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

Karan agrees to pay Deepa Rs. 30,000 if Deepa's cousin Esha refuses to buy Deepa's scooter within three months. After two months Esha buys another vehicle and informs Deepa she is not interested in the scooter, and the three months have not yet run out. Which view is most consistent with the Act?

The contract may be enforced now. Under Section 35, a contract contingent on an event not happening within a fixed time can be enforced before the time expires if it becomes certain the event will not happen. Esha's firm refusal makes her purchase certain not to occur.

  1. AThe contract is void because the event happened before the time fixed
  2. BThe contract can be enforced only on expiry of three months, never earlier
  3. CThe contract becomes void because Esha's refusal is a negative event
  4. DThe contract may be enforced now, since it has become certain that Esha will not buy within the timeCorrect

Explanation

The contract is contingent on Esha not buying within a fixed time. Section 35 allows enforcement before expiry if it becomes certain that the event will not happen. Esha's firm refusal makes it certain, so waiting for expiry is not required, which defeats the second option.

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