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    Question

    Section 56 of the Indian Contract Act, 1872, deals with

    the doctrine of frustration. Under this provision, what is the legal effect when the performance of a contract becomes impossible due to subsequent events?
    A The contract remains valid but the parties are excused from performance Correct Answer Incorrect Answer
    B The contract is void ab initio (void from its inception) Correct Answer Incorrect Answer
    C The contract becomes voidable at the option of the innocent party Correct Answer Incorrect Answer
    D The contract continues with modified terms as per court's direction Correct Answer Incorrect Answer
    E The contract is suspended pending removal of the impossibility Correct Answer Incorrect Answer

    Solution

    Section 56 of the Indian Contract Act, 1872, states that if the performance of a contract becomes impossible (either initially or subsequently) due to acts of God, destruction of subject matter, death or incapacity of essential parties, change in law, or other unforeseen circumstances beyond parties' control, the contract becomes void from the beginning. The Supreme Court in Satyabrata Ghose v. Mugneeram Bangur clarified that "impossibility" includes not just literal physical impossibility but also practical impossibility defeating the contract's essential purpose. Upon frustration, the parties stand discharged from obligations, though any benefits received before the frustrating event must be restored under Section 65.

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