(c) That's right. 

It is correct to say that section 11 applies when A agrees to sell his Ford GTX car to B for $20,000 and shortly after the contract is made, and before delivery to B, A discovers that his car was accidentally destroyed the day before by fire.  These facts fulfil all the requirements of section 11.

It is incorrect to say that section 11 applies when A agrees to sell his Ford GTX car to B for $20,000 and shortly after the contract is made, and before delivery to B, this car is destroyed in an accidental fire.  This is because the car had not yet perished ‘when the contract was made’.

It is incorrect to say that section 11 applies when A, who knows that his Ford GTX car has accidentally been destroyed in a fire, agrees to sell that car for $20,000 to B, intending to substitute another car of the same type when the time for delivery comes. This is because A knows the car has perished when he sells it.

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