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CMA Foundation · Fundamentals of Business Laws and Business Communication · Sale of Goods Act, 1930

Sharma Traders agrees to sell to Mehta Stores 'the Godrej almirah bearing serial number 4471 lying in my showroom'. Without fault of either party, a fire destroys that almirah after the agreement but before risk passes to Mehta Stores. What is the legal position?

The agreement is avoided. The almirah is specific goods, and Section 8 provides that where they perish without fault of seller or buyer after an agreement to sell but before risk passes to the buyer, the agreement is thereby avoided and neither party is bound.

  1. AThe agreement is avoided because specific goods perished before the risk passedCorrect
  2. BSharma Traders must supply another almirah of the same make
  3. CMehta Stores must pay the price because the contract was already made
  4. DThe agreement becomes voidable at the option of Sharma Traders only

Explanation

The almirah is specific goods. Under Section 8, where specific goods perish without fault of either party after the agreement to sell but before risk passes to the buyer, the agreement is avoided. The seller has no duty to supply a substitute, so the second option is wrong.

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