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

Under Section 10 of the Indian Contract Act, 1872, which of the following is stated as an essential for an agreement to become a contract?

An agreement becomes a contract under Section 10 when it is made with free consent by competent parties, for a lawful consideration and a lawful object, and is not expressly declared void. Writing, witnesses or registration are not general requirements, and adequacy of consideration is not demanded.

  1. AIt must be made for a lawful consideration and with a lawful objectCorrect
  2. BIt must always be in writing and signed before two witnesses
  3. CIt must always be registered with the Registrar of Documents
  4. DIt must be for a consideration that is adequate in market value

Explanation

Section 10 says agreements are contracts if made by free consent of competent parties, for a lawful consideration and with a lawful object, and not expressly declared void. Writing, witnesses and registration are needed only where some other law requires them. Adequacy of consideration is not required under Section 25 Explanation 2.

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