Multiple choice

In case of an agreement to sell, subsequent loss or destruction of the goods is the liability of

  1. the buyer

  2. the seller

  3. both the buyer and the seller

  4. the insurance company
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In an agreement to sale (as opposed to an absolute sale), property and ownership have not yet transferred to the buyer. The seller retains legal ownership and bears the risk of loss until the sale becomes absolute. Under Section 20 of the Sale of Goods Act, unless otherwise agreed, goods remain at seller's risk until property transfers, which in agreement to sale hasn't happened yet. Therefore, the seller bears liability for subsequent loss or destruction.

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