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

Arjun agrees to pay Bina Rs. 2,00,000 if a certain ship does not return. The ship is sunk at sea. Under the Indian Contract Act, 1872, when can Bina enforce the contract?

Bina can enforce the contract when the ship sinks. A contingent contract that depends on an event not happening can be enforced once the happening of that event becomes impossible, and not before. The sinking makes the ship's return impossible.

  1. AOnly after one full year from the date of the contract
  2. BWhen the ship sinks, as its return has become impossibleCorrect
  3. CNever, because the contract is a wagering agreement
  4. DOnly if Arjun consents to perform after the sinking

Explanation

Section 33 states that 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 sinking makes return impossible, so enforcement is possible at that point. No fixed year is mentioned, so waiting a year is not required.

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