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Test: Agreement - B Com MCQ


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20 Questions MCQ Test Business Law - Test: Agreement

Test: Agreement for B Com 2024 is part of Business Law preparation. The Test: Agreement questions and answers have been prepared according to the B Com exam syllabus.The Test: Agreement MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Agreement below.
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Test: Agreement - Question 1
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Which type of agreement is not enforceable by law?

Detailed Solution for Test: Agreement - Question 1
A void agreement is an agreement which is not enforceable by law. It does not give rise to any legal consequence and is void ab initio. This means that the agreement is considered void from the beginning and it cannot be enforced by either party. An example of a void agreement is an agreement with a person who is incompetent to contract under section 11 of the Indian Contract Act, 1872. For instance, if a minor enters into an agreement, it is void and cannot be enforced.
Test: Agreement - Question 2
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Which type of agreement is in restraint of marriage?

Detailed Solution for Test: Agreement - Question 2
Agreements in restraint of marriage are declared void under section 26 of the Indian Contract Act, 1872. Any agreement that imposes a restriction on a person's freedom to marry is considered to be in restraint of marriage and is void. Marriage is considered to be a fundamental right, and any agreement that seeks to restrict this right is against public policy. For example, if two parties enter into an agreement stating that one party will not marry anyone else, it is a void agreement as it restricts the freedom to marry.
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Test: Agreement - Question 3
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Under which section of the Indian Contract Act, 1872, are agreements in restraint of trade declared void?

Detailed Solution for Test: Agreement - Question 3
Agreements in restraint of trade are declared void under section 27 of the Indian Contract Act, 1872. Any agreement that seeks to restrict a person's freedom to carry on a lawful profession, trade, or business is considered to be in restraint of trade and is void. Such agreements are against public policy as they restrict healthy competition and economic freedom. However, reasonable restrictions may be imposed in certain cases, such as non-compete agreements in employment contracts for a limited period and within a reasonable geographical scope.
Test: Agreement - Question 4
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Which type of agreement is not enforceable due to the consideration or object being unlawful?
Detailed Solution for Test: Agreement - Question 4
Agreements the consideration or object of which is unlawful are declared void under section 23 of the Indian Contract Act, 1872. If the consideration or object of an agreement is illegal or against public policy, the agreement becomes void and cannot be enforced by law. For example, if two parties enter into an agreement for the sale of illegal drugs, the agreement is void as the consideration (payment for the drugs) is unlawful.
Test: Agreement - Question 5
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Which type of agreement is declared void if it is in restraint of legal proceedings?
Detailed Solution for Test: Agreement - Question 5
Agreements in restraint of legal proceedings are declared void under section 28 of the Indian Contract Act, 1872. Any agreement that seeks to restrict a party's right to approach the courts or obtain legal remedies is considered to be in restraint of legal proceedings and is void. It is against public policy to hinder access to justice and deny parties their legal rights. For example, if two parties enter into an agreement stating that they will not file a lawsuit against each other for any reason, it is void as it restricts the right to approach the courts.
Test: Agreement - Question 6
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Which type of agreement is not enforceable by law?
Detailed Solution for Test: Agreement - Question 6
A void agreement is an agreement that is not enforceable by law. It does not give rise to any legal consequences and is void ab initio. This means that the agreement is considered void from the beginning and is treated as if it never existed. Examples of void agreements include agreements with uncertain meaning, agreements contingent on impossible events, and agreements made without consideration.
Test: Agreement - Question 7
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Under which section of the Indian Contract Act, 1872, are agreements contingent on impossible events declared void?
Detailed Solution for Test: Agreement - Question 7
Agreements contingent on impossible events are expressly declared void under Section 36 of the Indian Contract Act, 1872. This means that if the performance of an agreement depends on the happening of an event that is impossible, the agreement is considered void. For example, if two parties enter into an agreement where one party promises to pay the other party a million dollars if it rains in the desert tomorrow, the agreement would be considered void because it is contingent on an impossible event.
Test: Agreement - Question 8
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Which type of agreement is entered into through a mutual mistake of fact?
Detailed Solution for Test: Agreement - Question 8
Agreements entered into through a mutual mistake of fact are considered void under Section 20 of the Indian Contract Act, 1872. A mutual mistake of fact occurs when both parties to the agreement are mistaken about a material fact. In such cases, the agreement is void as there was no true meeting of the minds between the parties. For example, if two parties enter into an agreement to sell a painting, believing it to be an original masterpiece, but later discover that it is a forgery, the agreement would be void due to the mutual mistake of fact.
Test: Agreement - Question 9
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Which section of the Indian Contract Act, 1872, declares agreements in restraint of marriage void?
Detailed Solution for Test: Agreement - Question 9
Agreements in restraint of marriage are expressly declared void under Section 26 of the Indian Contract Act, 1872. This means that any agreement that restricts a person's freedom to marry or imposes a condition upon marriage is considered void. For example, if two individuals enter into an agreement stating that they will never get married, such an agreement would be void as it goes against the public policy of promoting marriage and family.
Test: Agreement - Question 10
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Which type of agreement must be made in writing and registered to be enforceable?
Detailed Solution for Test: Agreement - Question 10
According to the Indian Contract Act, 1872, agreements relating to the transfer of immovable properties must be in written form and registered to be enforceable. This means that if parties enter into an agreement for the sale, lease, or mortgage of a property, the agreement must be in writing and registered with the appropriate authority. Failure to comply with these formalities will render the agreement void and unenforceable.
Test: Agreement - Question 11
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Which section of the Indian Contract Act, 1872, declares agreements in restraint of trade void?
Detailed Solution for Test: Agreement - Question 11
Agreements in restraint of trade are expressly declared void under Section 27 of the Indian Contract Act, 1872. This means that any agreement that restricts a person's freedom to engage in a lawful profession, trade, or business is considered void. Such agreements are against public policy as they hinder free competition and the right to earn a livelihood. For example, if an employee signs an agreement with an employer that prohibits them from working for a competitor after leaving the company, such an agreement would be void as it restricts trade.
Test: Agreement - Question 12
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Which type of agreement requires legal formalities to be complete in order to be enforceable?
Detailed Solution for Test: Agreement - Question 12
While agreements under the Indian Contract Act, 1872, may be oral or in writing, if an agreement is made in writing, it must be complete with all legal formalities to be enforceable. This means that the written agreement must comply with any specific requirements or regulations set forth by the law. Failure to complete the legal formalities will render the contract void and unenforceable.
Test: Agreement - Question 13
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Which section of the Indian Contract Act, 1872, declares agreements by way of wager void?
Detailed Solution for Test: Agreement - Question 13
Agreements by way of wager are expressly declared void under Section 30 of the Indian Contract Act, 1872. A wager is a bet or gamble where the outcome depends on chance, and not on skill or knowledge. Any agreement that involves a wager is considered void as it is against public policy and encourages gambling. For example, if two individuals enter into an agreement to bet on the outcome of a cricket match, such an agreement would be void.
Test: Agreement - Question 14
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Which type of agreement is considered void if it contains both legal and illegal promises?
Detailed Solution for Test: Agreement - Question 14
If a contract contains both legal and illegal promises, the second set of reciprocal promises is considered a void agreement. Under the Indian Contract Act, an agreement that is void is not enforceable by law and does not give rise to any legal consequences. This means that if an agreement includes promises that are both lawful and unlawful, the entire agreement is considered void. It is important to note that a void agreement cannot be enforced by either party involved in the agreement.
Test: Agreement - Question 15
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Which section of the Indian Contract Act declares agreements by way of wager as void?
Detailed Solution for Test: Agreement - Question 15
Section 30 of the Indian Contract Act declares agreements by way of wager as void. A wager is a bet or gamble on an uncertain event, and agreements based on such wagers are considered against public policy. These agreements are not enforceable by law and are therefore void. The reason for this is to discourage gambling and protect individuals from potential harm or loss resulting from wagers. It is important to note that agreements that are based on chance rather than skill or knowledge are considered wagers and are void under Section 30 of the Indian Contract Act.
Test: Agreement - Question 16
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Which section of the Indian Contract Act declares agreements in restraint of legal proceedings as void?
Detailed Solution for Test: Agreement - Question 16
Section 28 of the Indian Contract Act declares agreements in restraint of legal proceedings as void. An agreement in restraint of legal proceedings is one that restricts a person's right to seek legal action or pursue legal remedies. Such agreements are considered against public policy and are therefore void. The reason for this is to ensure access to justice and prevent individuals from being deprived of their legal rights. It is important to note that agreements that limit or restrict legal proceedings are generally void under Section 28 of the Indian Contract Act.
Test: Agreement - Question 17
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Under which section of the Indian Contract Act, 1872, are agreements contingent on impossible events declared void?
Detailed Solution for Test: Agreement - Question 17
Agreements contingent on impossible events are expressly declared void under Section 36 of the Indian Contract Act, 1872. This means that if the fulfillment of an agreement is contingent upon the occurrence of an event that is impossible to happen, the agreement is considered void and unenforceable. For example, an agreement to sell a house on the condition that it will rain gold is contingent on an impossible event and therefore void.
Test: Agreement - Question 18
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Under which section of the Indian Contract Act, 1872, are agreements in restraint of trade declared void?
Detailed Solution for Test: Agreement - Question 18
Agreements in restraint of trade are expressly declared void under Section 27 of the Indian Contract Act, 1872. Such agreements restrict a person's freedom to carry on a trade, profession, or business, and they are considered against public policy. Therefore, agreements that impose unreasonable restraints on trade are void and unenforceable. For example, a contract that prohibits an employee from working for a competitor after leaving the current job would be in restraint of trade and void.
Test: Agreement - Question 19
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What is the outcome when the illegal part of a contract cannot be separated from the legal part?
Detailed Solution for Test: Agreement - Question 19
When the illegal part of a contract cannot be separated from the legal part, the entire contract is considered void. This means that none of the provisions or obligations in the contract are enforceable by law. It is not possible to retain the legal part and reject the illegal part of the contract. Therefore, parties cannot seek legal remedies for any breaches or performance related to the contract. It is important to ensure that contracts comply with legal requirements to avoid such situations.
Test: Agreement - Question 20
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Which type of agreement is void if it is in restraint of marriage?
Detailed Solution for Test: Agreement - Question 20
Agreements in restraint of marriage are expressly declared void under Section 26 of the Indian Contract Act, 1872. Such agreements seek to restrict a person's freedom to marry, and they are considered against public policy. Therefore, any contract that imposes unreasonable restraints on marriage is void and unenforceable. For example, an agreement that prohibits a person from marrying a specific individual or from marrying altogether would be in restraint of marriage and void.
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