Consideration – Multiple Choice Questions -

Last Updated on: 19th July 2024, 03:10 pm

1. Which of the following amounts to a valid consideration?

(a) The promise by father to gift a bike to son on passing the Exam

(b) A promise to do something which is already bound to do under an existing contract

(d) Both (a) and (c) above.

The promise by father to gift a bike to son on passing the Exam does not constitute valid consideration.A promise to do something, which is already bound to do either by general law or under an existing contract is not a valid consideration for a new promise, since it adds nothing to the pre-existing legal or contractual obligation.

Where a person undertakes to do something more than what he is bound to do under the original contract, it will constitute valid consideration.

Hence, option (c) is the correct answer.

2. A consideration is :

(a) A reason behind making a proposal

(b) A condition of the fulfillment of the other’s promise

(d) Reward for something which one has done for another

Consideration is an act or abstinence for promise done at the desire of the promisor, by the promisee or any other person. Hence, option (c) is the correct answer.

3. Which one of the following promises is enforceable?

X promises to pay Rs.5,000/- to Y who saved him from drowning

X promises to pay Rs.5,000/- to his son

X promises to donate Rs.5,000/- to an Officer’s Club

(a) X promises to pay Rs.5,000/- as additional fees to his advocate for winning a suit

(b) The promise is enforceable as there is past consideration supplied by X. Here, Y has already performed his obligation before formation of the contract. Hence, option (a) is the correct answer.

(d) This promise cannot be enforced by law as there is no consideration. Hence, option (c) is not correct.

It is the duty of an advocate to plead the case. So, promise for additional fees for winning suit is not enforceable by law. Hence, option (d) is not correct.

4. Which of the following statement is true:

(a) Consideration must be adequate

(b) Consideration must result in a benefit to both the parties

(d) Past consideration is no consideration in India

Consideration need not be adequate and it may result in a benefit to one party and a detriment or loss to the other party or a detriment to both. So Option A and B is not correct. Moreover, Consideration must be something, which a promisor is not already bound to do. So, option (c) is the correct. Also past consideration is valid in India. So, option D is not correct. Hence, option (c) is the correct answer.

5. While B was on a holiday tour, a storm damaged B’s roof. A repaired the roof immediately. On return, A asked Rs.5,000 for the repairs but B promised to pay Rs.4,000 only .

(a)vA is entitled to claim Rs.5,000 from B

(b) A is entitled to claim Rs.4,000 from B

(d) None of the above.

A cannot demand payment from B for voluntary services not asked by A. Whereas if B promises to pay anything to A then A can claim the same from B. So, A is entitled to claim Rs.4,000 from B. Hence, option (b) is the correct answer

6. Consideration in India must be :

(a) Past consideration only

(b) Present consideration only

(d) May be Past, Present or future consideration

Consideration in India may be past, present or future. Hence, option (d) is the correct answer.

7. Which of these constitute a valid contract?

(a) B promised to pay Rs.1,00,000 as a donation to a club

(b) X promised to donate Y Rs.20,000 to enable him to meet the medical expenses of his ailing brother

(d) All the three.

B has declared a reward of Rs.10,000 to A for saving his goods from fire. So, a contract arises between them for a past consideration. Hence, there is a contract. So, option (c) is the correct answer.

8. A saves B from a car accident. B promises to pay him Rs.5000 out of gratitude. The consideration for B’s promise is a :

(a) Executed consideration

(b) Executory consideration

(d) Past consideration.

The consideration received by a party in the past (i.e., before formation of the contract), is called as past consideration. Where a party has already performed his obligation (i.e., before formation of the contract), he has supplied past consideration. In the given case, A saves B from an accident. After that B promises a reward of Rs.5,000 to him. So, this is related to past consideration. Hence, option (d) is the correct answer.

9. B cries for help while swimming. A, hears the cry, dives into water and rescues B. Seeing this, C, another passer by, joins and helps to get water out of B’s stomach. B, full of gratitude, promises A only to pay Rs.2000 and profusely thanks C, but B does not pay anything to C.

(a) A can recover Rs.2000 money from B

(b) A & C can recover Rs.1000 each from B

(d) None of the above.

Here, B had promised to pay Rs.2,000 only to A out of past consideration. Hence, A can recover Rs.2,000 from B according to his promise. So, option (a) is the correct answer.

10. A agrees to his advocate to pay Rs.1000 extra over his normal service charge of Rs.2000, if he wins the case. A wins the case.

(a) A is liable to pay Rs.2000

(b) A is liable to pay Rs.3000

(d) None of the above.

The advocate should properly plead his duty. He (advocate) was under a pre-existing contractual obligation. So, he cannot claim performance of conditional promise which is legally not enforceable. So, A is liable to pay only Rs.2,000. Hence, option (a) is the correct answer.

11. A in dire need of money, sells to B his new car purchased two months ago at a cost of Rs.1,00,000 for Rs.25,000. Afterwards A seeks to set aside the contract on the ground of inadequacy of consideration.

(a) A can refuse to sell the Car to B, setting aside the contract

(b) B is entitled to get the Car from A at Rs.25,000 as per contract

(d) None of the above.

Being in dire need of money, A sells his car to B at a cheaper price of Rs.25,000. There was no coercion or misrepresentation in the contract. This is a valid contract and so B is entitled to get the Car from A at Rs.25,000 as per contract.

Hence, option (b) is the correct answer.

12. A invites B for his son’s wedding. B accepts the invitation. In this case there is an agreement but no contract, since

(a) There is no consideration

(b) There is no intention to create legal relationship

(d) There is no formal acceptance of the offer

There is no Contrcat as there is no intention to create legal relationship

13. A was badly in need of money and offered to sell his piano worth Rs.8,500 to B for Rs.5,000. B refused to buy. A gradually lowered his price until Rs.2,500 was reached, which B accepted. Before the piano was delivered A received an offer of a larger sum from X and he refused to sell Piano to B claiming that the consideration was inadequate. Is A liable to pay damages to B if he does not sell the Piano to B at 2500.?

(a) No, as the consideration was inadequate A cancelled the contract

(b) Yes, A is liable to pay damages to B for failure to carry out his part of the contract

(d) Any of the above

Since A agreed to sell his piano at Rs.2,500 to B, the contract to sell the Pian at Rs 2500 is valid. If a party to a contract fails to carry out his part of contract, he is liable to pay damages to the other party. So, A is liable to pay damages to B for failure to carry out his part of the contract. Hence, option (b) is the correct answer.

14. An agreement entered into with free consent & lawful but inadequate consideration is:

(a) Void

(b) Voidable

(d) Valid

Consideration need not be adequate to a contract, if the consent is free. So, an agreement entered into with free consent & lawful but inadequate consideration is valid. Hence, option (d) is the correct answer.

15. Which of the following statement is NOT TRUE?

(a) Forbearance can be a consideration for a contract

(b) Abstinence can be a consideration for a contract

(d) Consideration must be real.

Forbearance or Abstinence to do may be a Consideration of a Contrcat. Consideration must be real and not illusory. A contract to do something illusory, unreal & impossible is not valid. Hence, option (c) is the correct answer.

16. A declares to pay Rs.1000 to anyone who finds his missing boy. He also reports to the police about it. A policeman finds the boy and claims Rs.1000 from A.

(a) A must pay Rs.1000 to the policeman

(b) A may refuse to pay Rs.1000 to the policeman

(d) None of the above.

Consideration must not be something which is duty of the promisor. No consideration emerges for something done which the person is bound to do under the law or a part of duty. In the given case, the policeman cannot claim Rs.1,000 because it is his duty to fetch A’s missing boy for which he (A) has already reported to the police station. Hence, option (b) is the correct answer.

17. A stranger (Third Party) can be a Party to a

(a) Contract

(b) Promise

(d) Consideration

A stranger cannot be party to Contract, Promise or Agreement. However, consideration may from or to a third party (stranger). Hence, there can be a stranger to a consideration. Hence, option (d) is the correct answer

18. Contract without consideration is valid when made

(a) Out of love and affection due to near relationship

(b) To pay a time barred debt

(d) All of these

A contract without consideration is valid in case of promise to pay a time barred debt, compensation for voluntary services and love and affection due to near relationship. Hence, option (d) is the correct answer.

19. A owes B an old debt of Rs.1,000, barred by limitation. When demanded by B, A gives a letter to B agreeing to pay him Rs.500 on account of the debt. What B can recover from A?

(a) B can recover Rs.500 as promised

(b) B can recover Rs.1000, the original amount due

(d) None of the above.

Promise to pay a time barred debt is enforceable if it is in writing and signed by debtor or specifically authorized on his behalf. So, A can recover Rs.500 as promised.

Hence, option (a) is the correct answer.

20. Written assent for Payment of time-barred debt is:

(a) Valid

(d) Void

(d) Voidable

Payment of time-barred debt is enforceable and valid if it is in writing and signed by debtor or specifically authorized on his behalf. Hence, option (a) is the correct answer.

21. A is indebted to B. A sells a trolley to C. C promises to pay all debts of A to B. If C fails to pay, B has no right to sue C because

(a) C is stranger to consideration

(b) C is stranger to contract

Only the parties to a contract can sue, and be sued on that contract. As C is a stranger to the contract formed between A and B, B cannot sue C on his failure to pay the debt of A. Hence, option (b) is the correct answer.

22. A promises to make a gift of Rs.3,000 towards the repairs of a temple. The trustee of the temple, on the faith of his promise, incurs liabilities of Rs.2,000 for the repair work. A does not pay.

(a) The trustee cannot recover anything from A.

(b) The trustee can recover Rs.3,000 from A.

If a person promises to contribute to charity and on this faith, the promisee undertakes a liability not exceeding the promised subscription, the contract shall be valid. In the given case, the trustee of the temple incurs liability of Rs.2,000 on the faith of A’s promise. Hence, it constitutes a valid contract and the trustee cant recover Rs.2,000 from A. So, option (c) is the correct answer.

23. A invites B to attend a friendly dinner on a Sunday at A’s house. B hires a taxi and comes to A’s house but A fails to host the dinner. B claimed damages from A for loss of time and expenses to come to A’s house.

(a) B cannot claim damages from A

(b) B can claim damages from A

(d) None of the above.

The contract must be intended to create a legally binding relationship between the parties. In the given problem, A has just invited B in a friendly dinner. There is no contract between A and B. So, B cannot claim damages from B. Hence, option (a) is the correct answer.

24. A’s uncle promises him a watch as a gift on his next birthday. Uncle does not give it.

(a) Uncle is liable to give a watch to A on his birthday

(b) Uncle is not liable to give a watch to A on his birthday

(d) None of the above.

A contract must be intended to create a legally binding relationship between the parties. In the given problem, the promise to gift a watch on birthday does not intent to create a legal relationship. So, there is no contract and Uncle is not liable to give a watch to A on his birthday. Hence, option (b) is the correct answer.

Quasi Contract

01. The principle that no one shall be allowed to enrich himself at the expense of another is applied in

(a) Quantum Meruit

(b) Nudem Pactum

(d) None of these.

Quantum Meruit means one will get what he deserves. So, option A is not correct. Nudem Pactum (or Naked Promise) means contract without consideration is not valid. So, option B is not correct. Quasi contracts are based on principles of equity & justice that no person shall be allowed to enrich himself at the expense of another. So, option (c) is the correct answer

02. The basis of ‘quasi contractual’ relations is the

(a) Existence of a valid contract between the parties

(b) Prevention of unjust enrichment at the expense of others

(d) Provisions contained in section 10 of the Indian Contract Act

Quasi contract is based upon the principle of equity and good conscience that no one can gain at the expense of others. Hence, option (b) is the correct answer.

03. The contracts in which law creates certain rights & obligations similar to those of a contract are

(a) Contingent contract

(b) Constructive contract

(d) Quasi contract

Even without entering into a contract, a legal relationship comes up with rights and obligations attached to it like a contract, termed as Quasi Contract. Hence, option (d) is the correct answer.

04. U leaves his goods at V’s place who consumes them. V is bound to pay the price. V’s act of consumption of goods constitutes an implied promise to pay, under the principal of:

(a) Deemed Contractual Obligations

(b) Semi Contractual Obligations

(d) Quasi – Contractual Obligations

Quasi – Contractual Obligations arise when two or more parties create legal relationship between them without entering into a contract. In this case, the act of consumption of goods by V (finder of goods) constitutes an implied promise to pay, under the principal of Quasi – Contractual Obligations. Hence, option (d) is the correct answer.

05. ………………. are the contracts implied by law:

(a) Contingent contracts

(b) Implied contract

(d) All of these

Quasi contracts are the contracts implied by law. Hence, option (c) is the correct answer.

06. A quasi contract is created by

(a) Agreement

(b) Consensus ad idem

(d) None of the above.

A quasi contract is imposed by operation of law. There is no Express Agreement or contract by the parties. Hence, option (c) is the correct answer.

07. The Indian Contract Act deals with the following Quasi – Contractual obligations:

(i) Claim for necessaries supplied to a person incompetent to contract

(ii) Responsibility of finder of goods

(iii) Re-imbursement of money paid, due by another

(iv) Obligation of person enjoying benefit of non – gratuitous act

(a) (ii) & (iii)

(b) (i) &(ii)

(d) (iii) & (iv)

The Indian Contract Act deals with the Quasi – Contractual obligations like, claim for necessaries supplied to a person incompetent to contract, responsibility of finder of goods, re-imbursement of money paid, due by another and obligation of person enjoying benefit of non – gratuitous act. Hence, option (c) is the correct answer.

Quantum Meruit

01. The amount of compensation that can be claimed by a person for the services rendered by him on repudiation of Contrcat is determined by the principle of

(a) Restitution

(b) Uberrimae Fidei

(d) Supervening impossibility.

Restitution means bring the party into original position. So, option A is not correct. Uberimae fidei is about contracts created under utmost good faith. So, option B is not correct. According to the Doctrine of Quantum Meruit, when a person has done something under a contract and the other party repudiates the contract, then the performing party can claim remuneration to the extent of the work done. Hence, option (c) is the correct answer. Supervening Impossibility is about situation when Contrcat becomes impossible to perform. So, option D is not correct

02. In which of the following cases a claim is not enforceable on the ground of quantum meruit?

(a) A is engaged by B to write a book to be published in instalments in weekly magazine. The magazine is abandoned after a few issues.

(b) A is employed as a managing director in a company. After he renders service for sometime it is found that the directors were not qualified to appoint him as such.

(c) A undertakes to build a house for B for Rs.25,000, but after having done half the work he abandons the contract. B afterwards completes the house.

(d) A decorates B’s flat and fits a wardrobe and a book-case for a lump sum of Rs.15,000. The work is done but B complaints of faulty workmanship.

In case of option (c), A cannot recover the value of the part he had completed because the contract was for the completion of the entire work. Due to abandonment by A, B had no alternative but to complete the rest of the work. So, in this case, the claim is not enforceable on the ground of quantum meruit. In case of (a) and (b), A can claim for the proportionate work done or period worked. In case of (d), A has performed the job, but faulty. This is not a case of Quantum Meruit. Hence, option (c) is the correct answer.

03. The phase “Quantum Meruit” Literally means:

(a) As soon as possible

(b) As much as is earned

(d) Quantity of goods

The phase “Quantum Meruit” literally means as much as is earned. Hence, option (b) is the correct answer.

04. A is engaged by B to write a series of articles in 10 instalments to be published weekly in a weekly magazine, for Rs.10,000 for the entire series. The magazine is abandoned after 4 issues are published carrying the Article.

(a) A cannot recover anything from the magazine

(b) A can recover Rs.10,000 from the magazine

(d) None of the above.

When a person has done something under a contract, and the other party repudiates the contract, or further performance of the contract becomes impossible, then the performing party can claim remuneration to the extent of the work done. So, A can recover Rs.4,000 (Rs.10,000 x 4/10) from the magazine for 4 instalments completion. Hence, option (c) is the correct answer.

05. A is employed as a managing director in a company in April for a period of one year. After he rendered service for April, it is found that the directors were not qualified to appoint him.

(a) A cannot claim anything form the Company

(b) A can claim salary for April only from the Company

(d) None of the above.

When a person has done something under a contract, and the other party repudiates the contract, or further performance of the contract becomes impossible, then the performing party can claim remuneration to the extent of the work done. So, A, who was employed as a managing director by the directors of the company, is entitled to claimsalary for April only from the Company on quantum meruit even if the directors were not qualified to appoint him. Hence, option (b) is the correct answer.

06. The claim for Quantum Meruit arises only when the original contract is.

(a) Renewed

(b) Revoked

(d) Discharged.

The claim for quantum meruit arises only when the original contract is discharged. Hence, option (d) is the correct answer.

07. A undertakes to build a house for B for Rs.25,000 to be paid after completion. But after having done half the work he abandons the contract. B afterwards completes the house.

(a) A is not entitled to claim anything from B

(b) A is entitled to claim Rs.25,000 from B

(d) None of the above.

A can not recover the value of the part he had completed because the payment was to be made only on the completion of the entire work. Due to abandonment by A, B had no alternative but to accept the part completed and complete the rest of the work. Hence, option (a) is the correct answer.

Consideration – Multiple Choice Questions

Quasi Contract

Quantum Meruit

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