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

Ravi agrees to sell a specific consignment of 50 sewing machines lying in his warehouse to Kiran. Unknown to Ravi, a fire had destroyed the entire consignment before the contract was made. As per the Sale of Goods Act, 1930, the contract is:

The contract is void. Where specific goods have perished at the time of contracting without the seller's knowledge, Section 7 makes the contract void. Ravi did not know of the fire, and the goods no longer existed, so no valid contract came into being.

  1. AValid, and Ravi must supply similar machines
  2. BVoidable at the option of Kiran
  3. CVoid, because the goods had perished without the seller's knowledge when the contract was madeCorrect
  4. DValid, but Ravi must pay damages only

Explanation

Under Section 7, where there is a contract for the sale of specific goods and the goods, without the seller's knowledge, have perished at the time the contract was made, the contract is void. Option A is wrong because the goods are specific, not generic, so substitution is not required.

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