Sale of Goods Act Section 26 — Risk prima facie passes with property

CHAPTER III EFFECTS OF THE CONTRACT — Transfer of property as between seller and buyer

Commercial / Corporate

Summary

Unless otherwise agreed, the goods remain at the seller’s risk until ownership of the goods is transferred to the buyer. Once ownership is transferred to the buyer, the goods are at the buyer’s risk, regardless of whether delivery has actually been made or not.

Under the first proviso, if delivery is delayed because of the fault of either the buyer or the seller, the goods are at the risk of the party who caused the fault, but only for any loss that would not have occurred without that fault.

Under the second proviso, this section does not affect the duties or liabilities of either the seller or the buyer when they are holding the goods as a bailee (that is, in lawful possession of the other party’s goods).

Official Text

Unless otherwise agreed, the goods remain at the seller’s risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer, the goods are at the buyer’s risk whether delivery has been made or not:

Provided that, where delivery has been delayed through the fault of either buyer or seller, the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault:

Provided also that nothing in this section shall affect the duties or liabilities of either seller or buyer as a bailee of the goods of the other party.