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CS Professional · Drafting, Pleadings and Appearances · Drafting of Commercial Contracts

Bose Infra promises to pay Nair Consultants Rs 10 lakh if a particular merchant ship does not return within one year. In month eight, the ship is burnt and becomes certain not to return. Nair Consultants sues in month nine. Which statement is correct under Section 35?

The suit may succeed. Under Section 35, a contract contingent on an event not happening within a fixed time may be enforced before expiry of the time if it becomes certain that the event will not happen. The burning of the ship made its return impossible.

  1. AThe suit fails because the one-year period has not expired
  2. BThe suit succeeds only if the ship also fails to return after one year
  3. CThe contract is void because the event became impossible before the fixed time
  4. DThe suit may succeed because it became certain before the time expired that the event would not happenCorrect

Explanation

Section 35 allows enforcement of a contract contingent on an event not happening within a fixed time when the time has expired without the event, or before expiry if it becomes certain the event will not happen. The burning made the return certain not to occur. Option c wrongly applies the rule for events that must happen within the time, where impossibility makes the contract void.

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