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

Rao Logistics promises to pay Singh Motors Rs 4 lakh if Singh Motors' warehouse is destroyed by fire within the financial year ending 31 March. The warehouse was not destroyed by fire, and 31 March has passed. What is the effect under Section 35?

The contract becomes void. Under Section 35, where performance depends on a specified event happening within a fixed time, the contract becomes void if the time expires without the event happening. The fire did not occur by 31 March, so the promise cannot be enforced.

  1. AThe contract is enforceable because the event did not occur
  2. BThe contract becomes void because the event did not happen within the fixed timeCorrect
  3. CThe contract stays alive until the warehouse is destroyed at any later date
  4. DThe contract is voidable at the option of Singh Motors

Explanation

Section 35 provides that a contingent contract to do something if a specified uncertain event happens within a fixed time becomes void if, at the expiry of that time, the event has not happened. The fire did not occur by 31 March, so the contract is void. Option c ignores the fixed time limit.

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