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

Anita found a purse belonging to Bhavna and returned it. Out of gratitude, Bhavna later promised to pay Anita Rs. 500. Bhavna now refuses to pay. Which statement is correct?

The promise is enforceable. Section 25(2) treats a promise to compensate, wholly or in part, someone who has already voluntarily done something for the promisor as a contract even without fresh consideration. Returning the lost purse is such an act, and no registration is required.

  1. ABhavna's promise is enforceable as a contract, since it compensates someone who voluntarily did something for herCorrect
  2. BBhavna's promise is void, because the return of the purse was past and so is no consideration
  3. CBhavna's promise is enforceable only if it was written and registered
  4. DBhavna's promise is voidable at Bhavna'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 consideration. Illustration (c) is of this kind: finding a purse and giving it back, followed by a promise to pay. Registration is needed only for the natural love and affection exception, so the second and third options are wrong.

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