1.An agreement consists of reciprocal promises between at least
(a) four parties.
(b) six parties.
(c) three parties.
(d) two parties.
Answer – d
2. Every promise and every set of promise forming the consideration for each other is a/an
(a) contract.
(b) agreement.
(c) offer.
(d) acceptance.
Answer – b
3. Contract is defined as an agreement enforceable by law, vide Section … of the Indian Contract Act.
(a) Section 2(e)
(b) Section 2(f)
(c) Section 2(h)
(d) Section 2(i)
Answer – c
4. In agreements of a purely domestic nature, the intention of the parties to create legal relationship is
(a) to be proved to the satisfaction of the court.
(b) presumed to exist.
(c) required to the extent of consideration.
(d) not relevant at all.
Answer -a
5. A makes a contract with B to beat his business competitor. This is an example of
(a) valid contract.
(b) illegal agreement.
(c) voidable contract.
(d) unenforceable contract
Answer – b
6. Which of the following legal statement is incorrect?
(a) An agreement enforceable by law is a contract [Section 2]
(b) All agreements are contracts [Section 10]
(c) A proposal when accepted becomes a promise [Section 2]
(d) Every promise and every set of promise forming the consideration for each other is an agreement [Section 2(e)]
Answer – a
7. Agreement the meaning of which is uncertain is
(a) Void
(b) Valid
(c) Voidable
(d) Illegal Answer:
Answer – a
8. …………….. is a one-sided contract in which only one party has to perform his promise or obligation.
(a) Void contract
(b) Illegal agreement
(c) Unilateral contract
(d) Bilateral contract
Answer – c
9. All Contract is a/an ……………..
(a) Offer
(b) Agreement
(c) Acceptance
(d) Transaction
Answer – b
10. A/an …………… is every Promise and every set of promises , forming consideration for each other
(a) Offer
(b) Agreement
(c) Acceptance
(d) Transaction
Answer – b
11. Every agreement and promise enforceable by law is …………….
(a) Offer
(b) Contract
(c) Acceptance
(d) Consideration
Answer – b
12. As per section 2(e) of the Indian Contract Act, “Every Promise and every set of promise forming the consideration for each other is a/an
(a) Contract
(b) Agreement
(c) Offer
(d) Acceptance
Answer – b
13. A promises to deliver his watch to B and, in return, B Promise to pay a sum of ` 2,000. There is said to be a/ an
(a) Agreement
(b) Proposal
(c) Acceptance
(d) Offer
Answer – a
14. For an acceptance to be valid, it must be
(a) Partial & qualified
(b) Absolute & unqualified
(c) Partial & unqualified
(d) Absolute & qualified
Answer – b
15. Which of the following is false? An offer to be Valid must
(a) Contain a term the non- compliance of which would amount to acceptance.
(b) Intend to create legal relations.
(c) Have certain and unambiguous terms.
(d) Be communicated to the person to whom it is made.
Answer – a
16. Over a cup of coffee in a restaurant, X Invites Y to dinner at his house on a Sunday. Y hires a taxi and reaches X’s house at the appointed time , but x fails to perform his promise. Can Y recover any damages from X?
(a) Yes, as y has suffered
(b) No, as the intention was not to create legal relation.
(c) Either (a) or (b)
(d) None of these.
Answer – b
17. Which one of the following has the correct sequence.
(a) Offer, acceptance, consideration, offer.
(b) Offer, acceptance , consideration, contract
(c) Contract, acceptance, consideration, offer.
(d) Offer, consideration, acceptance, contract.
Answer – b
18. In Commercial and business agreements, the intention of the parties to create legal relationship is
(a) Presumed to exist
(b) To be specifically expressed in writing
(c) Not relevant or all
(d) Not applicable.
Answer – a
19. Offer implied from conduct of parties or from circumstances of the case is called ………..
(a) Implied offer
(b) Express offer
(c) General offer
(d) Specific offer
Answer – a
20. An offer is revoked
(a) By the death or insanity of the proposer
(b) By Lapse of time
(c) By Communication of notice of revocation
(d) All of these
Answer -d
21. An acceptance on telephone should be
(a) Heard by the offeror
(b) Audible to the offeror
(c) Understood by the offeror
(d) All of the above.
Answer -d
22. Consideration in a contract:
(a) May be past, present or future
(b) May be present or future only
(c) Must be present only (d)
(d) Must be future only.
Answer -a
23. Agreement without consideration is valid, when made
(a) Out of love and affection due to near relationship
(b) To pay a time barred debt
(c) To compensate a person who has already done something voluntarily
(d) All of the above
Answer – d
24. If only a part of the consideration or object is unlawful, the Contract is
(a) Valid to the extent the same are lawful
(b) Void to the extent the same are unlawful
(c) Valid as a whole
(d) Void as a whole.
Answer d
25. The expression “Privity of contract” means
(a) A Contract is Contract between the parties only
(b) A Contract is a private document
(c) Only private documents can be contracts
(d) The contacts may be expressed in some usual and reasonable manner.
Answer -a
26. Under the Indian Contract Act, a third person
(a) Who is the beneficiary under the Contract can sue
(b) From whom the consideration has proceeded can sue
(c) Can not sue even if the consideration has proceeded from him.
(d) Can not sue at all for want of privity of contract.
Answer a
27. Which of the following is not Competent to Contract?
(a) A minor
(b) A person of unsound mind
(c) A person who has been disqualified from contracting by some Law
(d) All of these
Answer – d
28. “ Consensus – ad – idem” means ………
(a) General Consensus
(b) Meeting of minds upon the same thing in the same sense
(c) Reaching an agreement
(d) Reaching of contract
Answer -b
29. A Contract which is formed without the free consent of parties, is ……….
(a) Valid
(b) Illegal
(c) Voidable
(d) Void ab- initio
Answer -c
30. If an agreement suffers from any uncertainty. It is ………….
(a) Voidable
(b) Void
(c) Unenforceable
(d) Illegal.
Answer – b
31. All illegal agreements are ………….
(a) Void- ab- initio
(b) Valid
(c) Contingent
(d) Enforceable
Answer -a
32. A promise to give money or money’s worth upon the determination or ascertainment of an uncertain event is called …………..
(a) Wagering Agreement
(b) Unlawful Agreement
(c) Illegal Agreement
(d) Voidable Agreement
Answer -a
33. A Contingent Contract is a contract to do, or not to do something if some event, collateral to such contract
(a) happens
(b) does not happen
(c) Neither (a) nor (b)
(d) Either (a) or (b)
Answer -b
34. The phrase “Quantum Meruit” literally means –
(a) As much as is earned
(b) The fact in itself
(c) A Contract for the sale
(d) As much as is gained.
Answer – a
35. Which of the following is the essential ingredient of contract of indemnity:
(a) Contract to make good the loss
(b) Loss must be caused to the indemnity holder.
(c) Loss may be caused by promiser or any other person
(d) All of the above.
Answer -d
36. How agency is created:
(a) By Direct appointment
(b) By implication
(c) By necessity
(d) All of the above
Answer -d
37. An agreement which is enforceable by law at the option of one party
(a) Valid contract
(b) Void contract
(c) Voidable contract
(d) Illegal contract
Answer -c
38. A Gratuitous Promise can
(a) Be enforced
(b) Not be enforced
(c) Be enforced in court of law
(d) None of above
Answer -b
39. If A makes an offer to B on a particular day, then the offer can be revoked by A before
(a) B accepts the offer
(b) A receives B’s acceptance
(c) B has posted the letter of acceptance
(d) Reasonable period of time
Answer – c
40. The two types of breach are
(a) Actual breach and Deemed breach
(b) Actual breach and Conditional breach
(c) Actual breach and Anticipatory breach
(d) Actual breach and Remedial breach
Answer -c
18. Match the following
(i) Firm is bound by all acts of partner done within the scope. | (a) Partnership at will |
(ii) No duration for partnership. | (b) Particular Partnership |
(iii) Duration for a period | (c) Sub-partner |
(iv) Share of profits by an outsider | (d) Implied Authority |
Ans : (i) - (d), (ii) - (a), (iii) - (b), (iv) - (c)
19. Match the following
(i) Partnership | (a) Arises by operation of law |
(ii) Co-ownership | (b) Comes into existence only after registration |
(iii) Hindu Undivided Family | (c) Can arise by agreement or otherwise |
(iv) Company | (d) Arise by way of agreement only |
Ans : (i) - (d), (ii) - (c), (iii) - (a), (iv) - (b)
20. Match the following
(i) Partnership business carried on by all or by any one of them acting for all | (a) Evidence of Partnership |
(ii) Sharing of Profits | (b) Not necessary |
(iii) Registration of Partnership | (c) Does not arise form operation of law |
(iv) Contact of Partnership | (d) Test of partnership |
Ans : (i) - (d), (ii) - (a), (iii) - (b), (iv) - (c)
21. Match the following
(i) Full fledged Partner | (a) Does not disclose his name |
(ii) Sleeping Partner | (b) Known to outside World |
(iii) Partner by holding out | (c) Minor |
(iv) Partner to benefits of partnership | (d) Active Partner |
Ans : (i) - (d), (ii) - (a), (iii) - (b) (iv) - (c)
NATURE OF CONTRACT
1. Law of contract is ---
(a) not the whole law of agreements nor is it the whole law of obligations.
(b) the whole law of agreements.
(c) the whole law of obligations.
(d) None of the above.
2. A contract creates ---
(a) rights in persona.
(b) rights in rem.
(c) only rights and no obligations.
(d) only obligations and no rights.
3. An agreement is a voidable contract when it is ---
(a) enforceable if certain conditions are fulfilled.
(b) enforceable by law at the option of the aggrieved party.
(c) enforceable by both the parties.
(d) not enforceable at all.
4. An agreement not enforceable by law is said to be-
(a) voidable.
(b) void.
(c) illegal.
(d) unenforceable.
5. A contract ---
(a) may be void as originally entered into.
(b) may become void subsequent to its formation.
(c) cannot become void under any circumstances.
(d) may become void at the will of a party.
6. The transactions collateral to an illegal agreement are ---
(a) not affected in any manner.
(b) also tainted with illegality.
(c) voidable at the option of the plaintiff.
(d) void.
7. A contract is ---
(a) a legal obligation.
(b) an agreement plus a legal obligation.
(c) consensus ad idem.
(d) an agreement plus a legal object.
8. Flaw in capacity to contract may arise from ---
(a) lack of free consent
(b) lack of consideration.
(c) minority.
(d) absence of legal formalities.
CAPACITY TO CONTRACT
1. An agreement with or by a minor is _______
(a) voidable at the option of the minor.
(b) void.
(c) valid.
(d) voidable at the option of the other party.
2. On attaining the age of majority, a minor's agreement _____
(a) cannot be ratified by him.
(b) can be ratified by him.
(c) becomes valid.
(d) becomes void.
3. A minor, by misrepresenting his age, borrows some money _______
(a) he cannot be sued for fraud.
(b) he can be sued for fraud.
(c) none of the above.
(d) he is liable to return the money.
4. A minor enters into a contract for the purchase of certain necessaries. In such a case-
(a) he is liable to pay.
(b) he is not personally liable to pay.
(c) his guardian is liable to pay.
(d) his estate is liable to pay.
5. A person is usually of unsound mind, but occasionally of sound mind ______
(a) he may enter into a contract when he is of sound mind.
(b) he may not make a contract even when he is of sound mind.
(c) he cannot enter into a contract at all.
(d) None of the above.
6. A contract by an idiot is _______
(a) voidable.
(b) enforceable.
(c) void ab initio.
(d) invalid.
7. Contracts made before war with an alien enemy which are against public policy are ______
(a) suspended and are revived after the war is over.
(b) dissolved.
(c) not affected at all.
(d) void ab initio.
8. The contractual capacity of a company is regulated by _______
(a) its Memorandum of Association and the provisions of the Companies Act, 2013.
(b) the terms of contract entered into with a third party.
(c) its Articles of Association.
(d) its Prospectus.
9. The Case of Mohiri Bibi v. Dharmodas Ghose, (1903) 301 Cal. 539 deals with _______
(a) communication of offer.
(b) communication of acceptance.
(c) a minor's agreement.
(d) fraud.
10. Flaw in capacity to contract may arise from ________
(a) want of consideration.
(b) unsoundness of mind.
(c) illegality of object.
(d) uncertainty of object.
CONSIDERATION
1. Consideration must move at the desire of ---
(a) the promisor.
(b) the promise.
(c) promisor or any third party.
(d) both the promisor and the promise.
2. Consideration ---
(a) must move from the promise.
(b) may move from the promisee or any other person.
(c) may move from the third party.
(d) may move from the promisor.
3. Consideration ---
(a) must be adequate to the promise made.
(b) need not be adequate to the promise made.
(c) must be of reasonable value.
(d) must be of more value than the value of promise made.
4. Consideration must be something which the promisor ---
(a) is not already bound to do.
(b) is already bound to do.
(c) must not do.
(d) may voluntarily do.
5. Compromise of dispute claim ---
(a) is a good consideration for a contract.
(b) is not a good consideration for a contract.
(c) results in a void agreement.
(d) is not permitted by law.
6. A promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor is ---
(a) enforceable.
(b) not enforceable because it is without consideration.
(c) void.
(d) voidable.
7. A person who is not a party to a contract ---
(a) can sue.
(b) cannot sue.
(c) can sue only in well-recognized cases.
(d) None of these.
8. Consideration in a contract ---
(a) may be present or future only.
(b) may be past, present or future.
(c) must be future only.
(d) must be present only.
9. An agreement made without consideration is ---
(a) illegal.
(b) valid.
(c) void
(d) voidable.
OFFER AND ACCEPTANCE
1. Which of the following result/results in an offer?
(a) A declaration of intention
(b) An invitation to offer
(C) An advertisement offering reward to anyone who finds the lost dog of the advertiser
(d) An offer made in a joke.
2. A specific offer can be accepted by ---
(a) any friend of offeror.
(b) any person.
(c) the person to whom it is made.
(d) any friend of offeree.
3. A letter of acceptance sufficiently stamped and duly addressed is put into course of transmission. There is ---
(a) a contract voidable at the option of Acceptor.
(b) a contract voidable at the option of offeror.
(c) no contract at all
(d) a valid contract.
4. Acceptance may be revoked by the acceptor ---
(a) at any time.
(b) before the letter of acceptance reaches the offeror.
(c) after the letter of acceptance reaches the offeror.
(d) before the death of the acceptor.
5. An advertisement to sell a thing by auction is ---
(a) an invitation to offer.
(b) an offer.
(c) a contract.
(d) no offer at all.
6. On the face of the ticket for a journey the words "For conditions see back'" are printed in small print. The passenger ---
(a) is bound by the conditions whether he takes care to read them or not.
(b) is not bound by the conditions.
(c) may not take note of the conditions.
(d) none of the above.
7. An offer is made to Mani in a crowd. It ---
(a) can be accepted by him alone.
(b) may be accepted by any person who hears it.
(c)may be accepted by his brother.
(d) may be accepted by his friends.
8. An acceptance is not according to the mode prescribed but the offerer decides to keep quiet. In such a case, there is
(a) no contract.
(b) a contract.
(c) an unenforceable contract.
(d) avoidable contract.
9. There is a counter-offer when ---
(a) the offeree gives conditional acceptance or introduces a fresh term in acceptance.
(b) the offeror makes fresh offer.
(c) the offeree makes some query.
(d) the offeree accepts it.
10. A makes an offer to B on 10th by a letter which reaches B on 12th. B posts letter of acceptance on 14th which reaches A on 16th. The communication of acceptance is complete as against A on ---
(a) 10th.
(b) 16th.
(c) 12th.
(d) 14th.
LEGALITY OF OBJECT
1. The collateral transactions to an illegal agreement are-
(a) illegal.
(b) void.
(c) not affected at all.
(d) voidable.
2. An agreement made with an alien enemy is-
(a) unlawful on the ground of public policy.
(b) unlay flu because it becomes difficult to be performed.
(c) valid.
(d) voidable.
3. A person enters into an agreement whereby he is bound to do something which is against his pubic or professional duty. The agreement is ---
(a) valid.
(b) void on the ground of public policy.
(c) illegal.
(d) voidable.
4. Regulations as to the opening and closing of business in a market are ---
(a) not unlawful even if they are in restraint of trade
(b) unlawful because they are in restraint of trade.
(c) void.
(d) not valid.
5. An employee, by the terms of his service agreement, is prevented from acceptinga similar engagement after the termination of his service. The restraint is ---
(a) void.
(b) valid.
(c) illegal.
(d) unenforceable.
6. The Case of Norden felt v. Maxim Norden felt Gun Co., (1904) 29 B.L.R. 107 deals with ---
(a) agreements in restraint of legal proceedings.
(b) minor's agreements.
(c) agreements in restraint of trade.
(d) agreements in restraint of marriage.
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