LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

sale of goods Act doubt

Rahul Gupta (CA Final Student) (1780 Points)

29 February 2008

Aman contracted to erect machinery on sapan's premises on the condition that the price shall be paid on completion of work. During the progress of work the premises and machinery were destroyed by an accidental fire. Referring to the provisions of the sale of goods act, 1930 decide whether the parties are bound to perform their promises and can aman recover the price of the work actually done? (November 07-PE-2)

Reply
Follow
Share

2 Replies

(Guest)

My Point of view is that-If the materials are supplied by buyer himself then it is a contract for work and labor and sale of goods will not apply, however if the reverse is the situation then sale of goods apply to it. Normally in this kind of agreements a clause named "Force Majeur" is inserted which means in situation of contingent event if the goods destroy then both the parties are free from obligation, but however if such a clause is not inserted then the seller cannot claim any relief since the contract is not completed.

arpit (student) (87 Points)
Replied 06 March 2008

here is detailed answer 1. Future Goods u/s 2(6) ―  Future Goods means goods to be manufactured or produced or acquired by the seller, after making of the contract of sale. [Sec 2(6)].  The seller does not possess or own these goods at the time of of making the contract of sale.  The parties will not be discharged by the non–acquisition or non–production of the future goods. Conclusion: Here Aman will not be discharged from the contract and will be bound to perform the contract. He cannot claim any amount from Sapan for the loss of goods due to the accidental fire.