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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 civics consumer in the market consumer awareness, education and protection consumers and their rights consumer : satisfaction and protection

You have joined an educational institution and paid fees for the entire year but you found that the institution is not providing what it promised. Now you want to change the institution but the management refused to refund your fees? Which of your right is being violated?

  1. Right to be safety

  2. Right to choose

  3. Right to be informed

  4. Right to be information
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The definition of Right to Choose as per the Consumer Protection Act 1986 is ‘the right to be assured, wherever possible, to have access to a variety of goods and services at competitive prices’. For regulating the market place, there is just one factor required and that is competition.

Multiple choice organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

An agent is_________between his principal and the third party.

  1. Connecting link

  2. Sub agent

  3. Partner

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

An agent is not a connecting link, sub agent or partner between his principal and the third party. An agent can be referred as a person who acts on behalf of some other person. Agent always take an active role in order to create a specific effect on an activity.

Multiple choice commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

A contractors to sell his car to B for Rs. 4,00,000 and B agrees to pay on delivery. Once the car is delivered to B and B pays Rs. 4,00,000, contract comes to an end. This is called __________

  1. waiver of a Contract

  2. breach of a Contract

  3. rescission of a Contract

  4. discharge of a Contract
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

When both parties have fulfilled their respective obligations under a contract, the contract is said to be discharged by performance.

Multiple choice commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

When an inferior right accruing to a party in a contract merges into a superior right accruing to the same party, then________.

  1. the contract conferring the inferior right is discharged

  2. the contract conferring the superior right is discharged

  3. both contracts are discharged

  4. both contracts are not discharged
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Merger occurs when an inferior right and a superior right in the same subject matter meet in the same person. The inferior right is extinguished or merged into the superior one, thus discharging the contract related to the inferior right.

Multiple choice commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

A contract can be discharged by __________.

  1. frustration of the contract

  2. performance of the contract

  3. both (a) & (b)

  4. neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A contract can be discharged through various methods, including performance (both parties fulfill their duties) and frustration (an unforeseen event makes performance impossible).

Multiple choice commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

_________ signifies that the parties are not further bound under the contract.

  1. Waiver of a Contract

  2. Breach of a Contract

  3. Rescission of a Contract

  4. Discharge of a Contract
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Discharge of a contract means that the parties are no longer bound by the obligations created by the contract.

Multiple choice commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

When both the parties have decided to cancel the contract, it is known as _______ .

  1. remission

  2. novation

  3. rescission

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

Rescission is the act of canceling or terminating a contract by mutual agreement, effectively releasing both parties from their future obligations.

Multiple choice commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

Rescission of a Voidable Contract may also be revoked and the parties can get back on the original contract.

  1. True

  2. Partly true

  3. False

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

Rescission of a voidable contract allows the aggrieved party to set aside the contract. Once rescinded, the contract is no longer binding, and the parties are released from their obligations.

Multiple choice commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

In case of necessaries supplied to a person incompetent to contract, which of the following is true?

  1. Only the property (movable and immovable) of the incapable person shall be liable.

  2. The incapable person cannot be held liable personally.

  3. Where the incapable person does not own any property, nothing shall be payable.

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

Under the Indian Contract Act, a person incapable of contracting is not personally liable for necessaries supplied; however, their property is liable for reimbursement. If they have no property, the supplier cannot recover the cost.

Multiple choice commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

A minor got injured in his left leg in Football match. He engaged a doctor for treatment of leg. The doctor's claim for his services under the Indian Contract Act 1872 is _______.

  1. Valid

  2. Invalid

  3. Void

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

Medical services provided to a minor are classified as necessaries. Consequently, the claim for payment is legally valid under the Indian Contract Act, specifically regarding the minor's estate.

Multiple choice commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

A, a singer enters into a contract with B, the manager of a theatre to sing at his theatre two nights in every week during the next two months and B engages to pay her Rs. 1,00,000 for each night's performance. On the sixth night, A willfully absents himself from the theatre. If A turns up after a week and B without saying anything allowed A to perform that night __________.

  1. B is at liberty to put an end to the contract

  2. B cannot put an end to the contract but can claim damages from A

  3. The contract is left at the liberty of A

  4. The contract is unlawful
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

If a party accepts performance after a breach, they waive their right to rescind the contract based on that breach, though they may still be entitled to claim damages for the loss suffered.

Multiple choice commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

A contract may be discharged by

  1. Lapse of time

  2. Operation of the law

  3. Mutual agreement

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

A contract can be discharged through various means, including performance, mutual agreement, operation of law, or breach. All the listed options are valid methods of discharge.

Multiple choice commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

A contract is discharged by operation of law:

  1. by death of the promisor;

  2. by insolvency of promisor;

  3. by death or insolvency of promisor.

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

Discharge by operation of law occurs in cases such as insolvency or the death of a promisor (in contracts involving personal skill), making all the listed options correct.

Multiple choice meaning and characteristics of negotiable instruments the negotiable instruments act, 1881 commerce

Which of the following is NOT the essential requirement for the endorsement as per Negotiable Instrument Act, $1881$?

  1. It should be on the instrument.

  2. It should be made by the holder on the maker.

  3. Signatures should be in ink and not by pencil or rubber stamp.

  4. It should contain unconditional order.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
In the words of Section 15, of the Negotiable Instruments Act, 1881 endorsement is defined as when the maker or the holder of a negotiable instrument signs the same otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, he is said to endorse the same and is called the endorser and the person to whom the instrument is endorsed is called the endorsee. The requirements for endorsement under the act are:
  • It must be on the instrument. The endorsement may be on the back or the face of the instrument and if no space is left on the instrument, it may be made on a separate paper attached to it called along.
  • It must be an endorsement of the entire bill. A partial endorsement that is which purports to transfer to the endorse a part only of the amount payable does not operate as a valid endorsement.
  • It must be made by the maker or holder of the instrument. A stranger cannot endorse it.
  • It may be made either by the endorser merely signing his name on the instrument or by any words showing an intention to endorse or transfer the instrument to a specified person.
  • It must be signed by the endorser. It is not necessary to write the full name initial may be sufficient. Thumb- impression should be attested.
Multiple choice introduction of business laws business law and contract act business studies

Principle: The consideration or object of an agreement is unlawful if it is forbidden by law. Every agreement of which the object or consideration is unlawful is void.
Facts: 'X' promises to pay 'Y' $Rs. 50000$, if he ('Y') commits a crime, 'X' further promises to indemnify him ('Y') against any liability arising thereof. 'Y' agrees to act as per X's promise.
Which of the following derivations is correct?

  1. There is a contract between 'X' and 'Y'

  2. There is an agreement between 'X' and 'Y' which can be enforced by the court of law

  3. There is an agreement between 'X' and 'Y' which cannot be enforced by the court of law

  4. There is a voidable contract between 'X' and 'Y'
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Section $23$ of the Indian Contract Act $1872$, states that the consideration or object of an agreement is lawful, unless It is forbidden by law; or is of such nature that, if permitted it would defeat the provisions of any law or is fraudulent, of invalnes or implies, injury to the person or property of another, or the court regards it as immoral or opposed to public policy.
In the present scenario, X promises to pay Y $Rs. 50000$ if he (Y) commits a crime. Here both the object and consideration are unlawful and forbidden by law, So, the agreement between X and Y cannot be enforced by the court of Law.