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

Arun agrees to pay Bina ₹2,00,000 if a certain ship does not return to Chennai. The ship is later sunk at sea. Which statement is correct as per the Indian Contract Act, 1872?

The contract can be enforced when the ship sinks. Section 33 allows a contingent contract dependent on an event not happening to be enforced once the happening of that event becomes impossible, and not before. The sinking makes the ship's return impossible.

  1. AThe contract can be enforced when the ship sinks, as its return becomes impossibleCorrect
  2. BThe contract can be enforced only after one year from the date of the agreement
  3. CThe contract is void because the ship cannot return
  4. DThe contract can be enforced from the moment it was made

Explanation

Section 33 says a contingent contract 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 the return impossible, so enforcement is allowed then. It is not void, and it could not be enforced earlier.

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