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

Meera, a dealer who trades only in groundnut oil, agrees to sell to Karan 'one hundred tons of oil' without naming the kind. What is the legal position of this agreement?

The agreement is valid. Although the kind of oil is not stated, Meera trades only in groundnut oil, so her trade indicates what was meant. Under Section 29 the meaning is capable of being made certain, so the agreement is not void for uncertainty.

  1. AVoid, because the kind of oil is not stated in the agreement
  2. BVoidable at Karan's option, because Meera knew the kind of oil
  3. CValid, because the nature of Meera's trade shows the meaning of the wordsCorrect
  4. DVoid, because no price has been mentioned in the agreement

Explanation

Under Section 29, an agreement is void only if its meaning is not certain or capable of being made certain. The illustration on a dealer in cocoanut-oil shows that the nature of the seller's trade can indicate the meaning. Meera deals only in groundnut oil, so the meaning is capable of being made certain and the agreement is valid. Option A ignores this.

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