Section 56 of The Indian Contract Act, 1872

The interpretation of Section 56 of the The Contract Act, 1872 came up for consideration in Satyabrata Ghose v. Mugneeram Bangur & Co., (1954) SCR 310 It was held by this Court that the word ‘impossible’ has not been used in the sense of physical or literal impossibility. It ought to be interpreted as impracticable and useless from the point of view of the object and purpose that the parties had in view when they entered into the contract. This impracticability or uselessness could arise due to some intervening or supervening circumstance which the parties had not contemplated. However, if the intervening circumstance was contemplated by the parties, then the contract would stand despite the occurrence of such circumstance. In such an event, there can be no case of frustration because the basis of the contract being to demand performance despite the happening of a particular event, it cannot disappear when that event happens.”

Hon’ble Justice Madan B. Lokur, Delhi Development Authority v. Kenneth Builders & Developers Ltd., [Civil Appeal No. 5370 of 2016].

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