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CA Foundation · Business Laws · The Indian Contract Act, 1872

Neha agreed to sing at Om's wedding reception on 10 December for Rs 50,000. On 5 December she told Om she would not perform. Om treated the contract as ended and hired another singer for Rs 60,000. Which statement is correct about Om's rights?

Om can sue Neha for damages because her refusal before the due date is an anticipatory breach. The innocent party may treat the contract as ended immediately and claim damages, without waiting for the performance date to arrive.

  1. AOm can sue Neha for damages for breach, as the refusal before the due date is an anticipatory breachCorrect
  2. BOm has no remedy until 10 December passes
  3. COm can recover only Rs 50,000 as the contract price
  4. DThe contract is discharged by impossibility, so neither party is liable

Explanation

Neha's refusal before the due date is an anticipatory breach. The promisee may treat the contract as ended at once and claim damages without waiting for the due date. Option B is wrong because Om need not wait. Option D is wrong because the refusal is voluntary, so no impossibility exists.

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