1. “Consensus-ad-idem” means:
a. General consensus
b. Reaching of contract
c. Reaching an agreement
d. Meeting of minds upon the same thing in same sense
“Consensus-ad-idem” means that the two or more persons agree upon the same thing in the same sense. Hence, option (d) is the correct answer.
2. A contract made by mistake of law of land about the Indian Law, is:
a. Valid
b. Void
c. Voidable
d. Illegal
A contract is binding even if any of the party has contracted being ignorant of some law of the land. Hence, option (a) is the correct answer
3. Mistake as to foreign law is treated in the same manner as:
a. Mistake of Indian law
b. Mistake of fact
c. Misrepresentation
d. Fraud
Mistake as to foreign law is treated in the same manner as Mistake of fact. Hence, option (b) is the correct answer.
- A, a merchant of UP, made a contract to despatch 100 quintals of Sugar @ Rs.1200 per ton, to B at Delhi and B paid Rs.5,000 as earnest money to A. Both A & B were unaware that movement of sugar from and into the state of UP was banned by a recent notification by the Govt. A could not deliver goods due to the law.
a. B can claim refund of the earnest money of Rs.5,000 only from A
b. B cannot claim anything from A
c. B can claim refund of the earnest money of Rs.5,000 and damages from A
d. None of the above.
Bilateral mistake arise when both parties make mistake essential to the agreement. The agreement under Bilateral Mistake is void. So, in the given case, B can claim refund of the earnest money of Rs.5,000 only from A.
Hence, option (a) is the correct answer.
- In a contract both the parties believe that the subject matter of the contract is in existence but which is in fact not in existence. Agreement shall be:
a. Valid
b. Void
c. Void due to bilateral mistake
d. Void due to unilateral mistake
Bilateral mistake arises when both parties make mistake essential to the agreement. So, when both the parties in a contract believe that the subject matter of the contract is in existence but which is in fact not in existence, the agreement shall be void due to bilateral mistake. Hence, option (c) is the correct answer
- A contracts with B to construct a building at Rs.1,00,000 for B, as per specification. While the work was under progress, A threatens to quit unless B agrees to pay him an additional Rs.10,000. B agrees to pay. A completes the work and asks for the additional sum.
a. A is not liable to pay to B
b. A is liable to pay Rs.1,00,000 to B
c. A is liable to pay Rs.1,10,000 to B
d. None of the above.
Here, as A claims an additional amount of Rs.10,000 by threatening B it can be considered as coercion and hence, A is liable to pay only Rs.1,00,000 to B. So, option (b) is the correct answer.
- A threatens B’s wife that their son C would be abducted if B did not lease their land to him (A). This is a case of
a. Undue influence
b. Coercion
c. Fraud
d. Misrepresentation
Coercion is exercised if some property is unlawfully detained or threatened to detain, to the prejudice of some person. In this case, A by threatening B induces to enter into a contract. So, this is a case of Coercion. Hence, option (b) is the correct answer.
- Threat to commit suicide amounts to
a. Undue influence
b. Fraud
c. Cheating
d. Coercion.
As per s.15, committing or threatening to commit any act amounts to coercion and forbidden by the Indian Penal Code. Hence, option (d) is the correct answer.
- When the consent is obtained by coercion, the contract is
a. Valid
b. Void
c. Voidable
d. None of these
When a contract is entered by any party effected by coercion, the contract is voidable at the option of the Party who was influenced by coercion. Hence, option (c) is the correct answer.
- An illiterate old woman made a gift deed for practically her entire property to her nephew who managed her affairs. The gift can be set aside on the grounds of:
a. Mistake
b. Coercion
c. Fraud
d. Undue Influence
A contract is said to be induced by undue influence where one of the parties is in a position to dominate the will of the other and uses his position to obtain unfair advantage over the other. Here, the nephew of the old woman, taking the benefit of her illiteracy, has captured almost her entire property. So, the gift can be set aside on the grounds of Undue Influence. Hence, option (d) is the correct answer.
- Where the pre – assumption of “Undue Influence” does not exist?
a. Husband & Wife
b. Father & Son
c. Teacher & Student
d. Doctor & Patient
There is pre-assumption of Undue Influence in the relationship between Parent & Child, Guardian & Ward, Trustee & Beneficiary, Preacher & Disciple, Doctor & Patient, Solicitor & Client, Fiancé & Fiancée etc. However, there is no presumption of undue influence between Husband & Wife. Hence, option (a) is the correct answer.
- Under which of the following situations, can the presumption of undue influence be rebutted?
a. Full disclosure of fact was made to the party alleged to have been unduly influenced
b. The price was not extremely inadequate
c. The influenced party had independent advice before making the promise
d. All of these.
The presumption of undue influence can be rebutted if it is proved that:
– Full disclosure of the fact was made to the party alleged to have been unduly influenced, at the time of entering into the contract.
-The Price was not extremely inadequate.
– The influenced party had independent advice before making the agreement, if it is proved that such advice was competent and based on full knowledge of facts.
Hence, option (d) is the correct answer.
- A knows that the car he was buying from B was of year 2000 model although B sold it representing it as year 2004 model. Can A avoid the contract on the basis of misrepresentation?
a. A cannot rescind the contract and must pay B for the Car at agreed price
b. A can rescind the contract and can get back price of the Car from B
c. A can get back price of the Car from B and also claim damages on B
d. None of the above.
When a person positively asserts that a fact as true when his information does not warrant to be so, though he believes it to be true then it is known as Misrepresentation. Here, A bought the car becoming aware of the misrepresentation of B. So, it is a valid contract and A loses his right to rescind the contract.
Hence, option (a) is the correct answer.
- Though the husband was a divorcee, he did not disclose the fact of his previous marriage to his wife and in-laws. It was held that the consent was obtained by:
a. Mistake
b. Misrepresentation
c. Fraud
d. None of the above
Fraud means an act committed with intent to deceive another party to induce him to enter into the contract. In this case, the husband has concealed the fact (i.e., he is a divorcee) having knowledge of the fact. So, it was held that the consent was obtained by Fraud. Hence, option (c) is the correct answer.
- Silence does not amount to fraud unless silence is
a. Reasonable
b. Unreasonable
c. Equivalent to speech
d. None of the above
Mere silence to affect the willingness of a person to enter into a contract is not fraud, unless his silence is, in itself, equivalent to speech. Hence, option (c) is the correct answer.
- A fraudulently informs B that his house is free from encumbrances. B thereupon buys the house. The house is subject to a mortgage.
a. The contract is binding and B cannot claim back the money from A
b. The contract is voidable and B can claim back his money and claim damages from A
c. B can rescind the contract and claim back his money, but cannot claim any damages
d. None of the above.
A contract induced by fraud is voidable at the option of the party defrauded and the party whose consent was obtained by fraud may sue for damages. Hence, option (b) is the correct answer.
- X offers to sell a painting to Z which X knows is the copy of a well ¬known master piece. Z thinking that the painting is original decides to buy it at a very high price. Is this a valid contract?
a. Yes, price is not the criteria for setting aside the contract
b. No, X is guilty of fraud
c. Yes, Z has an erroneous belief as to the value of the painting
d. No X is guilty of misrepresentation
Z has an erroneous belief (i.e., the painting is original) as to the value of the painting though X knows that the painting was a copy of a master piece. So, it is a valid contract. Hence, option (c) is the correct answer.
- X sold rice to Y by sample and Y thinking that they were old rice, purchased them, but the rice was new. In this case:
a. Y is bound by the contract
b. Y is not bound by the contract
c. Y can recover damages from X
d. Y can sue for replacement of new rice with old rice
Y has an erroneous belief (i.e., rice is old) as to the quality of rice. He purchased the rice thinking that they were old, but the rice was new. So, it is a valid contract and Y is bound by the contract. Hence, option (a) is the correct answer.
- Which of the following statement is false?
a. A contract is not voidable if fraud or misrepresentation does not induce the other party to enter into a contract
b. A party cannot complain of fraudulent silence or misrepresentation if he had the means of discovering the truth with ordinary means
c. In case of fraud or misrepresentation, aggrieved party can either rescind or affirm the contract
d. A party who affirms the contract, can also change his option afterwards if he so decides
A party who affirms the contract, the contract is binding and cannot change his option afterwards. So, statement under option (d) is not correct. But, statements under options (a), (b) and (c) are correct. Hence, option (d) is the correct answer.
- A pays some money to B by mistake. It is really due to C.
a. C can recover from B
b. A can recover from B
c. Both (a) and (b)
d. None of the above.
As per sec. 72, a person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it to the person. So, A can recover the money from B. Hence, option (b) is the correct answer.
- A, a tradesman, sends some goods ordered by B. A’s servant delivers the goods by mistake at C’s house. C sold the goods to D.
a. A can recover the price of the goods from B
b. A can recover the price of the goods from C
c. A can recover the price of the goods from D
d. None of the above.
Here A has delivered the goods to C by mistake. So, he can recover the price of the goods from C. Hence option B is correct.
- Coercion, Fraud and misrepresentation makes contract
A. Void of the option of the party whose consent was caused
B. Voidable on the option of the party whose consent so caused
C. Valid for both sides
D. None of above
Coercion, Fraud and misrepresentation makes contract Voidable on the option of the party whose consent so caused. So Answer B is correct
- A intending to deceive B falsely represents that 500 mounds of Indigo are made annual at A’s factory and thereby induces B to buy the factory. The contract is :
A) Voidable at the option of B.
B) Voidable at the option of A.
C) Valid
D) Void .
The contract is voidable at the option of B who was deceived. Hence option A is correct.
