Question

Select the most appropriate statement that applies to impossibility of performance or doctrine of frustration.

• A. Dissolution of contract occurs on the ground of breach.
• B. Frustration should be due to the act or election of the party.
• C. Rights of the parties are existed under section 65 of the Contract Act, 1872.
• D. Rights of the parties are adjusted under section 65 of the Contract Act, 1872.

Hint:

Frustration discharges both parties; benefits must be refunded to prevent unjust enrichment.

Answer 1

The Correct Option is D

Step 1: Understanding frustration.
Frustration occurs when performance becomes impossible due to events beyond control. Section 65 ensures that benefits received are restored when a contract becomes void.
Step 2: Eliminate incorrect answers.
(a) Breach is different — it is a voluntary failure to perform.
(b) Frustration is not due to a party’s own act.
(c) Misworded — "adjusted" is more accurate than "existed."
(d) Correct — Section 65 adjusts parties’ rights after frustration. \[ \boxed{(d)} \]