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CSEET · Business Laws and Management · Elements of Law relating to Sale of Goods

Meera agrees to sell her specific scooter to Arjun for ₹40,000. Unknown to Meera, the scooter had been destroyed in a fire the previous night, before the agreement was made. What is the legal position under the Sale of Goods Act, 1930?

The contract is void. Under Section 7, where specific goods have, without the seller's knowledge, perished at the time the contract was made, the contract is void, so neither a substitute scooter nor damages can be demanded.

  1. AThe contract is valid and Meera must supply a similar scooter
  2. BThe contract is voidable at the option of Arjun
  3. CThe contract is void because the specific goods had perished without the seller's knowledge when the contract was madeCorrect
  4. DThe contract is valid but Meera must pay damages only

Explanation

Section 7 says that where there is a contract for the sale of specific goods and the goods, without the knowledge of the seller, have perished at the time the contract was made, the contract is void. It is not merely voidable, and no substitute need be supplied.

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