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Which of the following statements is/are correct: 1. A claim for damages arising out of breach of…

A claim for unliquidated damages for breach of contract is not a debt until the court determines the liability and the amount (Union of India v Raman Iron Foundry, 1974).…

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Which of the following statements is/are correct:
1. A claim for damages arising out of breach of contract is not a debt.
2. A person who enters into a contract with Government does not necessarily thereby undertake any public duty.

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Answer and explanation

Correct answer C

A claim for unliquidated damages for breach of contract is not a debt until the court determines the liability and the amount (Union of India v Raman Iron Foundry, 1974). The Explanation to section 74 of the Indian Contract Act, 1872 says that a person who enters into a contract with Government does not necessarily thereby undertake any public duty. Both statements are correct, so the answer is "both 1 and 2".

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