CMA Foundation · Fundamentals of Business Laws and Business Communication · Contingent Contracts
Anita promises to pay Bhaskar Rs. 30,000 if a certain ship does not return within a year. The year ends and the ship has not returned. What is the legal effect?
The contract may be enforced by law. Under Section 35, where a contract is contingent on an event not happening within a fixed time, it can be enforced once the time has expired and the event has not happened. The ship's non-return within the year satisfies this.
- AThe contract becomes void since the event did not happen
- BThe contract may be enforced by lawCorrect
- CThe contract is unenforceable until the ship is declared lost
- DThe contract is discharged by frustration
Explanation
Under Section 35, a contingent contract if a specified uncertain event does not happen within a fixed time may be enforced when the time has expired and the event has not happened. The year has expired without the ship returning, so Bhaskar can enforce. Voidness applies to the opposite form of contract.
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