Section 60 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 60 is a single sentence with two options in it. If either party to a contract of sale repudiates the contract before the date of delivery, the other party may either treat the contract as subsisting and wait till the date of delivery, or treat the contract as rescinded and sue for damages for the breach. 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 either party to a contract of sale repudiates the contract before the date of delivery, the other party has a choice: treat the contract as subsisting and wait till the date of delivery, or treat the contract as rescinded and sue for damages for the breach. The section applies to the buyer and the seller alike, and it leaves the choice to the party who did not repudiate.
The words of the section
"Where either party to a contract of sale repudiates the contract before the date of delivery, the other may either treat the contract as subsisting and wait till the date of delivery, or he may treat the contract as rescinded and sue for damages for the breach."
Taking the phrases in order:
- "Either party to a contract of sale". Buyer or seller. The section is symmetrical.
- "Repudiates the contract". The Act does not define repudiation in this section. Section 12 uses the idea in another way, saying that breach of a condition gives a right to treat the contract as repudiated; see our article on condition and warranty defined. Section 60 itself describes the act of the repudiating party only by the word "repudiates". Which option to take is a decision to make on the documents, and our legal dispute resolution service starts from the contract and the correspondence.
- "Before the date of delivery". The section applies only to a repudiation made before the date of delivery. A refusal at or after the date of delivery falls under the other remedies in Chapter VI, for example sections 56 and 57 on damages for non-acceptance and non-delivery. See our article on damages for non-acceptance and non-delivery.
- "The other may either ... or ...". The party who has not repudiated chooses. The two choices are mutually described by the word "either ... or".
Option one: treat the contract as subsisting and wait
The innocent party may "treat the contract as subsisting and wait till the date of delivery". The contract stays alive, the date of delivery stays as fixed, and the repudiation does not by itself end the obligations. The section does not say what follows if the innocent party waits and the repudiating party then performs, or what follows if the repudiating party still does not perform on the date; the text is silent on both. The remedies on the date of delivery are those of Chapter VI; see our articles on the suit for the price and on specific performance.
Example (our own, not from the Act): On 1 January, Das Garments contracts to sell 5,000 shirts to Ghosal Retail, delivery on 31 March. On 1 February, Ghosal Retail writes that it will not take the shirts. Das Garments may treat the contract as subsisting and wait till 31 March.
Option two: treat the contract as rescinded and sue for damages
Alternatively, the innocent party "may treat the contract as rescinded and sue for damages for the breach". Two things happen in this option: the contract is treated as rescinded, and the innocent party may sue for damages without waiting for the date of delivery.
The Act does not state how the damages are measured or at what date they are assessed. For compensation under the general law of contract, see our article on section 73 of the Indian Contract Act, 1872; section 3 of this Act applies the unrepealed provisions of the Contract Act except where inconsistent with this Act. For rescission in the general law, see our article on sections 63 to 65 of the Indian Contract Act, 1872. Those are articles on a different Act, and this article takes no rule from them.
Example (our own): In the same facts, Das Garments instead decides to treat the contract as rescinded and sues Ghosal Retail for damages for the breach, without waiting for 31 March.
The choice, and what the section does not say
| Point | What the section says | What it leaves unsaid |
|---|---|---|
| Who repudiates | "Either party" | What counts as repudiation |
| When | "Before the date of delivery" | Whether the repudiation must be in words |
| Who chooses | "The other" party | How or when the choice must be made |
| Option 1 | "Treat the contract as subsisting and wait till the date of delivery" | Effect of waiting on the damages |
| Option 2 | "Treat the contract as rescinded and sue for damages for the breach" | The measure of damages and the date of assessment |
How section 60 sits with its neighbours
- Section 38(2) asks whether a breach in an instalment is a repudiation of the whole contract or a severable breach; see our article on instalment deliveries. Section 60 is different: it deals with repudiation before the date of delivery.
- Section 44, proviso, preserves the seller's rights where the buyer's neglect or refusal to take delivery amounts to a repudiation of the contract; see our article on rejected goods and refusing delivery.
- Section 54(4) deals with a seller who reserves a right of re-sale on default and re-sells, and says that the original contract is thereby rescinded; see our article on resale by the unpaid seller.
- Sections 56 and 57 give damages for non-acceptance and non-delivery once the wrong is at the time of acceptance or delivery.
For a contract-law view of a refusal to perform wholly, our site has an article on sections 38 and 39 of the Indian Contract Act, 1872.
Practical points
- Read the letter or message that says "we will not perform". Section 60 starts from a repudiation by a party; keep a dated copy of the statement.
- Decide which option you choose, and say so. The Act leaves the choice to the innocent party. Silence for a long time can make the position harder to describe; the text does not say what the effect is, so record the choice.
- Waiting keeps the contract alive for both parties. If you choose option one, the contract continues until the date of delivery.
- Rescinding means suing for damages. Gather figures: contract price, replacement price, costs.
- Write the consequence of early repudiation into the contract. The Act states no formula, so a clause on notice and damages for early repudiation gives both sides a clear route.
Need help when the other side repudiates a supply contract?
If a buyer or supplier tells you in advance that the contract will not be performed, the choice between waiting and treating the contract as rescinded should be made on the documents. Our legal dispute resolution team can look at the contract and correspondence and advise on the route.
Key takeaways
- Section 60 applies when either party repudiates the contract of sale before the date of delivery.
- The other party may treat the contract as subsisting and wait till the date of delivery, or treat it as rescinded and sue for damages for the breach.
- The choice is the innocent party's.
- The section states no measure of damages and no form or time for the choice.
Read next
- Section 38 of the Sale of Goods Act, 1930: instalment deliveries
- Sections 56-57 of the Sale of Goods Act, 1930: damages for non-acceptance and non-delivery
- Section 61 of the Sale of Goods Act, 1930: interest and special damages
- Section 75 of the Indian Contract Act, 1872: compensation to party rightfully rescinding contract
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.