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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 commercial applications functioning of commercial organisation definition and functions of production department production or works department ideologies/concepts/views of marketing management

Choose the correct answers from the following alternatives given
An offer automatically lapes by the death or insanity of the:

  1. offerer even if the offer is accepted in ignorance of the death or insanity of the offerer

  2. offeree if the offeree dies or becomes insane before accepting the offer

  3. offeree if the offeree dies or becomes insane after accepting the offer

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

Under contract law, an offer lapses if the offeree dies or becomes insane before they have accepted the offer.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

Dishonour of a foreign bill requires protest if the law of the place ________ requires.

  1. where it is drawn

  2. where it is payable

  3. where it is accepted

  4. where the payee reside
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A bill which is not an inland bill, is deemed to be a foreign bill. 

Example: (1) A bill of exchange drawn in India, on a person residing outside India and made payable outside India. 
(2) A bill drawn outside India and made payable in India.
(3) A bill drawn outside India, on a person residing in India.
In case of a bill, foreign bills of exchange must be protested for dishonour when such protest is required by law of the place where the bills are drawn.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

Which of the following statements is true?

  1. A bill cannot be endorsed more than two times

  2. A bill is drawn by purchaser

  3. A bill contains an unconditional promise to pay

  4. Noting charges are borne by the drawee in the event of dishonor of bill
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Noting charges are legally the responsibility of the drawee, as they are the party who failed to meet the obligation of the bill.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

Dishonour by non-acceptance takes place _________________.

  1. When the bill is properly presented for acceptance, except where presentment is excused, but the drawee makes the default in accepting it.

  2. When the bill is properly presented for acceptance, except where presentment is excused, but the drawee makes the default in paying it.

  3. When the bill is properly presented for payment, except where presentment is excused, but the drawee fails to accept it.

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

Dishonour by non-acceptance occurs when a bill is presented for acceptance and the drawee refuses or fails to accept it. Non-payment is distinct from non-acceptance.

Multiple choice commerce performance of contract who will perform the contract performance, discharge, breach and remedies of contract business law and contract act

L says to J "I shall sell my house; will you buy?" A says, " Yes, I shall buy". The agreement is void due to ________.

  1. uncertainty of meaning

  2. uncertainty of price

  3. uncertainty of existence of subject matter

  4. uncertainty of quality of subject matter
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

An agreement is void if its meaning is not certain or capable of being made certain. In this case, the price is not specified, making the agreement void due to uncertainty.

Multiple choice commerce performance of contract who will perform the contract performance, discharge, breach and remedies of contract business law and contract act

A agrees to pay B Rs. 10 Lakhs and B promises to bring for A, stars from heaven. The agreement is _______.

  1. void

  2. valid

  3. voidable

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

An agreement to do an act that is physically impossible (like bringing stars from heaven) is void under the law as it cannot be performed.

Multiple choice commerce performance of contract who will perform the contract performance, discharge, breach and remedies of contract business law and contract act

A teacher enters in to contract with a student to teach for the exams, but he dies before teaching. Now __________.

  1. legal representatives are bound to perform

  2. becomes enforceable

  3. voidable

  4. contract comes to an end
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Contracts involving personal skill are dependent on the continued existence of the promisor. Death of the promisor terminates such a contract.

Multiple choice commerce performance of contract who will perform the contract performance, discharge, breach and remedies of contract business law and contract act

In case of death of a Joint Promisor(s), the Promisee can ________.

  1. enforce the contract against the survivor(s) of the said Joint Promisor(s)

  2. not enforce the contract against the survivor(s) of the said Joint Promisor(s)

  3. not enforce the contract at all

  4. both (a) & (b)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In the event of the death of a joint promisor, the promisee can enforce the contract against the surviving joint promisor(s) and the legal representatives of the deceased promisor.

Multiple choice commerce performance of contract who will perform the contract performance, discharge, breach and remedies of contract business law and contract act

The right of Joint Promisees to demand performance is ________.

  1. joint

  2. several

  3. joint or several

  4. joint and several
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The right to claim performance by joint promisees is joint, meaning they must demand performance together unless the contract specifies otherwise.

Multiple choice commerce performance of contract who will perform the contract performance, discharge, breach and remedies of contract business law and contract act

Where performance of contract is remaining in part of both parties of contract, then such contract is known as __________.

  1. executed

  2. executory

  3. void

  4. voidable
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

An executory contract is one where the obligations of both parties are yet to be performed, as opposed to an executed contract where both have performed.

Multiple choice commerce performance of contract who will perform the contract performance, discharge, breach and remedies of contract business law and contract act

A agrees to pay B a sum of money if a certain ship does not return. The ship is sunk. The contract can be enforced _________.

  1. when the ship sinks

  2. before the ship sinks

  3. when the ship returns

  4. only in International Court of ustice
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

This is a contingent contract. If the event (ship returning) becomes impossible (ship sinks), the contract becomes void and can be enforced based on the condition of non-return.

Multiple choice commerce performance of contract who will perform the contract performance, discharge, breach and remedies of contract business law and contract act

In case of default by Joint Promisors, the Promisee can sue any one of them for the entire promise.

  1. True

  2. Partly true

  3. False

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

Under the Indian Contract Act, the liability of joint promisors is joint and several. This means the promisee can compel any one or more of the joint promisors to perform the whole promise.