A Seller's Contract Duty to Deliver Goods to the Buyer
The parties to a sales contract are bound to perform according to its terms. Each is likewise under the duty to exercise good faith in its performance and to do nothing that would impair the expectation of the other party that the contract will be duly performed.
It is the seller's duty to make "delivery," which does not refer to a physical delivery but merely means that the seller must permit the transfer of possession of the goods to the buyer. The delivery must be made in accordance with the terms of the sale or contract to sell.
Place, Time, and Manner of Delivery
The terms of the contract determine whether the seller is to send the goods or the buyer is to call for them, or whether the transaction is to be completed by the delivery of documents without the movement of the goods. In the absence of a provision in the contract or usage of trade, the place of delivery is the seller's place of business, if he has one; otherwise, it is his residence. If, however, the subject matter of the contract consists of identified goods that are known by the parties to be in some other place, the place is the place of delivery. Documents of title may be delivered through customary banking channels.
The buyer has the right to insist that all the goods be delivered at one time. If the seller delivers a smaller quantity than that stipulated in the contract, the buyer may refuse to accept the goods. If the buyer accepts or retains part of the goods with knowledge of the seller's intention to deliver not more, he must pay the full contract price, unless the contract is divisible so that it is possible to apportion the contract price, in which case the buyer need only pay the proportionate price representing the items or units which he has received. If the goods are used or disposed of by the buyer before he learns of the seller's intention, the buyer is only required to pay the fair value of the goods he has received.
Delivery In Installments
The buyer is under no obligation or duty to accept delivery of goods by installments unless the contract contemplates such deliveries or unless the circumstances are such as to give rise to the right to make delivery in lots.
Delivery to Carrier
When the seller is required to or may send the goods to the buyer but the contract does not require him to make a delivery at a particular destination, the seller, in the absence of a contrary agreement, must put the goods in the possession of a proper carrier and make such contract for their transportation as is reasonable in view of the nature of the goods and other circumstances of the case. The seller must also obtain and promptly deliver or tender in properly indorsed form any document, such as a bill of lading, which is required by the buyer in order to obtain possession of the goods. The seller must likewise promptly notify the buyer of the shipment. If the seller fails to notify the buyer or to make a proper contract of carriage, the buyer may reject the goods when material delay or loss is caused by such breach.
Delivery at Destination
If the contract requires the seller to make delivery at a destination point, the duty of the seller is the same as though he were dealing with the buyer face to face, rather than placing the good in the possession of a carrier. In addition, however, if any documents are issued by the carrier that are necessary to obtain possession of the goods, the seller must also tender such documents.