The destruction of goods can affect a contract for sale in different ways depending on when the destruction occurs and whether the goods are specific or unascertained. If goods are destroyed after the risk has passed to the buyer, the contract remains valid and the buyer bears the loss. However, if specific goods are destroyed before the contract is formed or after agreement but before risk passes, the contract is void. For unascertained goods, the contract remains valid even if the goods are destroyed before formation of the contract, and the seller must still perform or pay damages for breach.

1. EFFECTS OF DESTRUCTION OF GOODS
If the goods are damaged or lost after their property was passed on to the buyer, the contract will remain
unaffected and the buyer will bear the loss. Where the goods are yet to become the buyer’s goods, any
damage or loss will have an effect on the contract. The destruction of goods may take place in various
situations as under the following heads:
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 the Section 7, of The 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 liquid 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 be seen as a divisible contract, the contract
for the goods which are intact shall remain valid.
However, if the seller has knowledge about the destruction of the goods, and in spite of it, he enters into a
Contract of Sale with the buyer, then the seller is bound to compensate the buyer.
Example: 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.
 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 supervising impossibility of performance. However,
the following conditions must be satisfied:
1. The contract of sale must be an ‘agreement to sell’ and not ‘actual sale’
2. The agreement to sell must be for the sale of specific goods
3. The goods must have perished before the agreement to sell becomes sale i.e. before the buyer
becomes the owner of goods
4. The goods must have perished without the fault of the buyer or the seller.

2. Example: 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.
EFFECT OF PERISHING OF UNASCERTAINED GOODS
Sec 7 & 8 do not voice the consequences in case of Destruction of Unascertained Goods.
In cases of destruction of unascertained goods, as the goods have not been identified at the time of
formation of the contract of sale, the seller would not be discharged on the grounds of impossibility of
performance. In such cases, the contract is subsisting and the seller needs to perform the contract or
pay damages for the breach in case if he fails to perform the same.
However, in case of unascertained goods, the contract will not be void.
Example: X agreed to sell to Y 10 bales of Egyptian cotton out of 100 bales lying in his godown. The
goods were already destroyed by fire before the Contract of Sale. But both X and Y did not know
about the fire. In this case, the contract is not void as it was not for the sale of specified goods, but for
the sale of certain quantity of unascertained goods. And thus, X is liable to supply 10 bales of
Egyptian cotton to Y, or to pay him the damages for braech of contract.
EFFECT OF DESTRUCTION OF FUTURE GOODS
If the future goods are specific, the destruction of such goods will amount to supervening
impossibility and the contract shall be void. In all the cases where the goods are unascertained goods
at the time of destruction, the contract shall remain unaffected and will have to be performed by the
seller.
Example: Mohan agreed to sell 200 tons of potatoes, to be grown on his land, to Sohan. The crop was
almost totally damaged because of a disease. The contract was said to have become void because it
was a case of destruction of specific future goods identified as the crop from a particular land.