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Contract Law

1,453 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

You have been asked to supervise an army purchase deal. While going through the files you notice that the deal has not been offered to the contractor with the lowest bid but instead to someone else. Your co-workers have also pressurised you to accept the proposal.

  1. Ignoring the pressure you order an internal inquiry into the matter.

  2. You write a formal complaint about your co-workers.

  3. You ignore the mishandling in the tender process and leave the matter to your seniors.

  4. You approach your juniors to get into the root of the matter.

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Internal inquiry (A) is mandatory when tender process irregularities are discovered, regardless of peer pressure. Complaining about co-workers (B) focuses on wrong issue, ignoring mishandling (C) enables corruption, and approaching juniors (D) is not the proper channel.

Multiple choice

Acceptance sent through post

  1. can be revoked at any time

  2. cannot be revoked at any time

  3. can be revoked before it comes to the knowledge of the offeror

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

An acceptance may be revoked at any time before the communication of the acceptance is complete.

Multiple choice

A partial illegality

  1. may avoid the whole agreement

  2. will not avoid the whole agreement

  3. will avoid the whole agreement

  4. Either (2) or (3)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Partial illegality means if any provision of this agreement or the application thereof to any party or circumstances shall be declared void, illegal or unenforceable, the remainder of this agreement shall be valid and enforceable.

Multiple choice

Which of the following cases does not have coercion?

  1. A contract was made to avoid threatened prosecution.

  2. There is a threat to strike.

  3. A contract was made under a statutory compulsion.

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

Statutory transactions are contracts under compulsion of law whereby parties are mandated by executive orders or legal regulations. 

Multiple choice

If a contract is based on personal skill or confidence of parties, the death of a party in such a case

  1. does not put an end to the contract

  2. makes the representatives of the deceased liable to perform such a contract

  3. puts an end to the contract

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

If a contract is based on personal skill or confidence of parties, the death of a party in such a case puts an end to the contract and damages can be claimed for the breach.

Multiple choice

An arbitral award may be set aside by the court if a party making the application furnishes proof that

  1. the party was under some incapacity

  2. the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law in force for the time being

  3. the party making the application was not given proper notice of the appointment

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

An arbitral award may be set aside by the court if the party making the application furnishes proof that a party was under some incapacity or if the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law in force for the time being, or the party making the application was not given proper notice of the appointment.

Multiple choice

Crossword competition is

  1. a wagering agreement

  2. a contingent contract

  3. an illegal agreement

  4. a valid agreement
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

It is nowhere provided as void in law.

Multiple choice

What is the nature of agreement to sell?

  1. Executory contract

  2. Executed contract

  3. Both executed and executory contract

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

Any contract to be applicable at future date is executory. Sale is an executed contract.

Multiple choice

A policy can be surrendered only if it has acquired

  1. legal value

  2. money value

  3. policy value

  4. paid-up value
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Paid-up value is the reduced amount of sum assured paid by the insurer in case of discontinuation of the payment of premiums after paying the full premiums for the first three years. Surrender value is a percentage of paid-up value. Hence, a policy can be surrendered only if it has acquired paid up value.