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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 business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

An agreement of agency must make clear the _______of a person to act on behalf of another person.

  1. intention

  2. certainty

  3. involvement

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

An agreement of agency requires that the intention of the agent to act on behalf of the principal be clearly established. Intention forms the core legal basis for creating an agency relationship.

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Which of the following statement is false?

  1. Void agreements are punishable

  2. Illegal agreements are punishable

  3. Illegal agreements are forbidden under the law

  4. Collateral transactions of a void agreement are not void
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A void agreement is not punishable under law whereas an illegal agreement is considered as an offence, hence the parties to it are punishable and penalised under Indian Penal Code (IPC)


An illegal agreement is one which is forbidden by law ; but a void agreement may not be forbidden , the law may merely say that if it is made , the courts will not enforce it . Thus every illegal contract is void but a void contract is not necessarily illegal.

Collateral agreements of a void agreement may or may not be void i.e. they may be valid also. Conversely, collateral agreements of an illegal agreement cannot be enforceable by law as they are void ab initio.

Multiple choice social science dynamic of human development social aspects of gender and women's education position of women and major social evils women change the world

Following is a kind of consideration.

  1. Executory

  2. Executed

  3. Past

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

Consideration in contract law can take multiple valid forms based on timing relative to the promise, including executory consideration (to be performed in the future), executed consideration (already performed), and past consideration (done before the promise is made). Therefore, all the listed options are valid kinds of consideration.

Multiple choice elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

Which one of the following is NOT an effective way to terminate an offer?

  1. Rejection by the offeree.

  2. Failure of a conditions precedent.

  3. Revoking the offer following acceptance.

  4. Lapse of reasonable time
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

An offer cannot be revoked after it has been accepted, as a binding contract is formed upon acceptance.

Multiple choice elements of business partnership 2 - organisation, classification, rights, duties and liabilities of partners types of partners types of partners and partnership firms types, rights and duties of partners

Parties are not competent to contract if any of them is __________________.

  1. minor

  2. insane

  3. declared

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

Competency to contract requires that a person is of sound mind, not a minor, and not disqualified by law. Since all listed categories (minor, insane, declared disqualified) lack competency, 'all the above' is correct.

Multiple choice elements of business partnership 2 - organisation, classification, rights, duties and liabilities of partners types of partners types of partners and partnership firms types, rights and duties of partners

Agency by Estoppel means ____________.

  1. a person is being posed by the person as his agent

  2. a person himself believes that he is the agent of some other person.

  3. a person who becomes the agent because of some kind of necessary requirement.

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

Agency by estoppel occurs when a principal, by their conduct or words, leads a third party to believe that someone is their agent, even if no formal agency exists. The principal is then 'estopped' from denying the agency.

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

If any _______ is present while forming the agency then the relationship of agency becomes contractual.

  1. consideration

  2. law

  3. emotion

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

Under the Indian Contract Act, an agency relationship requires consideration to be a binding contract, although the law of agency itself has specific provisions regarding the authority of an agent.

Multiple choice economics theories of employment and income measures to alleviate unemployment unemployment measures unemployment and employment generation

Wagering Agreements void _______.

  1. in all of India

  2. in all of India except Jammu & Kashmir

  3. in all of India except Mumbai

  4. in all of India except Calcutta
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under Section 30 of the Indian Contract Act, 1872, wagering agreements are void throughout India. However, in the state of Maharashtra (specifically Mumbai), wagering agreements are declared illegal by local state legislation. Because illegal agreements are also void, they are technically void everywhere, but this distinction makes Mumbai unique in legal terminology regarding collateral transactions.

Multiple choice

employment contracts are...

  1. legal

  2. necessary

  3. enforceable by the government

  4. legally binding, formal agreement

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Employment contracts are legally binding, formal agreements between an employer and an employee that outline the terms and conditions of employment. While they are legal documents, option D provides the most complete and accurate legal definition.

Multiple choice

employment contracts are...

  1. legal

  2. necessary

  3. enforceable by the government

  4. legally binding, formal agreement

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

An employment contract is defined as a legally binding, formal agreement that establishes the terms and conditions of employment between an employer and an employee. While they are legal documents, option D provides the most complete and accurate definition of what they are.

Multiple choice

One party in a contract CAN transfer _____, but can NEVER transfer ________.

  1. responsibility, duties

  2. tender, duties

  3. remedies, damages

  4. duties, responsibility
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In contract law, a party can delegate their duties to another person, but they cannot transfer their ultimate responsibility or liability for the performance. If the person delegated to fails to perform, the original contracting party remains legally responsible for the breach.

Multiple choice

A business promises to donate money to a charity

  1. unilateral contract

  2. not an enforceable contract

  3. not a contract

  4. enforceable contract even without consideration
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Promises to make charitable donations (charitable subscriptions) are generally enforceable by courts as a matter of public policy, even though they lack mutual consideration. This is a well-known exception to the rule that contracts must have consideration to be legally binding.