Skip to content

CMA Foundation · Fundamentals of Business Laws and Business Communication · Contingent Contracts

Mehta Traders promises to pay Rs. 50,000 to Gupta Exports if a particular cargo ship docks at Mumbai port within six months. Two months later the ship is burnt and destroyed at sea. What is the status of the contract?

The contract is void. Under Section 35, a contract contingent on an event happening within a fixed time becomes void if, before that time ends, the event becomes impossible. The ship being destroyed makes docking impossible, so the contract is void at once.

  1. AEnforceable, since the six months have not yet expired
  2. BVoid, because the event became impossible before the fixed timeCorrect
  3. CVoidable at the option of Gupta Exports
  4. DEnforceable only after the six months expire

Explanation

Section 35 provides that such a contract becomes void if, before the time fixed, the event becomes impossible. The ship's destruction makes docking impossible, so the contract is void immediately. Waiting for the six months to end is not required, so the option saying it is enforceable after six months is wrong.

Did you get it right without looking?

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

Practise Contingent ContractsFree diagnostic mock

More Contingent Contracts questions