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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

There may be a contract without consideration, if

  1. agreement is in writing and registered

  2. parties to the agreement are in near relationship

  3. agreement is made due to natural love and affection

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

Option (4) is correct: There may be a contract without consideration, if it is made in writing and registered under the law and is made on account of natural love and affection between parties standing in a near relation to each other.

Multiple choice

What is a voidable contract?

  1. Unlawful contract

  2. A contract unperformed

  3. An agreement enforceable at the option of some parties only

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

Option (3) is correct: A voidable contract is a contract which becomes void later on and is enforceable at the option of some parties only.

Multiple choice

Seller's right against the buyer in case of breach of contract is

  1. suit for price and damages for non-acceptance

  2. suit for damages for non-acceptance

  3. suit for price only

  4. Cannot sue for price and damages
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In case there is a breach of contract from the buyer side, the seller can sue the buyer for price and damages for non-acceptance of goods.

Multiple choice

A contract in which a party wins and other loses is called

  1. contingent contract

  2. wagering contract

  3. uncertain contract

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

A contract in which a party wins and other loses is called a wagering contract. A contingent event depends upon happening or non-happening of events.

Multiple choice

‘A’ entered into a contract with 'B' for the supply of certain things manufactured by 'C'. 'C' did not manufacture those goods. What is your advice?

  1. A is discharged from his obligation.

  2. A is not discharged from his obligation and is liable to 'B' for damages.

  3. B can say to A to get the goods manufactured from other party.

  4. The contract becomes void.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Option (2) is correct: As this contract was between 'A' and 'B' (to supply certain things), so if  'A' has not given the performance under the contract, then he (A) is liable to 'B' for damages. 'A' can sue 'C' for non-performing the contract between them to supply goods to 'A'.

Multiple choice

Under the Indian Contract Act, acceptance of proposal should be

  1. conditional or unconditional

  2. conditional but not absolute

  3. unconditional and absolute

  4. unconditional but not absolute
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Option (3) is correct: Under section 7 of Indian Contract Act, acceptance of proposal should be unconditional and absolute.

Multiple choice

In which of the following is consideration not required?

  1. Contract of insurance

  2. Contract of bailment

  3. Contract of guarantee

  4. Contract of service
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Option (3) is correct: Anything done, or any promise made, for the benefit of principal debtor may be a sufficient consideration to the surety for giving the guarantee. So in a contract of guarantee, a consideration is not required separately.

Multiple choice

Essentials of valid contract include

  1. meeting of minds

  2. meeting of parties

  3. meeting to discuss consideration

  4. meeting to discuss proposal and acceptance
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Option (1) is correct: Meeting of minds is an essential of a valid contract.

Multiple choice

In Indian Contract Act, the term 'voidable contract' has been defined under

  1. Section 2(e)

  2. Section 2(h)

  3. Section 2(i)

  4. Section 2(g)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Option (1) is incorrect: Section 2(e) of Contract Act defines the term 'agreement'. Option (2) is incorrect: Section 2(h) of Contract Act defines the term 'contract'. Option (3) is correct: Section 2(i) of Contract Act defines the term 'voidable contract' as an agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others. Option (4) is incorrect: Section 2(g) of Contract Act defines the term 'void contract'.

Multiple choice

Choose the correct essential(s) of a valid contract.

(i) Parties to contract should have capacity to contract. (ii) Parties to contract should have legal mind. (iii) Parties to contract should be intelligent. (iv) Invitation to offer should be accepted.

  1. Only (i)

  2. Only (i) and (iv)

  3. Only (ii)

  4. All of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Option (1) is correct: For a valid contract, the essential is that the parties should have capacity to contract.