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CS Professional · Drafting, Pleadings and Appearances · Drafting of Commercial Contracts

Nisha Logistics promises to pay Rs. 1,50,000 to Omkar if a certain cargo ship does not return within one year. Eight months later the ship is burnt and destroyed. Which statement is correct under Section 35 of the Indian Contract Act, 1872?

Omkar may enforce the promise now. Under Section 35, a contract contingent on an event not happening within a fixed time can be enforced if, before the time expires, it becomes certain the event will not happen. The ship's destruction makes its return impossible, so waiting out the year is unnecessary.

  1. AOmkar must wait until the full year expires before enforcing
  2. BThe contract is void because the ship cannot return
  3. CThe contract is enforceable only if the ship returns late
  4. DThe contract may be enforced now because it has become certain the ship will not return within the yearCorrect

Explanation

Section 35 allows a contract contingent on an event not happening within a fixed time to be enforced if, before the time expires, it becomes certain the event will not happen. The burning makes return certain not to occur, matching the Act's illustration on the ship burnt within the year. Voidness applies to the contrary case where the event was required to happen.

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