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

Tanvir agrees to sell Leela 100 quintals of wheat from his godown for Rs 2,500 per quintal. He tells her, 'I will deliver it when you ask, but you will pay only if you like the quality.' Leela is not obliged to pay whatever the quality may be. Which view is correct?

It is not a valid contract of sale. A contract of sale requires the buyer to be bound to pay a price for the goods. Since Leela can refuse to pay at her option, there is no binding obligation, even though the rate and goods are identified.

  1. AIt is a valid contract of sale since the price per quintal is stated
  2. BIt is a contract of sale because wheat is existing goods
  3. CIt is not a contract of sale, as the buyer is not bound to pay the price and so there is no real obligation to pay for the goodsCorrect
  4. DIt is a contract of sale because the delivery is to be made on demand

Explanation

A contract of sale requires the buyer to be bound to pay a price for the goods. If Leela can refuse payment at will, there is no binding promise to pay and the essential element of price as consideration is lacking. Stating a rate or having existing goods does not cure this, so option A is wrong.

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