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CS Professional · Drafting, Pleadings and Appearances · Commercial Contract Management

Gupta Shipping promises to pay Dilip Rs 2,00,000 if the vessel MV Sagar does not return to Kochi within one year. Four months later the vessel is burnt and lost at sea. Which statement is correct?

The contract may be enforced now. Where a contract depends on an event not happening within a fixed time, it can be enforced once it becomes certain before expiry that the event will not happen, as when the ship is burnt within the year.

  1. AThe contract becomes void because the event became impossible
  2. BThe contract may be enforced now, since it has become certain the vessel will not return within the yearCorrect
  3. CThe contract can be enforced only after one year has expired
  4. DThe contract is discharged because the vessel was destroyed

Explanation

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 that the event will not happen. The loss of the vessel makes its return certain not to happen, so Dilip can enforce now. Waiting a year is not required.

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