Question

Which of the following statements are correct?
All agreements are contracts, if: -
(i) They are made by the free consent of parties competent to contract.
(ii) They are made for a lawful consideration.
(iii) They are made with a lawful object.
(iv) They are expressly declared to be void under the law.

• A. Only (i), (ii), and (iii)
• B. Only (i), (ii), and (iv)
• C. Only (i), (iii), and (iv)
• D. Only (ii), (iii), and (iv)

Hint:

While all contracts are agreements, all agreements are not contracts.
Only those agreements that satisfy all the conditions laid down in Section 10 of the Act are enforceable by law as contracts.

Answer 1

The Correct Option is A

Step 1: Understanding the Question:
The question asks for the essential requirements that transform an agreement into a legally binding contract under the Indian Contract Act, 1872.
It provides four conditions and requires us to select the legally valid combination.

Step 2: Key Legal Principles and Approach:
The primary provision that defines which agreements rise to the level of enforceable contracts is Section 10 of the Indian Contract Act, 1872.
We must match the provided statements with the literal conditions set forth in Section 10.

Step 3: Detailed Explanation:

• Analysis of Section 10: Section 10 of the Act states: "All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void."

• Evaluating Statement (i): "They are made by the free consent of parties competent to contract." This is a direct element of Section 10.

• Free consent is defined in Section 14, and competency is defined in Section 11.

• Hence, statement (i) is correct.

• Evaluating Statement (ii): "They are made for a lawful consideration." This is another direct element of Section 10.

• Consideration is defined in Section 2(d) and must be lawful under Section 23.

• Hence, statement (ii) is correct.

• Evaluating Statement (iii): "They are made with a lawful object." This is also a direct element of Section 10 and Section 23.

• Hence, statement (iii) is correct.

• Evaluating Statement (iv): "They are expressly declared to be void under the law." This is incorrect.

• Section 10 requires that the agreements must not be expressly declared to be void under the law.

• If an agreement is expressly declared to be void (such as agreements in restraint of trade under Section 27), it can never become a contract.

• Therefore, only statements (i), (ii), and (iii) are correct, making Option (A) the correct answer.

Step 4: Final Answer:
Based on the express provisions of Section 10 of the Indian Contract Act, 1872, the correct statements are (i), (ii), and (iii), making Option (A) the correct answer.