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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 owned by a Chennai firm does not return to port within one year. Within six months the ship is burnt at sea. What is the legal position?

The contract can be enforced at once. A contract contingent on an event not happening within a fixed time may be enforced if, before the time expires, it becomes certain the event will not happen. The burning of the ship makes its return impossible.

  1. AThe contract is void because the ship cannot return
  2. BThe contract can be enforced because it has become certain that the ship will not return within the yearCorrect
  3. CThe contract can be enforced only after the full year expires
  4. DThe contract is void because the event was within the control of Meera

Explanation

Under Section 35, a contract contingent on an event not happening within a fixed time may be enforced when the time has expired without the event, or before expiry if it becomes certain that the event will not happen. The burning of the ship makes return impossible, so waiting a year is not required. Option C ignores this.

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