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Test: Contract Of Law - 2


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Test: Contract Of Law - 2 - Question 1

Principal: A gift comprising both existing and future property is void as to the letter.

Facts: ‘X’ has a house which is owned by him. He contracted to purchase a plot of land adjacent to the said house, but the sale (of the plot of land) in his favour is yet to be completed. He makes a gift of both the properties (house and land) to ‘Y’. 

Detailed Solution for Test: Contract Of Law - 2 - Question 1

According to the principal if a gift comprising both existing and future property the later means (Future one ) will be void.So here Land's agreement will be void. and is not the property of X so he doesn't have right to be selling it. because of this it is void.

Test: Contract Of Law - 2 - Question 2

Contract is said to have three essentials. Which one among the following is not an essential in the formation of contract?

Test: Contract Of Law - 2 - Question 3

Rania applied for the post of Director in an organization. The governing body of the organization passed a resolution appointing him to the post. Afterwards, one of the members of the governing body informed him privately of the resolution. Subsequently, the resolution was rescinded by the governing body. Rania files a suit for breach of contract and claims damages. Which one of the following is the correct legal proposition in the case?

Test: Contract Of Law - 2 - Question 4

A contract to which a minor is a party, is known as:

Test: Contract Of Law - 2 - Question 5

A contract enforceable at the instance of one party is known as:

Test: Contract Of Law - 2 - Question 6

X duly posts a letter of acceptance to Y, but the letter is lost in transit by the negligence of the Post Office

Test: Contract Of Law - 2 - Question 7

A Lease Agreement is a form of:

Detailed Solution for Test: Contract Of Law - 2 - Question 7 A lease agreement is a contract between a landlord and a tenant that covers the renting of property for long periods of time, usually a period of 12 months or more. The lease agreement is very specific in detailing the responsibilities of both parties during the lease and it includes all the necessary information to ensure that both parties are protected.
Test: Contract Of Law - 2 - Question 8

Principle: A contract is an agreement enforceable by law.

Facts: X invited Y to her house for dinner. Y accepted the invitation but later did not go. On Y's failure to attend, X filed a suit against Y for the price of non-consumed food. Can this agreement be enforced by law?

Detailed Solution for Test: Contract Of Law - 2 - Question 8

The correct option is A.
This is a social agreement and not lawfully enforceable.

Test: Contract Of Law - 2 - Question 9

Principle: An agreement to do an act impossible in itself is void.​

Facts: Rajdeep, a shipping magnate and wildlife enthusiast entered into an agreement with Karan as per which the latter was be paid Rupees five lacs in addition to expenses incurred by him if he caught a live anaconda in the Gir Forest area of India within a period of one year from the date of agreement. It is common knowledge that anaconda is endemic to South America.

Test: Contract Of Law - 2 - Question 10

Principle: The consideration or object of an agreement must be lawful. It should not be forbidden by law and should not defeat the provisions of any law. It should not be fraudulent or injure any person or property. The Court should not regard it as immoral or opposed to public policy.

Expanation – Every agreement of which the object or consideration is unlawful is void.

Facts: Rohan has a very perverted mind and he tells Saad who is desperately in need of money that, “I will pay you RS5000 to whip yourself”. Saad agrees and takes the money. Later, he refuses to whip (Chabuk for horse) himself. What is the status of the contract?

Detailed Solution for Test: Contract Of Law - 2 - Question 10

The correct answer is B as the contract is void according to the principle and moreover the contract between Saad and Rohan has an unlawful consideration and hence, void.

Test: Contract Of Law - 2 - Question 11

Principle:  The communication of proposals, their acceptance and revocation are deemed to be made by any act or omission of the party proposing, accepting or revoking by which he intends to communicate such proposal acceptance or revocation, or which has the effect of communicating it.

Explanation – The communication of an acceptance is complete, as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor; as against the acceptor, when it comes to the knowledge of the proposer.

Facts – The only daughter of Mrs Aggarwal went missing. She put a notice in the newspaper stating a reward for anyone who could find her. The reward was  RS 40000. Ms Shivani Bagul was a long-time friend of Mrs Aggarwal. She came to know of the reward but due to her bond with Mrs Aggarwal, she set out to search for the missing girl. She found Mrs Aggarwal’s daughter Shweta and returned her to her mother. Is Shivani entitled to the reward?

Detailed Solution for Test: Contract Of Law - 2 - Question 11

The correct answer is D as the proposal was to find out the missing girl and acceptance when ns shivani accepted that proposal and was aware of the reward.
 

Test: Contract Of Law - 2 - Question 12

“A” offers to sell his car to “B” for Rs. 50,000/-. “B” agrees to buy the car offering Rs.45, 000/-. The reply of “B” amounts to:

Detailed Solution for Test: Contract Of Law - 2 - Question 12

The correct answer is B asi t is a counter offer because B has offered a different price to A for A to agree

Test: Contract Of Law - 2 - Question 13

When goods are displayed in a show – window bearing price tags, it indicates:

Detailed Solution for Test: Contract Of Law - 2 - Question 13

The correct answer is B as When goods are displayed in a show – window bearing price tags, it indicates an invitation to offer as attract the customers for purchase.

Test: Contract Of Law - 2 - Question 14

Principle: A person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests.

Facts: Mr. X who is usually of sound state of mind, but occasionally of unsound state of mind, enters into a contract with Mr. Y when he was of unsound state of mind. Mr. Y having come to know about this fact afterwards wants to file a suit against Mr. X.

Test: Contract Of Law - 2 - Question 15

Principle: Every person, who is of the age of majority, is competent to contract according to the law to which he is subject. 

Facts: A minor mortgaged his house in favour of Thakur Das, a money lender, to secure a loan of Rs. 20000. A part of this, i.e. Rs. 10500 was actually advanced to him. While considering the proposed advance, the attorney who was acting for the money lender, received information that the plaintiff was still a minor. Subsequently the minor commenced an action stating that he was underage when he executed the mortgage and the same should, therefore, be cancelled. He prayed for setting aside the mortgage. The mortgagee money lender prayed for the refund of Rs. 10500 from the minor

Test: Contract Of Law - 2 - Question 16

Principle: Agreements, the meaning of which is not certain, or not capable of being made certain, are void.

Facts: A horse was bought for a certain price coupled with a promise to give Rs.500 more if the horse is proved lucky.

Detailed Solution for Test: Contract Of Law - 2 - Question 16

The correct answer is B as his agreement is void for uncertainty because it is very difficult to determine what luck, bad or good, the horse has brought to the buyer.hence there is uncertainty  which makes the agreement void.

Test: Contract Of Law - 2 - Question 17

All contracts are agreements
All agreements are accepted offers

Q. Which of the following derivation is correct?

Detailed Solution for Test: Contract Of Law - 2 - Question 17 In the first line as mentioned all contracts are agreements,further agreements are totally referred to be as accepted offers which means contracts are completely stated as accepted offers. 
Test: Contract Of Law - 2 - Question 18

Legal Principle 1: Acceptance of an offer is complete when the acceptance is put into the course of transmission so as to be out of the power of the acceptor

Legal Principle 2: Acceptance once completed, makes the agreement binding on both the parties

Facts: A accepts to buy B’s offer of his motor car for Rs. 4 Lakhs. The acceptance was put into e-mail. Unfortunately, when the e-mail was put, there is distortion as a result of which B is not in a position to really read what A has written

Detailed Solution for Test: Contract Of Law - 2 - Question 18 Its clear if u pay attention to principle 2 B has alredy done its work by making the offer now the contract required only A's acceptance to become a legal agrement
Test: Contract Of Law - 2 - Question 19

Legal Principle: A contract is an agreement which the law will enforce. All agreements are contracts if they are made with free consent by parties competent to contract for a lawful consideration and with a lawful contract

Facts: A, a 40 yrs. old businessman of sound mind agrees of his own free will to sell his bungalow worth Rs. 10 Lakhs for Rs. 1 Lakh. The agreement

I. Is invalid because of inadequate consideration
II. Is valid because there is lawful consideration
III. Is valid because it was entered into with the free consent
IV. Is valid because A has capacity to contract

Detailed Solution for Test: Contract Of Law - 2 - Question 19

The agreement is done between two sound mind persons, there is free consent and both have the capacity to contract. Thus to fulfill the conditions required for the contract. Thus is valid.

Test: Contract Of Law - 2 - Question 20

Legal principle: A contract requires a proposal and an acceptance of the proposal. It is necessary to make a binding contract, not only that the proposal be accepted, but also that the acceptance is notified to the proposer.

Facts:  D sent his servant P to trace his child. D in the meantime announced a reward for providing information about the missing boy. P, in ignorance of the announcement traced the boy and informed D. P later on came to know and he claimed it.

Issue: is the servant entitled to reward

Detailed Solution for Test: Contract Of Law - 2 - Question 20

The correct option is B.
Direct from the principle ‘ A contract requires a proposal and an acceptance of the proposal. It is necessary to make a binding contract, not only that the proposal be accepted, but also that the acceptance is notified to the proposer.

Test: Contract Of Law - 2 - Question 21

When the consent to an agreement is obtained by undue influence, the agreement is at the option of

Detailed Solution for Test: Contract Of Law - 2 - Question 21

The correct answer is B as under section 20 of indian contract act consent of parties competent to contract, for a lawful consideration and with a ... caused by undue influence, the agreement is a contract voidable at the option of the party whose consent.

Test: Contract Of Law - 2 - Question 22

Mere silence is no fraud unless           

Detailed Solution for Test: Contract Of Law - 2 - Question 22 At the same time it may be mentioned here that Explanation to Section 17 lays down that mere silence as to facts does not amount to fraud. It states that – mere silence as to facts does not amount o fraud unless it is the duty of the person keeping silence to speak or when his silence is equivalent to speech.
Test: Contract Of Law - 2 - Question 23

The mother owes Rs. 10000 to her daughter. By this debt has become barred by the limitation act. The mother signs a written promise to par Rs. 3000 on account of the debt. In this case which one of the following is correct

Detailed Solution for Test: Contract Of Law - 2 - Question 23

The correct answer is C as according to the limitation act this is enforceable against the mother because such a promise is valid and binding under the act

Test: Contract Of Law - 2 - Question 24

A minor estate is liable for the ………….supplied to him           

Detailed Solution for Test: Contract Of Law - 2 - Question 24 A minor's estate is liable for necessaries supplied. A minor is, therefore, liable to pay out of his property for necessaries supplied to him, or his 'minor dependents whom he is legally bound to support.
Test: Contract Of Law - 2 - Question 25

Principle 1: A minor is a person who is below the age of eighteen. However, where a guardian administers the minor’s property the age of majority is twenty one.

Principle 2: A minor is not permitted by law to enter into a contract. Hence, where a minor enters into a contract with a major person, the contract is not enforceable. This effectively means that neither the minor nor the other party can make any claim on the basis of the contract.

Principle 3: In a contract with a minor, if the other party hands over any money or confers any other benefit on the minor, the same shall not be recoverable from the minor unless the other party was deceived by the minor to hand over money or any other benefit. The other party will have to show that the minor misrepresented her age, he was ignorant about the age of the minor and that he handed over the benefit on the basis of such representation.

Facts : Ajay convinces Bandita, a girl aged 18 that she would sell her land to him. Bandita’s mother Chaaru is her guardian. Nonetheless Bandita, without the permission of Chaaru, sells the land to Ajay for a total sum of rupees fifty lakh, paid in full and final settlement of the price. Chaaru challenges this transaction claiming the Bandita is a minor and hence the possession of the land shall not be given to Ajay. Thus Ajay is in a difficult situation and has no idea how to recover his money from Bandita.

Chaaru is justified in challenging the sale transaction because:

Test: Contract Of Law - 2 - Question 26

Principle 1: A minor is a person who is below the age of eighteen. However, where a guardian administers the minor’s property the age of majority is twenty one.

Principle 2: A minor is not permitted by law to enter into a contract. Hence, where a minor enters into a contract with a major person, the contract is not enforceable. This effectively means that neither the minor nor the other party can make any claim on the basis of the contract.

Principle 3: In a contract with a minor, if the other party hands over any money or confers any other benefit on the minor, the same shall not be recoverable from the minor unless the other party was deceived by the minor to hand over money or any other benefit. The other party will have to show that the minor misrepresented her age, he was ignorant about the age of the minor and that he handed over the benefit on the basis of such representation.

Facts : Ajay convinces Bandita, a girl aged 18 that she would sell her land to him. Bandita’s mother Chaaru is her guardian. Nonetheless Bandita, without the permission of Chaaru, sells the land to Ajay for a total sum of rupees fifty lakh, paid in full and final settlement of the price. Chaaru challenges this transaction claiming the Bandita is a minor and hence the possession of the land shall not be given to Ajay. Thus Ajay is in a difficult situation and has no idea how to recover his money from Bandita.

Ajay can be allowed to recover the money only if he can show that

Detailed Solution for Test: Contract Of Law - 2 - Question 26

Iff Ajay proves that Bandita misrepresented her age that she's a minor, then only he can be allowed to recover his money.

Test: Contract Of Law - 2 - Question 27

In order to defend the sale, Bandita will need to show that

Detailed Solution for Test: Contract Of Law - 2 - Question 27

The correct answer is A as one should have attained the age of majority while defending any sale.

Test: Contract Of Law - 2 - Question 28

Which of the following is correct?

Test: Contract Of Law - 2 - Question 29

Which of the following is correct?

Detailed Solution for Test: Contract Of Law - 2 - Question 29

The correct answer is A as legally the first option if Ajay is allowed to recover the money, that will defeat the law framed for protecting the minors against fraudulent persons is accurate.

Test: Contract Of Law - 2 - Question 30

Principle: A contract obtained by misrepresentation is voidable at the option of the buyer.

Facts: Anand wants to sell his house. Anupama approaches him with an offer to buy the house and Anand shows her the house. The house is not in a very good condition and visibly requires repairs, without which it is uninhabitable. Anand does not tell anything regarding the required repairs to be livable. Anupama purchases the house for a huge consideration. Later on when she wants to move in her things into the house to start living she realizes the heavy repairs that the house requires urgently.

Detailed Solution for Test: Contract Of Law - 2 - Question 30

The correct answer is A Anand didn't misrepresent anything.as he already told about his house condition  Anand didn't tell anything positive about house.

Test: Contract Of Law - 2 - Question 31

Legal Principle: Performance of a legal duty cannot be a consideration for a promise
Factual Situation: ‘A’s wallet is stolen by a thief. ‘A’ lodges a complaint in the police station. ‘A’ promises to pay a sum of Rs. 500 to the person who is able to apprehend the thief and get back his wallet. The policeman’s servant ‘X’ apprehends the thief and gets back the wallet. ‘A’ refuses to pay ‘X’ the promised Rs. 500.
Choose the correct option:
I. The servant is entitled to the reward
II. The policeman would have been entitled to the reward had he been the person to apprehend the thief
III. The policeman would be entitled to the reward even if he had not apprehended the thief
IV. The servant would not be entitled to the

Detailed Solution for Test: Contract Of Law - 2 - Question 31

The correct option is B.

The servant is entitled to the reward as in the situation given A promises to pay a particular amount to the one who finds the thief.

Test: Contract Of Law - 2 - Question 32

A voidable contract is one which is:

Detailed Solution for Test: Contract Of Law - 2 - Question 32 These types of Contracts are defined in section 2(i) of the Act: “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 or others, is a voidable contract.”
Test: Contract Of Law - 2 - Question 33

A” promise to give money or money’s worth upon the determination or ascertainment of an uncertain event is called

Detailed Solution for Test: Contract Of Law - 2 - Question 33 According to Sir William Anson, a wagering agreement, is a promise to give money or money's worth upon the determination or ascertainment of an uncertain event. ... There must be promise to pay money or money`s worth. The promise must be conditional on an event happening or not happening. The event must be uncertain one.
Test: Contract Of Law - 2 - Question 34

“A” offers to sell his car to “B” for Rs. 50,000/-. “B” agrees to buy the car offering Rs. 45,000/-. The reply of “B” amounts to:

Detailed Solution for Test: Contract Of Law - 2 - Question 34

The correct answer is B as A counteroffer is the response given to an offer, meaning the original offer was rejected and replaced with another one.therefore here in the question the offer was replaced by 45000rs.

Test: Contract Of Law - 2 - Question 35

When goods are displayed in a show – window bearing price tags, it indicates:

Detailed Solution for Test: Contract Of Law - 2 - Question 35

The correct option is B.
Goods displayed on a shop window with a price label will amount to an invitation to offer since the shopkeeper making an invitation invites others to make an offer to him. It is a prelude to an offer inviting negotiations or preliminary discussions.

Test: Contract Of Law - 2 - Question 36

Principle: A contract which is duly supported by real and lawful consideration is valid notwithstanding the fact that the consideration is inadequate. The quantum of consideration is for the parties to decide at the time of making a contract and not for the courts (to decide) when the contract is sought to be enforced. An agreement to which the consent merely because the consent of the promisor is freely given is not void inadequate. But the inadequacy of the consideration may be taken into account by the court in determining thequestion whether the consent of the promisor was freely given.

Facts: ‘A’ agrees to sell his mobile phone worth Rs. 20000 for Rs. 100 only to ‘B’ A’s consent is freely given.

Test: Contract Of Law - 2 - Question 37

Principle: the consideration or object of an agreement is unlawful if it is forbidden by law. Every agreement of which the object or consideration is unlawful is void.   

Facts: ‘X’ promises to pay ‘Y’ Rs. 50000, if he (‘Y’) commits a crime, ‘X’ further promises to indemnify his (‘Y’) against any liability arising thereof. ‘Y’ agrees to act as per X’s promise.

Detailed Solution for Test: Contract Of Law - 2 - Question 37

The correct answer is C as according to the principle  Every agreement of which the object or consideration is unlawful is void.  Therefore There is an agreement between ‘X’ and ‘Y’ which cannot be enforced by the court of law.

Test: Contract Of Law - 2 - Question 38

Principle: The consideration of object of an agreement is unlawful if the court regards it as opposed to public policy. Every agreement of which the object or consideration is unlawful is void.

Facts: ‘X’ promises to obtain for ‘Y’ an employment in the public service and ‘Y’ promises to pay Rs. 500000 to ‘X’

Detailed Solution for Test: Contract Of Law - 2 - Question 38

The correct option is D.

The type of agreement here is void and is not enforceable by the court as it is against public policy.

Test: Contract Of Law - 2 - Question 39

Principle: Two or more person are said to consent if they agree upon the same thing in the same sense. Consent is said to be free when it is not caused by coercion, or undue influence, or fraud, or misrepresentation, or mistake.  

When consent to an agreement is caused by coercion, undue influence, fraud or misrepresentation, the agreement is a contract voidable (rescindable or terminable) at the option of the party whose consent was so caused, However, when consent to an agreement is caused by mistake as to a matter of fact essential to the agreement, the agreement is void.

Facts: ‘X’ threatens to gun down ‘Y’, if he (‘Y’) does not sell his property worth Rs. 2000000 for Rs. 100000 only. As a consequence ‘Y’ agrees to sell it as demanded by ‘X’. 

Test: Contract Of Law - 2 - Question 40

Principle: Agreements in restraint of marriage is void.

Facts: ‘X’ enters into an agreement, with ‘Y’ where under he agrees not to marry anybody else other than a person whose name starts with the letter ‘A’ and promises to pay Rs. 100000 to ‘Y’ of the (‘X’) breaks this agreement.

Detailed Solution for Test: Contract Of Law - 2 - Question 40 The agreement is valid since the provided condition is not completely restrictive of marriage of 'X'. He can marry a person whose name starts with 'A', under the agreement. Hence, he is also liable to pay 100000 to Y
Test: Contract Of Law - 2 - Question 41

Principal: A gift comprising both existing and future property is void as to the letter.

Facts: ‘X’ has a house which is owned by him. He contracted to purchase a plot of land adjacent to the said house, but the sale (of the plot of land) in his favour is yet to be completed. He makes a gift of both the properties (house and land) to ‘Y’. 

Detailed Solution for Test: Contract Of Law - 2 - Question 41

The correct answer is D as Gift of the plot of land is void as the sale in his favour is not completed.

Test: Contract Of Law - 2 - Question 42

Contract is said to have three essentials. Which one among the following is not an essential in the formation of contract?

Detailed Solution for Test: Contract Of Law - 2 - Question 42

The correct answer is D as damages  is not an essential in the formation of contract while all other three options are essential.

Test: Contract Of Law - 2 - Question 43

Rania applied for the post of Director in an organization. The governing body of the organization passed a resolution appointing him to the post. Afterwards, one of the members of the governing body informed him privately of the resolution. Subsequently, the resolution was rescinded by the governing body. Rania files a suit for breach of contract and claims damages. Which one of the following is the correct legal proposition in the case?

Test: Contract Of Law - 2 - Question 44

A contract to which a minor is a party, is known as:

Detailed Solution for Test: Contract Of Law - 2 - Question 44 Minors and Indian Contract Act, 1872. According to Section 3 of the Indian Majority Act, 1875, a person domiciled in India who is under the age of eighteen years, is a minor. Minor Agreements: A Minor is an incompetent person to enter into a contract subject to certain exceptions.
Test: Contract Of Law - 2 - Question 45

A contract enforceable at the instance of one party is known as:

Detailed Solution for Test: Contract Of Law - 2 - Question 45 These types of Contracts are defined in section 2(i) of the Act: “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 or others, is a voidable contract.”
Test: Contract Of Law - 2 - Question 46

X duly posts a letter of acceptance to Y, but the letter is lost in transit by the negligence of the Post Office

Detailed Solution for Test: Contract Of Law - 2 - Question 46

The correct option is B as for a contract it is required that  proposal and acceptance must be there.here There is no contract concluded because the proposer had not received the letter.

Test: Contract Of Law - 2 - Question 47

A Lease Agreement is a form of:

Detailed Solution for Test: Contract Of Law - 2 - Question 47

The correct answer is D  as As the relationship between the tenant and the landlord is called a tenancy, this term generally is also used for informal and shorter leases.

Test: Contract Of Law - 2 - Question 48

Principle: A contract is an agreement enforceable by law.

Facts: X invited Y to her house for dinner. Y accepted the invitation but later did not go. On Y's failure to attend, X filed a suit against Y for the price of non-consumed food. Can this agreement be enforced by law?

Detailed Solution for Test: Contract Of Law - 2 - Question 48

The correct answer is A as it is not enforced by law moreover all contracts are agreement but not all agreements are contract .

Test: Contract Of Law - 2 - Question 49

Principle: An agreement to do an act impossible in itself is void.

Facts: Rajdeep, a shipping magnate and wildlife enthusiast entered into an agreement with Karan as per which the latter was be paid Rupees five lacs in addition to expenses incurred by him if he caught a live anaconda in the Gir Forest area of India within a period of one year from the date of agreement. It is common knowledge that anaconda is endemic to South America.

Detailed Solution for Test: Contract Of Law - 2 - Question 49

The correct option is B as according to the principle applied the act itself is void 

Test: Contract Of Law - 2 - Question 50

Principle: The consideration or object of an agreement must be lawful. It should not be forbidden by law and should not defeat the provisions of any law. It should not be fraudulent or injure any person or property. The Court should not regard it as immoral or opposed to public policy.

Explanation – Every agreement of which the object or consideration is unlawful is void.

Facts: Rohan has a very perverted mind and he tells Saad who is desperately in need of money that, “I will pay you ₹5000 to whip yourself”. Saad agrees and takes the money. Later, he refuses to whip (Chabuk for horse) himself. What is the status of the contract?

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