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CMA Foundation · Fundamentals of Business Laws and Business Communication · Essential Elements of a Contract, Offer and Acceptance

Under the Indian Contract Act, 1872, a contract in which the parties have both made promises that are yet to be carried out, for example a buyer promising to pay on delivery and a seller promising to deliver, is best classified as:

Such a contract is bilateral, because each party has made a promise that remains to be performed. A unilateral contract leaves an obligation with only one party, a quasi-contract arises by operation of law, and a contingent contract depends on a future uncertain event.

  1. AA unilateral contract
  2. BA bilateral contractCorrect
  3. CA quasi-contract
  4. DA contingent contract

Explanation

A contract in which both parties still have obligations to perform is a bilateral (executory) contract. A unilateral contract has only one party with an outstanding obligation. A quasi-contract is created by law, not by agreement, and a contingent contract depends on an uncertain event.

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