Skip to content

CMA Intermediate · Business Laws and Ethics · Indian Contracts Act, 1872

Gupta promises to pay Rao Rs 50,000 if a certain ship does not return within one year. Before the year ends, the ship is burnt at sea. What is the legal position?

The contract may be enforced. Where a promise depends on an event not happening within a fixed time, it can be enforced once it becomes certain the event will not happen, such as the ship being burnt before the year ends.

  1. AThe contract becomes void because the event has become impossible
  2. BThe contract may be enforced, since it has become certain the ship will not returnCorrect
  3. CThe contract can be enforced only after the full year has expired
  4. DThe contract is void because it depends on an uncertain event

Explanation

Section 35 (second paragraph) allows enforcement of a contract contingent on an event not happening within a fixed time if, before the time expires, it becomes certain the event will not happen. Illustration (b) covers the ship burnt within the year. Waiting for the year to end is not required.

Did you get it right without looking?

One question tells you little. A timed set on Indian Contracts Act, 1872 shows your real accuracy, how long you take and where you lose marks.

Practise Indian Contracts Act, 1872Free diagnostic mock

More Indian Contracts Act, 1872 questions