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

Under the Indian Contract Act, 1872, which combination of requirements must be met for an agreement to become a contract under Section 10?

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

  1. AFree consent of parties competent to contract, lawful consideration and lawful object, and not expressly declared voidCorrect
  2. BWritten form, two witnesses and registration in every case
  3. CConsent of parties, adequate consideration and approval of a court
  4. DFree consent, a promise to pay money and a stamped document

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, witnesses or registration are needed only where some other law requires them. So the first option is the only complete statement.

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