Indian Contract Act 1872 for Judiciary Exam 2027 — Key Sections, Landmark Cases and 40 MCQs

Last Updated: May 2026

The Indian Contract Act 1872 is the bedrock of substantive law tested in every State PCS-J and APO Judiciary examination. Sections 1-75 of the Act remain fully in force; the Sale of Goods Act 1930 and the Indian Partnership Act 1932 carved out their portions. Judiciary papers test section-wise recall, landmark case applications and essay-type problem questions from this Act. This guide compiles every doctrine, the leading case law, exam-pattern MCQs and a 30-day revision strategy.

Quick Reference — Contract Act

Aspect	Detail
Enacted	25 April 1872
Effective	1 September 1872
Sections	266 (now 1-75 in force after carve-outs)
Based on	English Common Law of Contract
Key Doctrine	Pacta sunt servanda, consensus ad idem

1. Essentials of a Valid Contract (Section 10)

Section 10: “All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.”

Six essentials: (i) Offer + Acceptance; (ii) Free consent; (iii) Capacity; (iv) Consideration; (v) Lawful object; (vi) Not void.

2. Offer and Acceptance (Sections 2-9)

• Offer (Sec 2(a)): Proposal — willingness to do or abstain.
• Acceptance (Sec 2(b)): When the person to whom proposal is made signifies assent.
• Acceptance must be absolute, unqualified, communicated, in prescribed mode, before lapse of offer.
• Lalman Shukla vs Gauri Datt — knowledge of offer is essential to acceptance.
• Carlill vs Carbolic Smoke Ball Co. — general offer to public can be accepted by performance.

3. Consideration (Section 2(d) and 25)

Consideration is “something in return”. Section 25 declares nudum pactum (agreement without consideration) void unless:

• (a) Made out of natural love and affection between near relatives in writing and registered.
• (b) Compensation for past voluntary service.
• (c) A written promise to pay a time-barred debt.

Chinnaya vs Ramaya — past consideration is good consideration in India.

4. Capacity (Sections 11-12)

• Section 11: Every person is competent to contract who is of the age of majority (18 years), of sound mind, and not disqualified by any law.
• Mohori Bibee vs Dharmodas Ghose — minor’s contract is void ab initio, not merely voidable.
• Section 12: Sound mind = capable of understanding the contract.

5. Free Consent (Sections 13-22)

Vitiating Factor	Section	Effect on Contract
Coercion	15	Voidable
Undue Influence	16	Voidable
Fraud	17	Voidable + damages
Misrepresentation	18	Voidable
Mistake (bilateral, on essential fact)	20	Void
Mistake of foreign law	21	Void
Mistake of Indian law	21	Not voidable

Ranganayakamma vs Alwar Setti — coercion includes refusal to perform last rites unless adoption deed signed.

6. Lawful Object and Consideration (Section 23)

Section 23: Object/consideration unlawful if (i) forbidden by law; (ii) defeats provisions of any law; (iii) fraudulent; (iv) involves injury to person/property; (v) immoral; (vi) opposed to public policy.

Gherulal Parakh vs Mahadevdas — wagering agreements not against public policy but Section 30 makes them void; collateral transactions enforceable.

7. Void Agreements (Sections 24-30)

• Sec 24: Object partly unlawful — entire agreement void.
• Sec 26: Restraint of marriage (other than minor) — void.
• Sec 27: Restraint of trade — void, unless saved by exceptions.
• Sec 28: Restraint of legal proceedings — void.
• Sec 29: Uncertain agreements — void.
• Sec 30: Wagering agreements — void.

Madhub Chunder vs Rajcoomar Doss — restrictive covenants in restraint of trade enforceable only within statutory exceptions.

8. Performance and Discharge (Sections 37-67)

• Sec 37: Parties must perform their respective promises.
• Sec 39: Refusal of party to perform — other party may put an end to the contract.
• Sec 56: Doctrine of frustration — agreement to do impossible act is void; supervening impossibility makes contract void.
• Satyabrata Ghose vs Mugneeram Bangur — Section 56 codifies the doctrine; “impossible” includes “impracticable”.

9. Breach and Damages (Sections 73-75)

• Sec 73: Compensation for loss naturally arising from breach OR which parties knew was likely.
• Hadley vs Baxendale — basis of two-rule damages (ordinary + special).
• Sec 74: Liquidated damages — court awards reasonable compensation up to amount stipulated.
• Sec 75: Party rescinding can claim damages.

10. Special Contracts (Sections 124-238)

• Indemnity (Sec 124-125)
• Guarantee (Sec 126-147)
• Bailment and Pledge (Sec 148-181)
• Agency (Sec 182-238)

40 MCQs — Sample of 10

Q1. Indian Contract Act came into force on — (a) 25 April 1872 (b) 1 September 1872 (c) 26 January 1872 (d) 15 August 1872. Ans: (b)

Q2. A minor’s contract is — (a) Voidable (b) Void ab initio (c) Valid (d) Unenforceable. Ans: (b) Mohori Bibee vs Dharmodas Ghose.

Q3. Section dealing with frustration is — (a) 39 (b) 56 (c) 73 (d) 25. Ans: (b)

Q4. Carlill vs Carbolic Smoke Ball Co. case relates to — (a) Past consideration (b) Acceptance by performance (c) Mistake of fact (d) Coercion. Ans: (b)

Q5. Hadley vs Baxendale — leading case on — (a) Damages (b) Acceptance (c) Capacity (d) Consideration. Ans: (a)

Q6. Wagering agreements are dealt with under — (a) Sec 27 (b) Sec 30 (c) Sec 73 (d) Sec 56. Ans: (b)

Q7. Lalman Shukla vs Gauri Datt is a leading case on — (a) Consideration (b) Acceptance (c) Knowledge of offer (d) Capacity. Ans: (c)

Q8. Section dealing with restraint of trade is — (a) 26 (b) 27 (c) 28 (d) 29. Ans: (b)

Q9. “Pacta sunt servanda” means — (a) Treaties may be terminated (b) Promises must be kept (c) Let the buyer beware (d) Compensation for breach. Ans: (b)

Q10. Section 124 of the Indian Contract Act deals with — (a) Guarantee (b) Indemnity (c) Pledge (d) Agency. Ans: (b)

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