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.
A contract without, ______ is not valid.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → consideration
In contract law, consideration refers to something of value that is exchanged between the parties involved in a contract. It is an essential element for a contract to be valid under the Indian Contract Act, 1872. Without consideration, a contract is not enforceable, even if there is an agreement and acceptance between the parties.