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    Question

    Under the Sale of Goods Act, 1930, what happens if the

    goods sold are damaged or perish before the property passes to the buyer?
    A The buyer must pay the full price regardless. Correct Answer Incorrect Answer
    B The loss lies on the seller unless the buyer already had possession. Correct Answer Incorrect Answer
    C The buyer can recover damages from the insurer only. Correct Answer Incorrect Answer
    D The buyer can refuse to take delivery but must pay partial price. Correct Answer Incorrect Answer
    E The insurer is liable to pay both buyer and seller. Correct Answer Incorrect Answer

    Solution

    According to Section 20 of the Sale of Goods Act, 1930: • If the goods perish or are damaged before the property has passed to the buyer, the loss lies on the seller. • However, if the buyer has taken possession or the property has passed, the buyer bears the loss. • This principle is important for insurance contracts, particularly marine or transit insurance, to identify who is responsible for loss or damage and who claims under the insurance. This ensures clarity on risk transfer timing between seller and buyer in insured transactions.

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