Contract Law Fundamentals

Option (1) is incorrect: It is not a void contract.
Option (2) is incorrect: It is voidable only at the option of B.
Option (3) is correct: If B doesn’t want to perform the contract, he can declare it to be void from the court.
Option (4) is incorrect: It is not an illegal contract.

Option (1) is incorrect: It is a quasi contract.
Option (2) is incorrect: It is a quasi contract.
Option (3) is incorrect: It is a quasi contract.
Option (4) is correct: Novation is the substitution of a new contract in place of an old one. It is not a quasi contract.

Option (1) is correct: When the person to whom the proposal is made, signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.
Option (2) is incorrect: Every promise as well as every set of promises, forming the consideration for each other, is an agreement.
Option (3) is incorrect: An agreement enforceable by law is a contract.
Option (4) is incorrect: A consideration is something of value given by both the parties to a contract that induces them to enter into the agreement to exchange mutual performances.

Option (1) is incorrect: Void from the beginning
Option (2) is correct: Under Section 11 of the Indian Contract Act, 1872, every person is competent to contract who is of the age of majority. A contract with a minor is void ab initio.
Option (3) is incorrect: It is not a voidable contract.
Option (4) is incorrect: It is not a voidable contract at the option of either party.

Option (1) is incorrect: It is an example of continuing guarantee.
Option (2) is incorrect: It is not a simple guarantee.
Option (3) is correct: A guarantee which extends to a series of transactions is called a 'continuing guarantee'.

Option (1) is correct: It is a lawful consideration in the eyes of law.
Option (2) is incorrect: It is completely lawful.
Option (3) is incorrect: It is a valid consideration.

Option (1) is correct: If the future event on which a contract is contingent is the way in which a person will act at an unspecified time, the event shall be considered to become impossible when such a person does anything which renders it impossible that he should so act within any definite time or otherwise than under further contingencies.

Option (1) is incorrect: It is not valid.
Option (2) is incorrect: An agreement is not voidable, it is completely void.
Option (3) is correct: Under Section 24 of the Indian Contract Act, 1872, if any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object, is unlawful, the agreement is void.
Option (4) is incorrect: The agreement is not illegal, but void.

Option (1) is correct: Under Section 21 of the Indian Contract Act, 1872, a contract is not voidable because it was caused by a mistake as to any law in force in India, but a mistake as to a law not in force in India has the same effect as a mistake of fact.

Option (1) is incorrect: Under Section 2(g) of the Indian Contract Act, 1872, an agreement not enforceable by law is void from the beginning and can never become voidable.
Option (2) is correct: Under Section 2(g) of the Indian Contract Act, 1872, an agreement not enforceable by law is said to be void.
Option (3) is incorrect: An agreement not enforceable by law is not illegal.
Option (4) is incorrect: Under Section 2(g) of the Indian Contract Act, 1872, an agreement when enforceable by law becomes contract.

Option (1) is incorrect: For a valid agreement, there must be a proposal from one person. 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 either to such act or abstinence, he is said to make a proposal.

Option (2) is incorrect: When the person to whom the proposal is made, gives his assent, the proposal is said to be accepted. A proposal, when accepted, becomes a promise. An unaccepted proposal can never become a promise.

Option (3) is incorrect: When, at the desire of the person who made the proposal, the person to whom the proposal is made or any other person promises to do or to abstain from doing something, such act or promise is called a consideration for the promise. Hence, every promise and every set of promises, forming the consideration for each other, is an agreement.

Option (4) is correct: Immovable property is not required to make a valid agreement under the Indian Contract Act, 1872. Contract is not confined to immovable property.

Option (1) is incorrect: Yes, A is entitled for reimbursement from the property of B.
Option (2) is incorrect: No such provision
Option (3) is correct: Under Section 68 of the Indian Contract Act, 1872, if a person incapable of entering into a contract 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 an incapable person.

Option (1) is incorrect: A cannot revoke this authority.
Option (2) is incorrect: Authority cannot be terminated even if A becomes insane.
Option (3) is incorrect: Authority cannot be terminated even if A dies.
Option (4) is correct: If the contract is not expressed, then A cannot revoke this authority nor can it be terminated by his death or insanity.

Option (1) is correct: Y is liable being an owner.
Option (2) is incorrect: Y is liable though he was not aware.
Option (3) is incorrect: Y is liable fully, not partially.

Option (1) is correct: Reasonable time for performance of a contract is a question of fact.
Option (2) is incorrect: Reasonable time for performance of a contract is not a question of law.
Option (3) is incorrect: Reasonable time for performance of a contract is only a question of fact, not a question of law.
Option (4) is incorrect: Reasonable time for performance of a contract is not a question of prudence. 

Option (1) is correct: Under Section 31 of the Indian Contract Act, 1872, a 'contingent contract' is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. It is a valid contract.
Option (2) is incorrect: It is not a voidable contract.
Option (3) is incorrect: It is not void ab initio.
Option (4) is incorrect: It does not become void when the event becomes impossible.

Option (1) is incorrect: X's son cannot perform the promise.
Option (2) is correct: Under Section 40 of the Indian Contract Act,1872, if it appears from the nature of the case that it was the intention of the parties to any contract that any promise contain in it should be performed by the promisor himself, such promise must be performed by the promisor.
Option (3) is incorrect: X's servant cannot perform the promise.
Option (4) is incorrect: X's agent, who is an artist also, cannot perform the promise.

Option (1) is correct: In a pledge, ownership of property or goods remains with the pledger.
Option (2) is incorrect: Never transferred to the pledgee
Option (3) is incorrect: It cannot be transferred to the pledgee under any circumstances.

Option (1) is correct: Under Section 73 of the Indian Contract Act, 1872, when a contract has been broken, the party who suffers by such breach is entitled to receive damages, from the party who has broken the contract, compensation for any loss or damage caused to him and is thereby called liquidated damages.
Option (2) is incorrect: Are not compensatory damages.
Option (3) is incorrect: Are not penal damages.

Option (1) is correct: Under Section 30 of the Act, agreements by way of wager are void.
Option (2) is incorrect: It is not voidable, but void from the beginning.
Option (3) is incorrect: It is not a valid agreement.