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

In case of reciprocal promises, which is not applicable?

  1. They can perform simultaneously

  2. They cannot perform simultaneously

  3. They can be fixed by the parties to the Contract

  4. As depending upon the nature of the Contract
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Reciprocal promises can be performed simultaneously, or the order can be fixed by the parties or the nature of the contract. The statement that they cannot perform simultaneously is incorrect as it contradicts the standard provisions for reciprocal promises.

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

If no time is specified for performance of a Contract, it must be performed with in a reasonable time. " Reasonable time" means __________.

  1. which seems reasonable to the promisor

  2. which seems reasonable to the promise

  3. which is determined as reasonable by a third party

  4. which is reasonable under the facts and circumstances of the case
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Reasonable time is a question of fact. It is not determined by the subjective opinion of one party or a third party, but by the specific circumstances surrounding the contract.

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

Whether time is  the essence of the contract depends on _________.

  1. the intention of the parties

  2. the facts and circumstances of each separate case

  3. the provisions of law

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

Whether time is of the essence depends on the intention of the parties, the nature of the contract, and the facts and circumstances of the case. All these factors are relevant.

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

If time is the essence of the contract and the Promisor fails to perform the contract by the specified time, the contract _________.

  1. becomes void

  2. remains valid

  3. becomes voidable at the instance of the Promisee

  4. becomes unenforceable
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

If time is of the essence and the promisor fails to perform by the specified time, the contract becomes voidable at the option of the promisee. The promisee can choose to accept late performance or treat the contract as ended.

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

A Contract entered between Promisor and Promisee becomes impossible to perform due to destruction of subject matter. In this case __________.

  1. promisee is entitled for compensation

  2. contract continues to be valid

  3. contract is void

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

Under the doctrine of frustration, if the subject matter of a contract is destroyed without the fault of either party, the contract becomes void as it is impossible to perform.

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

Change in some or all terms of the Contract is ______.

  1. novation

  2. alteration

  3. merger

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

Alteration refers to a change in one or more of the terms of a contract, while the parties remain the same. Novation involves the substitution of a new contract or parties.

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

Novation of a contract under Indian Contract Act, means _______.

  1. cancellation of contract

  2. alteration of the contract

  3. the renewal of original contract

  4. substitution of a new contract in place of original contract
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Novation occurs when a new contract is substituted for an existing one, either between the same parties or with new parties, thereby discharging the original contract.

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

The original contract need not  be performed if there is _________.

  1. rescission of contract

  2. novation of contract

  3. alteration of contract

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

Rescission, novation, and alteration all result in the original contract being discharged or modified, meaning the original terms no longer need to be performed as they were.

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

N, a film star, agreed to act exclusively for K, a film producer, for one year. During the year, she contracted to act for some other producer. In this case, K ________.

  1. cannot sue N at all

  2. cannot restrain N by an injunction

  3. can restrain N by an injunction

  4. has to produce the film with other actors only
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In cases of negative covenants in a contract for personal service, the court may grant an injunction to prevent the party from performing the service for others, even if it cannot specifically enforce the positive act.

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

Specific performance may be ordered by the Court when________.

  1. the contract is voidable

  2. damages are an adequate remedy

  3. damages are not an adequate remedy

  4. defaulting party is not ready to pay damages
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Specific performance is an equitable remedy granted by the court when monetary damages are inadequate to compensate the aggrieved party for the breach.

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

Suit for specific performance of contract can be instituted by the promisee, where ___________. 

  1. the promisor has breached the contract

  2. the promisor has suffered abnormal loss

  3. damages are not an adequate remedy to promisee

  4. parties agree to go to court for remedy
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A suit for specific performance is appropriate when the subject matter is unique or where damages would not provide an adequate remedy for the breach.

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

An agreement for rendering services entered into by a father on behalf of his minor daughter is _______.

  1. Void

  2. Voidable

  3. Valid

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

A minor is incompetent to contract. An agreement entered into by a father on behalf of his minor daughter for personal services is void because the minor cannot be bound by 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

Contract contingent upon the non- happening of an uncertain future event can be enforced __________.

  1. when the happening of event becomes impossible

  2. when the event has happened

  3. at the time of making the contact

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

A contract contingent upon the non-happening of an uncertain future event becomes enforceable when the happening of that event becomes impossible, as the condition for non-happening is then fulfilled.

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

Status quo obligations arise:

  1. In case of legal obligations

  2. When the contract is made

  3. Outside scope of the Indian Contract Act, 1872

  4. Within the scope of the Indian Contract Act, 1872
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Status quo obligations generally refer to legal duties that exist independently of the specific provisions of the Indian Contract Act, often arising from other areas of law or equity.