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A freely agrees to sell a horse worth ₹1,000 for ₹10. Assuming the other requirements of a valid…

Explanation 2 and illustration (f) to section 25 of the Indian Contract Act, 1872, distinguish inadequate consideration from an absence of consideration. Inadequacy can be…

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A freely agrees to sell a horse worth ₹1,000 for ₹10. Assuming the other requirements of a valid contract are met, what is the legal effect of the low price?

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Answer and explanation

Correct answer C

Explanation 2 and illustration (f) to section 25 of the Indian Contract Act, 1872, distinguish inadequate consideration from an absence of consideration. Inadequacy can be evidence about consent, which is expressly free here.

Option feedback

Option A

The low price alone creates no right to avoid the contract.

Option B

The ₹10 price supplies consideration.

Option C

The freely agreed price supports a valid contract on the stated facts.

Option D

Inadequacy of the agreed price alone does not make the sale unlawful.

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