Read the given paragraph carefully and answer given question:

Contracts are the important part of commercial law because all commercial transactions usually begin with an agreement or a contract.

Business transactions involving sale-purchase or exchange of services have become an integral part in day-to-day activities. In such instances, an agreement or a contract is necessary for determining the rights, obligations and liabilities of parties when they enter into any business transaction. The Indian Contract Act is the law governing contracts in India.

Ram agrees to give Rs. 1000/- to Biju if India wins the match on 24th April. Biju agrees to pay Ram the same amount if India does not win the match. Which type of situation is mentioned above?

wager

The correct answer is Option (4) → wager

The situation described involves a bet between Ram and Biju regarding the outcome of a match. Each party stands to win or lose money based on whether India wins or loses the match. This is characteristic of a wagering contract, which is an agreement where two parties agree to pay money based on the outcome of an uncertain event. In this case, the event is the outcome of the match.