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CMA Foundation · Fundamentals of Business Laws and Business Communication · Sources of Law

In the context of sources of law, a custom becomes binding as law when it satisfies certain tests. Which of the following is one of the essential requirements of a valid custom?

A valid custom must be followed continuously over a long period and must be reasonable, along with being certain and not against statute or public policy. It does not need Parliament's enactment, presidential approval or a written contract, because custom is itself an independent source of law.

  1. AIt must have been followed continuously from long usage and be reasonableCorrect
  2. BIt must have been enacted by Parliament
  3. CIt must have been approved by the President of India
  4. DIt must be recorded in a written contract between the parties

Explanation

A valid custom must be ancient or long-followed, continuous, certain, reasonable and not opposed to statute or public policy. Enactment by Parliament or presidential approval is not needed, since custom is a source of law independent of legislation. A written contract is also not a requirement for custom to be valid.

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