Part delivery does not always have the same effect
Sale of Goods Act section 34 distinguishes delivery of part in progress of delivery of the whole from a part delivered with an intention to sever it from the whole. The first has the effect specified for passing property as delivery of the whole; the second does not operate as delivery of the remainder. The commercial intention and surrounding delivery evidence therefore matter. A percentage dispatched alone cannot establish ownership of every undelivered item.
Read the applicable text: India Code: Sale of Goods Act, 1930, sections 34 and 38.
Apply the rule within the actual contract
Identify the goods and the contract population before describing a movement as part delivery. A single invoice can relate to separate agreed deliveries, while several dispatch records may evidence progress toward one whole-lot handover. Read the terms, identification, instructions and communications together. Section 34 is about the effect of delivery for passing property; it does not eliminate the other applicable requirements governing property in the goods. In particular, section 18 bars passing property in unascertained goods until ascertainment, and section 19 gives effect to the parties’ intended time of transfer for specific or ascertained goods.
Gather evidence of progress or severance
Record whether the parties intended the first handover as a step toward transferring the whole identified lot or as a separately severed portion. Relevant records can include release instructions, remaining-goods allocation, acknowledgements, separate acceptance terms and correspondence on the intended balance. A label such as first instalment helps locate evidence but does not conclusively settle the legal intention. Preserve conflicting documents instead of choosing the one that produces the desired accounting result.
Keep property, custody and remedies separate
A legal conclusion about passing property is different from a physical-stock statement. Goods can remain undelivered even where the applicable property analysis has a broader effect. Conversely, delivering a severed portion does not by that act deliver the remainder. Risk, payment conditions, short-delivery remedies and an obligation to accept instalments require their own contractual and statutory analysis. Do not convert section 34 into a universal advance-payment or revenue-recognition rule.
Build one population bridge
Maintain original identified quantity, part physically delivered, balance in custody, delivery dates and the supported legal conclusion. Reconcile warehouse and customer confirmations to the same identifiers. If multiple contracts or lots are involved, keep each separately traceable. The value column should state whether it represents contract price, carrying amount or another measure; none is by itself proof of who owns the goods.
Close disagreements before issuing blanket confirmations
When intention or the identified remainder is disputed, obtain a goods-specific legal assessment. Explain the facts and assumptions used, and avoid a generic certificate that all invoiced stock belongs to the buyer solely because one box was collected. Equally, do not describe every item still onsite as automatically the seller's property. The worked examples below illustrate quantity and evidence controls rather than determining title from arithmetic.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: One whole-lot population
An identified lot contains 1,000 units and the first handover contains 200. Physical delivery is 20%, with 800 units still onsite. If the evidence establishes progress toward delivery of the whole, apply section 34's first limb within the full property analysis; do not equate the 800-unit custody balance with an automatic title conclusion.
Illustrative example 2: Severed portion
A 1,000-unit population is divided by a supported agreement into a severed 200-unit delivery and an 800-unit remainder. Section 34's second limb means that delivery of the severed 200 does not operate as delivery of the 800. At a hypothetical contract rate of ₹100, the remainder's price measure is ₹80,000, not proof of its legal ownership.
Illustrative example 3: Several steps toward a whole
A 600-unit identified lot is physically handed over in movements of 150, 200 and 250 units. The total is 600, leaving no physical balance. Preserve the intention and identification evidence throughout; an eventual quantity match does not retrospectively prove every earlier legal conclusion.
Illustrative example 4: Keep separate contracts separate
Contract A covers 300 units and contract B 500. A 100-unit movement is evidenced only against A. A has 200 physically undelivered; B remains at 500. Aggregating the contracts into 800 and treating the movement as proof of delivery progress for both would ignore the source evidence.
Illustrative example 5: Stock confirmation mismatch
The order-linked register shows an 800-unit physical remainder, but the custodian confirms 780. Twenty units, or 2.5% of the expected remainder, require investigation. This discrepancy does not itself resolve whether the original part delivery was progressive or severing.
Illustrative example 6: Price and custody are different measures
An identified lot is 400 units at ₹1,500 contract price each: ₹6,00,000. After delivery of 100 units, 300 remain physically held, representing ₹4,50,000 at that price measure. The ₹4,50,000 is not automatically the seller's closing inventory value or the buyer's recognised asset.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Identify the contract | Accepted terms and relevant variations. |
| 2 | Identify the whole population | Specific lot, quantity and distinguishing records. |
| 3 | Match the part delivered | Handover evidence and recipients. |
| 4 | Assess intention | Progress toward the whole or severance of a portion. |
| 5 | Preserve supporting communications | Instructions, acknowledgements and conflicting evidence. |
| 6 | Apply the full property analysis | Section 34 alongside other applicable rules and terms. |
| 7 | Reconcile remaining custody | Warehouse quantities and customer confirmations. |
| 8 | Label value measures | Contract price versus carrying amount or other basis. |
| 9 | Assess separate consequences | Payment, risk, remedies and accounting independently. |
| 10 | Close with qualified evidence | Supported legal conclusion, assumptions and unresolved disputes. |
Sixteen practitioner FAQs
1. Does delivery of one item always transfer property in the whole lot?
No. Apply the statutory distinction and the full property analysis.
2. What does the first limb concern?
Part delivery in progress of delivery of the whole.
3. What does the second limb concern?
Part delivery with the intention of severing it from the whole.
4. Does a severed delivery operate as delivery of the remainder?
Section 34 says it does not.
5. Can the dispatched percentage decide intention?
No. Use the contract and surrounding evidence.
6. Does one invoice establish one indivisible delivery population?
Not necessarily. Check the actual agreement and identified goods.
7. Can multiple dispatch records relate to one whole-lot delivery?
They can on supported facts; the records and intention must be examined.
8. Is physical custody identical to property ownership?
No. Keep the legal and physical questions separate.
9. Does section 34 decide every risk question?
No. Apply the relevant contractual and statutory risk rules separately.
10. Does it itself impose acceptance of instalments?
Do not infer that. Instalment obligations require their own analysis.
11. Is an invoice price the same as inventory carrying value?
No. Identify the value measure used.
12. Can a customer confirmation replace the contract analysis?
It is evidence to consider, not a substitute for every relevant term and fact.
13. Should separate contracts be aggregated automatically?
No. Preserve the goods and contract identifiers.
14. Does a count mismatch prove severance?
No. Investigate quantity and legal intention separately.
15. Can this rule alone establish revenue recognition?
No. Apply the relevant financial-reporting requirements independently.
16. What makes a closing confirmation useful?
A defined goods population, physical reconciliation, supported property analysis and clear qualifications.