Written by Prashant Panwar
Total Questions: 50 | Marks: 100 | Time: 1 hour
SECTION A – BASICS OF CONTRACT
1. The Indian Contract Act was enacted in:
a) 1860
b) 1872
c) 1882
d) 1890
2. A contract is defined under:
a) Section 2(a)
b) Section 2(b)
c) Section 2(h)
d) Section 2(i)
3. An agreement enforceable by law is called:
a) Proposal
b) Promise
c) Consideration
d) Contract
4. A voidable contract is:
a) Enforceable by both parties
b) Enforceable at the option of one party
c) Not enforceable by any party
d) Illegal
5. Free consent includes:
a) Coercion
b) Undue influence
c) Fraud
d) Absence of these
SECTION B – OFFER & ACCEPTANCE
6. Offer is defined under:
a) Section 2(a)
b) Section 2(b)
c) Section 2(d)
d) Section 2(f)
7. Acceptance must be:
a) Conditional
b) Silent
c) Absolute and unqualified
d) Oral only
8. Communication of acceptance is complete for offeror when:
a) Acceptance is posted
b) Acceptance is received
c) Acceptance is written
d) Acceptance is spoken
9. Revocation of offer can be made:
a) Anytime before acceptance is communicated
b) Anytime
c) After acceptance
d) Only through post
10. Silence as acceptance is:
a) A rule
b) Generally no acceptance
c) Always acceptance
d) Accepted in all cases
SECTION C – CONSIDERATION
11. Consideration is defined under:
a) Section 2(d)
b) Section 2(h)
c) Section 10
d) Section 13
12. Consideration must move from:
a) Promisor only
b) Promisee only
c) Any person
d) Court
13. “No consideration, no contract” has exceptions under:
a) Section 10
b) Section 25
c) Section 73
d) Section 124
14. Natural love and affection valid without consideration requires:
a) Oral agreement
b) Written and registered agreement
c) No conditions
d) Witnesses only
15. Past consideration in India is:
a) Valid
b) Invalid
c) Illegal
d) Not defined
SECTION D – CAPACITY OF PARTIES
16. A minor’s agreement is:
a) Valid
b) Void
c) Voidable
d) Illegal
17. Leading case on minor’s agreement:
a) Mohori Bibee v. Dharmodas Ghose
b) Balfour v. Balfour
c) Lalman Shukla v. Gauri Dutt
d) Hadley v. Baxendale
18. Minor can be:
a) Agent
b) Principal
c) Contracting party
d) Guarantor
19. Person of unsound mind:
a) Cannot enter into contract
b) Can never contract
c) May contract when of sound mind
d) Only with guardian
20. Agreement with alien enemy during war is:
a) Valid
b) Void
c) Illegal
d) Voidable
SECTION E – FREE CONSENT
21. Coercion is defined under:
a) Section 14
b) Section 15
c) Section 16
d) Section 17
22. Undue influence involves:
a) Physical force
b) Dominating position
c) Mutual agreement
d) Mistake
23. Fraud includes:
a) Silence always
b) Promise without intention
c) Innocent misrepresentation
d) Coercion
24. Misrepresentation is:
a) Innocent false statement
b) Deliberate lie
c) Threat
d) Mistake
25. Mistake of law (India):
a) Void
b) Valid
c) Illegal
d) Voidable
SECTION F – VOID & VOIDABLE AGREEMENTS
26. Agreement in restraint of marriage is:
a) Valid
b) Void
c) Voidable
d) Illegal
27. Agreement in restraint of trade:
a) Valid
b) Void
c) Voidable
d) Conditional
28. Wagering agreements are:
a) Valid
b) Void
c) Voidable
d) Illegal (in some states)
29. Contingent contracts are covered under:
a) Sections 31–36
b) Sections 38–45
c) Sections 73–75
d) Section 124
30. Quasi-contract obligations arise:
a) By promise
b) By law
c) By consent
d) By custom
SECTION G – PERFORMANCE OF CONTRACT
31. Tender of performance must be:
a) Improper
b) Conditional
c) Unconditional
d) Oral only
32. Time is essence of contract when:
a) Not specified
b) Parties intend it as essential
c) Law says so
d) Consideration is present
33. Novation means:
a) Termination
b) Alteration of terms
c) Substitution of new contract
d) Performance
34. Reciprocal promise means:
a) Only one party performs
b) Mutual promises
c) Promise without consideration
d) Implied promise
35. Appropriation of payment relates to:
a) Identity of parties
b) Time
c) Which debt is paid
d) Consideration
SECTION H – BREACH & REMEDIES
36. Damages for breach are under:
a) Section 60
b) Section 73
c) Section 10
d) Section 124
37. Vindictive damages are:
a) Punitive damages
b) Normal damages
c) Nominal damages
d) Specific damages
38. Special damages arise from:
a) Ordinary loss
b) Unusual circumstances communicated
c) Law
d) Minor breach
39. Leading case on remoteness of damages:
a) Mohori Bibee
b) Hadley v. Baxendale
c) Carlill v. Carbolic Smoke Ball
d) Lalman Shukla
40. Injunction is:
a) Monetary remedy
b) Equitable remedy
c) Damages
d) Promise
SECTION I – GUARANTEE, INDEMNITY & BAILMENT
41. Contract of indemnity definition:
a) Sec 124
b) Sec 125
c) Sec 73
d) Sec 126
42. Guarantee requires minimum:
a) One person
b) Two persons
c) Three persons
d) Four persons
43. Bailment involves:
a) Transfer of ownership
b) Delivery of goods
c) Sale of goods
d) Services
44. Pledge is:
a) Special bailment
b) Void agreement
c) Sale
d) Mortgage
45. Finder of goods is treated as:
a) Owner
b) Bailor
c) Bailee
d) Agent
SECTION J – AGENCY
46. Agency is created by:
a) Contract only
b) Law only
c) Necessity & ratification also
d) Will of agent
47. Principal is bound by agent’s acts:
a) Within authority
b) Beyond authority
c) Without consent
d) Under coercion
48. Agent’s authority terminates by:
a) Death of principal
b) Revocation
c) Completion
d) All of the above
49. Sub-agent is appointed by:
a) Principal
b) Agent (with authority)
c) Court
d) Law
50. Agent is personally liable when:
a) Principal disclosed
b) Principal minor
c) Acting in good faith
d) Duty performed
#️⃣ ANSWER KEY + EXPLANATIONS
SECTION A – BASICS
1. b) – ICA came into force on 1 September 1872.
2. c) – Contract = Sec 2(h).
3. d) – Agreement + enforceability = Contract.
4. b) – Enforceable at option of one party.
5. d) – Free consent = absence of coercion, fraud, undue influence, misrepresentation.
SECTION B – OFFER & ACCEPTANCE
6. a) – Offer = Sec 2(a).
7. c) – Acceptance must be absolute (Sec 7).
8. b) – For offeror: when acceptance is received.
9. a) – Before acceptance is communicated (Sec 5).
10. b) – Silence ≠ acceptance (general rule).
SECTION C – CONSIDERATION
11. a) – Consideration = Sec 2(d).
12. c) – From promisee or any other person.
13. b) – Exception: Sec 25.
14. b) – Must be in writing + registered.
15. a) – Past consideration valid in India.
SECTION D – CAPACITY
16. b) – Minor’s agreement void (Mohori Bibee).
17. a) – Leading case: Mohori Bibee v. Dharmodas Ghose.
18. a) – Minor can be agent but not principal.
19. c) – Valid when person is of sound mind.
20. b) – Agreements with alien enemy during war are void.
SECTION E – FREE CONSENT
21. b) – Coercion = Sec 15.
22. b) – Undue influence = dominating position.
23. b) – Fraud includes false promise without intention.
24. a) – Innocent false statement.
25. b) – Mistake of Indian law ≠ void (everyone expected to know law).
SECTION F – VOID AGREEMENTS
26. b) – Restraint of marriage = void (Sec 26).
27. b) – Restraint of trade = void (Sec 27).
28. d) – Wagering = void; illegal in Maharashtra & Gujarat.
29. a) – Contingent contracts = Sec 31–36.
30. b) – Quasi-contracts imposed by law.
SECTION G – PERFORMANCE
31. c) – Tender must be unconditional.
32. b) – Depends on intention of parties.
33. c) – Novation = new contract (Sec 62).
34. b) – Mutual promises.
35. c) – Debtor chooses which debt is paid.
SECTION H – BREACH
36. b) – Damages = Sec 73.
37. a) – Vindictive = punitive damages.
38. b) – Special damages: unusual loss communicated.
39. b) – Rule in Hadley v. Baxendale.
40. b) – Injunction is equitable remedy.
SECTION I – GUARANTEE, INDEMNITY & BAILMENT
41. a) – Indemnity = Sec 124.
42. c) – Principal + Surety + Creditor.
43. b) – Bailment = delivery of goods (Sec 148).
44. a) – Pledge = bailment for security.
45. c) – Finder is treated as bailee.
SECTION J – AGENCY
46. c) – Agency arises by contract, necessity, ratification.
47. a) – Principal bound only when agent acts within authority.
48. d) – All modes terminate authority.
49. b) – Agent can appoint sub-agent with authority.
50. b) – Agent personally liable if principal is minor or undisclosed.
