Classify the delivery before approving payment
Section 37 of the Sale of Goods Act, 1930 distinguishes short quantity, excess quantity and goods mixed with a different description. A buyer should identify which occurred before treating an invoice discrepancy as a simple rate adjustment. The statutory rules are subject to usage of trade, special agreement and the parties' course of dealing. Read those facts first; there is no universal quantity tolerance supplied by this guide. India Code: Sale of Goods Act, 1930, section 37.
Short delivery and accepted quantities
For a short delivery, the default rule permits rejection; if the buyer accepts the goods delivered, payment is at the contract rate. The receiving team should record actual counts and the acceptance decision separately. An invoice for the ordered quantity should not erase a supported shortage in the commercial reconciliation. Whether further performance or another remedy remains available requires its own contract analysis. India Code: Sale of Goods Act, 1930, section 37.
Excess delivery requires a deliberate election
Where the seller delivers more than contracted, the default options include accepting the contracted goods and rejecting the excess, or rejecting the whole. Acceptance of the whole carries payment at the contract rate. Do not let an unexplained warehouse entry decide the commercial election after the event. Identify who was authorised to accept goods and retain the buyer's actual communication. India Code: Sale of Goods Act, 1930, section 37.
Mixed description is a different problem
Where contracted goods arrive mixed with goods of another description outside the contract, subsection (3) permits acceptance of the conforming goods with rejection of the rest, or rejection of the whole, subject to the subsection (4) qualifications. A total carton count cannot prove description conformity. Record item codes, batches and quantities so the decision can be traced to the actual goods. India Code: Sale of Goods Act, 1930, section 37.
Connect receiving evidence with accounts
A practical file contains the purchase order, applicable terms, dispatch documents, count or inspection record, acceptance/rejection communication and invoice bridge. Segregate disputed goods operationally and avoid presenting a clerical goods-received entry as conclusive legal acceptance in every case. Any later use, onward movement or settlement should be flagged for legal review where the acceptance position is disputed. India Code: Sale of Goods Act, 1930, section 37.
Keep the price working within its scope
The illustrations use agreed unit prices and the default section 37 framework, with no contrary usage, special agreement or course of dealing. They exclude tax, freight, damages and storage claims. A zero accepted-quantity price working is not a conclusion that every contractual liability or remedy is zero. Confirm the actual agreement before offsetting disputed claims against an invoice. India Code: Sale of Goods Act, 1930, section 37.
Applicable primary references
India Code: Sale of Goods Act, 1930, section 37
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Short delivery accepted
Order: 100 units at ₹500. Delivery: 80 units, all accepted. The accepted-goods price is 80 × 500 = ₹40,000. The order value ₹50,000 exceeds that working by ₹10,000; separately review the undelivered balance.
Illustrative example 2: Excess rejected
Order: 100 units at ₹500. Delivery: 120. The buyer accepts the contracted 100 and rejects the remaining 20 under the assumed default rule. Accepted-goods price is ₹50,000; the rejected excess represents ₹10,000 at that rate and is not included in this price working.
Illustrative example 3: Whole excess delivery accepted
With the same order and delivery, the buyer accepts all 120 units. Contract-rate price is 120 × ₹500 = ₹60,000, ₹10,000 above the original 100-unit order value.
Illustrative example 4: Mixed descriptions separated
A shipment has 80 contracted-description units and 20 units of another description outside the contract. The buyer accepts the 80 and rejects the different goods. At an assumed ₹500 contract unit price, the accepted-goods reconciliation is ₹40,000, with the rejected items separately identified.
Illustrative example 5: Whole excess delivery rejected
On an order for 100 units at ₹500, 120 are delivered and the buyer validly elects to reject the whole under the assumed default facts. Accepted units are zero, so the accepted-goods price working is 0 × 500 = ₹0. This does not decide separate disputed damages or other claims.
Illustrative example 6: Count differs from carton labels
An order is for 1,000 units at ₹250. Ten cartons are labelled 100 units each, but a supported count establishes 950 units, which the buyer accepts. Price is 950 × 250 = ₹2,37,500, rather than ₹2,50,000; the discrepancy is ₹12,500. Actual count evidence matters more than multiplying labels.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Identify contract documents | Collect the order, agreed rates and incorporated terms. |
| 2 | Review contrary qualifications | Check trade usage, special agreement and course of dealing. |
| 3 | Count actual delivery | Retain count sheets, weights or other appropriate quantity evidence. |
| 4 | Check description | Compare item, specification and batch identifiers with the contract. |
| 5 | Classify the discrepancy | Separate short, excess and mixed-description facts. |
| 6 | Record the buyer's election | Document what is accepted or rejected and by whom. |
| 7 | Communicate the discrepancy | Keep the dated communication and delivery acknowledgment. |
| 8 | Reconcile the unit price | Apply the supported contract rate to the accepted quantity. |
| 9 | Separate additional claims | Review freight, tax, damages and other disputed amounts on their own basis. |
| 10 | Approve the invoice bridge | Tie the receiving record, election, supplier response and payment decision together. |
Sixteen practitioner FAQs
1. Does every quantity mismatch have the same remedy?
No. First classify the delivery facts.
2. Can special terms change the default review?
Yes. Section 37 expressly preserves the stated contractual and trade qualifications.
3. Is there a universal five-per-cent tolerance?
No such tolerance is assumed here; examine the actual terms and practice.
4. What rate applies in the short-delivery acceptance model?
The contract rate for goods accepted under the stated default rule.
5. Can the buyer accept contracted quantity and reject excess?
That is one default option for an excess delivery.
6. What happens if the buyer accepts the whole excess delivery?
The contract-rate calculation applies to the whole quantity accepted.
7. Is mixed description simply an excess quantity?
No. Record conformity as well as the total count.
8. Should rejected goods remain in the ordinary accepted-stock record?
Use clear operational segregation and document their status rather than obscuring the dispute.
9. Does a warehouse posting conclusively resolve legal acceptance?
Not by itself in every case; review the actual conduct and agreement.
10. Can carton labels replace a supported count?
Not where reliable evidence shows a different quantity.
11. Do the examples calculate GST?
No. Tax treatment requires its own supported analysis.
12. Does zero accepted price eliminate every claim?
No. The model expressly leaves other liabilities and remedies open.
13. How should an ongoing shortage be recorded?
Keep the accepted quantity and outstanding delivery issue separately visible.
14. Who should approve an election?
Use the buyer's actual authority arrangements and preserve the decision evidence.
15. Can accounts automatically net damages against price?
Do not do so without a supported contractual and legal basis.
16. What is the best closing evidence?
A traceable order-to-delivery-to-election-to-invoice reconciliation.
Conclusion
Short, excess and mixed-description deliveries require different decisions. Reconcile the goods actually accepted with the contract rate and preserve rejection evidence.