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

Meera promises to pay Rohan Rs. 50,000 if a certain cargo ship returns to Kochi port within one year. Before the year ends, the ship is burnt at sea. What is the legal position of the contract?

The contract becomes void. It was contingent on the ship returning within a year, and once the ship is burnt the return becomes impossible before the time fixed. Section 35 makes such a contract void immediately, without waiting for the year to end.

  1. AIt becomes void because the event has become impossible within the time fixedCorrect
  2. BIt can be enforced because the ship did not return
  3. CIt remains valid until the year expires
  4. DIt can be enforced for half the sum

Explanation

Under Section 35, a contract contingent on an event happening within a fixed time becomes void if, before the time fixed, the event becomes impossible. Burning of the ship makes its return impossible, so the contract is void at once; it need not wait for the year to expire.

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