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Role Of Carrier In Sale Of Goods Act, 1930

This research paper engages in a discussion about the role of carriers concerning Sales of Goods Act, 1930. This act deals with all the contracts under which the seller transfers or agrees to transfer the goods to the buyer for some monetary return.
Carrier refers to a person, who is charged with delivering goods as per the instructions stated by the seller. This paper deals with a profound analysis of the role of carrier in contracts and agreements which are related to sales of goods.

Nature And Scope
Carrier is a person or any entity who, in a contract of carriage or agreement, undertakes to perform or to obtain the performance of carriage by any means of transport (railways, road, sea, air, inland waterway).

S.39(1) of Sale of Goods Act briefly states that in a contract of sale, when the seller is needed to send the goods to the buyer, for which he makes use of the service of carriers, whether named by the buyer or otherwise, with the end goal of transmission of the goods to the buyer, or delivery of the goods to a Wharfinger for safe care, it amounts to be a delivery of the goods to the buyer.

Carriers play an important role in shipping businesses as they hold the responsibility to deliver the goods. Let us briefly understand the duties and the roles which are considered as the nature of their work along with their rights and liabilities.

Roles and Duties of Carriers

The most important duty of Carrier is to take Reasonable care of goods, it is the responsibility of the carrier to take reasonable care of goods. The carriers have to see that loading of goods is. being done carefully and properly, suppose the carrier is dealing with business transactions associated to sea ship, then the carrier has to see that the cargo is loaded safely and the carrier must deliver the cargo without loss or damage, exceptions being the act of God (natural disasters), inherent vice of the cargo, defective packaging.

It is the duty of carrier to carry goods safely, the carrier must deliver the goods before the deadline of orders. The duty of carrier is to obey the instructions given by Seller; it is the duty of the carrier to deliver the goods to the final destination. The carrier here has to ensure that the goods are being loaded properly and carefully.

The carrier has the duty to deliver goods within stipulated time, time is the essence for any transportation contract, the carrier has the obligation to deliver goods within the time prescribed or agreed in contract between seller and buyer. Reliability and punctuality of the service by carriers are one of the most important elements and lastly, it is the duty of the carrier to deliver goods at specified place as instructed by the buyer.

Rights And Liabilities of the Carrier are listed below:

  • Right of Reward: To demand the reasonable amount for the services rendered
  • Right to Retain: To retain goods if the amount is not paid to him/her.
  • Right of advance Payment: Before the acceptance of goods, the carrier has the right to demand advance payment.
  • Right to Refuse: Carrier has right to refuse in special cases like illegal drug trade, dangerous goods, etc.
  • Right to Damages: If the goods carried are hazardous in nature and cause any harm or damage then carrier has the right to recover such damage.
  • Liabilities of Carrier: Carrier is liable for damage in case of wrong Delivery/short delivery and negligence while transporting.

Judicial Pronouncements
The role of carrier has been reinforced by the courts over the course of many judgments, some of which are as follows:
Marwar Tent Factory v. Union of India [1]
Although the carrier is not a party to the case, the court held that the seller was not liable, instead, the carrier had a duty to take reasonable care of goods and in a situation where the number of tents supplied to the buyer was less than the order, while the seller had receipt of transporting adequate quantity with the railways, the suit lied against the railways for failing to take reasonable care.

Nagpur Golden Transport Co. v. Nath Traders[2]

It was held that a carrier, upon paying for the damage caused during transportation is entitled to the damaged goods thereafter. The carrier, upon court order, paid for the damaged pumps to the buyers, who had already paid the cost of pumps to the seller. In such a scenario, to prevent the seller from getting unjustifiably enriched through amount paid for pumps as well as possession of damaged pumps, the carrier was entitled to keep the damaged pumps that it had paid for.

Bharathi Knitting Co. v. DHL Worldwide Express[3]

The court discussed the question of law with respect to carrier upon the possibility of awarding damages which exceeded the clause limiting carrier's liability under the contract. It was held that parties were bound by the contract and excess damages could not be awarded against the carrier.

Even though a carrier plays an important role in the delivery of goods through the course of a SOG contract, the number of provisions covering the role of carrier in the Sale of Goods Act is quite limited. The Act lays down provisions for situations involving the need for a carrier in sale, however, it is not exhaustive in nature.

The rights and duties of a carrier, along with Sale of Goods Act, are also derived from principles of Common Law and separate acts governing the field of carriage through land, sea, and air. These rights and duties equitably distribute the liabilities arising out of different situations, on the buyer, the seller, and the carrier. By themselves, the provisions of S.23 and S.39 cover the role of involvement of carrier in SOG contract.
However, one grey area that has an impact on carrier arises out of provisions of ownership transfer of ownership in the act rather than provisions dealing with carrier itself.

When dealing with unascertained goods, by virtue of S.23, when such goods are appropriated to contract, the goods are said to pass upon to buyer, implying that as soon as contract is entered into, the ownership is transferred. In case of a carrier being involved, as soon as buyer transfers goods to carrier for delivery, goods are said to have been transferred upon the buyer. The same is especially applicable while goods are transported through sea in a FOB contract, where the buyer takes the duty of freight, and unless the seller reserves the right to disposal, its role ends with shipment being given to carrier.

But, in S.41, buyer has the right to examine the goods and is only to accept them if they meet the terms of the contract. This brings up a question of law, if the buyer is not said to have accepted the goods until they are examined to be as per contract, then how does the ownership transfer upon entering into contract as per S.23? Because in case the goods are defective, the buyer can reject them, indicating that ownership was never accepted.

For a carrier, in a situation, where unascertained goods are being transported, and the goods are provided to carrier in a defective state, upon discovery of which the buyer refuses to take the delivery, the carrier is deprived of freight costs by the buyer and has to incur additional costs for storage and transport of goods. Unlike the Carriage by Road Act, 2007, the Carriage of Goods by Sea Act, 1925 does not provide for a right to retain goods and sell them to cover the costs after serving a notice.

In such a scenario, the carrier still has the right to lien by way of Common Law principle of carrier's lien as well as his right as a bailee under the contract act. However, it is unclear that under the ambiguity of transfer of ownership, under which party does the carrier's right to sue for legal remedy lie to cover the incurred costs, which serves as an extra burden on the carrier.

To conclude, a carrier serves as an important link in fulfillment of SOG contracts over long distances, especially in the present age of globalization, and the law covers all aspects of a carrier's role. The only gap exists in ambiguity over transfer of ownership, which although is something that can be interpreted by the courts based on the factual matrix of the case, it still serves as a small hurdle in access to legal remedy.

  1. 1990 AIR 1753, Marwar Tent Factory v. Union of India.
  2. AIR 2012 SC 357, Nagpur Golden Transport Co. v. Nath Traders.
  3. (1996) 4 SCC 704, Bharathi Knitting Co. v. DHL Worldwide Express.
Written By:
  1. Shivani Gupta (2nd Year BBA.LLB) &
  2. Sanskar Dua (2nd Year BA.LLB)

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