Question

The 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. In other words, in answering the following question, you must not rely on any principles except the principle that is given herein below for the 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 in the study of law, research aptitude, and problem-solving ability.

PRINCIPLE Generally, an agreement without consideration is not valid. Therefore in order to make a valid agreement some consideration which may have some value in the eyes of law, is essentially required.

FACTS William has an old car of which he makes seldom uses. He voluntarily enters into an agreement with Smith to sell this car for rupees ten thousand. Thereafter one Anson approaches William and offers to buy that car for rupees one lac as the car was one which Anson has been searching for long. Now William wants to cancel his agreement with Smith and refuses to deliver the car to him saying that consideration (price) for the car promised by Smith is negligible and, therefore, agreement with him cannot be said to be the valid one.

Options

• William can cancel his agreement with Smith as the consideration involved in that is really inadequate

• William cannot cancel his agreement with Smith as the sale of the car for rupees ten thousand was voluntary and this price has some value in the eyes of the law

• William can cancel his agreement with Smith as he was ignorant about the value/price of the car for which it could be sold

• William can cancel his agreement with Smith as he is entitled to get the full market value/price of his car.

Answer 1

William cannot cancel his agreement with Smith as the sale of the car for rupees ten thousand was voluntary and this price has some value in the eyes of the law

Explanation:

As per the principle mentioned in the question and also supported by the Indian Contract Act, 1872 generally an agreement without consideration is not for valid. In this case, William cannot cancel his agreement with Smith because the sale of the car to Smith ₹10000 was a voluntary act and this price or consideration has some value in the eyes of law.