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'X' on 1st July, 2018 agrees to sell his house to 'Y' for a price of Rs. 1 crore, if the entire price…

Because the price payable is fixed by a clear formula depending on the date of payment, and the forfeiture clause for non-payment is a definite contractual term rather than…

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'X' on 1st July, 2018 agrees to sell his house to 'Y' for a price of Rs. 1 crore, if the entire price is paid on or before 31st July, 2018 and for the price of Rs. 1,25,00,000/- after 31st July, 2018 but before 30th September, 2018. It was further agreed that if the entire price is not paid by 30th September, 2018, 'Y' shall not be entitled to purchase the house and the earnest money paid by 'Y' to 'X' shall stand forfeited. Such an agreement:

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Correct answer C

Because the price payable is fixed by a clear formula depending on the date of payment, and the forfeiture clause for non-payment is a definite contractual term rather than a wager on an uncertain event, the price and the parties' obligations are certain and ascertainable, making the agreement a valid and enforceable contract.

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