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Contract Law

1,497 Questions

Contract Law encompasses the rules and statutes governing legally binding agreements between parties. This hub provides practice questions on essential topics like legal obligations, breach of contract, and termination clauses. These concepts are frequently tested in law entrance tests and various other competitive government examinations.

Legal obligationsVoid contractsBreach of contractCommunication of acceptanceStatute of FraudsContract clauses

Contract Law Questions

Multiple choice

In which of the following conditions is a transaction said to be in a committed state?

  1. After the successful execution of the transaction

  2. After the discovery that normal execution can no longer proceed

  3. When it is in its initial state

  4. After the final statement has been executed

  5. After the transaction has been rolled back
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

This option is correct as a transaction is committed only after its successful completion.

Multiple choice

A change of nature of the obligation of a contract is known as

  1. novation

  2. rescission

  3. alteration

  4. repudiation

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

An alteration is a variation made in the language or terms of a legal document that affects the rights and obligations to the parties to contract. An alteration of an instrument materially changes it.

Multiple choice

Quantum merit means

  1. as much as is earned

  2. in proportion to the work done

  3. Both 1 and 2

  4. Neither 1 nor 2

  5. lawful amount
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Both options are correct. Quantum merit means what one has earned or a sum according to the proportion of work done.

Multiple choice

A contract may be discharged by mutual agreement between the parties. It is called

  1. rescission or cancellation of contract

  2. alteration of contract

  3. novation of contract

  4. repudiation of contract

  5. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Rescission means termination of a contract by mutual agreement between the parties or as a result of some legal defect or as a result of fraud, etc. Under rescission, both the parties are discharged from the obligations of a contract.

Multiple choice

If the performance of contract becomes impossible because the subject matter of contract has ceased to exist, then

  1. both the parties are liable

  2. neither party is liable

  3. only offerer is liable

  4. only acceptor is liable

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A contract to do an act, which after the contract is made, becomes impossible by reason of some event, which the promisor could not prevent, becomes void when the contract becomes impossible. Thus, neither party is liable for the non-performance of contract.

Multiple choice

The transfer of contractual rights or liabilities by a party to contract to some other person who is not a party is known as

  1. accord of contract

  2. assignment of contract

  3. novation of contract

  4. rescission of contract

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A contract of assignment is one when original parties to contract gives the obligations and benefits of  contract to another party. Whereas where a party assigns only the benefits of contract and retain the obligations, it is called assignment of rights.

Multiple choice

A contingent contract is

  1. dependent or conditional upon the happening or non-happening of a future event or contingency

  2. dependent or conditional upon the happening of a future event or contingency

  3. independent or unconditional contract

  4. None of these

  5. All of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A contingent contract is a contract to do or not to do something if some event collateral to such contract does not happen. A contingent contract depends upon the happening or non-happening of a certain event. If such event takes place, then a contingent contract becomes valid and if that uncertain event does not take place, then a contingent contract becomes void.

Multiple choice

Assignment by operation of law takes place _____________________

  1. by the mutual consent of the parties

  2. by the will of either party

  3. when the subject matter of a contract ceases to exist

  4. by the death of a party to contract
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Assignment by operation of law takes place by the death or retirement of a party to contract.

Multiple choice

An executory consideration is __________________.

  1. the consideration, promised by executive of a company

  2. the consideration, which consists simply of a mutual exchange of promisee, each being a consideration for the other

  3. the consideration, which should be executed on the future date

  4. the consideration, which should be executed before the court
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

An executory consideration is a consideration that should be executed on the future date.

Multiple choice

In which of the following cases, the promisor must apply for the performance?

  1. Where no time for performance is specified, and the promise is to be performed without demand by the promisee.

  2. Where no place for performance is specified, and the promise is to be performed without demand by the promisee.

  3. Where time for performance is specified, and the promise is to be performed without demand by the promise

  4. Where place for performance is specified, and the promise is to be performed without demand by the promise.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The promisor must apply for the performance where no place for performance is specified, and the promise is to be performed without demand by the promisee.

Multiple choice

Which of the following is not a valid contract?

  1. A verbal promise made without consideration to compensate the person who has already done something voluntarily or has done something, which the promisor was legally bound to do.

  2. A written promise to pay time barred debt.

  3. Completed gifts between parties who do not stand in a near relation to each other

  4. A promise to pay Rs. 1000 p.m. to wife for her maintenance by a Hindu husband through a registered document after referring to quarrels.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A promise to pay Rs.1000 p.m. to wife for her maintenance by a Hindu husband through a registered document after referring to quarrels is not a valid contract.