EFFECT OF DESTRUCTION OF GOODS

by • 24/06/2013 • GeneralComments (0)356

Q.6      Describe the effect of destruction of goods?

Ans:    EFFECT OF DESTRUCTION OF GOODS

The effect of destruction of goods can be discussed under the following two heads:

(a)        In Case of contract of sale [Section 7]

The contract of sale is void if the following three conditions are satisfied:

(i)         There must be a contract of sale for specific goods.

(ii)        The goods must have perished or become so damaged as no longer to answer to their description in the contract, before making of the contract.

(iii)       The seller must not be aware about the destruction of goods.

 

The aforesaid provision is based on the principle of impossibility of performance of the contract.

Example

X sold to Y all 700 bags of cement lying in hisHyderabadgodown. State the legal position

(i)         If unknown to X, all bags had been stolen before the contract was made,

(ii)        If unknown to X, the cement had becomes stone as a result of heavy rainfall,

(iii)       If unknown to X, 109 bags had been stolen at the time of making the contract.

 

Solution:

Case I:            The contract is void because the goods have perished before making of the contract.

Case II:           The contract is void because the goods became so damaged as no longer to answer to their description.

Case III: The contract has become void and Y cannot be compelled to accept 591 bags because the contract was indivisible.

 

(b)        In Case of an agreement to sell [Section B]

An agreement to sell becomes void if the following four conditions are satisfied:

(i)         There must be an agreement to sell specific goods;

(ii)        The goods must have perished or become so damaged as no longer to answer to their description in the agreement;

(iii)       There must not be any fault of seller or buyer;

(iv)       The risk must not have passed to the buyer, i.e. the goods must have perished before the agreement to sell becomes sale.

EXAMPLE I

X agrees to sell particular horse to V on the expiry of 8 days. The horse was delivered on,. trial for 8 days. However, the horse died on the third day, without any fault of either seller or buyer. This agreement become void and X could not recover the price from V.

 

EXAMPLE II

X agrees to sell some specific goods to Y on the expiry of 8 days. However, the Government on the third day requisitioned the goods- This agreement becomes void.

EXAMPLE III

X agreed to sell to Y 10 tones of potatoes to be grown on his land. X sowed sufficient land to grow more than 10 tones of potatoes. But without any fault on X s part, a disease attached the crop and only about eight tones of potatoes could be grown. It was held that the agreement to sell has become void.

 

Note: The provision of Section 7 and 8 are applicable only in case of specific goods and not in case of unascertained goods. If unascertained goods are destroyed either before or after making the agreement, the contract shall not become void. An agreement to sell certain unascertained goods “shall not become void even if the entire stock of unascertained stock is destroyed.

 

EXAMPLE

X agrees to sell 100 bags of cement out of 700 bags lying in his godown. The entire cement had become stone. The contract is not void because the contract was for unascertained goods and not for specific goods. Hence, X must deliver 100 bags of cement or pay damages for the breach.

Thus, no texts, images or videos will be hidden from you mobile spy login
Pin It

Leave a Reply