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CMA Foundation · Fundamentals of Business Laws and Business Communication · Void and Voidable Agreements, No Consideration No Contract

Anita finds the lost wallet of Bhaskar and returns it to him without being asked. Touched by her honesty, Bhaskar promises to pay her Rs. 500. Anita later claims the amount. Which statement is correct under the Indian Contract Act, 1872?

The promise is enforceable. Anita voluntarily did something for Bhaskar earlier by returning his wallet, and his later promise to compensate her is covered by the exception in Section 25(2). Writing and registration are needed only for promises made out of natural love and affection between near relations.

  1. AThe promise is void because Anita gave no consideration at the time of the promise
  2. BThe promise is void because it is not in writing and registered
  3. CThe promise is enforceable as a promise to compensate a person who has already voluntarily done something for the promisorCorrect
  4. DThe promise is voidable at Bhaskar's option

Explanation

Section 25(2) makes a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor a contract even without fresh consideration. Returning the wallet is such an act, as in the finder-of-purse illustration. Writing and registration are required only for the natural love and affection exception, so that option is wrong.

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