Skip to content

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

Rao Agro agreed to sell 500 quintals of wheat to Kumar Flour Mills at Rs 2,000 per quintal, delivery on 10 July. Rao delivered nothing. On 10 July the market price was Rs 2,300 per quintal. Applying the prima facie rule for damages for non-delivery, what is Kumar's claim?

Kumar can claim Rs 1,50,000. Damages for non-delivery are the difference between market price and contract price on the date of breach, which is Rs 300 per quintal, and this multiplied by 500 quintals gives Rs 1,50,000.

  1. ARs 1,50,000Correct
  2. BRs 10,00,000
  3. CRs 11,50,000
  4. DRs 1,00,000

Explanation

The measure of damages is the difference between the contract price and the market price on the date of the breach. Difference = 2,300 - 2,000 = Rs 300 per quintal. For 500 quintals the claim is 300 x 500 = Rs 1,50,000. Rs 11,50,000 is the whole market value, not the loss.

Did you get it right without looking?

One question tells you little. A timed set on The Sale of Goods Act, 1930 shows your real accuracy, how long you take and where you lose marks.

Practise The Sale of Goods Act, 1930Free diagnostic mock

More The Sale of Goods Act, 1930 questions