The Contract of Sale of Goods: Implications, Types, and Legal Principles, Study notes of Law

Download The Contract of Sale of Goods: Implications, Types, and Legal Principles and more Study notes Law in PDF only on Docsity! Dr. Tabbassum Chaudhry Dept. of Law Amu SFA Study Material B.A.LL.B. (HONS.) IV SEMESTER BUSINESS LAW SPECIAL CONTRACTS (SALE OF GOODS AND PARTNERSHIP) Unit 2 Conditions and Warranties (S. 12-15) The contract of sale of goods is a special type of contract and has a huge application in the business world. These contracts are governed by the Sale of Goods Act 1930, which was earlier part of the Indian Contract Act, 1872. Because of the wide use of the contract of sale of goods, a special enactment was necessary but despite the separate legislation, the law has its root in the Indian Contract Act, 1872. Both the laws are complementary to each other thus, the basic provisions of the Indian Contract Act are applicable to the contracts of sale. Whenever we buy any goods like electronic gadgets etc, we are concerned about the warranty periods. We ask the seller about the warranty to make sure that even if the product is found to be faulty after purchase, we can easily get the product replaced or repaired. The terms “Condition” and “Warranty” are set out in the contract of sale in order to determine remedies the parties can claim in case of the breach by either of the parties. Here in this article, we will see the manner how these terms are defined, their differences and their legality in the light of Sale of Goods Act, 1930.  Definition Certain provisions need to be fulfilled as demanded in the contract of sale or any other contract. The condition is a fundamental precondition on the basis of which the whole contract is based upon, on the other hand, warranty is the written guarantee wherein the seller commits to repair or replace the product in case of any fault in the product. Section 11 to 17 of the Sale of Goods Act enlightens the provisions relating to Conditions and Warranties. Section 12 of the Act draws a demarcation between a condition and a warranty. The determination of condition or warranty depends upon the interpretation of the stipulation. The interpretation should be based on its function rather than the form of the word used.  Condition In the context of the Sale of Goods Act, 1930, a condition is a foundation of the entire contract and integral part for performing the contract. The breach of the conditions gives the right to the aggrieved party to treat the contract as repudiated. In other words, if the seller fails to fulfil a condition, the buyer has the option to repudiate the contract or refuse to accept the goods. If the buyer has already paid, he can recover the prices and also claim the damages for the breach of the contract. For example, Sohan wants to purchase a horse from Ravi, which can run at a speed of 50 km per hour. Ravi shows a horse and says that this horse is well suited for you. Sohan buys the horse. Later on, he finds that the horse can run only at a speed of 30 km/hour. This is the breach of condition as the requirement of the buyer is not fulfilled. The conditions can be further classified as follows. Dr. Tabbassum Chaudhry Dept. of Law Amu SFA  Kinds of conditions 1. Expressed Condition The dictionary meaning of the term is defined as a statement in a legal agreement that says something must be done or exist in the contract. The conditions which are imperative to the functioning of the contract and are inserted into the contract at the will of both the parties are said to be expressed conditions. 2. Implied Condition There are several implied conditions which are assumed by the parties in different kinds of contracts of sale. Say for example the assumption during sale by description or sale by sample. Implied conditions are described in Section 14 to 17 of the Sale of Goods Act, 1930. Unless otherwise agreed, these implied conditions are assumed by the parties as if it is incorporated in the contract itself. Let’s study these conditions briefly: - Implied condition as to title In every contract of sale, the basic yet essential implied conditions on the part of the seller are that- 1. Firstly, he has the title to sell the goods. 2. Secondly, in case of an agreement to sell, he will have the right to sell the goods at the time of performing the contract. Consequently, if the seller has no title to sell the given goods, the buyer may refuse or reject those goods. He is also entitled to recover the full price paid by him. In Rowland v. Divall (1923), the party bought a second-hand motor car from the former and paid for the same. After six months, he was deprived of it as the seller had no title to sell the car. It was held that the aggrieved party is entitled to recover the money. - Implied condition as to the description Moving to Section 15 of the Act, In the contract of sale, there is an implied condition that the goods should be in conformity with the description. The buyer has the option to either accept or reject the goods which do not conform with the description of the good. Say for example: Where Ram buys a new car which he thinks to be new from “B” and the car is not new. Ram’ can reject the car. Referring to Section 16(2) of the given Act, goods must be of merchantable quality. In other words, the goods are of such quality that would be accepted by a reasonable person. For eg: A purchased sugar sack from B which was damaged by ants. The condition of merchantability is broken here and it is unfit for use. It must be noted from this section that the buyer has the right to examine the goods before accepting it. But a mere opportunity without an actual examination would not suffice to deprive the buyer of his rights. If, however, the examination does not reveal the defect but within a reasonable time period the goods are found to be defective, He may repudiate the contract even if he approves the goods. Dr. Tabbassum Chaudhry Dept. of Law Amu SFA  When does Condition sink to the level of Warranty? Section 13 of the Act specifies the cases wherein a breach of Condition sink to the level of breach of Warranty. In the first two following points, it depends upon the will of the buyer, but the last one is compulsory and acts as estoppel against him: 1. When the buyer waives the condition, the condition is considered a warranty. 2. A condition would sink to the level of warranty where the buyer on his own will treat the breach of condition as a breach of warranty. 3. Wherein the contract is indivisible and the buyer has accepted the whole or part of goods, the condition is treated as a warranty. Consequently, the contract cannot be repudiated. However, the damages can be claimed. Rule of Caveat Emptor (S.16-17) The rule of caveat emptor which means “let the buyer beware” has been overridden by the rule of caveat venditor. Such change was required because of changing conditions of modern trade and commerce. The phrase caveat emptor is not used by the judges very often nowadays. This doctrine is based on the principle that when a buyer is satisfied as to the product’s suitability, then he is left with no subsequent right to reject such product. The caveat emptor rule originated many years ago in common law and over the times has undergone major changes. The exceptions of the doctrine started expanding with time as it was being given a concrete shape. Statement of Caveat emptor The principle of Caveat emptor is explained in Section 16 of the Sale of Goods Act 1930 which states that there is no implied condition or warranty as to quality or fitness for any particular purpose of goods supplied.” The History of Caveat emptor In the 19th century, the attitude of common law towards the buyer can be understood by the maxim Caveat emptor which means let the buyer beware. This maxim explains that a purchaser must carefully examine and judge what is best for him. The purchaser should not take the risk of the condition and quality of the object which he needs to buy, he must protect himself by a warranty. The philosophy behind the rule of Caveat emptor basically was that buyer shall apply his own skill and judgment before buying. It is based on the fundamental principle that when a buyer is satisfied with the suitability of the product for his use, no subsequent right will be left with him to reject the same. When the rule of caveat emptor originated, it was quite rigid and there was no scope for any subsequent change in the rule. In English Sale of Goods Act, 1893, it is highly noticeable and evident that the seller’s duties as to requirements of disclosure when a product is sold was minimal. There was no duty upon the seller to provide information and proper examination of the goods by the buyer was considered over and above any other duty. The Concepts which could be used to shift the burden as to quality and fitness on the Dr. Tabbassum Chaudhry Dept. of Law Amu SFA seller such as ‘fitness of goods’ and ‘merchantability’, were not encouraged. Another strong statement which was present in Section 11(1)(c) in the said Act, which mandated that the buyer could not reject the goods on any ground in cases where there was sale of ‘specific’ goods. Thus, it is highly noticeable that the law was bent towards the seller and in those times, one could not even find a corresponding rule which would put the burden on the seller. The Fallacy & The Need for Change At the time of its origin the rule of Caveat emptor prevailed in its absolute form but it was later categorised as detrimental to the development of commerce and trade. Rule of Caveat emptor in its absolute form was highly detrimental to the buyer because of the absence of the element of reasonable examination. Therefore, a buyer would have no recourse against the seller who is aware of the latent defect but did not aware the buyer about the same and the buyer cannot detect that defect (as it cannot be detected by reasonable examination). Another strong reason for the fallacy of the rule of Caveat emptor, is the need for providing protection to the buyer who purchases the goods in good faith, that is, where the buyer purchases goods from the seller by relying on his skill and judgment. Thus, the rule was subsequently diluted so as to give proper recognition to the relationship between the seller and the buyer and in order to give rise to a scenario wherein commercial transactions are encouraged. How it changed to Caveat venditor? For the aforementioned reasons, the rule of Caveat emptor for the first time suffered backlash in the case of Priest v. Last, wherein reliance was placed on the buyer relying on seller’s skill and judgment and the buyer was allowed to reject the goods for the first time. In this case the buyer purchased a hot water bottle relying on the seller’s skill and judgment. It was observed that if a buyer purchases an object relying on the seller’s skill and judgment then the buyer will be allowed to reject the same on the occurrence of any defect. This was the first ever decision in common law in which importance was given to the buyer’s reliance on the seller’s judgment and skill. Gradually this rule gained prominence and the seller’s obligations have been given a proper shape along various case laws and statutes limiting the rule of Caveat emptor to ‘reasonable examination’. In cases like milk containing typhoid germs, contaminated beer, the Courts have been generous enough to establish that where the defects would not have been traced by reasonable examination in ordinary circumstances, the buyer will be exempted from this duty. Further, in Harlingdon & Leinster Enterprises Ltd v. Christopher Hull Fine Art Ltd, the buyer claimed that he had the right to reject the painting as it was not of the original painter. So, it was observed that where the buyer has more expertise in a given field and is more reasonable than the seller then it would be completely wrong to suggest that the buyer would have the right to reject the purchased object. Therefore, the seller is bound by the duty to make known to the buyer all the defects in the goods and the information relating to the usage of goods. This obligation of the seller is irrespective of his own judgment and skill because what matters is what he is expected to have and not what he has. Judicial Trends Dr. Tabbassum Chaudhry Dept. of Law Amu SFA In Ward v. Hobbes (1878) 4 AC 13, the House of Lords held that if a seller uses artifice or disguise to conceal the defects in the product which is to be sold, it would amount to fraud on the buyer; still no duty to disclose the defects in the product is imposed on the seller by the doctrine of caveat emptor. An obligation to use care and skill while purchasing goods is imposed on the buyer by the doctrine of Caveat emptor. The Court of Appeal Wallis v. Russel (1902) 2 IR 585, explained the scope of caveat emptor and laid down that the rule of Caveat emptor implies that “the buyer must take care”. It applies to the purchase of those things upon which buyer can exercise his own skill and judgment, e.g. a picture, book, etc (also known as specific goods); it also applies in the cases where by usage or by a term of contract it is implied that the buyer shall not rely on the skill and judgment of the seller. Exceptions to The Rule of Caveat emptor (Section 16 of The Sale of Goods Act, 1930)  Fitness for buyers’ purpose [Section 16(1)] Section 16(1) of the said Act provides that in situations where the seller is aware either expressly or by necessary implication of the purpose for which a buyer needs to purchase a specific product, further, the goods are of such description which the seller supply in his ordinary course of business and by relying upon the judgment and skill of the seller, the buyer purchases that product, then the goods should be in accordance with the purpose. In other words, this section explains the circumstances where the seller has an obligation to supply the goods to the buyer as per the purpose for which he intends to buy the goods. Requirements of Section 16(1) are as follows: -  The buyer should explain the particular purpose for which he is making the purchase to the seller.  The buyer should rely on the seller’s skill and judgment while making a purchase.  The goods must be of a description which the seller in his ordinary course of business supply. In Shital Kumar Saini v. Satvir Singh, a compressor was purchased by the petitioner with one- year warranty. The defect in the product appeared within three months. The petitioner sought a replacement. The seller replaced it but did not provide any further warranty. The State Commission stated that an implied warranty was guaranteed under section 16 of the Sale of Goods Act, 1930 and allowed it to be rejected.  Sale under Trade Name [Proviso to S. 16(1)] In some cases, a buyer purchases goods not by relying on the skill and judgment of the seller but by relying on the product’s trade name. In such cases, it would be unfair that the seller is burdened with the responsibility of quality. The proviso to Section 16 deals with such cases. It provides that: “Provided that, there is no implied condition as to fitness for any particular purpose in the case of a contract for the sale of a specified product under its patent or other trade names.  Merchantable quality [Section 16(2)] Dr. Tabbassum Chaudhry Dept. of Law Amu SFA For example, Deepak from his 300 oranges wants to sell 100 oranges; however, he doesn’t specify which oranges he wants to sell. This is called a sale of unascertained goods. Future Goods As per Section 2(6) of the Sale of Goods Act, 1930, future goods have been characterised as those goods which at the time of formation of the contract will either be “manufactured, produced or acquired by the buyer”. There will not be an actual sale in the sale of future goods, it will always be an “agreement to sell”. For example, Deepak has an orange grove with oranges in it. He agrees to sell 500 oranges to a buyer once the oranges are ready for market. This is a sale which will happen in the future. However, the goods have already been identified along with the agreement to sell. Such goods are known as future goods. Contingent Goods Contingent goods are a subtype of future goods. In contingent goods, the sale happens in the future. The sale will always come with some contingency clause in it. For example, if Deepak sells his oranges from his orange grove when the trees are yet to produce oranges, then the oranges are contingent good. This sale of contingent goods will be dependent on a condition that the trees will produce oranges, which may or may not happen.  Legal Principles regarding Transfer of Goods There are four principles regarding the transfer of goods under the umbrella of The Sale of Goods Act, 1930, which the article will be talking about and they’re as follows: Transfer of property in sale of Specific or Ascertained Goods Section 19 to section 22 of The Sale of Goods Act, 1930 are a few sections which govern the transfer of goods in a case where the goods are specific and ascertained in nature: Property when intended to pass (Section 19) Section 19 of The Sale of Goods Act, 1930, is divided into further subsections and they’re as follows: 1. Where a contract for sale of ascertained or specific goods exists, a specified time is fixed as per the convenience and consensus of both the parties at which the property is intended to be transferred from the seller to the buyer. 2. One has to pay attention to the circumstances and conduct of both the parties to the contract in order to understand the true intention of the contracting parties. Also, the terms of the contract should be given equal importance in the existing case. 3. Except if an alternate intention shows up, the principles laid under the Section 20 to 24 of the Act will help in finding out the intention of the contracting parties in respect with the time at which the goods are about to get transferred from the seller to the buyer. Specific goods in a Deliverable state (Section 20) Section 20 of The Sale of Goods Act, 1930 relates to specific goods in a deliverable state, and it states: Dr. Tabbassum Chaudhry Dept. of Law Amu SFA In a contract for the sale of specific goods, which is unconditional in nature, the goods are transferred from the seller to the buyer at the time of formation of the contract. However, the only precondition required for the transfer of property is the fact that the goods must be existing in a deliverable state. The delay in the payment or delivery of goods or both is not something which holds importance. Example: A goes to a big electronic shop in order to buy a television set. He selects a big plasma Television set and asks the shopkeeper to deliver the television at his house which is at the other end of the town. The shopkeeper agrees to it. With this, “A” will become the owner of the television, and the Television set will become his property. Specific goods to be put into a deliverable state (Section 21) Section 21 of The Sale of Goods Act, 1930: certain goods to be put in a deliverable state: Where there is an existence of a contract for the sale of specific goods, the property concerned in the transaction will only be passed to the buyer, if the seller performs the necessary acts and omissions in order to put the goods in a deliverable state. Also, it is mandatory for the seller to notify the buyer regarding the alterations. Example: A goes to a mall to buy a smart television from an electronics store. He selects a big fancy smart TV from the electronic section and asks for its home delivery. The manager agrees to deliver it to A’s home. However, at the time where he selects the smart TV, it doesn’t have an operating system installed. The manager promises to install the operating system and on the next day, he informs “A” that his smart TV is now installed with the operating system and is ready for its delivery. Further, he asked for his permission to make the delivery. In order to summarize the example, the goods will only be transferred to “A” if the manager has installed the operating system making the smart TV ready for its use. Specific goods are in a deliverable state but the seller has to do something to ascertain the price (Section 22) Section 22 of The Sale of Goods Act, 1930: Specific goods are in a deliverable state but the seller has to do something to ascertain the price: Where there is a contract for the sale of specific goods in a deliverable state, the seller is undoubtedly bound to weigh, measure, test or do the necessary demonstration or anything which is required in reference with the sale of those particular goods. He’ll be doing this to ascertain the appropriate value of the goods. The property in the goods will not pass until such demonstration or particulars are done and the buyer has acknowledged it thereof. Example: Rishabh sells a wooden bed to Deepak and agrees to assemble it in Deepak’s bedroom as it was a part of the agreement. Rishabh delivers the wooden bed and makes a call to him informing Deepak that he will assemble the wooden bed the next day. That night the wooden bed gets stolen from Deepak’s premises. In this case, Deepak will not be liable for the loss since the wooden bed was not passed to him. According to the terms of the contract, the wooden bed would be in a deliverable state only after it is assembled. Transfer of property in sale of Unascertained Goods Dr. Tabbassum Chaudhry Dept. of Law Amu SFA Section 23 of The Sale of Goods Act, 1930 govern the transfer of goods in a case where the goods are unascertained in nature:  Sale of unascertained goods and appropriation (Section 23) Section 23 of The Sale of Goods Act, 1930, is divided into further subsections and they’re as follows: Section 23(1) Sale of unascertained goods by description: In a contract, for the sale of unascertained goods by description, if goods of a specific description are appropriated either by the seller with the consent of buyer or by the buyer with the consent of the seller, then the goods are passed to the buyer. The consent can be expressed or implied and can be given before or after the appropriation is made. Section 23(2) Delivery to the carrier: The seller has unconditionally appropriated the property if he delivers the property to the buyer/ carrier/ bailee for the reason of transmission to the buyer, however, he doesn’t reserve the disposal rights to the property, then it can be said that he has appropriated the contract. Goods sent on “sale or return” When goods are disposed on the basis of “sale or return” by the seller, the ownership of the goods aren’t transferred to the buyer unless the buyer gives assent to the goods. However, if these goods are held by its buyer without giving an approval then they’re taken as goods whose ownership is yet to be transferred. In that case, they’re treated as goods which belong to the seller and not the buyer. Goods sent on approval or “on sale or return” (Section 24) Section 24: In a case where the goods are delivered to the buyer either on approval or on “sale or return” or on other comparable terms then: (a) The goods therein will only pass to the buyer if the buyer either portrays his consent or acknowledges to the seller or does any act by which the transaction would be adopted. (b) The goods therein will only pass to the buyer if the buyer doesn’t express his consent or acknowledgement to the seller that he intends to reject the goods, however, holds the goods without giving a notice to the buyer then on the expiration of time frame for the return of the goods or if time hasn’t been fixed, then on the completion of a reasonable time, the property will be passed to the buyer. Example: “A” the seller of a precious necklace gives it to “B” the buyer on “Sale or return” basis. B after observing the necklace finds it very beautiful and put forth his consent on buying the necklace. In this case, the goods will be transferred to the buyer. However, if the buyer doesn’t wish to give the acknowledgement for the product then the goods shall be duly returned back to B. In case of right to disposal The intention behind reserving the right of disposal of the goods is to make sure that the value of the product is paid before the property is transferred to the buyer. However, under the Dr. Tabbassum Chaudhry Dept. of Law Amu SFA Types of E-Commerce E-commerce can be categorised into six categories: 1. Business-to-Business (B2B) – B2B e-commerce consists of all kinds of electronic transactions, dealings and business related to the goods and services that are conducted between two companies. This type of e-commerce exists between the producers of a product and the conventional wholesalers who advertise the product to consumers for purchase. So, in this kind of e-commerce the final consumer is not involved and the online transactions only involve the manufacturers, wholesalers, retailers etc. 2. Business-to-Consumer (B2C) – It is the most common form of e-commerce, and it deals with electronic business relationships between businesses and consumers. This kind of e-commerce allows consumers to shop around for the best prices, read customer reviews and find different products that they would not find otherwise in the retail world. This kind of e-commerce is related to the transactions and relationships between businesses and the end customers. Today, we find various online shopping sites and virtual stores on the internet, that sell thousands of products, ranging from computers, fashion items to medicines and other necessities. 3. Consumer-to-Consumer (C2C) – This level of e-commerce consists of all electronic transactions that take place between consumers. This consists of electronic transactions of goods and services between two customers and is mainly conducted through a third party that provides an online platform for these transactions. C2C e-commerce consists of sites where old items are bought and sold, such as OLX, Quicker etc. Generally, these payment transactions are provided by online platforms (such as Paytm, Google Pay etc), and are conducted through social media networks (such as Facebook, Instagram etc) and websites. 4. Consumer-to-Business (C2B) – In C2B e-commerce, a consumer or an individual makes their goods or services available online for companies to purchase, so, in this kind of e-commerce a complete reversal of the selling and buying process takes place. For example, a graphic designer making a company site or logo or a photographer taking photos for an e-commerce website. This is very relevant for crowd- sourcing projects. 5. Business-to-Administration (B2A) – This e-commerce consists of electronic transactions that takes place companies and bodies of public administration such as government. Therefore, the B2A model is sometimes also referred to as B2G (Business- to-Government). Many processes are becoming optimized through digitalization because of that many administrations and governing bodies are implementing third- party technologies to assist in the process. This involves many services in various areas such as social security, fiscal measures, employment and legal documents. 6. Consumer-to-Administration (C2A) – This e-commerce consists of electronic transactions that takes place between people and bodies of public administration. This relationship allows access for consumers to receive information, make payments, and establish direct communication between the government or administrations and the Dr. Tabbassum Chaudhry Dept. of Law Amu SFA consumers. Many common C2A transactions may include paying taxes, fines, or paying tuition to a University. The main objective of both the B2A and C2A types of eCommerce is to increase flexibility, efficiency, and transparency in public administration. Important Issues in Global E-commerce 1. Issue relating to Privacy- The increase of electronic transactions over the internet raises various concerns on the collection, storing and manipulation of personal information without the consent or knowledge of consumers. The functioning of E-Commerce is highly connected and dependent upon the collection and storing of personal information of consumers to provide them with the products and services and maintain their data. Therefore, there is a chance that without the consent or knowledge of consumers, personal information may be shared with or sold to others. Because of these concerns the protection of privacy has become one of the most important policy issues among policy-makers, businesses and consumers. 2. Issue relating to Security- E-Commerce security can be defined as “a protection of an information resource from the threats and risks in the confidentiality, authenticity and integrity of the electronic transactions transmitted via a network”. The e-commerce can only grow if the system is capable of providing the same level of trust and security which is found in traditional methods of business. This can be achieved only if consumers of e-commerce are confident of the security provided by the concerned e- commerce. 3. Issue relating to Consumer Protection– The consumers must be sure that they are as protected in the electronic marketplace as they are in the real marketplace. There are many consumer protection issues related to electronic transactions such as card information, bank information, etc. Therefore, it becomes important that confidential information such as credit/ debit card information, bank account number etc. are kept protected. Earlier, it used to be difficult for a consumer to verify the authentication and security information in an online atmosphere, but with the introduction of digital signature it has become easy and safe. 4. Issue relating to Content Regulation- There is certain types of online transmissions that are deemed inappropriate, offensive or harmful to certain segments of consumers and users of E-Commerce. Adult materials, bullying, terrorism, hate speech against minors and sedition are some examples of those activities that raise public concerns. And those who are concerned about these harmful or inappropriate Internet contents advocate for regulatory intervention and content regulation by government and concerned organizations. This is an issue for policy makers and concerned companies. However, the counter argument for such content regulation and intervention is on the ground of right to speech and expression. This problem should be solved without affecting the functioning and growth of e-commerce. 5. Issues relating to Access: The following are the main issues related to access to e- commerce: Dr. Tabbassum Chaudhry Dept. of Law Amu SFA Access to infrastructure- In order to conduct commercial transactions over the Internet, consumers need to have access to telecommunications networks and services. Access to content- In e-commerce, the kind and amount of content transmitted over this infrastructure is also one of the critical elements for the growth of e-commerce. The contents have to be competitive, respecting the cultural values of others, and not inappropriate or harmful to others. Universal access- With the increasing importance and involvement of Information and Communication Technologies in our everyday lives, universal availability of various communication services, has become a necessity for both consumers and companies of e- commerce. A large number of people are still living without the basic telephone services. This gap related to technology and digitization in the world population is called as digital divide. The digital divide affects the people’s capacity to access modern Information and Communication Technologies, which in turn impedes their capacity to access the Internet and e-commerce, which ultimately daunts the growth of e-commerce. Language and localization: With e-commerce extending to other boundaries, language and localization becomes an issue because it becomes difficult to communicate with a native speaker of any particular country. Pros of E-Commerce E-commerce is an advanced way of conducting businesses online and across the borders and because of that it has various advantages to it: 1. Its reach is across the global market and with minimum investments. 2. It enables sellers to sell their products on a global level and allows customers to make a broader choice. Now sellers and buyers can meet in the virtual world, without the barrier of borders. 3. E-commerce process reduces the product distribution chain to a considerable extent. 4. It helps in making a direct and transparent business and transaction channel between the producers, wholesalers and final customers. 5. It provides quick delivery of goods and customer complaints are also addressed quickly. It also saves time, energy and effort for both the consumers and the company. 6. E-commerce leads to increased productivity and better service as it brings sellers and customers closer. 7. The customer can choose between different sellers. 8. Customers now have access to virtual stores all the time. 9. E-Commerce leads to considerable cost reduction of goods and services. Transaction costs are also reduced in E-commerce and due to that customers get to buy products at a comparatively lower rate. Cons of E-Commerce However, along with advantages, E-commerce has certain disadvantages too, such as: