MCQs

MCQ Law of Contract [Part-1]

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1. The Indian Contract Act came into force on: 

(a) 15th September, 1872 

(b) 1st September, 1872 

(c) 1st October, 1872 

(d) 15th October, 1872. 

Ans.b

2. The Indian Contract Act, applies to the:  

(a) Whole of India excluding Jammu & Kashmir 

(b) Whole of India including Jammu & Kashmir 

(c) States notified by the Central Government from time to time 

(d) None of the above. 

Ans.b 

3. An agreement consists of reciprocal promises between at least  

(a) four parties. 

(b) six parties. 

(c) three parties. 

(d) two parties. 

Ans.d

4. Every promise and every set of promise forming the consideration for each other is a/an  

(a) contract. 

(b) agreement. 

(c) offer. 

(d) acceptance. 

Ans.b

5. Contract is defined as an agreement enforceable by law, vide Section … of the Indian Contract Act.  

(a) Section 2(e) 

(b) Section 2(f) 

(c) Section 2(h) 

(d) Section 2(i)

Ans.c

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6. A agrees to serve B as B’s housekeeper and also to live in adultery

with him at a fixed salary of Rs. 500/- per month. In this situation:

(a) The whole agreement is unlawful and thus it is void

(b) The agreement is lawful and valid as adultery is not an offence in

Indian Contract Act

(c) This first portion of the agreement, being lawful, is a contract

whereas the latter portion is void

(d) The agreement as a whole is void as the lawful portion is not

severable from unlawful portion

Ans.A

7. An agreement without consideration will be

(a) Voidable

(b) Void

(c) Illegal

(d) Inoperative

Ans.B

8. Which one of the following amounts to misrepresentation

(a) Suggestion or representation as a fact of that which is not true by

one who does not believe it to be true

(b) A suggestion or representation made without knowing it to be false,

while honestly believing it to be true

(c) Active concealment of a fact

(d) A promise made without any intention of performing it

Ans.B

9. Ramesh asks his servant to sell his cycle to him at a price less than

the market’s price. Such an agreement between Ramesh and his

servant:

(a) Is a valid contract

(b) Is a contract void ab initio because of undue influence

(c) Is a voidable contract at the option of the servant because the

agreement was affected by undue influence

(d) Is a contract void ab initio because of соercion

Ans.C

10. Which of the following statement is correct:

(a) A lunatic person can never enter into an contract

(b) A lunatic person is legally capable of entering into a contract at any

time

(c) A lunatic person should not enter into a contract

(d) A lunatic person, who is at intervals of sound mind, may contract

during those intervals

Ans.D

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11. A person is said to be of sound mind for the purpose of making a

contract, if at the time when he makes it

(a) He is capable of forming an intention to enter into a contract and is

capable of making a correct choice from the available options

(b) He is capable of understanding it and of forming rational judgement

as to its effects upon his interests

(c) He is capable of taking rational decisions and to the best of his

interest

(d) He is not of unsound mind and knows that he is going to enter into a

contract

Ans.B

12. ‘A’ promises to paint a picture for ‘B’-

(a) ‘A’ may employ a competent person to perform the promise

(b) Representatives of ‘A’ may employ a competent person for the

purpose

(c) ‘A’s’ sons may perform the promise

(d) ‘A’ must perform this promise personally

Ans.D

13. “A” threatened “B” to commit suicide if B did not employ him in

his factory. An agreement so made can be avoidable by B on the

ground of:

(a) Undue influence

(b) Criminal intimidation

(c) Coercion

(d) Duress

Ans.C

14. P’s son had been missing for some time. P sent his servant Q in search of son. Thereafter, through hand bill P offered a reward of Rs. 501/- to whoever was able to trace the whereabouts of his son. Q was successful in tracing the son and brought him to P. Then he came to know of the reward and claimed it. P refused to pay . In this case:

(a) Q is entitled to the reward because P made a general offer and

whoever fulfills the condition of the offer was entitled the reward. Q had,

infact, fulfilled the condition of the offer

(b) Since Q was not aware of the offer at the time when he acted upon

it, no valid acceptance could come into existence Thus Q is not entitled

to the reward

(c) Since Q was P’s servant and was sent by him to trace the son, he

cannot claim reward

(d) Q is not entitled to the reward. It would be P’s grace if he gives him

Rs. 501vany amount by way of reward

Ans.B

15. If a contract is caused by mistake as to a law not in force in India

i.e. a foreign land such contract is:

(a) Valid and enforceable

(b) Voidable

(c) Void ab initio and unenforceable

(d) Valid but unenforceable

Ans.C

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16. A applies to banker for a loan at a time when there is stringency in

the money market. The banker declines to make loan expect at an

unusually high rate of interest. A accepts the loan of these term In this

case:

(a) The contract is vitiated by undue influence

(b) The contract is valid because this is the transaction in the ordinary

course of business

(c) The contract is void because the bank took unfair advantage of

stringency in money market

(d) The contract is voidable at the option of A who was deceived by the

banker

Ans.B

17. Which may render an agreement void:

(a) Coercion causing consent

(b) Undue influence causing consent

(c) Fraud causing consent

(d) Mistake causing consent

Ans.D

18. A sells in auction, to B, a horse which A knows to be unsound. A

says nothing to B about the horse’s unsoundness. In this situation

(a) The contract of sale is valid and it was not the duty of A to disclose

the actual condition of the horse

(b) The contract of sale is void for being vitiated by fraud on A’s part, it

being A’s duty to disclose the truth

(c) The contract of sale is voidable at B’s option bećause of cheating by

A

(d) The contract of sale is voidable at B’s option because of fraud by A

Ans.A

19. Who has said that “an offer need not be made to an ascertained

person, but no contract can arise until it has been accepted by an

ascertained person”

(a) Cheshire & Fifoot

(b) Anson

(c) Lord Atkin

(d) Lord Stowell

Ans.B

20. X’ applied for the principalship of a local college and the

Governing Body passed a resolution appointing him. After the

meeting, one of the members of the Governing body privately

informed him of the resolution. Subsequently the resolution was

rescinded. X claims damages. In this situation:

(a) X cannot claim damages as there was no official communication of

an offer which X could validity accept

(b) X can claim damages as there was a private communication of the

resolution which amounts as a tacit offer to X

(c) X is not qualified for principal ship so he cannot claim damages

(d) The Governing Body cannot rescind the resolution once passed, so X

can claim damages.

Ans.A

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21.The Carlill v. Carbolic Smoke Ball Co., case is related to:

(a) Offer and counter offer

(b) Offer to public at large

(c) Invitation to offer to public at large

d) Offer and revocation of offer

Ans.B

22.On January 2, the defendant sent a letter offering to sell goods to

the plaintiff. The letter added “receiving your answer in the course of

post”. The letter reached the plaintiff on 5th January. On the 6th

January the plaintiff posted his letter of acceptance which reached

defendant on 9th of January. The defendant sold the goods on 8th

January. In this case:

(a) There is no concluded contract between the parties since the

subject matter of the contract i.e. the goods had already been sold by

the defendant before the conclusion of the contract

(b) There is no concluded contract between the parties because by

selling the goods to someone else than the plaintiff the defendant had

impliedly revoked his offer

(c) There is a concluded contract between the parties which was made

on 5th January when the plaintiff received the letter of offer

(d) There is a concluded contract between the parties which came into

existence on 6th January when the plaintiff posted the letter of

acceptance

Ans.D

23. Every agreement in restraint of the marriage of any person other

than a minor-

(a) Is voidable

(c) Is void

(b) Is illegal

(d) Is valid

Ans.C

24.The decision in Mohori Bibl v. Dharmadas Ghose was given by the:

(a) Supreme Court in 1953

(b) Federal Court in 1947

(c) Privy Council in 1928

(d) Privy Council in 1903

Ans.D

25. The decision in Mohori Bibi v. Dharmadas Ghose case was related

to the:

(a) Offer and its communication

(b) Acceptance and its communication

(c) Undue influence

(d) Capacity of a minor to enter into a contract

Ans.D

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26.A sees B’s child drowning in water. He saves the child from

drowning. Later ‘B’ promises to give ‘A’Rs. 1000. In this circumstances:

(a) B’s liability arises in quasi-contract

(b) B’s liability is statutory

(c) B is not liable as there is no contract

(d) B is liable because the agreement is not “nudum pactum”, and is

based on past voluntary service

Ans.D

27. According to Section 2 of the Indian Contract, 1872, when one

person signifies to another his willingness to do or to abstain from

doing anything, with a view to obtain the assent of that other to such

act or abstinence, he is said to make a:

(a) Promise

(b) Consent

(c) Proposal

(d) Communication

Ans.C

28. A proposal, when accepted becomes:

(a) An acceptance

(b) A promise

(c) A consideration for the promise

(d) An agreement

Ans.B

29. A patient in a lunatic asylum, who is at intervals of sound mind–

(a) May not contract

(b) May contract

(c) May contract during those intervals when he is of sound mind

(d) May contract only after he becomes completely of sound mind

Ans.C

30. A bid at an auction sale is:

(a) An implied offer to buy

(b) An implied acceptance of the offer to buy

(c) An express offer to buy

(d) An express acceptance of the other to buy

Ans.A

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31. A void agreement means:

(a) Agreement not enforceable by law

(b) Agreement illegal in nature

(c) Agreement not acceptable to Court of law

(d) Agreement violating legal procedure

Ans.A

32. The provision that an agreement not enforceable by law is said to

be void, is contained In:

(a) Section 2(j)

b) Section 2 (f)

(c) Section 2 (g)

(d) Section 2 (i)

Ans.C

33. Number of ingredients of ‘Promise’ is-

(a) Two

b) Three

(c) Four

d) Five

Ans.A

34. The communication of an acceptance, as against the acceptor, is

complete :

(a) When it is put in a course of transmission so as to be out of the

power of the accepter

(b) When the proposer says that he received the acceptance to the

proposal

(c) When it comes to the knowledge of proposer

(d) When the acceptor decides to accept proposal and communicate it

Ans.C

35. The communication of a revocation, a against the person who

makes it, is complete:

(a) When it is put into a course of transmission so as to be out of the

power of the person who makes it

(b) When it comes to the knowledge of the person to whom it is being

made

(c) When the person to whom it is being made, signifies his assent

thereto

(d) All of the above

Ans.A

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36. “A” took his wife “B” to England for vacations. Due to some

business emergency A had to go back to his place of work

immediately while leaving B in England owing to her ill-health. A

promised to pay B 300 pounds per week as maintenance during her

stay in England, but failed to pay. If A is sued by B then.”

(a) A is liable for breach of contract

(b) A is not liable because he cannot be presumed to have any intention

to enter into a contract with his wife

(c) A is not liable because of the lack of consideration on the part of B

(d) A is liable because a promise to one’s wife result in a binding

contract even in the absence of a consideration for the promise

Ans.B

37. A promises his son to buy him a Maruti Car if he stands first in his

tenth class Board examination, On the faith of the promise the son

worked hard and stood first in the exam. In this case:

(a) The son can sue A for the car as there was a contract between him

and his father A

(b) The son cannot sue A as the contract was voidable at the option of A

(c)The son can sue A because he worked hard on the faith of A’s

promise and performed his part of the contract

d) The son cannot sue A because in the household domestic setting like

this such promises are not made with the intention to bind the parties

into a valid contract

Ans.D

38. A” offered to sell his house to “B” which B instantly accepted.

Under these circumstances:

(a) A can revoke his offer anytime before the actual sale of the house

b) A can revoke his offer with the consent of B

(c) A cannot revoke his offer at all

(d) A can revoke his offer even without the consent of B

Ans.C

39. “A” telegraphed “B”, “Will you sell your house, telegraph the

lowest cash price.” B also replied by telegram, “lowest price for the

house of Rs. 15,00,000/- This is a:

(a) Complete Agreement.

(b) Complete Contract

(c) No Contract

(d) Voidable Contract

Ans.C

40. Consensus ad idem means ……

(a) theme of contract

(b) common object

(c) meeting of minds upon the same thing in the same sense

(d) None of the above

Ans.C

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41. An agreement is:

(a) Every promise and every set of promises forming the consideration

for each other

(b) Every promise to do something or to abstain from doing something

(c) Signification by one person of the intention to abide by the promise

(d) Promise against a promise

Ans.A

42. A notice in the newspaper inviting tenders is

(a) A proposal

(b) A invitation to proposal

(c) A promise

(d) An invitation for negotiation

Ans.B

43. A catalogue of books, listing price of each book and specifying the

place where the listed books are available is:

a) A promise to make available the book at the listed price

(b) An offer

(c) An invitation to visit the book shop

(d) An invitation to offer

Ans.D

44. A proposal when accepted –

(a) Becomes a promise

(b) Becomes an agreement

(c) Becomes a contract

(d) Becomes a consideration

Ans.A

45. In which of the following statement there is a valid contract:

(a) A promises to pay Rs. 5,000/- to B who saved “A” from drowning in

a river

(b) A promises to pay Rs. 5,000/- to B if India loses in a India-Pakistan

cricket match

(c) A promises to pay Rs. 5,000/- to B if B cross through mount

Himalayas within 3 days on his feet

(d) A promises to pay Rs. 5,000/- to B if B works for A in his smuggling

business

Ans.A

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46. A agrees to serve B as B’s housekeeper and also to live in adultery

with him at a fixed salary of Rs. 500/- per month. In this situation:

(a) The whole agreement is unlawful and thus it is void

(b) The agreement is lawful and valid as adultery is not an offence in

Indian Contract Act

(c) This first portion of the agreement, being lawful, is a contract

whereas the latter portion is void

(d) The agreement as a whole is void as the lawful portion is not

severable from unlawful portion

Ans.A

47.A sees B’s child drowning in water. He saves the child from

drowning. Later ‘B’ promises to give ‘A’Rs. 1000. In this circumstances:

(a) B’s liability arises in quasi-contract

(b) B’s liability is statutory

(c) B is not liable as there is no contract

(d) B is liable because the agreement is not “nudum pactum”, and is

based on past voluntary service

Ans.D

48. Which of the following is a contract:

(a) An agreement to do a lawful act by unlawful means

(b) An undertaking in writing duly signed to pay the time barred debt

(c) An agreement in restraint of the lawful trade

(d) An agreement to pay Rs. 1000/- only without consideration

Ans.B

49.In the case of an alternative promise, one branch of which is legal

and the other illegal-

(a) Such a promise can be enforced

(b) Any of its branch cannot be enforced

(c) The legal branch alone can be enforced

(d) With the permission of the court, both the branches can be

enforced

Ans.C

50. A contracts to sing for B at a concert for 1,000 rupees which are

paid in advance. A is too ill to sing-

(a) A is bound only to make compensation to B for the loss of the

profits which B would have made if A had been able to sing but not

bound to refund 1,000 paid in advance

(b) A is neither bound to refund 1,000 rupees paid in advance nor is

bound to make compensation to B for the loss of profits which B would

have made if A had been able to sing.

(c) A is not bound to make compensation to B for the loss of profits

which B would have made if A had been able to sing, must refund to B

the 1,000 rupees paid in advance

(d) A is not bound to make compensation to B for the loss of profits

which B would have made if A had been able to sing must refund to B

half of the amount paid in advance

Ans.C

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