Can a buyer refuse payment for goods that do not match specifications?

A buyer in Pakistan may be entitled to reject goods, demand replacement or claim compensation where the supplier delivers items that do not conform to the contractual description, sample, quality or other agreed specification. The answer is not always an unconditional right to refuse every payment: the Sale of Goods Act, 1930 distinguishes conditions from warranties and addresses inspection, acceptance, rejection and the consequences of nonconforming delivery.

The applicable rights depend on the contract, the seriousness of the deviation, whether the buyer has accepted the goods and whether nonconformity was notified promptly. A buyer who uses an entire shipment for months may face a different legal position from one who immediately segregates clearly defective products and refuses acceptance.

Identify the binding specification

Obtain the signed contract, purchase order, bill of quantities, approved sample, technical data sheet, clarifications and any valid amendment.

A procurement description may require particular materials, dimensions, performance standards or certification. The question is whether those requirements formed part of the legal bargain.

A buyer cannot reject goods solely because internal preferences changed after the supplier performed exactly as agreed.

Sale by description under section 15

Section 15 of the Sale of Goods Act, 1930 implies a condition that goods sold by description correspond with that description.

Where the sale is by sample and description, conformity to the sample does not necessarily excuse failure to meet the agreed description.

A buyer should identify the precise discrepancy rather than assert generically that the shipment is substandard.

Fitness and quality under section 16

Section 16 deals with defined implied conditions concerning quality or fitness, subject to its qualifications.

Where the buyer makes a specific intended purpose known and relies on the seller's skill or judgment in circumstances covered by the Act, that may matter.

A technical supplier's promise that equipment is appropriate for a defined industrial environment may create questions different from a sale of generic stock expressly selected by the buyer.

Sample-based sales

Where sale is by sample, section 17 addresses relevant implied conditions including correspondence with the sample and a reasonable opportunity for comparison.

Preserve the approved reference sample and test the actual delivered items using agreed and reliable methods.

A test report should state the method, calibration, sample size and measurable deviation. Unsubstantiated adjectives are weak grounds for expensive rejection.

Conditions and warranties

Section 12 distinguishes conditions and warranties. Breach of a condition may justify rejection or treating the contract as repudiated in relevant circumstances, while breach of a warranty ordinarily supports damages rather than rejection.

Section 13 addresses situations where a condition is treated as a warranty, including relevant acceptance or contractual circumstances.

The lawyer must classify the contractual promise and examine what the buyer did after discovering nonconformity.

Inspection rights

Section 41 recognises a buyer's right to a reasonable opportunity to examine goods for conformity.

The inspection period depends on the goods and circumstances. Expensive industrial equipment may require commissioning tests, while easily inspected products may permit prompt verification.

A buyer should arrange competent inspection, document findings and avoid unjustified delay that could be characterised as acceptance.

When goods are accepted

Section 42 concerns acts and circumstances amounting to acceptance. Express acceptance, conduct inconsistent with the seller's ownership or retention without timely rejection may be relevant.

The buyer should preserve written reservations when goods are accepted provisionally for testing, subject to the agreement and law.

Merely labelling the goods "under protest" after consuming or reselling the entire shipment may not resolve every legal issue.

Wrong quantity or mixed delivery

Section 37 addresses the delivery of fewer goods, excess goods and goods mixed with a different description, subject to relevant contractual and trade qualifications.

The buyer may have options to reject all or part depending on the statutory situation.

A quantity shortfall should be distinguished from a technical quality defect; the available commercial remedy can differ.

Payment and delivery

Under the Act, payment and delivery may operate as concurrent conditions subject to the bargain.

If the supplier has failed to tender conforming goods, refusal to pay may be justified in appropriate circumstances.

But a buyer should not withhold the entire price of already accepted conforming goods without identifying a legal right of set-off or withholding.

Rejection procedure

Send a documented rejection describing the contract, consignment, defects, testing evidence and requested collection or replacement.

Store goods safely and reasonably to preserve their condition and evidentiary value. Section 43 addresses the buyer's obligation concerning return of rejected goods in the applicable circumstances.

The buyer should not destroy rejected equipment or sell it without considering legal consequences.

Cure or replacement

Some contracts provide for corrective action, replacement parts or a cure period before termination or damages.

The buyer should follow effective cure provisions and allow reasonable testing where required.

A supplier's offer to replace immaterial components may not necessarily cure failure of an essential specification or repeated acceptance-test failure.

Damages and substitute purchases

If nonconforming supply causes a recoverable loss, sections of the Sale of Goods Act and section 73 of the Contract Act may govern compensation.

Evidence may include the original price, reasonable replacement cost, inspection expense and proven consequences.

A claim for consequential operational loss must establish the legal and factual basis, causation and limits; it is not automatically equal to projected business revenue.

A public-procurement example

A public hospital contracts for equipment meeting a named technical standard, but the supplier delivers a different certified class.

The purchaser should compare tender documents, accepted bid and delivered specification. It must also follow any procurement and contract procedures governing inspection, rejection and replacement.

The department cannot arbitrarily create a stricter criterion after award that was not part of the contract.

An international shipment example

A Pakistani buyer imports machinery and discovers defects after delivery. The agreement specifies inspection certificates and foreign governing law.

The buyer must first interpret the governing-law and inspection terms, including whether risk and title passed and whether the agreed inspection was conclusive.

Domestic Sale of Goods Act principles cannot be mechanically applied without first considering valid choice of law and transaction facts.

Opinion and recommended course

A buyer may reject material nonconforming goods or claim legally available remedies under the Sale of Goods Act and its contract. The right to withhold payment turns on conformity, acceptance, legal classification of terms and contractual procedures.

Document specifications, inspect promptly, preserve testing evidence and issue a precise rejection or cure notice. Reconcile any payment withholding to actual rights and avoid treating accepted conforming goods as automatically unpaid.

Principal authorities: Sale of Goods Act, 1930, sections 12–17, 31–43 and relevant buyer remedies; Contract Act, 1872, section 73; the executed supply contract and applicable sector or procurement law.