Start with the agreed exchange
Section 32 of the Sale of Goods Act, 1930 makes delivery and payment concurrent conditions unless otherwise agreed. The seller must be ready and willing to give possession in exchange for the price, and the buyer ready and willing to pay in exchange for possession. It does not automatically convert an agreed credit sale into cash on delivery, or prove that a party performed merely because it raised an invoice or issued a purchase order.
Read the applicable text: India Code: Sale of Goods Act, 1930, sections 31–33 and 38.
Identify any different agreement first
Read the accepted contract, credit terms, advance-payment terms, shipment conditions and relevant later variations. Record what must be paid, when, against which delivery and with what agreed evidence. A unilateral invoice label does not necessarily establish a variation. Where trade dealings or disputed communications affect the terms, obtain a reasoned contract assessment rather than imposing the statutory default without examining the facts.
Prove readiness on both sides
For the seller, identify the goods, location, agreed delivery event and practical ability to hand over possession. For the buyer, identify the due price, payment arrangement and ability and willingness to make the required exchange. An unprocessed draft payment instruction is different from an executed transfer; a stock allocation is different from an available conforming shipment. Document the events without pretending that a spreadsheet alone determines breach.
Distinguish delivery from ownership and invoicing
Section 33 addresses acts agreed to constitute delivery or putting goods into possession of the buyer or an authorised person. Other provisions address property, third-party custody and carrier delivery. Consequently, an invoice date, title clause, dispatch date and physical receipt can differ. Match the contract's delivery event and applicable rules; do not infer that section 32 settles all ownership, risk, GST or revenue-recognition questions.
Use a goods-to-payment reconciliation
Set out contract quantity and rate, agreed advance applied, balance required for the particular exchange, accepted credits and actual payment evidence. For partial shipments or staged payment terms, establish the legal basis first. Section 32 does not itself require a buyer to accept instalments or establish the remedies for a short delivery. Section 38(1) separately states that a buyer is not bound to accept delivery by instalments unless otherwise agreed. Keep accepted partial quantities and unresolved disputes visible rather than netting everything against one invoice balance.
Preserve the handover and dispute trail
Keep instructions, payment confirmation, delivery acknowledgement, exceptions and any reservation of rights. If a party refuses the exchange, state precisely what was offered and missing. The separate legal analysis may concern a price claim, damages, unpaid-seller rights or another remedy; concurrent conditions do not supply an automatic penalty or universal cancellation right. The examples below assume specified terms solely to show how to reconcile performance evidence.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Cash against the full delivery
Assume an agreed cash-against-delivery sale of 100 units at ₹2,000 each, ignoring tax for simplicity. The exchange price is ₹2,00,000. Evidence of readiness for 100 units and payment readiness for that price belong in the same handover file.
Illustrative example 2: Agreed advance applied once
For the same ₹2,00,000 price, assume an agreed ₹50,000 advance already paid and applicable to this delivery. The remaining exchange payment is ₹1,50,000. Requiring another ₹2,00,000 without accounting for the advance would overstate the balance by ₹50,000.
Illustrative example 3: Agreed credit overrides the default timing
Assume a ₹3,00,000 delivery contract expressly permits payment 30 days after delivery. Payment is not converted into an immediate ₹3,00,000 cash condition merely by citing section 32. If the agreed credit starts on 1 June 2026 and the contract's counting convention excludes that date, 30 days reach 1 July 2026.
Illustrative example 4: Partial exchange with an agreed basis
Assume the parties validly agree to a separately payable 60-unit delivery at ₹2,000 per unit. The amount for that exchange is ₹1,20,000, with 40 units of the original 100 still outside the completed delivery. This assumption does not establish a unilateral right to force instalment acceptance.
Illustrative example 5: Payment confirmation gap
The agreed exchange balance is ₹1,50,000, but verified completed payment is ₹1,30,000. The unresolved amount is ₹20,000. A screenshot of a separate unexecuted ₹20,000 instruction is not the same evidence as completed payment or another agreed payment arrangement.
Illustrative example 6: Accepted credits affect the actual balance
Assume delivery price ₹5,00,000, applicable advance ₹1,00,000 and a valid agreed credit of ₹20,000. The balance is ₹3,80,000. If ₹3,50,000 is paid, ₹30,000 remains under those assumptions; check disputed offsets separately rather than treating every buyer deduction as accepted.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Read the accepted contract | Delivery, credit, advance and payment conditions. |
| 2 | Identify any variation | Evidence of agreement rather than unilateral invoice wording. |
| 3 | Define the goods population | Quantity, description and conforming delivery evidence. |
| 4 | Determine the delivery event | Possession, agreed acts and applicable custody arrangements. |
| 5 | Establish seller readiness | Available goods and practical handover capability. |
| 6 | Establish buyer readiness | Required price and agreed payment arrangement. |
| 7 | Apply advances and valid credits | Supported allocation against the particular exchange. |
| 8 | Match completed events | Payment confirmation and delivery acknowledgement. |
| 9 | Record unresolved differences | Shortfalls, refused performance and disputed terms. |
| 10 | Assess remedies separately | Rights, notices and legal route supported by the actual facts. |
Sixteen practitioner FAQs
1. Is cash on delivery always mandatory?
No. Section 32 applies unless otherwise agreed.
2. Can agreed credit terms matter?
Yes. Identify the agreed payment timing before applying the default rule.
3. Does a new invoice label necessarily change the contract?
Not automatically. Establish a valid agreement or variation.
4. What must the seller be ready to exchange?
Possession of the goods against the price under the applicable terms.
5. What must the buyer be ready to exchange?
The required price against possession, subject to the actual agreement.
6. Does issuing an invoice prove delivery?
No. Establish the relevant delivery event and supporting facts.
7. Does a purchase order prove payment readiness?
Not necessarily. Examine the actual arrangement and evidence.
8. Is a payment instruction always a completed transfer?
No. Preserve execution and confirmation evidence or the alternative agreed arrangement.
9. Should applicable advances reduce the balance?
Yes, where validly allocated to that exchange, without applying them twice.
10. Can every buyer deduction be treated as an agreed credit?
No. Distinguish accepted adjustments from disputed offsets.
11. Does section 32 determine title and risk by itself?
No. Those questions require the applicable contractual and statutory analysis.
12. Can delivery occur through an agreed act?
Section 33 recognises agreed acts and acts putting goods in the relevant possession.
13. Can a seller force instalment delivery by citing concurrent conditions?
That does not follow from section 32. Assess the separate agreement and applicable rules.
14. Does a partial payment settle the entire handover automatically?
No. Identify the agreed exchange and remaining balance.
15. Is a fixed penalty supplied by this provision?
No. Do not invent one from a payment or handover discrepancy.
16. What is the essential evidence pack?
Agreed terms, goods readiness, payment readiness, valid adjustments, actual exchange and unresolved issues.