CMA Foundation · Fundamentals of Business Laws and Business Communication · Contingent Contracts
Which of the following best describes the effect of Section 32 on a contract contingent on an uncertain event happening?
Such a contract can be enforced only when the uncertain event happens, and it becomes void if the event becomes impossible. Section 32 therefore delays enforcement until the event occurs and ends the contract if the event can no longer occur.
- AThe contract is enforceable from the date of agreement
- BThe contract is enforceable only when the event happens, and void if the event becomes impossibleCorrect
- CThe contract is void if the event is uncertain
- DThe contract is enforceable only when the event does not happen
Explanation
Section 32 has two parts: no enforcement unless and until the event has happened, and the contract becomes void if the event becomes impossible. The last option describes Section 33, which deals with events not happening.
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