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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.
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.
|
Srsps answered |
The correct answer is: B’s statement is absolute but qualified.
Explanation:
- In this scenario, B has agreed to purchase A's house, but the agreement is subject to the approval of B's solicitors. This means that B's decision to purchase the house is not final until their solicitors approve the transaction.
- B's statement is absolute in the sense that they have shown their intention to purchase the house. They have not expressed any uncertainty or doubt about their desire to buy the property.
- However, B's statement is also qualified because the agreement is contingent upon the approval of their solicitors. This additional condition adds a qualification to B's intention to purchase the house, as their intention is dependent on the outcome of the solicitors' review.
- Thus, B's statement is both absolute (in terms of their intention to buy) and qualified (by the condition of solicitor approval).
Explanation:
- In this scenario, B has agreed to purchase A's house, but the agreement is subject to the approval of B's solicitors. This means that B's decision to purchase the house is not final until their solicitors approve the transaction.
- B's statement is absolute in the sense that they have shown their intention to purchase the house. They have not expressed any uncertainty or doubt about their desire to buy the property.
- However, B's statement is also qualified because the agreement is contingent upon the approval of their solicitors. This additional condition adds a qualification to B's intention to purchase the house, as their intention is dependent on the outcome of the solicitors' review.
- Thus, B's statement is both absolute (in terms of their intention to buy) and qualified (by the condition of solicitor approval).
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.
--------- 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.
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
|
|
Freedom Institute answered |
A "voidable contract" is the correct answer because it refers to a contract that is legally valid and enforceable, but one or more parties involved have the option to void or cancel the contract under certain circumstances. This means that the contract is binding and can be enforced by law, but one party has the right to terminate the contract if they choose to do so.
The other options can be explained as follows:
Option A: A valid contract is a legally binding agreement that meets all the necessary requirements for enforceability. It does not give either party the option to void the contract.
Option B: An unenforceable contract is a contract that has legal validity but cannot be enforced in a court of law due to certain specific reasons, such as the statute of limitations.
Option D: A void agreement is an agreement that has no legal effect and is not a contract at all. It is invalid from the beginning and cannot be enforced by either party.
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.
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.
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.
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.
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
|
|
Srsps answered |
An offer must not be conditional.
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.
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 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 |
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.
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.
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.
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.
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.
When the consent of a party is obtained by fraud, the contract is ____________.- a)Valid
- b)Void
- c)Illegal
- d)Voidable
Correct answer is 'D'. Can you explain this answer?
When the consent of a party is obtained by fraud, the contract is ____________.
a)
Valid
b)
Void
c)
Illegal
d)
Voidable
|
|
Srsps answered |
Answer:
When the consent of a party is obtained by fraud, the contract is voidable. Here's a detailed explanation:
1. Definition of Fraud:
Fraud refers to the intentional misrepresentation of facts or the suppression of material facts with the purpose of deceiving another party.
2. Effect on Contract:
When the consent of a party is obtained by fraud, it affects the validity of the contract. The innocent party has the option to either affirm the contract or rescind it.
3. Voidable Contract:
A contract that is obtained by fraud is considered a voidable contract. This means that the innocent party has the right to void or cancel the contract due to the fraudulent actions of the other party.
4. Rescission of Contract:
The innocent party can choose to rescind the contract, which means they can treat the contract as if it never existed. They can be relieved from their obligations under the contract and seek restitution for any losses suffered.
5. Time Limit:
It's important to note that the innocent party must exercise their right to rescind the contract within a reasonable time frame. Delay in rescinding the contract may result in the innocent party losing their right to void the contract.
6. Legal Remedies:
In addition to rescission, the innocent party may also seek legal remedies such as damages or restitution for any losses or harm caused by the fraudulent actions.
In conclusion, when the consent of a party is obtained by fraud, the contract is voidable. The innocent party has the option to either affirm the contract or rescind it, seeking legal remedies for any losses suffered.
When the consent of a party is obtained by fraud, the contract is voidable. Here's a detailed explanation:
1. Definition of Fraud:
Fraud refers to the intentional misrepresentation of facts or the suppression of material facts with the purpose of deceiving another party.
2. Effect on Contract:
When the consent of a party is obtained by fraud, it affects the validity of the contract. The innocent party has the option to either affirm the contract or rescind it.
3. Voidable Contract:
A contract that is obtained by fraud is considered a voidable contract. This means that the innocent party has the right to void or cancel the contract due to the fraudulent actions of the other party.
4. Rescission of Contract:
The innocent party can choose to rescind the contract, which means they can treat the contract as if it never existed. They can be relieved from their obligations under the contract and seek restitution for any losses suffered.
5. Time Limit:
It's important to note that the innocent party must exercise their right to rescind the contract within a reasonable time frame. Delay in rescinding the contract may result in the innocent party losing their right to void the contract.
6. Legal Remedies:
In addition to rescission, the innocent party may also seek legal remedies such as damages or restitution for any losses or harm caused by the fraudulent actions.
In conclusion, when the consent of a party is obtained by fraud, the contract is voidable. The innocent party has the option to either affirm the contract or rescind it, seeking legal remedies for any losses suffered.
_________ 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.
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.
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.
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 |
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.
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.
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
|
|
Jayant Mishra answered |
As against the acceptor:
Communication of acceptance is complete as against the acceptor when it comes to the knowledge of the poposer, i.e., when he receives the latter. In the above example, it is complete against B on 14th January.
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.
________ 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.
“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.
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.
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...
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.
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.
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.
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.
A specific offer can be accepted by ______.- a)Any person
- b)Any friend to offeror
- c)The person to whom it is made
- d)Any friend of offeree
Correct answer is option 'C'. Can you explain this answer?
A specific offer can be accepted by ______.
a)
Any person
b)
Any friend to offeror
c)
The person to whom it is made
d)
Any friend of offeree
|
|
Arjun Singhania answered |
When offer is made to a definite person, it is known as specific offer and such offer can be accepted by that specified persons only.
L says to J, I shall sell my house, will you buy? J says yes, I shall buy. The agreement is void due to: - a)Uncertainty of meaning
- b)Uncertainty of price
- c)Uncertainty of existence of subject matter
- d)Uncertainty of quality of subject matter
Correct answer is option 'B'. Can you explain this answer?
L says to J, I shall sell my house, will you buy? J says yes, I shall buy. The agreement is void due to:
a)
Uncertainty of meaning
b)
Uncertainty of price
c)
Uncertainty of existence of subject matter
d)
Uncertainty of quality of subject matter
|
|
Deepika Nambiar answered |
Explanation:
The agreement between L and J, where L says "I shall sell my house, will you buy?" and J says "yes, I shall buy," is void due to the uncertainty of price.
Uncertainty of Price:
Price is an essential element of a contract of sale, and it must be certain or at least ascertainable. In this case, L did not mention the price of the house. When J agreed to buy, there was no mutual agreement on the price of the house. Therefore, the contract is void.
Other Types of Uncertainty:
Let's take a look at the other types of uncertainty that can make a contract void.
- Uncertainty of meaning: A contract is void if its terms are not clear and precise enough to be understood. For example, if L says, "I shall sell my car to J," without specifying which car, the contract is void due to the uncertainty of meaning.
- Uncertainty of existence of subject matter: A contract is void if the subject matter is not in existence or cannot come into existence. For example, if L says, "I shall sell my unicorn to J," the contract is void due to the uncertainty of existence of the subject matter.
- Uncertainty of quality of subject matter: A contract is void if the quality of the subject matter is uncertain. For example, if L says, "I shall sell my car to J, but I don't know if it's in good condition or not," the contract is void due to the uncertainty of quality of the subject matter.
Conclusion:
In conclusion, the agreement between L and J is void due to the uncertainty of price. The price is an essential element of a contract of sale, and it must be certain or at least ascertainable.
The agreement between L and J, where L says "I shall sell my house, will you buy?" and J says "yes, I shall buy," is void due to the uncertainty of price.
Uncertainty of Price:
Price is an essential element of a contract of sale, and it must be certain or at least ascertainable. In this case, L did not mention the price of the house. When J agreed to buy, there was no mutual agreement on the price of the house. Therefore, the contract is void.
Other Types of Uncertainty:
Let's take a look at the other types of uncertainty that can make a contract void.
- Uncertainty of meaning: A contract is void if its terms are not clear and precise enough to be understood. For example, if L says, "I shall sell my car to J," without specifying which car, the contract is void due to the uncertainty of meaning.
- Uncertainty of existence of subject matter: A contract is void if the subject matter is not in existence or cannot come into existence. For example, if L says, "I shall sell my unicorn to J," the contract is void due to the uncertainty of existence of the subject matter.
- Uncertainty of quality of subject matter: A contract is void if the quality of the subject matter is uncertain. For example, if L says, "I shall sell my car to J, but I don't know if it's in good condition or not," the contract is void due to the uncertainty of quality of the subject matter.
Conclusion:
In conclusion, the agreement between L and J is void due to the uncertainty of price. The price is an essential element of a contract of sale, and it must be certain or at least ascertainable.
In case of illegal agreements, the collateral agreements are:- a)Valid.
- b)Void.
- c)Voidable.
- d)None of these.
Correct answer is option 'B'. Can you explain this answer?
In case of illegal agreements, the collateral agreements are:
a)
Valid.
b)
Void.
c)
Voidable.
d)
None of these.
|
|
Freedom Institute answered |
In the case of illegal agreements, the collateral agreements are considered void.
Here is a detailed explanation:
Illegal Agreements
- An illegal agreement is a contract that involves the performance of an act that is against the law, public policy, or prohibited by legislation.
- These agreements are not enforceable by law, and the parties involved cannot seek legal remedies in case of a breach.
Collateral Agreements
- A collateral agreement is a secondary contract that is related to the primary contract.
- It is made to provide additional terms, conditions, or assurances to the primary contract.
Void Collateral Agreement
- In the context of illegal agreements, collateral agreements are considered void.
- This means that the collateral agreements are treated as if they never existed, and the parties involved have no legal obligations or rights under the agreement.
- The reason for this is that the collateral agreement is related to the primary illegal agreement, which is not enforceable by law. As a result, the collateral agreements are also considered invalid and unenforceable.
In summary, when the primary agreement is illegal, any associated collateral agreements are deemed void and unenforceable as they are directly related to the illegal agreement.
Illegal Agreements
- An illegal agreement is a contract that involves the performance of an act that is against the law, public policy, or prohibited by legislation.
- These agreements are not enforceable by law, and the parties involved cannot seek legal remedies in case of a breach.
Collateral Agreements
- A collateral agreement is a secondary contract that is related to the primary contract.
- It is made to provide additional terms, conditions, or assurances to the primary contract.
Void Collateral Agreement
- In the context of illegal agreements, collateral agreements are considered void.
- This means that the collateral agreements are treated as if they never existed, and the parties involved have no legal obligations or rights under the agreement.
- The reason for this is that the collateral agreement is related to the primary illegal agreement, which is not enforceable by law. As a result, the collateral agreements are also considered invalid and unenforceable.
In summary, when the primary agreement is illegal, any associated collateral agreements are deemed void and unenforceable as they are directly related to the illegal agreement.
In an auction sale, X is the highest bidder. The auctioneer accepts the offer by not speaking but striking the hammer on the table. This amounts to: - a)Express acceptance
- b)Implied acceptance
- c)Future acceptance
- d)No acceptance
Correct answer is option 'B'. Can you explain this answer?
In an auction sale, X is the highest bidder. The auctioneer accepts the offer by not speaking but striking the hammer on the table. This amounts to:
a)
Express acceptance
b)
Implied acceptance
c)
Future acceptance
d)
No acceptance
|
|
Jayant Mishra answered |
An implied acceptance is one which is made otherwise than in words. In other words, it is inferred from the conduct of the person or the circumstances of the particular case. Hence in this case in an auction sale 'X' is the highest bidder.The auctioneer accepts the offer by not speaking but striking the hammer on the table. This amounts to imputed acceptance.
Which of the following statement is false? Consideration:- a)Must move at the desire of the promisor.
- b)May move from any person.
- c)Must be illusory.
- d)Must be of some value.
Correct answer is option 'C'. Can you explain this answer?
Which of the following statement is false? Consideration:
a)
Must move at the desire of the promisor.
b)
May move from any person.
c)
Must be illusory.
d)
Must be of some value.
|
|
Freedom Institute answered |
A promise that is unenforceable because of uncertainty or absence of commonality, where just one side will undoubtedly perform. Consideration isn't official if the promise doesn't make an obligation or force a commitment, for example, with illusory promises. Illusory promises remember end provisions for agreements and yield and necessities contracts.
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.
In case a counter offer is made, the original offer stands:- a)Rejected
- b)Accepted automatically
- c)Accepted subject to certain modications and variations
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
In case a counter offer is made, the original offer stands:
a)
Rejected
b)
Accepted automatically
c)
Accepted subject to certain modications and variations
d)
None of the above
|
|
Alok Mehta answered |
(a) Rejected
Description: When the offeree offers to qualified acceptance of the offer subject to modification and variations in the terms of original offer, he is said to have made a counter offer. It amounts rejection of the original offer.
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 offer may lapse by:- a)Revocation.
- b)Counter Offer.
- c)Rejection of Offer by Offeree.
- d)All of these.
Correct answer is option 'D'. Can you explain this answer?
An offer may lapse by:
a)
Revocation.
b)
Counter Offer.
c)
Rejection of Offer by Offeree.
d)
All of these.
|
|
Arka Kaur answered |
Lapse of an Offer
An offer is a proposal made by one party to another with the intention of entering into a legally binding contract. However, an offer may lapse or come to an end due to various reasons.
There are three different ways in which an offer can lapse:
1. Revocation
When an offeror withdraws the offer before it is accepted, it is known as revocation. The offeror has the right to revoke the offer at any time before it is accepted by the offeree. The revocation of an offer terminates the offer immediately.
2. Counter Offer
When the offeree makes a counter-proposal to the offeror, it is known as a counter-offer. A counter-offer acts as a rejection of the original offer and terminates it automatically. The offeror is no longer bound by the original offer and cannot accept it later.
3. Rejection of Offer by Offeree
When the offeree rejects the offer, it terminates the offer. The rejection of an offer can be either express or implied. An express rejection is where the offeree clearly communicates that they do not accept the offer, while an implied rejection is where the offeree does not respond to the offer within a reasonable time.
Conclusion
Therefore, it can be concluded that an offer may lapse due to revocation, counter-offer, or rejection of the offer by the offeree.
An offer is a proposal made by one party to another with the intention of entering into a legally binding contract. However, an offer may lapse or come to an end due to various reasons.
There are three different ways in which an offer can lapse:
1. Revocation
When an offeror withdraws the offer before it is accepted, it is known as revocation. The offeror has the right to revoke the offer at any time before it is accepted by the offeree. The revocation of an offer terminates the offer immediately.
2. Counter Offer
When the offeree makes a counter-proposal to the offeror, it is known as a counter-offer. A counter-offer acts as a rejection of the original offer and terminates it automatically. The offeror is no longer bound by the original offer and cannot accept it later.
3. Rejection of Offer by Offeree
When the offeree rejects the offer, it terminates the offer. The rejection of an offer can be either express or implied. An express rejection is where the offeree clearly communicates that they do not accept the offer, while an implied rejection is where the offeree does not respond to the offer within a reasonable time.
Conclusion
Therefore, it can be concluded that an offer may lapse due to revocation, counter-offer, or rejection of the offer by the offeree.
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.
Which of the following statement is true?- a)There can be a stranger to a contract.
- b)There can be a stranger to a consideration.
- c)There can be a stranger to a contract & consideration.
- d)None of the above.
Correct answer is option 'B'. Can you explain this answer?
Which of the following statement is true?
a)
There can be a stranger to a contract.
b)
There can be a stranger to a consideration.
c)
There can be a stranger to a contract & consideration.
d)
None of the above.
|
|
Freedom Institute answered |
Correct Answer :- b
Explanation : There can be a stranger to a consideration but not a stranger to a contract signifies that a consideration may move from Promisee or any other person.
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.
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Business Laws for CA Foundation
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