Objective Type Cpt Law

7/29/2019 Objective Type Cpt Law

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Chapter=1 Kinds And Nature Of Contracts

1. Which of the following is correct?a. Indian Contract Act, 1882b. Indian Contract Act, 1972c. Indian Contract Act, 1872d. Indian Contract Act, 18882. An agreement consists of reciprocal promises between at leasta. Four partiesb. Six Partiesc. Three Partiesd. Partially correct

3. Every contract is an agreement but every agreement is not a contract. Thisstatement is-

a. Wrongb. Correctc. Correct subject to certain exceptiond. Partially correct

4.

A Promises to deliver his watch to B and, in return, B promises to pay a sumof Rs. 2,000. There is said to be a/ana. Agreementb. Proposalc. Acceptanced. Offer

5. An Agreement is-a. Offerb. Offer + Acceptance + Considerationc. Contractd. Offer + Acceptance

6. Contract-a. Offer + Acceptanceb. Offer + Acceptance + Considerationc. Agreement + Considerationd. Agreement + enforceability at law.

7. K owns a residential flat in Chennai. He is entitled to quiet possession andenjoyment of his property. This is called

a. Rights in Personamb. Right against the whole world & is available to the ownerc. Constitutional Rightd. 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 Personamb. Constitutional Rightc. There is no right at all

9. A contract is said to be executed when it has been performed wholly ona. One sideb. Two sidesc. More than two sidesd. All of the above

10.Valid contracta. Are made by free consent


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b. Are those where the parties to the contract are competent to enterinto an agreement

c. Have lawful consideration & lawful objectd. All of the above.

11.A contract which ceases to be enforceable by law become voida. Before it ceases to be enforceableb. No, such condition is necessaryc. When it ceases to be enforceabled. When it becomes void.

12.A contract which is valid initially however ceases to be enforceablesubsequently-

a. Becomes void when it ceases to be enforceableb. Remains validc. Becomes voidable when it ceases to be enforceabled. Becomes void since inception

13.Contract, when ceases to be enforceable by law becomes a / ana. Unenforceable Contractb. Void Contractc.

Void Agreementd. Voidable contract

14.An agreement to commit a crime or a tort isa. Voidb. Voidablec. Validd. Unenforceable you cannot get it enforced in the court of law/

15.Agreement which do not create legal obligations can also b e considered ascontract.

a. Trueb. Partly truec. Falsed. None of the above

16.A invites B for his sons wedding. B accepts the invitation. In this case, thereis a / ana. There is no considerationb. There is no intention to create legal relationshipc. 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 inthe first attempt. S passed the exam in the first attempt, but F failed to paythe amount. S files a suit for recovery of the amount. State whether S canrecover the amount under the Indian Contract Act, 1872.

a. S can sue F for not honouring his wordsb. S has to pay Rs. 1 lakh to Fc. S has no remedy against Fd. S has to write exam again, to claim the reward

18.One of the clauses in an agreement wasThis agreement shall not belegally enforceable, but binding in honour only. In such case, theagreement is

a. Invalidb. Validc. Illegald. Infructuous


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19.One of the clauses in an agreement wasThis arrangement is not a formalor legal agreement, and shall not be subject to legal jurisdiction in a Courtof Law. In such case, the agreement is

a. Invalidb. Validc. Illegald. Infructuous20.In agreement of purely domestic/social nature, the intention of the parties

to create legal relationship isa. To b e proved to the satisfaction of the Courtb. Presumed to existc. Required to the extent of considerationd. Not relevant at all.

21.N obtained Ks acceptance by fraud. The contract can avoided at Ksinstance, this is a case of

a. Void agreementb. Voidable contractc. Unlawful contract (fraud is a civil wrong)d.

Void contract22.Voidable contract is one

a. Which is lawfulb. Which is invalidc. 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 enforcedbecause of certain technical defects. This is called a/an

a. Unilateral contractb. Bilateral contractc. Unenforceable contractd. Void contract

24.is without any legal effect and cannot be enforced in a Court ofLawa. Valid contractb. Void contractc. Unenforceable contract

25. is forbidden by law. The court will not enforce such a contract.a. Valid contractb. Void contractc. Voidable contractd. Unenforceable contract

26.When the agreement is not in written form, barred by limitation, etc. it isan example of

a. Valid contractb. Illegal contractc. Voidable contractd. unenforceable contract

27.A consignment is delivered at a wrong place. There is an implied conditionfor the recipient of return it, so that it can be delivered to the intendedconsignee. This is an example of

a. Express contractb. Implied contract


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c. Tacit contractd. Unlawful contract

28.D agrees to by Vs cycle by promising to pay cash on 15th July. V agrees todeliver the cycle on 20th July. This is a case of

a. Executed contractb. Executory contractc. Void contractd. 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 ofcontract on 16th July. This is an example o f

a. Void contractb. Illegal Contractc. Unilateral contractd. Bilateral contract

Answers.

1 C 6 D 11 C 16 A 21 A 26 B

2 D 7 B 12 A 17 B 22 B 27 D3 B 8 A 13 C 18 C 23 C 28 B

4 A 9 A 14 D 19 B 24 C 29 B

5 B 10 D 15 C 20 B 25 B 30 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 proposalwhen accepted becomes a/an..

a. Contractb. Agreementc. Promised. Offer

2. Silence cannot amount to offer by conduct.a. Trueb. Partly Truec. Falsed. None of the above

3. A Company announced a reward of 100 to anyone who contractedinfluenza after using its Smoke Balls for a certain period. Mrs. C used theSmoke Balls but contracted influenza. She claimed the reward but the

Company rejected her claim stating that she did not communicate heracceptance to the Company. Here:-a. Acceptance is not communicated and reward cannot be claimedb. Offer is not communicated and reward cannot be claimedc. Acceptance need not be communicated and reward can be claimedd. 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. ifthe house was Put through repairs and rooms were handsomelydecorated. Here, there is no offer since

a. There is no legal obligationb. There is no communication of offerc. Amount to a promised. Amount to acceptance5. 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. Illegalb. Voidc. Not voidd. Unenforceable

6. ..is expression of initial intention.a. Invitation of offerb. Offerc. Proposald. Acceptance

7.

Statement of lowest price at which the Vendor would sell his goodsconstitutes-a. A valid contractb. A implied contractc. An express contractd. No contract

8. Goods advertised for sale by auction, does not constitute a contract since-a. There is no contract with any person who attends the saleb. It is a social obligationc. There is no communication of offerd. There is not consent of the offeree

9. In a self-service departmental store, customers pick-up articles and takethem to the cashiers desk to pay. The Customers action in packing upparticular gods is a/an-

a. Invitation to offerb. Offerc. Bidd. Acceptance

10.In a self-service departmental store, a valid contract is concluded by offerand its acceptance, when-

a. Customers enter the Department Storeb. Customers pick up the articlesc. Customers take the articles to the Cashiers deskd. Proposals cannot be advertised, while advertisements cannot be

proposed.11.The different between an advertisement for sale and a proposal isa. No difference at allb. 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 thecontract at any time for future supplies

a. Destroys the very basis of the contracts and the clause is voidb. Makes the entire contract voidc. Makes the contract voidabled. Does not destroy the basis of the contract & the clause is valid.

13.A tender will be irrevocable wherea. Tenderer has, for some consideration, promised not to withdrawb. There is s statutory prohibition against withdrawalc. Either (a) or (b)d. Neither (a) nor (b)

14.When a tenderer offers to supply a definite quantity of goods it is called asa. Definite tenderb. Express tenderc. Standing tenderd. General tender

15.When a Tenderer offers to supply goods periodically or in accordance withthe requirements of the Offers, it is called as

a.

Definite Tenderb. Express Tenderc. Standing Tenderd. Implied Tender

16.There is a Counter-Offer-whena. The Offeree gives conditional acceptance or introduces a fresh term

in acceptance.b. The Offeror makes a fresh offerc. The Offeror makes some queryd. 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 Mb. May be accepted by Mc. Is irrationald. Is illegal

18.A wrotes to B, Will you buy my car for Rs.4.5 Lakhs? Reply by nextSunday. B communicates his acceptance on Monday next. In such case

a. A is not bound to Bs delayed acceptanceb. A is bound to Bs acceptancec. B has to make a Counter Offerd. 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 theshares. Is Xs action valid:

a. Yes shares cannot be allotted on the faith of letter written by Xb. Yes, share cannot be allotted in the second half of a calendar yearc. 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 only-a. When it comes to the knowledge of the person to whom it is madeb. 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 above21.An offer can be accepted by---

a. Notice of acceptanceb. Performance of condition specified in the offerc. Acceptance of consideration for a reciprocal promisesd. All of the above

22.Express offers and Acceptance may be proved by the agreement betweenthe parties but implied offers can be proved only bya. Wordsb. Conductc. Circumstantial evidenced. Prima facie evidence.

23.S sent his servant L, to trace his missing nephew. Later, S offered a rewardfor anyone who found out his missing nephew. L, ignorant of theannouncement, traced the boy. Subsequently, he claimed the reward,when he came to know of it. L is not entitled to the reward since-

a. No reward can be given for tracing missing persons.b. Offer was not made to an ascertained personc.

It is the servants duty to help his master.d. Revocation of the offer.

24.Performance of conditions of an offer; for the acceptance of anyconsideration for a reciprocal promise which may be offered with aproposal, is a/an-

a. Acceptance of the offerb. Rejection of the offerc. Couonter-offerd. Revocation of the offer.

25.A mere variation in the language which does not involve any difference insubstance would not make the acceptance ineffective.


26.F offers to sell his house to G for Rs. 20 Lakhs. G replies that he would buythe house provided his solicitor approves of Fs title to the house. The offerdid not contain any mention as to title. The acceptance is

a. Qualified, hence invalidb. Conditional, hence invalidc. Validd. Both (a) and (b)

27.M offered to sell his land to N for Rs. 70 Lakhs. N replied purporting toaccepts and enclosed Rs. 20 Lakhs, promising to pay the balance of Rs. 50Lakhs by monthly installments of Rs. 10 Lakhs eachin this case-monthly

installments of Rs.10 Lakhs each. In this case-a. There is no valid acceptanceb. The contract is voidable at Ms optionc. The contract is voidable at Ns optiond. There is a valid acceptance

28.Silence constitutes a valid acceptance only if-a. Offeree has, by his previous conduct, indicated that silence amounts

to his acceptance.


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b. Offer contains a term that Offerees silence will constituteacceptance

c. Both (a) and (b)d. Either (a) or (b)

29.Acceptance cannot be implied merely from silence of Offeree, even if it isexpressly state in the offer itself . In such cases, mere silence cannot

constitute acceptancea. Trueb. Partly truec. Falsed. None of the above

Answers

1. C 6 C 11 D 16 C 21 A 26 A

2 A 7 B 12 B 17 A 22 D 27 C

3 C 8 D 13 D 18 B 23 B 28 A

4 C 9 A 14 C 19 A 24 D 29 A5 B 10 B 15 A 20 C 25 A 30 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, theward Seek back. One condition limited the liability of Railway for anypackage to Rs. 100. The bag was lost, and passenger claimed Rs. 2,4000being its value, pleading that he had not read conditions. Can thepassenger win the case?

a. Yes, railway company cannot take undue advantageb. Yes, damages are payable for loss of propertyc. 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 theshipping Company from liability for loss of luggage. He never looked atthe back of the ticket and there was nothing on the face of it to draw hisattention to the terms on its back. He lost his luggage and sued fordamages. Can the passenger win the case?

a. Yes, Shipping Company cannot take undue advantage.b. Yes, passenger is not bound by something which was notcommunicated 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 place-

a. Where the acceptance is communicatedb. Where the offer was madec. From where the acceptance is made


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d. All of the above4. 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 mutuallyagreed between them. In such a case

a. The contract is in restraint of tradeb. The contract is contingentc. The contract is unenforceabled. There is not contract.

5. J engages M, an artist, to paint a portrait of his uncle and promises topay M Rs. 10,000 for the work. Later, K refuse to pay stating thatconsideration must move from his uncle. Which of the followingstatements is correct?

a. K is bound to pay Mb. K is not bound to pay Mc. Uncle is bound to pay Md. M cannot claim anything from K or his uncle.

6. As long as there is a consideration for a promise, it is immaterial whohas furnished

a.

Trueb. Partly Truec. Falsed. None of the above

7. Consideration must be something which the Promisora. is already bound to dob. is not already bound to doc. may voluntarily dod. must not do.

8. An Executory Consideration -a. Is an outstanding liability on both the partiesb. Consists of a promise I futurec. Is a promise Reciprocal promises.d. All the above.9. An Executory Consideration is -a. Consideration promised by the executive of a companyb. Consideration which consists simply of a mutual exchange of each

being a consideration for the otherc. Consideration which should be executed before the Registrard. Consideration which should be executed before the Court.

10.A promises to pay an existing debt punctually if, B, the creditor, giveshim a discount . Is this consideration valid?

a. Yes , it is genuine considerationb. No, promisor is already bound to pay punctuallyc. No, inadequate considerationd. Yes, enforceable consideration.11.Which of the following is good and valid consideration?a. Forbearance to sueb. Compounding, with Creditorsc. Compromise of Disputed Claimsd. All of the above

12.A Hindu husband by a registered document, after referring to quarrelsan 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. Theabove contract is void since-

a. Document is registeredb. Agreement is in restraint of marital dutiesc. Natural love and affection was missingd. Agreement has an illegal object

13.A promise made without consideration is valid if-a. It is promise to compensate wholly or in part, a person who hasalready voluntarily done something for the promisor

b. Something which the promisor was legally compellable to doc. Either (a) or (b)d. Neither (A) or (b)

14.X supports Ys infantson. Y promises to pay Xs expenses. The contractis-

a. Voidb. Illegalc. Validd. Unenforceable

15.K signs a written promise to pay L a time barred debt. At the time ofsigning the promise, the amount is not ascertained. Hence, k promisesto pay what is due, after taking accounts. The contract is-

a. Voidb. Illegalc. Validd. Voidable

16.No Consideration No Contract does not apply to completed gifts, i.e.gifts given and accepted.


17.If a person promises to contribute to charity and on this faith, thepromise undertakes a liability to the extent not exceeding the promisedsubscription, the contract shall be valid.


18.A promised to pay B, who had received summons, to appear at a trail ina civil suit, a certain sum being a compensation for loss of time duringhis attendance. The promise is void since-

a. Object is immoralb. Consideration is illusoryc. Agreement is in restraint if legal proceedingsd. All of the above

19.If only a part of the consideration or object is unlawful, the contract is-a. Valid to the extent the same are lawfulb. Void to the extent the same are unlawfulc. 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 theconsideration of that contract-


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a. Cannot enforce that contractb. Can enforce that contractc. Can enforce that contract subject to certain exceptionsd. Can wait for the parties to perform the contract.

21.Under the Indian Contract Act, a stranger-a. To the contract cannot sueb. To the contract can sue22.Only those persons, who are parties to a contract, can sue and be sued

upon the contract. This Rule is called the doctrine of-a. Promissory Estoppelsb. Right of Privilege Suitc. Privities of contractd. Rights in Rem.

23.A who is indebted to B, sells his property to C. C promises to pay off thedebt to B, when C fails to pay B has no right to sue C, because-

a. The object is unlawfulb. There is no consideration between B and Cc. B is a stranger to Contract between A and Cd.

The consideration is inadequate24.In which of the following situations, a stranger to contract can file a valid

suit?a. Assignment of a contractb. Contracts entered into through an Agentc. Covenants running with landd. All of the above.

25.Marriage Settlement, Partition and other Family Arrangements can beenforced by beneficiary who is not a party to the contract, only if suchagreement is-

a. Registeredb. Reduced to writingc. 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. Trueb. Partly truec. Falsed. None of the above

27.The purchaser of immovable property who has notice that the owner ofthe land is bound by certain conditions or covenants created by anagreement affecting the land, shall be bound by such conditions, eventhough he is not a party to the original agreement containing thoseconditions or covenants.


28.A husband who was separated from his wife executed a separationdeed by which he promised to pay the Trustee all the expenses for hermaintenance. The agreement created a trust in favour of his wife. Theagreement is-

a. Void due to lack of consideration


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b. Valid and could be enforced by the wifec. Valid but not enforceable by the wifed. Void but Court can entertain a petition by the Wife.

29.Two brothers, on partition of family joint properties agreed to invest inequal shares for their mothers maintenance. There was no separateagreement with the mother. In such case, the mother

a. Cannot enforce the contractb. Can sue for setting aside the partition.c. Is entitled to require her sons to make the investmentd. Is entitled to the entire property.

Answers

1 D 6 A 11 D 16 A 21 C 26 C

2 B 7 B 12 C 17 A 22 C 27 A

3 C 8 D 13 C 18 B 23 C 28 B4 D 9 B 14 C 19 D 24 D 29 C

5 A 10 B 15 A 20 C 25 B

Chapter-4 Capacity to Contract

1. A convict when undergoing imprisonmenta. Is capable of entering into a contractb. Is incapable of entering into a contractc. Is capable of entering into a contract, if it is permitted by the lawd. Is capable of passing on consideration

2. A corporation cannot enter into contracts that are-a. Ultra vires its Memorandum of Associationb. Strictly of a personal nature as it is only an artificial personc. Either (a) or (b)d. Neither (a) or (b)

3. The age of majority for the purpose of the Indian Contract Act isa. 16 years for girls & 18 years boysb. 18 years girls & 21 years for boyc. 18 yearsd. 21 years

4. Parents of Guardian shall.for branch of contract by Minor.


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a. Be held liableb. Not be held liablec. Be imprisonedd. Not be questioned

5. D, a Minor, entered into a contact for borrowing a sum of Rs. 20,000 out ofwhich lender paid him sum of Rs. 8,000. D executed mortgage of propertyin favour the lender. The mortage is-

a. Valid to the extent ofb. Valid to the extent of Rs. 20,000c. Totally invalidd. Validated on attaining majority

6. Identify the incorrect sentence from the following.a. A Minor can be a beneficiaryb. A Minor can be admitted to the benefits of a Partnershipc. A Minor cannot plead minorityd. A Minor can be held liable in tort.

7. A Minor speculated in the Stock Exchange and became liable to StockBrokers 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. 90,000c. Minor is liable for Rs. 10,000d. Minor is not liable for any amount.8. 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 circumstances-

a. The mortage is not enforceable by A, because he is a minorb. The mortage is enforceable but only when he attains majorityc. The mortage is enforceable by a even though he is a Minord. There is no mortage at all.

9. When a contract is entered in on behalf of a Minor by hisParents/Guardians/Manager of his estate, it can be specifically enforced byor against the minor if the contract is

a. Within the scope of the authority of the Parent/Guardian/Managerb. For the benefit of the minorc. Either (a) or (b)d. Both (a) or (b)


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10.The Principle of Estoppel cannot be applied against a Minor since-a. He has no sound mindb. He has no privilege to cheat persons by making any representationc. He will be induced by dishonest traders to declare in writing that he

is major at the time of entering in a contractd. He has not attained the age of majority.

11.Parents or Guardian shall be liable to creditors when the Minor is acting asagent of the Parents or Guardian.


12.Education and Marriage of a Female have also been hele do be necessariesin India

a. Trueb. Partly true falsec. 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 necessaryprosecution

c. Leading money to a Minor for paying his Creditors in respect ofhorse racing & betting debtsd. 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 educationb. Provision of medical and legal advicec. 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 coatsb. Minors property can be attached for payment


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c. Minor is liable since he has misled N into supply of coatsd. Minor or his property is not liable at all.

16.A person who is usually of unsound mind, but occasionally of sound minda. May enter into a contract when he is of sound mindb. May not make a contract even when he is of sound mindc. 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, maycontract during those intervals.

a. Trueb. Partly truec. Falsed. None of the above.

18.A sane man who is delirious from fever or who is so drunk that he cannotunderstand terms of a contract or form a judgment, cannot contract whilesuch delirium or drunkenness lasts


19.Whether a party to a contract, at the time of entering into a contract, is ofsound mind or not is a question of fact to be decided by the Court


20.consensus-ad-idem means-a. General consensusb. Meeting of minds upon the same thing in the same sensec. Reaching an agreementd. Reaching of contract

21.Inadequacy of consideration is relevant in determining the question ofa. Capacity of partiesb. Possibility of performancec. Legality of objectd. Free consent

22.Coercion, if employed..does not amount of free consent


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a. At a place where Indian Penal code is not in forceb. At a place where Indian Penal Code is in forcec. Either (a) or (b)d. In the court

23.A person is deemed to be in a position to dominate the will of another ifa. He holds a real or apparent authority over the otherb. He stands in a fiduciary relation to the otherc. 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. Validb. Voidc. Voidabled. Illegal

25.An illiterate old woman made a gift deed of practically her entire propertyto he nephew whom managed her affairs. The gift can be set aside on the

ground of

a. Mistakeb. Coericionc. Fraudd. Both (a) and (b)26.The burden of proof that consent was obtained by undue influence lies ona. 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 toassume that one relation was in a position to dominate the will of another.


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


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b. Active concealment of Fact by one having knowledge or belief of thec. Promise made without any intention of performing itd. All of the above

29.Active concealment of a fact by one having knowledge or belief of the factis an example of

a. Fraudb. Coercionc. Mistaked. Undue influence

30.When a person positively asserts that a fact is true when his informationdoes not warrant it to be so, though he believes it to be true, there is

a. Misrepresentationb. Fraudc. Undue influenced. Coercion.

Answers

1 D 6 C 11 A 16 A 21 D 26 A

2 C 7 D 12 A 17 A 22 C 27 A

3 C 8 C 13 C 18 B 23 C 28 D

4 D 9 D 14 D 19 A 24 C 29 A5 C 10 D 15 D 20 B 25 D 30 A

Chapter-5 Free consent

1. Under English Law, if the threat is in relation to goods or property ofanother person, it is not duress.


2. A Carrier Company refuses to deliver certain goods to the consignee, exceptupon payment of an illegal charge for carriage. The Consignee pays the sum

charged and obtains the goods. In this case


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c. Fraudd. Misrepresentation

8. Which of these does not constitute Fraud?a. Promise made without any intention of performing itb. Physical threat to the person or property of anotherc. Any act fitted to deceived. 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 notc. Amounts to undue influence

10.Mere silence as to facts, likely to affect the willingness of a person to enterinto a contract is not Fraud.


11.Duty to speak exists in casea. Where the parties stand in a fiduciary relationshipb. 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 damagesd. All of the above

13.In which of the following cases, the contract cannot be avoided on groundof fraud?

a. A fraud which did not cause the consent of the party to theagreement.


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b. Where the consent was caused by silence amounting to fraud, if theparty 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.


15.X brought shares in a company on the faith of a prospectus that containedan untrue statement as to the Directorship of J, X had never heard of J andhence 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 thetruth. It was held by the Supreme court that

a. There was fraud by the candidateb. There was no fraud by the candidatec. There was misrepresentationd. There was mistake on the part of the candidate

17.Misrepresentation need not be made directly to the person involved. Awrong statement of facts made to a third person with an intent to

communicate it to the party involved amounts to misrepresentation


18.Where consent is caused by Fraud or Misrepresentation, the aggrievedparty can sue for damages.


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19.The contract cannot be rescinded on grounds of misrepresentationa. If the party takes a benefit under the contract, or in some other wayaffirms the contract, after coming to know of such misrepresentation

b. Where restoration of the original position is not possiblec. Where a third party h as acquired rights in the subject matter for

value and in good faith.

d. All of the above20.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 misrepresentationb. No, P is guilty of fraudc. 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 jewellers shop and chose some jewels. The jewelerwas 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. Illegalb. Validc. Voidd. Voidable

22.An old illiterate man was made to sign a bill of exchange, by means of afalse representation that it was a guarantee. The contract is

a. Illegalb. Validc. Voidd. Voidable

23.A contract can be avoided on grounds of unilateral mistake if such mistakerelates to the nature of the contract, and not to the terms of the contract.

a. Trueb. Partly truec. False


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d. None of the above24.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 casea. Cundy has good title to goods and can retain themb. 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, Cundys title is defective.

25.S knew that on account of his critictism of plays in past, he would not beallowed 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 thetheatre, he sued for damages for breach of contract.

a. S is entitled to damagesb. S is entitled to enter the theatrec. There is a valid contract between the theatre company and Sd. There is no contract between the theatre company and s.

26.Cundy vs. Lindsay Case deals witha. Coercionb. Undue influencec. Mistake as to the nature of transactiond. Mistake as regards identity.

27.An agreement is void when there isa. Mistake to fact by both the partiesb. Mistake of fact by both the partiesc. Mistake of foreign lawd. All the above

28.Bilateral Mistake as to fact renders an agreement void sincea. There is no considerationb. 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. Unknownto both the parties, the original painting was stolen and its copy was placed

there. The contract is void on the grounds of :


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a. Bilateral mistake as to quality of the subject matterb. Unilateral mistake as to quality of the subject matterc. Mistake as to lawd. Mistake as to identity of art items

30.P wrote to H inquiring price of rifles suggesting that he might buy as manyas 50. On receipt of information, he telegraphed, Send three rifles. Due totelegraphic mistake message was transmitted as Send the rifles. H

dispatched 50 rifles. In this case:

a. There is no contractb. There is a valid contractc. He has to accept the loss on 50 riflesd. He has to accept the loss on 3 rifles.

1 A 6 C 11 C 16 B 21 B 26 D2 A 7 A 12 D 17 A 22 C 27 B

3 C 8 B 13 D 18 B 23 A 28 C

4 B 9 A 14 A 19 D 24 D 29 A

5 C 10 A 15 C 20 C 25 D 30 A

Chapter-6 legality of object and consideration

1. Amar promises to drop prosecution which he has institute against Balu forrobbery. Balu promises to restore value of things taken. The agreement is

valid on grounds

a. Contingmentb. Validc. Voidabled. Of stifling prosecution

2. Arun estate is sold for arrears for revenue. As per the Act, the defaulter isprohibited 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. Legalb. Validc. Voidable


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d. Void3. Which of the following agreements are valid?

a. Uncertain agreementsb. Wagering agreementsc. Agreements contingent upon in possible events.d. None of the above

4. 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)

5. Of the following agreements which one is not void?a. Agreement without considerationb. Agreement in restraint of marriagec. Wagering agreementd. Agreement with a handicapped person

6. In case of a void contract, there is no legal remedy for the parties to thecontract.

a. Trueb. Partly truec. Falsed. None of the above.7. 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 Realjewellery

b. Void with regard to limitation jewellery; and valid as regards RealJewellery.

c. Wholly voidd. Fully valid.

8. Trade Combination agreements like opening and closing of businessventures, 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


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9. If the seller agrees to supply all the goods produced by him to a certainbuyer and to nobody else, and Buyer also, in turn, undertakes to accept the

whole of the quantity, the agreement is---

a. Void agreementb. Solus agreementc. Illegal agreementd. Unlawful agreement

10.An employer can restrain his employee from acting in theatre plays or inperforming an art, during the course of his employemt.


11.An agreement in restraint of legal proceedings, if it imposesa. Total prohibition shall be voidb. Total or partial prohibition shall be voidc. Partial prohibition shall be validd. 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 byway 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 orin respect of any contract on the expiry of a specified period so as to

restrict any party from enforcing his rights is

a. Voidb. Enforceablec. Validd. Voidable

14.An express agreement between parties to vest jurisdiction to refer anydispute to a specified Curt amounts to contracting against statute and

hence void.

a. True


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b. Partly truec. Falsed. None of the above.

15.An agreement between two parties to refer to arbitration, any questionbetween them that has already arisen is valid

a. If it can be inferred by conduct of partiesb. If it is in writingc. 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 befair ad reasonable. However, N dissatisfied with payment made by M

wanted to sue hm. Ns suit will be

a. Validb. Invalidc. Restricted only to payment of remuneration and not damagesd. Restrict only to damages and not remuneration

17.A agreed to pay a certain sum when he was able to pay. The agreement isvoid on grounds of

a. Inadequacy of considerationb. Agreement to agree in futurec. Uncertaintyd. All of the above

18.A agrees to sell to B, 200 tons of oil. A deals only in coconut oil. Theagreement isa. Validb. Void due to uncertainly of meaningc. Illegald. Opposed to public policy

19.Illegal agreements area. Not enforceable by lawb. Forbidden under lawc. Either (a) or (b)d. Both (a) or (b)

20.The maximum in pari delicto, portior est. conditio defendentis meansa. The defendant can be pardoned if his condition demands sob. The defendant has to prove his innocence beyond doubt.c. In cases of equal guilt, the defendant is in a better position.


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d. The law assumes that the defendant is innocent.21.Monies paid or properties transferred under illegal agreements

a. Can be recovered in all casesb. Can be recovered only if they exist in speciec. Cannot be recovered unless court directs sod. Cannot b e recovered at all.

22.In wagering agreements neither party should have interest in thehappening (or non-happening) of the event other than

a. His honour or prestigeb. The sum or stake he stands to win or losec. Either (a) or (b)d. Both (a) or (b)

23.where a person enters into a wagering transaction through an agent, andthe agent fails to carry out the Principals instructions?

a. Principal can sue Agent for breach of contract of agencyb. Principal cannot sue Agent for breach of contract of agencyc. Principal can sue Agent for damagesd. Principal can sue Agent to recover the betting moneys paid.

24.A, in Mumbai, bets with B and loses. A applies to C for a loan in order to payB. C gives the loan to a to enable him to pay B. In this case

a. C can recover the amount of loan from Ab. C cannot recover the amount of loan from Ac. C can recover the amount from Bd. C can recover the amount from A or B

25.Transactions for sale and purchase of stocks and shares or for sale anddelivery of goods, with a clear intention only to settle the price difference

are

a. Wagering Agreementsb. Not Wagering agreementsc. Contingent Contractsd. Voidable Agreements

26.As per the Prize Competition Act, 1955, prize competitions in game of skillare not wagers provided the prize money does not exceed

a. Rs.10b. Rs.100c. Rs.1,00d. Rs. 10,000


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27.Where a wagering transaction amounts to a lottery, it isa. Validb. Enforceablec. Illegal as per sec.294-A of the Indian Panal Coded. Voidable28.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.


29.An agreement to buy a ticket for a lottery is not a Wagering Agreement.a. Trueb. Partly truec. Falsed. None of the above

30.Government authorized Lottery isa. A crime and hence punishableb. Void and unenforceable transactionc. Legal but not enforceable transactiond. Enforceable transaction

Answers

1 D 6 A 11 B 16 B 21 D 26 C

2 D 7 A 12 D 17 C 22 B 27 C

3 D 8 B 13 A 18 A 23 B 28 A

4 C 9 B 14 C 19 D 24 B 29 C

5 D 10 C 15 B 20 C 25 A 30 D

Chapter-7 Performance of contract


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1. A sum of money was agreed to be paid to the father in consideration ofbreaking his daughter in marriage. The agreement is void o grounds of

being

a. Restraint of Marriageb. Marriage brokerage contractc. Restraint of personal libertyd. Restraint of legal proceedings

2. When the performance of a contract becomes impossible, the purposewhich 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 frustrationb. Initial impossibilityc. Unlawful considerationd. All of the above

3. One cannot plead doctrine of frustration for ones own in action.a. Trueb. Partly truec. Falsed. None of the above

4. A musical hall was agreed to be let out on certain dates, but before thosedates the hall was destroyed by fire. The contract becomes void on the

ground ofa. Impossibility of performanceb. Illegality of objectc. Unlawful considerationd. All of the above

5. A stationer agreed to supply white paper at a single rate contracted for oneyear. 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 commerciallyimpossible of performance

b. Stationer can claim that contract had become commerciallyimpossible of performance.

c. Stationer can claim revision of contract rates.d. All of the above.


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6. Unconditional contracts are called----------------contracts.a. Unenforceableb. Contingentc. Quasid. None of the above7. The collateral event to a Contingent Contract should be a/ana. Uncertain Eventb. Certain Eventc. Either (a) or (b)d. Neither (a) or (b)

8. Contracts contingent upon the happening of an certain Future Event cannotbe enforce by law

a. At allb. Unless and until such an event has happenedc. Unless and until such an event has not happenedd. At the option of the Promisor

9. A agrees to pay B a sum of money if a certain ship does not return. The shipis sunk. The contract can be enforced

a. When the ship sinksb. Before the ship sinks.c. When the ship returnsd. 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 contracta. May be enforced if the ship returns within the yearb. 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 Eventwithin a fixed time, can be enforced by law

a. When time fixed has expired and such event has not happenedb. 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 atan unspecified time of future.


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13.A agrees to pay B a sum of money if b marries C. But C marries D. althoughit is possible that D may die and that C may afterwards marry B, themarriage of B and C

a. Will be considered unlawfulb. Will be considered impossiblec. Will be considered contingentd. Will be considered necessary

14.All Wagering Agreements and contingent contracts are void.a. Trueb. Partly truec. Falsed. None of the above

15.Every contingent contract is calid and enforceable until it becomes voida. Trueb. Partly truec. Falsed. None of the above

16.Wagering Agreements is valid contracta. Wagering Agreementb. Is a game of chancec. Is a voidable contractd. Is a quasi-contract

17.A is not a game, but contingent upon the happening or non-happening of a uncertain future event.

a. Wagering Agreementb. Quasi contractc. Continous Contractd. Contingent Contract

18.In a Wagering Agreement, the future event is the ..in determiningthe agreement.

a. Primary factorb. Collateral aspectc. Either (a) or (b)


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d. Both (a) or (b)19.In a contingent contract, the future event is the..in determining the

agreement

a. Primary factorb. Collateral aspectc. Either (a) or (b)d. Both (a) or (b)

20.Every contingent contract is necessarily a Wagering agreement.a. Trueb. Partly truec. Falsed. None of the above

21.The parties to a contract need not perform when the performance isa. Dispensed withb. Excused under the provisions of any lawc. 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 legalrepresentatives of A.

b. The contract becomes impossible due to the death of A.c. The contract can be enforced against As representatives and B isbound to pay Rs. 50,000 to As representatives.d. The contract is illegal.

23.Upon an offer of performance by the Promisor, if the Promisee neglects toprovide or does not provide reasonable facilities for performance, the

promisor is

a. Bound to offer performance againb. Excused by such neglect or refusal as to any non-performance caused

thereby

c. Not entitled to remunerationd. Not entitled to sue the Promisee

24.An offer of performance is known asa. Offerb. Proposalc. Tender


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d. Acceptance25.R contracts to deliver 100 bags of Basmati Rice at Ts godown on a specified

date. T should bring the whol lot of 100 bags to Ts 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. Sucha tender is

a. Invalidb. Unenforceablec. Validd. Void

26.Where the Promisor has offered to perform his promise to thePromisee/any one of Joint Promisee, and the promise refuses to accept his

performance

a. Promisor is not responsible for non-performanceb. Promisor does not lose his rights under the contractc. 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 performanceb. Promisor has disabled himself from performing his promise in

entirely

c. Promisor has refuse to perform his promise in entirelyd. 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 nights 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 contractb. B cannot put an end to the contract but can claim damages from Ac. The contract is left at the liberty of Ad. The contract is unlawful

29.Only the Promisor should perform the promise personally in the followingsituations

a. Where the parties intendedperformance of the promise by thepromisor himself


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b. Where performance involves the exercise of personal skills by thePromisor

c. Where the promise is founded on personal confidence between theparties.

d. All of the above.30.A Promises to deliver 10 bags of wheat to B. In case of As death beforeperformance, As representatives

a. Are not bound by the promiseb. 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 contractAnswers

1 B 6 D 11 C 16 B 21 C 26 C

2 A 7 A 12 A 17 D 22 C 27 D

3 A 8 B 13 B 18 A 23 B 28 B

4 A 9 A 14 B 19 B 24 C 29 D

5 A 10 C 15 A 20 C 25 C 30 C

Chapter-8 Discharge of Contract

1. A , B and C jointly promise to pay D Rs. 3,000. D may compela. A, B and C jointly to pay him Rs. 3,000b. A to pay him Rs. 3,000c. A or B or C to pay him Rs. 3,000d. 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 entitledto claim contribution from other partners when he pays the debt of the

firm.



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3. K sued some of the Partners of A firm ABC Co., for damages, but then hesettled 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 liabilityb. X has to bear the entire loss arising out of Ys insolvencyc. X and Z have to bear equally, the loss arising out of Ys 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 timeb. Within a reasonable timec. Within the stipulated timed. Within the shortest time.

6. Reasonable time for performance of a contract is aa. Question of lawb. Question of factc. Mixed question of fact and lawd. Question of prudence

7. A promises to deliver goods at Bs warehouse on the 1st January. On thatday, A brings the goods Bs 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 promiseb. A kept his promise as time was not specified.c. A performs his duty as time is not the essence of the contractd. All of these.

8. Where the terms of agreement openly state that a particular act as regardsfurtherance 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. Trueb. Partly true


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c. Falsed. None of the above

9. B owes A Rs. 50,000. A desires B to pay the amount to As account with C, abanker. B who also banks with C orders the amount to be transferred from

his account to As credit and this is done by C. Subsequently before A knowsof the transfer, C fails. In this case

a. B has not paid A properlyb. There has been a good payment by B.c. It is As 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 As goods in reduction of debt. Insuch case, the delivery of goods

a. Operates as a part of the paymentb. Does not reduce As liability to Bc. Is against the provisions of Contract Actd. Is without any consideration.

11.In contract of sale of movable properties, time isa. Not presumed to be the essence of the contractb. Presumed to be the essence of the contractc. No presumption as to time can be raised. All of the above

12.A and B contract that A shall hand over his stock in trade to B at a fixedprice, and B promises to give security for payment of money. As promiseneed 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.


13.A and B agree that A shall sell his house to B for Rs. 10 lakhs; but if B isgoing to use it is a gambling house, he shall sell it for Rs. 50 lakhs. In thiscase

a. Promise of selling the house and paying Rs. 10 lakhs is a validcontract.

b. Promise of selling the house where B is to use it for an unlawfulpurpose, is a void agreement.


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c. The whole contract is validd. Both (a) and (b) are correct.

14.The Creditor may also, until he has declared the appropriation to theDebtor, alter the appropriation


15.Where the Debtor does not expressly intimate or where the circumstancesattending on a payment do not indicate intention, the Creditor may apply it

to

a. Any disputed debt dueb. Any lawful debt duec. To the last debtd. To the first debt

16.Where neither the creditor or debtor makes any appropriaction and thereare many debts of equal standing in the orders of time, payment shall be

applied in discharge of

a. The smallest debtb. The largest debtc. Each proportionallyd. Any debt to which the amount tallies.

17.A contract can be discharged by performance in which of the followingways?a. Actual performanceb. Offer to perform i.e. tenderc. 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 theamount as Rs. 50,000. A is liable to pay

a. Rs. 5,000b. Rs. 50,000c. Rs. 45,000d. Not liable at all.

19.A Bill of Exchange which was accepted by K, reaches Ks hands after beingnegotiated and endorsed through 4 other parties. The contract is

a. Void


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b. Dischargedc. Rescindedd. Voidable 8

20.In discharge of contract by novation, the consideration for the new contractis

a. The discharge of the Original Contractb. To be separately identifiedc. To be decided by the parties.d. All of the above.

21.Partial Rescission of a contract occurs where the original contract is variedby

a. Rescinding some terms of the contractb. Substituting new terms for those rescindedc. 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 canget back on the original contract.


23.A promises to supply 50 sets of Mens Suit of a particular type to B threemonths hence. By that time there is no demand for those suits. A and B canrescind the contract. This is called.

a. Mutual Rescissionb. Breachc. Impossibility of performanced. Revocation of proposal

24.A contracts with B to supply certain goods at Bs warehouse by 15th Mayand 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 bya. Alteration of contractb. Novation of contractc. Remission of contractd. Rescission of contract


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25. A owes B Rs. 50,000. Due date of payment is 25 th 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 promiseb. Extension time of performancec. Acceptance of any other satisfaction instead of performance.d. All of the above

26.No consideration is necessary for a waiver.a. Trueb. Partly truec. Falsed. None of the above

27.Novation can be made bya. Change in the terms of the contractb. Change in the contracting partiesc. Either (a) or (b)d. Neither (a) or (b)

28.In case of Novationa. Old contract need not be performedb. New contract must be performedc. Both (a) and (b)d. Neither (a) or (b)

29.In case of Alterationa. Old term and conditions need not be performed.b. New terms and conditions must be performedc. Both (a) or (B)d. Neither (a) nor (b)

30.Breaking of an obligation which one is bound to do under a contract iscalled

a. Avoidanceb. Breachc. Voidabilityd. Rescission


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Answers

1 D 6 B 11 B 16 C 21 D 26 A

2 A 7 A 12 A 17 C 22 A 27 C3 B 8 A 13 D 18 A 23 A 28 C

4 C 9 B 14 A 19 B 24 A 29 C

5 B 10 A 15 B 20 A 25 A 30 A

Chapter-9 Remedies For Breach Of Contract

1. A agrees to deliver 100 bags of sugar to B at a certain price on 1 stSeptember. 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 performanceb. Anticipatory Breach on the due date of performancec. Actual Brach during the course of performanced. Anticipatory Breach during the course of performance

2. Where in an anticipatory breach, the promise opts to put an end to thecontract 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 fullyc. has to perform his part of the promise fullyd. has to consider the contract as illegal.

3. Where in an anticipatory breach, the Promisee opts to put an end to thecontract 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 performanceb. Immediately without waiting till date of performance.c. (a) or (b) whichever is earlierd. (a) or (b) whichever is later.

4. Incase of anticipatory breach, where the Promisee electsto keep thecontract alive, if during the time the contract remains open, some event

happens discharging the Promisor from his liability, the Contract becomes

a. Illegal


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b. Voidc. Voidabled. Contingent

5. In case of anticipatory breach, where the Promisee opts to keep thecontract alive till the actual date of performances, the amount of damages= Price prevailing on the date of performance- contract Price


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 subjectmatter 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 housefrom a certain company. In this cases, he can be restrained by an injunction

from buying electricity from any other person.


8. The Right to sue on Quantum Meruit lies witha. 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 wherea. Contract is discovered to be unenforceableb. One party abandons performancec. Act is done without intention of gratuitousnessd. All of the above

10.S, a singer, contract with H, manager of a theatre, to sing at his theatre fortwo nights every week during next two months. H agrees to pay her Rs.


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1000 for each nights performance. On sixth night, willfully absents herself,

and H,. in consequence rescinds the contract. In this case

a. H has no obligations to Sb. H must pay $ for five nights on which she had performedc. 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 intentionto provide remuneration; then the party rendering services can sue upon

quantum meruit for ..remuneration.

a. Substantialb. Adequatec. Reasonabled. Minimum

12.When an indivisible contract for lump sum is completely performed, butbadly, the person who has performed, cana. Claim the lumpsumb. 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 Bs flat for a lump sum of Rs. 3,00,000. A did the workbut B complained of faulty workmanship. It costs B Rs. 50,000 to remedy

the defect. A can recover from B

a. Rs. 3,00,000b. Rs. 50,00,00c. Rs. 2,50,000d. Rs. 3.50,000

14.Damages are also applicable in respect of failure to discharge a Quasi-contract, in the same manner as in respect of breach of contracts.


15.When the Seller retains goods after the breach, he can recover from thebuyer any further loss if the market falls, also he is liable to have the

damages reduced if the market rises.

a. Trueb. Partly true


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c. Falsed. None of the above

16.Special Damages can be claimed if the party breaking the contract is madeknown of the special circumstances at any time after the breach.


17.Damages awarded simply to recognize the right of the party to claimdamages for the breach of the contract are called

a. General damagesb. Special damagesc. Vindictive damagesd. Nominal damages18.In case of damages for inconvenience and discomfort, the measure of

damages is not affected by the motive or manner of breach.

a. Trueb. Partly Truec. Falsed. None of the above

19.Duty to mitigate damages on the part of injured party arisesa. In cases of anticipatory breachb. In cases of breach at the time fixed for performance of the contractc. Neither (a) nor (b)d. Either (a) or (b)

20.The intention for fixing/ stipulating Penalty isa. Recovery of damages that might arise due to breachb. To ensure performance of a contractc. Either (a) or (b)d. Both (a) or (b)

21.If the compensation to be paid on breach of contract is the genuine pre-estimate of the prospective damages, it is known as

a. Penalty lb. liquidated Damagesc. Uniliquidated Damagesd. Special Damages


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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 Damagesb. Penaltyc. Liquidated damagesd. Special Damages

23.A contracts with B that if A practices as a surgeon within Calcutta, he willpay Rs. 5,000. Practices as surgeon in Calcutta. Be is entitled to such

compensation

a. Exceeding Rs. 5,000b. Not exceeding Rs. 5,000c. Not exceeding Rs. 5,000 as the Court considers reasonabled. As B may wish.

24.A stipulation for increased interest from the date of default is known asa. Compensationb. Penaltyc. Liquidated damagesd. Damages

25.In a contract of debt, when a sum is expressed to be payable on a certaindate and a further sum is stipulated to be payable in the event of default,

then later sum is by way ofa. Liquidated Damagesb. Penaltyc. Special Damagesd. Nominal Damages

26.A who is a builder, agrees to erect and finish a house by 1 st Jan, so that Bmay 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 1 st January has to be rebuilt by

B. As a consequence. B loses the rent which he was to have received fromC, 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 houseb. The rent lostc. The compensation made to C


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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 Damagesb. General Damagesc. Vindictive Damagesd. Special Damages

28.Nominal Damages may be very small, say, even a rupee.a. Trueb. Partly truec. Falsed. None of the above

29.The intention for fixing / stipulating Liquidated Damages isa. Recovery of damages that might arise due to breach.b. To ensure performance of a contractc. Either (A) or (b)d. Both (a) or (b)

30.The essence of Liquidated Damages is that it should bea. Genuine pre-estimate of damageb. More than probable damagec. Less than probable damaged. Any of the above

Answers

1 A 6 D 11 C 16 C 21 B 26 D

2 A 7 A 12 B 17 D 22 B 27 C

3 B 8 B 13 C 18 A 23 C 28 A

4 B 9 D 14 A 19 D 24 D 29 A

5 A 10 B 15 C 20 B 25 B 30 A

Chapter-10

1. X leaves his goods at Ys place who consumes them. Y is bound to pay price.Ys act of consumption of goods constitutes an implied promise to pay,

under the principle of

a. Contractual Obligationsb. Quasi contractual Obligations


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c. Semi contractual Obligationsd. Deemed contractual Obligations

2. Quasi Contract rests on the principle ofa. Equality / Equityb. There cannot be unjust enrichment of a party at the expenses ofanotherc. Neither (A) not (b)d. Both (a) and (b)

3. Quasi Contracts or Implied Contracts are exceptional kinds of contracts bywhich

a. One party is bound to pay money in consideration of something doneor suffered by the other party.

b. No contractual relation exists between the partiesc. No contract has been made by the partiesd. All of these

4. If a person, incapable of entering into a contract, or anyone whom he islegally 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. Trueb. Partly truec. Falsed. None of the above5. 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. Bs propertyb. B personallyc. B s wife and childrend. The court

6. 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. Trueb. Partly truec. Falsed. None of the above


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7. To claim reimbursement of money paid on behalf of another person, whichof the following is not required?

a. There should be some legal or other coercive proves compelling thepayment.

b. Original liability should be of another personc. Payment must be made to their party to whom another party wasliable.

d. The payment must be voluntary8. 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 benefitd. All of the above9. A saves Bs property from fire. A is entitled to compensation from B, if the

circumstances show that A intended to act

a. Gratuitouslyb. Non-gratuitouslyc. Either (A) nor (B)d. Neither (a) nor (b)

10.A person who finds goods belonging to another and takes them into hiscustody, is subject to the same responsibility as a

a. BAILEEb. True Ownerc. Thiefd. Trespasser

11.A person to whom money has been paid, or anything delivered by mistakeor under coercion, must repay or return it.


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 Bb. C is bound to repay the amount to B and A jointlyc. C is bound to repay the amount to A and B equally


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d. C is not bound to repay the amount to B.13.Damages under section 73 of Indian Contract Act are

a. Compensatoryb. Liquidatedc. Penald. Collateral

14.are awarded with a view to punish the defendant, and not soleywith the idea of awarding compensation to the plaintiff.

a. Special Damagesb. Ordinary Damagesc. Nominal Damagesd. Exemplary or Vindictive Damages

15.Hadley v/s Baxendale case is a leading case ona. Breach of Implied Termb. Anticipatory Breachc. Remoteness of Damagesd. Bilateral Mistake of Fact

16.In case the contact is divisible, and one party has enjoyed the benefit ofpart performance, then, the other party may sue on quantum meruit.

a. Trueb. Partly truec. Falsed. None of the above17.Quantum meruit meansa. A non-gratutious promiseb. As implied promisec. 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 naturec. Either (A) or (B)d. Neither (A) nor (b)

19...means an order of the Court restraining a person from doingwhat he promised not to do.

a. Quantum Meruitb. Rescission


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c. Injunctiond. 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 damagec. Either (a) or (b)d. Neither (a) or (b)

21.In case of anticipatory breach, the promise opts to put an end to thecontract and treat the anticipatory breach as actual breach, the amount of

damages = Price prevailing as on the date of refusal to perform Contract

Price.


22.A promise may dispense with the performance of a promisea. Whollyb. in partc. falsed. neither (a) nor (b)

23.a Creditor agrees with his Debtor and a third party to accept that third ashis Debtor. The contract is discharged by

a. performerb. alterationc. waiverd. remission

24.in case of alteration, there is a change in the parties and new parties maybe included.


25.A contracts with B to deliver 90 kg. of material X if 15th June. B may rescindthe contract. The contract is discharged due to

a. Mutual decisionb. A failure to performc. Impossibility of performance


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d. Revocation of proposal26.A bill ofexchange which was accepted by K, reaches Ks hands after being

negotiated and endorsed through 4 other parties. The contract is

discharged due to

a. Merging of inferior right in a superior rightb. Debt barred by law of limitationc. Rights and liabilities vesting in the same persond. Breach of contract

27.A owes B totally Rs. 25,000. He sends a cheque for Rs. 10,000 stating that itshall be appropriated towards he first sum of Rs. 10,000 he took from B. B

shall appropriate it

a. Towards any debt due from Ab. Towards any time barred debt due from Ac. 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 readyand willing to construct the house, but A prevents him from doing so. In

this case

a. B can opt to rescind the contractb. B is eintitled to recover compensation for any loss suffered by himc. Either (a) or (b)d. Both (a) and (b)

29.If a contract expressly provides for the order of performances of reciprocalpromises, the promises shall be performeda. In the order mentioned and not otherwiseb. In any reasonable orderc. In any appropriate orderd. In any order what so ever

30.Where a witness who has received summons to appear at a trial, a promiseto pay him anything beyond his expenses is

a. Void since consideration is illusoryb. Validc. Unlawfuld. In restraint of legal proceedings.

Answers


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1 B 6 A 11 A 16 A 21 A 26 C

2 D 7 D 12 A 17 C 22 C 27 D

3 D 8 D 13 A 18 C 23 D 28 D

4 A 9 B 14 D 19 C 24 C 29 A

5 A 10 A 15 C 20 C 25 B 30 A

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