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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

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.

Multiple choice

Interpleader suit cannot be instituted

  1. for any property which relates to two persons, but which is being held by a third person for the time being

  2. for determining the relationship between a property and the persons claiming it

  3. for getting himself absolved from the liability to keep the property, which is not being held by him

  4. where a suit is pending in which the rights of all parties can properly be decided
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Options (1), (2) and (3) are incorrect: Under Section 88, where two or more persons claim adversely to one another the same debt from another person who claims no interest therein other than for charges or costs and who is ready to pay or deliver it to the rightful claimant, such other person may institute a suit of interpleader against all the claimants for the purpose of obtaining a decision. Option (4) is correct: Proviso to Section 88 states where any suit is pending in which the rights of all parties can properly be decided, no such suit of interpleader shall be instituted.

Multiple choice

Compromise under Order XXIII, Rule 3 of the CPC

  1. must be in writing and signed by the parties

  2. must be in writing, but need not be signed by the parties

  3. must be in writing, but need not be lawful

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

Option (1) is correct: Compromise under Order XXIII, Rule 3 of the CPC must be in writing and signed by the parties.

Multiple choice

Which of the following contracts is specifically enforceable?

  1. A, an author, contracts with B, a publisher, to complete a literary work.

  2. A contracts to sell and B contracts to buy a residential building.

  3. A contracts to marry B.

  4. A contract by a guardian to purchase immovable property on behalf of a minor.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Option (1) is incorrect: Literary work is based on personal qualification of an author. Option (2) is correct: It is a contract that can be specifically enforceable. Option (3) is incorrect: It cannot be specifically enforceable as marriage is the personal decision of a person. Option (4) is incorrect: A minor is not bound to specifically enforce an act.

Multiple choice

A enters into a contract with B for the sale of goods to be delivered at a future date. Which type of case is this?

  1. It is a case of wagering agreement.

  2. It is a case of future consideration.

  3. It is a case of contingent contract.

  4. It is an impossible agreement to be performed.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Option (2) is correct: Goods (subject matter) are to be delivered at a future date. Therefore, this contract is a case of future consideration.

Multiple choice

Which of the following statement is true?

  1. There can be a stranger to the contract.

  2. There can be a stranger to a consideration.

  3. There can be a stranger to a contract and consideration.

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

In Indian contract law, consideration can be provided by a third party who is not the promisee, known as a stranger to consideration. However, the doctrine of privity of contract generally prevents a stranger to the contract from enforcing it. Thus, the statement that there can be a stranger to consideration is legally accurate.