Indian contract act 1872 50 MCQ question
MCQs on Indian Contract Act, 1872
Section A: General Principles of Contract
Which section of the Indian Contract Act, 1872 defines 'Proposal' as: "When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence"?
(a) Section 2(a)
(b) Section 2(b)
(c) Section 2(c)
(d) Section 2(d)
An agreement which is not enforceable by law is declared void under which of the following sections?
(a) Section 2(e)
(b) Section 2(f)
(c) Section 2(g)
(d) Section 2(h)
A contract which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a:
(a) Void Agreement
(b) Voidable Contract
(c) Void Contract
(d) Illegal Agreement
Which of the following is an example of a person disqualified from contracting by law?
(a) A Minor
(b) A Person of unsound mind
(c) An Alien Enemy
(d) All of the above
An agreement entered into with a minor is, according to the ruling in Mohori Bibee v. Dharmodas Ghose:
(a) Voidable at the minor's option
(b) Void ab initio (Void from the very beginning)
(c) Valid
(d) Void upon breach of contract
According to Section 25 of the Indian Contract Act, an agreement made without Consideration is void, with the exception of:
(a) A promise to compensate a person who has voluntarily done something for the promisor.
(b) A promise to pay a time-barred debt.
(c) An agreement made on account of natural love and affection, expressed in writing and registered.
(d) All of the above.
The principle of "two or more persons agree upon the same thing in the same sense" relates to which essential element of a contract?
(a) Lawful Object
(b) Free Consent
(c) Consensus ad idem
(d) Capacity to Contract
When the consent of a party to an agreement is obtained by Coercion, the contract is rendered:
(a) Void
(b) Illegal
(c) Voidable at the option of the aggrieved party
(d) Unenforceable
Which of the following agreements is explicitly declared a Void Agreement under the Act?
(a) Agreement in restraint of trade (with some exceptions)
(b) Agreement in restraint of marriage
(c) Agreement in restraint of legal proceedings (with some exceptions)
(d) All of the above
A Wagering Agreement (Betting Contract) under the Indian Contract Act, 1872, is:
(a) Valid
(b) Voidable
(c) Void (though not illegal in all states)
(d) Illegal
Section B: Offer, Acceptance, and Consideration
A General Offer is an offer made:
(a) To a specific person only.
(b) To the public at large, and can be accepted by anyone who performs the conditions, having knowledge of the offer.
(c) Which can only be accepted by conduct.
(d) Which can only be accepted by word of mouth.
When does the communication of acceptance become irrevocable against the proposer?
(a) When the letter of acceptance is received by the proposer.
(b) When the acceptance comes to the knowledge of the proposer.
(c) When the letter of acceptance is put into a course of transmission to him, so as to be out of the power of the acceptor.
(d) Acceptance is irrevocable at any time.
If the proposer has prescribed a particular manner in which the proposal is to be accepted, and the acceptance is not made in that manner, what must the proposer do to reject the acceptance?
(a) The acceptance is automatically invalid.
(b) The proposer must, within a reasonable time, object to the acceptance being made in a non-prescribed manner.
(c) The proposer can reject it at any time.
(d) The proposer must immediately sue for non-compliance.
Past Consideration in Indian Law is:
(a) Invalid, as consideration must move at the desire of the promisor.
(b) Only valid if it is of monetary value.
(c) Valid, unlike in English law where it is generally not valid.
(d) Only valid if it is written and registered.
Consideration may move from:
(a) Only the promisee.
(b) The promisee or any other person (Doctrine of Privity of Consideration).
(c) Only the proposer.
(d) Only the parties to the contract.
Section C: Voidable Contracts and Free Consent
If the consent is caused by Fraud or Misrepresentation, the contract is:
(a) Void
(b) Valid
(c) Voidable at the option of the party whose consent was so caused.
(d) Illegal
Coercion involves:
(a) The commission, or threat to commit, any act forbidden by the Indian Penal Code.
(b) The unlawful detaining, or threat to detain, any property.
(c) Causing physical injury to a person.
(d) Both (a) and (b).
What is the essential element required to prove Undue Influence?
(a) Use of physical force.
(b) A threat to detain property.
(c) One party being in a position to dominate the will of the other.
(d) Disclosure of false information.
If consent was caused by Misrepresentation, and the aggrieved party could have discovered the truth with ordinary diligence, the contract is:
(a) Void.
(b) Not voidable (unless the misrepresentation was by silence constituting fraud).
(c) Valid, but the party can claim damages.
(d) Automatically terminated.
An agreement is void where both the parties to the agreement are under a mistake as to a matter of fact essential to the agreement. This is covered under:
(a) Section 20
(b) Section 21
(c) Section 22
(d) Section 23
Section D: Contingent and Quasi-Contracts
A Contingent Contract is defined in which section of the Act?
(a) Section 30
(b) Section 31
(c) Section 32
(d) Section 68
The enforcement of a Contingent Contract depends upon:
(a) The occurrence or non-occurrence of an uncertain future event that is part of the essential terms of the contract.
(b) The certainty of performance by the promisor.
(c) The occurrence or non-occurrence of an uncertain future event collateral to such contract.
(d) The will of the promisor.
If the performance of a contract depends upon the happening of an impossible event, the contract is:
(a) Valid, if the parties were unaware of the impossibility.
(b) Voidable.
(c) Void (irrespective of the knowledge of the parties).
(d) Illegal.
A Quasi-Contract (or certain relations resembling those created by contract) is based on the principle of:
(a) Express agreement between parties.
(b) Unjust Enrichment (No man should be allowed to enrich himself at the expense of another).
(c) Implied promise.
(d) The Doctrine of Caveat Emptor.
The liability of a person incapable of contracting (e.g., a minor) to pay for necessaries supplied to him or his dependents is covered under the head of:
(a) Valid Contract
(b) Voidable Contract
(c) Quasi-Contract (Section 68)
(d) Illegal Agreement
A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it. This duty is enshrined in:
(a) Section 68
(b) Section 69
(c) Section 70
(d) Section 72
Section E: Specific Contracts, Discharge, and Remedies
A Contract of Indemnity is defined in:
(a) Section 123
(b) Section 124
(c) Section 126
(d) Section 128
How many parties are there in a Contract of Indemnity?
(a) One
(b) Two (Indemnifier and Indemnified/Indemnity Holder)
(c) Three
(d) Four
How many parties are there in a Contract of Guarantee?
(a) Two
(b) Three (Creditor, Principal Debtor, and Surety)
(c) Four
(d) One
A Continuing Guarantee may be revoked by the Surety as to future transactions by:
(a) Consent of the Creditor.
(b) Performance of the contract.
(c) Notice to the Creditor (Section 130).
(d) Death of the Principal Debtor.
The Liability of the Surety is:
(a) Less than that of the Principal Debtor.
(b) More than that of the Principal Debtor.
(c) Co-extensive with that of the Principal Debtor, unless it is otherwise provided by the contract.
(d) Contingent upon the insolvency of the Principal Debtor.
Which of the following is a recognized mode for the Discharge of a Contract?
(a) By Performance
(b) By Agreement or Novation
(c) By Operation of Law or Breach
(d) All of the above
When a new contract is substituted for an old one, either between the same parties or between different parties, it is known as:
(a) Rescission
(b) Novation
(c) Alteration
(d) Waiver
The celebrated case that established the Principle of Remoteness of Damages in contract law is:
(a) Balfour v. Balfour
(b) Mohori Bibee v. Dharmodas Ghose
(c) Hadley v. Baxendale
(d) Carlill v. Carbolic Smoke Ball Company
The measure of Ordinary Damages for breach of contract is:
(a) The loss that does not naturally arise from the breach.
(b) The loss which naturally arose in the usual course of things from such breach (Section 73).
(c) Punitive in nature.
(d) Pre-determined by the parties.
A pre-estimated sum fixed by the parties as payable in case of breach, which is a genuine pre-estimate of likely loss and not in the nature of a penalty, is known as:
(a) Ordinary Damages
(b) Liquidated Damages
(c) Nominal Damages
(d) Special Damages
A contract to do an act which, after the contract is made, becomes impossible or unlawful, by reason of some event which the promisor could not prevent, becomes:
(a) Valid
(b) Voidable
(c) Void (Doctrine of Frustration - Section 56)
(d) Illegal
The remedy for breach of contract based on the principle of "as much as he earned" or "as much as merited" is called:
(a) Specific Performance
(b) Injunction
(c) Quantum Meruit
(d) Restitution
If time is the essence of a contract and a party fails to perform in time, the contract becomes:
(a) Void ab initio.
(b) Voidable at the option of the promisee (Section 55).
(c) Valid, but damages can be claimed.
(d) Automatically discharged by frustration.
The delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering th
1 em, is the definition of Bailment under:(a) Section 148
(b) Section 124
(c) Section 172
(d) Section 182
Section F: Advanced and Conceptual Questions
Anticipatory Breach of contract refers to:
(a) Breach on the due date of performance.
(b) Explicit or implied repudiation of the contract by a party before the due date of performance (Section 39).
(c) Breach by failure to perform an act essential to the contract.
(d) Breach after the contract has been fully performed.
In case of Anticipatory Breach, what is the option available to the injured party?
(a) To treat the contract as operative and wait for the time of performance.
(b) To treat the contract as immediately rescinded and sue for damages at once.
(c) Only to sue for specific performance.
(d) Either (a) or (b).
The injured party has a duty to mitigate damages upon breach of contract. This principle is based on:
(a) The Doctrine of Subrogation.
(b) The concept of Privity of Contract.
(c) The Duty of Prudence (the injured party must take reasonable steps to minimize the loss).
(d) The rule in Rylands v. Fletcher.
Promises which form the consideration or part of the consideration for each other are called:
(a) Unilateral Promises
(b) Reciprocal Promises
(c) Independent Promises
(d) Implied Promises
The term "Impossibility" under Section 56 (Doctrine of Frustration) covers:
(a) Subsequent physical destruction of the subject matter.
(b) Change in the law (supervening illegality).
(c) Non-occurrence of a fundamental event necessary for the performance.
(d) All of the above.
If the Creditor and the Principal Debtor enter into an agreement by which the Creditor gives time to the Principal Debtor, and this is done without the consent of the Surety, the Surety is:
(a) Only discharged from future transactions.
(b) Not discharged at all.
(c) Discharged from liability (Section 135).
(d) Liable to claim indemnity from the Principal Debtor.
A contract of Life Insurance is essentially a:
(a) Contract of Indemnity.
(b) Contingent Contract (as the event of death/maturity is uncertain).
(c) Contract of Guarantee.
(d) Wagering Contract.
Exemplary (Vindictive) Damages are generally not allowed in India for breach of contract, except in which of the following cases?
(a) Breach of a commercial contract.
(b) Breach of a contract to marry and Wrongful dishonour of a customer's cheque by a bank.
(c) Breach caused by fraud.
(d) Failure to deliver goods.
A Pledge is a bailment of goods:
(a) For a specific time period.
(b) As security for payment of a debt or performance of a promise (Section 172).
(c) For safekeeping only.
(d) For use by the bailee.
Which statement is FALSE regarding the enforcement of contracts concerning a minor?
(a) No specific performance can be allowed against a minor.
(b) A minor can be made liable for restitution (return of benefits received) in equity, provided the goods/money can be traced.
(c) A minor is liable for damages for fraudulent misrepresentation of age.
(d) All contracts by a minor are void, and there is no remedy available. (This statement is technically false, as the minor may be liable for necessaries and restitution in equity).
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