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CMA Intermediate · Business Laws and Ethics · Indian Contracts Act, 1872

Sharma agrees to pay Verma Rs 2 lakh when Verma marries Anita. Anita dies unmarried to Verma. Which is correct, and which section principle applies?

The contract becomes void. A contingent contract that depends on an event happening is void once that event becomes impossible, and Anita's death before marriage makes the marriage, the condition for payment, impossible.

  1. AThe contract is enforceable after a reasonable period, as Verma acted in good faith
  2. BThe contract becomes void because the event has become impossibleCorrect
  3. CThe contract remains valid until Sharma cancels it
  4. DThe contract is enforceable only after Anita's death is proved in court

Explanation

Under Section 32, if the event on which a contract depends becomes impossible, the contract becomes void. Illustration (c) is exactly this case, where C dies without marrying B. Good faith or reasonable waiting plays no role.

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