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CMA Foundation · Fundamentals of Business Laws and Business Communication · Discharge of Contracts

Dev agrees to pay Esha a sum of money if a certain ship does not return. The ship is sunk. When can the contract be enforced?

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

  1. AOnly after one year from the sinking
  2. BWhen the ship sinks, as its return becomes impossibleCorrect
  3. CIt is void because the event became impossible
  4. DNever, because the event is uncertain

Explanation

Section 33 says 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 the return impossible, so the contract is enforceable then. Treating it as void confuses it with Section 32, which applies where the contract depends on an event happening.

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