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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 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

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

This is NOT an element of constructive dismissal

  1. There must be a breach of the contract by the Employer

  2. The Employee must leave as soon as possible

  3. The breach of contract can ne trivial or major

  4. Employee must leave the employment because of the conduct of the Employer
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For constructive dismissal to be established, the breach of contract by the employer must be fundamental or major, not trivial. Trivial breaches do not justify an employee treating the contract as terminated.

Multiple choice

Which one is not a dismissal

  1. employer terminates the contract

  2. fixed term contract finishes

  3. employee leaves to go to another job

  4. employee resigns on the basis of constructive dismissal
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When an employee voluntarily resigns to take another job, it is a voluntary resignation, not a dismissal. In contrast, employer termination, the expiration of a fixed-term contract, and constructive dismissal are legally classified as forms of dismissal.

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.

Multiple choice

Each party in a valid contract must be giving up something

  1. acceptance

  2. consideration

  3. benefit

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

Consideration is the legal value, benefit, or detriment bargained for and exchanged between parties in a contract. For a contract to be valid, both parties must incur a legal detriment by giving up something of value or promising to do something they are not otherwise obligated to do.

Multiple choice

A written contract must include all of these EXCEPT...

  1. date

  2. price

  3. names of parties

  4. right of transfer clause
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A written contract must contain essential terms such as the names of the parties, the subject matter, the price or consideration, and usually the date or time of performance. A 'right of transfer' clause (or assignment clause) is an optional provision and is not required for a contract to be legally binding.