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Subject to the exception in Section 21 of the Transfer of Property Act, 1882, what kind of interest…

Section 21 calls this a contingent interest. If the condition is that the event happens, the interest vests when it happens. If the condition is that the event does not…

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Subject to the exception in Section 21 of the Transfer of Property Act, 1882, what kind of interest arises on a transfer of property when it is to take effect only if a specified uncertain event happens or fails to happen?

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Answer and explanation

Correct answer A

Section 21 calls this a contingent interest. If the condition is that the event happens, the interest vests when it happens. If the condition is that the event does not happen, the interest vests when the event becomes impossible. The section excepts certain age-qualified interests where the income is given absolutely or directed to be applied for the beneficiary before the specified age.

Option feedback

Option A

A contingent interest depends on whether the specified uncertain event happens or fails to happen.

Option B

Incorrect. The Transfer of Property Act, 1882 does not classify an interest dependent on a specified uncertain event as an 'implied interest'; Section 21 expressly terms it a contingent interest.

Option C

Under Section 19, an interest can vest immediately or on an event that must happen, subject to a contrary intention. The uncertain event here makes the interest contingent under Section 21.

Option D

Incorrect. Because 'contingent interest' is the exact statutory term in Section 21, this catch-all option is incorrect.

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