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

On 1 April, Deepa Constructions promises to pay Rs. 3,00,000 to Imran if a municipal sanction for a building plan is granted within six months. On 1 August, the municipality finally and irrevocably rejects the plan and no further application is possible. What is the effect under Section 35 of the Indian Contract Act, 1872?

The contract becomes void on 1 August. Section 35 provides that a contract contingent on an event happening within a fixed time becomes void if, before the time fixed, the event becomes impossible. The final rejection makes sanction impossible, so there is no need to wait for the six months to expire.

  1. AThe contract stays alive until 1 October and then becomes void
  2. BThe contract becomes enforceable against Deepa on 1 October
  3. CThe contract becomes void on 1 August because the event became impossible before the time fixedCorrect
  4. DThe contract is voidable at Imran's option

Explanation

Section 35 makes a contract contingent on a specified event happening within a fixed time void if, before the time fixed, the event becomes impossible. The final rejection on 1 August makes sanction impossible, so voidness arises then, not at the end of the period. Waiting until 1 October is wrong because the section covers earlier impossibility.

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