CAIIB · BRBL

Meaning and Essentials of Contract, Contract of Guarantee & Bailment

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 legal definition of a 'contract' under the Indian Contract Act, 1872?

A

A contract is an agreement enforceable by law, formed between two or more parties with free consent, lawful consideration, and a lawful object.

Q

What is an 'illegal agreement' under the Indian Contract Act, 1872?

A

An agreement forbidden by law or against public policy.

Q

Which section of the Indian Contract Act, 1872 defines an 'agreement'?

A

Section 2(e) defines an agreement as 'every promise and every set of promises forming the consideration for each other.'

Q

What is a 'quasi-contract' under the Indian Contract Act?

A

A legal obligation imposed by law without a real agreement.

Q

What are the essential elements required for a valid contract?

A

A valid contract requires offer and acceptance, free consent, competent parties, lawful consideration, lawful object, certainty, possibility of performance, and not expressly declared void.

Q

What is the rule regarding agreements in restraint of trade?

A

They are void under Section 27 of the Indian Contract Act.

Q

What does 'free consent' mean under the Indian Contract Act, 1872?

A

Free consent means consent not caused by coercion, undue influence, fraud, misrepresentation, or mistake, as defined under Section 14 of the Act.

Q

What is meant by 'consensus ad idem' in contract law?

A

Meeting of minds; both parties agree on the same thing.

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