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    Question

    According to Section 26 of the Sale of Goods Act, 1930,

    which statement correctly reflects when risk passes to the buyer? 
    A Risk always passes to the buyer upon physical delivery, regardless of property transfer Correct Answer Incorrect Answer
    B Risk passes with the property, unless otherwise agreed; but if delivery is delayed due to buyer's fault, the buyer bears loss from delay Correct Answer Incorrect Answer
    C Risk remains with the seller even after property passes to the buyer Correct Answer Incorrect Answer
    D Risk and property are independent and never coincide Correct Answer Incorrect Answer
    E The seller bears risk throughout unless the buyer pays the full price in advance Correct Answer Incorrect Answer

    Solution

    Section 26 provides: "Unless otherwise agreed, the goods remain at the seller's risk until the property therein is transferred to the buyer, but when the property therein is transferred to buyer, the goods are at the buyer's risk whether delivery has been made or not: Provided that if the delivery of goods has been delayed due to the fault of either the buyer or the seller and there has occurred some loss to the goods due to such delay, the party at fault has to bear the loss." This section establishes the maxim "res perit domino" (a thing perishes to the owner). The important proviso creates an exception: if delay is caused by one party's fault, that party bears the loss. For example, if the seller delays delivery and the goods are destroyed in a flood that would not have occurred had timely delivery been made, the seller bears the loss despite property having passed to the buyer.

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