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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
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Express contract
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Implied contract
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Void contract
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Quasi contract
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Contingent contract
D
Correct answer
Explanation
It is the correct answer.
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implied contract
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wagering contract
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contingent contract
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quasi contract
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formal contract
A
Correct answer
Explanation
It is the correct answer.
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void agreement
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void contract
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valid contract
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contingent contract
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wagering contract
B
Correct answer
Explanation
It is the correct answer.
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executory contract
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unilateral contract
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bilateral contract
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executed contract
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none of these
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An illegal agreement is definitely void.
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A void agreement is essentially an illegal contract.
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All contracts are agreements.
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An illegal agreement is illegal ab initio.
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An illegal agreement has wider scope than void agreement.
B
Correct answer
Explanation
It is not correct. A void agreement is not essentially illegal.
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The offerer and offeree must be distinct persons.
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It shows willingness or intention to do or to abstain from doing a particular thing.
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It is made to get the consent of other party.
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It must be endorsed or permitted by law.
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It should always be accepted by other party.
E
Correct answer
Explanation
It is not correct as offer is not always bound to be accepted. It may be rejected also.
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A specific offer may be accepted by anyone.
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A general offer may be accepted by anyone.
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An offer must be communicated to the concerned person.
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An offer is not the same as an invitation to offer.
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Statement of price is not an offer.
A
Correct answer
Explanation
It is not correct as specific offer can be accepted only by definite person or group to whom it is made.
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An offer lapses, if it is not accepted in prescribed mode.
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An offer lapses, if it is not accepted in stipulated or reasonable time.
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An offer lapses, if it is revoked by offerer before it is accepted.
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An offer lapses, if it is revoked after its acceptance.
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An offer lapses, if it is subsequently forbidden by law before it is accepted.
D
Correct answer
Explanation
It is not the correct statement.
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Acceptance must be absolute and unqualified.
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Acceptance may be implied from the silence of offeree.
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Acceptance must be in prescribed mode only.
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Acceptance must be communicated.
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Acceptance cannot precede an offer.
B
Correct answer
Explanation
It is not correct. If the offeree does not respond to offer, it does not become acceptance.
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Promise made on account of love and affection
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Contract of agency
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Complete gifts
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Pension given to retired employee
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Contract of guarantee given to bank for the loan taken by friend
D
Correct answer
Explanation
It is the correct answer. The pension given to retired employee is an example of past consideration, i.e. services given in the past.
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B/R is a negotiable instrument
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B/R must be accepted by drawee
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There can be three parties in respect of bills of exchange - drawer, drawee and payee
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Oral bill of exchange is also valid
D
Correct answer
Explanation
A bill of exchange is a written document.
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noting
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discounting
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acceptance
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none of the above
C
Correct answer
Explanation
Unlike Bill of Exchange, a Promissory note does not require any acceptance since it is signed by the persons who is liable to pay.
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guarantee
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undertaking
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underwriting
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pledge
C
Correct answer
Explanation
Underwriting is an agreement where by the underwriters ensure the company that in case the shares and debentures offered to the public, are not subscribed by the public to the extent, the balance of shares and debentures will be taken up by the underwriters.
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voidable
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void
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illegal
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voidable contract
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valid but voidable at the option of one party
B
Correct answer
Explanation
Option (1) is incorrect: Under Section 2(g) of the Indian Contract Act, 1872, an agreement not enforceable by law is void from the beginning and can never become voidable.
Option (2) is correct: Under Section 2(g) of the Indian Contract Act, 1872, an agreement not enforceable by law is said to be void.
Option (3) is incorrect: An agreement not enforceable by law is not illegal.
Option (4) is incorrect: Under Section 2(g) of the Indian Contract Act, 1872, an agreement when enforceable by law becomes contract.
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Proposal
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Acceptance
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Consideration
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Immovable property
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None of the above
D
Correct answer
Explanation
Option (1) is incorrect: For a valid agreement, there must be a proposal from one person. When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that either to such act or abstinence, he is said to make a proposal.
Option (2) is incorrect: When the person to whom the proposal is made, gives his assent, the proposal is said to be accepted. A proposal, when accepted, becomes a promise. An unaccepted proposal can never become a promise.
Option (3) is incorrect: When, at the desire of the person who made the proposal, the person to whom the proposal is made or any other person promises to do or to abstain from doing something, such act or promise is called a consideration for the promise. Hence, every promise and every set of promises, forming the consideration for each other, is an agreement.
Option (4) is correct: Immovable property is not required to make a valid agreement under the Indian Contract Act, 1872. Contract is not confined to immovable property.