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CA Foundation · Business Laws · The Sale of Goods Act, 1930

Meera Textiles of Surat agreed to sell to Rohan 200 bales of cotton 'to be selected from the stock lying in its godown' without specifying which bales. Before any bales were set apart, a fire destroyed the entire godown stock without fault of either party. Which of the following best describes the legal position?

Rohan owes no price. In a contract for unascertained goods, property does not pass until the goods are ascertained, and risk follows property. As no bales were set apart before the fire, ownership and the loss stayed with Meera Textiles, the seller.

  1. ARohan must still pay the price, because the contract was already concluded and property passes on agreement
  2. BThe contract is not void, and Meera Textiles must deliver bales from any other source at its own cost
  3. CProperty had passed to Rohan, so the loss falls on Rohan as the owner
  4. DThe contract is not enforceable as a sale because the goods were unascertained and no property passed, so risk stayed with the seller; Rohan owes no priceCorrect

Explanation

Under the Act, where there is a contract for sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained. Since no bales were set apart, property remained with Meera Textiles, and risk follows property. Option C is wrong because ownership never passed. Option A is wrong because mere agreement does not transfer property in unascertained goods.

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