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

Mohan Orchards agrees to sell to Sethi Foods all the mangoes that will grow on its trees in the coming season, at Rs 40 per kg. The mangoes have not yet grown. What is the legal nature of this contract?

The contract is an agreement to sell. The mangoes have not yet grown, so they are future goods, being goods the seller will produce or acquire after the contract. A sale of future goods operates only as an agreement to sell, and it is not void.

  1. AAgreement to sell, because it concerns future goodsCorrect
  2. BContract of sale of existing goods, because the trees exist
  3. CVoid, because the goods are not in existence
  4. DVoid, because the quantity is not fixed

Explanation

Goods to be manufactured, produced or acquired by the seller after the contract is made are future goods. A contract for the sale of future goods can only be an agreement to sell, and not a sale. The goods are capable of being identified at harvest, so the contract is not void for uncertainty.

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