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

Consider these statements about contingent contracts with a fixed time. I. A contract to pay if an event does not happen within a fixed time may be enforced when the time has expired and the event has not happened. II. A contract to pay if an event happens within a fixed time becomes void if at expiry of the time the event has not happened. III. A contract to pay if an event does not happen within a fixed time becomes void if it becomes certain before expiry that the event will not happen. Which are correct?

Only statements I and II are correct. Section 35 makes a contract contingent on an event happening within a fixed time void if it has not happened at expiry, and lets a contract contingent on non-happening be enforced after expiry. Statement III reverses the rule.

  1. AI and II onlyCorrect
  2. BII and III only
  3. CI and III only
  4. DI, II and III

Explanation

Statements I and II reflect Section 35. Statement III is wrong because in such a contract, certainty before expiry that the event will not happen allows enforcement, not voidness. Hence only I and II are correct.

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