Multiple choice

If the performance of contract becomes impossible because the subject matter of contract has ceased to exist, then

  1. both the parties are liable

  2. neither party is liable

  3. only offerer is liable

  4. only acceptor is liable

  5. None of these
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B Correct answer
Explanation

A contract to do an act, which after the contract is made, becomes impossible by reason of some event, which the promisor could not prevent, becomes void when the contract becomes impossible. Thus, neither party is liable for the non-performance of contract.

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