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CMA Foundation · Fundamentals of Business Laws and Business Communication · Capacity of Parties, Free Consent

Under Section 10 of the Indian Contract Act, 1872, which of the following is one of the conditions for an agreement to be a contract?

An agreement becomes a contract when it is made by free consent of parties competent to contract, for lawful consideration and with a lawful object, and is not expressly declared void. Writing, registration or witnesses are required only where another law demands them.

  1. AIt must be made by the free consent of parties competent to contractCorrect
  2. BIt must always be made in writing and registered
  3. CIt must always be made in the presence of two witnesses
  4. DIt must be made only between parties residing in India

Explanation

Section 10 says all agreements are contracts if made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and not expressly declared void. Writing, registration or witnesses are needed only where some other law requires them, so those options state a general rule that does not exist.

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