Offer and Acceptance – Business Law MCQ Questions with Answers

1. Partial acceptance of offer result in _________.

(a) counter offer
(b) unqualified acceptance
(c) binding contract
(d) none of the above
Answer:
(a) counter offer

2. A tender is _________.
(a) an offer
(b) invitation to an offer
(c) acceptance of offer
(d) none of the above
Answer:
(b) invitation to an offer

3. Death or insanity of the proposer will revoke the proposal _________.

(a) Automatically.
(b) If the fact of the death or insanity is known to the offeree.
(c) The knowledge of death or insanity is irrelevant.
(d) Only if the family members of the proposer informs the offeree.
Answer:
(b) If the fact of the death or insanity is known to the offeree.

4. When counter offer is given, the original offer _________.

(a) Lapses.
(b) Remains valid.
(c) Is accepted and becomes a contract.
(d) The original offer can also be accepted.
Answer:
(a) Lapses.

5. For an acceptance to be valid, it must be _________.

(a) Partial & qualified.
(b) Absolute & unqualified.
(c) Partial & unqualified.
(d) Absolute & qualified.
Answer:
(b) Absolute & unqualified.
6. 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.
Answer:
(a) When the letter of acceptance is posted by the acceptor.

7. An advertisement for sale goods by auction _________.

(a) Amounts to an invitation to offer.
(b) Amounts to an offer to hold such sale.
(c) Amounts to an implied offer.
(d) Amount to a general offer.
Answer:
(a) Amounts to an invitation to offer.

8. Communication of offer is complete when _________.

(a) It comes to the knowledge of the offeree.
(b) It is posted to the offeree.
(c) When the offeror writes the letter but does not post it.
(d) None of the above
Answer:
(a) It comes to the knowledge of the offeree.

9. An acceptance will be revoked at any time before the communication of

acceptance is complete against the acceptor, but not afterwards _________.
(a) True
(b) False
(c) Acceptance once given cannot be revoked.
(d) Acceptance can be revoked at any time.
Answer:
(a) True

10. Acceptance once given cannot be revoked.

(a) True
(b) False
(c) Incomplete information.
(d) None of the above.
Answer:
(a) True
11. A tender and a bid at an auction sale are _________.
(a) Not offers.
(b) Offers.
(c) Acceptance of the offer.
(d) Invitation to offer.
Answer:
(b) Offers.

12. A quotation is:

(a) Not offer.
(b) Offer.
(c) Acceptance of the offer.
(d) Invitation to offer.
Answer:
(d) Invitation to offer.

13. If the offeree does not accept the offer according to the mode prescribed, then
_________.
(a) The offeror may accept or reject such acceptance.
(b) The offer lapses automatically.
(c) It is a counter offer.
(d) Offeree commits a breach of contract.
Answer:
(a) The offeror may accept or reject such acceptance.

14. 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.
Answer:
(b) The letter is received by the offeree.

15. A bid at an auction sale is _________.

(a) An implied offer to buy
(b) An express offer to buy
(c) An Invitation to offer to buy
(d) An invitation to come to bid
Answer:
(b) An express offer to buy
16. When the offers made by two persons to each other containing similar terms of
bargain cross each other in post, they are known as _________.
(a) Cross offers
(b) Implied offers
(c) Direct offers
(d) Expressed offers
Answer:
(a) Cross offers

17. When the proposal or acceptance is made otherwise than words, the promise is
said to be _________.
(a) Expressed
(b) Implied
(c) Accepted
(d) Rejected
Answer:
(b) Implied

18. The communication of an acceptance is complete as against the acceptor

_________.
(a) When it is posted by him
(b) When it is put in the course of transmission
(c) When it comes to the knowledge of the proposer
(d) None of these
Answer:
(c) When it comes to the knowledge of the proposer

19. Goods displayed in a shop window with a price label will amount to _________.
(a) Offer
(b) Invitation to offer
(c) Acceptance of offer
(d) None of these
Answer:
(b) Invitation to offer

20. A promisee is _________.

(a) A person who makes a promise
(b) A person who monitors the statement of intentions of two parties
(c) A person to whom the promise is made
(d) None of these
Answer:
(c) A person to whom the promise is made
21. The person making the proposal is called _________.
(a) Promisor
(b) Promise
(c) Participator
(d) None of these
Answer:
(a) Promisor

22. Acceptance in ignorance of the offer is _________.

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

23. When the contract is perfectly valid in its substance but which cannot be
enforced because of certain technical defects. This is called a _________.
(a) Unilateral contract
(b) Bilateral contract
(c) Unenforceable contract
(d) Void contract
Answer:
(c) Unenforceable contract

24. Is telegraphing lowest price on request a mere invitation for an offer?

(a) Yes
(b) No
(c) Not in normal cases
(d) None of these
Answer:
(a) Yes

25. In the case of proposal and acceptance by telephone conversation, contract is

made at place where _________ is received.
(a) Offer
(b) Consideration
(c) Proposal
(d) Acceptance
Answer:
(d) Acceptance
26. An offer does not lapse if the _________.
(a) Offeror dies before acceptance
(b) The offeree dies before acceptance
(c) Acceptance is made by the offeree in ignorance of the death of the offeror
(d) Acceptance is made by the offeree with knowledge of the death of the offeror
Answer:
(c) Acceptance is made by the offeree in ignorance of the death of the offeror

27. When a person without expressing his final willingness, proposes certain terms on
which he is willing to negotiate, he makes _________.
(a) Counter offer
(b) Standing offer
(c) Offer
(d) Invitation to treat
Answer:
(d) Invitation to treat

28. A subscribed to the “Daily News” for one year. After the expiry of his subscription,
the newspa¬per company continued to send him the paper by mail for 3 years. A
continued to use the paper but failed to pay the bills.
(a) A is not liable to pay as non-renewal of the subscription is akin to non-acceptance
(b) Non-payment of bills by A can be construed as non-acceptance of the offer made
by sending the newspapers
(c) A is bound to pay as his continued use of the newspaper was an acceptance of
the offer made by sending the newspaper
(d) A fresh contract is to be entered into after the lapse of the first year
Answer:
(c) A is bound to pay as his continued use of the newspaper was an acceptance of
the offer made by sending the newspaper

29. Which one of the following falls into the category of offer?
(a) Newspaper advertisement regarding a 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
Answer:
(d) Announcement of reward to the public

30. The big Corporations like LIC supply ready forms of Contract with all conditions
printed; the offeree has either to take all or let go. Such contracts are known as
_________.
(a) Company contracts
(b) Corporation contracts
(c) Government
(d) Standard form contracts
Answer:
(d) Standard form contracts

31. A dress is displayed in the showroom of a shop with a price tag attached to the
dress. A buyer interested in the dress and ready to pay the price mentioned in the
tag approached the shopkeeper for purchasing the dress.
(a) The shopkeeper can refuse to sell the dress
(b) The shopkeeper cannot refuse to sell the dress as the buyer has accepted the
offer
(c) In case of refusal, the shopkeeper will be liable for breach of contract
(d) The shopkeeper cannot refuse to sell the dress but may charge higher price
Answer:
(a) The shopkeeper can refuse to sell the dress

32. In one auction sale, ‘X’ is the highest bidder. The auctioneer accepts the offers not
by speaking but by striking the hammer on the table. This amounts to
(a) Express acceptance
(b) Implied acceptance
(c) Future acceptance
(d) No acceptance
Answer:
(b) Implied acceptance

State Whether The Following Are True or False:

1. Death or insanity of the proposer automatically revokes the proposal.

2. Crossing of letters of offer in the post for the sale & purchase of the
same article constitute a valid agreement.
3. A proposal may be revoked by the proposer before the posting of the
letter of acceptance by the acceptor.
4. If an offer is made in the form of a promise in return for an act, the
performance of that act, even without any communication thereof, is to
be treated as an acceptance of the offer.
5. Counter offer to an offer does not make the original offer lapse.
6. Acceptance can be made even without the knowledge of the offer.
7. A counter offer proposing different terms amount to rejection of the
proposal.
8. When the promisee does not accept the offer of performance the
promisor is not responsible for non-performance.
 9. For an acceptance to be valid it should not be partial or qualified.
10. Acceptance takes place as against the proposer, when a letter is posted,
not when it is received.
11. An advertisement for sale of goods by auction amounts to an offer to
hold such sale.
12. Communication of offer is complete when it is posted to the offeree.
13. Performance of conditions of a proposal is an acceptance of the
proposal.
14. An acceptance will be revoked at any time before the communication
of the acceptance is complete against the acceptor, but not afterwards.
15. An offer need not be made to an ascertained person.
16. An agreement to agree in future upon terms to be settled afterwards
between the parties is valid.
17. Acceptance once given cannot be revoked.
18. A tender and a bid at an auction sale are not offers.
19. A quotation and an answer to a question or inquiry are not offers.
20. A contract is formed when the acceptor has done something to signify
his intention to accept, not when he has made to his mind to do so.
21. If the offeree does not accept the offer according to the mode
prescribed by the offeror, the offer does not lapse automatically.
22. Communication of an offer is complete when the letter is posted
though it has not reached the person to whom the offer is made.
23. Where the mode of acceptance is prescribed in the proposal, it need
not be accepted in that manner.
24. A proposal when accepted becomes a contract.
25. Acceptance takes place when and where the message is received.
Answer:

1. False
2. False
3. True
4. True
5. False
6. False
7. True
8. True
9. True
10. True
11. False
12. False
13. True
14. True
15. True
 16. False
17. True
18. False
19. True
20. True
21. True
22. False
23. False
24. False
25. True.

Consideration – Business Law MCQ Questions with Answers

1. If there is no consideration, then _________.

(a) The agreement is void
(b) The agreement is valid
(c) The agreement is illegal
(d) The agreement is voidable
Answer:
(a) The agreement is void

2. A valid consideration has the following essential elements :

(a) It must move at the desire of the promisor
(b) Consideration may be supplied by the promisee or any other person
(c) Consideration may be past, present or future
(d) All the above
Answer:
(d) All the above

3. The latin term “quidpro quo” refers to :

(a) Something in return
(b) Stranger to consideration
(c) Something sensible
(d) Something valuable
Answer:
(a) Something in return

4. A promise to pay a time-barred debt must be :

(a) Oral
(b) Written and signed
(c) Registered
(d) Written and registered
Answer:
(b) Written and signed

5. A stranger to a consideration _________.

(a) Can file a suit
(b) Cannot file a suit
(c) Can file, only with consent of court
(d) Is similar to stranger to a contract
Answer:
(a) Can file a suit

6. A stranger to a contract _________.

(a) Can file a suit
(b) Can file a suit only with permission of court
(c) Can file a suit, if contract is in writing
(d) Cannot file a suit
Answer:
(d) Cannot file a suit

7. An agreement not supported by consideration is called:

(a) Consensus ad idem
(b) Ignoratia juris non execuset
(c) Ab initio
(d) Nudum Pactum
Answer:
(d) Nudum Pactum

8. Past consideration means _________.

(a) Money received in the past without making even a proposal
(b) The price which is more than the promisee’s expectation
(c) A past act done before the promise is made
(d) None of the above
Answer:
(c) A past act done before the promise is made

9. In India, a person who is stranger to the consideration _________.

(a) Can sue on the contract, if he is a party
(b) Cannot sue the contract
(c) Depends on the parties
(d) Depends on the circumstances
Answer:
(a) Can sue on the contract, if he is a party
10. A promise to pay a time barred debt is enforceable, if some conditions are
fulfilled. Which of the following conditions is not required?
(a) It must be signed by the promisor
(b) It must be definite and express
(c) It must be in writing
(d) It must be registered
Answer:
(d) It must be registered

11. X promised Y, a priest, to pay ₹ 10,000 as char-ity. The priest on X’s promise
incurred certain liabilities towards the repairing of the temple to the extent of ₹
7,500. Y, the priest, can recover from X _________.
(a) ₹ 10,000
(b) ₹ 7,500
(c) Nothing
(d) ₹ 7,500 plus damages
Answer:
(b) ₹ 7,500

State Whether The Following Are True or False:

1. Inadequacy of consideration does not affect the validity of a contract.

2. A stranger to the contract can enforce the contract.
3. Consideration need not be material and may even be abstract.
4. Consideration must move simultaneously with promise.
5. A stranger to the consideration can enforce the contract.
6. Forbearance to sue or compromising disputed claim is no good
consideration.
7. Consideration is essential for the validity of a contract in all cases.
8. Adequacy of consideration is essential for validity of a contract.
9. No consideration is required to create agency.
10. Past consideration is no consideration
11. According to the doctrine of “Privity of contract”, a stranger to a
contract, if he is beneficiary cannot enforce the contract.
12. Inadequacy of consideration cannot be taken into account by the court
in determining whether the consent was given freely.
13. The manufacture of goods can enforce conditions imposed upon the
dealer against the sub-dealer.
14. In the Indian Law, consideration must move from the promisee only.
15. In discharge of the whole claim, a party to the contract agrees to accept
a lesser amount than due, from the other party is a valid contract
inspite of inadequate consideration.
 16. Consideration may move even from a person who is not a party to the
contract.
17. A promise to pay a time barred debt is not enforceable.
Answer:

1. False
2. False
3. True
4. False
5. True
6. False
7. False
8. False
9. True
10. False
11. False
12. False
13. False
14. False
15. True
16. True
17. False

Free Consent – Business Law MCQ Questions with Answers

1. If there is no consent the agreement is:

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

2. If consent in not free due to coercion, undue influence, fraud, and

misrepresentation then the agreement is:
(a) Void
(b) Voidable
(c) Illegal
(d) Valid
Answer:
(b) Voidable
3. If the agreement is made by obtaining consent by doing an act forbidden by the
Indian Penal Code, the agreement would be caused by:
(a) Coercion
(b) Fraud
(c) Misrepresentation
(d) Undue influence
Answer:
(a) Coercion

4. A buys an article thinking that it is worth ₹ 100 when in fact it is worth only ₹ 50.
There has been no misrepresentation on the part of the seller. The contract is:
(a) Valid
(b) Void
(c) Voidable
(d) Unenforceable
Answer:
(a) Valid

5. Where a person is in a position to dominate the will of another person and uses
that position to obtain on unfair advantage it is called:
(a) Fraud
(b) Coercion
(c) Undue influence
(d) Misrepresentation.
Answer:
(c) Undue influence

6. An agreement caused by unilateral mistake of fact is:

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

7. Unlawfully detaining or threatening to detain any property, to the prejudice of any

person making him to enter into an agreement amounts to:
(a) Threat
(b) Coercion
(c) Undue influence
(d) Misappropriation
Answer:
(b) Coercion

8. An agreement made under mistake of fact, by both the parties, forming the
essential subject matter of the agreement is:
(a) Void
(b) Voidable
(c) Valid
(d) Unenforceable
Answer:
(a) Void

9. “Active concealment of fact” is associated with which one of the following?

(a) Misrepresentation
(b) Undue influence
(c) Fraud
(d) Mistake
Answer:
(c) Fraud

10. Lending money to a borrower, at high rate of interest, when the money market is
tight renders the agreement of loan:
(a) Void
(b) Valid
(c) Voidable
(d) Illegal
Answer:
(b) Valid

11. When a person, who is in dominating position, obtains the consent of the other
by exercising his influence on the other, the consent is said to be obtained by:
(a) Fraud
(b) Intimidation
(c) Coercion
(d) Undue influence
Answer:
(d) Undue influence

12. With regard to the contractual capacity of a per-son of unsound mind, which one
of the following statements is most appropriate?
(a) A person of unsound mind can never enter into a contract
(b) A person of unsound mind can enter into a contract
(c) A person who is usually of unsound mind can contract when he is, at the time of
entering into a contract, of sound mind
(d) A person who is occasionally of unsound mind can contract although at the time
of making the contract, he is of unsound mind
Answer:
(c) A person who is usually of unsound mind can contract when he is, at the time of
entering into a contract, of sound mind

13. While obtaining the consent of the promisee, keeping silence by the promisor
when he has a duty to speak about the material facts, amounts to consent obtained
by:
(a) Coercion
(b) Misrepresentation
(c) Mistake
(d) Fraud
Answer:
(d) Fraud

14. ‘A’ threatened to commit suicide if his wife did not execute a sale deed in favour
of this brother. The wife executed the sale deed. This transaction is:
(a) Voidable due to under influence
(b) Voidable due to coercion
(c) Void being immoral
(d) Void being forbidden by law
Answer:
(b) Voidable due to coercion

15. A threatens to shoot B, if B does not agree to sell his property to A at a stated
price. B’s consent in this case has been obtained by ________.
(a) Fraud
(b) Undue influence
(c) Coercion
(d) None
Answer:
(c) Coercion

16. A master asks his servant to sell his cycle to him at less than the market price. This
contract can be avoided by the servant on grounds of:
(a) Coercion
(b) Undue influence
(c) Fraud
(d) Mistake
Answer:
(b) Undue influence

17. If A sells, by auction to B a horse which A knows to be unsound and A says

nothing to B about the horse’s unsoundness, this amounts to:
(a) Fraud
(b) Not fraud
(c) Unlawful
(d) Illegal
Answer:
(b) Not fraud

18. Silence is fraud when silence is, in itself equivalent to speech. This statement is:
(a) True
(b) False
(c) Untrue in certain cases
(d) None of these
Answer:
(a) True

19. A person is deemed to be in a position to dominate the will of another if he:

(a) Holds real or apparent authority
(b) Stands in a fiduciary relationship
(c) Both (a) and (b)
(d) Either (a) or (b)
Answer:
(c) Both (a) and (b)

20. If both the parties to a contract believe in the existence of a subject, which infact
does not exist, the agreement would be ________.
(a) Unenforceable
(b) Void
(c) Voidable
(d) None of these
Answer:
(b) Void

21. When both the parties to an agreement are under a mistake as to a matter of fact
essential to an agreement, the agreement is:
(a) Void
(b) Valid
(c) Voidable
(d) Illegal
Answer:
(a) Void

State Whether The Following Are True or False:

1. A threat to commit suicide does not amount to coercion.

2. A deceit which does not deceive is no fraud.
3. Consent obtained by fraud makes the agreement void.
4. A person who is usually of unsound mind but occasionally of sound
mind can always enter into contract.
5. Mere silence as to facts likely to affect the willingness of a person to
enter into contract is not fraud.
6. A contract is not voidable merely because it was caused by one of the
parties to it being under a mistake as to a matter of fact.
7. In the absence of consent, there can be no contract.
8. A threat amounting to coercion must necessarily proceed from a party
to the contract.
9. Undue influence involves use of moral pressure.
10. Undue influence can be exercised only by a party to the contract.
11. If there is no damage, there is no fraud.
12. In case of fraud, the aggrieved party loses the right to rescind the
contract if he had the means of dis-covering the truth by ordinary
diligence.
13. Undue influence can be exercised only between the parties who are
related to each other.
14. A promise made without any intention of performing it amounts to
fraud.
15. If one of the parties to a contract was under a mistake as to the matter
of fact, the contract is voidable.
16. Ignorance of foreign law is put on a same level with ignorance of fact.
17. A contract is not voidable only because there is a mistake of Indian law.
Answer:

1. False
2. True
3. False
4. False
5. True
6. True
7. True
8. False
9. True
 10. True
11. False
12. False
13. True
14. True
15. False
16. True
17. True

Void Agreements – Business Law MCQ Questions with Answers

1. The period of limitation for simple contract in India is __________.

(a) 2 years
(b) 3 years
(c) 6 years
(d) 8 years
Answer:
(b) 3 years

2. A void agreement is __________.

(a) Illegal
(b) Enforceable by law
(c) Not enforceable by law
(d) None of these.
Answer:
(c) Not enforceable by law

3. An agreement in restraint of parental rights is __________.

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

4. An agreement will be unlawful if:

(a) There is no consent
(b) Consent is not free
(c) There is no consideration
(d) The object is forbidden by law
Answer:
(d) The object is forbidden by law
5. An agreement in restraint of marriage is:
(a) Voidable
(b) Void
(c) Valid
(d) Illegal.
Answer:
(b) Void

6. An agreement in restraint of trade is:

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

7. A wagering agreement is:

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

8. A contract of insurance is a :
(a) Contract of guarantee
(b) Contract of indemnity
(c) Wagering agreement
(d) Contingent contract
Answer:
(d) Contingent contract

9. In a wagering agreement:
(a) Both the parties win
(b) Both the parties loose
(c) None of the parties wins
(d) One party wins and the other looses.
Answer:
(d) One party wins and the other looses.

10. A wagering agreement in India is declared by the Contract Act as __________.

(a) Illegal and void
(b) Void but not illegal
(c) Voidable at the option of the aggrieved party
(d) Immoral
Answer:
(b) Void but not illegal

11. Agreement to do an impossible act has been declared __________.

(a) Void
(b) Voidable
(c) Enforceable
(d) None of these
Answer:
(a) Void

12. An agreement which restricts a person’s freedom 9 to marry or to marry any

person of his choice is against public policy and is __________.
(a) Lawful
(b) Illegal
(c) Void
(d) None of these
Answer:
(c) Void

13. An agreement of service under which an employ¬ee agrees that he will serve a
particular employer for a certain duration and that he will not serve anybody else
during that period, is a __________.
(a) Valid agreement
(b) Void agreement
(c) Illegal agreement
(d) None of these
Answer:
(a) Valid agreement

14. If the contract is impossible in itself physically or legally the agreement is

__________.
(a) Void contract
(b) Voidable
(c) Void ab initio
(d) None of these
Answer:
(c) Void ab initio
15. M, who is a dealer in mustard oil only, agrees to sell to N ‘500 litres of oil’. This
agreement is __________.
(a) Valid contract
(b) Void contract
(c) Voidable contract
(d) Unenforceable contract
Answer:
(a) Valid contract

16. A and B agree that A shall pay ₹ 1000 for which B shall afterwards deliver to A
either rice or smuggled opium. In this case __________.
(a) The first agreement is void and the second voidable
(b) The first is voidable and the second is void
(c) The first is valid and the second is void
(d) The first is void and the second is valid
Answer:
(c) The first is valid and the second is void

17. A promises B to pay ₹ 100 if it rains on Monday, and B promises A to pay ₹ 100 if
it does not rain on Monday. This agreement is __________.
(a) a valid agreement
(b) a voidable agreement
(c) a wagering agreement
(d) an illegal agreement
Answer:
(c) a wagering agreement

18. P engages B to kill C and borrows ₹ 100 from D to pay B. If D is aware of the
purpose of the loan, the transaction is __________.
(a) Valid
(b) Void
(c) Illegal
(d) Not enforceable
Answer:
(c) Illegal

19. A leaves a firm doing a particular business in Mumbai. He agrees with the other
partners of the firm not to start a similar business as that of the firm in and around
Mumbai for 3 years. This agreement is __________.
(a) Valid
(b) Immoral
(c) Illegal
(d) Void
Answer:
(a) Valid

20. A, while filling up the insurance application form, states his age as 25 believing it
to be true. His actual age was 27. The Life Insurance Corporation issued a policy in
his favour charging a lower premium than what it should have charged if the actual
age had been given. This is a case of __________.
(a) Fraud
(b) Misrepresentation
(c) Undue influence
(d) Mistake of fact
Answer:
(b) Misrepresentation

21. B, having discovered a vein of ore on the estate of A, adopts means to conceal,
and does conceal, the existence of the ore from A. Owing to A’s ignorance B is
enabled to buy the estate at a low price. The contract is __________.
(a) Valid
(b) Void
(c) Voidable at the option of A
(d) Invalid
Answer:
(c) Voidable at the option of A

22. B let a cabin on hire to P a prostitute, knowing that it would be used for immoral
purposes. The agreement is __________.
(a) Enforceable
(b) Valid
(c) Voidable
(d) Void
Answer:
(d) Void

23. A asks B to beat C, promising to compensate B against the consequences. B beats

C and is fined ₹ 100. B can recover from A __________.
(a) ₹ 50
(b) ₹ 100
(c) Nothing
(d) ₹ 100 plus damages
Answer:
(a) ₹ 50
24. A enters into an agreement with B who has robbed A of ₹ 10,000 to drop
prosecution against him (B) in consideration of B’s returning ₹ 8,000. Afterwards B
refused to pay. A can get from B __________.
(a) ₹ 8,000
(b) ₹ 100
(c) Nothing
(d) ₹ 10,000 plus damages
Answer:
(c) Nothing

25. A agrees with B to discover treasure by magic for a consideration of ₹ 500. This is
__________.
(a) A void agreement
(b) A void contract
(c) A valid agreement
(d) An unenforceable contract.
Answer:
(a) A void agreement

26. X, a tailor, employed Y as his assistant under an agreement that Y, on termination

of his employ¬ment shall not start the business of a tailor. This restraint is __________.
(a) Void
(b) Valid
(c) Illegal
(d) Voidable
Answer:
(a) Void

27. X promises to marry Y after the death of his wife. This agreement is __________.
(a) Valid
(b) Void
(c) Illegal
(d) Invalid
Answer:
(a) Valid

28. A promises B to drop a prosecution which he has instituted against B for robbery,
and B promis¬es to restore the value of the things taken. The agreement is
__________.
(a) Valid
(b) Void
(c) Voidable
(d) A contract
Answer:
(b) Void

29. Rajeev entered into a contract with Lata to marry her on a fixed date. However,
before the marriage date. Rajeev went mad. With reference to the Indian Contract
Act which is the valid response?
(a) Lata can’t marry till Rajeev dies
(b) The executers of Rajeev can enforce the contract against Lata
(c) The contract becomes void
(d) All the statements are correct
Answer:
(c) The contract becomes void

State Whether The Following Are True or False:

1. An Agreement to discover treasure by magic is valid.

2. An Agreement to refer a future dispute to arbitration is perfectly valid.
3. Lotteries authorised by the Government are not to be taken as of
wagering nature.
4. Wagering agreements do not cover insurance contracts.
5. A contract by which two or more persons agree to refer their disputes if
any to arbitration shall be illegal.
6. Insurance contracts are basically wagering contracts.
7. Speculative transactions being wagering transactions are void.
8. An agreement which extinguishes personal legal rights of the parties is
void.
9. An agreement the meaning of which is not certain or capable of being
made certain is not void.
10. Transactions incidental to wagering agreements are not void.
11. An illegal contract is fatal to the main contract, but not to collateral
transactions.
Answer:

1. False
2. True
3. True
4. True
5. False
6. False
7. False
8. True
9. False
10. True
11. False