Section 36 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 36 is the longest delivery section in Chapter IV. Its five sub-sections answer the questions a supply contract often leaves open: who moves the goods, where they are delivered, how soon the seller must send them, what happens when a third person holds them, at what hour a demand or tender can be made, and who pays to get the goods ready. This article follows the text of the Act consulted (latest amendment shown: Act 28 of 1993); amendments after that should be checked in the official text.
Section 36 supplies default rules for delivery. Whether the buyer collects or the seller sends depends on the contract, express or implied; with no such contract, goods are delivered where they were at the time of sale. A seller bound to send the goods with no time fixed must send them within a reasonable time. If a third person holds the goods, there is no delivery until that person acknowledges to the buyer that he holds them on the buyer's behalf. Unless otherwise agreed, the seller bears the expenses of putting the goods into a deliverable state.
Sub-section (1): who moves the goods, and where delivery happens
The first sentence says: "Whether it is for the buyer to take possession of the goods or for the seller to send them to the buyer is a question depending in each case on the contract, express or implied, between the parties." The Act does not decide it in advance. A contract that states in words that the goods will be "delivered at the buyer's godown" answers it expressly, and the natural place to say so is the vendor and supplier agreement itself; the conduct and circumstances of the parties may answer it by implication.
The second sentence supplies the place of delivery, but only "apart from any such contract". It has three cases:
- Goods sold (the sale is complete now): delivered "at the place at which they are at the time of the sale".
- Goods agreed to be sold (an agreement to sell, a future sale): delivered "at the place at which they are at the time of the agreement to sell".
- Goods not then in existence: delivered "at the place at which they are manufactured or produced".
The difference between a sale and an agreement to sell is explained in section 4; see our article on the difference between sale and agreement to sell.
Example (our own, not from the Act): Rohit Textiles agrees to sell 500 metres of a fabric that its mill has not yet woven to Sunita Garments, and the contract says nothing about the place. On the third case, the place of delivery is where the fabric is manufactured, that is, the mill. If the parties had agreed that Rohit Textiles would send the fabric to Sunita Garments' factory, the contract would answer the point and the default would not apply.
Sub-section (2): reasonable time for sending
"Where under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time." Two conditions must exist together: the seller is bound to send, and no time is fixed. Section 63 adds that what is a reasonable time "is a question of fact"; see our article on reasonable time under sections 62 and 63. The Act gives no number of days.
Sub-section (3): goods held by a third person
"Where the goods at the time of sale are in the possession of a third person, there is no delivery by seller to buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf."
The test has two parts. The goods must be in the possession of a third person at the time of sale, and the third person must acknowledge to the buyer that he holds them on the buyer's behalf. Until then, the section says in plain words that there is no delivery. Goods lying in a warehouse operated by a stranger to the contract are the usual case.
Example (our own): Vikram Metals sells 30 tonnes of copper wire lying in the godown of a storage operator to Ananya Cables. Until the operator tells Ananya Cables that he now holds the wire on her behalf, the sub-section says there is no delivery by seller to buyer.
The proviso. "Provided that nothing in this section shall affect the operation of the issue or transfer of any document of title to goods." So the issue or transfer of a document of title to goods works as the Act otherwise provides, and sub-section (3) does not take that away. "Document of title to goods" is defined in section 2(4); see our article on the definition of document of title. Readers who ship by sea may also want our post on the bill of lading as a document of title.
Sub-section (4): a reasonable hour
"Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour. What is a reasonable hour is a question of fact." The word is "may": the section does not say that a demand at an odd hour is always void, only that it can be treated as ineffectual. It applies to a demand by the buyer and a tender by the seller alike. The Act sets no hours.
Sub-section (5): expenses of a deliverable state
"Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state shall be borne by the seller." Goods are in a "deliverable state" under section 2(3) when they are in "such state that the buyer would under the contract be bound to take delivery of them". If the seller has to pack, bag, bottle or finish the goods so that the buyer must take them, the cost is his, unless the contract says otherwise. Note that sub-section (5) speaks of expenses "of and incidental to" that step. It says nothing about the cost of carriage to the buyer's premises.
The five sub-sections together
| Sub-section | Subject | Is it expressly subject to the parties' contract? |
|---|---|---|
| (1) | Who moves the goods; place of delivery | Yes: "depending in each case on the contract" and "apart from any such contract" |
| (2) | Reasonable time for sending | Applies where "no time for sending them is fixed" |
| (3) | Goods in a third person's possession | No opening words; proviso saves documents of title |
| (4) | Reasonable hour | Question of fact |
| (5) | Expenses of deliverable state | "Unless otherwise agreed" |
Section 62 adds that anything that would arise "by implication of law" under a contract of sale may be negatived or varied by express agreement, by the course of dealing between the parties, or by usage that binds both.
Section 36 follows sections 33 to 35 on the modes of delivery; for the general contract-law rule on time and place of performance, see our article on sections 46 to 50 of the Indian Contract Act, 1872, a different Act.
Need help with delivery clauses in a supply contract?
Most delivery disputes come from silence on place, hour or who pays for packing. If you want the place, time and handover steps stated before the first order, a vendor and supplier agreement can set them out clearly, and our team will draft it for your trade.
Key takeaways
- The contract, express or implied, decides who moves the goods; failing that, delivery is where the goods are (or are made).
- No time fixed: a reasonable time, a question of fact (section 63).
- A third-party holder must acknowledge to the buyer before there is delivery.
- Unless otherwise agreed, the seller bears the cost of a deliverable state.
Read next
- Sections 33-35 of the Sale of Goods Act, 1930: delivery, part delivery and buyer to apply
- Section 37 of the Sale of Goods Act, 1930: delivery of wrong quantity or mixed goods
- Section 38 of the Sale of Goods Act, 1930: instalment deliveries
- Section 38-39 of the Indian Contract Act, 1872: tender of performance
Disclaimer: Based on the consolidated text of the Sale of Goods Act, 1930 consulted on 2 October 2026, whose latest amendment shown is Act 28 of 1993. It explains the words of the statute only; later amendments and the way courts apply these sections should be checked. This article is general information, not legal advice; check the official text before acting.