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CMA Foundation · Fundamentals of Business Laws and Business Communication · Contingent Contracts

Which pair correctly contrasts the two rules in Section 35 of the Indian Contract Act, 1872?

A contract contingent on an event happening within a fixed time becomes void if time expires without it or it becomes impossible. A contract contingent on the event not happening may be enforced when time expires without it, or earlier once it becomes certain it will not happen.

  1. AContingent on event happening within fixed time: enforceable once time expires without the event; contingent on event not happening: void once the event happens
  2. BContingent on event happening within fixed time: void if time expires without the event or the event becomes impossible; contingent on event not happening within fixed time: enforceable on expiry of time without the event or earlier if certain it will not happenCorrect
  3. CBoth types become void if the event becomes impossible before the time fixed
  4. DBoth types are enforceable only after the fixed time has fully expired

Explanation

Section 35 voids happening-type contracts on expiry without the event or earlier impossibility, and permits enforcement of not-happening-type contracts on expiry without the event or earlier certainty that it will not happen. The other options mix these rules up. Impossibility voids only the happening-type contract.

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