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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

What is the term for a legal agreement between two or more parties?

  1. Contract

  2. Covenant

  3. Indenture

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

A contract is a legal agreement between two or more parties.

Multiple choice

What is a third-party beneficiary in a contract?

  1. A person who is not a party to the contract but who receives a benefit from it.

  2. A person who is a party to the contract but who does not receive a benefit from it.

  3. A person who is not a party to the contract but who is harmed by it.

  4. A person who is a party to the contract and who is harmed by it.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A third-party beneficiary is a person who is not a party to a contract but who receives a benefit from it. This benefit can be anything of value, such as money, property, or services.

Multiple choice

What rights do intended third-party beneficiaries have?

  1. The right to enforce the contract.

  2. The right to sue for breach of contract.

  3. The right to receive the benefit of the contract.

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

Intended third-party beneficiaries have the right to enforce the contract, the right to sue for breach of contract, and the right to receive the benefit of the contract.

Multiple choice

What is the doctrine of promissory estoppel?

  1. A doctrine that prevents a promisor from revoking a promise that has been relied upon by a third party.

  2. A doctrine that allows a third party to enforce a contract even if they are not a party to the contract.

  3. A doctrine that imposes a duty on a promisor to disclose all material facts to a third party.

  4. A doctrine that allows a third party to recover damages from a promisor for breach of contract.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The doctrine of promissory estoppel prevents a promisor from revoking a promise that has been relied upon by a third party. This doctrine is based on the principle that it would be unfair to allow a promisor to make a promise that they know will be relied upon by a third party and then later revoke that promise.

Multiple choice

Can a third-party beneficiary enforce a contract?

  1. Yes, if they are an intended beneficiary.

  2. Yes, if they are an incidental beneficiary.

  3. No, third-party beneficiaries cannot enforce contracts.

  4. It depends on the jurisdiction.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Intended third-party beneficiaries can enforce a contract, but incidental third-party beneficiaries cannot. This is because intended third-party beneficiaries are parties to the contract, while incidental third-party beneficiaries are not.

Multiple choice

Which of the following is not a requirement for a valid contract?

  1. Agreement

  2. Consideration

  3. Capacity

  4. Legality
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Legality is not a requirement for a valid contract. The other three elements are essential for a contract to be valid.

Multiple choice

A contract is illegal if it:

  1. Is against public policy

  2. Is prohibited by statute

  3. Is contrary to good morals

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

A contract is illegal if it is against public policy, prohibited by statute, or contrary to good morals.

Multiple choice

Which of the following is an example of a contract that is illegal because it is against public policy?

  1. A contract to sell drugs

  2. A contract to commit a crime

  3. A contract to restrain trade

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

All of the above are examples of contracts that are illegal because they are against public policy.

Multiple choice

Which of the following is an example of a contract that is illegal because it is prohibited by statute?

  1. A contract to sell alcohol to a minor

  2. A contract to gamble

  3. A contract to work without a license

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

All of the above are examples of contracts that are illegal because they are prohibited by statute.

Multiple choice

Which of the following is an example of a contract that is illegal because it is contrary to good morals?

  1. A contract to sell a human organ

  2. A contract to engage in prostitution

  3. A contract to commit adultery

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

All of the above are examples of contracts that are illegal because they are contrary to good morals.

Multiple choice

What is the effect of an illegal contract?

  1. The contract is void

  2. The contract is voidable

  3. The contract is unenforceable

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

An illegal contract is void, voidable, and unenforceable.

Multiple choice

Who can challenge the validity of an illegal contract?

  1. The parties to the contract

  2. The government

  3. Third parties who are injured by the contract

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

All of the above can challenge the validity of an illegal contract.

Multiple choice

Is a contract to sell a kidney illegal?

  1. Yes

  2. No
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Selling a kidney is illegal in most countries because it is against public policy and contrary to good morals.

Multiple choice

Is a contract to gamble on the outcome of a sporting event illegal?

  1. Yes

  2. No
Reveal answer Fill a bubble to check yourself
Correct answer
Explanation

The legality of gambling contracts depends on the laws of the jurisdiction in which the contract is made.

Multiple choice

Is a contract to work as a prostitute illegal?

  1. Yes

  2. No
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Prostitution is illegal in most countries, so a contract to work as a prostitute is also illegal.