Principle: The consideration or object of an agreement is unlawful if it is forbidden by law. Every agreement of which the object or consideration is unlawful is void.

Facts: ‘X’, promises to pay ‘I” t 50,000, if he (1”) commits a crime. ‘X’ further promises to indemnify him (‘Y’) against any liability arising thereof. el” agrees to act as per X’s promise.

Which of the following derivations is CORRECT?

• There is a contract between ‘X’ and ‘I”
• There is an agreement between ‘X’ and ‘Y’ which can be enforced by the court of law
• There is an agreement between ‘X’, and ‘Y’ which cannot be enforced by the court of law
• There is an agreement between ‘X’, and ‘Y’ which cannot be enforced by the court of law

Principle: Agreements in restraint of marriage are void.

Facts: ‘X’ enters into an agreement with ‘Y’ whereunder he agrees not to many anybody else other than a person whose name starts with the letter and promises to pay Rs. 1,00,000/- to ‘Y’ if he (‘X’) breaks this agreement. Which of the following derivations is CORRECT?

• There is a contract between ‘X’ and ‘Y’
• There is an agreement between ‘X’ and ‘Y’ which can be enforced by the court of law
•  There is an agreement between ‘X’, and ‘Y’ which cannot be enforced by the court of law
•  There is an agreement between ‘X’, and ‘Y’ which cannot be enforced by the court of law

Principle: When one person signifies to another his willingness to do or to abstain from doing anything. with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal. The expression of willingness/desire results in a valid proposal only when it is made/addressed to some person(‘s).

Facts: ‘X’ makes the following statement in an uninhabited hall: “I wish to sell my mobile phone
for Rs l,000.” Which of the following, derivations is CORRECT?

• ‘X’ made a statement that resulted in a promise
• made a statement that resulted in a proposal
• X’ made a statement that did not result in any proposal
• X’ made a statement that did not result in any proposal

Principle: A proposal (offer) should be made with an intention that after its valid acceptance. a legally binding promise or agreement will be created. The test for the determination of such intention is not subjective. rather it is objective. The intention of the parties is to be ascertained from the terms of the agreement and the surrounding circumstances under which such an agreement is entered into. As a general rule. in the case of arrangements regulating social relations, it follows as a matter of course that the parties do not intend legal consequences to follow. On the contrary, as a general rule. in the case of arrangements regulating business affairs. it follows as a matter of course that the parties intend legal consequences to follow. However the above rules are just presumptive in nature, and hence, can be rebutted.

Facts: One morning while having breakfast. ‘X’ the father says to ‘Y’ (X’s son) in a casual manner, “I shall buy a motorbike for you if you get through the CLAT.” Which of the following derivations is CORRECT?

•  ‘X’ made a statement that resulted in an enforceable promise
• ‘X’ made a statement that resulted in a valid proposal
•  ‘X’ made a statement that resulted in an enforceable agreement
•  ‘X’ made a statement that resulted in an enforceable agreement

Principle: Acceptance (of offer) must be communicated by the offeree to the offeror so as to give rise to a binding obligation. The expression ‘by the offeree to the offeror’ includes communication between their authorised agents.

Facts: ‘X’ made an offer to buy Y’s property for a stipulated price. ‘Y’ accepted it and communicated his acceptance to ‘Z’ a stranger. Which of the following derivations is CORRECT‟?

• Y’s acceptance resulted in an agreement
• Y’s acceptance did not result in any agreement
• Y’s acceptance resulted in a contract
• Y’s acceptance resulted in a contract

 Principle: Acceptance should be made while the offer is still subsisting. The offeror is free to retract his offer at any time before his offer gets accepted by the offeree. Once the offer is withdrawn or is lapsed. it is not open to be accepted so as to give rise to a contract. Similarly. if a time is prescribed within which the offer is to be accepted, then, the offer must be accepted within the prescribed time. And. if no time is prescribed, then. the acceptance must be made within a reasonable time.

What is a reasonable time, is a question of fact which is to be determined by taking into account all the relevant facts and surrounding circumstances.

Facts: ‘X’ makes an offer to ‘Y’ to sell his equipment for ? 1,000.00. No time is specified for the acceptance. ‘Y’ sends his reply two years after receiving the offer. Which of the following derivations is CORRECT?

• There arises a contract between ‘X’ and ‘Y’ to sell/buy the equipment in question for Rs 1,000.00
• There does not arise any contract between ‘X’ and ‘Y’ to sell/buy the equipment in question for Rs 1,000.00
•  ‘X’ is bound by his offer and hence cannot reject the acceptance made by ‘Y’
•  ‘X’ is bound by his offer and hence cannot reject the acceptance made by ‘Y’

Principle: Minor’s agreement is void from the very beginning. It can never be validated. It cannot be enforced in the court of law.

Facts: ‘A’ a boy of 16 years of age, agrees to buy a camera from ‘B’ who is a girl of 21 years of age. Which of the following derivations is CORRECT?

• There arises a contract between ‘A’ and ‘B’ to sell/buy the camera in question
• There arises an enforceable agreement between ‘A’ and ‘B’ to sell/buy the camera in question
• There does not arise any contract between ‘A’ and ‘B’ to sell/buy the camera in question
• There does not arise any contract between ‘A’ and ‘B’ to sell/buy the camera in question

Principle: A contract which is duly supported by real and lawful consideration is valid notwithstanding the fact that the consideration is inadequate. The quantum of consideration is for the parties to decide at the time of making a contract, and not for the courts (to decide) when the contract is sought to be enforced. An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given.

Facts: ‘A’ agrees to sell his mobile phone worth t 20,000/- for 100/- only to ‘B’. A’s consent is freely given.

Which of the following derivations is CORRECT?

• There is a contract between ‘A’ and ‘B’
• There is no contract between ‘A’ and ‘B’ because consideration is not adequate
• There is no contract between ‘A’ and ‘B’ because a mobile phone worth 20,000/- cannot be sold for just 100/-
• There is no contract between ‘A’ and ‘B’ because a mobile phone worth 20,000/- cannot be sold for just 100/-

Principle: The consideration or object of an agreement is unlawful if the Court regards it as opposed to public policy. Every agreement of which the object or consideration is unlawful is void.

Facts: ‘X’ promises to obtain for ‘Y’ an employment in the public service; and ‘Y’ promises to pay Rs. 5,00,000/- to ‘X’. Which of the following derivations is CORRECT?

• There is a contract between ‘X’ and ‘Y’
• There is a voidable contract between ‘X’ and ‘Y’
• There is an agreement between ‘X’ and ‘Y’ which can be enforced by the court of law
• There is an agreement between ‘X’ and ‘Y’ which can be enforced by the court of law

Principle: Two or more persons are said to consent if they agree upon the same thing in the same sense. Consent is said to be free when it is not caused by coercion, or undue influence, or fraud, or misrepresentation, or mistake. When consent to an agreement is caused by coercion, undue influence, fraud or misrepresentation, the agreement is a contract voidable (rescindable or terminable) at the option of the party whose consent was so caused. However, when consent to an agreement is caused by mistake as to a matter of fact essential to the agreement, the agreement is void.

Facts: ‘X’ threatens to gun down ‘Y’, if he (‘Y’) does not sell his property worth Rs. 20,00,000/- for Rs 1,00,000/- only. As a consequence, ‘Y’ agrees to sell it as demanded by ‘X’. Which of the following derivations is CORRECT?

• There is a contract between ‘X’ and ‘Y’
• There is an agreement between ‘X’ and ‘Y’ which can be enforced by the court of law
• There is an agreement between ‘X’, and ‘Y’ which cannot be enforced by the court of law
• There is an agreement between ‘X’, and ‘Y’ which cannot be enforced by the court of law