CMA Intermediate · Business Laws and Ethics · Sale of Goods Act, 1930
Rohit Traders agrees to sell to Meena a particular second-hand machine lying in its yard. Unknown to Rohit, a fire had destroyed the machine the previous night, before the contract was made. What is the legal position?
The contract is void. Under Section 7, where a contract is for specific goods and the goods have perished without the seller's knowledge at the time the contract was made, the contract is void, so the seller has no duty to supply a substitute machine.
- AThe contract is voidCorrect
- BThe contract is valid and Rohit must supply a similar machine
- CThe contract is voidable at Rohit's option only
- DThe contract is valid but Meena must pay damages
Explanation
Section 7 provides that where specific goods have, without the seller's knowledge, perished at the time the contract was made, the contract is void. A seller is not bound to supply a similar machine, since the contract concerns that specific machine. Option B ignores this rule.
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