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All questions of Unit 1: Nature of Contracts for CA Foundation Exam
H, a coolie in uniform at the railway station carried the luggage of Z, a passenger, from the platform to the taxi stand without being asked by Z to do so and Z did not attempt to stop him from carrying the luggage. In this case, Z ________ to make payment to H:- a)Is bound
- b)Is not bound
- c)Is free
- d)None of the above
Correct answer is 'A'. Can you explain this answer?
H, a coolie in uniform at the railway station carried the luggage of Z, a passenger, from the platform to the taxi stand without being asked by Z to do so and Z did not attempt to stop him from carrying the luggage. In this case, Z ________ to make payment to H:
a)
Is bound
b)
Is not bound
c)
Is free
d)
None of the above
|
Priya Patel answered |
Since the coolie is in uniform, therefore it is clear that he is performing a service by carrying the luggage of the passenger from the platform to the taxi stand. Although, Z has not asked the coolie to carry his luggage but he also did not try to stop him. Thus, it is a case of implied acceptance and therefore, he is bound to make a reasonable payment to coolie.
Can you explain the answer of this question below:The person making a proposal is called....
- A:
promisor
- B:
Vendor
- C:
Contractor
- D:
Promisee
The answer is a.
The person making a proposal is called....
promisor
Vendor
Contractor
Promisee
|
Sumer Jerry answered |
Ans. The person making the proposal or offer is called the "promisor".Hence , option (a) is correct answer.
When the consent of a party is not free, the contract is- a)Void.
- b)Voidable.
- c)Valid.
- d)Illegal.
Correct answer is 'A'. Can you explain this answer?
When the consent of a party is not free, the contract is
a)
Void.
b)
Voidable.
c)
Valid.
d)
Illegal.
|
Freedom Institute answered |
When a contract is entered into without the free consent of the party, it is considered a voidable contract. The definition of the act states that a voidable contract is enforceable by law at the option of one or more parties but not at option of the other parties.
Can you explain the answer of this question below: A offers to sell his house to B, who agrees to purchase it subject to approval by B’s solicitors. Which one of the statements in correct?
- A:
B’s statement is absolute and unqualified.
- B:
B’s statement is not absolute and unqualified.
- C:
B’s statement is absolute but qualified.
- D:
All the above statements are correct.
The answer is c.
A offers to sell his house to B, who agrees to purchase it subject to approval by B’s solicitors. Which one of the statements in correct?
B’s statement is absolute and unqualified.
B’s statement is not absolute and unqualified.
B’s statement is absolute but qualified.
All the above statements are correct.
|
Yashi Jain answered |
Answer is (c) B's statement is absolute but he has condition that he would purchase it only on approval by his solicitor (lawyer). So the given statement is absolute and qualified (condition)
--------- contracts are also called contracts with executed consideration. - a)Unilateral
- b)Completed
- c)Bilateral
- d)Executory
Correct answer is 'B'. Can you explain this answer?
--------- contracts are also called contracts with executed consideration.
a)
Unilateral
b)
Completed
c)
Bilateral
d)
Executory
|
Jayant Mishra answered |
Completed contracts are also called contracts with executed consideration i.e. the consideration for the promise in a contract is given or executed.
The juristic concept of contract consists of:
- a)Offer and Acceptance
- b)Free Consent & Capacity
- c)Agreement & Obligation
- d)Consideration & Coercion
Correct answer is option 'C'. Can you explain this answer?
The juristic concept of contract consists of:
a)
Offer and Acceptance
b)
Free Consent & Capacity
c)
Agreement & Obligation
d)
Consideration & Coercion
|
Rajat Patel answered |
The juristic concept of contract comprises two constituent elements—'obligation' and 'agreement'. Obligation means a legal tie, which imposes upon a determinate person or persons, the necessity of doing, or abstaining from doing, a definite act or acts.
An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other, is a : - a)Valid contract
- b)Unenforceable contract
- c)Voidable contract
- d)Void agreement
Correct answer is 'C'. Can you explain this answer?
An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other, is a :
a)
Valid contract
b)
Unenforceable contract
c)
Voidable contract
d)
Void agreement
|
Pallabi Khanna answered |
Explanation:
Voidable contracts are those which are enforceable at the option of one or more parties but not at the option of others. This means that one party has the power to avoid the legal obligations of the contract while the other party is bound by it. The party who has this option is said to have the power of avoidance.
Examples of voidable contracts include contracts made by minors, contracts made under duress or undue influence, and contracts made by parties who lack mental capacity.
In a voidable contract, the party with the power of avoidance must act within a reasonable amount of time in order to avoid the contract. If they do not act within this time frame, the contract becomes binding on both parties.
For example, if a minor enters into a contract to buy a car, they have the power to avoid the contract. However, if they continue to use the car for several months without taking any action to avoid the contract, the contract becomes binding on both parties.
In conclusion, a voidable contract is enforceable at the option of one or more parties but not at the option of others. It is important for parties to be aware of the circumstances under which a contract may be voidable, and to take action within a reasonable amount of time if they wish to avoid the contract.
Voidable contracts are those which are enforceable at the option of one or more parties but not at the option of others. This means that one party has the power to avoid the legal obligations of the contract while the other party is bound by it. The party who has this option is said to have the power of avoidance.
Examples of voidable contracts include contracts made by minors, contracts made under duress or undue influence, and contracts made by parties who lack mental capacity.
In a voidable contract, the party with the power of avoidance must act within a reasonable amount of time in order to avoid the contract. If they do not act within this time frame, the contract becomes binding on both parties.
For example, if a minor enters into a contract to buy a car, they have the power to avoid the contract. However, if they continue to use the car for several months without taking any action to avoid the contract, the contract becomes binding on both parties.
In conclusion, a voidable contract is enforceable at the option of one or more parties but not at the option of others. It is important for parties to be aware of the circumstances under which a contract may be voidable, and to take action within a reasonable amount of time if they wish to avoid the contract.
The Contract Act of 1872 was enacted on- a)25th April, 1872
- b)25th May, 1872
- c)25th June, 1872
- d)None of above
Correct answer is option 'A'. Can you explain this answer?
The Contract Act of 1872 was enacted on
a)
25th April, 1872
b)
25th May, 1872
c)
25th June, 1872
d)
None of above
|
|
Sounak Jain answered |
The Indian Contract Act, 1872 prescribes the law relating to contracts in India and is the key act regulating Indian contract law. The Contract Act of 1872 was enacted on 25 April 1872.
Can you explain the answer of this question below:In case of illegal agreements, the collateral agreements are :
- A:
Valid contract
- B:
Void contract
- C:
Voidable contract
- D:
None of these
The answer is B.
In case of illegal agreements, the collateral agreements are :
Valid contract
Void contract
Voidable contract
None of these
|
Bhaskar Sharma answered |
An agreement which loses its legal status is a void agreement. An illegal agreement is one which is not permissible under law. ... Conversely, collateral agreements of an illegal agreement cannot be enforceable by law as they are void ab initio.
A proposal when accepted becomes aa)Promise.b)Contract.c)Offer.d)Acceptance.Correct answer is 'A'. Can you explain this answer?
|
|
Priya Patel answered |
According to The Indian Contract Act, 1872 that prescribes the law relating to contracts in India:
Promise 2(b) : A Proposal when accepted becomes a promise. In simple words, when an offer is accepted it becomes promise.
4. Promisor and promisee 2(c) : When the proposal is accepted, the person making the proposal is called as promisor and the person accepting the proposal is called as promisee.
Indian Contract Act, 1872 is passed by: - a)Indian Parliament
- b)British Parliament
- c)U.S. Congress
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
Indian Contract Act, 1872 is passed by:
a)
Indian Parliament
b)
British Parliament
c)
U.S. Congress
d)
None of these
|
Srsps answered |
The Indian Contract Law, 1872 was passed by the British Parliament. It is based on the principles of English Common Law.
Moral pressure is involved in the case of- a)Coercion.
- b)Undue Influence.
- c)Misrepresentation.
- d)Fraud.
Correct answer is option 'B'. Can you explain this answer?
Moral pressure is involved in the case of
a)
Coercion.
b)
Undue Influence.
c)
Misrepresentation.
d)
Fraud.
|
|
Gayatri Khanna answered |
Undue influence is a form of pressure or persuasion that is used to influence someone's decision-making ability. It is a situation where one party is in a position of power or authority and uses this power to influence or manipulate the other party.
Explanation:
Undue influence occurs when one party uses their position of power to pressure or persuade another party to do something that they might not otherwise do. This can happen in a variety of situations, including in contracts, employment relationships, or in personal relationships. Some common examples of undue influence include:
1. Taking advantage of a vulnerable or emotionally dependent person.
2. Making false or misleading statements to influence someone's decision.
3. Using threats, intimidation, or coercion to manipulate someone's actions.
4. Exploiting a position of trust or authority.
5. Using emotional appeals or flattery to influence someone's decision.
In legal terms, undue influence is a form of fraud that can be used to void a contract or other legal agreement. It is important to be aware of the signs of undue influence and to take steps to protect yourself if you believe that you are being pressured or manipulated into making a decision that you might not otherwise make.
Explanation:
Undue influence occurs when one party uses their position of power to pressure or persuade another party to do something that they might not otherwise do. This can happen in a variety of situations, including in contracts, employment relationships, or in personal relationships. Some common examples of undue influence include:
1. Taking advantage of a vulnerable or emotionally dependent person.
2. Making false or misleading statements to influence someone's decision.
3. Using threats, intimidation, or coercion to manipulate someone's actions.
4. Exploiting a position of trust or authority.
5. Using emotional appeals or flattery to influence someone's decision.
In legal terms, undue influence is a form of fraud that can be used to void a contract or other legal agreement. It is important to be aware of the signs of undue influence and to take steps to protect yourself if you believe that you are being pressured or manipulated into making a decision that you might not otherwise make.
Can you explain the answer of this question below:Which one of the following promises is enforceable?
- A:
X promises to pay Rs. 5,000/- to Y who saved him from drowning
- B:
X promises to pay Rs. 5,000/- to his son
- C:
X promises to donate Rs. 5,000/- to an Officer’s Club
- D:
X promises to pay Rs. 5,000/- as additional fees to his advocate for winning a suit
The answer is a.
Which one of the following promises is enforceable?
X promises to pay Rs. 5,000/- to Y who saved him from drowning
X promises to pay Rs. 5,000/- to his son
X promises to donate Rs. 5,000/- to an Officer’s Club
X promises to pay Rs. 5,000/- as additional fees to his advocate for winning a suit
|
Arjun Singhania answered |
The promise by X to pay Y who saved him from drowning is enforceable as there is completion of "quid pro quo" i.e. something in return of. In this case X's life was saved hence he is held liable to pay the amount to Y.
Which one of the following element is not necessary for a contract?- a)Competent parties
- b)Reasonable terms and conditions
- c)Free consent
- d)Lawful consideration
Correct answer is option 'B'. Can you explain this answer?
Which one of the following element is not necessary for a contract?
a)
Competent parties
b)
Reasonable terms and conditions
c)
Free consent
d)
Lawful consideration
|
|
Divya Dasgupta answered |
As per Indian Contract Act 1872, section 10 contains option a,c and d except option b
Reasonable term and condition is not necessary to make a contract.
Reasonable term and condition is not necessary to make a contract.
When an offer is made to the world at large, it is ________ offer.- a)Counter offer
- b)Special offer
- c)General Offer
- d)None of the above.
Correct answer is 'C'. Can you explain this answer?
When an offer is made to the world at large, it is ________ offer.
a)
Counter offer
b)
Special offer
c)
General Offer
d)
None of the above.
|
Sneha Meshram answered |
Option C) is correct because
General Offer means an offer made to the public at large...
and special offer means offer made to specific person or specific group of person
Counter offer means an offer which is exchanged by a new offer in place of old one
General Offer means an offer made to the public at large...
and special offer means offer made to specific person or specific group of person
Counter offer means an offer which is exchanged by a new offer in place of old one
Which of the following statements is not correct?
- a)Acceptance must be absolute
- b)Communication of an offer is essential
- c)Acceptance may be given in any manner
- d)An offer must not be conditional
Correct answer is option 'D'. Can you explain this answer?
Which of the following statements is not correct?
a)
Acceptance must be absolute
b)
Communication of an offer is essential
c)
Acceptance may be given in any manner
d)
An offer must not be conditional
|
|
Aditya Das answered |
Incorrect Statement: An offer must not be conditional.
Explanation: A conditional offer is a valid offer. A conditional offer is an offer that is made subject to certain conditions. For example, an offer to buy a house may be conditional upon the buyer being able to obtain financing or upon the completion of a home inspection. As long as the conditions are clearly stated, the offer is valid.
Correct Statements:
- Acceptance must be absolute: This means that acceptance must be unconditional and must match the terms of the offer. Any attempt to change the terms of the offer or to add new conditions is not considered acceptance but a counteroffer.
- Communication of an offer is essential: An offer must be communicated to the offeree for it to be valid. Communication can be done orally, in writing, or by conduct. However, the communication must be clear and unambiguous.
- Acceptance may be given in any manner: Acceptance can be given in any manner that is reasonable under the circumstances. This can include oral, written, or conduct that clearly indicates acceptance.
Conclusion: The incorrect statement is option D, "An offer must not be conditional."
Explanation: A conditional offer is a valid offer. A conditional offer is an offer that is made subject to certain conditions. For example, an offer to buy a house may be conditional upon the buyer being able to obtain financing or upon the completion of a home inspection. As long as the conditions are clearly stated, the offer is valid.
Correct Statements:
- Acceptance must be absolute: This means that acceptance must be unconditional and must match the terms of the offer. Any attempt to change the terms of the offer or to add new conditions is not considered acceptance but a counteroffer.
- Communication of an offer is essential: An offer must be communicated to the offeree for it to be valid. Communication can be done orally, in writing, or by conduct. However, the communication must be clear and unambiguous.
- Acceptance may be given in any manner: Acceptance can be given in any manner that is reasonable under the circumstances. This can include oral, written, or conduct that clearly indicates acceptance.
Conclusion: The incorrect statement is option D, "An offer must not be conditional."
An agreement enforceable by law is : - a)Obligation
- b)Promise
- c)Proposal
- d)Contract
Correct answer is option 'D'. Can you explain this answer?
An agreement enforceable by law is :
a)
Obligation
b)
Promise
c)
Proposal
d)
Contract
|
Kavita Joshi answered |
Section 2 (h) of the Indian Contract Act, 1872 defines a contract as an agreement enforceable by law. In other words, an agreement which can be enforced in a court of law is known as a contract. According to Salmond, a contract is an agreement creating and defining obligations between the parties’. Sir William Anson defines a contract as a legally binding agreement made between two or more persons by which rights are acquired by one or more to acts or forbearances on the part of the other or others’.
Hence, a contract is an agreement between two or more persons which is intended to have legal consequences. It is clear from the above definition of the contract that there are two elements of a contract;
- An agreement, and
- Legal obligation.
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.
Correct answer is option 'B'. Can you explain this answer?
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.
|
|
Poonam Reddy answered |
A void contract means:- a)An agreement which is not enforceable by law
- b)A contract which ceases to be enforceable by law
- c)An agreement which creates liability for punishment
- d)A contract which is enforceable at the option of an aggrieved party
Correct answer is option 'B'. Can you explain this answer?
A void contract means:
a)
An agreement which is not enforceable by law
b)
A contract which ceases to be enforceable by law
c)
An agreement which creates liability for punishment
d)
A contract which is enforceable at the option of an aggrieved party
|
|
Vaishnavi Joshi answered |
Explanation:
A void contract is a contract that is not legally enforceable and is considered to be null and void from the beginning. It is different from a voidable contract, which is a contract that is enforceable, but may be voided by one of the parties for certain reasons.
The following are the reasons why a contract may be considered void:
1. Lack of capacity: If one or both parties lack the capacity to enter into a contract, it may be considered void. For example, if one of the parties is a minor or mentally incapacitated, the contract may be void.
2. Illegality: If the subject matter of the contract is illegal, then the contract may be void. For example, a contract to sell drugs or engage in illegal activities would be considered void.
3. Mistake: If both parties are mistaken about a material fact related to the contract, the contract may be void. For example, if the contract is for the sale of a painting that both parties believe to be authentic, but is later discovered to be a forgery, the contract may be void.
4. Fraud: If one of the parties engages in fraud, such as misrepresenting a material fact, the contract may be void.
5. Duress: If one of the parties is forced to enter into the contract under duress, such as the threat of physical harm, the contract may be void.
Therefore, a void contract is one that has ceased to be enforceable by law from the beginning due to one of the reasons mentioned above.
A void contract is a contract that is not legally enforceable and is considered to be null and void from the beginning. It is different from a voidable contract, which is a contract that is enforceable, but may be voided by one of the parties for certain reasons.
The following are the reasons why a contract may be considered void:
1. Lack of capacity: If one or both parties lack the capacity to enter into a contract, it may be considered void. For example, if one of the parties is a minor or mentally incapacitated, the contract may be void.
2. Illegality: If the subject matter of the contract is illegal, then the contract may be void. For example, a contract to sell drugs or engage in illegal activities would be considered void.
3. Mistake: If both parties are mistaken about a material fact related to the contract, the contract may be void. For example, if the contract is for the sale of a painting that both parties believe to be authentic, but is later discovered to be a forgery, the contract may be void.
4. Fraud: If one of the parties engages in fraud, such as misrepresenting a material fact, the contract may be void.
5. Duress: If one of the parties is forced to enter into the contract under duress, such as the threat of physical harm, the contract may be void.
Therefore, a void contract is one that has ceased to be enforceable by law from the beginning due to one of the reasons mentioned above.
Which of the following is false? An acceptance:- a)Must be communicated.
- b)Must be absolute and unconditional.
- c)Must be accepted by a person having authority to accept.
- d)May be presumed from silence of offeree.
Correct answer is option 'D'. Can you explain this answer?
Which of the following is false? An acceptance:
a)
Must be communicated.
b)
Must be absolute and unconditional.
c)
Must be accepted by a person having authority to accept.
d)
May be presumed from silence of offeree.
|
|
Dhruba Choudhary answered |
False Statement: An acceptance may be presumed from silence of offeree.
Explanation:
An acceptance is a crucial element in the formation of a contract. It is the expression of assent to the terms of an offer. The general rule is that an acceptance must be communicated to the offeror. Silence or inaction cannot be considered as an acceptance.
Reasons why silence cannot be considered as acceptance:
1. Lack of Mutual Agreement: For a contract to be formed, there must be a mutual agreement between the parties. If one party remains silent, there is no mutual agreement, and therefore no contract.
2. Communication is Essential: Communication is a fundamental element of contract law. Without communication, there can be no offer or acceptance. Silence does not constitute communication, and therefore cannot be considered as acceptance.
3. Unreliable Indicator of Intention: Silence is an unreliable indicator of intention. It is impossible to determine whether someone intends to accept an offer or is simply remaining silent. Therefore, silence cannot be considered as acceptance.
Conclusion:
In conclusion, the false statement is that an acceptance may be presumed from silence of offeree. Silence cannot be considered as acceptance as there must be a clear communication of acceptance to the offeror.
Explanation:
An acceptance is a crucial element in the formation of a contract. It is the expression of assent to the terms of an offer. The general rule is that an acceptance must be communicated to the offeror. Silence or inaction cannot be considered as an acceptance.
Reasons why silence cannot be considered as acceptance:
1. Lack of Mutual Agreement: For a contract to be formed, there must be a mutual agreement between the parties. If one party remains silent, there is no mutual agreement, and therefore no contract.
2. Communication is Essential: Communication is a fundamental element of contract law. Without communication, there can be no offer or acceptance. Silence does not constitute communication, and therefore cannot be considered as acceptance.
3. Unreliable Indicator of Intention: Silence is an unreliable indicator of intention. It is impossible to determine whether someone intends to accept an offer or is simply remaining silent. Therefore, silence cannot be considered as acceptance.
Conclusion:
In conclusion, the false statement is that an acceptance may be presumed from silence of offeree. Silence cannot be considered as acceptance as there must be a clear communication of acceptance to the offeror.
A advertises to sell his old Car by advertising in a newspaper. This offer is called:- a)General offer
- b)Special offer
- c)Continuing offer
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
A advertises to sell his old Car by advertising in a newspaper. This offer is called:
a)
General offer
b)
Special offer
c)
Continuing offer
d)
None of the above
|
|
Adithya Rao answered |
Because advertisement for general public means it is for every people who likes to buy old car.it is not specific for anyone...
_________ agreements are created by situation:- a)Written
- b)Oral
- c)Void
- d)Implied
Correct answer is option 'D'. Can you explain this answer?
_________ agreements are created by situation:
a)
Written
b)
Oral
c)
Void
d)
Implied
|
|
Arun Khanna answered |
An implied contract is an agreement created by actions of the parties involved, but it is not written or spoken. An implied contract is a legal substitute for a contract that is assumed to have been drawn. In this case, there is no written record nor any actual verbal agreement.
A form of an implied contract is an implied warranty provided automatically by law. An implied warranty means that when a product is purchased, it is guaranteed to work for its ordinary purpose. For example, a refrigerator is fit to keep food cool.
Which of the following statement is true?- a)A contract with a minor is voidable at the option of the minor.
- b)An agreement with a minor can be ratified after he attains majority.
- c)A person who is usually of an unsound mind cannot enter into contract even when he is of a sound mind.
- d)A person who is usually of a sound mind cannot enter into contract when he is of unsound mind.
Correct answer is option 'D'. Can you explain this answer?
Which of the following statement is true?
a)
A contract with a minor is voidable at the option of the minor.
b)
An agreement with a minor can be ratified after he attains majority.
c)
A person who is usually of an unsound mind cannot enter into contract even when he is of a sound mind.
d)
A person who is usually of a sound mind cannot enter into contract when he is of unsound mind.
|
|
Freedom Institute answered |
A agrees to sell to B a horse for Rs. 25,000 if he wins race and for Rs. 15,000 if he does not. The horse wins the race. The agreement is: - a)Valid and Enforceable
- b)Void and enforceable
- c)Void and wagering
- d)Voidable and wagering
Correct answer is 'C'. Can you explain this answer?
A agrees to sell to B a horse for Rs. 25,000 if he wins race and for Rs. 15,000 if he does not. The horse wins the race. The agreement is:
a)
Valid and Enforceable
b)
Void and enforceable
c)
Void and wagering
d)
Voidable and wagering
|
Nandini Iyer answered |
According to Section 2(g), "Agreement not enforceable by law is said to be void." Such agreement are void as initio which means that they are enforceable right from the time they are made. Similarly according to Section 30 of the Indian Contract Act, 1872, a wagering agreement is an agreement between two persons under which money or money's worth is payable, by one person to another on the happening or non- happening of a future uncertain event is called a wagering agreement.
Hence, in this case where A agrees to sell to B a horse for Rs. 25,000 if it wins a race and for Rs.15,000 if does not and the horse wins the race, the agreement between A and B is void and wagering as the agreement between them is unenforceable and wagering because money is payable on the horse winning the race.
X makes a proposal to Y, which Y accepts. But before the acceptance came to the knowledge of X, Y revokes his acceptance by telegram :When is the revocation complete?
- a)When the contents of the telegram come to the knowledge of X
- b)When X accepts the revocation
- c)When the telegram is dispatched
- d)When the telegram is received by X
Correct answer is option 'A'. Can you explain this answer?
X makes a proposal to Y, which Y accepts. But before the acceptance came to the knowledge of X, Y revokes his acceptance by telegram :When is the revocation complete?
a)
When the contents of the telegram come to the knowledge of X
b)
When X accepts the revocation
c)
When the telegram is dispatched
d)
When the telegram is received by X
|
|
Arjun Singhania answered |
The revocation of acceptance is complete when it comes to the knowledge of X. Therefore, the correct answer is option 4, when the contents of the telegram come to the knowledge of X.
According to Section 4 of the Indian Contract Act, 1872, communication of an acceptance is complete when it is put in a course of transmission to the person making the proposal. However, communication of a revocation of acceptance is only complete when it comes to the knowledge of the person who made the proposal.
In this case, Y has accepted the proposal made by X, but before X comes to know about the acceptance, Y revokes his acceptance by telegram. The revocation of acceptance is complete only when it comes to the knowledge of X. This means that if X comes to know about the revocation of acceptance before he receives the acceptance itself, then the revocation will be complete and the contract will not be formed.
M/s Law Book Company made an offer to sell a new law book released recently only to the members of Bar Council. This offer is called:- a)General offer
- b)Specific offer
- c)Implied offer
- d)Invitation to offer
Correct answer is option 'B'. Can you explain this answer?
M/s Law Book Company made an offer to sell a new law book released recently only to the members of Bar Council. This offer is called:
a)
General offer
b)
Specific offer
c)
Implied offer
d)
Invitation to offer
|
|
Jayant Mishra answered |
Specific offer refers to the offer made to a definite person or group of persons. Such an offer can be accepted by that specified person or group of persons. Such an offer can be accepted by that specified person or group of persons only. Here, in given case the Law Book is offered to be sold only to members of Bar Council, hence it is a specific offer.
________ amounts to rejection of the original offer.- a)Cross offer
- b)Special offer
- c)Standing offer
- d)Counter offer
Correct answer is option 'D'. Can you explain this answer?
________ amounts to rejection of the original offer.
a)
Cross offer
b)
Special offer
c)
Standing offer
d)
Counter offer
|
|
Nandini Iyer answered |
When the offeree offers to qualified acceptance of the offer subject to modifications and variations in the terms of original offer, he is said to have made a counter offer. Counter offer amounts to rejection of the original offer.
A match fixing contract between a player and a broker is a:- a)Valid Contract
- b)Unenforceable Contract
- c)Void Contract
- d)Illegal Contract
Correct answer is option 'D'. Can you explain this answer?
A match fixing contract between a player and a broker is a:
a)
Valid Contract
b)
Unenforceable Contract
c)
Void Contract
d)
Illegal Contract
|
|
Srsps answered |
Illegal contracts are the contracts which are forbidden by law. These are the contracts which are without any legal effect, thus the court will not enforce such contracts. A match fixing contract is against the public policy, thus illegal.
When the consent of a party is not free, the contract is- a)Void.
- b)Voidable.
- c)Valid.
- d)Illegal.
Correct answer is option 'A'. Can you explain this answer?
When the consent of a party is not free, the contract is
a)
Void.
b)
Voidable.
c)
Valid.
d)
Illegal.
|
|
Poonam Reddy answered |
When a contract is entered into without the free consent of the party, it is considered a voidable contract. The definition of the act states that a voidable contract is enforceable by law at the option of one or more parties but not at option of the other parties.
The communication of an acceptance is complete as against the acceptor: - a)When it is put in course transmission to him so as to be out of reach of the acceptor
- b)When it comes to the knowledge of the proposer
- c)When both the proposer and the acceptor declare the acceptance
- d)When the acceptor accepts his acceptance in a court of law
Correct answer is option 'B'. Can you explain this answer?
The communication of an acceptance is complete as against the acceptor:
a)
When it is put in course transmission to him so as to be out of reach of the acceptor
b)
When it comes to the knowledge of the proposer
c)
When both the proposer and the acceptor declare the acceptance
d)
When the acceptor accepts his acceptance in a court of law
|
|
Siddharth Sen answered |
Communication of Acceptance:
The acceptance of a proposal becomes binding only when it is communicated to the proposer. The communication of an acceptance is complete as against the acceptor when it comes to the knowledge of the proposer.
Methods of Communication:
The communication of acceptance can be made in any of the following ways:
- Oral communication
- Written communication
- Postal communication
- Electronic communication
Rules of Communication:
- Acceptance must be communicated by the acceptor himself or an authorized agent.
- Communication must be made in the mode and manner prescribed or accepted by the proposer.
- Acceptance must be communicated within a reasonable time.
- Acceptance must be communicated before the lapse of the time prescribed for acceptance.
- Acceptance must be absolute and unqualified.
Completion of Communication:
The communication of acceptance is complete when it comes to the knowledge of the proposer. However, there are certain exceptions to this rule:
- When the acceptance is sent by post, the communication is complete as soon as the letter containing the acceptance is posted, even if it is lost in transit.
- When the acceptance is sent by means of an electronic communication, the communication is complete when it enters a computer resource outside the control of the sender or when it is received by the addressee.
- When the acceptance is sent through a messenger, the communication is complete when the messenger reaches the proposer.
Conclusion:
Thus, the communication of acceptance is a crucial element in the formation of a contract. It must be made in accordance with the rules prescribed by law, and it becomes complete when it comes to the knowledge of the proposer.
The acceptance of a proposal becomes binding only when it is communicated to the proposer. The communication of an acceptance is complete as against the acceptor when it comes to the knowledge of the proposer.
Methods of Communication:
The communication of acceptance can be made in any of the following ways:
- Oral communication
- Written communication
- Postal communication
- Electronic communication
Rules of Communication:
- Acceptance must be communicated by the acceptor himself or an authorized agent.
- Communication must be made in the mode and manner prescribed or accepted by the proposer.
- Acceptance must be communicated within a reasonable time.
- Acceptance must be communicated before the lapse of the time prescribed for acceptance.
- Acceptance must be absolute and unqualified.
Completion of Communication:
The communication of acceptance is complete when it comes to the knowledge of the proposer. However, there are certain exceptions to this rule:
- When the acceptance is sent by post, the communication is complete as soon as the letter containing the acceptance is posted, even if it is lost in transit.
- When the acceptance is sent by means of an electronic communication, the communication is complete when it enters a computer resource outside the control of the sender or when it is received by the addressee.
- When the acceptance is sent through a messenger, the communication is complete when the messenger reaches the proposer.
Conclusion:
Thus, the communication of acceptance is a crucial element in the formation of a contract. It must be made in accordance with the rules prescribed by law, and it becomes complete when it comes to the knowledge of the proposer.
“Holiday Packages” announced as an advertisement are an example of _________:- a)Offer
- b)Counter offer
- c)Invitation to offer
- d)None of the above
Correct answer is option 'C'. Can you explain this answer?
“Holiday Packages” announced as an advertisement are an example of _________:
a)
Offer
b)
Counter offer
c)
Invitation to offer
d)
None of the above
|
|
Alok Mehta answered |
Invitation to an offer is only a circulation of an offer as distinguished from offer. It is an attempt to induce people and precede a definite offer. Eg:- an advertisement given to sell something.Similarly, an advertisement of holiday packages is an invitation to offer and not an offer.
On the valid performance of the contractual obligations by the parties, the contract- a)is discharged.
- b)becomes enforceable.
- c)becomes void.
- d)none of these.
Correct answer is option 'A'. Can you explain this answer?
On the valid performance of the contractual obligations by the parties, the contract
a)
is discharged.
b)
becomes enforceable.
c)
becomes void.
d)
none of these.
|
|
Deepika Desai answered |
Discharge of Contractual Obligations:
When the parties perform their respective obligations as per the terms of the contract, then the contract is said to be discharged. This means that the parties have fulfilled their duties and responsibilities under the contract.
Effect of Discharge:
The effect of the discharge of the contract is that the parties are no longer bound by the terms of the contract. It means that they are released from their obligations and are free to pursue other opportunities.
Options given in the Question:
a)is discharged.
This option is correct as it correctly states the effect of the performance of contractual obligations.
b)becomes enforceable.
This option is incorrect as the contract was already enforceable from the time it was created. The performance of obligations does not change this fact.
c)becomes void.
This option is incorrect as the contract cannot become void simply by the performance of obligations. There has to be some other valid reason for a contract to become void.
d)none of these.
This option is incorrect as option 'A' is the correct answer.
When the parties perform their respective obligations as per the terms of the contract, then the contract is said to be discharged. This means that the parties have fulfilled their duties and responsibilities under the contract.
Effect of Discharge:
The effect of the discharge of the contract is that the parties are no longer bound by the terms of the contract. It means that they are released from their obligations and are free to pursue other opportunities.
Options given in the Question:
a)is discharged.
This option is correct as it correctly states the effect of the performance of contractual obligations.
b)becomes enforceable.
This option is incorrect as the contract was already enforceable from the time it was created. The performance of obligations does not change this fact.
c)becomes void.
This option is incorrect as the contract cannot become void simply by the performance of obligations. There has to be some other valid reason for a contract to become void.
d)none of these.
This option is incorrect as option 'A' is the correct answer.
Soffered a reward to anyone who returns his lost dog. F bought the dog to S without having heard of the offer. Which of the following is correct?- a)F is entitled to the reward
- b)F is not entitled to the reward
- c)S has to find the dog himself
- d)No reward can be given for the return of lost dog
Correct answer is 'B'. Can you explain this answer?
Soffered a reward to anyone who returns his lost dog. F bought the dog to S without having heard of the offer. Which of the following is correct?
a)
F is entitled to the reward
b)
F is not entitled to the reward
c)
S has to find the dog himself
d)
No reward can be given for the return of lost dog
|
|
Devanshi Rane answered |
Answer is B because F was not knowing about the offer of reward for finding S's dog therefore he cant claim that.
A asks B a watch repairer, to repair his watch without forming any contractual relationship, still a legal relationship has arisen and it will create ________.- a)Express Contract
- b)Implied Contract
- c)Tacit Contract
- d)Formal Contract
Correct answer is option 'B'. Can you explain this answer?
A asks B a watch repairer, to repair his watch without forming any contractual relationship, still a legal relationship has arisen and it will create ________.
a)
Express Contract
b)
Implied Contract
c)
Tacit Contract
d)
Formal Contract
|
Khushbu answered |
It is a case that done without oral or written and done with action. so, it is implied contract.
An agreement enforceable by law is a- a)Promise.
- b)Contract.
- c)Obligation.
- d)Lawful Promise.
Correct answer is option 'B'. Can you explain this answer?
An agreement enforceable by law is a
a)
Promise.
b)
Contract.
c)
Obligation.
d)
Lawful Promise.
|
|
Arun Khanna answered |
Section 2 (h) of the Indian Contract Act, 1872 defines a contract as an agreement enforceable by law. In other words, an
agreement which can be enforced in a court of law is known as a contract. According to Salmond, a contract is an agreement creating and defining obligations between the parties’. Sir William Anson defines a contract as a legally binding agreement made between two or more persons by which rights are acquired by one or more to acts or forbearances on the part of the other or others’. Hence, a contract is an agreement between two or more persons which is intended to have legal consequences. It is clear from the above definition of the contract that there are two elements of a contract;
- An agreement, and
- Legal obligation.
Which of the following statements is not true about minor’s position in a firm?
- a)He cannot become a partner in an existing firm.
- b)He can become a partner in an existing firm.
- c)He can be admitted only to the benefits of any existing firm.
- d)He can become partner on becoming a major.
Correct answer is option 'B'. Can you explain this answer?
Which of the following statements is not true about minor’s position in a firm?
a)
He cannot become a partner in an existing firm.
b)
He can become a partner in an existing firm.
c)
He can be admitted only to the benefits of any existing firm.
d)
He can become partner on becoming a major.
|
|
Kavita Joshi answered |
Correct answer is B. He can become a partner in an existing firm.
An agreement the object or consideration of which is unlawful, is- a)Void.
- b)Valid.
- c)Voidable.
- d)Contingent.
Correct answer is option 'A'. Can you explain this answer?
An agreement the object or consideration of which is unlawful, is
a)
Void.
b)
Valid.
c)
Voidable.
d)
Contingent.
|
|
Akshat Choudhary answered |
As per section 2(g) an agreement which is unenforceable is void. Thus in an agreement the object or consideration of which is unlawful makes it unenforceable and becomes void agreement.
P agrees to pay a certain sum to Q, if Q brings on earth a star from sky. This is a :- a)Valid contract
- b)Void agreement
- c)Enforceable contract
- d)None of these
Correct answer is option 'B'. Can you explain this answer?
P agrees to pay a certain sum to Q, if Q brings on earth a star from sky. This is a :
a)
Valid contract
b)
Void agreement
c)
Enforceable contract
d)
None of these
|
|
Sameer Basu answered |
Void Agreement
Explanation:
A contract must have certain essential elements like offer, acceptance, consideration, intention to create legal relations, etc. If any of these elements are missing, then the contract becomes void.
In the given scenario, P agrees to pay a certain sum to Q if Q brings on earth a star from the sky. Here, the subject matter of the contract is impossible. It is impossible for anyone to bring a star from the sky to the earth. Hence, this contract is void ab initio i.e., void from the beginning.
Therefore, the correct answer is option 'B' - Void agreement.
Explanation:
A contract must have certain essential elements like offer, acceptance, consideration, intention to create legal relations, etc. If any of these elements are missing, then the contract becomes void.
In the given scenario, P agrees to pay a certain sum to Q if Q brings on earth a star from the sky. Here, the subject matter of the contract is impossible. It is impossible for anyone to bring a star from the sky to the earth. Hence, this contract is void ab initio i.e., void from the beginning.
Therefore, the correct answer is option 'B' - Void agreement.
_____________Contract is good in substance but suffers from some technical defect:- a)Valid
- b)Illegal
- c)Voidable
- d)Unenforceable
Correct answer is option 'D'. Can you explain this answer?
_____________Contract is good in substance but suffers from some technical defect:
a)
Valid
b)
Illegal
c)
Voidable
d)
Unenforceable
|
|
Nitin Kumar answered |
Unenforceable contract is good in substance but suffers from some technical defect (such as not in writing, under stamped). Such contracts can be enforced if the technical defect involved is removed.
Example: An oral agreement for arbitration is unenforceable because the law requires that an arbitration agreement must be in writing. If the oral agreement for arbitration is reduced to writing, it will become enforceable.
Example: An oral agreement for arbitration is unenforceable because the law requires that an arbitration agreement must be in writing. If the oral agreement for arbitration is reduced to writing, it will become enforceable.
Can you explain the answer of this question below:An Executed Consideration is : - A:An act of mutual exchange of promises
- B:An act done in the expectation of a proposal
- C:An act done in response to a positive promise
- D:All of the above
The answer is c.
An Executed Consideration is :
A:
An act of mutual exchange of promises
B:
An act done in the expectation of a proposal
C:
An act done in response to a positive promise
D:
All of the above
|
|
Nandini Iyer answered |
A consideration which consists of the performnance, it is "executed" i.e. an act done in response to a positive promise. Where it consists only of a promise it is executory. For example where A pays Rs. 5,000 to B to deliver certain quantity of rice, to which B agrees, here consideration for B is executed by 'A' as he has already paid Rs 5,000 where as B's promise is executory as he is yet to deliver the rice.
A agrees to sell his car to B at a price which B may be able to pay. This agreement is- a)void
- b)valid
- c)voidable
- d)contingent
Correct answer is option 'A'. Can you explain this answer?
A agrees to sell his car to B at a price which B may be able to pay. This agreement is
a)
void
b)
valid
c)
voidable
d)
contingent
|
Anju Anju answered |
As per Section 29 of this act, here amount being uncertain, the agreement is void.
An advertisement for sale of an old flat is published in a leading newspaper. This kind of offer is - a)Special offer
- b)Continuing offer
- c)Open offer
- d)General offer
Correct answer is option 'D'. Can you explain this answer?
An advertisement for sale of an old flat is published in a leading newspaper. This kind of offer is
a)
Special offer
b)
Continuing offer
c)
Open offer
d)
General offer
|
|
Arun Khanna answered |
General offer.
In a takeover, an offer to buy all of the remaining shares in a company, that must be made when a company owns more than 33% of the voting shares in another company.
In a takeover, an offer to buy all of the remaining shares in a company, that must be made when a company owns more than 33% of the voting shares in another company.
When two parties exchange identical offers in ignorance at the time of each other offer, the offers are called:- a)Counter offer
- b)Cross offer
- c)General offer
- d)Special offer
Correct answer is option 'B'. Can you explain this answer?
When two parties exchange identical offers in ignorance at the time of each other offer, the offers are called:
a)
Counter offer
b)
Cross offer
c)
General offer
d)
Special offer
|
|
Arjun Singhania answered |
Two offers which are similar in all respects made by two parties to each other, in ignorance of each other's offer are known as cross offers. Cross offer donot amount to acceptance of one's offer by the other. Hence, no contract is entered into cross offers.
There is no binding Contract in case of -------- as one’s offer cannot be construed as acceptance- a)Cross offer
- b)Standing offer
- c)Counter offer
- d)Special offer
Correct answer is option 'A'. Can you explain this answer?
There is no binding Contract in case of -------- as one’s offer cannot be construed as acceptance
a)
Cross offer
b)
Standing offer
c)
Counter offer
d)
Special offer
|
|
Alok Mehta answered |
Cross-offer is a contract law term that refers to an offer made to another in ignorance that the offeree has made the same offer to the offeror. In a cross offer both parties state to each other the same proposal.
Soffered a reward to anyone who returns his lost dog. F bought the dog to S without having heard of the offer. Which of the following is correct?- a)F is entitled to the reward
- b)F is not entitled to the reward
- c)S has to find the dog himself
- d)No reward can be given for the return of lost dog
Correct answer is option 'B'. Can you explain this answer?
Soffered a reward to anyone who returns his lost dog. F bought the dog to S without having heard of the offer. Which of the following is correct?
a)
F is entitled to the reward
b)
F is not entitled to the reward
c)
S has to find the dog himself
d)
No reward can be given for the return of lost dog
|
|
Arun Khanna answered |
An offer must be communicated to the person to whom it is made. One can accept the offer only when he knows about it thus an offer accepted without its knowledge does not confer any legal right on the acceptor. Hence in this case it was held that F was not entitled to the reward because F cannot be said to have accepted the offer which he did not know.
In telephonic conversation, the acceptance is completed when:- a)The words are heard by offeror
- b)The words are spoken by offeree
- c)The words are heard and action is taken.
- d)None of these.
Correct answer is option 'A'. Can you explain this answer?
In telephonic conversation, the acceptance is completed when:
a)
The words are heard by offeror
b)
The words are spoken by offeree
c)
The words are heard and action is taken.
d)
None of these.
|
|
Arjun Singhania answered |
Communication of acceptance is complete as against the acceptor when it comes to the knowledge of the proposer. In case of telephonic conversation, communication is complete when the words are heard by the offeror.
The threat to commit suicide amounts to- a)Coercion.
- b)Undue Influence.
- c)Misrepresentation.
- d)Fraud.
Correct answer is option 'A'. Can you explain this answer?
The threat to commit suicide amounts to
a)
Coercion.
b)
Undue Influence.
c)
Misrepresentation.
d)
Fraud.
|
|
Amrutha Goyal answered |
Threat to commit suicide is an act forbidden by Indian Penal Code under the provision of Indian Contract Act,1872.Hence it comes under coercion.
A minor is liable for the ________________ supplied to him.- a)Necessaries.
- b)Luxuries
- c)Necessities
- d)All the things.
Correct answer is option 'A'. Can you explain this answer?
A minor is liable for the ________________ supplied to him.
a)
Necessaries.
b)
Luxuries
c)
Necessities
d)
All the things.
|
Sakshi Shah Sks answered |
A necessaries is the correct answer
liability for necessaries
liability for necessaries
Chapter doubts & questions for Unit 1: Nature of Contracts - Business Laws for CA Foundation 2025 is part of CA Foundation exam preparation. The chapters have been prepared according to the CA Foundation exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for CA Foundation 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
Chapter doubts & questions of Unit 1: Nature of Contracts - Business Laws for CA Foundation in English & Hindi are available as part of CA Foundation exam.
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