Indian Contract Act - Study Mode
[#151] An agreement without consideration is
Correct Answer
(C) Void barring certain circumstances
[#152] Read Assertion (A) and Reason (R) and answer using given below: Assertion (A): Compensation is recoverable for any loss or damage which the parties knew at the time of the contract as unlikely to result from the breach of the contract. Reason (R): Because above rule is laid down in Hadley v. Baxendale case.
Correct Answer
(B) Both (A) and (R) are wrong
[#153] Where A a tenant, pays the property tax on behalf of owner B, who is bound to pay it, A is
Correct Answer
(A) Entitled to be reimbursed by B
[#154] A contract caused by mistake of law not in force in India:
Correct Answer
(C) Has the same effect as though it was caused by a mistake of fact
[#155] A frustration of contract entails if the performance is
Correct Answer
(C) Destruction of subject matter
Explanation
Solution: Frustration of contract refers to a situation where the performance of a contract becomes impossible due to unforeseen events, without the fault of either party. Commercially impossible → If fulfilling the contract becomes commercially unviable due to unexpected circumstances (like drastic changes in the market or supply chain collapse), courts may consider it as frustration, especially if the cost becomes exorbitant or the benefit of the contract is lost. Restricted by Government rules & regulations → If a government law or regulation directly prohibits or restricts the performance of the contract, it constitutes frustration as the legal environment changes beyond the control of either party. Destruction of subject matter → If the core subject matter of the contract is destroyed (e.g., a specific item to be sold is destroyed by fire), the contract becomes void as its performance is no longer possible. Therefore, all the situations mentioned can lead to frustration of contract, making Option D the correct answer.