41. ‘X’ agrees to buy from ‘Y’ a cow. It turns out that the cow was dead at the time of the bargain though neither party was aware of the fact. Is the contract valid.

1. Facts of the Case

‘X’ entered into a contract with ‘Y’ to purchase a cow.
Both parties believed in good faith that the cow was alive and fit for sale at the time of the contract.
Subsequently, it was discovered that the cow was already dead at the time the contract was made.
Neither ‘X’ nor ‘Y’ was aware of the cow’s death at the time of agreement.
The question arises whether the contract is valid, or whether it is void due to the impossibility of performance.

2. Issues in the Case

1. Whether the existence of the subject matter (cow) at the time of the contract is essential for a valid contract.
2. Whether the contract becomes void if the subject matter did not exist at the time of agreement, even though both parties were unaware.
3. Application of Section 56 of the Indian Contract Act, 1872 (Doctrine of Frustration and impossibility).
4. Whether any rights or obligations arise under such a contract.

3. Legal Principles Covered to Support Case Proceedings and Judgements

Relevant Provisions:

• Section 7, Sale of Goods Act, 1930 – Sale of Specific Goods:
  “Where there is a contract for the sale of specific goods, the property in them is transferred from the seller to the buyer when the parties intend it to be transferred.”
  Principle: The subject matter must exist at the time of the contract for a valid transfer of ownership.
• Section 6, Sale of Goods Act, 1930 – Existing Goods:
  “Goods must exist at the time when the contract is made. Goods which have perished cannot be sold unless the seller is unaware and the perishing occurs after the contract.”
• Section 56, Indian Contract Act, 1872 – Agreement to do impossible act:
  “A contract to do an act which, at the time of the contract, is impossible is void.”

Legal Principles and Analysis:

1. Contract for non-existent goods is void:
   • Since the cow was already dead, it did not exist at the time of the bargain.
   • The contract involved a sale of specific goods that must exist at the time of contract.
2. Doctrine of Mistake (Common Mistake):
   • Both parties were under a common mistake regarding the existence of the cow.
   • Under Section 20 of the Indian Contract Act, 1872, a contract is void if it is based on a fundamental mistake relating to the existence of the subject matter.
3. Impossibility of Performance:
   • It is impossible to deliver a cow that is already dead.
   • Section 56 confirms that a contract to do an impossible act is void.

Case Law References:

1. Bell v. Lever Brothers Ltd. (1932) AC 161:
   A contract is void if the subject matter does not exist or fundamental conditions are impossible at the time of agreement.
2. Cooper v. Phibbs (1867) LR 2 HL 149:
   A contract is void if there is a common mistake as to the existence of the subject matter at the time of making the contract.
3. Sale of Goods Act, 1930, Section 6:
   Goods must exist at the time of the contract for the contract to be valid.

4. Possible Judgement

In the present case:

• The cow did not exist at the time of contract, as it was already dead.
• Both X and Y were under a common mistake regarding the existence of the cow.
• The contract involved a sale of specific goods, which cannot be delivered because the subject matter had already perished.
• Therefore, the contract is void ab initio under Section 56 of the Indian Contract Act, 1872, and Section 6 of the Sale of Goods Act, 1930.

Judgement:

• The contract cannot be enforced.
• Neither party has any obligation under the contract.
• Any advance or consideration exchanged should be returned, as the contract is void due to the non-existence of the subject matter.

About lawgnan:

Explore the legal principles governing contracts for non-existent goods at Lawgnan.in. Learn how Section 56 of the Indian Contract Act, 1872 and Sections 6 and 7 of the Sale of Goods Act, 1930 protect parties from agreements based on impossibility or common mistake. Understand when a contract becomes void ab initio, and how both parties can recover advances or consideration exchanged. Lawgnan.in provides detailed explanations, real-life case references like Bell v. Lever Brothers and Cooper v. Phibbs, and practical insights for students, lawyers, and business professionals to navigate disputes involving the sale of specific goods that do not exist.