1.

An agreement consists of reciprocal promises between at least

(a) four parties.
(b) six parties.
(c) three parties.
(d) two parties.
Answer – d
2. Every promise and every set of promise forming the consideration for each other is a/an
(a) contract.
(b) agreement.
(c) offer.
(d) acceptance.
Answer – b
3. 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)
Answer – c
4. 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.
Answer -a
5. 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
Answer – b
6. 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)]
Answer – a
7. Agreement the meaning of which is uncertain is
(a) Void
(b) Valid
(c) Voidable
(d) Illegal Answer:
Answer – a
8. …………….. 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
Answer – c
9. All Contract is a/an ……………..
(a) Offer
(b) Agreement
(c) Acceptance
(d) Transaction
Answer – b
10. A/an …………… is every Promise and every set of promises , forming consideration for
each other
(a) Offer
(b) Agreement
(c) Acceptance
(d) Transaction
Answer – b
11. Every agreement and promise enforceable by law is …………….
(a) Offer
(b) Contract
(c) Acceptance
(d) Consideration
Answer – b
12. 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
Answer – b
13. 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
Answer – a
14. For an acceptance to be valid, it must be
(a) Partial & qualified
(b) Absolute & unqualified
(c) Partial & unqualified
(d) Absolute & qualified
Answer – b
15. 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.
Answer – a
16. 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.
Answer – b
17. 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.
Answer – b
18. 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.
Answer – a
19. 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
Answer – a
20. 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
Answer -d
21. 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.
Answer -d
22. 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.
Answer -a
23. 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
Answer – d
24. 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.
Answer d
25. 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.
Answer -a
26. 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.
Answer a
27. 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
Answer – d
28. “ 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
Answer -b
29. A Contract which is formed without the free consent of parties, is ……….
(a) Valid
(b) Illegal
(c) Voidable
(d) Void ab- initio
Answer -c
30. If an agreement suffers from any uncertainty. It is ………….
(a) Voidable
(b) Void
(c) Unenforceable
(d) Illegal.
Answer – b
31. The person who during the contract of Bailment delivers goods is called
a) Bailor b) Bailee c) Special bailment d Pledge Answer (a)
32. The bailment of goods as security for payment of debt or performance of a promise is called
a) Pledge b) Special bailment c) Servant d) Labour Answer (a)
33. A person employed to do any act for another or to represent another in dealings with third
person is called
a) Servant b) Labour c) Agent d) Bailor Answer (c)
34. Which of the following forms of business has the advantage of simplicity?
a) Partnership b) Joint Stock company c) Limited Liability Company d) Single member
company. Answer (a)
35. Which of the following statements is not true about the partnership form of business?
Answer(d)
a) A partnership is a business run by two or more persons
b) A partnership business is easy to set up.
c) Each partner is liable under the law for the actions of other partners.
d) In the absence of agreement, partners will be paid salaries.
36. All illegal agreements are ………….
(a) Void- ab- initio
(b) Valid
(c) Contingent
(d) Enforceable
Answer -a
37. 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
Answer -a
38. 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)
Answer -b
39. 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.
Answer – a
40. 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.
Answer -d
41. How agency is created:
(a) By Direct appointment
(b) By implication
(c) By necessity
(d) All of the above
Answer -d
42. 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
Answer -c
43. A Gratuitous Promise can
(a) Be enforced
(b) Not be enforced
(c) Be enforced in court of law
(d) None of above
Answer -b
44. If A makes an offer to B on a particular day, then the offer can be revoked by A before
(a) B accepts the offer
(b) A receives B’s acceptance
(c) B has posted the letter of acceptance
(d) Reasonable period of time
Answer – c
45. The two types of breach are
(a) Actual breach and Deemed breach
(b) Actual breach and Conditional breach
(c) Actual breach and Anticipatory breach
(d) Actual breach and Remedial breach
Answer –c
1 What are the nature of liabilities under Contracts of Indemnity and Guarantee?
2 Write a note on Quasi Contracts?
3 Whether a promise to pay a time barred bet is valid and if so under what conditions?
4 What do you mean by Transfer of Property working in the Contract Act?
5 Explain the main objectives provided for consumers in the consumer protection act?
6 What are the advantages in partnership agreement?
7 Explain about the Copyright fundamental rights and its benefits?
8 How is Alternative Dispute resolution approved in India?
9 What are the principles of law following in the Indian Contract Act?
10 What are the principles relating to the valid contract?