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CA Foundation · Business Laws · The Indian Contract Act, 1872

Anita promises to give her nephew Vivek Rs 50,000 as a gift, out of natural love and affection, and puts the promise in a written, registered document with her nephew's name on it. Vivek did not give anything in return. Under the Indian Contract Act, 1872, the promise is:

The promise is valid. Although Vivek gave no consideration, a written and registered agreement made out of natural love and affection between near relatives is an exception to the rule that an agreement without consideration is void, so it is enforceable.

  1. AVoid, because there is no consideration under any circumstances
  2. BValid, because it is in writing, registered, and made out of natural love and affection between near relativesCorrect
  3. CVoidable at Vivek's option, because he gave nothing in return
  4. DValid only if Vivek gives some consideration within a reasonable time

Explanation

An agreement without consideration is void, but there is an exception: a written and registered agreement made on account of natural love and affection between parties standing in a near relationship is enforceable. Aunt and nephew are near relatives, and all conditions are met. Option A ignores this exception.

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