Section 45 of ICA : Section 45: Devolution Of Joint Rights

Explanation using Example

Imagine three friends, Raj, Simran, and Anjali, who decide to start a small business together. They contribute equal amounts of money and agree that the profits will be shared equally. To formalize their arrangement, they enter into a contract where Raj promises to distribute the profits to Simran and Anjali jointly at the end of each year.

Unfortunately, Simran passes away after a couple of years. According to Section 45 of The Indian Contract Act, 1872, the right to claim the share of the profits now rests with Simran's legal heir (say, her son Karan) jointly with Anjali. If Anjali were to pass away later, the right to claim the entire profits would then rest with the legal representatives of both Simran and Anjali jointly.