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CSEET · Business Laws and Management · Elements of Law of Contracts

Anil agrees to pay Bhavna ₹20,000 if a certain ship does not return. The ship is sunk at sea. According to the Indian Contract Act, 1872, when can the contract be enforced?

The contract can be enforced when the ship's return becomes impossible, which occurs when it sinks, and not before. Where the promise is contingent on an event not happening, the law allows enforcement only once the happening of that event becomes impossible.

  1. AOnly after one year from the date of the contract
  2. BWhen the happening of the event becomes impossible, and not beforeCorrect
  3. CAt once, even before the ship sinks, since the contract is valid
  4. DNever, because the contract is wagering and void

Explanation

Contingent contracts to do something if an uncertain future event does not happen can be enforced when the happening of that event becomes impossible, and not before. The ship's sinking makes its return impossible, so enforcement is possible from then. No fixed time is stated, so the one-year option is wrong.

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