PRINCIPLE: A contract is an agreement enforceable by law. All agreements are contracts if they are made with free consent by parties competent to contract for a lawful consideration and with a lawful object.<br>FACT: A, a 40-year-old businessman of sound mind, agrees to sell his bungalow worth 40 lakhs for 1 lakh. The agreement is:<br>(1) Invalid due to inadequate consideration<br>(2) Valid as there is lawful consideration<br>(3) Valid as A entered into it with free consent<br>(4) Valid because A has capacity to contract.

Correct Answer: 2, 3 and 4