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

Meera promises to pay Rohan Rs. 50,000 if a particular cargo ship, now at sea, returns to Kochi port within one year. The ship is destroyed by fire in the sixth month. What is the legal position of the contract?

The contract becomes void. A contingent contract depending on an event happening within a fixed time becomes void if, before the time expires, that event becomes impossible. The ship's destruction by fire makes its return impossible, so Meera's promise cannot be enforced.

  1. AIt becomes void because the event became impossible before the time fixedCorrect
  2. BIt remains enforceable until the year ends
  3. CIt becomes voidable at the option of Rohan
  4. DIt becomes enforceable immediately because the event has been settled

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 ship's destruction makes its return impossible, so the contract is void. It is not voidable, and waiting until the year ends is unnecessary.

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