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

Anita says to her neighbour Bhaskar, 'I will give you Rs 5,000 if you paint my gate.' Bhaskar replies, 'I accept.' Which of the following best describes the nature of this agreement at the stage of the exchange of these words?

It is a valid contract. Anita's proposal was accepted by Bhaskar, and the mutual promises to pay Rs 5,000 and to paint the gate supply lawful consideration. Nothing requires such a contract to be in writing, so it is enforceable by law once accepted.

  1. AA valid contract, because the proposal was accepted and there is consideration in the form of painting the gateCorrect
  2. BA void agreement, because the consideration is not adequate
  3. CA voidable contract, because Bhaskar has not yet painted the gate
  4. DAn illegal agreement, because the price is not specified in a written document

Explanation

A proposal that is accepted becomes a promise, and an agreement enforceable by law is a contract. Here the promise to pay Rs 5,000 and the promise to paint the gate are consideration for each other. Option 2 is wrong because inadequacy of consideration does not affect validity, and writing is not required for such a contract.

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