CMA Foundation · Fundamentals of Business Laws and Business Communication · Contingent Contracts
Under Section 36 of the Indian Contract Act, 1872, what is the legal status of a contingent agreement to do or not to do something if an impossible event happens?
Such an agreement is void. Section 36 says that contingent agreements to do or not to do anything if an impossible event happens are void, so neither party can enforce them. They are not merely voidable at anyone's option.
- AValid and enforceable once the parties perform
- BVoidable at the option of the promisee
- CVoidCorrect
- DValid but enforceable only after a court order
Explanation
Section 36 states that contingent agreements to do or not to do anything if an impossible event happens are void. They are not voidable and need no court order to become void. The option calling them voidable at the promisee's option is wrong because the law declares them void outright.
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