Each question consists of legal propositions/ principles (hereinafter referred to as 'principle') and facts. These principles have to be applied to the given facts to arrive at the most reasonable conclusion. Such principles may or may not be true in the real sense, yet you have to conclusively assume them to be true for the purposes of this section. In other words, in answering the following questions, you must not rely on any principles except the principles that are given herein below for every question. Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest towards study of law, research aptitude and problem solving ability even if the 'most reasonable conclusion' arrived at may be unacceptable for any other reason. It is not the object of this section to test your knowledge of law.
PRINCIPLE: A contract which is duly supported by real and lawful consideration is valid notwithstanding the fact that the consideration is inadequate. The quantum of consideration is for the parties to decide at the time of making a contract, and not for the courts (to decide) when the contract is sought to be enforced. An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given.
FACTS: 'A' agrees to sell his mobile phone worth Rs. 20,000 for Rs.100 only to 'B'. A's consent is freely given.
Which of the following derivations is CORRECT?
Correct Answer :
There is a contract between 'A' and 'B'
Solution :
The correct option is There is a contract between 'A' and 'B'.
Step-by-Step Explanation:
1. Analysis of the Principle:
According to the given legal principle:
- A contract supported by real and lawful consideration is valid, even if the consideration is inadequate.
- The quantum (amount) of consideration is for the parties to decide when making the contract, not for the courts to decide upon enforcement.
- Inadequacy of consideration does not make an agreement void if consent was freely given.
2. Application to the Facts:
- 'A' agrees to sell a mobile phone worth Rs. 20,000 to 'B' for Rs. 100.
- Although Rs. 100 is inadequate compared to the actual value of Rs. 20,000, Rs. 100 is still a real and lawful consideration.
- The facts explicitly state that "A's consent is freely given."
3. Conclusion:
Since consideration is present and lawful, and consent was given freely without any coercion or undue influence, the inadequacy of the price does not invalidate the agreement. Therefore, a valid contract exists between 'A' and 'B'.
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