MCQs on Indian Contract Act 1872 (1)

1. The Indian Contract Act came into force on:

(a) 15th September, 1872
(b) 1st September, 1872
(c) 1st October, 1872
(d) 15th October, 1872.

Answ er - (b)

2. The Indian Contract Act, applies to the:

(a) Whole of India excluding Jammu & Kashmir
(b) Whole of India including Jammu & Kashmir
(c) States notified by the Central Government from time to time
(d) None of the above. Answer:

Answ er - (a)

3. An agreement consists of reciprocal promises between at least

(a) four parties.
(b) six parties.
(c) three parties.
(d) two parties.

Answ er - (d)

4. Every promise and every set of promise forming the consideration for each other is
a/an
(a) contract.
(b) agreement.
(c) offer.
(d) acceptance.

Answ er - (b)

5. Contract is defined as an agreement enforceable by law, vide Section … of the Indian

Contract Act.
(a) Section 2(e)
(b) Section 2(f)
(c) Section 2(h)
(d) Section 2(i)

Answ er - (c)

6. Valid contracts
(a) are made by free consent.
(b) are made by competent parties.
(c) have lawful consideration and lawful object.
(d) all of the above.

Answ er - (d)

7. A contract creates
(a) rights and obligations of the parties to it.
(b) obligations of the parties to it.
(c) mutual understanding between the parties to it.
(d) mutual lawful rights and obligations of the parties to it.

Answ er - (b)
8. In agreements of a purely domestic nature, the intention of the parties to create
legal relationship is
(a) to be proved to the satisfaction of the court.
(b) presumed to exist.
(c) required to the extent of consideration.
(d) not relevant at all.

Answ er - (a)

9. ………………. is forbidden by law.

(a) Valid contract
(b) Illegal agreement
(c) Voidable contract
(d) Unenforceable contract

Answ er - (b)

10. A makes a contract with B to beat his business competitor. This is an example of
(a) valid contract.
(b) illegal agreement.
(c) voidable contract.
(d) unenforceable contract.

Answ er - (b)

11. Which of the following legal statement is incorrect?

(a) An agreement enforceable by law is a contract [Section 2]
(b) All agreements are contracts [Section 10]
(c) A proposal when accepted becomes a promise [Section 2]
(d) Every promise and every set of promise forming the consideration for each other is an
agreement [Section 2(e)]

Answ er - (b)

12. ……………… is made by words written.

(a) Express contract
(b) Implied contract
(c) Tacit contract
(d) Unlawful contract

Answ er - (a)

13. Agreement the meaning of which is uncertain is

(a) Void
(b) Valid
(c) Voidable
(d) Illegal Answer:

Answ er - (a)

14. Which of the following relationship raise presumption of positive

influence?
(a) Parent and Child
(b) Religious/ Spiritual Guru and disciple
(c) Guardian and Ward
(d) All of the above

Answ er - (d)
15. Which of the following is false with respect to minor entering a contract?
(a) An agreement with or by a minor is void ab initio
(b) A minor can be a beneficiary of a contract
(c) The contracts involving a minor as a beneficiary may be enforced at the option of the third
party
(d) A minor cannot ratify a contract on attaining majority

Answ er - (c)

16. Drawing cash from ATM, sale by fall of hammer at an auction sale, etc., are example
of
(a) express contract.
(b) implied contract.
(c) tacit contract.
(d) unlawful contract.

Answ er - (b)

17. …………….. is a one-sided contract in which only one party has to perform his
promise or obligation.
(a) Void contract
(b) Illegal agreement
(c) Unilateral contract
(d) Bilateral contract

Answ er - (c)

18. All Contract is a/an ……………..

(a) Offer
(b) Agreement
(c) Acceptance
(d) Transaction

Answ er - (b)

19. A/an …………… is every Promise and every set of promises , forming consideration
for each other
(a) Offer
(b) Agreement
(c) Acceptance
(d) Transaction

Answ er - (b)

20. Every agreement and promise enforceable by law is …………….

(a) Offer
(b) Contract
(c) Acceptance
(d) Consideration

Answ er - (b)

21. “A Contract is an agreement creating and defining obligations between

the parties” the definition was put forwarded by
(a) Dr. Ambedkar
(b) Pollock
(c) Salmonds
(d) N.D.Kapoor

Answ er - (c)
22. The Law of Contract is nothing but ...............

(a) A Child of Commercial dealing

(b) A Child of Religion
(c) A Child of day to day Politics
(d) A Child of Economics.
Answ er - (a)

23. To form a valid contract, there should be atleast .............

(a) Two parties

(b) Three parties
(c) Four parties
(d) Five parties.
Answ er - (a)

24. Contractual rights and duties are created by ...............

(a) State
(b) Statute
(c) Parties
(d) Custom or Usage.

Answ er - (c)

25. Agreement is defined by the section ............... of the Indian Contract Act, 1872.

(a) Section 2(c)

(b) Section 2(e)
(c) Section 2(g)
(d) Section 2(i)

Answ er - (b)

26. As per section 2(e) of the Indian Contract Act, “Every Promise and every set of
promise forming the consideration for each other is a/an

(a) Contract
(b) Agreement
(c) Offer
(d) Acceptance

Answ er - (b)

27. A promises to deliver his watch to B and, in return, B Promise to pay a sum of `
2,000. There is said to be a/ an

(a) Agreement
(b) Proposal
(c) Acceptance
(d) Offer

Answ er - (a)
28. An Agreement is ...................

(a) Offer
(b) Offer+ Acceptance
(c) Offer + Acceptance + Consideration
(d) Contract

Answ er - (b)

29. A Contract is ................

(a) A promise to do something or abstain from doing something.

(b) A communication of intention to do something or abstain from doing something
(c) A set of promises.
(d) An agreement enforceable by law.

Answ er - (d)

30. Contract is defined as an agreement enforceable by Law, vide section ............ of the
Indian Contract Act.

(a) Section 2(e)

(b) Section 2(f)
(c) Section 2(h)
(d) Section 2(i)
Answ er - (c)

31. The offer must be …………..

(a) Conditional
(b) Temporary
(c) Definite
(d) all of the above

Answ er - (c)

32. A contract is made where:

(a) A buys a book from a shop
(b) X bids at a public auction.
(c) X agrees with Y to discover a treasure by magic
(d) Z agrees to attend the birthday party of his friend
Answ er - (a)

33. Parol contracts are also know as

(a) Simple Contract
(b) Format Contract
(c) Void Contract
(d) Conditional contract
Answ er - (a)

34. An offer made by words spoken or written is called:

(a) Implied offer
(b) Express offer
(c) Formal agreement
(d) Informal agreement
Answ er - (b)
35. A tender is
(a) an offer
(b) invitation to an offer
(c) acceptance of offer
(d) none of the above
Answ er - (a)

36. An offer stands revoked

(a) If the fact of the death or insanity is known to offeree

(b) By counter offer
(c) By rejection of offer
(d) All the above

Answ er - (d)

37. For an acceptance to be valid, it must be

(a) Partial & qualified

(b) Absolute & unqualified
(c) Partial & unqualified
(d) Absolute & qualified

Answ er - (b)

38. Acceptance takes place as against the proposer, when

(a) When the letter of acceptance is posted by the acceptor

(b) When the letter of acceptance is received by the proposer
(c) When the offeree, writes the letter of acceptance, but doesn't post it
(d) All the above

Answ er - (a)

39. Communication of offer is complete when

(a) The letter is posted to the offeree
(b) The letter is received by the offeree
(c) The offer is accepted by the person to whom it is made
(d) It comes to the knowledge of the offeror that the letter has been received by the offeree

Answ er - (b)

40. The communication of a proposal is complete when it comes to

(a) The knowledge of that person

(b) The object of the offer
(c) The intention with which offer is made
(d) The facts underlying the offer
Answ er - (a)

41. Which of the following is false? An offer to be Valid must

(a) Contain a term the non- compliance of which would amount to acceptance.
(b) Intend to create legal relations.
(c) Have certain and unambiguous terms.
(d) Be communicated to the person to whom it is made.

Answ er - (a)
42. Over a cup of coffee in a restaurant, X Invites Y to dinner at his house on a Sunday.
Y hires a taxi and reaches X’s house at the appointed time , but x fails to perform his
promise. Can Y recover any damages from X?

(a) Yes, as y has suffered

(b) No, as the intention was not to create legal relation.
(c) Either (a) or (b)
(d) None of these.

Answ er - (b)

43. Which one of the following is the best statement about the Indian Contract Act?

(a) It is an exhaustive code containing the entire law of contract.

(b) It is an Act to amend certain parts of the law relating to contracts
(c) It is an Act to define certain parts of the law relating to contracts and contains only the
general principles of contract.
(d) It is not an exhaustive code containing the entire law of contracts being an Act to define
and amend certain parts of law relating to contract.

Answ er - (c)

44. Which of following is a contract?

(a) A engages B for a certain work and promises to pay such remuneration as shall be fixed. B
does the work.
(b) A and B promise to marry each Other.
(c) A takes a Seat in a public vehicle
(d) A invites B to a card party. B accepts the invitation.

Answ er - (a)

45. For binding contract both the parties to the contract must:
(a) Agree with each other.
(b) Put the offer and counter offers.
(c) Stipulate their individual offer
(d) Agree upon the same thing in the same sense.

Answ er - (d)

46. Which one of the following has the correct sequence.

(a) Offer, acceptance, consideration, offer.
(b) Offer, acceptance , consideration, contract
(c) Contract, acceptance, consideration, offer.
(d) Offer, consideration, acceptance, contract.

Answ er - (b)

47. Goods displayed in a Shop window with a price label will amount to:

(a) Offer
(b) Acceptance of offer
(c) Invitation to offer
(d) Counter offer
Answ er - (c)
48. What can a catalogue of books, listing price of each book and specifying the place
where the listed books are available be termed as?

(a) An offer
(b) An obligation
(c) An invitation to offer
(d) A promise to make available the books at the listed place.

Answ er - (c)

49. Which one of the following statement about a valid acceptance of an offer is
incorrect?

(a) Acceptance should be absolute and unqualified.

(b) Acceptance should be in the prescribed manner
(c) Acceptance should be communicated
(d) Acceptance should be made while the offer is subsisting
Answ er - (d)

50. A Counter offer is ...............

(a) A rejection of the original offer

(b) An acceptance of the offer
(c) A bargain
(d) An invitation to treat
Answ er - (a)

51. A person making a proposal is called ..............

(a) Promisor
(b) Vendor
(c) Contractor
(d) Promise

Answ er - (a)

52. Which one of the following will constitute a valid acceptance?

(a) An enquiry as to fitness of the subject matter of contract.

(b) A provisional acceptance
(c) Addition of a superfluous term, while accepting an offer.
(d) A conditional acceptance.

Answ er - (a)

53. Which one of the following statement is true?

(a) Offer and acceptance are revocable

(b) Offer and acceptance are irrevocable
(c) An offer can be revoked but acceptance cannot
(d) An offer cannot be revoked but acceptance can be revoked.

Answ er - (a)
54. The Communication of acceptance through telephone is regarded as complete
when:

(a) Acceptance is spoken on phone.

(b) Acceptance comes to the knowledge of party proposing.
(c) Acceptance is put in course of transmission.
(d) Acceptance has done whatever is required to be done by him.

Answ er - (b)

55. Which one of the following falls into the category of offer?

(a) Newspaper advertisement regarding sale.

(b) Display of goods by a shopkeeper in his window with prices marked on them
(c) An advertisement for a concert.
(d) Announcement of reward to the public.

Answ er - (d)

56. A sees an article marked “Price Rupees Twenty” in B’s shop .He offers B 20 for the
article. B refuses to sell saying the article is not for sale. Advice A.

(a) A cannot force B to sell the article at ` 20

(b) A can force B to sell the article at ` 20
(c) A can claim damages
(d) A can sue B in the Court.

Answ er - (a)

57. Which one of the following statement is incorrect?

(a) Oral acceptance is a valid acceptance.

(b) Mere silence is not acceptance
(c) Acceptance must be communicated
(d) Acceptance may not be in the prescribed manner

Answ er - (d)

58. Consider the following statement:

(1) There is no difference between the English Law and Indian Law with regard to acceptance
through post.
(2) Both Under the English Law and the Indian Law a contract is concluded when the letter of
acceptance is posted.
(3) Under the Indian Law when the Letter of acceptance is posted it is completed only as
against the proposer.

Which of the above statement is/are correct?

(a)1 and 2
(b) 2 alone
(c) 3 alone
(d) None

Answ er - (c)
59. In Commercial and business agreements, the intention of the parties to create legal
relationship is

(a) Presumed to exist

(b) To be specifically expressed in writing
(c) Not relevant or all
(d) Not applicable.

Answ er - (a)

60. An agreement is a Voidable Contract when it is

(a) Enforceable
(b) Enforceable by Law at the option of the aggrieved party
(c) Enforceable by both the parties
(d) Not enforceable at all.

Answ er - (b)

61. A Contract creates..............

(a) Rights in personam

(b) Rights in rem
(c) Only rights and no obligations
(d) Only Obligations and no rights.

Answ er - (a)

62. An agreement not enforceable by Law is said to be void under section ................ of the
Indian Contract Act.

(a) Section 2(a)

(b) Section 2(b)
(c) Section 2(f)
(d) Section 2(g)

Answ er - (d)

63. When the contract is perfectly valid in its substance but cannot be enforced because of
certain technical defects. This is called a/ an-

(a) Unilateral Contract

(b) Bilateral Contract
(c) Unenforceable Contract
(d) Void Contract

Answ er - (c)

64. The term” Proposal or offer” has been defined in - of the Indian contract Act.
(a) Section 2(a)
(b) Section 2(b)
(c) Section 2(c)
(d) Section 2(d)

Answ er - (a)
65. The term” Promise” has been defined in .............. of the Indian Contract Act.
(a) Section 2(a)
(b) Section 2(b)
(c) Section 2(c)
(d) Section 2(d)

Answ er - (b)

66. The person making the proposal is called .............

(a) Promisor
(b) Promisee
(c) Participator
(d) Principal

Answ er - (a)

67. Offer implied from conduct of parties or from circumstances of the case is called ...........
(a) Implied offer
(b) Express offer
(c) General offer
(d) Specific offer

Answ er - (a)

68. An offer made to a (i) Specific person, or (ii) a group of persons is known as
(a) Standing offer
(b) Specific offer
(c) Special offer
(d) Separate offer

Answ er - (b)

69. Communication of proposal is complete when it comes to the knowledge of ...........

(a) The person to whom it is made
(b) The proposer
(c) Either (a) or (b)
(d) The Court.

Answ er - (a)

70. Terms of an offer must be .........

(a) Ambiguous
(b) Uncertain
(c) Definite
(d) Vague

Answ er - (c)

71. Offer should not contain a term, the non- Compliance of which would amount to
acceptance. This statement is

(a) True
(b) Partly True
(c) False
(d) None of the above

Answ er - (a)
72. When two persons make identical offers to each other, in ignorance of each other’s offer,
it is called ............

(a) Cross offers

(b) Implied offers
(c) Direct offers
(d) Express offers.

Answ er - (a)

73. An offer is revoked

(a) By the death or insanity of the proposer

(b) By Lapse of time
(c) By Communication of notice of revocation
(d) All of these

Answ er - (d)

74. Acceptance in ignorance of the offer is

(a) Valid
(b) Invalid
(c) Void
(d) Voidable
Answ er - (b)

75. Acceptance should be given within

(a) The time specified by the Offerer

(b) A reasonable time
(c) Such time as the offer lapses
(d) All of the above

Answ er - (d)

76. An acceptance on telephone should be

(a) Heard by the offeror

(b) Audible to the offeror
(c) Understood by the offeror
(d) All of the above.

Answ er - (d)

77. Section --- of the Indian Contract Act defines “Consideration”.

(a) Section 2(a)

(b) Section 2(b)
(c) Section 2(d)
(d) Section 2(c)

Answ er - (c)
78. Consideration must move at the desire of

(a) The promisor

(b) The promisee
(c) The promisor or any third party
(d) Both the promisor and the promise

Answ er - (a)

79. Consideration in a contract:

(a) May be past, present or future

(b) May be present or future only
(c) Must be present only (d)
(d) Must be future only.

Answ er - (a)

80. Past Consideration is valid in -

(a) England Only

(b) India Only
(c) Neither in England nor in India
(d) both in England and India

Answ er - (b)

81. Agreement without consideration is valid, when made

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

(b) To pay a time barred debt
(c) To compensate a person who has already done something voluntarily
(d) All of the above

Answ er - (d)

82. If only a part of the consideration or object is unlawful, the Contract is

(a) Valid to the extent the same are lawful

(b) Void to the extent the same are unlawful
(c) Valid as a whole
(d) Void as a whole.

Answ er - (d)

83. The expression “Privity of contract” means

(a) A Contract is Contract between the parties only

(b) A Contract is a private document
(c) Only private documents can be contracts
(d) The contacts may be expressed in some usual and reasonable manner.

Answ er - (a)
84. Under the Indian Contract Act, a third person

(a) Who is the beneficiary under the Contract can sue

(b) From whom the consideration has proceeded can sue
(c) Can not sue even if the consideration has proceeded from him.
(d) Can not sue at all for want of privity of contract.

Answ er - (a)

85. In India, a person who is stranger to the Consideration.

(a) Can sue based on the Contract

(b) Can not sue based on the Contract
(c) Can sue depending on the Conditions
(d) Can sue if permitted by the court.

Answ er - (a)

86. Capacity to Contract has been defined in

(a) Section 10
(b) Section 11
(c) Section 12
(d) Section 25

Answ er - (b)

87. Competency to Contract means

(a) Age of the parties

(b) Soundness of mind of the parties
(c) Both (a) and (b)
(d) Intelligence of the parties.

Answ er - (c)

88. Which of the following is not Competent to Contract?

(a) A minor
(b) A person of unsound mind
(c) A person who has been disqualified from contracting by some Law
(d) All of these

Answ er - (d)

89. A minor’s agreement is void .This was held in the case of

(a) Mohiri Bibee V. Dharmadas Ghosh

(b) Nihal Chand V. Jan Mohamed khan
(c) Suraj Narain V. Sukhu Aheer
(d) Chinnaiya V. Ramaiya.

Answ er - (a)
90. The age of majority for the purpose of the Indian Contract Act is

(a) 16 years for girls & 18 years for boys

(b) 18 years for girls & 21 years for boys
(c) 18 years
(d) 21 years.

Answ er - (c)

91. ..................... are goods suitable to the condition in the life of the minor, and to his
actual requirements at the time of sale and delivery.

(a) Necessaries
(b) Goods
(c) Life Style Products
(d) Luxuries.
Answ er - (a)

92. “ Consensus - ad - idem” means .........

(a) General Consensus

(b) Meeting of minds upon the same thing in the same sense
(c) Reaching an agreement
(d) Reaching of contract
Answ er - (b)

93. A Contract which is formed without the free consent of parties, is ..........
(a) Valid
(b) Illegal
(c) Voidable
(d) Void ab- initio

Answ er - (c)

94. Contracts under unilateral mistake are .................... if such mistake is caused by
the fraud or misrepresentation of the other party.
(a) Valid
(b) Void
(c) Illegal
(d) Unenforceable

Answ er - (b)

95. Mistake as to foreign law is treated in the same manner as .........

(a) Mistake of India Law
(b) Mistake of Fact
(c) Misrepresentation
(d) Fraud

Answ er - (b)

96. If an agreement suffers from any uncertainty. It is .............

(a) Voidable
(b) Void
(c) Unenforceable
(d) Illegal.

Answ er - (b)
97. All illegal agreements are .............
(a) Void- ab- initio
(b) Valid
(c) Contingent
(d) Enforceable

Answ er - (a)

98. A promise to give money or money’s worth upon the determination or

ascertainment of an uncertain event is called ..............

(a) Wagering Agreement

(b) Unlawful Agreement
(c) Illegal Agreement
(d) Voidable Agreement

Answ er - (a)

99. In the States of Gujarat and Maharashtra, collateral transactions to a wagering

agreement are ............
(a) Voidable
(b) Illegal and Void
(c) Valid and Enforceable
(d) Contingent

Answ er - (b)

100. A Contingent Contract is a contract to do, or not to do something if some event,

collateral to such contract
(a) happens
(b) does not happen
(c) Neither (a) nor (b)
(d) Either (a) or (b)

Answ er - (d)

101. Which of these parties cannot demand performance of promise?

(a) Promisee
(b) Any of the Joint Promisees.
(c) On the death of a Promisee, his Legal Representative.
(d) Stranger to the Contract

Answ er - (d)

112. If a new contract is substituted in place of an existing contract it is called -

(a) Alteration
(b) Rescission
(c) Novation
(d) Waiver

Answ er - (c)
113. The phrase “Quantum Meruit” literally means -

(a) As much as is earned

(b) The fact in itself
(c) A Contract for the sale
(d) As much as is gained.

Answ er - (a)

114. Damages awarded to compensate the injured party for the actual amount of loss
suffered by him for breach of contract are called -

(a) General / Ordinary Damages

(b) Special Damages
(c) Vindictive Damages
(d) Nominal Damages

Answ er - (a)

115. A finder of lost goods is a

(a) Bailor
(b) Bailee
(c) True Owner
(d) Thief.

Answ er - (b)

116. Which of the following is the essential ingredient of contract of indemnity:

(a) Contract to make good the loss

(b) Loss must be caused to the indemnity holder.
(c) Loss may be caused by promiser or any other person
(d) All of the above.

Answ er - (d)

117. When the goods are delivered by one to another by way of security for the money
borrowed, then it is technically known as:

(a) Hire
(b) Pawnee
(c) Pledge
(d) None of the above.

Answ er - (b)

118. How agency is created:

(a) By Direct appointment

(b) By implication
(c) By necessity
(d) All of the above

Answ er - (d)
119. The Delivery of goods by one person to another as security for the payment of a
debt is called

(a) Bailment
(b) Pledge
(c) Mortgage
(d) Hypothecation

Answ er - (b)

120. An agreement enforceable by law is a

(a) Promise
(b) Contract
(c) Obligation
(d) Lawful Promise

Answ er - (b)

121. A contract is a combination of two elements

(a) An Agreement & An Promise

(b) An Agreement & An Obligation
(c) A Promise & An Obligation
(d) An offer & An Acceptance

Answ er - (b)

122. A proposal when accepted becomes a

(a) Promise
(b) Contract
(c) Acceptance
(d) Agreement

Answ er - (a)

123. A void agreement is one which is

(a) Valid but not enforceable

(b) Enforceable
(c) Enforceable by one party
(d) Not enforceable in law

Answ er - (d)

124. Agreement which are not contracts

(a) Mr. A purchases goods from Mr. B.

(b) Avanshu supplies goods to Mohit’s firm.
(c) An agreement for watching cinema.
(d) None of the above

Answ er - (c)
125. Which one is correct

(a) All contracts are agreements

(b) All agreements are contracts
(c) All agreements are not contracts
(d) Both (a) & (c)

Answ er - (d)

126. An agreement which is enforceable by law at the option of one party

(a) Valid contract

(b) Void contract
(c) Voidable contract
(d) Illegal contract
Answ er - (c)

127. Which of the following is false? An offer

(a) Must be clear, definite, final & complete

(b) Can be vague
(c) Must be communicated
(d) May be general or specific
Answ er - (b)

128. An offer may lapse by

(a) Revocation
(b) Counter offer
(c) Rejection by offeree
(d) All of the above

Answ er - (d)

129. Which of the following is false? An acceptance

(a) Must be communicated
(b) Must be absolute
(c) Must be unconditional
(d) May be presumed from silence of offeree
Answ er - (d)

130. In case of illegal agreements, the collateral agreements are

(a) Valid
(b) Void
(c) Voidable
(d) None of the above

Answ er - (b)

131. An offer by post may be accepted by

(a) Post
(b) Over telephones
(c) Both (a) & (b)
(d) None of the above

Answ er - (a)
132. An offer is made only when
(a) The letter is posted
(b) Letter reaches the offeree
(c) Offeree post his acceptance
(d) None of the above
Answ er - (b)

132. Which of the following is true?

(a) Consideration must result in benefit to both party

(b) Past consideration is no consideration in India
(c) Consideration is adequate
(d) Consideration must be something, which a promisor is not bound to do

Answ er - (a)

134. Which of the following statement is false in respect of 'Consideration'?

(a) Must move at desire of the promiser
(b) May move from any person
(c) Must be illusionary
(d) Must be of some value

Answ er - (c)

135. Which of the following is true?

(a) There can be a stranger to a contract

(b) There can be a stranger to a consideration
(c) There can be a stranger to contract & consideration
(d) None of above

Answ er - (b)

136. Consideration in simple term means

(a) Anything in Return

(b) Something in Return
(c) Everything in Return
(d) Nothing in Return
Answ er - (b)

137. Which of the following statement is false

(a) Generally, a stranger to a contract cannot sue

(b) A verbal promise to pay a time barred debt is valid
(c) Completed gifts need no consideration
(d) No consideration is necessary to create an agency.
Answ er - (b)

138. A Gratuitous Promise can

(a) Be enforced
(b) Not be enforced
(c) Be enforced in court of law
(d) None of above
Answ er - (b)
139. Ordinarily, a minor’s agreement is

(a) Void ab initio

(b) Voidable
(c) Valid
(d) Unlawful

Answ er - (a)

140. A minor’s liability for ‘necessaries’ supplied to him

(a) Arises after he attains majority age

(b) Is against only minor’s property
(c) Does not arises at all
(d) Arises if a minor promises for it.

Answ er - (b)

141. Which of the following statement is not true about minor’s position in
a firm?

(a) He cannot became a partner

(b) He can became a partner
(c) He can be admitted only to the benefits
(d) He can become a partner after majority attaining

Answ er - (c)

142. Which of the following statement is true?

(a) A contract with a minor is voidable at option of minor

(b) An agreement with a minor can be ratified after he attains majority
(c) A person who is usually of unsound mind cannot enter into a contract when
he is of sound mind
(d) A person who is usually of sound mind cannot enter into a contract when he
is of unsound mind

Answ er - (d)

143. When the consent of both the parties is given by mistake, the contract
is

(a) Void
(b) Valid
(c) Voidable
(d) Illegal

Answ er - (a)
144. The contract is void on account of bilateral mistake of fact, but if
there is a mistake of only one party, then contract is
(a) Void
(b) Valid
(c) Voidable
(d) Illegal

Answ er - (b)

145. A contract made by mistake about Indian law is

(a) Void
(b) Valid
(c) Voidable
(d) Illegal

Answ er - (b)

146. A contract made by mistake about some foreign law, is

(a) Void
(b) Valid
(c) Voidable
(d) Illegal

Answ er - (a)

147. A mistake as to law not in force in India has the effect as

(a) Mistake of fact
(b) Mistake of Indian law
(c) Fraud
(d) Misrepresentation

Answ er - (a)

148. In case of innocent misrepresentation

(a) Contract become voidable and damages are payable
(b) Contract become voidable and damages are not payable
(c) Contract become valid and damages are payable
(d) Contract remains valid and damages are not payable.

Answ er - (b)

149. In case of wilful misrepresentation or fraud

(a) Contract becomes voidable & damages are payable

(b) Contract become voidable & damages are not payable
(c) Contract become void & damages are payable
(d) Contract become void & damages are not payable.

Answ er - (a)
150. Consent is not said to be free when it is caused by

(a) Coercion
(b) Undue influence
(c) Fraud
(d) All of above

Answ er - (d)

151. When the consent of a party is obtained by fraud, the contract is

(a) Void
(b) Voidable
(c) Valid
(d) Illegal

Answ er - (b)

152. Moral pressure is involved in case of

(a) Coercion
(b) Undue influence
(c) Misrepresentation
(d) Fraud

Answ er - (b)

153. Which of the following statement is true?

(a) A threat to commit suicide does not amount to coercion
(b) Undue influence involves use of physical pressure
(c) Ignorance of law is no excuse
(d) Silence always amount to fraud

Answ er - (c)

154. An agreement is void if it is opposed to public policy. Which of the

following is not covered under heads of public policy?

(a) Trading with enemy

(b) Trafficking in public offences
(c) Marriage brokerage contracts
(d) Contracts to do impossible acts

Answ er - (d)
155. Wagering means
(a) Betting
(b) Bidding
(c) Both (a) & (b)
(d) None of above

Answ er - (a)

156. An agreement in restraint of marriage, i.e. agreement preventing a

person from marrying is
(a) Valid
(b) Voidable
(c) Void
(d) Contingent

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157. An agreement in restraint of marriage is valid in case of following

persons
(a) Minors
(b) Educated
(c) Married
(d) None of above

Answ er - (a)

158. In India, wagering agreements are void except in

(a) Kanpur
(b) Mumbai
(c) Delhi
(d) None of the above

Answ er - (b)

159. If any party has received any benefit under a contract from the other
party, he must restore it or make compensation to other party. It is the
case if
(a) Quantum meruit
(b) Restitution
(c) Consideration
(d) Quasi-contract

Answ er - (b)
160. The basis of quasi contractual relation is the

(a) Existence of a valid contract between parties

(b) Prevention of unjust enrichment at expense of other
(c) Provision contained in section 10 of contract act
(d) Existence of a voidable contract between the parties

Answ er - (b)

161. A contingent contract is

(a) Void
(b) Voidable
(c) Valid
(d) Illegal

Answ er - (c)

162. A contract is said to be discharged or terminated

(a) When the rights and obligation are completed

(b) When the contract becomes voidable
(c) Both (a) & (b)
(d) None of the above

Answ er - (a)

163. Which is not the mode of discharge of contract

(a) Performance of contract

(b) Lapse of time
(c) Breach of contract
(d) Injunction

Answ er - (d)

164. A person finds certain goods belonging to some other persons. In such a
case, the finder

(a) Becomes the owner of that good

(b) Is under a duty to trace the real owner
(c) Can sell that good if true owner is not found
(d) Both (b) & (c)

Answ er - (d)
165. If in a contract, the time lapses and if the party fails to perform the
contract within specified time the contract becomes

(a) Voidable
(b) Void
(c) Illegal
(d) Enforceable in the court
Answ er - (a)

166. Change in one or more of the important terms in a contract, it is the case of

(a) Novation
(b) Rescission
(c) Remission
(d) Alternation
Answ er - (d)

167. In both the cases, devolution of joint liabilities and devolution of joint
rights, if a promisor dies, who will perform on behalf of him

(a) Other promiser

(b) His legal representation
(c) Both (a) & (b)
(d) None of the above

Answ er - (c)

168. A contract which is impossible to perform is

(a) Voidable
(b) Void
(c) Illegal
(d) Enforceable

Answ er - (b)

169. A party entitled to rescind the contract, loses the remedy where

(a) He has ratified the contract

(b) Third party has acquired right in good faith
(c) Contract is not separable
(d) All of the above

Answ er - (d)

170. The special damages i.e. the damages which arises due to some special or
unusual circumstances

(a) Are not recoverable altogether

(b) Are illegal being positive in nature
(c) Cannot be claimed as a matter of right
(d) Can be claimed as a matter of right
Answ er - (c)