CAIIB · BRBL

The Indian Contract Act, 1872

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.

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Q

What is the definition of a contract under the Indian Contract Act, 1872?

A

A contract is an agreement enforceable by law, formed when an offer is accepted and supported by lawful consideration between competent parties for a lawful object.

Q

What is a 'proposal' under Section 2(a) of the Indian Contract Act, 1872?

A

A proposal is when one person signifies willingness to do or abstain from doing something to obtain another's assent.

Q

What are the essential elements of a valid contract under Section 10 of the Indian Contract Act?

A

A valid contract requires free consent, competent parties, lawful consideration, a lawful object, and must not be expressly declared void by law.

Q

What is an 'acceptance' under Section 2(b) of the Indian Contract Act?

A

Acceptance is when the person to whom the proposal is made signifies his assent thereto.

Q

Who is considered competent to contract under Section 11 of the Indian Contract Act, 1872?

A

A person is competent to contract if they are of the age of majority (18 years), of sound mind, and not disqualified from contracting by any law to which they are subject.

Q

What is a 'promise' under Section 2(b) of the Indian Contract Act, 1872?

A

A promise is a proposal when accepted; accepted proposal is called a promise.

Q

What does 'free consent' mean under Section 14 of the Indian Contract Act?

A

Free consent means consent not caused by coercion, undue influence, fraud, misrepresentation, or mistake — all five vitiating factors must be absent for consent to be truly free.

Q

What is the meaning of 'promisor' and 'promisee' under the Indian Contract Act?

A

The person making the promise is promisor; the person accepting it is promisee.

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