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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

Which one of the following statements is correct?

  1. All agrements are contracts.

  2. All contracts are agreements.

  3. Contract and agreement is opposite to each other.

  4. Contract and agreement is the same thing
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Right- An agreement is between parties then it becomes a contract.Every contract consists the essentials of the agreement.

Multiple choice

What is the objective of contract of guarantee?

  1. To provide additional security to the principal debtor

  2. To provide additional security to the creditor

  3. To provide additional security to the surety

  4. To provide additional security both to the principal debtor and creditor
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Objective of contract of guarantee is to provide additional security to the creditor.

Multiple choice

Which of the following statements is incorrect?

  1. Guarantee obtained by misrepresentation is invalid.

  2. Guarantee obtained by concealment is invalid.

  3. Every contract requires free consent.

  4. Guarantee obtained by concealment is sometimes valid.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

It is not correct statement because Section 143 says consent obtained by concealment is not free consent and contract is not valid.

Multiple choice

Which of the following is a correct statement?

  1. Contract of guarantee is always in written.

  2. Benefit to the principal debtor is sufficient consideration.

  3. There is no need of principal debt.

  4. Contract of guarantee is always in oral form.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

It is right statement according to the Contract Law.

Multiple choice

Which of the following statements is incorrect?

  1. There are two parties in the contract of indemnity.

  2. Object of contract of guarantee is the security of creditor.

  3. Contract of guarantee consists of three contracts.

  4. Indemnity contract consists of two contracts.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Right- Because indemnity contract always consists one contract only that is indemnifier with indemnity holder. So it is incorrect statement.

Multiple choice

When does a contract become irrevocable?

  1. When an offer has been made.

  2. When acceptance has been made.

  3. When there is a time limit for acceptance.

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

Once an acceptance is made offer can't be revoked and a contract becomes irrevocable.

Multiple choice

Which of the following statements is incorrect?

  1. Acceptance should be communicated.

  2. Acceptance should be expressed in usual and reasonable manner.

  3. Acceptance should be made while the offer is still subsisting.

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

It is right because all above mentioned statements are correct.

Multiple choice

Which of the following is not an advantage of an Accommodation Bill?

  1. Drawn without any consideration

  2. Legal action cannot be restorted

  3. Financial assistance received

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

 It is a major disadvantage of accommodation bill. As accommodation bills are drawn in absence of any consideration, it is not a proof of debt. It is not easy to maintain a suit for recovery of the amount. In trade bills, legal action can be take easily, if the bill is dishonoured.