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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 that is said to be implied is one in which:

An implied contract is one where the proposal or acceptance is made otherwise than in words, that is, through conduct or circumstances. A contract made orally or in writing in words is express. Absence of writing, performance status or unenforceability does not make a contract implied.

  1. AThe proposal or acceptance is made otherwise than in words, through conduct or circumstancesCorrect
  2. BThe contract is not in writing
  3. COne party has performed fully
  4. DThe agreement is not enforceable by law

Explanation

Under the Act, a proposal or acceptance made in words is express, while one made otherwise than in words is implied. Conduct such as boarding a public bus creates an implied contract. A contract may be oral and still be express, so lack of writing does not make it implied. Performance status and enforceability are separate classifications.

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