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A and B both believe that a particular kind of rice is being sold in the market at Rs. 3,000 per quintal and A sells rice of that kind to B at Rs.3,000 per quintal. But, in fact, the market price was Rs. 4,000. The contract is
- a)Valid.
- b)Void.
- c)Voidable.
- d)Illegal.
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
A and B both believe that a particular kind of rice is being sold in t...
The correct answer is A: Valid.
Explanation:
To determine the validity of the contract between A and B, we need to consider the essential elements of a valid contract. These elements include:
1. Offer and acceptance: A offered to sell the rice to B at Rs. 3,000 per quintal, and B accepted the offer. This indicates that there was a mutual agreement between the parties.
2. Consideration: A agreed to sell the rice to B at the agreed price of Rs. 3,000 per quintal. Both parties provided something of value (the rice and the payment) in exchange for the contract.
3. Intention to create legal relations: Both A and B believed that they were entering into a valid contract for the sale of rice. This indicates their intention to create a legally binding agreement.
4. Capacity to contract: It is assumed that both A and B have the legal capacity to enter into a contract.
5. Legality of object: The object of the contract (the sale of rice) is not illegal.
Based on these elements, it can be concluded that the contract between A and B is valid. Even though the actual market price was different from what both parties believed, their mutual agreement and intention to create a legally binding contract make it valid.
Most Upvoted Answer
A and B both believe that a particular kind of rice is being sold in t...
It's a bilateral mistake of fact so contract must be void and not valid ..
option B is correct
option B is correct
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Community Answer
A and B both believe that a particular kind of rice is being sold in t...
Understanding the Validity of the Contract
In this scenario, A and B enter into a contract for the sale of rice based on a mutual belief about the price.
Key Points
- Mutual Misunderstanding: Both parties believe the price is Rs. 3,000 per quintal, while the actual market price is Rs. 4,000. However, their belief does not affect the validity of the contract.
- Existence of Consensus: A and B have reached a consensus on the price, which is a critical element for a valid contract. They both agree to the terms, demonstrating mutual assent.
- Legality of the Subject Matter: The rice being sold is legal, and the contract does not involve any illegal activity. The contract is for a lawful object, making it valid.
Legal Principles
- Contract Law: According to contract law, a contract is considered valid if it meets the essential elements, which include offer, acceptance, consideration, and legal capacity. In this case, all elements are satisfied.
- Market Price Irrelevance: The actual market price being higher does not invalidate the contract. Parties are free to set their own prices, even if they differ from the prevailing market rate.
Conclusion
Since both A and B have a genuine agreement on the terms, and the contract involves a lawful object, the contract is valid despite the misunderstanding regarding the market price. Thus, the correct answer is option 'A': Valid.
In this scenario, A and B enter into a contract for the sale of rice based on a mutual belief about the price.
Key Points
- Mutual Misunderstanding: Both parties believe the price is Rs. 3,000 per quintal, while the actual market price is Rs. 4,000. However, their belief does not affect the validity of the contract.
- Existence of Consensus: A and B have reached a consensus on the price, which is a critical element for a valid contract. They both agree to the terms, demonstrating mutual assent.
- Legality of the Subject Matter: The rice being sold is legal, and the contract does not involve any illegal activity. The contract is for a lawful object, making it valid.
Legal Principles
- Contract Law: According to contract law, a contract is considered valid if it meets the essential elements, which include offer, acceptance, consideration, and legal capacity. In this case, all elements are satisfied.
- Market Price Irrelevance: The actual market price being higher does not invalidate the contract. Parties are free to set their own prices, even if they differ from the prevailing market rate.
Conclusion
Since both A and B have a genuine agreement on the terms, and the contract involves a lawful object, the contract is valid despite the misunderstanding regarding the market price. Thus, the correct answer is option 'A': Valid.
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A and B both believe that a particular kind of rice is being sold in the market at Rs. 3,000 per quintal and A sells rice of that kind to B at Rs.3,000 per quintal. But, in fact, the market price was Rs. 4,000. The contract isa)Valid.b)Void.c)Voidable.d)Illegal.Correct answer is option 'A'. Can you explain this answer?
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A and B both believe that a particular kind of rice is being sold in the market at Rs. 3,000 per quintal and A sells rice of that kind to B at Rs.3,000 per quintal. But, in fact, the market price was Rs. 4,000. The contract isa)Valid.b)Void.c)Voidable.d)Illegal.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A and B both believe that a particular kind of rice is being sold in the market at Rs. 3,000 per quintal and A sells rice of that kind to B at Rs.3,000 per quintal. But, in fact, the market price was Rs. 4,000. The contract isa)Valid.b)Void.c)Voidable.d)Illegal.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B both believe that a particular kind of rice is being sold in the market at Rs. 3,000 per quintal and A sells rice of that kind to B at Rs.3,000 per quintal. But, in fact, the market price was Rs. 4,000. The contract isa)Valid.b)Void.c)Voidable.d)Illegal.Correct answer is option 'A'. Can you explain this answer?.
A and B both believe that a particular kind of rice is being sold in the market at Rs. 3,000 per quintal and A sells rice of that kind to B at Rs.3,000 per quintal. But, in fact, the market price was Rs. 4,000. The contract isa)Valid.b)Void.c)Voidable.d)Illegal.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A and B both believe that a particular kind of rice is being sold in the market at Rs. 3,000 per quintal and A sells rice of that kind to B at Rs.3,000 per quintal. But, in fact, the market price was Rs. 4,000. The contract isa)Valid.b)Void.c)Voidable.d)Illegal.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B both believe that a particular kind of rice is being sold in the market at Rs. 3,000 per quintal and A sells rice of that kind to B at Rs.3,000 per quintal. But, in fact, the market price was Rs. 4,000. The contract isa)Valid.b)Void.c)Voidable.d)Illegal.Correct answer is option 'A'. Can you explain this answer?.
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