Explanation:

- Statement 1: Social stratification is indeed a hierarchical division of society, where people are ranked in layers or strata. (True)

- Statement 2: Stratification can be based on various factors like class, caste, or status, including cultural background. (True)

- Statement 3: It is not generally a contractual system. Stratification is not based on a formal agreement but develops naturally or traditionally. (False)

- Option 1: 1 and 2 – Correct choice, since statements 1 and 2 are true.

- Option 2: 2 and 3 – Incorrect, because 3 is false.

- Option 3: 1 alone – Incomplete, as 2 is also correct.

- Option 4: 3 alone – Incorrect, as explained above.