Discharge of Contracts Questions and Answers

Q: The principle of 'force majeure' emanates from which provision of the Indian Contract Act, 1872?

The principle emanates from Section 56.Section 56 of the Indian Contract Act, 1872 embodies the doctrine of frustration: an agreement to do an act impossible in itself is void, and a contract becomes void when the act becomes impossible or unlawful after it is made, by events the promisor could not prevent. Force majeure, an event beyond the parties' control, draws on this principle; where the contract has its own force majeure clause, it operates as a contingency under Section 32.Section 52 deals with the order of performance of reciprocal promises, Section 54 with reciprocal promises dependent on each other, and Section 58 with alternative promises one branch of which is illegal.

Q: Legal impossibility means :

Legal impossibility means performance of a promise made impossible by operation of law.Under the second paragraph of Section 56 of the Indian Contract Act, a contract to do an act which, after it is made, becomes impossible or, by reason of some event the promisor could not prevent, unlawful, becomes void. Where a change in the law, such as a prohibition or a requisition order, makes performance illegal, the impossibility arises from the law itself.'An agreement to do an impossible act' is the initial impossibility covered by the first paragraph of Section 56, whatever its cause. Lex non cogit ad impossibilia, 'the law does not compel the impossible', is the general maxim behind the doctrine of frustration, not a definition of legal impossibility, so 'All of the above' is not the answer.

Q: A frustrated contract is :

A frustrated contract is void.Section 56 of the Indian Contract Act provides that a contract to do an act which, after it is made, becomes impossible or unlawful through an event the promisor could not prevent, becomes void when the act becomes impossible or unlawful. This is the doctrine of frustration (Satyabrata Ghose v. Mugneeram Bangur, 1954).It is not enforceable or valid, since performance is excused. Voidable means valid until avoided at a party's option, which is not how frustration operates; it discharges the contract automatically.

Q: Which one of the following cases is related to the 'Doctrine of frustration' ?

The case is Satyabrata Ghosh vs Mugneeram Bangur & Co.In this 1954 decision the Supreme Court explained the doctrine of frustration under Section 56 of the Indian Contract Act: a contract is discharged when performance becomes impossible or its foundation is destroyed by an unforeseen event. On the facts, the wartime requisition of the land did not frustrate a contract to develop and sell plots.Hadley vs Baxendale (1854) is the leading case on remoteness of damages, and Carlill vs Carbolic Smoke Ball Co. (1893) on offers made to the world at large. Neither is a frustration case.

Q: Assertion (A) : When subject matter of a contract is destroyed, the contract is frustrated.Reason (R) : Frustration of a contract frustrates a party to the contract.Codes :

Both statements are true, but (R) does not explain (A).(A) is true in the sense of section 56 of the Contract Act and Taylor v. Caldwell: when the thing that is the subject of the contract is destroyed without the fault of either side, performance becomes impossible and the contract is frustrated.(R) says that frustration frustrates a party to the contract. In ordinary language that is so, but it only plays on the word and says nothing of why destruction of the subject matter discharges the contract. So the first option is wrong, and the second is the key. The third and fourth options call a true statement false.

The principle of 'force majeure' emanates from which provision of the Indian Contract Act, 1872?

A.Section 52
B.Section 54
C.Section 56
D.Section 58

Exam Year(s)

Rajasthan High Court Civil Judge - 2019, Rajasthan Judicial Service - 2019,

Answer: C

The principle emanates from Section 56.

Section 56 of the Indian Contract Act, 1872 embodies the doctrine of frustration: an agreement to do an act impossible in itself is void, and a contract becomes void when the act becomes impossible or unlawful after it is made, by events the promisor could not prevent. Force majeure, an event beyond the parties' control, draws on this principle; where the contract has its own force majeure clause, it operates as a contingency under Section 32.

Section 52 deals with the order of performance of reciprocal promises, Section 54 with reciprocal promises dependent on each other, and Section 58 with alternative promises one branch of which is illegal.

Discuss in Forum

Legal impossibility means :

A.Performance of a promise impossible by operation of law
B.An agreement to do an impossible act
C.Lex non cogit ad impossibilia
D.All of the above

Exam Year(s)

MH SET - 2018, SET Exam - 2018,

Answer: A

Legal impossibility means performance of a promise made impossible by operation of law.

Under the second paragraph of Section 56 of the Indian Contract Act, a contract to do an act which, after it is made, becomes impossible or, by reason of some event the promisor could not prevent, unlawful, becomes void. Where a change in the law, such as a prohibition or a requisition order, makes performance illegal, the impossibility arises from the law itself.

'An agreement to do an impossible act' is the initial impossibility covered by the first paragraph of Section 56, whatever its cause. Lex non cogit ad impossibilia, 'the law does not compel the impossible', is the general maxim behind the doctrine of frustration, not a definition of legal impossibility, so 'All of the above' is not the answer.

Discuss in Forum

A frustrated contract is :

A.enforceable
B.void
C.voidable
D.valid

Exam Year(s)

MH SET - 2023, SET Exam - 2023,

Answer: B

A frustrated contract is void.

Section 56 of the Indian Contract Act provides that a contract to do an act which, after it is made, becomes impossible or unlawful through an event the promisor could not prevent, becomes void when the act becomes impossible or unlawful. This is the doctrine of frustration (Satyabrata Ghose v. Mugneeram Bangur, 1954).

It is not enforceable or valid, since performance is excused. Voidable means valid until avoided at a party's option, which is not how frustration operates; it discharges the contract automatically.

Discuss in Forum

Which one of the following cases is related to the 'Doctrine of frustration' ?

A.Hadley vs Baxendale
B.Carlill vs Carbolic Smoke Ball Co.
C.Satyabrata Ghosh vs Mugneeram Bangur & Co.
D.State Bank of India vs Quality Bread factory

Exam Year(s)

Tripura Public Service Commission - 2019,

Answer: C

The case is Satyabrata Ghosh vs Mugneeram Bangur & Co.

In this 1954 decision the Supreme Court explained the doctrine of frustration under Section 56 of the Indian Contract Act: a contract is discharged when performance becomes impossible or its foundation is destroyed by an unforeseen event. On the facts, the wartime requisition of the land did not frustrate a contract to develop and sell plots.

Hadley vs Baxendale (1854) is the leading case on remoteness of damages, and Carlill vs Carbolic Smoke Ball Co. (1893) on offers made to the world at large. Neither is a frustration case.

Discuss in Forum

Assertion (A) : When subject matter of a contract is destroyed, the contract is frustrated.

Reason (R) : Frustration of a contract frustrates a party to the contract.
Codes :

A.Both (A) and (R) are true and (R) is the correct explanation of (A).
B.Both (A) and (R) are true, but (R) is not correct explanation of (A).
C.(A) is true, but (R) is false.
D.(A) is false, but (R) is true.

Exam Year(s)

UGC NET - 2012,

Answer: B

Both statements are true, but (R) does not explain (A).

(A) is true in the sense of section 56 of the Contract Act and Taylor v. Caldwell: when the thing that is the subject of the contract is destroyed without the fault of either side, performance becomes impossible and the contract is frustrated.

(R) says that frustration frustrates a party to the contract. In ordinary language that is so, but it only plays on the word and says nothing of why destruction of the subject matter discharges the contract. So the first option is wrong, and the second is the key. The third and fourth options call a true statement false.

Discuss in Forum

Discharge of Contracts Questions and Answers

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