CA
CA Saarthi← All Posts
Home/Blog/Indian Contract Act 1872: Quick Revision Guide for CA Foundation Paper 2

Indian Contract Act 1872: Quick Revision Guide for CA Foundation Paper 2

22 April 2026·6 min·By CA Saarthi
Indian Contract ActCA Foundation Paper 2 revisionBusiness Laws CA Foundation

# Indian Contract Act, 1872 — Exam-Day Revision

Paper 2's single most tested chapter. Get this solid and you've already locked 12–15 marks.

The equation

Contract = Agreement + Enforceability by law (Sec 2(h))

Agreement = Offer + Acceptance (Sec 2(e)).

Essentials of a valid contract (Sec 10)

  • Offer and acceptance
  • Free consent (not caused by coercion/fraud/mistake/undue influence/misrepresentation)
  • Lawful consideration
  • Capacity of parties (not a minor, not of unsound mind, not disqualified)
  • Lawful object
  • Not expressly declared void
  • Legal formalities if prescribed

    • Consideration (Sec 2(d))

  • Must move at the desire of the **promisor**.
  • May be past, present, or future.
  • Need not be adequate, but must be real.

    • 'No consideration, no contract' — exceptions

  • Natural love and affection (written, registered, near relations)
  • Compensation for voluntary services
  • Promise to pay time-barred debt (in writing, signed)
  • Completed gift
  • Agency / bailment without reward

    • Void vs Voidable

  • Void: — no legal effect from the start. Example: minor's agreement.
  • Voidable: — valid until aggrieved party chooses to avoid it. Example: contract obtained by coercion.

    • Cannot be enforced (Sec 26–30)

  • In restraint of marriage
  • In restraint of trade (except sale of goodwill)
  • In restraint of legal proceedings
  • Uncertain
  • Wagering

    • Remedies on breach

  • Rescission
  • Damages (ordinary, special, exemplary, nominal)
  • Quantum meruit
  • Specific performance
  • Injunction

    • Must-know case laws

  • Mohori Bibee v. Dharmodas Ghose — minor's agreement is void ab initio.
  • Carlill v. Carbolic Smoke Ball Co. — general offer accepted by performance.
  • Balfour v. Balfour — social agreements are not legally enforceable.

    • Revise this list the night before — MCQ marks are almost guaranteed here.

    Ready to Start Your CA Foundation Journey?

    Free diagnostic test, 2,500+ practice questions, and personalised study plans.

    More Articles

    5 min
    Time Management During the CA Foundation Exam
    6 min
    How to Write Paper 1 Descriptive Answers (and Pick Up Free Marks)
    6 min
    CA Foundation Pass Percentage: Trends, Analysis, and What It Means for You
    7 min
    CA Foundation Paper 3 Strategy: How to Split Maths, LR & Stats
    5 min
    ICAI Study Material vs Coaching Notes: Which Should You Use?
    7 min read
    Forensic Accounting & Fraud Detection 2026: What CA Foundation Students Must Know
    7 min read
    ICAI Ethics Code Updates 2026: What CA Foundation Students Must Know
    7 min read
    Impairment Testing Standards 2026: CA Foundation Guide to Asset Valuation Changes
    6 min
    CA Foundation Exam-Day Checklist: The Complete Pre-Exam Playbook
    7 min
    ICAI Mock Test Strategy: How to Analyse a Mock the Right Way
    6 min
    How to Memorise Business Laws Sections Without Losing Your Mind
    5 min
    CA Foundation vs Class 12 Commerce: What Actually Changes
    12 min
    90-Day CA Foundation Study Plan for May 2026 (Week-by-Week)
    10 min
    Partnership Accounts for CA Foundation: A Full Roadmap with Examples
    7 min
    Top 10 Mistakes CA Foundation Students Make (and How to Avoid Them)
    9 min
    CA Foundation Paper 1 Accounting: Complete Strategy & Chapter-wise Weightage
    8 min
    How to Start CA Foundation Preparation from Scratch in 2026
    7 min read
    Ind AS 19 Employee Benefits: Latest Updates for CA Foundation 2026
    7 min read
    ICAI Guidance on Cryptocurrency Accounting for CA Foundation: What You Must Know
    12 min read
    Time Series Analysis for CA Foundation: Master Trend and Seasonal Variation
    12 min read
    CA Foundation Index Numbers: Construction Methods and Problems Explained
    7 min read
    New Accounting Standards for Financial Instruments: What CA Foundation Students Must Know in 2026
    7 min read
    ICAI Related Party Transaction Disclosure Guidance: Key Updates for CA Foundation Students
    7 min read
    Lease Accounting Standards Changes 2026: CA Foundation Guide to Ind AS 116 & Practical Implications
    7 min read
    ICAI Updates on Revenue Recognition Standards: What CA Foundation Students Must Know in 2026
    12 min read
    Time Value of Money for CA Foundation: Complete Guide to Annuity and Present Value
    7 min read
    Fair Value Measurement under Ind AS 113: Recent Updates Every CA Foundation Student Must Know
    7 min read
    New ICAI Practice Management Standards for CAs: What CA Foundation Students Must Know
    7 min read
    CA Foundation Exam 2026: New Eligibility Criteria and Registration Changes You Must Know
    12 min read
    CA Foundation Ratio and Proportion: Quick Shortcuts and Tricks for Faster Problem Solving
    7 min read
    ICAI Vision 2030 and the Future of Chartered Accountancy: What CA Foundation Students Must Know
    7 min read
    CA Foundation Exam Guide: Latest ICAI CPE Requirements and Continuing Education Updates 2026
    8
    BRS Bank Reconciliation Statement: Practice and Problem Solving
    8
    CA Foundation Mock Test Strategy: How to Analyze and Improve
    8
    Companies Act 2013 for CA Foundation: Simplified Guide
    9
    CA Foundation Preparation Without Coaching: Self-Study Guide
    8
    CA Foundation Negotiable Instruments Act: Complete Notes and Guide
    8
    Partnership Accounts: Admission and Retirement Explained (CA Foundation)
    7
    CA Foundation Statistics Formulas Cheat Sheet: Quick Reference Guide
    8
    CA Foundation Pass Percentage and Difficulty Analysis: What You Need to Know
    8
    How to Prepare for CA Foundation While in College: Balancing Studies
    8
    CA Foundation Business Economics: Important Topics and Concepts
    8
    Difference Between Sale and Agreement to Sell in CA Foundation
    8
    CA Foundation Accounting Adjustments Entries Explained
    7
    How to Solve Ratio and Proportion Questions in CA Foundation
    7
    CA Foundation Study Plan for 3 Months: Complete Roadmap
    8
    Indian Contract Act: Important Sections for CA Foundation
    8 min read
    CA Foundation June 2026: Latest Exam Pattern, Dates & What Has Changed
    7 min read
    CA Foundation Exam Day Strategy: What to Do Before, During & After Each Paper
    8 min read
    CA Foundation Paper 3: Quantitative Aptitude Maths & Stats — How to Score 50+
    8 min read
    CA Foundation Paper 2 Business Laws: How to Study & Remember Everything
    7 min read
    CA Foundation Paper 1 Accounting: Chapter-wise Tips & Scoring Strategy
    8 min read
    How to Prepare for CA Foundation 2026: Complete Strategy Guide
    10 min read
    CA Foundation Syllabus 2026: Paper-wise Topics and Weightage
    7 min read
    Top 10 Mistakes CA Foundation Students Make (And How to Avoid Them)