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CSEET · Business Laws and Management · Elements of Law of Contracts

Anil, an adult of sound mind, agrees with Bhavna, also competent, that she will pay him Rs 50,000 for helping her smuggle prohibited goods. Both consent freely and the money is the stated consideration. Which essential of Section 10 is lacking?

The lacking essential is lawful consideration and lawful object. Both parties are competent and consent freely, but the purpose of smuggling prohibited goods is unlawful, so the agreement fails Section 10 and cannot be a valid contract despite the payment of money.

  1. ACompetence of the parties
  2. BFree consent
  3. CLawful consideration and lawful objectCorrect
  4. DAbsence of an express declaration of voidness by a court

Explanation

Both parties are competent and consent freely, so those essentials are met. Section 10 requires a lawful consideration and a lawful object, and smuggling prohibited goods is unlawful. The agreement therefore fails this essential and is not a valid contract.

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