CMA Foundation · Fundamentals of Business Laws and Business Communication · Contingent Contracts
Meera agrees to pay Rohan Rs. 50,000 if a certain cargo ship of Sagar Lines does not return to Kochi port. The ship is wrecked and sinks in a storm. Which statement is correct?
The contract can be enforced when the ship sinks. Under Section 33, a contract contingent on an event not happening is enforceable once that event becomes impossible, and the sinking makes the ship's return impossible.
- AThe contract is void because the event has become impossible
- BThe contract can be enforced only after one year from the date of agreement
- CThe contract can be enforced when the ship sinksCorrect
- DThe contract can be enforced only if the ship returns
Explanation
This matches the Section 33 illustration. The sinking makes the return of the ship impossible, so the contract can be enforced at that point. Option 1 wrongly applies the rule for contracts depending on an event happening.
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