What is the result of a perishing of the goods in a contract for the sale of goods?

Question

In a contract for the sale of specific goods, what is the result of the perishing of the goods?

Answer

Goods are considered to have perished either due to complete destruction of the subject matter, or where they have been altered so significantly that they are not the same goods that were subject to the contract (Asfar v Blundell). Goods irretrievably lost due to theft are also considered to have perished (Barrow Lane & Phillip).

The Barrow Lane case also suggests that a partial loss of the goods will suffice. In that case, 109 of the 700 goods were lost, which was held to constitute a perishing of the goods. Although conflicting authority, Sainsbury v Street suggests that the seller should be required to make the remaining goods available for sale, although the buyer is under no obligation to accept the lesser amount.

If the perishing of the goods occurs prior to the contracts formation, absent of any contrary agreement in the contract, the contract is void (S6 Sale of Goods Act). If the perishing of the goods comes subsequent to the contracts formation, the agreement is avoided under statutory frustration (S7 Sale of Goods Act). If risk/property has passed to the buyer before the goods perish, the buyer will bear the risk, and S7 cannot be applied (Baskind, 2016).

References

Baskind, E., Osbourne, G., and Roach, L., (2016) Commercial Law, Second edition, Oxford University Press

Asfar & Co v Blundell [1896] 1 QB 123

Barrow Lane & Ballard Ltd v Phillip Phillips & Co Ltd [1929] 1 KB 574

HR & S Sainsbury Ltd v Street [1972] 1 WLR 834