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Contract Law

Practice questions on contracts of guarantee, indemnity, and general contract principles under Indian Contract Act 1872.

25 Questions Published
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Questions

Question 1 Multiple Choice (Single Answer)

Under what the surety will not be discharged from liability?

  1. On the death of surety
  2. By variance in the terms of contract
  3. By release or discharge of principal debtor
  4. None of these
Question 2 Multiple Choice (Single Answer)

What is the effect of fraud in a contract?

  1. Sometimes the contract is valid.
  2. Contract is void.
  3. It is voidable.
  4. It is legal.
Question 3 Multiple Choice (Single Answer)

Which of the following statements is correct?

  1. Insurance contract is an indemnity contract.
  2. Insurance contract is a contingent contract.
  3. Insurance contract is a contract of guarantee.
  4. Insurance contract is a wagering contract.
Question 4 Multiple Choice (Single Answer)

Which section of the Contract Act defines contract of guarantee?

  1. Section - 124
  2. Section - 125
  3. Section - 126
  4. Section - 128
Question 5 Multiple Choice (Single Answer)

What is the objective of contract of guarantee?

  1. To provide additional security to the principal debtor
  2. To provide additional security to the creditor
  3. To provide additional security to the surety
  4. To provide additional security both to the principal debtor and creditor
Question 6 Multiple Choice (Single Answer)

Which of the following is not the right of indemnity holder?

  1. He can take action against promisor for recovering damages.
  2. He can take action for recovering costs.
  3. He has the right to be indemnified.
  4. None of these.
Question 7 Multiple Choice (Single Answer)

What is the effect of consent obtained by concealment in contract of guarantee?

  1. Contract is valid
  2. Contract is voidable
  3. Contract is invalid
  4. None of these
Question 8 Multiple Choice (Single Answer)

How many parties are required in contract of guarantee?

  1. Two parties
  2. Three parties
  3. One party
  4. None of these
Question 9 Multiple Choice (Single Answer)

Which of the following statements is incorrect?

  1. Guarantee obtained by misrepresentation is invalid.
  2. Guarantee obtained by concealment is invalid.
  3. Every contract requires free consent.
  4. Guarantee obtained by concealment is sometimes valid.
Question 10 Multiple Choice (Single Answer)

Which of the following is a correct statement?

  1. Contract of guarantee is always in written.
  2. Benefit to the principal debtor is sufficient consideration.
  3. There is no need of principal debt.
  4. Contract of guarantee is always in oral form.
Question 11 Multiple Choice (Single Answer)

In contract of indemnity one party promises to serve the other from loss which may be caused

  1. by the conduct of promisor himself
  2. by the conduct of any other person
  3. Both 1 and 2
  4. Neither 1 nor 2
Question 12 Multiple Choice (Single Answer)

Which of the following statements is incorrect?

  1. There are two parties in the contract of indemnity.
  2. Object of contract of guarantee is the security of creditor.
  3. Contract of guarantee consists of three contracts.
  4. Indemnity contract consists of two contracts.
Question 13 Multiple Choice (Single Answer)

What type of liability is possessed by surety?

  1. Same as that of principal debtor
  2. Not same as that of principal debtor
  3. Same as that of creditor
  4. None of these
Question 14 Multiple Choice (Single Answer)

What is the effect of surety's death?

  1. Discharge of surety from liability
  2. Discharge of principal debtor from liability
  3. Rights of creditor comes to an end
  4. None of these
Question 15 Multiple Choice (Single Answer)

Which form is required by the contract of guarantee?

  1. Oral
  2. Written
  3. Both oral and written
  4. None of these
Question 16 Multiple Choice (Single Answer)

Which of the following statements is incorrect?

  1. Liability of surety and principal debtor is joint and several.
  2. Sometimes surety is liable not to the full extent as that of principal debtor.
  3. In contract of guarantee there can also be a surety.
  4. None of these
Question 17 Multiple Choice (Single Answer)

What type of liability is possessed by indemnifier?

  1. Secondary
  2. Primary
  3. Neither primary nor secondary
  4. None of these
Question 18 Multiple Choice (Single Answer)

What is subrogation?

  1. Creditor's right
  2. Principal debtor's right
  3. Surety's right
  4. Third party's right
Question 19 Multiple Choice (Single Answer)

What type of loss is covered by contract of indemnity?

  1. Loss caused by human agency
  2. Loss caused by natural agency
  3. Loss caused by accidents
  4. None of these
Question 20 Multiple Choice (Single Answer)

Which of the following is not the right of surety?

  1. Right to subrogation
  2. Right to contribution with co- sureties
  3. Right to indemnity against the principal debtor
  4. Right to sue the creditor
Question 21 Multiple Choice (Single Answer)

When does a contract become irrevocable?

  1. When an offer has been made.
  2. When acceptance has been made.
  3. When there is a time limit for acceptance.
  4. None of these
Question 22 Multiple Choice (Single Answer)

Which of the following statements is correct?

  1. A minor can not take benefits of a partnership firm.
  2. A minor can become a partner of a partnership firm.
  3. A minor can take benefits of a partnership firm.
  4. None of these
Question 23 Multiple Choice (Single Answer)

What is provided by Section 124 of Contract Act,1872?

  1. Contract of guarantee
  2. Rights of indemnity holder
  3. Liability of surety
  4. Contract of indemnity
Question 24 Multiple Choice (Single Answer)

Which of the following statements is incorrect?

  1. Acceptance should be communicated.
  2. Acceptance should be expressed in usual and reasonable manner.
  3. Acceptance should be made while the offer is still subsisting.
  4. None of these
Question 25 Multiple Choice (Single Answer)

Which of the following is the legal consideration according to the Contract Act, 1872?

  1. Moral consideration
  2. Forbidden by law
  3. Fraudulante purpose
  4. None of these
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