CA Foundation · Business Laws · The Sale of Goods Act, 1930
Neha Traders agrees to sell Ravi a particular consignment of 500 kg of saffron lying in its warehouse. Unknown to both parties, a fire had destroyed the entire consignment the previous night. What is the legal position?
The contract is void. Specific goods that, without the seller's knowledge, had already perished when the contract was made cannot be sold, so the Act treats the contract as void and neither party can enforce it against the other.
- AThe contract is valid and Neha must supply similar saffron
- BThe contract is voidCorrect
- CThe contract is voidable at Ravi's option only
- DThe contract is valid but Neha pays damages
Explanation
Where specific goods have, without the seller's knowledge, perished at the time the contract is made, the contract is void. The goods here were specific, because they were identified and agreed upon. Neha cannot be required to supply other saffron because the contract was never for unascertained goods.
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