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

Kaveri Textiles agrees to dye 500 metres of cloth for Ganesh Garments. Ganesh Garments unreasonably refuses entry to its godown, so only 300 metres could be collected and dyed. Separately, 50 metres of the collected cloth was left undyed because of a machine breakdown at Kaveri's own unit. Under Section 67, for which shortfall is Kaveri excused?

Kaveri is excused only for the 200 metres that could not be collected because Ganesh Garments refused entry. Section 67 excuses only non-performance caused by the promisee's neglect, so the 50 metres lost to Kaveri's own machine breakdown remain its responsibility.

  1. AOnly the 200 metres not collected because of the refusal of entryCorrect
  2. BBoth the 200 metres and the 50 metres
  3. COnly the 50 metres lost to the machine breakdown
  4. DNeither shortfall, since part performance was delivered

Explanation

Section 67 excuses non-performance caused by the promisee's neglect or refusal. The 200 metres not collected were caused by the refusal of entry. The 50 metres resulted from Kaveri's own machine failure, which is not caused by the promisee, so no excuse applies.

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