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

Meera promises to pay Rohan ₹50,000 if a particular cargo ship returns to the Mumbai port within one year. Before the year ends, the ship is burnt and cannot return. What is the legal position of this contract?

The contract becomes void. Under Section 35, a contingent contract depending on an event happening within a fixed time is void if, before that time ends, the event becomes impossible. The ship being burnt makes its return impossible, so Meera cannot be made to pay.

  1. AIt becomes void because the event has become impossible before the time fixedCorrect
  2. BIt remains enforceable until the year expires
  3. CIt becomes voidable at the option of Rohan
  4. DIt is enforceable at once because the event is uncertain

Explanation

Under Section 35, a contingent contract to do something if a specified uncertain event happens within a fixed time becomes void if, before the time fixed, the event becomes impossible. The burning of the ship makes its return impossible, so the contract is void. Waiting for the year to expire is wrong because the contract becomes void as soon as the event becomes impossible.

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