This is a legal question. It is entirely hypothetical so I don’t need answers fast. Please assume that this happens in the United States.
Let’s say that a farmer takes a goat to the market to sell. A buyer approaches and agrees to buy the goat for $100. As the buyer takes out his wad of cash in order to hand it to the farmer, the goat jumps up, grabs the money with his mouth, chews it into pulp, and swallows it. Let’s assume that the behavior of the goat is entirely unexpected by both parties.
So now the farmer can’t give the goat to the farmer because no payment is received, yet the buyer is out $100 . So, according to common law, who owes whom what?
Totally unexpected by both parties? Well, how is the goat restrained? If it slips from its halter, for example, and the farmer mis-tied the halter, he might be liable. If on the other hand it was properly secured, and a reasonable person would not hold money that near a goat, then no liability.
The sale of the goat was not consumated so the goat still belongs to the Farmer as he never received compensation. The Farmer is responsible for the loss of the buyer as his goat ate the $100.
The Farmer should reimburse the buyer the $100.
The buyer should then pay the Farmer the $100.
The Farmer should then deliver the goat to the buyer.
Or cut out the steps and the Farmer should give the goat to the buyer.
Why should the buyer take the goat at this point? The sale wasn’t completed, he isn’t obligated to continue with the purchase. In practical terms, he may have a tough time collecting the $100 bucks, so taking the goat makes sense, but if he can get his money back he might not want a goat that eats money.
I don’t see this as a matter of contract–yet. At this point, I see it more as a matter of tort. Let’s examine this fact:
Somebody here was negligent, and negligence will generally give rise to a tort claim. It may have been the farmer who was negligent for not properly restraining the goat; and if this is the case, then the farmer owes the buyer $100. Or it may have been the buyer, for putting the cash within the goat’s reach; and if this is the case, the buyer is out $100. Or negligence may be shared in some way: 50-50, 60-40, 75-25, etc. Based on the facts given, it is impossible to say how this question would be settled; but regardless, a wrong (i.e. a tort) was committed: somebody’s negligence caused the cash to be destroyed, and somebody is thus responsible for the destruction.
Once the tort question is settled, then the contractual question can be addressed; but I think the tort question will have to be settled first.
The OP stated that the buyer agreed to buy the goat for $100. Sounds like a contract to me. The contract arose before any tort action. Although an oral contract, it probably does not violate the Statute of Frauds (depending upon the local law) since the consideration was less than $500, but that would vary upon location. Any tort, if tort there be, came later. The buyer is contractually liable to buy the goat and the seller is contractually liable to sell it. Was the consideration ($100) constructively given when the seller’s goat swallowed it? If the goat’s action was unexpected by both parties, how is either negligent?
Tripolar:
He had, however, agreed to buy it, and the seller agreed to sell it. Unless it violated the Statute of Frauds, that’s a binding contract.
It’s not clear from the facts if there was a contract yet. The OP says the buyer “agreed” to buy the goat for $100 and took out his cash. We don’t really know if the seller “agreed” to sell it to the buyer for that price.
I can only assume at this point that the word “agreed” in the OP means there was an offer and an acceptance of that offer between the parties, amounting to an “agreement” by mutual assent. If this is so, then there is a contract.
What if the buyer threw the $100 in the air toward the seller and, while the money was in the air, a bolt of lightning fried the money to a crisp? The seller never received or accepted payment. I would think the buyer bears the risk of loss until the money is received and accepted by the seller.
TORT
Further, just because harm was done (i.e., loss of the $100) doesn’t necessarily mean someone was negligent. We don’t have enough facts to decide that someone breached a duty of care and that breach caused the harm.
No, I still think tort has to come first. Yes, a valid contract was reached. However, it was, shall we say, frustrated. For a moment, anyway; and the outcome of the tort decision affects the how the contract will work and what each party will be left with at the end of the day.
If the farmer was negligent in restraining the goat, and the negligence caused the buyer to be out $100, then the farmer owes the buyer $100. We then look to the contract–under that, the buyer owes the farmer $100. With the farmer owing $100 (in damages) and a goat, and the buyer owing $100 (in consideration), all that happens is that no money changes hands and the buyer ends up with the goat.
If the buyer was negligent in waving the cash too close to the adequately-restrained goat, and this negligence caused the buyer to be out $100, then the buyer is out $100. Then, looking at the contract, the buyer still owes the farmer $100. With the farmer owing a goat, and the buyer owing $100, they can complete the contract: the farmer gets $100 and the buyer gets the goat. However, owing to his negligence, the buyer is also out an extra $100–which is the cash that the goat ate.
But what if it’s not an either/or situation? Let’s say that the goat, while adequately restrained, had a habit of eating bits of paper. The farmer knows this. Let’s also say that the buyer grew up on a goat farm, and knows that some goats will eat bits of paper. In spite of what they each know about this particular goat and about goats in general, neither acts upon that knowledge–to use the language of negligence, they do not act prudently, nor do they they act according to the reasonable person standard. The farmer doesn’t say, “You want to be careful with that wad of cash near that goat”; and the buyer, armed with his knowledge of the eating habits of goats, somehow puts the cash near the goat’s mouth anyway. It can be argued that each contributed in some way to the negligence that caused the buyer’s $100 to be eaten by the goat. Now, how do we complete the contract?
This is why I maintain that the tort decision has to come first. We need to know who was negligent so we can apportion the damages accordingly, and set them off against the agreement struck in the contract. I suppose that the parties could complete the contract before the tort question is settled, but I doubt very much that the buyer would be happy about that–he’ll be out $200 for a while, up to half of which he might get back as a result of the later tort claim. If he reneges on the contract pending the tort settlement, the farmer (who wants to complete the contract now) could sue him to complete it, but the buyer would most likely counterclaim for the damages caused by the goat. The contract would thus be incomplete until the tort question was addressed anyway.
Why on earth frustrated? That the buyer now hasn’t his $100 won’t frustrate the contract, nor will the fact that it turns out the goat is a money eating goat. That one or other party may now consider themselves to have some seperate action concerning the destroyed $100 is neither here nor there as far as the contract is concerned. And the entire latter part of your answer seems more concerned with commercial wrangling than the legal position.
Note what I actually said, before you edited my remarks: “Yes, a valid contract was reached. However, it was, shall we say, frustrated. For a moment, anyway…” Emphasis added. I never said there was no contract; I only said that the tort action must be decided before the contractual one.
Agreed. I think I alluded to that above, in one of the hypothetical outcomes that I listed. I apologize if I wasn’t as clear as I could have been.
Again, agreed. What is at issue is which comes first: the tort action or the contractual one?
Maybe. But do we have enough facts to be able to say that my remarks do not obtain? No, I’d suggest that we don’t. With the facts supplied, all we can do is guess. I made a guess; an educated one, I’d say. Heck, I made a few of them. You may disagree, in which case, I’d be interested in your educated guess(es).
At the end of the day, I maintain that we have two separate actions: one in tort and one in contract. The result of one might set off against the other. Decide the tort, and then we can figure out who owes what to whom under the contract.
It doesn’t make any difference. The contract wasn’t frustrated at all, ever, even for a microsecond. Can you give me an reason known to law why it was frustrated at all? Can you give any reason why the tort action “must” be decided first?
Okay, maybe “delayed” is a better word to use. Here, “frustrated” does not necessarily mean “a contract that cannot be completed.” Perhaps “frustrated” means something different in your jurisdiction?
I think I’ve explained my reasons above. I would welcome your reasoning as to why tort does not affect the contractual decision.