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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

A agrees to pay B Rs. 1 Lakh if X is not made the Prime Minister after he wins in the general election for choosing members of Parliament. According to the Contract Act, this is a contingent contract under

  1. S. 35

  2. S. 34

  3. S. 33

  4. S. 32
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

This is a contingent contract according to section 32 of the Indian contract act. It states that contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened." If the event becomes impossible, such contracts become void. 

Multiple choice

Relief of rescission is granted in cases where

  1. contract is void

  2. contract is voidable

  3. contract is both voidable and void

  4. contract is neither void nor voidable
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

It has been laid down by the legislature under section 27 of the specific relief act that any person interested in a contract may sue to have it rescinded and such rescission may be adjudged by the court where the contract is voidable or terminable by the plaintiff.

Multiple choice

‘Nemo dat quod non habet’ means

  1. one can transfer what he doesn’t possess

  2. possession is nine points in law

  3. transfer without consideration is invalid

  4. one cannot transfer what he doesn’t possess
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Nemo dat quod non habet, literally meaning "no one gives what he doesn't have" is a legal rule, sometimes called the nemo dat rule.

Multiple choice

Hadley V. Baxendale is related to

  1. Quasi Contract

  2. Contingent Contract

  3. Damages for Breach of Contract

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

Hadley v Baxendale (1854) is a leading English contract law case. It sets the basic rule to determine consequential damages from a breach of contract.

Multiple choice

“Past consideration is no consideration.” This statement is

  1. correct under Indian Law of Contract

  2. correct under English Law of Contract

  3. correct both under Indian and English Laws of Contract

  4. Not correct under both Indian and English Laws of Contract
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Under English Law, past consideration is no consideration and under Indian Law, past consideration is good consideration.

Multiple choice

A continuing guarantee may be revoked

  1. by notice to the creditor

  2. by surity’s death

  3. by both (1) and (2)

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

At any time, a continuing guarantee about future transactions can be revoked by the surety by notice to the creditor and continuing guarantee can be revoked by death of surety.

Multiple choice

In a simple suit for specific performance of contract for sale, a person who is not a party to the Agreement for Sale is neither a necessary nor proper party. The exemptions available under Specific Relief Act are

  1. cases of novatio

  2. interest arising out of prior contracts

  3. where it is necessary to join parties for avoiding multiplicity of proceedings

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

In a simple suit for specific performance of contract for sale, a person who is not a party to the Agreement for Sale is neither a necessary nor proper party. The exemptions available under Specific Relief Act are in all above cases mentioned.

Multiple choice

‘A’ saves ‘B’ from drowning in a river. ‘B’ promises to pay ‘A’ Rs. 10,000 for this kind act. The contract is

  1. void for want of consideration

  2. voidable

  3. unenforceable because it is immoral

  4. enforceable as it covered by execptions to consideration
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

If a promise is made to compensate, wholly or in part, a person who has voluntarily done something for the promisor, is enforceable even though without consideration. In other words, a promises to pay for a past voluntarily service is binding. This is an exception to the principle that past consideration is no consideration. ‘A’ saves ‘B’ from drowning in a river. ‘B’ promises to pay ‘A’ Rs. 10,000 for this kind act. The contract is valid.

Multiple choice

Which one of the following conditions must be satisfied for making claim under “necessaries” supplied to a person incapable of contracting?

  1. The articles supplied should be necessaries.

  2. The articles supplied should be necessary at the time of sale and delivery.

  3. Necessaries must have been supplied gratituously out of mere kindness.

  4. Necessaries should be supplied out to a person incompetent to contract.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The articles supplied should be necessaries for making claim under “necessaries” supplied to a person incapable of contracting.

Multiple choice

“B” accepts the proposal of “A” by posting a letter of acceptance to “A”. The above acceptance

  1. cannot be revoked by “B” as he has already accepted the offer and dropped the letter of acceptance

  2. can be revoked by “B” before the letter of acceptance reaches “A”

  3. can be revoked by “B” as soon as the letter of acceptance reaches “A”

  4. can be revoked by “B” at any time after the letter of acceptance reaches “A”
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

“B” accepts the proposal of “A” by posting a letter of acceptance to “A”. The above acceptance can be revoked by “B” before the letter of acceptance reaches “A”.