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CMA Intermediate · Business Laws and Ethics · Indian Contracts Act, 1872

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

Section 10 makes an agreement a contract when it is made by 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 demands them.

  1. AIt must be made by the free consent of parties competent to contract, for a lawful consideration and with a lawful objectCorrect
  2. BIt must always be made in writing and registered
  3. CIt must be made in the presence of at least two witnesses
  4. DIt must involve payment of money by one party to the other in advance

Explanation

Section 10 says all 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 or registration are needed only where some other law requires them, as the section itself notes. Advance payment is not a requirement.

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