A delivers goods to B for resale in U.K. and the price was fixed in the contract of the sale.....Give reasons in support of your answer with reference to section (s) of the Sale of Goods Act and case law, if any.

Question: A delivers goods to B for resale in U.K. and the price was fixed in the contract of the sale. The contract fixed the quality of goods on seller and time was made essence of it. Is B a del credere agent of A? Was it a contract of sale or agency? Is del credere agent liable to indemnify the seller if owing to insolvency of the buyer or other analogous cause, the seller is unable to recover the price? Give reasons in support of your answer with reference to section (s) of the Sale of Goods Act and case law, if any. [Punj JS 1988]

Find the answer to the Law of Sale of Goods only on Legal Bites. [A delivers goods to B for resale in U.K. and the price was fixed in the contract of the sale. The contract fixed the quality of goods on seller and time was made essence of it. Is B a del credere agent of A? Was it a contract of sale or agency? Is del credere agent liable to indemnify the seller if owing to insolvency of the buyer or other analogous cause, the seller is unable to recover the price? Give reasons in support of your answer with reference to section (s) of the Sale of Goods Act and case law, if any.]

Answer

A del credere agency arrangement involves the agent guaranteeing the payment to the principal (seller) for goods sold to a third party (buyer). However, Based on the information provided, there is no indication or mention that B is acting as a del credere agent of A. Without any explicit statement or evidence of such an arrangement, it cannot be assumed that B is acting as a del credere agent of A.

The scenario describes that A (the seller) delivers goods to B (the buyer) for resale in the U.K., and the price has been fixed in the contract of sale. In a contract of sale, ownership and the risk associated with the goods typically pass from the seller to the buyer upon delivery. On the other hand, in an agency agreement, the agent acts on behalf of the principal (seller) but does not take ownership or title to the goods.

Since B is not established as a del credere agent in the scenario, there is no del credere agency relationship. Therefore, the question of B indemnifying the seller (A) for the price due to the buyer's insolvency or other analogous cause does not arise.

In the absence of a del credere agency arrangement, the buyer (B) would not bear the responsibility of indemnifying the seller (A) for any losses arising from the buyer's insolvency. In a regular contract of sale, the risk of non-payment due to the buyer's insolvency falls on the seller (A), unless there are specific contractual provisions or other legal safeguards in place to address such risks.