Test: The Indian Contract Act, 1872- 1


40 Questions MCQ Test Business Laws for CA Foundation | Test: The Indian Contract Act, 1872- 1


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QUESTION: 1

The law of contract in India is contained in

Solution:

Indian Contract Act is describe that how to do contract with other perso and legal right,fraud,mistake and so many thing describe in this book in Indian Contrat Act social or domestic agreement is not considerd
It came into force on "1st september 1872"

therefore it is known as "Indian Contract Act 1872"

QUESTION: 2

An agreement enforceable by law is a

Solution:

Section 2 (h) of the Indian Contract Act, 1872 defines a contract as an agreement enforceable by law.

QUESTION: 3

A void agreement is one which is

Solution:

A void agreement is defined under section 2(g) of Indian Contract Act, 1872, as an agreement which cannot be enforceable by law, i.e. such agreements cannot be challenged in the court of law. Such an agreement lacks legal consequences, and so, it does not confer any rights to the parties concerned. A void agreement is void from the day, it is created and can never turn into the contract.

QUESTION: 4

An agreement which is enforceable by law at the option of one or more of the parties thereon but not at the option of the other or others is a

Solution:

(i) 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;

(j) A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable

QUESTION: 5

Which of the following is false? An offer to be valid must:

Solution:
QUESTION: 6

When the consent of a party is not free, the contract is

Solution:

If the consent of the party is not free then it will be a case of fraud misrepresentation mistake hence the contract is void

QUESTION: 7

Which of the following is false? An acceptance:

Solution:
QUESTION: 8

In case of illegal agreements, the collateral agreements are:

Solution:
QUESTION: 9

An offer may lapse by:

Solution:
QUESTION: 10

A proposal when accepted becomes a

Solution:
QUESTION: 11

Which of the following statement is true?

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QUESTION: 12

Which of the following statement is false? Consideration:

Solution:
QUESTION: 13

Which of the following statement is false?

Solution:
QUESTION: 14

Consideration must move at the desire of

Solution:

Consideration is the doing or not doing of something which the promisor desires to be done or not done. Consideration must be at the desire of the promisor.

QUESTION: 15

Which of the following statement is true?

Solution:
QUESTION: 16

Consideration may be

Solution:
QUESTION: 17

Consideration in simple term means:

Solution:

consideration is a benefit which must be bargained for between the parties

QUESTION: 18

What is essential component of an contract?

Solution:

both are essential for contract if a contract is only agreement and it does not create legal obligation then it would never be a contract.

QUESTION: 19

Ordinarily, a minor’s agreement is

Solution:
QUESTION: 20

A minor’s liability for ‘necessaries’ supplied to him;

Solution:

A minor is liable to pay out of his property for 'necessariessupplied to him or to anyone whom he is legally bound to support.

QUESTION: 21

Which of the following statements is not true about minor’s position in a firm?

Solution:

Section 30 of the Indian Partnership Act, provides that though a minor cannot be a partner in a firm, but, with the consent of all the partners for the time being, he may be admitted to the benefits of partnership by an agreement executed through his guardian with the other partners.

QUESTION: 22

Which of the following statement is true?

Solution:
QUESTION: 23

Consent is not said to be free when it is caused by

Solution:

 According to Section 10 of the Indian Contract Act, 1872, to constitute a valid contract, parties should enter into the contract with their free Consent. Consent is said to be free when it is not obtained by coercion, or undue influence or fraud or misrepresentation or mistake.

QUESTION: 24

When the consent of a party is obtained by fraud, the contract is;

Solution:

A voidable contract is where one party has the right to enforce or cancel the contract. If a party does not cancel the contract, then it remains as a valid contract and has to be performed like a valid contract. An agreement when found to be caused by coercion, fraud or misrepresentation becomes voidable at the option of the party whose consent was caused. On the other hand, if consent is caused by a bilateral mistake, the agreement becomes void, and there is ‘no consent’.

QUESTION: 25

The threat to commit suicide amounts to

Solution:

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.

QUESTION: 26

Moral pressure is involved in the case of

Solution:
QUESTION: 27

A wrong representation when made without any intention to deceive the other party amounts to

Solution:
QUESTION: 28

Which of the following statement is true?

Solution:
QUESTION: 29

In case of illegal agreements, the collateral agreements are:

Solution:

Collateral agreements of an illegal agreement cannot be enforceable by law as they are void ab initio.

QUESTION: 30

An agreement the object or consideration of which is unlawful, is

Solution:

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.

QUESTION: 31

An agreement is void if it is opposed to public policy. Which of the following is not covered by heads of public policy?

Solution:
QUESTION: 32

On the valid performance of the contractual obligations by the parties, the contract

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QUESTION: 33

Which of the following persons can perform the contract?

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QUESTION: 34

A, B and C jointly promised to pay Rs. 60,000 to D. Before performance of the contract, C dies. Here, the contract

Solution:
QUESTION: 35

A contract is discharged by novation which means the

Solution:
QUESTION: 36

A contract is discharged by rescisson which means the

Solution:

Discharge of contract means termination of the contractual relationship between the parties. A contract is said to be discharged when it ceases to operate, i.e., when the rights and obligations created by it come to an end.

QUESTION: 37

When prior to the due date of performance, the promisor absolutely refuses to perform the contract, it is known as

Solution:

Anticipatory Breach of Contract: It occurs when prior to the due date of performance, the promisor absolutely refuses or disables himself from the performance of his obligations. In other words, it is a declaration by one party of his intention not to perform his obligations under the contract.

QUESTION: 38

In case of anticipatory breach, the aggrieved party may treat the contract

Solution:

An anticipatory breach of contract is an action that shows one party's intention to fail to fulfill its contractual obligations to another party. Demonstrating the other party's intention to breach the contract gives the counterparty grounds for beginning legal action.

QUESTION: 39

In case of breach of contract, which of the following remedy is available to the aggrieved party?

Solution:
QUESTION: 40

Sometimes, a party is entitled to claim compensation in proportion to the work done by him. It is possible by a suit for

Solution:

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