyer accepts the goods, and therefore cannot thereafter reject them (although he may still sue for damages as hereafter shown) when he so states, or deals with them inconsistently with the seller's title, or does not reject them within a reasonable time.
If the buyer accepts he cannot reject even if the goods are not in compliance with the contract. He shows acceptance in any of three ways: (1) By so intimating to the seller; (2) by dealing with the goods in any manner that is inconsistent with the seller's ownership; and (3) by failing to reject them within a reasonable time.
Acceptance does not bar an action for damages as hereafter shown.
87. Zipp Mfg. Co. v. Pa.storino, 120 Wis. 176.