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CSEET · Business Laws and Management · Elements of Law of Contracts

Which one of the following statements about the essentials in Section 10 is correct?

An agreement is a contract only when made by free consent of competent parties, for lawful consideration and with a lawful object, and not expressly declared void. All these conditions operate together, so an unlawful object or an express declaration of voidness defeats contract status.

  1. AAn agreement made by parties who give free consent is a contract even if it is expressly declared void by law
  2. BA contract needs lawful consideration but the object may be unlawful
  3. CAn agreement is a contract only if made by free consent of parties competent to contract, for lawful consideration and with lawful object, and not expressly declared voidCorrect
  4. DCompetence of parties is required only for contracts in writing

Explanation

Section 10 combines all the essentials: free consent, competent parties, lawful consideration, lawful object and not being expressly declared void. Dropping any one, such as allowing an unlawful object or ignoring express voidness, contradicts the text.

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