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A "Formal contract" under English Law derives its validity from:
AReciprocal benefit to both parties
BSubstantial consideration only
CCourt approval before signing
DIts form alone — valid even if it lacks consideration
Answer & Solution
Correct answer: D. Its form alone — valid even if it lacks consideration
1. Per OCR: "Validity of these contracts depends upon their form. They are valid even if they lack consideration."
2. Two sub-types: Contract under seal (signed & sealed) + Contract of Records (court judgments, recognizance).
3. Indian law generally needs consideration — formal contracts are an English-law concept.
_Source: ICMAI BoS CMA Foundation Paper 1 (FBLC) — Paper1_07042026.pdf, Module 2 §2.1 (page 53)_
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