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

On 1 March, Meera agrees to buy a specific second-hand machine from Sundaram Engineering. Unknown to the seller, the machine had been destroyed in a fire on 28 February. What is the legal position of the contract?

The contract is void. For specific goods, if the goods have perished at the time the contract is made without the seller's knowledge, the contract is void. It is not merely voidable, and the seller has no duty to supply a substitute.

  1. AValid, and the seller must supply a similar machine
  2. BVoidable at the option of the buyer
  3. CValid, but the seller must pay damages
  4. DVoid, because the specific goods had perished at the time the contract was made without the seller's knowledgeCorrect

Explanation

Section 7 declares a contract for specific goods void if, without the seller's knowledge, the goods have perished at the time of contracting. Here the machine was destroyed before the contract and the seller did not know. It is void, not voidable or valid.

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