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CS Professional · Drafting, Pleadings and Appearances · Commercial Contract Management

Bharat Steel contracted to have Anil Fabricators fabricate structures for Rs. 9,00,000. Anil was ready and willing, but Bharat Steel refused to give access to its site, so Anil could not start. Under the Indian Contract Act, 1872, what is Anil's position?

Anil may treat the contract as voidable at his option and claim compensation for his loss. Under section 53, when one party to reciprocal promises prevents the other from performing, the prevented party holds the option to rescind and recover compensation from the party who prevented him.

  1. AThe contract is void automatically and Anil has no remedy
  2. BThe contract is voidable at Anil's option and he can claim compensation for loss from non-performanceCorrect
  3. CThe contract remains binding on Anil and he must still complete the work
  4. DThe contract is voidable at Bharat Steel's option

Explanation

Section 53 applies to reciprocal promises where one party prevents the other from performing. The contract becomes voidable at the option of the party prevented, who is also entitled to compensation for loss sustained. Bharat Steel, the preventing party, gets no option.

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