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Under the Indian Contract Act, 1872, which of the following legal statements is incorrect?

Under Section 10 of the Indian Contract Act, 1872, 'All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful…

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Under the Indian Contract Act, 1872, which of the following legal statements is incorrect?

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Answer and explanation

Correct answer D

Under Section 10 of the Indian Contract Act, 1872, 'All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.' Thus, while all contracts are agreements, not all agreements are contracts (for example, social/domestic agreements or void agreements). Hence, the unqualified statement 'All agreements are contracts [Section 10]' is incorrect. The other three statements accurately state the statutory definitions of promise [Section 2(b)], agreement [Section 2(e)], and contract [Section 2(h)].

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Option A

Incorrect (this is a true legal statement). Under Section 2(b) of the Indian Contract Act, 1872, a proposal, when accepted, becomes a promise.

Option B

Incorrect (this is a true legal statement). Under Section 2(e) of the Indian Contract Act, 1872, every promise and every set of promises, forming the consideration for each other, is an agreement.

Option C

Incorrect (this is a true legal statement). Under Section 2(h) of the Indian Contract Act, 1872, an agreement enforceable by law is a contract.

Option D

Correct (this is the incorrect legal statement). Under Section 10 of the Indian Contract Act, 1872, not all agreements are contracts; only those agreements are contracts that are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not expressly declared to be void.

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