Contract Act objective questions With Answers

1. An agreement enforceable at law is a (a) enforceable acceptance (b) accepted offer (c) approved promise (d) contract

d

2. Every promise and every set of promises, forming the consideration for each other, is an (a) agreement

a

(b) contract

(c) offer (d) acceptance.

3. Promises which form the consideration or part of the consideration for each other are called (a) reciprocal promises

a

(b) cross offers (c) conditional offer (d) conditional promises. 4. An agreement not enforceable by law is stated to be void under (a) section 2(d) (b) section 2(e) (c) section 2(f) (d) section 2(g).

d

5. Void agreement signifies (a) agreement illegal in nature (b) agreement not enforceable by law

b

(c) agreement violating legal procedure (d) agreement against public policy. 6. Offer as defined under section 2(a) is (a) communication from one person to another (b) suggestion by one person to another (c) willingness to do or abstain from doing an act in order to obtain the assent of other thereto

c

(d) none of the above. 7. Under section 2(b) if the person to whom the proposal is made signifies his assent the proposal is said to have been (a) accepted

a

(b) agreed (c) provisionally agreed (d) tentatively accepted. 8. A proposal when accepted becomes (a) promise under section 2(b) (b) agreement under section 2(e) (c) contract under section 2(h) (d) none of the above.

a

9. When, at the desire of the promisor, the promisee or any other person has done or abstained from doing or, does or abstain from doing or promises to do or to abstain from doing something, such act or abstinence or promise under section 2(d) is called (a) reciprocal promise (b) consideration for the promise

b

(c) counter offer (d) acceptance. 10. Promises which form the consideration or part thereof, for each other under section 2(F) are called (a) acceptances for different proposals (b) agreements (c) reciprocal promises

c

(d) consideration. 11. Every promise or set of promises forming the consideration for each other under section 2(e) is called (a) reciprocal promise (b) contract (c) agreement

c

(d) none of the above. 12. An agreement enforceable by law at the instance of one party & not of other party under section 2(i) is called (a) a valid contract (b) an illegal contract (c) void contract (d) a voidable contract.

d

13. Which is correct (a) proposal + acceptance = promise (b) promise + consideration = agreement (c) agreement + enforceability = contract (d) all the above.

d

14. In a valid contract, what comes first (a) enforceability

a

(b) acceptance (c) promise (d) proposal. 15. Under section 2(c) promisor is the (a) person who makes the proposal

a

(b) person who accepts the proposal (c) person who makes the promise (d) person to whom the proposal is made. 16. Under section 2(c) promisee is the (a) person who makes the proposal (b) person who accepts the proposal (c) person who makes the promise (d) person to whom proposal is made. 17. Goods displayed in a shop with a price tag is an

b

(a) offer (b) invitation to offer

b

(c) counter offer (d) none of the above. 18. Tender is (a) an offer (b) an invitation to offer

b

(c) a counter offer (d) a promise. 19. Communication of a proposal is complete (a) when it is put in the course of transmission (b) when it comes to the knowledge of the person to whom it is made

b

(c) when the proposal is communicated to the person to whom it is made (d) all the above. 20. Communication of acceptance is complete as against the proposer (a) when it comes to the knowledge of the proposer (b) when it is put in the course of transmission to him so as to be out of power of the acceptor

b

(c) when the acceptance is communicated to the proposer (d) all the above. 21. Communication of acceptance is complete as against the acceptor (a) when it comes to the knowledge of the proposer

a

(b) when it is put in the course of transmission (c) when it is communicated to the acceptor that the acceptance has reached the proposer (d) when the proposer conveys the acceptance to the acceptor. 22. Revocation of offer by letter or telegram can be complete (a) when it is despatched (b) when it is received by the offeree

b

(c) when it reaches the offeree (d) both (a) and (c). 23. Acceptance to be valid must (a) be absolute (b) be unqualified (c) both be absolute & unqualified

c

(d) be conditional. 24. A contract with or by a minor is a (a) valid contract (b) void contract (c) voidable contract (d) voidable at the option of either party. 25. A contract which ceases to be enforceable by law becomes void

b

(a) when it ceases to be enforceable

a

(b) before it ceases to be enforceable (c) no such condition necessary (d) none of above. 26. An acceptance can be revoked (a) at any time before the communication of acceptance is complete as against the promisee (b) after its acceptance comes to the knowledge of the promisee (c) both (a) & (b)

c

(d) neither (a) nor (b). 27. A proposal stands revoked (a) by communication of notice of revocation by the proposer (b) by failure of acceptor to fulfil a condition precedent (c) by death or insanity of proposer to the knowledge of acceptor (d) all the above.

d

28. A proposal can be accepted (a) by notice of acceptance (b) by performance of condition of proposal (c) by acceptance of consideration for a reciprocal promise (d) all the above.

d

29. Enforceable agreements are the one (a) made by free consent (b) parties to the contract are competent to enter into an agreement (c) having lawful consideration & lawful object (d) all the above.

d

30. Competency to contract relates to (a) age of the parties (b) soundness of mind of the parties (c) both age & soundness of mind

c

(d) intelligence of the parties. 31. Which one of the following is correct (a) past consideration is no consideration (b) consideration can be past, present or future (c) consideration can only be present (d) consideration can only be present & future.

d

32. Past consideration is valid in (a) England only

a

(b) India only (c) both in England & India (d) neither in England nor in India. 33. An agreement not to raise the plea of limitation is (a) valid & binding (b) void

a

(c) voidable (d) illegal. 34. A letter of acceptance sent by post is lost in transit (a) there is a concluded contract as the letter of acceptance is put in the course of transmission (b) there is no concluded contract as the acceptance has not come to the knowledge of the proposer

b

(c) there is no concluded contract as the acceptance has not been communicated to the proposer (d) all the above. 35. When the consent to the contract is caused by coercion, the contract under section 19 is (a) valid (b) voidable

b

(c) void (d) illegal. 36. A's son forged B's name to a promissory note. B under threat of prosecuting A's son obtains a bond from A for the amount of the forged note. If B sues on this bond the court (a) has no jurisdiction in this case (b) must not set aside the bond (c) may set aside the bond

c

(d) none of above. 37. When the consent is caused by misrepresent-tation, the contract under section 19 is (a) valid (b) void (c) voidable

c

(d) illegal. 38. When the consent is caused by undue influence, the contract under section 19A is (a) valid (b) void (c) voidable

c

(d) illegal. 39. Where both the parties are under mistake as to matter of fact, the contract under section 20 is (a) voidable (b) void

b

(c) valid (d) illegal. 40. Where one of the parties is under a mistake as to matter of fact the contract is (a) valid (b) void (c) voidable

b

(d) illegal. 41. Considerations & objects are unlawful where it is (a) forbidden by law or defeat the provision of any law (b) which is fraudulent (c) which is immoral & against the public policy (d) all the above.

d

42. If only a part of the consideration or object is unlawful, the contract under section 24 shall be (a) valid (b) voidable (c) void

c

(d) illegal. 43. A contract without consideration under section 25 is (a) valid (b) voidable (c) void

c

(d) illegal. 44. Consideration should be something in return of promise which (a) both the law and parties regard, as having some value

a

(b) only law regards a having some value (c) only the parties regard some value (d) only adequate value necessary. 45. If the proposer prescribes the mode & manner of acceptance, the acceptance (a) can be in any manner & mode (b) should be in the manner & mode prescribed

b

(c) can be in any reasonable mode & manner (d) all the above. 46. Parties are not competent to contract if any of them is (a) minor (b) insane (c) declared unqualified (d) all the above.

d

47. Consent is free under section 14 if not caused by (a) coercion & undue influence (b) fraud and misrepresentation (c) mistake subject to the provisions of sections 20, 21 and 22 (d) all the above.

d

48. Consent under section 13 means (a) agreeing on the same thing in the same sense (b) agreeing on the same thing at the same time (c)agreeing on the same thing at different time

b

(d) agreeing on different things at different times. 49. A contract which is valid initially however, ceases to be enforceable subsequently, the contract (a) remains valid (b) becomes voidable when enforceable

Becomes void when it ceases to be enfor

(c) becomes void when it enforceable (d) becomes void since inception. 50. Agreements, the meaning of which is not certain or not capable of being made certain under section 29 is (a) void

a

(b) voidable (c) illegal (d) valid 51. An agreement in restraint of trade under section 27 is (a) valid (b) voidable (c) void

c

(d) unenforceable 52. An agreement restraint of trade is valid under section 27 if relates to (a) sale of goodwill

a

(b) mutual adjustment (c) business contingency (d) none of the above. 53. An agreement not to pursue any legal remedy to enforce the rights under section 28 is (a) valid (b) voidable (c) void

c

(d) unenforceable. 54. An agreement not to persue legal remedies but to refer the dispute to the arbitrator, under section 28 is (a) valid

a

(b) voidable (c) void (d) unenforceable. 55. An agreement to refer the dispute to the arbitrator is valid (a) in respect of disputes already arisen (b) in respect of disputes which may arise in future (c) both (a) & (b)

c

(d) neither (a) nor (b) 56. An agreement by way of wager under section 30 is (a) void (b) voidable (c) valid (d) unenforceable

a

57. An agreement in connection with horse- racing under section 30 is (a) unlawful (b) void (c) voidable (d) valid.

d

58. An agreement in restraint of marriage under section 26 is (a) void

a

(b) voidable (c) valid (d) unenforceable 59. If only a part of the consideration or object is unlawful, the contract under section 24 shall be (a) valid to the extent the same are lawful

a

(b) void to the extent the same are unlawful (c) void as a whole (d) valid as a whole. 60. An agreement shall be void on account of (a) mistake of fact by one party (b) mistake of fact by both the parties

b

(c) mistake of foreign law (d) both (a) & (b). 61. Coercion which vitiates free consent under section 15 is (a) committing or threatening to commit any act which is forbidden by law (b) committing or threatening to commit any act which is forbidden by Indian Penal Code (c) unlawful detaining or threatening to detain any property with an intention to causing any person to enter into an agreement (d) all the above.

d

62. What is correct of a standard form contract (a) it is a valid contract (b) one party has no choice but to accept & sign the contract (c) both (a) & (b)

c

(d) the consent is not a free consent. 63. Law of contract primarily (a) specifies the circumstances in which promises are binding on the parties to the contract (b) lays down certain norms by which the parties are bound (c) lays down the circumstances under which a promise may be made (d) all the above. 64. Misrepresentation under section 18 means

d

(a) a positive assertion, in a manner not warranted by the information of the person making it, not true but he believes it to be true (b) any breach of duty, which gains an advantage to the person committing it, by misleading another to his prejudice (c) causing a party to make an agreement to make a mistake as to the subject matter of contract (d) all the above.

d

65. 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 (a) reason of age (b) reason of illness (c) mental or bodily distress (d) all the above.

d

66. An agreement to remain unmarried is (a) valid (b) voidable (c) void (d) unenforceable.

c d

67. A general offer open for world at large can be accepted (a) by sending a communication of acceptance (b) by complying with the conditions of offer (c) by tendering himself to comply the conditions of offer

c

(d) none of the above. 68. The term consensus ad-idem means (a) general consensus (b) reaching an agreement (c) meeting of minds upon the same thing in( the same sense

c

(d) all the above. 69. Which one of the following does not amount to fraud (a) suggestion as a fact which is not true, by one who does not believe it to be true (b) active concealment of a fact (c) a representation made without knowing it to be false, honestly believing it to be true

c

(d) a promise made without any intention of performing it. 70. Contract without consideration made in writing & registered and made on account of natural love and affection is (a) void (b) voidable (c) valid (d) unenforceable.

c

71. Inadequacy of consideration does not make the contract (a) void

a

(b) voidable (c) unenforceable (d) neither void nor voidable. 72. Inadequacy of consideration is relevant in determining the question of (a) fraud (b) misrepresentation (c) undue influence (d) free consent.

d

73. Agreement without consideration is valid (a) when made out of love & affection due to near relationship (b) when made to compensate a person who has already done something voluntarily (c) when made to pay a time barred debt (d) all the above.

d

74. A contract based on the happening or nonhappening of a future event under section 31 is called (a) a contingent contract

a

(b) a wagering contract (c) a contract marked with uncertainty and hence void (d) none of the above. 75. A contingent contract to do or not to do anything on the happening of an uncertain future event under section 32 (a) is never enforceable (b) becomes enforceable only on the happening of that event

b

(c) enforceable since the time of making it (d) becomes enforceable in the immediate possibility of happening of that event. 76. A contingent contract (a) is void (b) never becomes void (c) becomes void when the event becomes impossible

c

(d) is voidable. 77. A contingent agreement based on an impossible event under section 36 (a) is void

a

(b) is void till the impossibility is known (c) becomes void on the knowledge of impossibility (d) all the above. 78. What is true of misrepresentation (a) it is the same thing as fraud (b) it renders the contract voidable (c) it may be due to innocence (d) both (b) & (c).

d

79. Two persons have the capacity to contract under section 11 (a) if both are major (b) if both are not of unsound mind (c) if none is declared unqualified to contract (d) all are correct.

d

80. A contract with minor is (a) voidable at the instance of the minor (b) voidable at the instance of other party (c) void

c

(d) valid. 81. An agreement to do an act impossible in itself under section 36 is (a) void

a

(b) valid (c) voidable (d) unenforceable. 82. A contingent contract based on the specified uncertain event happening within a fixed time under section 35 (a) remains valid even if the event does not happen within that fixed time (b) becomes void at the expiration of the time fixed (c) becomes void if the happening of that event becomes impossible before the expiry of time fixed (d) both (b) & (c).

d

83. A contingent contract based on the specified uncertain event not happening within a fixed time under section 35 (a) can be enforced if the event does not happen within the time fixed (b) can be enforced if before the expiry of time fixed, it becomes certain that such an event shall not happen

b

(c) cannot be enforced at all, being void (d) both (a) & (b). 84. A promisor can perform (a) the promise himself (b) the promise through his representa-tive competent to perform

b

(c) the promise through his representa-tive irrespective of the competency of that representative (d) both (a) & (b). 85. A promisee can accept the performance (a) from the promisor himself

a

(b) from the representative of the promisor competent to perform (c) from a third person (d) all the above. 86. In case of joint promise, generally the performance must be by (a) all the promisors jointly (b) any one of them individually

a b

(c) one not authorised to perform (d) none of the above. 87. In cases of joint promise generally a promisee can compel (a) all the joint promisors to perform (b) any one of them to perform (c) some of them to perform (d) all the above.

d

88. Generally, the joint promisors can (a) compel each other to contribute equally

a

(b) not to compel each other to contribute equally (c) cannot compel each other to contribute (d) none of the above. 89. Where one of the joint promisors makes a default in contribution of performance (a) the other joint promisors have no right against the defaulter

a

(b) have to bear the loss in equal share (c) not supposed to bear the loss (d) the contract becomes void to that extent. 90. In case of default by joint promisors the promisee (a) can sue any one of them for the entire promise (b) can sue any one of them to the extent of his share in the joint promise (c) both (a) & (b)

c

(d) cannot sue any single promisee. 91. In case of death of a joint promisor(s) the promisee (a) can enforce the contract against the survivor(s) of the said joint promisor(s) alongwith the joint promisors who are alive

a

(b) cannot enforce the contract against the survivor(s) of the said joint promisor(s) (c) both (a) & (b) (d) cannot enforce the contract against any of them. 92. In a contract not specifying the time for performance, the promisor can perform the contract (a) within any time howsoever long it may be (b) within the shortest time (c) within a reasonable time

c

(d) none of the above. 93. What is a reasonable time for performance of a contract (a) is a question of fact (b) is a question of law (c) is a mixed question of fact & law (d) is a question of prudence. 94. A contract not specifying the place of performance

a

(a) performed at any place to the knowledge of the promisee

a

(b) the promisor has to apply to the promisee for appointment of a place of performance & perform the promise at that place (c) the promisor need not seek any instructions from the promisee as to the place of performance (d) the promisor can perform the promise at a place other than the place appointed by the promisee. 95. In case the promisee prescribes the manner and time of performance of promise (a) the performance must be in the manner and at the time prescribed

a

(b) the performance can be in a different manner but at the time prescribed (c) the performance can be in the manner prescribed but at a time beyond the time prescribed (d) the performance need not be in the manner and time prescribed. 96. 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 (a) the contract becomes void (b) the contract remains valid (c) the contract becomes voidable at the instance of the promisee

c

(d) the contract becomes unenforceable. 97. If the time is not the essence of the contract the failure to perform the contract by the specified time makes the contract (a) void (b) voidable at the instance of the promisee (c) remains valid but the promisee can claim compensation for the loss suffered by him by such failure

c

(d) remains valid & can be performed at any subsequent time without being liable for the loss suffered by the promisee. 98. In contract for sale of immovable property the presumption is that the time is (a) the essence of the contract (b) not the essence of the contract (c) the essence of the contract but failure does not make the contract voidable (d) not the essence of the contract but makes the contract voidable at the instance of the other party. 99. Reciprocal promises provide for doing certain things which are legal & certain others which are illegal, under section 57 (a) the entire set of promises is void (b) the first set is voidable, but the second set is void

d

(c) the first set is valid but the second set is void

c

(d) the entire set of promises is valid. 100. A contract, performance of which becomes impossible or unlawful becomes (a) void when the performance becomes unlawful or impossible (b) void (c) voidable when the performance becomes impossible. (d) neither becomes void nor voidable

: Which of the following most accurately describes the requirements of a valid arbitration agreement under the Arbitration and Conciliation Act, 1996 (“the Arbitration Act, 1996”)? Options: (a) There is no need for parties to a dispute to frame an arbitration agreement under the Arbitration Act, 1996 (“the Arbitration Act”). (b) The parties need not concern themselves with the validity of the arbitration agreement. (c) The provisions of the Indian Contract Act, 1872 (“the Contract Act”), do not apply to such agreements. (d) The arbitration agreement must be valid as per the Contract Act, and the parties must be competent to contract. (e) The only requirement is that the parties must be competent to contract; all other requirements of validity under the Contract Act are unnecessary. : Which of the following most accurately describes the enforceability of an arbitral award? Options: (a) An arbitral award is not binding on the parties; they may choose to follow it if they so wish. (b) An arbitral award, unless set aside by a court of competent jurisdiction, is

b

enforceable in the same manner as a decree of a civil court. (c) An arbitral award can only be enforced if there is a specific direction from a court that it should be so enforced. (d) An arbitral award can be enforced, but only upon an application by the arbitrator to a court to do so. (e) An arbitral award cannot be enforced in the case of commercial disputes : Under the Arbitration Act, does the arbitrator have to provide reasons for the award? Options: (a) An arbitrator must always provide reasons for the award. (b) An arbitrator need never provide reasons for the award. (c) An arbitrator need only provide reasons for the award when specifically requested by the parties to do so. (d) An arbitrator must always provide reasons for the award, unless the parties have agreed that no reasons are to be given, or the award is an arbitral award on agreed terms. (e) An arbitrator must always provide reasons for the award, and the only exception to this rule is in the case of an arbitral award on agreed terms Which provision of the Code of Civil Procedure, 1980 (“the CPC”) specifically provides for the settlement of disputes through alternative dispute resolution? Options: (a) There is no specific provision of the CPC providing for alternative dispute resolution. (b) The CPC as a whole provides for alternative dispute resolution. (c) Section 89 of the CPC expressly provides for settlement of disputes through alternative dispute resolution.

(d) It is not the CPC, but rather, the Arbitration Act of 1987 which is the governing law on alternative dispute resolution in the country today. (e) Section 5 of the CPC expressly provides for alternative dispute resolution

mes void when it ceases to be enforceable