Select the price-claim route before compiling the balance
Section 55 of the Sale of Goods Act, 1930 provides two routes to a suit for price. Under subsection (1), property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay according to the contract. Under subsection (2), the contract makes the price payable on a day certain irrespective of delivery and the buyer wrongfully fails to pay; a price suit may then be available even without passing of property or appropriation of the goods. Government-hosted Sale of Goods Act: sections 55, 56, 59 and 61.
Prove passing of property rather than relying on an invoice label
For the first route, collect the contract, goods identification, delivery and acceptance records and any reservation of title. Assess when ownership passed under the applicable rules and intention. Invoice creation, revenue recognition and physical dispatch are pieces of evidence, not interchangeable legal conclusions. A finance team should give the reviewer the underlying documents and a reasoned ownership chronology. Government-hosted Sale of Goods Act: sections 55, 56, 59 and 61.
Read both parts of the special payment-date condition
A due-date field alone does not establish subsection (2). The bargain must make the price payable on a day certain irrespective of delivery. Quote the actual contractual term in the case file and explain its effect. If payment is expressly conditional on delivery or another unsatisfied event, do not ignore that condition by treating the invoice's printed date as conclusive. Government-hosted Sale of Goods Act: sections 55, 56, 59 and 61.
Reconcile the price with supported credits and buyer defences
Prepare an invoice-level bridge from contractual price to receipts and legally supported adjustments. Section 59 allows a buyer to set up a breach of warranty in diminution or extinction of the price, or sue for damages, on its conditions. A disputed quality deduction is not automatically either valid or worthless. Separate the gross claimed debt, admitted adjustments and contested defences with evidence of each. Government-hosted Sale of Goods Act: sections 55, 56, 59 and 61.
Distinguish the price from damages and interest
Section 56 separately addresses damages for wrongful non-acceptance and non-payment. A price claim and a damages model have different foundations; the full invoice balance is not automatically the damages measure. Section 61 preserves relevant interest and special-damages rights and permits a court, absent a contrary contract, to award interest at a rate it considers fit on the stated basis. Do not invent a fixed statutory rate or add unapproved costs to the price ledger. Government-hosted Sale of Goods Act: sections 55, 56, 59 and 61.
Build a litigation-ready commercial file
Keep the parties' identities, authority, agreed terms, goods records, correspondence, receipts and adjustment history in sequence. Document demands actually made without assuming this article supplies a universal notice form, forum, limitation period or court-fee rule. Check those separately for the actual dispute, including any arbitration agreement. This guide concerns the personal claim for price; possession-based lien or transit remedies require their own facts and statutory tests. Government-hosted Sale of Goods Act: sections 55, 56, 59 and 61.
Applicable primary references
Government-hosted Sale of Goods Act: sections 55, 56, 59 and 61
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Passed-property price balance
Assume ownership has passed, the price is ₹10 lakh, ₹4 lakh has been received and the remaining payment is wrongfully withheld under the contract. The unpaid price working is ₹6 lakh. This arithmetic assumes, rather than proves, the section 55(1) conditions.
Illustrative example 2: Day certain irrespective of delivery
Assume a valid contract makes ₹5 lakh payable on 30 September 2026 irrespective of delivery, and the buyer wrongfully fails to pay. On 10 October, ten days have elapsed after that date. The price base remains ₹5 lakh even though the assumed facts involve no passing of property; interest requires its separate basis.
Illustrative example 3: Warranty adjustment
For a ₹12 lakh price, assume a ₹2 lakh warranty diminution is established and there are no payments. The adjusted price is ₹10 lakh. If the ₹2 lakh is only alleged and contested, show ₹12 lakh gross and ₹2 lakh disputed separately rather than presenting ₹10 lakh as an agreed debt.
Illustrative example 4: Invoice-level payment allocation
Invoices A and B are ₹4 lakh and ₹6 lakh. Supported allocated payments are ₹3 lakh and ₹2 lakh respectively. Remaining prices are ₹1 lakh and ₹4 lakh, totalling ₹5 lakh. Preserve the payment-allocation evidence rather than reallocating cash to improve one claim artificially.
Illustrative example 5: Agreed goods-return credit
Assume an enforceable ₹1.5 lakh price credit for agreed returned goods, an original ₹8 lakh price and ₹2 lakh paid. The remaining price working is ₹4.5 lakh. The credit's legal and contractual validity is an express assumption.
Illustrative example 6: Post-decree recovery control
Assume a decree establishes ₹6 lakh principal and ₹2 lakh is validly allocated to that principal. Remaining principal is ₹4 lakh. Track any decreed interest and costs separately; this illustration does not assume they are nil or prescribe their allocation rules.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Identify the seller and buyer | Verify contracting entities and authority. |
| 2 | Preserve the contract | Keep accepted price, payment and delivery terms. |
| 3 | Identify the goods | Connect the disputed price to specific transaction records. |
| 4 | Select section 55 route | Record subsection (1) or the special subsection (2) basis. |
| 5 | Prove the selected conditions | Support ownership or day-certain-irrespective-of-delivery wording. |
| 6 | Establish contractual default | Record due terms, performance and the wrongful failure alleged. |
| 7 | Reconcile receipts | Match bank evidence and valid allocations to invoices. |
| 8 | Review adjustments and defences | Separate agreed credits from contested warranty claims. |
| 9 | Separate other remedies and amounts | Support any damages, interest and costs independently. |
| 10 | Review dispute procedure | Check forum, limitation, agreement and filing requirements for the case. |
Sixteen practitioner FAQs
1. Does an unpaid invoice alone prove section 55 eligibility?
No. Establish the applicable statutory and contractual conditions.
2. What does property mean here?
Ownership in the goods, which requires its own legal analysis.
3. Is physical delivery always the same as passing of property?
Do not assume so; examine the contract and applicable rules.
4. What is the ordinary subsection (1) route?
Passed property and wrongful failure to pay according to the contract.
5. Can a suit for price be available before property passes?
Subsection (2) provides a route on its specific conditions.
6. Is any printed due date sufficient for subsection (2)?
No. The price must be payable on a day certain irrespective of delivery.
7. Must goods already be appropriated for that special route?
The text permits the claim although goods have not been appropriated, if its conditions are met.
8. Does a revenue entry settle the ownership question?
No. Preserve and assess the transaction evidence.
9. Can a buyer raise a warranty defence to price?
Section 59 permits diminution or extinction on the relevant conditions.
10. Should an alleged deduction automatically reduce the admitted balance?
No. Identify whether it is established, agreed or contested.
11. Is section 56 the same claim as section 55?
No. Section 56 concerns damages for non-acceptance.
12. Does section 61 prescribe one fixed interest rate?
No. Its court-award wording uses the rate the court considers fit, subject to the provision.
13. Should interest be mixed into principal silently?
No. Keep the legal basis and calculations separate.
14. Does this guide establish a universal limitation period?
No. Check the applicable period and accrual facts independently.
15. Does a price claim automatically establish lien rights?
No. Possessory remedies have separate conditions.
16. What should the reviewer be able to trace?
The chosen legal route, goods, terms, default, payments, adjustments and supported claim.
Conclusion
A seller’s section 55 price claim requires the appropriate statutory route and contractual default. Establish passing of property or the special day-certain condition before reconciling the unpaid price.