1
Chapter=1 Kinds And Nature Of Contracts
1. Which of the following is correct?
a. Indian Contract Act, 1882
b. Indian Contract Act, 1972
c. Indian Contract Act, 1872
d. Indian Contract Act, 1888
2. An agreement consists of reciprocal promises between at least
a. Four parties
b. Six Parties
c. Three Parties
d. Partially correct
3. Every contract is an agreement but every agreement is not a contract. This
statement isa. Wrong
b. Correct
c. Correct subject to certain exception
d. Partially correct
4. A Promises to deliver his watch to B and, in return, B promises to pay a sum
of Rs. 2,000. There is said to be a/an
a. Agreement
b. Proposal
c. Acceptance
d. Offer
5. An Agreement isa. Offer
b. Offer + Acceptance + Consideration
c. Contract
d. Offer + Acceptance
6. Contracta. Offer + Acceptance
b. Offer + Acceptance + Consideration
c. Agreement + Consideration
d. Agreement + enforceability at law.
7. K owns a residential flat in Chennai. He is entitled to quiet possession and
enjoyment of his property. This is called
a. Rights in Personam
b. Right against the whole world & is available to the owner
c. Constitutional Right
d. There is not right at all.
8. Hari owes Rs. 1,00,000 to Jaya is entitled to recover this amount from Hari.
This is called
a. Rights in Personam
b. Constitutional Right
c. There is no right at all
9. A contract is said to be executed when it has been performed wholly on
a. One side
b. Two sides
c. More than two sides
d. All of the above
10. Valid contract
a. Are made by free consent
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b. Are those where the parties to the contract are competent to enter
into an agreement
c. Have lawful consideration & lawful object
d. All of the above.
11.A contract which ceases to be enforceable by law become void
a. Before it ceases to be enforceable
b. No, such condition is necessary
c. When it ceases to be enforceable
d. When it becomes void.
12.A contract which is valid initially however ceases to be enforceable
subsequentlya. Becomes void when it ceases to be enforceable
b. Remains valid
c. Becomes voidable when it ceases to be enforceable
d. Becomes void since inception
13.Contract, when ceases to be enforceable by law becomes a / an
a. Unenforceable Contract
b. Void Contract
c. Void Agreement
d. Voidable contract
14.An agreement to commit a crime or a tort is
a. Void
b. Voidable
c. Valid
d. Unenforceable you cannot get it enforced in the court of law/
15.Agreement which do not create legal obligations can also b e considered as
contract.
a. True
b. Partly true
c. False
d. None of the above
16.A invites B for his son’s wedding. B accepts the invitation. In this case, there
is a / an
a. There is no consideration
b. There is no intention to create legal relationship
c. There is no written document.
d. There is no formal acceptance of the offer.
17.F promised to pay his son S a sum of Rs. 1, 00,000 if S passed C.A exams in
the first attempt. S passed the exam in the first attempt, but F failed to pay
the amount. S files a suit for recovery of the amount. State whether S can
recover the amount under the Indian Contract Act, 1872.
a. S can sue F for not honouring his words
b. S has to pay Rs. 1 lakh to F
c. S has no remedy against F
d. S has to write exam again, to claim the reward
18.One of the clauses in an agreement was – “This agreement shall not be
legally enforceable, but binding in honour only”. In such case, the
agreement is
a. Invalid
b. Valid
c. Illegal
d. Infructuous
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19.One of the clauses in an agreement was – “This arrangement is not a formal
or legal agreement, and shall not be subject to legal jurisdiction in a Court
of Law”. In such case, the agreement is
a. Invalid
b. Valid
c. Illegal
d. Infructuous
20.In agreement of purely domestic/social nature, the intention of the parties
to create legal relationship is
a. To b e proved to the satisfaction of the Court
b. Presumed to exist
c. Required to the extent of consideration
d. Not relevant at all.
21.N obtained K’s acceptance by fraud. The contract can avoided at K’s
instance, this is a case of
a. Void agreement
b. Voidable contract
c. Unlawful contract (fraud is a civil wrong)
d. Void contract
22.Voidable contract is one
a. Which is lawful
b. Which is invalid
c. Which is valid as long as it is not avoided by the party entitled to do
so.
d. Which is unlawful.
23.When the contract is perfectly valid in its substance but cannot be enforced
because of certain technical defects. This is called a/an
a. Unilateral contract
b. Bilateral contract
c. Unenforceable contract
d. Void contract
24.………………is without any legal effect and cannot be enforced in a Court of
Law
a. Valid contract
b. Void contract
c. Unenforceable contract
25.………………… is forbidden by law. The court will not enforce such a contract.
a. Valid contract
b. Void contract
c. Voidable contract
d. Unenforceable contract
26.When the agreement is not in written form, barred by limitation, etc. it is
an example of
a. Valid contract
b. Illegal contract
c. Voidable contract
d. unenforceable contract
27.A consignment is delivered at a wrong place. There is an implied condition
for the recipient of return it, so that it can be delivered to the intended
consignee. This is an example of
a. Express contract
b. Implied contract
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c. Tacit contract
d. Unlawful contract
28.D agrees to by V’s cycle by promising to pay cash on 15th July. V agrees to
deliver the cycle on 20th July. This is a case of
a. Executed contract
b. Executory contract
c. Void contract
d. Illegal contract
29.G books a ticket with Indian Airlines from Delhi to Chennai on 16th June,
date of travel being 16th July. Indian Airlines has to perform its part of
contract on 16th July. This is an example o f
a. Void contract
b. Illegal Contract
c. Unilateral contract
d. Bilateral contract
Answers.
1
C
2
D
3
B
4
A
5
B
6
7
8
9
10
D
B
A
A
D
11
12
13
14
15
C
A
C
D
C
16
17
18
19
20
A
B
C
B
B
21
22
23
24
25
A
B
C
C
B
26
27
28
29
30
B
D
B
B
C
Chapter – 2 Offer & Acceptence
1. Section 2(b) states, “When the person to whom the proposal is made,
signifies his assent thereto, the proposal is said to be accepted. A proposal
when accepted becomes a/an…..
a. Contract
b. Agreement
c. Promise
d. Offer
2. Silence cannot amount to offer by conduct.
a. True
b. Partly True
c. False
d. None of the above
3. A Company announced a reward of 100 to anyone who contracted
influenza after using its Smoke Balls for a certain period. Mrs. C used the
Smoke Balls but contracted influenza. She claimed the reward but the
Company rejected her claim stating that she did not communicate her
acceptance to the Company. Here:a. Acceptance is not communicated and reward cannot be claimed
b. Offer is not communicated and reward cannot be claimed
c. Acceptance need not be communicated and reward can be claimed
d. There is no claim since reward cannot be given for contracting
diseases.
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4. L Offered to take a house on lease for a period of 3 years at Rs. 1 Lakh p.a. if
the house was “Put through repairs and rooms were handsomely
decorated”. Here, there is no offer since
a. There is no legal obligation
b. There is no communication of offer
c. Amount to a promise
d. Amount to acceptance
5. If the agreement contains a basis for ascertaining the meaning of a vague
term, the agreement is ………….on the ground of its being vague.
a. Illegal
b. Void
c. Not void
d. Unenforceable
6. ……………………..is expression of initial intention.
a. Invitation of offer
b. Offer
c. Proposal
d. Acceptance
7. Statement of lowest price at which the Vendor would sell his goods
constitutesa. A valid contract
b. A implied contract
c. An express contract
d. No contract
8. Goods advertised for sale by auction, does not constitute a contract sincea. There is no contract with any person who attends the sale
b. It is a social obligation
c. There is no communication of offer
d. There is not consent of the offeree
9. In a self-service departmental store, customer’s pick-up articles and take
them to the cashier’s desk to pay. The Customer’s action in packing up
particular gods is a/ana. Invitation to offer
b. Offer
c. Bid
d. Acceptance
10. In a self-service departmental store, a valid contract is concluded by offer
and its acceptance, whena. Customers enter the Department Store
b. Customers pick up the articles
c. Customers take the articles to the Cashier’s desk
d. Proposals cannot be advertised, while advertisements cannot be
proposed.
11. The different between an advertisement for sale and a proposal is
a. No difference at all
b. A proposal becomes a promise as soon as the party to whom it is
made accepts it but an advertisement is only an invitation to offer.
c. Every case will have to be viewed according to the circumstances.
d. Proposals cannot be advertised, while advertisements cannot be
proposed.
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12.A clause in a tender authorizing the party inviting tenders to terminate the
contract at any time for future supplies
a. Destroys the very basis of the contracts and the clause is void
b. Makes the entire contract void
c. Makes the contract voidable
d. Does not destroy the basis of the contract & the clause is valid.
13.A tender will be irrevocable where
a. Tenderer has, for some consideration, promised not to withdraw
b. There is s statutory prohibition against withdrawal
c. Either (a) or (b)
d. Neither (a) nor (b)
14.When a tenderer offers to supply a definite quantity of goods it is called as
a. Definite tender
b. Express tender
c. Standing tender
d. General tender
15.When a Tenderer offers to supply goods periodically or in accordance with
the requirements of the Offers, it is called as
a. Definite Tender
b. Express Tender
c. Standing Tender
d. Implied Tender
16.There is a Counter-Offer-when
a. The Offeree gives conditional acceptance or introduces a fresh term
in acceptance.
b. The Offeror makes a fresh offer
c. The Offeror makes some query
d. The Offeror accepts it.
17.M offers to sell his car for Rs. 3.8 Lakhs to N.N says, he would buy it for Rs.
3.5 Lakhs. The counter-Offer by N for Rs. 3.5 Lakhs
a. Cannot be accepted by M
b. May be accepted by M
c. Is irrational
d. Is illegal
18.A wrotes to B, “Will you buy my car for Rs.4.5 Lakhs? Reply by next
Sunday.” B communicates his acceptance on Monday next. In such case
a. A is not bound to B’s delayed acceptance
b. A is bound to B’s acceptance
c. B has to make a Counter Offer
d. There is no offer at all.
19.X offered to purchase shares in a company by writing a letter on 1st May.
The company allotted shares on 1st November of that year. X refused the
shares. Is X’s action valid:
a. Yes shares cannot be allotted on the faith of letter written by X
b. Yes, share cannot be allotted in the second half of a calendar year
c. Yes, offer lapsed as it was not accepted within a reasonable time.
d. No, X has to accept and pay for the shares
20.Communication of proposal is complete onlya. When it comes to the knowledge of the person to whom it is made
b. When the proposal is communicated to the person to whom it is
made.
c. When it is put in the course of transmission
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d. All of the above
21.An offer can be accepted by--a. Notice of acceptance
b. Performance of condition specified in the offer
c. Acceptance of consideration for a reciprocal promises
d. All of the above
22.Express offers and Acceptance may be proved by the agreement between
the parties but implied offers can be proved only by—
a. Words
b. Conduct
c. Circumstantial evidence
d. Prima facie evidence.
23.S sent his servant L, to trace his missing nephew. Later, S offered a reward
for anyone who found out his missing nephew. L, ignorant of the
announcement, traced the boy. Subsequently, he claimed the reward,
when he came to know of it. L is not entitled to the reward sincea. No reward can be given for tracing missing persons.
b. Offer was not made to an ascertained person
c. It is the servant’s duty to help his master.
d. Revocation of the offer.
24.Performance of conditions of an offer; for the acceptance of any
consideration for a reciprocal promise which may be offered with a
proposal, is a/ana. Acceptance of the offer
b. Rejection of the offer
c. Couonter-offer
d. Revocation of the offer.
25.A mere variation in the language which does not involve any difference in
substance would not make the acceptance ineffective.
a. True
b. Partly true
c. False
d. None of the above
26.F offers to sell his house to G for Rs. 20 Lakhs. G replies that he would buy
the house provided his solicitor approves of F’s title to the house. The offer
did not contain any mention as to title. The acceptance is—
a. Qualified, hence invalid
b. Conditional, hence invalid
c. Valid
d. Both (a) and (b)
27.M offered to sell his land to N for Rs. 70 Lakhs. N replied purporting to
accepts and enclosed Rs. 20 Lakhs, promising to pay the balance of Rs. 50
Lakhs by monthly installments of Rs. 10 Lakhs each—in this case-monthly
installments of Rs.10 Lakhs each. In this casea. There is no valid acceptance
b. The contract is voidable at M’s option
c. The contract is voidable at N’s option
d. There is a valid acceptance
28.Silence constitutes a valid acceptance only ifa. Offeree has, by his previous conduct, indicated that silence amounts
to his acceptance.
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b. Offer contains a term that Offeree’s silence will constitute
acceptance
c. Both (a) and (b)
d. Either (a) or (b)
29.Acceptance cannot be implied merely from silence of Offeree, even if it is
expressly state in the offer itself . In such cases, mere silence cannot
constitute acceptance
a. True
b. Partly true
c. False
d. None of the above
Answers
1.
2
3
4
5
C
A
C
C
B
6
7
8
9
10
C
B
D
A
B
11
12
13
14
15
D
B
D
C
A
16
17
18
19
20
C
A
B
A
C
21
22
23
24
25
A
D
B
D
A
26
27
28
29
30
A
C
A
A
A
CHAPTER-3 CONSIDERATION
1. A Passenger deposited a bag in the cloakroom at a Railway Station.
Acknowledgement Receipt given to him carried, on the face of it, the
ward “Seek back.” One condition limited the liability of Railway for any
package to Rs. 100. The bag was lost, and passenger claimed Rs. 2,4000
being its value, pleading that he had not read conditions. Can the
passenger win the case?
a. Yes, railway company cannot take undue advantage
b. Yes, damages are payable for loss of property
c. No, suit for value below Rs. 5,000 is not permissible in law.
d. No, the passenger had constructive notice of conditions whether
he read them or not.
2. A passenger was traveling with luggage from Dublin to Whitehaven on a
ticket, on the back of which there was a term that exempted the
shipping Company from liability for loss of luggage. He never looked at
the back of the ticket and there was nothing on the face of it to draw his
attention to the terms on its back. He lost his luggage and sued for
damages. Can the passenger win the case?
a. Yes, Shipping Company cannot take undue advantage.
b. Yes, passenger is not bound by something which was not
communicated to him.
c. No, suit for loss of luggage is not permissible in law.
d. No, the passenger had constructive notice of conditions whether
he read them or not.
3. In case an acceptance on phone, the contract is made at the placea. Where the acceptance is communicated
b. Where the offer was made
c. From where the acceptance is made
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d. All of the above
4. K, an actress was engaged for a tour. The agreement provided that if the
party went to London, K would be engaged at a salary to be mutually
agreed between them. In such a case
a. The contract is in restraint of trade
b. The contract is contingent
c. The contract is unenforceable
d. There is not contract.
5. J engages M, an artist, to paint a portrait of his uncle and promises to
pay M Rs. 10,000 for the work. Later, K refuse to pay stating that
consideration must move from his uncle. Which of the following
statements is correct?
a. K is bound to pay M
b. K is not bound to pay M
c. Uncle is bound to pay M
d. M cannot claim anything from K or his uncle.
6. As long as there is a consideration for a promise, it is immaterial who
has furnished
a. True
b. Partly True
c. False
d. None of the above
7. Consideration must be something which the Promisor
a. is already bound to do
b. is not already bound to do
c. may voluntarily do
d. must not do.
8. An Executory Consideration a. Is an outstanding liability on both the parties
b. Consists of a promise I future
c. Is a promise Reciprocal promises.
d. All the above.
9. An Executory Consideration is a. Consideration promised by the executive of a company
b. Consideration which consists simply of a mutual exchange of each
being a consideration for the other
c. Consideration which should be executed before the Registrar
d. Consideration which should be executed before the Court.
10. A promises to pay an existing debt punctually if, B, the creditor, gives
him a discount . Is this consideration valid?
a. Yes , it is genuine consideration
b. No, promisor is already bound to pay punctually
c. No, inadequate consideration
d. Yes, enforceable consideration.
11.Which of the following is good and valid consideration?
a. Forbearance to sue
b. Compounding, with Creditors
c. Compromise of Disputed Claims
d. All of the above
12.A Hindu husband by a registered document, after referring to quarrels
an disagreements between himself and his wife, promised to pay his
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wife a sum of money for her maintenance and separate residence. The
above contract is void sincea. Document is registered
b. Agreement is in restraint of marital duties
c. Natural love and affection was missing
d. Agreement has an illegal object
13.A promise made without consideration is valid ifa. It is promise to compensate wholly or in part, a person who has
already voluntarily done something for the promisor
b. Something which the promisor was legally compellable to do
c. Either (a) or (b)
d. Neither (A) or (b)
14. X supports Y’s infantson. Y promises to pay X’s expenses. The contract
isa. Void
b. Illegal
c. Valid
d. Unenforceable
15.K signs a written promise to pay L a time barred debt. At the time of
signing the promise, the amount is not ascertained. Hence, k promises
to pay what is due, after taking accounts. The contract isa. Void
b. Illegal
c. Valid
d. Voidable
16.‘No Consideration No Contract’ does not apply to completed gifts, i.e.
gifts given and accepted.
a. True
b. Partly true
c. False
d. None of the above
17.If a person promises to contribute to charity and on this faith, the
promise undertakes a liability to the extent not exceeding the promised
subscription, the contract shall be valid.
a. True
b. Partly true
c. False
d. None of the above
18.A promised to pay B, who had received summons, to appear at a trail in
a civil suit, a certain sum being a compensation for loss of time during
his attendance. The promise is void sincea. Object is immoral
b. Consideration is illusory
c. Agreement is in restraint if legal proceedings
d. All of the above
19.If only a part of the consideration or object is unlawful, the contract isa. Valid to the extent the same are lawful
b. Void to the extent the same are unlawful
c. Valid as a whole.
d. Void as a whole.
20.A person who is not a party to a contract but has some interest in the
consideration of that contract-
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a. Cannot enforce that contract
b. Can enforce that contract
c. Can enforce that contract subject to certain exceptions
d. Can wait for the parties to perform the contract.
21.Under the Indian Contract Act, a strangera. To the contract cannot sue
b. To the contract can sue
22.Only those persons, who are parties to a contract, can sue and be sued
upon the contract. This Rule is called the doctrine ofa. Promissory Estoppels
b. Right of Privilege Suit
c. Privities of contract
d. Rights in Rem.
23.A who is indebted to B, sells his property to C. C promises to pay off the
debt to B, when C fails to pay’ B has no right to sue C, becausea. The object is unlawful
b. There is no consideration between B and C
c. B is a stranger to Contract between A and C
d. The consideration is inadequate
24.In which of the following situations, a stranger to contract can file a valid
suit?
a. Assignment of a contract
b. Contracts entered into through an Agent
c. Covenants running with land
d. All of the above.
25.Marriage Settlement, Partition and other Family Arrangements can be
enforced by beneficiary who is not a party to the contract, only if such
agreement isa. Registered
b. Reduced to writing
c. Either (a) or (b)
d. Both (a) or (b)
26.The assignee of a contract cannot enforce the promise since there is no
consideration flowing from him to the Promisor:
a. True
b. Partly true
c. False
d. None of the above
27.The purchaser of immovable property who has notice that the owner of
the land is bound by certain conditions or covenants created by an
agreement affecting the land, shall be bound by such conditions, even
though he is not a party to the original agreement containing those
conditions or covenants.
a. True
b. Partly true
c. False
d. None of the above
28. A husband who was separated from his wife executed a separation
deed by which he promised to pay the Trustee all the expenses for her
maintenance. The agreement created a trust in favour of his wife. The
agreement isa. Void due to lack of consideration
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b. Valid and could be enforced by the wife
c. Valid but not enforceable by the wife
d. Void but Court can entertain a petition by the Wife.
29.Two brothers, on partition of family joint properties agreed to invest in
equal shares for their mother’s maintenance. There was no separate
agreement with the mother. In such case, the mother
a. Cannot enforce the contract
b. Can sue for setting aside the partition.
c. Is entitled to require her sons to make the investment
d. Is entitled to the entire property.
Answers
1
2
3
4
5
D
B
C
D
A
6
7
8
9
10
A
B
D
B
B
11
12
13
14
15
D
C
C
C
A
16
17
18
19
20
A
A
B
D
C
21
22
23
24
25
C
C
C
D
B
26
27
28
29
C
A
B
C
Chapter-4 Capacity to Contract
1. A convict when undergoing imprisonment
a. Is capable of entering into a contract
b. Is incapable of entering into a contract
c. Is capable of entering into a contract, if it is permitted by the law
d. Is capable of passing on consideration
2. A corporation cannot enter into contracts that area. Ultra vires its Memorandum of Association
b. Strictly of a personal nature as it is only an artificial person
c. Either (a) or (b)
d. Neither (a) or (b)
3. The age of majority for the purpose of the Indian Contract Act is
a. 16 years for girls & 18 years boys
b. 18 years girls & 21 years for boy
c. 18 years
d. 21 years
4. Parents of Guardian shall………….for branch of contract by Minor.
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5.
6.
7.
8.
9.
a. Be held liable
b. Not be held liable
c. Be imprisoned
d. Not be questioned
D, a Minor, entered into a contact for borrowing a sum of Rs. 20,000 out of
which lender paid him sum of Rs. 8,000. D executed mortgage of property
in favour the lender. The mortage isa. Valid to the extent of
b. Valid to the extent of Rs. 20,000
c. Totally invalid
d. Validated on attaining majority
Identify the incorrect sentence from the following.
a. A Minor can be a beneficiary
b. A Minor can be admitted to the benefits of a Partnership
c. A Minor cannot plead minority
d. A Minor can be held liable in tort.
A Minor speculated in the Stock Exchange and became liable to Stock
Brokers for Rs.1 Lakhs. Subsequent to attaining majority he gave two bills of
exchange for Rs. 45,000 each in satisfaction of the original debt.
a. Minor is liable for Rs. 1 Lakh.
b. Minor is liable for Rs. 90,000
c. Minor is liable for Rs. 10,000
d. Minor is not liable for any amount.
A is a minor, B approaches A for a loan on the basis of a mortage of the
house owned by B. hence, A advances the money and B executed a
mortage in favour of A, a minor. In these circumstancesa. The mortage is not enforceable by A, because he is a minor
b. The mortage is enforceable but only when he attains majority
c. The mortage is enforceable by a even though he is a Minor
d. There is no mortage at all.
When a contract is entered in on behalf of a Minor by his
Parents/Guardians/Manager of his estate, it can be specifically enforced by
or against the minor if the contract is
a. Within the scope of the authority of the Parent/Guardian/Manager
b. For the benefit of the minor
c. Either (a) or (b)
d. Both (a) or (b)
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10.The Principle of Estoppel cannot be applied against a Minor sincea. He has no sound mind
b. He has no privilege to cheat persons by making any representation
c. He will be induced by dishonest traders to declare in writing that he
is major at the time of entering in a contract
d. He has not attained the age of majority.
11.Parents or Guardian shall be liable to creditors when the Minor is acting as
agent of the Parents or Guardian.
a. True
b. Partly true
c. False
d. None of the above
12.Education and Marriage of a Female have also been hele do be necessaries
in India
a. True
b. Partly true false
c. None of the above
13.Which of these is a not a “necessary” for a minor?
a. Leading money to a Minor for defending a suit on his behalf in which
his property is in jeopardy
b. Lending money to a Minor for defending him in necessary
prosecution
c. Leading money to a Minor for paying his Creditors in respect of
horse racing & betting debts
d. Lending money to a Minor for saving his property from sale in
execution of a degree.
14.Which of these is a not a ‘necessary’ for a Minor?
a. Provision of education
b. Provision of medical and legal advice
c. Provision of a house on rent for the purpose of living ad continuing
his studies
d. Provision of intoxicants and alcoholic drinks.
15.A minor who was a student, bought 11 fancy coats from N. He was , at that
time, adequately provided with clothes, but N did not know this fact. In
such a case
a. Minor is personally liable to pay for the coats
b. Minor’s property can be attached for payment
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c. Minor is liable since he has misled N into supply of coats
d. Minor or his property is not liable at all.
16.A person who is usually of unsound mind, but occasionally of sound mind
a. May enter into a contract when he is of sound mind
b. May not make a contract even when he is of sound mind
c. Cannot enter into a contract at all.
d. Can enter into a contract at all times but can plead innocence.
17.A patient in a lunatic asylum, who is at intervals of sound mind, may
contract during those intervals.
a. True
b. Partly true
c. False
d. None of the above.
18.A sane man who is delirious from fever or who is so drunk that he cannot
understand terms of a contract or form a judgment, cannot contract while
such delirium or drunkenness lasts
a. True
b. Partly true
c. False
d. None of the above
19.Whether a party to a contract, at the time of entering into a contract, is of
sound mind or not is a question of fact to be decided by the Court
a. True
b. Partly true
c. False
d. None of the above
20.“consensus-ad-idem” meansa. General consensus
b. Meeting of minds upon the same thing in the same sense
c. Reaching an agreement
d. Reaching of contract
21.Inadequacy of consideration is relevant in determining the question of
a. Capacity of parties
b. Possibility of performance
c. Legality of object
d. Free consent
22.Coercion, if employed…………..does not amount of free consent
16
a. At a place where Indian Penal code is not in force
b. At a place where Indian Penal Code is in force
c. Either (a) or (b)
d. In the court
23. A person is deemed to be in a position to dominate the will of another if
a. He holds a real or apparent authority over the other
b. He stands in a fiduciary relation to the other
c. He makes a contract with a person whose mental capacity is
temporarily or permanently affected by reason of age, illness or
mental or bodily distress
d. All of the above.
24.When the consent is caused by undue influence, the contract is
a. Valid
b. Void
c. Voidable
d. Illegal
25.An illiterate old woman made a gift deed of practically her entire property
to he nephew whom managed her affairs. The gift can be set aside on the
ground of
a. Mistake
b. Coericion
c. Fraud
d. Both (a) and (b)
26.The burden of proof that consent was obtained by undue influence lies on
a. The person whom seeks to avoid the contract.
b. The person who employs the undue influence.
c. Either (a) or (b)
d. Both (a) or (b)
27.Mere proof of nearness of relationship is not sufficient for the court to
assume that one relation was in a position to dominate the will of another.
a. True
b. Partly true
c. False
d. None of the above.
28.Which of these constitute Fraud?
a. Suggestions as a Fact, of something which is not true, by a person
who does not believe it to be true
17
b. Active concealment of Fact by one having knowledge or belief of the
c. Promise made without any intention of performing it
d. All of the above
29.Active concealment of a fact by one having knowledge or belief of the fact
is an example of
a. Fraud
b. Coercion
c. Mistake
d. Undue influence
30.When a person positively asserts that a fact is true when his information
does not warrant it to be so, though he believes it to be true, there is
a. Misrepresentation
b. Fraud
c. Undue influence
d. Coercion.
Answers
1
2
3
4
5
D
C
C
D
C
6
7
8
9
10
C
D
C
D
D
11
12
13
14
15
A
A
C
D
D
16
17
18
19
20
A
A
B
A
B
21
22
23
24
25
D
C
C
C
D
26
27
28
29
30
A
A
D
A
A
Chapter-5 Free consent
1. Under English Law, if the threat is in relation to goods or property of
another person, it is not duress.
a. True
b. Partly true
c. False
d. None of the above
2. A Carrier Company refuses to deliver certain goods to the consignee, except
upon payment of an illegal charge for carriage. The Consignee pays the sum
charged and obtains the goods. In this case
18
3.
4.
5.
6.
7.
a. Consignee is entitled to recover so much of the charge as was
illegally excessive.
b. Consignee is entitled to recover the entire charges
c. Consignee is not entitled to recover any amount
d. Consignee is not entitled to return of goods.
D’s son forged B’s name to a Pro Note. B under threat of persecuting D’s
son and exercising undue influence obtains a bond from D for the amount
of the forged note. The Bond
a. Is valid
b. Is void an initio
c. Is voidable
d. Can be set aside by the court
A minor girl who lost her parents lived with her cousin brother who was in
the position of her parents. She executed an unconscionable gift deed in his
favour. This gift deed can be set aside on grounds of
a. Mistake
b. Undue influence
c. Fraud
d. Coercion.
To prove undue influence, the plaintiff has to prove that
a. The relations subsisting between the parties are such that the
Defendant was in a position to dominate the will of the Plaintiff
b. The Defendant used that position to obtain an unfair advantage from
the plaintiff
c. Both (a) or (b)
d. Neither (a) or (b)
Which of the following relationships do not raise a presumption of undue
influence?
a. Guardian & Ward
b. Doctor & Patient
c. Husband & Wife
d. Fiance and Fiancee
If the contract is avoided on grounds of ……….it is at the discretion of the
Court to direct the aggrieved party to restore or refund the benefit
received.
a. Undue Influence
b. Coercion
19
c. Fraud
d. Misrepresentation
8. Which of these does not constitute Fraud?
a. Promise made without any intention of performing it
b. Physical threat to the person or property of another
c. Any act fitted to deceive
d. Any such act or omission as specifically declared by law to be
fraudulent.
9. A mere attempt at deceit by one party.
a. Is not fraud unless the other party is actually deceived.
b. Is fraud whether the other party has been derived or not
c. Amounts to undue influence
10.Mere silence as to facts, likely to affect the willingness of a person to enter
into a contract is not Fraud.
a. True
b. Partly true
c. False
d. None of the above
11.Duty to speak exists in case
a. Where the parties stand in a fiduciary relationship
b. Where contract is a one of ubberima fidei (requiring utmost good
faith)
c. Both (a) or (b)
d. Neither (a) or (b)
12. Where consent is obtained by fraud, the D frauded party has the following
remedies
a. He can rescind the contract with in a reasonable time.
b. He can insist on the performance of the contract upon a condition
that he shall be put on the position in which he would have been if
the representations made had been true.
c. He can sue for damages
d. All of the above
13.In which of the following cases, the contract cannot be avoided on ground
of fraud?
a. A fraud which did not cause the consent of the party to the
agreement.
20
b. Where the consent was caused by silence amounting to fraud, if the
party whose consent was so caused, had the means to discover the
truth with ordinary diligence.
c. Where a party enters into a contract in ignorance of fraud.
d. All of the above.
14.Where interest of third parties intervene, before the contract is avoided,
such contract cannot be rescinded, even if the consent of the party is
caused by fraud.
a. True
b. Partly true
c. False
d. None of the above
15.X brought shares in a company on the faith of a prospectus that contained
an untrue statement as to the Directorship of J, X had never heard of J and
hence such statement was immaterial from his view point. X claimed
damages for fraud. His claim will be dismissed on the ground that
a. There was no fraud at all.
b. Fraud in company prospectus is not covered by Indian Contract Act.
c. The untrue statement had not induced him to buy the shares.
d. All of the above.
16.Shri krishnan, a candidate for L.L.B. part-I exam, who short of attendance,
did not mention that fact in the admission form for the examination of
Kurukshetra University authorities made proper enquiries to discover the
truth. It was held by the Supreme court that
a. There was fraud by the candidate
b. There was no fraud by the candidate
c. There was misrepresentation
d. There was mistake on the part of the candidate
17.Misrepresentation need not be made directly to the person involved. A
wrong statement of facts made to a third person with an intent to
communicate it to the party involved amounts to misrepresentation
a. True
b. Partly true
c. False
d. None of the above
18.Where consent is caused by Fraud or Misrepresentation, the aggrieved
party can sue for damages.
21
a. True
b. Partly true
c. False
d. None of the above
19.The contract cannot be rescinded on grounds of misrepresentation
a. If the party takes a benefit under the contract, or in some other way
affirms the contract, after coming to know of such misrepresentation
b. Where restoration of the original position is not possible
c. Where a third party h as acquired rights in the subject matter for
value and in good faith.
d. All of the above
20.P offers, to sell a painting to K which P knows is the copy of a well know
masterpiece. K thinking that the painting is original devides to buy it at a
very high price. Is this a valid contact?
a. No, P is guilty of misrepresentation
b. No, P is guilty of fraud
c. Yes, K has an erroneous belief as to the value of the painting.
d. Yes, price is not a criteria for setting aside the contract
21.N, came in person to jeweller’s shop and chose some jewels. The jeweler
was prepared to sell to him as a casual customer. N tendered payment by
cheque signing in the name of G, a person of credit. N later took the jewels,
which he pledged with B. the Pledge made with B is
a. Illegal
b. Valid
c. Void
d. Voidable
22. An old illiterate man was made to sign a bill of exchange, by means of a
false representation that it was a guarantee. The contract is
a. Illegal
b. Valid
c. Void
d. Voidable
23.A contract can be avoided on grounds of unilateral mistake if such mistake
relates to the nature of the contract, and not to the terms of the contract.
a. True
b. Partly true
c. False
22
d. None of the above
24.One Blenkarn, knowledge that Blenkiron& Co. were reputed customers of
Lindsay & Co., placed and order with Lindsay & Co. by imitating signatures
of Blenkiron. Goods were then sold to Cundy, an innocent buyer. Lindsay &
Co. sued Cundy for recovery of goods. In the case
a. Cundy has good title to goods and can retain them
b. Sale made by Blenkarn to Cundy is valid.
c. Both (A) and (b)
d. Lindsay never intended to contract with Blenkarn, there was no
contract, so, Cundy’s title is defective.
25.S knew that on account of his critictism of plays in past, he would not be
allowed entry at a theatre. The Managing Director of the theatre, gave
instructions that a ticket should not be sold to S. S, however, obtained a
ticket through one of his friends. On being refused admission to the
theatre, he sued for damages for breach of contract.
a. S is entitled to damages
b. S is entitled to enter the theatre
c. There is a valid contract between the theatre company and S
d. There is no contract between the theatre company and s.
26. Cundy vs. Lindsay Case deals with
a. Coercion
b. Undue influence
c. Mistake as to the nature of transaction
d. Mistake as regards identity.
27.An agreement is void when there is
a. Mistake to fact by both the parties
b. Mistake of fact by both the parties
c. Mistake of foreign law
d. All the above
28.Bilateral Mistake as to fact renders an agreement void since
a. There is no consideration
b. Such agreement are unlawful.
c. There is no agreement as there is absence of consensus.
d. It is opposed to public policy
29.A sells a painting to B saying that it is an original wark of Picasso. Unknown
to both the parties, the original painting was stolen and its copy was placed
there. The contract is void on the grounds of :
23
a. Bilateral mistake as to quality of the subject matter
b. Unilateral mistake as to quality of the subject matter
c. Mistake as to law
d. Mistake as to identity of art items
30.P wrote to H inquiring price of rifles suggesting that he might buy as many
as 50. On receipt of information, he telegraphed, “Send three rifles”. Due to
telegraphic mistake message was transmitted as “Send the rifles”. H
dispatched 50 rifles. In this case:
a. There is no contract
b. There is a valid contract
c. He has to accept the loss on 50 rifles
d. He has to accept the loss on 3 rifles.
1
2
3
4
5
A
A
C
B
C
6
7
8
9
10
C
A
B
A
A
11
12
13
14
15
C
D
D
A
C
16
17
18
19
20
B
A
B
D
C
21
22
23
24
25
B
C
A
D
D
26
27
28
29
30
D
B
C
A
A
Chapter-6 legality of object and consideration
1. Amar promises to drop prosecution which he has institute against Balu for
robbery. Balu promises to restore value of things taken. The agreement is
valid on grounds
a. Contingment
b. Valid
c. Voidable
d. Of stifling prosecution
2. Arun estate is sold for arrears for revenue. As per the Act, the defaulter is
prohibited from purchasing it. Bhat agrees with Arun to purchase the estate
and convey it back to Arun for the price which Bhatt has paid. The
agreement is
a. Legal
b. Valid
c. Voidable
24
3.
4.
5.
6.
7.
8.
d. Void
Which of the following agreements are valid?
a. Uncertain agreements
b. Wagering agreements
c. Agreements contingent upon in possible events.
d. None of the above
Which of the following agreements are voidd?
a. Agreements to be impossible acts.
b. Agreements do reciprocal promises, one set of which is legal, and the
other part is illegal.
c. Both (a) or(b)
d. Neither (a) or (b)
Of the following agreements which one is not void?
a. Agreement without consideration
b. Agreement in restraint of marriage
c. Wagering agreement
d. Agreement with a handicapped person
In case of a void contract, there is no legal remedy for the parties to the
contract.
a. True
b. Partly true
c. False
d. None of the above.
S a seller of imitation jewellery, sells his business to B and promises, not to
carry on business in imitation jewellery and real jewellery. The agreement is
a. Valid with regard to imitation jewellery and void as regards Real
jewellery
b. Void with regard to limitation jewellery; and valid as regards Real
Jewellery.
c. Wholly void
d. Fully valid.
Trade Combination agreements like opening and closing of business
ventures, licensing of traders, supervisions and control of dealers, etc. are
a. Void since they are in restraint of trade.
b. Valid even if they are in restraint of trade.
c. Voidable at the option of the aggrieved party.
d. Immoral and hence void and initio
25
9. If the seller agrees to supply all the goods produced by him to a certain
buyer and to nobody else, and Buyer also, in turn, undertakes to accept the
whole of the quantity, the agreement is--a. Void agreement
b. Solus agreement
c. Illegal agreement
d. Unlawful agreement
10.An employer can restrain his employee from acting in theatre plays or in
performing an art, during the course of his employemt.
a. True
b. Partly true
c. False
d. None of the above.
11. An agreement in restraint of legal proceedings, if it imposes—
a. Total prohibition shall be void
b. Total or partial prohibition shall be void
c. Partial prohibition shall be valid
d. Total prohibition shall be valid.
12.Which of the following agreements is void?
a. Restricting absolutely, and party, from enforcing his rights under or in
respect of any contract by usual legal proceedings in the Ordinary
Tribunals
b. Limiting the time within which any party may enforce his rights by
way of legal proceedings in the Ordinary Tribunals.
c. Extinguishing the rights of any party to the agreement.
d. All of the above
13.Any agreement which discharges any party thereto from liability; under or
in respect of any contract on the expiry of a specified period so as to
restrict any party from enforcing his rights is
a. Void
b. Enforceable
c. Valid
d. Voidable
14.An express agreement between parties to vest jurisdiction to refer any
dispute to a specified Curt amounts to contracting against statute and
hence void.
a. True
26
b. Partly true
c. False
d. None of the above.
15.An agreement between two parties to refer to arbitration, any question
between them that has already arisen is valid
a. If it can be inferred by conduct of parties
b. If it is in writing
c. Either (a) or (b)
d. Neither (A) or (B)
16.M promised to pay n for his services at his (M) sole discretion found to be
fair ad reasonable. However, N dissatisfied with payment made by M
wanted to sue hm. N’s suit will be
a. Valid
b. Invalid
c. Restricted only to payment of remuneration and not damages
d. Restrict only to damages and not remuneration
17.A agreed to pay a certain sum when he was able to pay. The agreement is
void on grounds of
a. Inadequacy of consideration
b. Agreement to agree in future
c. Uncertainty
d. All of the above
18.A agrees to sell to B, 200 tons of oil. A deals only in coconut oil. The
agreement is
a. Valid
b. Void due to uncertainly of meaning
c. Illegal
d. Opposed to public policy
19.Illegal agreements are
a. Not enforceable by law
b. Forbidden under law
c. Either (a) or (b)
d. Both (a) or (b)
20.The maximum “in pari delicto, portior est. conditio defendentis” means
a. The defendant can be pardoned if his condition demands so
b. The defendant has to prove his innocence beyond doubt.
c. In cases of equal guilt, the defendant is in a better position.
27
d. The law assumes that the defendant is innocent.
21. Monies paid or properties transferred under illegal agreements
a. Can be recovered in all cases
b. Can be recovered only if they exist in specie
c. Cannot be recovered unless court directs so
d. Cannot b e recovered at all.
22. In wagering agreements neither party should have interest in the
happening (or non-happening) of the event other than
a. His honour or prestige
b. The sum or stake he stands to win or lose
c. Either (a) or (b)
d. Both (a) or (b)
23.where a person enters into a wagering transaction through an agent, and
the agent fails to carry out the Principal’s instructions?
a. Principal can sue Agent for breach of contract of agency
b. Principal cannot sue Agent for breach of contract of agency
c. Principal can sue Agent for damages
d. Principal can sue Agent to recover the betting money’s paid.
24.A, in Mumbai, bets with B and loses. A applies to C for a loan in order to pay
B. C gives the loan to a to enable him to pay B. In this case
a. C can recover the amount of loan from A
b. C cannot recover the amount of loan from A
c. C can recover the amount from B
d. C can recover the amount from A or B
25.Transactions for sale and purchase of stocks and shares or for sale and
delivery of goods, with a clear intention only to settle the price difference
are
a. Wagering Agreements
b. Not Wagering agreements
c. Contingent Contracts
d. Voidable Agreements
26.As per the Prize Competition Act, 1955, prize competitions in game of skill
are not wagers provided the prize money does not exceed
a. Rs.10
b. Rs.100
c. Rs.1,00
d. Rs. 10,000
28
27.Where a wagering transaction amounts to a lottery, it is
a. Valid
b. Enforceable
c. Illegal as per sec.294-A of the Indian Panal Code
d. Voidable
28.As per Sec. 294A of the Indian Panal Code, anyone who keeps any office or
place for the purpose of drawing a lottery (other than a State Lottery or a
lottery authorized by the State Government) shall be punished with upto 6
months imprisonment and / or fine.
a. True
b. Partly true
c. False
d. None of the above
29.An agreement to buy a ticket for a lottery is not a Wagering Agreement.
a. True
b. Partly true
c. False
d. None of the above
30.Government authorized Lottery is
a. A crime and hence punishable
b. Void and unenforceable transaction
c. Legal but not enforceable transaction
d. Enforceable transaction
Answers
1
2
3
4
5
D
D
D
C
D
6
7
8
9
10
A
A
B
B
C
11
12
13
14
15
B
D
A
C
B
16
17
18
19
20
B
C
A
D
C
21
22
23
24
25
Chapter-7 Performance of contract
D
B
B
B
A
26
27
28
29
30
C
C
A
C
D
29
1. A sum of money was agreed to be paid to the father in consideration of
breaking his daughter in marriage. The agreement is void o grounds of
being
a. Restraint of Marriage
b. Marriage brokerage contract
c. Restraint of personal liberty
d. Restraint of legal proceedings
2. When the performance of a contract becomes impossible, the purpose
which the parties had in mind is frustrated. If the purpose becomes
impossible because of supervising event, the promisor is excuse from the
performance of the contract. This is known
a. Doctrine of frustration
b. Initial impossibility
c. Unlawful consideration
d. All of the above
3. One cannot plead doctrine of frustration for one’s own in action.
a. True
b. Partly true
c. False
d. None of the above
4. A musical hall was agreed to be let out on certain dates, but before those
dates the hall was destroyed by fire. The contract becomes void on the
ground of
a. Impossibility of performance
b. Illegality of object
c. Unlawful consideration
d. All of the above
5. A stationer agreed to supply white paper at a single rate contracted for one
year. Later, due to steep increase in market price, contractor stated that he
would suffer very heavy loss by supplying at the contracted rates. Under
the contract, rates were to be firm except for statutory levies. In this case
a. Stationer cannot claim that contract had become commercially
impossible of performance
b. Stationer can claim that contract had become commercially
impossible of performance.
c. Stationer can claim revision of contract rates.
d. All of the above.
30
6. Unconditional contracts are called----------------contracts.
a. Unenforceable
b. Contingent
c. Quasi
d. None of the above
7. The collateral event to a Contingent Contract should be a/an
a. Uncertain Event
b. Certain Event
c. Either (a) or (b)
d. Neither (a) or (b)
8. Contracts contingent upon the happening of an certain Future Event cannot
be enforce by law
a. At all
b. Unless and until such an event has happened
c. Unless and until such an event has not happened
d. At the option of the Promisor
9. A agrees to pay B a sum of money if a certain ship does not return. The ship
is sunk. The contract can be enforced
a. When the ship sinks
b. Before the ship sinks.
c. When the ship returns
d. Only in International Court of Justice
10.A promise to pay B a sum of money if a certain ship returns within a year.
The contract
a. May be enforced if the ship returns within the year
b. Becomes void, if the ship is burnt within the year.
c. Both (a) or (b)
d. Any one of (a) or (b) is true
11.Contracts contingent upon the non-happening of Uncertain future Event
within a fixed time, can be enforced by law
a. When time fixed has expired and such event has not happened
b. Before expiry of the time fixed, it becomes certain that such event
will not happen.
c. Either (a) or (b)
d. Neither (a)or (b)
12.There can be a volid contract contingent upon the behavior of a person at
an unspecified time of future.
31
a. True
b. Partly true
c. False
d. None of the above.
13.A agrees to pay B a sum of money if b marries C. But C marries D. although
it is possible that D may die and that C may afterwards marry B, the
marriage of B and C
a. Will be considered unlawful
b. Will be considered impossible
c. Will be considered contingent
d. Will be considered necessary
14.All Wagering Agreements and contingent contracts are void.
a. True
b. Partly true
c. False
d. None of the above
15.Every contingent contract is calid and enforceable until it becomes void
a. True
b. Partly true
c. False
d. None of the above
16.Wagering Agreements is valid contract
a. Wagering Agreement
b. Is a game of chance
c. Is a voidable contract
d. Is a quasi-contract
17.A ……………………is not a game, but contingent upon the happening or nonhappening of a uncertain future event.
a. Wagering Agreement
b. Quasi contract
c. Continous Contract
d. Contingent Contract
18. In a Wagering Agreement, the future event is the ……………..in determining
the agreement.
a. Primary factor
b. Collateral aspect
c. Either (a) or (b)
32
d. Both (a) or (b)
19.In a contingent contract, the future event is the…………..in determining the
agreement
a. Primary factor
b. Collateral aspect
c. Either (a) or (b)
d. Both (a) or (b)
20.Every contingent contract is necessarily a Wagering agreement.
a. True
b. Partly true
c. False
d. None of the above
21.The parties to a contract need not perform when the performance is
a. Dispensed with
b. Excused under the provisions of any law
c. Either (a) or (b)
d. Neither (a) or (b)
22.A promises to deliver goods to B on a certain day on payment of Rs. 50,000.
A dies before that day.
a. The contract becomes void and cannot be enforced against legal
representatives of A.
b. The contract becomes impossible due to the death of A.
c. The contract can be enforced against A’s representatives and B is
bound to pay Rs. 50,000 to A’s representatives.
d. The contract is illegal.
23.Upon an offer of performance by the Promisor, if the Promisee neglects to
provide or does not provide reasonable facilities for performance, the
promisor is
a. Bound to offer performance again
b. Excused by such neglect or refusal as to any non-performance caused
thereby
c. Not entitled to remuneration
d. Not entitled to sue the Promisee
24.An offer of performance is known as
a. Offer
b. Proposal
c. Tender
33
d. Acceptance
25.R contracts to deliver 100 bags of Basmati Rice at T’s godown on a specified
date. T should bring the whol lot of 100 bags to T’s godown, on the
specified date, and offer T an opportunity of inspecting the same to ensure
that all 100 bags are there and it is of the same quality as contracted. Such
a tender is
a. Invalid
b. Unenforceable
c. Valid
d. Void
26.Where the Promisor has offered to perform his promise to the
Promisee/any one of Joint Promisee, and the promise refuses to accept his
performance
a. Promisor is not responsible for non-performance
b. Promisor does not lose his rights under the contract
c. Both (a) or (b)
d. Neither (a) or (b)
27.In which of the following cases, the Promisor is at fault?
a. Promise does not give reasonable facilities for performance
b. Promisor has disabled himself from performing his promise in
entirely
c. Promisor has refuse to perform his promise in entirely
d. Both (b) and (c)
28.A, a singer enters into a contract with B, the manager of a theatre to sing at
his theatre two nights in every week during the next two months and B
engages to pay her Rs. 1,00,000 for each night’s performance. On the sixth
night, a willfully absents himself from the theatre. If A turns up after a week
and B without anything allowed A to perform that night.
a. B is at liberty to put an end to the contract
b. B cannot put an end to the contract but can claim damages from A
c. The contract is left at the liberty of A
d. The contract is unlawful
29.Only the Promisor should perform the promise personally in the following
situations
a. Where the parties intendedperformance of the promise by the
promisor himself
34
b. Where performance involves the exercise of personal skills by the
Promisor
c. Where the promise is founded on personal confidence between the
parties.
d. All of the above.
30.A Promises to deliver 10 bags of wheat to B. In case of A’s death before
performance, A’s representatives
a. Are not bound by the promise
b. Shall be bound to deliver the wheat to B.
c. Shall be bound to deliver the wheat to B but their liability is limited
to the value of the property inherited from the deceased.
d. Shall avoid the contract
Answers
1
2
3
4
5
B
A
A
A
A
6
7
8
9
10
D
A
B
A
C
11
12
13
14
15
C
A
B
B
A
16
17
18
19
20
B
D
A
B
C
21
22
23
24
25
C
C
B
C
C
26
27
28
29
30
C
D
B
D
C
Chapter-8 Discharge of Contract
1. A , B and C jointly promise to pay D Rs. 3,000. D may compel
a. A, B and C jointly to pay him Rs. 3,000
b. A to pay him Rs. 3,000
c. A or B or C to pay him Rs. 3,000
d. A, B and C jointly and separately to pay Rs. 3,000.
2. A partner of the firm is a joint promisor with other partners. He is entitled
to claim contribution from other partners when he pays the debt of the
firm.
a. True
b. Partly true
c. False
d. None of the above.
35
3. K sued some of the Partners of A firm ABC Co., for damages, but then he
settled his claim against one of them and agreed to withdraw his claim and
suit against that partner. In this case
a. K cannot continue the suit against the other Partners.
b. The suit could be carried on against rest of the partners.
c. K cannot sue the firm at all.
d. The partner who is discharged has to file a suit against the firm.
4. X, Y and Z are partners of software business jointly promise to pay Rs.
30,000 to A .Over a period of time Y became insolvent, but his assents are
sufficient to pay 1/4th of his debts. Z is compelled to pay the whole
a. Z has to bear the entire amount of liability
b. X has to bear the entire loss arising out of Y’s insolvency
c. X and Z have to bear equally, the loss arising out of Y’s insolvency.
d. Z can recover back the entire amount from A.
5. When time is not the essence of a contract, it is expected that the promisor
would perform his promise
a. Within a suitable time
b. Within a reasonable time
c. Within the stipulated time
d. Within the shortest time.
6. Reasonable time for performance of a contract is a
a. Question of law
b. Question of fact
c. Mixed question of fact and law
d. Question of prudence
7. A promises to deliver goods at B’s warehouse on the 1st January. On that
day, A brings the goods B’s warehouse but after the usual hour for closing it
and they are not received which one of the following is correct.?
a. A has not kept his promise
b. A kept his promise as time was not specified.
c. A performs his duty as time is not the essence of the contract
d. All of these.
8. Where the terms of agreement openly state that a particular act as regards
furtherance of a contract has to be done in a particular manner, the parties
have no liability to innovate their own manner of performance of contract.
a. True
b. Partly true
36
c. False
d. None of the above
9. B owes A Rs. 50,000. A desires B to pay the amount to A’s account with C, a
banker. B who also banks with C orders the amount to be transferred from
his account to A’s credit and this is done by C. Subsequently before A knows
of the transfer, C fails. In this case
a. B has not paid A properly
b. There has been a good payment by B.
c. It is A’s responsibility to pay B.
d. The ase is not covered by the Indian Contract Act.
10.A owes B Rs. 50,000. B accepts some of A’s goods in reduction of debt. In
such case, the delivery of goods
a. Operates as a part of the payment
b. Does not reduce A’s liability to B
c. Is against the provisions of Contract Act
d. Is without any consideration.
11.In contract of sale of movable properties, time is
a. Not presumed to be the essence of the contract
b. Presumed to be the essence of the contract
c. No presumption as to time can be raise
d. All of the above
12.A and B contract that A shall hand over his stock in trade to B at a fixed
price, and B promises to give security for payment of money. A’s promise
need not be performed until the security is given, because the nature of
transaction requires that A should have a security before he delivers up his
stock.
a. True
b. Partly true
c. False
d. None of the above
13.A and B agree that A shall sell his house to B for Rs. 10 lakhs; but if B is
going to use it is a gambling house, he shall sell it for Rs. 50 lakhs. In this
case
a. Promise of selling the house and paying Rs. 10 lakhs is a valid
contract.
b. Promise of selling the house where B is to use it for an unlawful
purpose, is a void agreement.
37
c. The whole contract is valid
d. Both (a) and (b) are correct.
14.The Creditor may also, until he has declared the appropriation to the
Debtor, alter the appropriation
a. True
b. Partly true
c. False
d. None of the above.
15.Where the Debtor does not expressly intimate or where the circumstances
attending on a payment do not indicate intention, the Creditor may apply it
to
a. Any disputed debt due
b. Any lawful debt due
c. To the last debt
d. To the first debt
16.Where neither the creditor or debtor makes any appropriaction and there
are many debts of equal standing in the orders of time, payment shall be
applied in discharge of
a. The smallest debt
b. The largest debt
c. Each proportionally
d. Any debt to which the amount tallies.
17.A contract can be discharged by performance in which of the following
ways?
a. Actual performance
b. Offer to perform i.e. tender
c. Either (a) or (b)
d. Both (a) or (b)
18.A agrees upon a promissory note to pay Rs. 50,000 to B, B alters the
amount as Rs. 50,000. A is liable to pay
a. Rs. 5,000
b. Rs. 50,000
c. Rs. 45,000
d. Not liable at all.
19.A Bill of Exchange which was accepted by K, reaches K’s hands after being
negotiated and endorsed through 4 other parties. The contract is
a. Void
38
b. Discharged
c. Rescinded
d. Voidable 8
20.In discharge of contract by novation, the consideration for the new contract
is
a. The discharge of the Original Contract
b. To be separately identified
c. To be decided by the parties.
d. All of the above.
21.Partial Rescission of a contract occurs where the original contract is varied
by
a. Rescinding some terms of the contract
b. Substituting new terms for those rescinded
c. Adding new terms without any rescinding the original terms.
d. All of the above
22. Rescission of Voidable Contract may also be revoked and the parties can
get back on the original contract.
a. True
b. Partly true
c. False
d. None of the above
23.A promises to supply 50 sets of Men’s Suit of a particular type to B three
months hence. By that time there is no demand for those suits. A and B can
rescind the contract. This is called.
a. Mutual Rescission
b. Breach
c. Impossibility of performance
d. Revocation of proposal
24.A contracts with B to supply certain goods at B’s warehouse by 15th May
and B agrees to pay on delivery. Both of them may agree to modify the
term; say, delivery on 18th May and payment one week since delivery. The
original contract is discharged by
a. Alteration of contract
b. Novation of contract
c. Remission of contract
d. Rescission of contract
39
25. A owes B Rs. 50,000. Due date of payment is 25th March. A pays to B Rs.
30,000 on 25th March, who accepts it in full satisfaction of the debt. The
debt discharged on account of
a. Remission of part of the performance of a promise
b. Extension time of performance
c. Acceptance of any other satisfaction instead of performance.
d. All of the above
26.No consideration is necessary for a waiver.
a. True
b. Partly true
c. False
d. None of the above
27.Novation can be made by
a. Change in the terms of the contract
b. Change in the contracting parties
c. Either (a) or (b)
d. Neither (a) or (b)
28.In case of Novation
a. Old contract need not be performed
b. New contract must be performed
c. Both (a) and (b)
d. Neither (a) or (b)
29.In case of Alteration
a. Old term and conditions need not be performed.
b. New terms and conditions must be performed
c. Both (a) or (B)
d. Neither (a) nor (b)
30.Breaking of an obligation which one is bound to do under a contract is
called
a. Avoidance
b. Breach
c. Voidability
d. Rescission
40
Answers
1
2
3
4
5
D
A
B
C
B
6
7
8
9
10
B
A
A
B
A
11
12
13
14
15
B
A
D
A
B
16
17
18
19
20
C
C
A
B
A
21
22
23
24
25
D
A
A
A
A
26
27
28
29
30
A
C
C
C
A
Chapter-9 Remedies For Breach Of Contract
1. A agrees to deliver 100 bags of sugar to B at a certain price on 1st
September. If a refuses or fails to deliver the goods on 1st September. If A
refuses or fails to deliver the goods on 1st September, there is an
a. Actual Breach on the due date of performance
b. Anticipatory Breach on the due date of performance
c. Actual Brach during the course of performance
d. Anticipatory Breach during the course of performance
2. Where in an anticipatory breach, the promise opts to put an end to the
contract and treat the anticipatory breach as actual breach of contract, the
Promise.
a. is excused from performing or further performance of his promise.
b. has to perform his part of the promise fully
c. has to perform his part of the promise fully
d. has to consider the contract as illegal.
3. Where in an anticipatory breach, the Promisee opts to put an end to the
contract and treat the anticipatory breach as actual breach, the Promisee
can sue the Promisor for breach of contract
a. Only after the due date of performance
b. Immediately without waiting till date of performance.
c. (a) or (b) whichever is earlier
d. (a) or (b) whichever is later.
4. Incase of anticipatory breach, where the Promisee electsto keep the
contract alive, if during the time the contract remains open, some event
happens discharging the Promisor from his liability, the Contract becomes
a. Illegal
41
b. Void
c. Voidable
d. Contingent
5. In case of anticipatory breach, where the Promisee opts to keep the
contract alive till the actual date of performances, the amount of damages
= Price prevailing on the date of performance- contract Price
a. True
b. Partly true
c. False
d. None of the above
6. In which of the following situations, specific performance can granted?
a. Where it is probable that compensation in money cannot be got for
non-performance
b. Where there is no exact substitute or alternative to the subject
matter of the contract.
c. Neither (a) or (b)
d. Either (a) or (b)
7. G agreed to but the whole of the electric energy required for his house
from a certain company. In this cases, he can be restrained by an injunction
from buying electricity from any other person.
a. True
b. Partly true
c. False
d. None of the above
8. The Right to sue on Quantum Meruit lies with
a. The party at fault i.e. who has not performed his promise.
b. The party who is not at fault, i.e. who has performed his party of the
contract
c. Either (a) or (b)
d. Both (a) or (b)
9. Quantum Meruit is applicable i.e. there is a right to sue in case where
a. Contract is discovered to be unenforceable
b. One party abandons performance
c. Act is done without intention of gratuitousness
d. All of the above
10.S, a singer, contract with H, manager of a theatre, to sing at his theatre for
two nights every week during next two months. H agrees to pay her Rs.
42
1000 for each night’s performance. On sixth night, willfully absents herself,
and H,. in consequence rescinds the contract. In this case
a. H has no obligations to S
b. H must pay $ for five nights on which she had performed
c. S has no remedy against H.
d. The contract is illegal.
11.To a contract to render services, if there is no express or implied intention
to provide remuneration; then the party rendering services can sue upon
quantum meruit for ………..remuneration.
a. Substantial
b. Adequate
c. Reasonable
d. Minimum
12.When an indivisible contract for lump sum is completely performed, but
badly, the person who has performed, can
a. Claim the lumpsum
b. Claim the lumpsum less deduction for bad work.
c. Not claim any amount at all.
d. Perform the work again.
13.A greed to decorate B’s flat for a lump sum of Rs. 3,00,000. A did the work
but B complained of faulty workmanship. It costs B Rs. 50,000 to remedy
the defect. A can recover from B
a. Rs. 3,00,000
b. Rs. 50,00,00
c. Rs. 2,50,000
d. Rs. 3.50,000
14.Damages are also applicable in respect of failure to discharge a Quasicontract, in the same manner as in respect of breach of contracts.
a. True
b. Partly true
c. False
d. None of the above
15.When the Seller retains goods after the breach, he can recover from the
buyer any further loss if the market falls, also he is liable to have the
damages reduced if the market rises.
a. True
b. Partly true
43
c. False
d. None of the above
16.Special Damages can be claimed if the party breaking the contract is made
known of the special circumstances at any time after the breach.
a. True
b. Partly true
c. False
d. None of the above
17.Damages awarded simply to recognize the right of the party to claim
damages for the breach of the contract are called
a. General damages
b. Special damages
c. Vindictive damages
d. Nominal damages
18.In case of damages for inconvenience and discomfort, the measure of
damages is not affected by the motive or manner of breach.
a. True
b. Partly True
c. False
d. None of the above
19.Duty to mitigate damages on the part of injured party arises
a. In cases of anticipatory breach
b. In cases of breach at the time fixed for performance of the contract
c. Neither (a) nor (b)
d. Either (a) or (b)
20.The intention for fixing/ stipulating Penalty is
a. Recovery of damages that might arise due to breach
b. To ensure performance of a contract
c. Either (a) or (b)
d. Both (a) or (b)
21.If the compensation to be paid on breach of contract is the genuine preestimate of the prospective damages, it is known as
a. Penalty l
b. liquidated Damages
c. Uniliquidated Damages
d. Special Damages
44
22. P contracts to deliver 50 units of a Petrol Engine to Q on a stipulated;
failing which he shall pay Rs. 5 lakhs. Neither the price of Engine nor loss on
failure of delivery would amount to Rs. 5 lakh. In such case the amount of
Rs. 5 lakhs is a
a. Exemplary Damages
b. Penalty
c. Liquidated damages
d. Special Damages
23.A contracts with B that if A practices as a surgeon within Calcutta, he will
pay Rs. 5,000. Practices as surgeon in Calcutta. Be is entitled to such
compensation
a. Exceeding Rs. 5,000
b. Not exceeding Rs. 5,000
c. Not exceeding Rs. 5,000 as the Court considers reasonable
d. As B may wish.
24.A stipulation for increased interest from the date of default is known as
a. Compensation
b. Penalty
c. Liquidated damages
d. Damages
25.In a contract of debt, when a sum is expressed to be payable on a certain
date and a further sum is stipulated to be payable in the event of default,
then later sum is by way of
a. Liquidated Damages
b. Penalty
c. Special Damages
d. Nominal Damages
26.A who is a builder, agrees to erect and finish a house by 1st Jan, so that B
may give possession of the house at that time to C to whom B has
contracted to let it. A is informed of the contract between B and C. a builds
the house so badly that it falls down before 1st January has to be rebuilt by
B. As a consequence. B loses the rent which he was to have received from
C, and is obliged to make compensation to C for the breach of his contract.
A must make compensation to B for
a. The cost of rebuilding the house
b. The rent lost
c. The compensation made to C
45
d. All the above.
27.In case of………..the measure of damages depends upon the severity of
shock to the sentiments of the Promisee/aggrieved party.
a. Nominal Damages
b. General Damages
c. Vindictive Damages
d. Special Damages
28.Nominal Damages may be very small, say, even a rupee.
a. True
b. Partly true
c. False
d. None of the above
29.The intention for fixing / stipulating Liquidated Damages is
a. Recovery of damages that might arise due to breach.
b. To ensure performance of a contract
c. Either (A) or (b)
d. Both (a) or (b)
30.The essence of Liquidated Damages is that it should be
a. Genuine pre-estimate of damage
b. More than probable damage
c. Less than probable damage
d. Any of the above
Answers
1
2
3
4
5
A
A
B
B
A
6
7
8
9
10
D
A
B
D
B
11
12
13
14
15
C
B
C
A
C
16
17
18
19
20
C
D
A
D
B
21
22
23
24
25
B
B
C
D
B
26
27
28
29
30
D
C
A
A
A
Chapter-10
1. X leaves his goods at Y’s place who consumes them. Y is bound to pay price.
Y’s act of consumption of goods constitutes an implied promise to pay,
under the principle of
a. Contractual Obligations
b. Quasi contractual Obligations
46
2.
3.
4.
5.
6.
c. Semi contractual Obligations
d. Deemed contractual Obligations
Quasi Contract rests on the principle of
a. Equality / Equity
b. There cannot be unjust enrichment of a party at the expenses of
another
c. Neither (A) not (b)
d. Both (a) and (b)
Quasi Contracts or Implied Contracts are exceptional kinds of contracts by
which
a. One party is bound to pay money in consideration of something done
or suffered by the other party.
b. No contractual relation exists between the parties
c. No contract has been made by the parties
d. All of these
If a person, incapable of entering into a contract, or anyone whom he is
legally bound to support, is supplied by another person, with necessaries
suited to his condition in life, the person who has furnished such supplies is
entitled to be reimbursed from the property of such incapable person.
a. True
b. Partly true
c. False
d. None of the above
A whom supplies the wife and children of B, a lunatic, with necessaries
suitable to their condition in life, is entitled to be reimbursed from
a. B’s property
b. B personally
c. B ‘s wife and children
d. The court
A person, who is interested in the payment of money and pays such money,
which another is bond by law to pay, is entitled to be reimbursed by the
other.
a. True
b. Partly true
c. False
d. None of the above
47
7. To claim reimbursement of money paid on behalf of another person, which
of the following is not required?
a. There should be some legal or other coercive proves compelling the
payment.
b. Original liability should be of another person
c. Payment must be made to their party to whom another party was
liable.
d. The payment must be voluntary
8. To attract obligation for enjoying benefit of non-gratuitous act, which of
the following are required?
a. The thing or act must be one lawfully.
b. Intention must be to do it non-gratuitously.
c. Person for whom the act is done must have enjoyed its benefit
d. All of the above
9. A saves B’s property from fire. A is entitled to compensation from B, if the
circumstances show that A intended to act
a. Gratuitously
b. Non-gratuitously
c. Either (A) nor (B)
d. Neither (a) nor (b)
10.A person who finds goods belonging to another and takes them into his
custody, is subject to the same responsibility as a
a. BAILEE
b. True Owner
c. Thief
d. Trespasser
11.A person to whom money has been paid, or anything delivered by mistake
or under coercion, must repay or return it.
a. True
b. Partly true
c. False
d. None of the above
12.A and B jointly owe Rs. 10 Lakhs to C. A alone pays the amount to C and B,
not knowin this fact pays Rs. 10 Lakhs over again to C.
a. C is bound to repay the amount to B
b. C is bound to repay the amount to B and A jointly
c. C is bound to repay the amount to A and B equally
48
d. C is not bound to repay the amount to B.
13. Damages under section 73 of Indian Contract Act are
a. Compensatory
b. Liquidated
c. Penal
d. Collateral
14.………………are awarded with a view to punish the defendant, and not soley
with the idea of awarding compensation to the plaintiff.
a. Special Damages
b. Ordinary Damages
c. Nominal Damages
d. Exemplary or Vindictive Damages
15.Hadley v/s Baxendale case is a leading case on
a. Breach of Implied Term
b. Anticipatory Breach
c. Remoteness of Damages
d. Bilateral Mistake of Fact
16. In case the contact is divisible, and one party has enjoyed the benefit of
part performance, then, the other party may sue on quantum meruit.
a. True
b. Partly true
c. False
d. None of the above
17.Quantum meruit means
a. A non-gratutious promise
b. As implied promise
c. Either (a) or (b)
d. Neither (a) nor (b)
18.In which of the following situations, Specific Performance is not granted?
a. Where monetary compensation is an adequate relief.
b. Where the contract is of a personal nature
c. Either (A) or (B)
d. Neither (A) nor (b)
19.………………..means an order of the Court restraining a person from doing
what he promised not to do.
a. Quantum Meruit
b. Rescission
49
c. Injunction
d. Specific Performance
20.In which of the following situations, specific performance can be granted?
a. Where monetary compensation is not an adequate relief.
b. Where there is no standard for ascertaining the actual damage
c. Either (a) or (b)
d. Neither (a) or (b)
21.In case of anticipatory breach, the promise opts to put an end to the
contract and treat the anticipatory breach as actual breach, the amount of
damages = Price prevailing as on the date of refusal to perform – Contract
Price.
a. True
b. Partly true
c. False
d. None of the above
22.A promise may dispense with the performance of a promise
a. Wholly
b. in part
c. false
d. neither (a) nor (b)
23.a Creditor agrees with his Debtor and a third party to accept that third as
his Debtor. The contract is discharged by
a. performer
b. alteration
c. waiver
d. remission
24.in case of alteration, there is a change in the parties and new parties may
be included.
a. True
b. Partly true
c. False
d. None of the above
25.A contracts with B to deliver 90 kg. of material X if 15th June. B may rescind
the contract. The contract is discharged due to
a. Mutual decision
b. A’ failure to perform
c. Impossibility of performance
50
d. Revocation of proposal
26.A bill of exchange which was accepted by K, reaches K’s hands after being
negotiated and endorsed through 4 other parties. The contract is
discharged due to
a. Merging of inferior right in a superior right
b. Debt barred by law of limitation
c. Rights and liabilities vesting in the same person
d. Breach of contract
27.A owes B totally Rs. 25,000. He sends a cheque for Rs. 10,000 stating that it
shall be appropriated towards he first sum of Rs. 10,000 he took from B. B
shall appropriate it
a. Towards any debt due from A
b. Towards any time barred debt due from A
c. Towards that debt as indicated by A.
d. Towards that debt as indicated by A.
28.A and B contract that B shall build a house for A for Rs. 9 Lakhs. B is ready
and willing to construct the house, but A prevents him from doing so. In
this case
a. B can opt to rescind the contract
b. B is eintitled to recover compensation for any loss suffered by him
c. Either (a) or (b)
d. Both (a) and (b)
29.If a contract expressly provides for the order of performances of reciprocal
promises, the promises shall be performed
a. In the order mentioned and not otherwise
b. In any reasonable order
c. In any appropriate order
d. In any order what so ever
30.Where a witness who has received summons to appear at a trial, a promise
to pay him anything beyond his expenses is
a. Void since consideration is illusory
b. Valid
c. Unlawful
d. In restraint of legal proceedings.
Answers
51
1
2
3
4
5
B
D
D
A
A
6
7
8
9
10
A
D
D
B
A
11
12
13
14
15
A
A
A
D
C
16
17
18
19
20
A
C
C
C
C
21
22
23
24
25
A
C
D
C
B
26
27
28
29
30
C
D
D
A
A