All India Bar Examination (AIBE) 6-VI Previous Year Question Papers with Answers

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19.

A promise or set of promises forming consideration to each other – is known as

A: Proposal
B: Consideration
C: Agreement
D: Contract

The answer is: C

Explanation

The correct option is C: Agreement.

A promise or set of promises forming consideration to each other is known as an agreement, according to section 2 (e) of the Indian Contract Act, 1872. A promise is an expression of intention to do or abstain from doing something, communicated by one party to another, who accepts it.

Consideration is something of value given or done by one party in return for the promise of the other. An agreement is the result of an offer and an acceptance, where the parties agree on the same thing in the same sense. An agreement may or may not be enforceable by law, depending on whether it satisfies the conditions of a valid contract. A contract is an agreement enforceable by law, which creates legal obligations between the parties.