1. Indian Contract Act came into force since
(a) 1st April ,1872,
(b) 1st January, 1872,
(c) 1st September, 1872,
(d) 1st July, 1872.
The Indian Contract Act, 1872 was enacted on 25th April, 1872 and subsequently came into force on the first day of September 1872. Options (a), (b) and (d) are not correct.
Hence, option (c) is the correct answer.
2. A Contract means
(a) a promise or set of promises forming consideration for each other
(b) an agreement between two parties
(c) an agreement enforceable by Law
(d) none of the above.
A Contract is an agreement enforceable by Law. When an agreement is valid as per the law of land and legally enforceable, it becomes a Contract. Options (a), (b) and (d) are not correct.
Hence, option (c) is the correct answer.
3. Which of these are essential elements of a valid contract?
(a) Adequacy of consideration
(b) Lawful consideration
(c) Must be in writing
(d) The offer and its acceptance must be in writing.
A contract must involve some lawful consideration (benefit etc). Consideration of a Contract may not be adequate. A Contract is valid even if the offer and acceptance is not written in paper. Options (a), (c) and (d) are not correct.
Hence, option (b) is the correct answer.
4. A & B promise to marry each other. Is it a valid contract?
(a) It is not a valid contract between A & B
(b) It is a valid contract between A & B
(c) It is a voidable contract at the option of any of the party
(d) None of the above.
The contract must be intended to create a legally binding relationship between the parties. Since A & B has promised to marry each other they intend form a legal relationship between them. So, it is a valid contract between A & B. Options (a), (c) and (d) are not correct.
Hence, option (b) is the correct answer.
5. An Executed Contract is
- An act of mutual exchange of promises
- An act done in the expectation of a proposal
- A contract in which parties performed their respective promises
- All of the above
When a contract has been executed completely in which both the parties performed their respective promises and nothing remains to be done by either party, it is termed as Executed Contract. Options (a), (b) and (d) are not correct.
Hence, option (c) is the correct answer.
6. If the terms of the Contract is written or spoken, it is called an
(a) Implied contract
(b) Express contract
(c) Formal contract
(d) Contract under seal.
Contracts in which terms are specified are called Express Contract. It may be oral of written. Options (a), (c) and (d) are not correct.
So, option (b) is correct.
7. P agrees to pay Rs 1 lakh to Q, if Q brings on earth a star from sky. This is a :
(a) Valid contract
(b) Void agreement
(c) Voidable contract
(d) Enforceable contract
In the given case, the terms of contract is unreal and impossible to perform. So, this is a void agreement. Options (a), (c) and (d) are not correct.
Hence, option (b) is the correct answer
8. X Promises to pay Z Rs.5,00,000, if Z can make his dead wife alive. Such an agreement is :
(a) Valid
(b) Void
(c) Voidable
(d) Unenforceable
As the terms of this contract is unreal & impossible to perform, it is a void agreement. Options (a), (c) and (d) are not correct.
Hence, option (b) is the correct answer.
9. A invites B for his son’s wedding. B accepts the invitation. In this case, there is a valid agreement but no valid contract, since:
(a) There is no consideration
(b) There is no intention to create legal relationship
(c) There is no written document
(d) There is no formal acceptance of the offer
Invitation related to wedding is not intended to create a legal relationship between parties. So, this is just an agreement but not a contract. Options (a), (c) and (d) are not correct.
Hence, option (b) is the correct answer.
10. An agreement enforceable by law amounts to
(a) offer
(b) promise
(c) contract
(d) obligation
An agreement enforceable by law amounts to a contract. Options (a), (b) and (d) are not correct.
Hence, option (c) is correct.
11. A Contract means
- a promise or set of promises forming consideration for each other
- an agreement between two parties
- an agreement enforceable by Law
- none of the above.
A Contract is an agreement enforceable by Law. Options (a), (b) and (d) are incorrect.
Hence, option (c) is correct.
12. M invites N for dinner in a restaurant and N accepts the invitation. On the appointed date, N goes there but M is not present. In this case
(a) N can sue M for not coming to the dinner
(b) N has no remedy against M
(c) M has to invite N again, to perform the promise
(d) N can claim compensation from M.
A contract must be intended to create a legally binding relationship between the parties. But, in this case, the invitation for dinner does not intend to create legal relationship between parties. So, no contract is established and N has no remedy against M. Options (a), (c) and (d) are incorrect.
Hence, option (b) is correct.
13. Which one of the following is an essential element of a valid contract?
(a) Acceptance of Offer
(b) Consideration
(c) Competent Parties
(d) all of the above.
In a valid contract, there must be an offer by one competent party and acceptance by another competent party. There must be a consideration also. So, statements in Options (a), (b) and (c) are all correct.
Hence, option (d) is correct.
14. In a Bilateral Contract,
(a) one party has performed his obligation while the other has yet to perform his obligation,
(b) promise on one side is exchanged for an act on the other side,
(c) both the parties are yet to fulfill their obligations,
(d) None of these.
In a Bilateral Contract, both the parties are yet to fulfill their obligations. Options (a), (b) and (d) are incorrect.
Hence, option (c) is correct.
15. A unilateral contract, in which only one party is bound is also known as a
(a) executed contract
(b) executory contract
(c) tacit contract
(d) Implied contract.
A contract where one or both the parties to the contract have still to perform their obligations is called as Executory Contract. So, Options (a), (c) and (d) are incorrect.
Hence, option (b) is correct.
16. Under which of these circumstances an agreement becomes void and illegal?
(a) When it is forbidden by law
(b) When it is voidable at the option of the aggrieved party
(c) When there is no consideration in the contract
(d) When it is a bilateral contract.
When an agreement is forbidden by law, it becomes void and illegal. Options (b), (c) and (d) are incorrect.
Hence, option (a) is the correct answer.
