MCQs – Indian Contract Act, 1872 (40 Qs)

Definition & Essentials

1. According to Section 2(h), a contract is:

a) A promise without legal force

b) An agreement enforceable by law

c) A social obligation
d) A mutual understanding

Ans: b) An agreement enforceable by law

2. Every contract is an agreement but every agreement is not a contract because:

a) Social agreements lack enforceability

b) All agreements are voidable

c) Only written agreements are contracts

d) Consideration is not required

Ans: a) Social agreements lack enforceability

3. Essentials of a valid contract include all except:

a) Free consent

b) Lawful consideration
c) Lawful object

d) Social relationship

Ans: d) Social relationship

4. Which one is an example of a social agreement?

a) Promise to marry

b) Promise to lend money

c) Dinner invitation between friends

d) Partnership agreement

Ans: c) Dinner invitation between friends

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Offer & Acceptance

5. An offer must be:

a) Communicated

b) Vague

c) Silent

d) Future only

Ans: a) Communicated

6. A person making an offer is called:

a) Offeree
b) Offeror

c) Promisee

d) Contractee

Ans: b) Offeror
7. Offer can be made by:

a) Words (oral/written)

b) Conduct

c) Advertisement

d) All of these

Ans: d) All of these

8. Silence of a party amounts to:

a) Valid offer

b) Valid acceptance

c) No offer or acceptance

d) Invitation to offer

Ans: c) No offer or acceptance

9. Acceptance must be:

a) Conditional

b) Unconditional and absolute

c) Revocable

d) Oral only

Ans: b) Unconditional and absolute

10. Once an offer is accepted, it becomes:

a) An invitation to offer

b) A promise

c) A void agreement
d) A voidable agreement
Ans: b) A promise

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Consideration

11. Consideration under Section 2(d) may be:

a) Past

b) Present

c) Future

d) All of these

Ans: d) All of these

12. Consideration must be:

a) Adequate only

b) Real and lawful

c) Gratuitous

d) From promisor only

Ans: b) Real and lawful

13. Which case showed consideration must be at promisor’s desire?

a) Balfour v. Balfour

b) Durga Prasad v. Baldeo

c) Mohori Bibee v. Dharmodas Ghose
d) Merritt v. Merritt

Ans: b) Durga Prasad v. Baldeo

14. In Chinnaya v. Ramayya, the court held:

a) Consideration must move from promisee only

b) Consideration may move from any person

c) Past consideration is invalid

d) Consideration must be adequate

Ans: b) Consideration may move from any person

15. Consideration must not be:

a) Real

b) Possible

c) Unlawful

d) Executory

Ans: c) Unlawful

16. Exceptions to “No consideration, no contract” include:

a) Love & affection

b) Past voluntary service

c) Time-barred debt

d) All of these

Ans: d) All of these

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Capacity to Contract

17. Age of majority in India is:

a) 16

b) 18
c) 21

d) 25

Ans: b) 18

18. Contract with a minor is:

a) Valid

b) Void

c) Voidable

d) Illegal

Ans: b) Void

19. Case law declaring minor’s contract void-ab-initio:

a) Balfour v. Balfour
b) Merritt v. Merritt

c) Mohori Bibee v. Dharmodas Ghose

d) Durga Prasad v. Baldeo

Ans: c) Mohori Bibee v. Dharmodas Ghose

20. Can a minor ratify a contract on attaining majority?

a) Yes

b) No

c) Yes, if written

d) Yes, if consideration paid

Ans: b) No

21. Who among the following cannot contract?

a) Alien enemy

b) Prisoner

c) Insolvent

d) All of these

Ans: d) All of these

22. A contract with an intoxicated person is:

a) Valid

b) Void

c) Voidable

d) Illegal

Ans: b) Void

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Free Consent
23. Consent is free when not caused by:

a) Coercion

b) Fraud

c) Undue influence

d) Mistake

Ans: d) Mistake

24. Coercion makes contract:

a) Valid

b) Void

c) Voidable at option of aggrieved party

d) Illegal

Ans: c) Voidable at option of aggrieved party

25. Undue influence exists when:

a) Fiduciary relationship exists

b) Authority abused

c) Mental weakness exploited

d) All of these

Ans: d) All of these

26. Fraud involves:

a) False statement knowingly

b) Active concealment
c) Promise without intention
d) All of these

Ans: d) All of these

27. Misrepresentation makes a contract:

a) Void

b) Valid

c) Voidable at option of misled party

d) Illegal

Ans: c) Voidable at option of misled party

28. Bilateral mistake of fact makes a contract:

a) Valid

b) Void

c) Voidable

d) Illegal

Ans: b) Void

29. Unilateral mistake of fact makes a contract:

a) Void

b) Valid
c) Voidable

d) Illegal

Ans: b) Valid

30. Mistake of Indian law:

a) Makes contract void

b) Excuses the party

c) Not excused – ignorance of law is no excuse

d) Makes contract voidable

Ans: c) Not excused – ignorance of law is no excuse

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Unlawful Object & Void Agreements

31. Object is unlawful if:

a) Forbidden by law

b) Fraudulent

c) Opposed to public policy

d) All of these

Ans: d) All of these

32. Agreement in restraint of marriage is:

a) Valid
b) Void

c) Voidable

d) Illegal only if registered

Ans: b) Void
33. Wagering agreements are:

a) Valid

b) Void

c) Voidable

d) Illegal

Ans: b) Void

34. Agreement in restraint of trade is:

a) Valid

b) Void

c) Voidable

d) Enforceable only if registered

Ans: b) Void

35. Exception to restraint of trade includes:

a) Sale of goodwill

b) Service agreements

c) Partnership Act restrictions

d) All of these

Ans: d) All of these

36. Agreement without consideration is:

a) Valid

b) Void

c) Voidable
d) Illegal
Ans: b) Void

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Case Laws

37. Balfour v. Balfour failed because:

a) Wife was minor

b) No intention to create legal relation

c) No consideration

d) Fraud involved

Ans: b) No intention to create legal relation

38. Merritt v. Merritt was enforceable because:

a) Wife signed written agreement

b) Parties were separating & intention existed

c) Consideration was not required

d) Husband admitted liability

Ans: b) Parties were separating & intention existed

39. In Durga Prasad v. Baldeo, why was contract invalid?

a) Consideration did not move at promisor’s desire

b) Promisee was a minor

c) Object was unlawful
d) Agreement was in restraint of trade

Ans: a) Consideration did not move at promisor’s desire

40. In Chinnaya v. Ramayya, who was allowed to sue?

a) Only promisee

b) Stranger to contract

c) Stranger to consideration
d) None

Ans: c) Stranger to consideration

Second text

MCQs

Discharge of Contract

1. Which of the following is not a mode of discharge of contract?

a) Performance

b) Agreement

c) Impossibility

d) Formation

Answer: d) Formation

2. Anticipatory breach of contract means:

a) Breach before performance is due

b) Breach after contract ends

c) Breach after full performance

d) Breach by mutual consent
Answer: a) Breach before performance is due

3. Which of the following discharges a contract by operation of law?

a) Agreement

b) Breach

c) Death, insolvency, merger

d) Performance
Answer: c) Death, insolvency, merger

Contract of Indemnity

4. Contract of Indemnity is defined under which section?

a) Sec 124
b) Sec 126

c) Sec 148

d) Sec 172

Answer: a) Sec 124

5. In a contract of indemnity, the parties are:

a) Principal & Agent

b) Bailor & Bailee

c) Indemnifier & Indemnity holder
d) Creditor & Debtor
Answer: c) Indemnifier & Indemnity holder

6. In Adamson v Jarvis, the principle established was related to:

a) Guarantee

b) Agency

c) Indemnity

d) Pledge
Answer: c) Indemnity

Contract of Guarantee

7. A contract of guarantee is a contract to:

a) Save another from loss

b) Perform promise or discharge liability of third person

c) Deliver goods for a purpose

d) Act on behalf of another

Answer: b) Perform promise or discharge liability of third person

8. In a contract of guarantee, the person to whom guarantee is given is:

a) Surety

b) Principal Debtor
c) Creditor
d) Bailor
Answer: c) Creditor

9. Which is not essential for a valid guarantee?

a) Tripartite agreement

b) Consideration

c) Principal debt

d) Misrepresentation by creditor
Answer: d) Misrepresentation by creditor

10. The liability of surety can be discharged by:

a) Revocation by notice

b) Variance in terms of contract

c) Death of surety

d) All of the above

Answer: d) All of the above

Bailment

11. Bailment is defined under which section?

a) Sec 124

b) Sec 126
c) Sec 148
d) Sec 172
Answer: c) Sec 148

12. In bailment, the person delivering goods is called:

a) Bailee

b) Bailor

c) Pawnor

d) Pledgee
Answer: b) Bailor

13. One essential feature of bailment is:

a) Must be in writing

b) Involves delivery of possession of goods

c) Always for money

d) Requires agent’s consent

Answer: b) Involves delivery of possession of goods

14. The bailor is bound to disclose:

a) Ownership of goods

b) Faults in goods bailed

c) Bailee’s identity
d) His financial status

Answer: b) Faults in goods bailed

15. The bailee must take care of goods as:

a) A rich man would
b) An ordinarily prudent man would

c) A judge would

d) The bailor directs

Answer: b) An ordinarily prudent man would

Pledge

16. Pledge is defined under which section?

a) Sec 124

b) Sec 126

c) Sec 148

d) Sec 172

Answer: d) Sec 172

17. Pledge is a type of:

a) Agency

b) Guarantee

c) Bailment

d) Indemnity

Answer: c) Bailment

18. The person who delivers goods in pledge is called:

a) Pawnee
b) Pawnor

c) Bailor

d) Surety

Answer: b) Pawnor

19. The right of Pawnee to sell goods arises:

a) After due notice and default of payment

b) Immediately after pledge

c) Only with court order

d) Never

Answer: a) After due notice and default of payment

20. The pawnor has the right to:

a) Destroy goods

b) Redeem goods before actual sale

c) Sell goods without consent

d) Avoid payment of debt

Answer: b) Redeem goods before actual sale

Agency

21. The law of agency is based on the maxim:

a) Nemo dat quod non habet
b) Caveat emptor

c) Qui facit per alium facit per se

d) Res ipsa loquitur

Answer: c) Qui facit per alium facit per se

22. Who can employ an agent?

a) Any minor
b) Person of sound mind and majority age

c) Any person without capacity

d) Bailee only

Answer: b) Person of sound mind and majority age

23. Consideration is:

a) Always necessary in agency

b) Not necessary in agency

c) Necessary only in pledge

d) Necessary in bailment only

Answer: b) Not necessary in agency

24. Agency can be created by:

a) Agreement

b) Necessity

c) Ratification

d) All of the above

Answer: d) All of the above

25. A written contract of agency is called:

a) Power of Attorney

b) Indemnity Bond

c) Guarantee Deed

d) Pledge Agreement

Answer: a) Power of Attorney

26. Which of the following is an implied agency?

a) Express appointment

b) Husband and wife relationship

c) Written Power of Attorney

d) Contract under seal

Answer: b) Husband and wife relationship

27. Agency can be determined by:

a) Agreement

b) Notice

c) Completion of act

d) All of the above

Answer: d) All of the above

28. Agency is terminated by operation of law if:

a) Principal dies

b) Agent becomes of unsound mind

c) Subject matter is destroyed
d) All of the above

Answer: d) All of the above

29. The person who is represented by the agent is called:

a) Creditor

b) Principal

c) Surety
d) Bailor

Answer: b) Principal

30. The person who acts on behalf of another is called:

a) Principal

b) Agent

c) Bailee

d) Pawnor

Answer: b) Agent