Sections 39 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.
Sections 39 and 40 deal with goods that travel from seller to buyer through a third party. Section 39 says when handing goods to a carrier or wharfinger is treated as delivery to the buyer, what contract the seller must make with the carrier, and what notice is due when goods go by sea. Section 40 deals with the risk of deterioration where the seller agrees to deliver at his own risk at another place. 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.
Where the seller is authorised or required to send the goods, delivery to a carrier, named by the buyer or not, or to a wharfinger for safe custody, is prima facie deemed delivery to the buyer. Unless the buyer authorises otherwise, the seller must make a reasonable contract with the carrier or wharfinger on the buyer's behalf; if he omits to, the buyer may decline to treat the delivery as delivery to himself or hold the seller responsible in damages. Unless otherwise agreed, on a sea route where it is usual to insure, the seller must give the buyer notice enabling him to insure, failing which the goods are at the seller's risk during sea transit. Under section 40 the buyer still bears the deterioration necessarily incident to the course of transit, unless otherwise agreed.
Section 39(1): delivery to a carrier is prima facie delivery to the buyer
"Where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, or delivery of the goods to a wharfinger for safe custody, is prima facie deemed to be a delivery of the goods to the buyer."
The conditions are:
- the seller is "authorised or required" by the contract of sale to send the goods to the buyer;
- the goods are delivered to a carrier "for the purpose of transmission to the buyer" (it makes no difference whether the buyer named the carrier), or to a wharfinger "for safe custody".
The consequence is "prima facie": the deeming can be displaced. The Act does not say what displaces it, or by what evidence; section 62 permits an express agreement, course of dealing or binding usage to vary what the law would otherwise imply. The Act does not define "carrier" or "wharfinger" in the section, so a vendor and supplier agreement should say which transporters or warehouse keepers the seller may use.
Example (our own, not from the Act): Shah Spices sells 50 sacks of turmeric to Gomes Retail, and the contract requires Shah Spices to send them by road. Shah Spices hands the sacks to a transport company for carriage to Gomes Retail. Under sub-section (1) this is prima facie deemed delivery to Gomes Retail.
This ties to the general rules on delivery in section 33, which allows delivery to a person authorised to hold the goods for the buyer; see our article on delivery under sections 33 to 35.
Section 39(2): the seller's contract with the carrier
"Unless otherwise authorised by the buyer, the seller shall make such contract with the carrier or wharfinger on behalf of the buyer as may be reasonable having regard to the nature of the goods and the other circumstances of the case."
If the seller omits to do so, and the goods are lost or damaged "in course of transit or whilst in the custody of the wharfinger", the buyer has two choices:
- he "may decline to treat the delivery to the carrier or wharfinger as a delivery to himself"; or
- he "may hold the seller responsible in damages".
The test is reasonableness "having regard to the nature of the goods and the other circumstances of the case". Perishable goods, fragile goods and high-value goods call for different terms; the Act sets no checklist. The measure of damages is not stated; see our articles on section 73 of the Indian Contract Act, 1872 for compensation under that Act.
Section 39(3): notice for sea transit
"Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving sea transit, in circumstances in which it is usual to insure, the seller shall give such notice to the buyer as may enable him to insure them during their sea transit, and if the seller fails so to do, the goods shall be deemed to be at his risk during such sea transit."
There are three elements: a route involving sea transit; circumstances in which it is usual to insure; and a notice that enables the buyer to insure. If the notice is not given, the goods are "deemed to be at his risk", meaning the seller's, during the sea transit. The sub-section opens with "Unless otherwise agreed", so it can be varied. The Act does not say what form the notice takes or how soon it must be given before sailing. Trade terms used in international sales are a separate subject; for background on those terms, see our post on Incoterms and risk transfer; the Act itself uses no such terms in these sections.
Section 40: risk where goods are delivered at a distant place
"Where the seller of goods agrees to deliver them at his own risk at a place other than that where they are when sold, the buyer shall, nevertheless, unless otherwise agreed, take any risk of deterioration in the goods necessarily incident to the course of transit."
So even when the seller promises to deliver at his own risk at a distant place, the buyer takes "any risk of deterioration in the goods necessarily incident to the course of transit". The word "necessarily" limits it: deterioration that goes with the transit itself, not every loss. The section is "unless otherwise agreed", so a contract may place that risk on the seller. Risk generally follows property under section 26; see our article on risk passes with property.
Example (our own): Ocean Fruits agrees to deliver mangoes to Zaveri Stores in another city at Ocean Fruits' own risk. Section 40 says Zaveri Stores nevertheless takes the risk of deterioration necessarily incident to the course of transit, unless the contract says otherwise.
The two sections side by side
| Provision | Trigger | Rule | Can the parties vary? |
|---|---|---|---|
| 39(1) | Seller authorised or required to send; delivery to carrier or wharfinger | Prima facie delivery to buyer | Prima facie only |
| 39(2) | Same | Seller to make a reasonable contract with the carrier or wharfinger | "Unless otherwise authorised by the buyer" |
| 39(3) | Route involving sea transit, usual to insure | Seller to give notice enabling insurance; else goods at his risk during sea transit | "Unless otherwise agreed" |
| 40 | Seller agrees to deliver at his own risk at another place | Buyer takes risk of deterioration necessarily incident to transit | "Unless otherwise agreed" |
Need help with carriage and risk terms in a supply contract?
Where the goods travel, the contract should say who contracts with the carrier, who insures and who carries transit loss. We can set these out in a vendor and supplier agreement that fits your route and your goods, and the same terms are worth a second look before a large order.
Key takeaways
- Delivery to a carrier (named by the buyer or not) or to a wharfinger for safe custody is prima facie delivery to the buyer.
- The seller must make a reasonable contract with the carrier or wharfinger, unless the buyer authorises otherwise.
- On a sea route where insurance is usual, the seller must give notice enabling the buyer to insure, or the goods are at his risk during sea transit.
- Under section 40 the buyer still bears deterioration necessarily incident to transit, unless otherwise agreed.
Read next
- Sections 33-35 of the Sale of Goods Act, 1930: delivery and part delivery
- Section 26 of the Sale of Goods Act, 1930: risk passes with property
- Sections 50-51 of the Sale of Goods Act, 1930: right of stoppage in transit
- Section 148 of the Indian Contract Act, 1872: bailment, bailor and bailee defined
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.