Skip to content

CS Professional · Drafting, Pleadings and Appearances · Commercial Contract Management

Meera Textiles Pvt Ltd was induced by Arvind Traders' fraudulent statement to buy 500 bales under a supply agreement. Meera had not yet paid, but had already received 100 bales. On discovering the fraud, Meera validly rescinds the contract. Under Section 64 of the Indian Contract Act, 1872, what is the position?

On rescission, Arvind need not perform his promises, and Meera must restore the benefit of the 100 bales received, so far as may be. Section 64 imposes restoration on the rescinding party irrespective of who was at fault.

  1. AArvind need not perform any promise of his own, and Meera must restore the benefit of the 100 bales received, so far as may beCorrect
  2. BArvind must still deliver the remaining bales, but Meera may keep the 100 bales
  3. CBoth parties stay bound until a court declares rescission
  4. DMeera need not restore anything because the fraud was by Arvind

Explanation

Section 64 relieves the other party from performing his promises once the entitled party rescinds. The rescinding party must restore any benefit received, so far as may be. Fraud by the other side does not excuse restoration, so option four is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Commercial Contract Management shows your real accuracy, how long you take and where you lose marks.

Practise Commercial Contract ManagementFree diagnostic mock

More Commercial Contract Management questions