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Contract Law

1,497 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 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.

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.