BCL – L1 – SA – Q57 – Contract Law

Effect of failing to perform a contract on time in commercial transactions.

Question

In commercial transactions, time is considered to be of the essence of contract, and if the party fails to perform the contract within specified time, the contract becomes.

A Voidable at the option of the other party

B Void and cannot be enforced

C Illegal for noncompliance of legal terms

D Enforceable in higher court only

Answer

Explanation:
The correct answer is A because, in commercial transactions, time is typically of the essence, meaning failure to perform within the specified time allows the other party to treat the contract as voidable (i.e., they can choose to rescind or continue). Option B is incorrect as the contract is not automatically void, C is incorrect as it’s not illegal, and D is irrelevant.

Tags: Commercial Transactions, Contract Law, Time Essence, Voidable Contract
Level: Level 1

Topic: Contract Law

Uploader: Samuel Duah