Multiple Choice Questions on Indian Contract Act, 1872
1-An agreement
enforceable by law is- Contract.
2- Every promise and
every set of promises forming the consideration for each other is an-
Agreement.
3- Promises which
form the consideration or part of the consideration for each other are called-
Reciprocal Promises
5-Void agreement
signifies- Agreement not enforceable by law.
6- Offer is defined
under Section 2(a) is- Willingness to do or abstain from doing an act in order
to obtain the order to obtain the assent of other thereto.
7-Under Section 2(b)
if the person to whom the proposal is made signifies his assent the proposal is
said to be have been- Accepted.
8-A proposal when
accepts becomes- Promise under section 2(b).
9-When at the desire
of the promisor, the promise or any other person has done or abstained from
doing or promise to do or to abstain from doing something, such act or
abstinence or promise under section 2(d) is called- Consideration for the
promise.
10-Promises which
form the consideration or part thereof, for each other under section 2(f) are
called- Reciprocal Promise.
11-Every promise or
set of promises forming the consideration for each other under section 2(e) is
called- Agreement.
12-An agreement
enforceable by law at the instance of one party and not of other party under
section 2(i) is called- a voidable contract.
13-In a valid
contract proposal comes first.
14-Goods displayed in
a shop with a price tag is an- invitation to offer.
16-Communication of
proposal completes when it comes to the knowledge of the person to whom it is
made.
17-Communication of
acceptance is complete as against the proposer- When it is put in the course of
transmission to him so as to be out of the power of the acceptor.
18-Communication of
acceptance is complete as against the acceptor- When it comes to the knowledge
of the proposer.
19-Revocation of
offer by letter or telegram can be complete- When it is dispatched.
20-Acceptance to be
valid must- both be absolute & unqualified.
21-A contract which
ceases to be enforceable by law becomes void- When it ceases to be enforceable.
22-An acceptance can
be revoked- At any time before the communication of acceptance is complete as
against the promise.
23-A proposal stands
revoked-by communication of notice of revocation by the proposer, by the
failure of acceptor to fulfill a condition precedent, by death or insanity of
proposer to the knowledge of acceptor.
24-A proposal can be
accepted- by notice of acceptance, by performance of condition of proposal, by
acceptance of consideration for a reciprocal promise.
25-Enforceable
agreement- Made by free consent, parties to the contract are competent to enter
into an agreement, having lawful consideration and lawful object.
26-Competency to
contract both relates to- both age and soundness of mind.
28-Past consideration
both valid in Both in England & India.
29-An agreement not
to raise the plea of limitation is- Void
30-A letter of
acceptance sent by post is lost in transit- there is concluded contract as the
letter of acceptance is put in the course of transmission.
31-When the consent
to the contract is caused by coercion; the contract under Section 19 is-
Voidable.
32-When the consent
is caused by misrepresentation; the contract under section 19 is- Voidable.
33-Where both the
parties are under mistake as to matter of fact, the contract under section 20
is- Void.
34-When the consent
is caused by undue influence, the contract under section 19A is – Voidable.
35-Where one of the
parties is under a mistake of fact the contract is- Valid.
36-Consideration and
objects are unlawful where it is- forbidden by law or defeat the provision of
any law, which is fraudulent, which is immoral and against the public policy.
37-If only a part of
the consideration or object is unlawful, the contract under section 24 shall be
–Void.
38-A contract without
consideration under section 25 is- Void.
39-Consideration
should be something in return of promise which- both the law and parties
regard, as having some value.
40-If the proposer
prescribes the mode and manner of acceptance, the acceptance should be in
manner and mode prescribed.
41-Consent under
section 13 means- agreeing on the same thing in the same sense.
42-Agreements, the
meaning of which is not certain or not capable of being made certain under
section 29 is- Void.
43-An agreement in
restraint of trade is under section 27 is- Void.
44- An agreement in
restraint of trade is under section 27 is valid if it relates to Sale of Good
Will.
45-An agreement not
to pursue legal remedies to enforce the right under section 28 is- Valid.
46-An agreement to
refer the dispute to the arbitrator is valid- in respect dispute already
arisen, in respect of disputes which may arise in future.
48-An agreement
connection with horse racing under section 30 is- Valid.
49-An agreement in
restraint of marriage under section 26 is- Void.
50-An agreement shall
be void on account of- mistake of fact by both the parties.
51-Coercion which
vitiates free consent under section 15 is- Committing or threatening to commit
any act which is forbidden by law, Committing or threatening to commit any act
which is forbidden by IPC, Unlawful detain or threatening to detain any
property with an intention to causing any person to enter into an agreement.
52-Law of contract
primarily- specifies the circumstances in which promises are binding on the
parties to the contract.
53- A person is
deemed to be in a position to dominate the will of another by undue influence
if the mental capacity is affected temporarily or permanently by- reason of
age, reason of illness, mental or bodily distress.
54-An agreement to
remain unmarried is- Void.
55-A general offer
open for world at large can be accepted- by complying with the conditions of
offer.
56-The term consensus
ad-idem means- meeting of minds upon the same thing in the same sense.
57-Contract without
consideration made in writing and registered and made on account of natural
love and affection is –Valid.
58-Inadequacy of
consideration does make the contract- neither void nor voidable.
59-Agreement without consideration is
valid- When made out of love and affection due to near relationship, when made
to compensate a person who has already done something voluntarily and when it
made to pay time barred debt.
60-A Contract based on the happening or non-happening
of a future event under section 31 is called- Contingent contract.
61-A contingent contract becomes void when
the event becomes impossible.
62-A Contingent agreement based on an
impossible event under section 36 is Void.
63-A contingent contract based on the
specified uncertain event happening within a fixed time under section 35-
becomes void if the happening of that event becomes impossible before the
expiry of time fixed.
64-A contingent contract based on the
specified uncertain event not happening within a fixed time under section 35- can be enforced if the event does
not happen within the time fixed, can be enforced if before the expiry of time
fixed, it becomes certain that such an event shall not happen.
65-In case of joint promise, generally the
performance must be by- all other promisors jointly.
66-In cases of joint promise generally a
promise can compel- all the joint promisors to perform, any one of them to
perform, some of them to perform.
67-Generally, the joint promisors can- compel
each other to contribute equally.
68-Where one of them joint promisors makes
a default in contribution of performance- have to bear the loss in equal share.
69-In case of default by joint promisors
the promise- can sue any one of them for entire promise.
70-In case of death of joint promisor(s)
the promise- can enforce the contract against the survivor(s) of the said joint
promisor(s) alongwith the joint promisors who are alive.
71-A contract not specifying the place of
performance- the promisor has to apply to the promise for appointment of a
place of performance and perform the promise at that place.
72-If the time of performance of the
contract is the essence of the contract and the promisor fails to perform the
contract by the specified time- becomes voidable at the instance of the
promise.
73-If the time is not essence of contract
the failure to perform the contract by the specified time makes the contract-
remains valid but the promise can claim compensation for the loss suffered by
him by such failure.
74-Reciprocal promises provide for doing
certain things which are legal and certain others which are illegal, under
section 57- the first set is valid but second set is void.
75-Under section 62, the original contract
need not be performed if there is- novation of contract, rescission of contract
alteration of contract.
77-Benefits received by a party under a
void contract- is liable to restore the benefits to the party from whom the benefits
are received.
78-In contracts of sale of movable property-
time is presumed to be of the essence of the contract.
79-A contract can be discharged- by the
performance of the contract or by the frustration of the contract.
80-Novation of contract means- substitution
of new contract in place of original contract.
81-rescission of the contract means-
cancellation of contract.
82-Claim for necessaries of life supplied
to a minor under section 68- Can be enforced against the minor’s property or
estate.
83-In case of breach of contract,
compensation can be claimed under section 73- for the proximate and natural
consequences of breach.
84-A and B being traders, entered upon a
contract. A has private information of a change in price which would affect B’s
willingness to proceed with the contract- A is not bound to inform B.
85-Under the Indian Contract act
consideration may proceed from the promise or from any other person.
86-Under the Indian contract act a third
person who is the beneficiary under the contract can sue.
87-Executory consideration consist of
promise in future, liability is outstanding on both parties and is a promise
for promise.
88-An executed consideration- is an act or
actual forbearance against a future promise, liability is outstanding on one
side only and can be positive or negative.
89-Where the proposal & acceptance is
through letters, the contract is made at the place where the letter of
acceptance is posted.
90-In cases of general offer to public at
large- the performance of his part of the contracts amounts to acceptance.
91-A contract is voidable under section 21-
because of mistake as to foreign law on the part of both the parties.
92-In agreement in restraint of legal
proceeding if imposes total or partial prohibition shall be void.
94-An obligation under a contract stands
discharged- by proper performance, by dispensation with performance, by death
of the contracting party if the contract is personal in nature.
95-Under assignment of contract- benefits
under the contract can be assigned without the consent of other party, burden
under the contract cannot be assigned without the consent of other party.
96-In cases of refusal to perform by one
party, the other party can ignore the notice of refusal for the time being and
wait till the time when the contract is to be executed, can treat the
repudiation as wrongful putting an end to the contract and can waive his right
to rescission by acquiescence.
97-Under section 73 of the contract act-
special damages can be claimed if the party breaking the contract is made known
of the special circumstances at the time of contract.
98-Section 73 of the contract act applies
to contract- for sale of moveable properties and for sale of immovable properties.
99-In cases of general offer, for a valid
contract- the acceptor must have the knowledge of the offer before acceptance
by performance.
100-The principle, performance of a
condition is a sufficient without notification is contained in-Section 8.
101-No contract can arise if the acceptance
is made by an unascertained person.
102-An acceptance containing additions,
limitations or other modifications shall amount to rejection of the offer and a
counter offer.
103-A clause in the tender authorizing the
party inviting inviting tenders to terminate the contract at any time for
future supplies does not destroy the basis of the contract and the clause is
valid.
104-Presumption of undue influence can be
raised in cases of- apparently unconscious bargaining, relationship of parties
being such that one party is in position to dominate the will of the other and
contract with pardanashin lady.
105-Mere silence is not fraud unless there
is duty to speak, the silence is deceptive(kapat) there is change in the
circumstances to be brought to the notice of the party.
106-When a contract provides for a
specified sum in case of breach- it prescribes the maximum limit of liability.
107-Section 74 applies to where the
aggrieved party is seeking to recover a fixed amount on breach of contract.
108-The law relating to tender of
performance is laid down in- Section 37.
109-For a loan, when there is stringency in
money market, a banker asks for an unusually high rate interest, ‘A’ Accepts
the loan on these terms. This is- A transaction vitiated by Undue Influence.
111-‘A’ and ‘B’ agreed to marry each other
on a certain date and before that ‘A’ goes mad. ‘B’ cancelled the contract
& sued for damages- On account of ‘A’ going mad, the contract frustrated
& void. B has no right to sue for damages.
112-‘X’, a Delhi merchant & native of
Delhi entered into contract with ‘Y’, a Jabalpur merchant for the purchase of
50 quintals of Sitaphal. In Delhi Sitaphal is a vegetable, while Jabalpur it is
a fruit- the contract is void on account of mutual mistake as to the meaning of sitaphal.
113- If a promise accepts a anticipatory
breach committed by the promisor, then- the promise need not perform his part
of the contract and claim damages without till the date of performance.
114-‘A’ enters into contract with B for
which B is guilty of fraud. A can- set aside(radd karna) the contract &
recover damages.
115-An offer was sent by post, the acceptor
wrote ‘accepted’ on the letter, put it in his drawer & forgot about it. The
transaction is a- no agreement as the acceptance was never communicated to the
proposer.
116-An employer ask his employee to sell
his servant’s goods at a price for less than the market price. Servant can
avoid the contract on ground- Undue Influence.
117-The doctrine of impossibility of
performance rendering contracts void is based on- supervening impossibility.
118-A contract is signed between two
countries without specifying as to which country’s law shall govern in cases of
dispute- it shall be governed by the law of the country which the parties
intended to apply, i.e., where the contract is localized.
119-The damages under section 73 of Indian
Contract Act are- Compensatory.
120-The essence of liquidated damages is-
genuine pre-estimate of damages.
121- A contract of indemnity as a contract
by which one party promises to save the other party from the loss caused to him
by the conduct of the promisor himself or of any other person, has been
defined- under section 124
122-A contract of guarantee has been
defined- under section 126.
124-Creditor is a person to whom the
guarantee is given.
125-A guarantee can be oral or in writing.
126-Liability of surety is conditional on
default.
127-A valid guarantee can be given only if
there is a principle debt.
128-A guarantee to be valid- can only be a
of present debt, can be of a past debt if some further debt is incurred after the
guarantee, can be of future debt if some debt is incurred after the guarantee.
129-A guarantee obtained by
misrepresentation or concealment is –Invalid.
130-Guarantee of a minor’s debt is a valid
guarantee.
131-The liability of the surety is co-extensive
with that of the principle debtor.
132-Under the contract of guarantee, the
liability of surety- cannot be limited & has to extend to the whole of the
amount due from principle debtor.
133-A guarantee which extends to the series
of transactions under section 129 is called- a continuing guarantee.
134-A continuing guarantee applies to- a
specific transaction.
135-A continuing guarantee under section
130 is- revocable as regards future transaction.
136-The liability of surety on his death
under section 131 in case of continuing guarantee- stands terminated as regards
future transaction.
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