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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 bilateral contract is one where

  1. the performance of both the parties is executory.

  2. the performance of both the parties is executed.

  3. the performance of one of the parties is executory.

  4. the performance of one party is executed.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When the obligation pending from both parties is yet to be executed, it is a bilateral contract. (B) is an example of executed contract. (C) and (D) are unilateral contracts.

Multiple choice

Which of the following is not true?

  1. An acceptance can precede an offer.

  2. There are at least two parties in an offer.

  3. The offer may be positive or negative.

  4. Offer must be communicated.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An acceptance can't take place before an offer is made.

Multiple choice

An offer can be accepted within

  1. specified time

  2. reasonable time

  3. both (1) and (2)

  4. any time
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The offer must be accepted within the time specified or otherwise within reasonable time only.

Multiple choice

A, by letter, offers to sell his car to B for Rs. 2 lakh. The letter is written on 4th March, posted on 5th March and reaches B on 8th March. B accepts the offer and posts a recommendation letter on 10th March, which reaches A on 14th March. A can revoke his offer before

  1. 5th March

  2. 8th March

  3. 14th March

  4. 10th March
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The offer can be rejected anytime before it is accepted. The acceptance is made on 10th March. B can revoke his acceptance anytime before the letter reaches A, i.e. 14th March.

Multiple choice

An agreement with a minor comes under

  1. void contract

  2. voidable contract

  3. valid contract

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

Agreements with minor are void ab initio, i.e. void agreements. Void contracts are those which were otherwise valid, but had become void due to certain event. If a contract fulfills all conditions, it is a valid contract. A contract is voidable if it is caused by fraud, coercion, etc.

Multiple choice

The agreement without free consent is _______.

  1. voidable contract

  2. void contract

  3. valid contract

  4. illegal agreement
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When consent is not free, it is voidable at the option of aggrieved party. Void contracts are those which were otherwise valid but had become void due to certain event. If a contract fulfills all conditions, it is a valid contract.

Multiple choice

Mistake of fact in a contract may be ______.

  1. unilateral only

  2. bilateral only

  3. both unilateral and bilateral

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

Mistake made by both the parties of contract is bilateral, while mistake by one of the parties is unilateral mistake.

Multiple choice

An agreement with a minor comes under

  1. void contract

  2. voidable contract

  3. valid contract

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

Agreements with minor are void ab initio, i.e. void agreements. Void contracts are those which were otherwise valid, but had become void due to certain event. If a contract fulfills all conditions, it is a valid contract. A contract is voidable if it is caused by fraud, coercion, etc.

Multiple choice

Which of the following can make valid contract?

  1. Alien enemy

  2. Minors

  3. Professionals

  4. Person with permanently unsound mind
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A professional is eligible to make a valid contract. Alien enemies and minors are disqualified by law from making contracts.

Multiple choice

Mistake of fact in a contract may be ______.

  1. unilateral only

  2. bilateral only

  3. both unilateral and bilateral

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

Mistake made by both the parties of contract is bilateral, while mistake by one of the parties is unilateral mistake.

Multiple choice

Minors can sign a loan document.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A minor is legally incompetent to enter into a contract. Therefore, a loan document signed by a minor is void ab initio.

Multiple choice

Assertion (A): Collateral transactions to wagering agreements are valid. Reason (R): Only wagering agreements are declared void under Section 30 of the Indian Contract Act.

  1. (A) is true, but (R) is false.

  2. (A) is false, but (R) is true.

  3. Both (A) and (R) are true, but (R) is not the correct explanation of (A).

  4. Both (A) and (R) are true, and (R) is the correct explanation of (A).
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Collateral transactions to wagering agreements are valid. Only wagering agreements are declared void under Section 30 of the Indian Contract Act.