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What is the effect of Section 30 of the Indian Contract Act, 1872 on an agreement to contribute towards…

Section 30 generally makes wagers void. Its horse-racing exception provides that the section does not render unlawful an agreement to subscribe or contribute towards a prize…

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What is the effect of Section 30 of the Indian Contract Act, 1872 on an agreement to contribute towards a ₹500 prize for the winner of a horse race?

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Answer and explanation

Correct answer D

Section 30 generally makes wagers void. Its horse-racing exception provides that the section does not render unlawful an agreement to subscribe or contribute towards a prize worth at least ₹500 for the winner or winners. The threshold refers to the prize's value. The exception does not decide validity under other laws or apply to a bet merely because it concerns a horse race.

Option feedback

Option A

The exception expressly prevents Section 30 from rendering this prize contribution agreement unlawful.

Option B

The exception provides no right to avoid a qualifying prize contribution agreement at either party's option.

Option C

The agreement is to contribute towards a qualifying prize. The wagering rule does not invalidate it as a wager.

Option D

The ₹500 prize meets the statutory threshold. The exception preserves the agreement against invalidity under Section 30.

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