CS Professional · Drafting, Pleadings and Appearances · Drafting of Agreements, Deeds and Documents
Ritu Enterprises signs an unregistered, insufficiently stamped agreement. A drafter argues that Section 10 of the Indian Contract Act, 1872 means a valid contract needs no stamping or registration so long as it has free consent, lawful consideration and a lawful object. Which statement is correct?
The argument is wrong. Section 10 of the Contract Act lists the essentials of a valid contract but expressly preserves laws requiring writing or witnesses and laws relating to registration of documents, so statutory formalities still apply separately.
- AThe argument is wrong, because Section 10 does not affect any law requiring a contract to be in writing or witnessed, or any law on registration of documentsCorrect
- BThe argument is right, because Section 10 overrides the Registration Act
- CThe argument is right for documents relating to movable property only
- DThe argument is wrong, because Section 10 itself requires all contracts to be registered
Explanation
The second paragraph of Section 10 saves laws requiring writing or witnesses and laws relating to registration of documents. So fulfilling the contract essentials does not remove other statutory formalities. Section 10 does not itself require registration of all contracts, which is the opposite error.
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