Question:medium

Every promise and every set of promises, forming the consideration for each other is known as

Updated On: Jul 13, 2026
  • Consideration
  • Agreement
  • Contract
  • Reciprocal Promises
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The Correct Option is B

Solution and Explanation

The Indian Contract Act builds up its vocabulary in a chain: a proposal becomes a promise once accepted, and once that promise is looked at along with whatever is given in return for it, it becomes an agreement. Section 2(e) uses almost the same words as this question to describe that last step, so identifying the missing term means matching the description to that chain.

  1. Consideration: this is only the something-in-return part of the promise, the price for which the promise is bought. It is one half of the picture, not the combined promise and counter-promise itself.
  2. Agreement: once a promise and the thing offered as its consideration are looked at together, the law calls that combination an agreement. This matches the wording in the question exactly.
  3. Contract: an agreement only becomes a contract once it is also enforceable at law, meaning it additionally has free consent, competent parties, and a lawful object. The question describes only the promise-consideration link, not this extra requirement of enforceability.
  4. Reciprocal Promises: this term is reserved for promises that are consideration for each other within a single transaction, used mainly for rules about the order in which each side must perform. It is a sub-category inside the Act's performance chapter, not the general name for a promise-consideration set.

Working through the chain, proposal, promise, agreement, contract, shows that the description in the question stops at the agreement stage, before enforceability is added.

The correct answer is Agreement.

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