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Under section 2 of the Indian Contract Act, 1872, which sequence correctly traces the stages from a proposal to a contract?

Question and options

Under section 2 of the Indian Contract Act, 1872, which sequence correctly traces the stages from a proposal to a contract?

  1. Proposal → agreement → contract → promise

  2. Proposal → promise → agreement → contract

  3. Promise → proposal → agreement → contract

  4. Proposal → agreement → promise → contract

Answer and explanation

Correct answer: B - Proposal → promise → agreement → contract

Under section 2(b) of the Indian Contract Act, 1872 a proposal, when accepted, becomes a promise; under section 2(e) every promise or set of promises forming the consideration for each other is an agreement; and under section 2(h) an agreement enforceable by law is a contract. Placing the agreement before the promise is the common slip, but the Act derives the agreement from promises, not the other way round.

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