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

Dev promises to pay Esha Rs. 50,000 if a certain ship does not return within a year. Within six months the ship is burnt. Which statement is correct?

The contract can be enforced once it becomes certain the ship will not return, even before the year ends. Section 35 allows enforcement of such a contract when the time expires or earlier if it becomes certain that the event will not happen.

  1. AThe contract becomes void because the event became impossible
  2. BThe contract can be enforced only after the full year expires
  3. CThe contract can be enforced only if the ship returns
  4. DThe contract can be enforced once it becomes certain the ship will not return, even before the year endsCorrect

Explanation

Under Section 35, a contract contingent on an event not happening within a fixed time may be enforced when the time has expired without the event, or earlier if it becomes certain the event will not happen. Burning of the ship makes its return certain not to happen. Waiting for the full year is therefore unnecessary, so that option is wrong.

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