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Effect of perishing of specific goods

The effect of perishing of specific goods can be understood under the following heads in order to have a clear understanding of the effect of such destruction on the contract and its effect on the burden of liability.
  • Goods perishing before making of contract: According to Section 7, of sale of goods act 1930, when in case of sale or agreement to sell, the perishing of specific goods at or before the time of making the contract would render the contract void.
    The term ‘perishing of goods’ does not only mean physical destruction but also includes the cases in which the goods have lost their commercial value e.g. when sugar has been converted into sharbat by mixing of water etc. As the transfer of property has not taken place the risk remains with the seller. When only a part of the goods have perished, the contract as a whole will be void if it was an indivisible contract requiring total performance by the seller. If the contract can been seen as a divisible contract, the contract for the goods which are intact shall remain valid.

Note: If the seller has knowledge about the destruction the goods, and in spite of it enters into a contract of sale with the buyer, then the seller is bound to compensate the buyer.



A sold specific goods to B which were lying in A’s godown unknown to both the parties the goods got destroyed due to fire. Such contract is void.


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Note: The sec 7 of Sale of Goods Act 1930 is based on the ground of impossibility of performance Sec 56(1) as specified in Indian Contract Act 1872.

  • Goods perishing before sale but after agreement to sale: According to Section 8, “Where there is an agreement to sell specific goods and the goods subsequently without any fault of seller or buyer perish or suffer such damages as not to answer to description in an agreement before the risk passes to the buyer, the agreement becomes void”.
    The contract of sale becomes void on the ground of supervening impossibility of performance. However, the following conditions must be satisfied
    • The contract of sale must be an ‘agreement to sell’ and not ‘actual sale’
    • The agreement to sell must be for the sale of specific goods
    • The goods must have perished before the agreement to sell becomes sale i.e. before the buyer becomes the owner of goods
    • The goods must have perished without the fault of the buyer or the seller

John delivered a horse to Johny for a trial for 8 days. It was agreed that the sale would be complete if the horse was found suitable for Johny’s purpose. The horse died on the 3rd day without any fault of either party. The contract was void and John could not recover the price from Johny.

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Note: Note- the Sec 8 of Sale of Goods Act 1930 is based on the ground of supervening impossibility of performance Sec 56(2) as specified in Indian Contract Act 1872.

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