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Meghna contracts to supply Prabha with furniture worth Rs.20 lakh within four weeks. The contract…

The unexcused failure of an essential time term permits Prabha to reject late performance and pursue the applicable compensatory remedies. Section 74 allows reasonable…

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Meghna contracts to supply Prabha with furniture worth Rs.20 lakh within four weeks. The contract expressly makes time essential, allocates cyclone-related transit delay to Meghna, and provides no force-majeure excuse for that delay. It stipulates Rs.5 lakh for each day of delay. A cyclone delays delivery by seven days, constituting an unexcused breach; performance is not frustrated, and Prabha proves compensable loss. Prabha has not accepted the late delivery. Under the Indian Contract Act, 1872, which statement is incorrect?

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Correct answer B

The unexcused failure of an essential time term permits Prabha to reject late performance and pursue the applicable compensatory remedies. Section 74 allows reasonable compensation within the stipulated ceiling. The daily figure therefore does not automatically entitle her to an award of thirty-five lakh.

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