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

Which of the following is an essential element of a valid contract under the Indian Contract Act, 1872?

A valid contract needs free consent of parties competent to contract, a lawful consideration and a lawful object, and it must not be expressly declared void. Registration, witnesses or money payment are not general requirements for validity.

  1. AThe agreement must be registered with a government authority
  2. BThe agreement must be made in the presence of a witness
  3. CThe agreement must be made by the free consent of parties competent to contract for a lawful consideration and with a lawful objectCorrect
  4. DThe agreement must involve a payment in money

Explanation

All agreements are contracts if made by free consent of parties competent to contract, for a lawful consideration and with a lawful object, and not expressly declared void. Registration, witnesses and money payment are not general requirements.

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