Sections 56 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 56 and 57 are two short mirror-image provisions. Section 56 allows the seller to sue for damages for non-acceptance where the buyer wrongfully neglects or refuses to accept and pay for the goods. Section 57 allows the buyer to sue for damages for non-delivery where the seller wrongfully neglects or refuses to deliver. Neither section says how the damages are measured. 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 56: where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for non-acceptance. Section 57: where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery. The sections state no formula or measure of damages. For the measure, the general law of contract has to be looked at, and this Act's section 3 applies the unrepealed provisions of the Indian Contract Act, 1872 where not inconsistent.
Section 56: damages for non-acceptance
"Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for non-acceptance."
The conditions and the consequence:
- The buyer "wrongfully neglects or refuses". Both neglect and refusal are covered, and the word "wrongfully" means the buyer must be without a right to do so. A buyer who rightly rejects, for example under the rules in section 37 or because he is not deemed to have accepted under sections 41 and 42, is outside the section.
- "To accept and pay for the goods". The default is joined: acceptance and payment. Section 31 makes it the duty of the buyer to accept and pay in accordance with the terms of the contract; see our article on duties of seller and buyer.
- "The seller may sue him for damages for non-acceptance." The remedy is a suit for damages.
Section 56 is different from the suit for the price in section 55. Section 55 is available where the property has passed (or where the price is payable on a day certain irrespective of delivery); section 56 is stated without those conditions. See our article on the suit for the price. The Act does not say when the seller must choose between them or whether he may claim both; the text is silent on that.
Example (our own, not from the Act): Rao Spices contracts to sell 5 tonnes of pepper to Sinha Exports, to be taken and paid for on a fixed date. On that date Sinha Exports, with no right to do so, refuses to take or pay for the pepper. Under section 56, Rao Spices may sue Sinha Exports for damages for non-acceptance. Where the dispute is commercial, the commercial suit filing stage needs the contract, the default notice and the loss figures together.
Section 57: damages for non-delivery
"Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery."
The shape matches section 56:
- The seller "wrongfully neglects or refuses to deliver". Delivery rules are in sections 31 to 44; see our articles on delivery and on rules as to delivery. A seller who is not bound to deliver yet, for example because the buyer has not applied for delivery under section 35 or because payment and delivery are concurrent conditions under section 32, has not "wrongfully" neglected.
- "The buyer may sue the seller for damages for non-delivery." Again the remedy is a suit for damages.
Example (our own): Mukherjee Engineering contracts to buy a machine from Pillai Tools, delivery to be made by a fixed date. Pillai Tools, with no right to do so, does not deliver. Under section 57, Mukherjee Engineering may sue Pillai Tools for damages for non-delivery.
What the two sections leave unsaid
The sections are brief, and it is important not to read more into them than they say.
- No measure of damages. Neither section states how damages are calculated. This article states no formula of its own. The measure under the general law of contract is the subject of our articles on section 73 of the Indian Contract Act, 1872: compensation for breach of contract and remoteness of damage, on section 73: obligations resembling contract and duty to mitigate loss and on section 74: liquidated damages and penalty. Those are articles on a different Act. Section 3 of the Sale of Goods Act applies the unrepealed provisions of the Contract Act except where inconsistent with it.
- No limitation period. The Act states none here. Time limits are in a separate law; our site has a post on the Limitation Act, 1963 articles on specific performance and compensation for breach of contract, which should be read for itself.
- No forum or form. The sections say "may sue" and nothing more. For commercial disputes, our site has a post on the meaning of a commercial dispute under the Commercial Courts Act, 2015; nothing is taken from it here.
- Interest and special damages. Section 61 saves rights to interest and special damages where the law allows them; see our article on interest and special damages.
- Warranty breach and early repudiation. Section 59 gives the buyer remedies for breach of warranty and section 60 deals with repudiation before the due date; see our articles on remedy for breach of warranty and on repudiation before the due date.
The two sections compared
| Point | Section 56 | Section 57 |
|---|---|---|
| Who sues | Seller | Buyer |
| Default complained of | Buyer "wrongfully neglects or refuses to accept and pay for the goods" | Seller "wrongfully neglects or refuses to deliver the goods to the buyer" |
| Relief | "damages for non-acceptance" | "damages for non-delivery" |
| Measure of damages | Not stated | Not stated |
| Related duty | Section 31: buyer to accept and pay | Section 31: seller to deliver |
| Related sections | 55 (price), 44 (neglect to take delivery) | 59 (breach of warranty), 60 (repudiation) |
Practical points
- Record the date and the way of default. "Wrongfully neglects or refuses" is the test, so correspondence showing a request to accept or deliver and the answer received is the evidence.
- Work out which claim fits. A suit for the price (section 55), for damages (sections 56 and 57) or for specific performance (section 58) each rests on different conditions.
- Keep records of the loss. The sections say "damages" and give no formula; whatever measure applies, the figures must come from your books and from market quotations.
- Write the consequences into the contract. Because the Act is silent on measure, a clause that says what happens on default is the clearest guide for both sides.
- Choose the forum with care. Where the contract is commercial, prepare the right documents from the start.
Need help with a claim for damages on a goods contract?
Whether you are a seller left with goods the buyer will not take, or a buyer who has not received what you ordered, the first step is to put the contract, the default and the loss in order. We can assess your position and prepare a commercial suit filing on the documents you hold.
Key takeaways
- Section 56: where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue for damages for non-acceptance.
- Section 57: where the seller wrongfully neglects or refuses to deliver, the buyer may sue for damages for non-delivery.
- Neither section states a measure of damages, a time limit or a procedure.
- Section 3 applies the unrepealed provisions of the Indian Contract Act, 1872 where not inconsistent; the Contract Act's section 73 articles on this site deal with compensation.
Read next
- Section 55 of the Sale of Goods Act, 1930: suit for the price
- Section 58 of the Sale of Goods Act, 1930: specific performance of a contract to deliver goods
- Section 59 of the Sale of Goods Act, 1930: remedy for breach of warranty
- Section 74 of the Indian Contract Act, 1872: liquidated damages and penalty
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.