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

Karan promises to sell his horse to Lata at ₹40,000 if Mohan, to whom the horse has been offered, refuses to buy it. Mohan has not yet replied. Lata sues Karan to compel delivery. Which is correct?

Lata fails for now. The agreement is a contingent contract, which cannot be enforced unless and until the uncertain event, Mohan refusing to buy the horse, has happened. It is not void merely because it depends on a third party's act; it is simply not yet enforceable.

  1. ALata succeeds, because the contract was valid when made
  2. BLata fails for now, because the contract cannot be enforced unless and until Mohan refuses to buyCorrect
  3. CLata fails permanently, because contracts depending on third parties are void
  4. DLata succeeds if she pays the price into court immediately

Explanation

This is a contingent contract; it is valid but cannot be enforced by law unless and until the specified event, Mohan's refusal, has happened. It is not void merely because a third party's act is involved. Hence Lata's suit is premature, not permanently barred.

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