Question

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

• A. Proposal
• B. Consideration
• C. Agreement
• D. Contract

Hint:

Remember the progression of a contract: \textbf{Proposal} + \textbf{Acceptance} = \textbf{Promise}. \textbf{Promise(s)} + \textbf{Consideration} = \textbf{Agreement}. \textbf{Agreement} + \textbf{Enforceability} = \textbf{Contract}.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
The question asks for the legal term for a set of promises where each promise acts as consideration for the other. This requires knowledge of the fundamental definitions in the Indian Contract Act, 1872.
Step 2: Detailed Explanation:
Let's look at the definitions from the Act:
- Section 2(a) - Proposal: When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal.
- Section 2(d) - Consideration: When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.
- Section 2(e) - Agreement: Every promise and every set of promises, forming the consideration for each other, is an agreement.
- Section 2(h) - Contract: An agreement enforceable by law is a contract.
The wording in the question, "A promise or set of promises forming consideration to each other," is a direct match with the definition of an Agreement under Section 2(e).
Step 3: Final Answer:
The definition provided in the question is the exact legal definition of an Agreement as per Section 2(e) of the Indian Contract Act. Therefore, option (C) is correct.