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CMA Foundation · Fundamentals of Business Laws and Business Communication · Performance of Contracts

Karan promises to supply goods to Latha on 10 April. On that day he tenders the goods at Latha's shop, but Latha refuses to accept them without any lawful reason. Which statement best reflects Section 37?

Karan has met his obligation because Section 37 requires a party either to perform or to offer to perform. His tender of the goods on the due date was such an offer, and Latha's unjustified refusal does not make Karan the defaulting party.

  1. AKaran is in breach because he did not actually complete delivery
  2. BKaran has discharged his obligation under Section 37 by offering to performCorrect
  3. CThe contract becomes void because both parties failed to perform
  4. DKaran must keep tendering indefinitely before he can act on the refusal

Explanation

Section 37 requires parties either to perform or to offer to perform. Karan made a valid offer on the due date, which satisfies his obligation, and the fault lies with Latha. Treating him as in breach ignores the words 'or offer to perform'.

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