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Section 118: Sections 76 to 123 [Repealed by the Indian Sale of Goods Act, 1930]

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1872
Section 117 All 266 Sections of Indian Contract Act Section 119

Legal Commentary & Landmark Judgments: Section 118

Historical Section 118 of the Indian Contract Act, 1872 governed the buyer's rights where goods were ordered for a specific purpose or sold by description and did not conform to the warranty upon delivery, permitting the buyer to refuse to accept the goods, or to keep them and claim compensation. Modernized in Sections 42 and 59 of the Sale of Goods Act, 1930, this rule establishes the buyer's election between rejection and damages.

  • Right of Timely Rejection: Where goods are unascertained or sold by description, the buyer is not compelled to accept non-conforming goods; he may reject them within a reasonable time after inspection.
  • Election of Remedies: The buyer possesses an unequivocal election: either refuse to accept the goods and demand a refund of any prepaid price, or accept them and claim compensation for the shortfall in value.
  • Bar by Inconsistent Conduct: If the buyer performs any act inconsistent with the seller's ownership (such as reselling, consuming, or altering the goods), he loses the right to reject and is relegated to a claim for damages.
Key Landmark Precedents:
  • Hardy & Co. v. Hillerns & Fowler [1923] 2 KB 490: Authoritative ruling holding that where wheat arrived at the port and the buyer resold and dispatched a portion of it to sub-buyers before inspecting, such sub-sale was an act inconsistent with the ownership of the seller, precluding rejection.
  • Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories AIR 1965 SC 980: The Supreme Court analyzed commercial descriptions and remedies, noting the strict standards governing rejection and election in mercantile contracts.
Courtroom Practice & Strategic Litigation Guidance:

Advise commercial clients that if delivered goods deviate from contract specifications, they must issue an immediate formal notice of rejection without putting the goods into production or transferring them to third parties. Keep the goods in segregated storage marking them as 'rejected and held at seller's risk and cost'.

Section 117 All 266 Sections of Indian Contract Act Section 119