Test: The Indian Contract Act, 1872- 4


18 Questions MCQ Test Business Laws for CA Foundation | Test: The Indian Contract Act, 1872- 4


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QUESTION: 1

Which of the following is true with respect to minor entering a contract?

1 . An agreement with or by a minor is void ab initio.

2 . A minor can be a beneficiary of a contract.

3 . The contracts involving a minor as a beneficiary may be enforced at the option of the third party.

4 . A minor can ratify a contract on attaining majority.

Solution:
QUESTION: 2

Which of the following is/are not competent to enter into a contract?

1 . A person of the age of majority.

2 . A minor.

3 . A person who is not capable of understanding the contract at the time of its making.

4 . A lunatic during lucid intervals (period of soundness).

Solution:
QUESTION: 3

Which of the following statements is true?

1 . Even if a proposal is not accepted properly it becomes a valid contract.

2 . The agreements which are against the public policy can be enforced if the parties are willing to contract.

3 . For breach of contract a party can claim compensation for loss or damage.

4 . Two are more persons are said to consent when they agree upon the same thing in the same sense.

Solution:
QUESTION: 4

Which of the following is/are false?

1 . Consideration must be real.

2 . Consideration can be inadequate.

3 . A promise to do something which one is already bound to do by law, will be treated as good consideration.

4 . Consideration must be adequate.

Solution:
QUESTION: 5

Which of the following is/are the essential elements of a valid offer?

1 . Offeror must have an intention to be bound by his offer.

2 . Offer must be made to a specific person/party and not to public at large.

3 . Must be definite.

4 . Offer can be vague.

Solution:
QUESTION: 6

Which of the following agreements is/are void?

1 . Agreement in restraint of legal proceedings.

2 . Agreement to stifle prosecution.

3 . Agreement by an outgoing partner with his partners not to carry on any business within a specified period or within specified local limits.

4 . Contingent Contracts.

Solution:
QUESTION: 7

Which of the following offers do not constitute a valid offer?

1 . An auctioneer displays a T.V. set before a gathering in an auction sale.

2 . Ram who is in possession of three cars purchased in different years says ‘I will sell you a car’.

3 . A says to B, “Will you purchase my motor cycle for Rs. 20,000”?

4 . Ram communicates to Shyam that he will sell his car for Rs. 1,50,000.

Solution:
QUESTION: 8

Which of the following agreements are void?

1 . Agreements made under the unilateral mistake of fact.

2 . Agreements made under the bilateral mistake of fact.

3 . Agreements the consideration of which is unlawful.

4 . Contingent agreement.

Solution:
QUESTION: 9

Which of the following is a requirement for misrepresentation to exist?

1 . Misrepresentation should relate to a material fact.

2 . The person making a misrepresentation should believe it to be true..

3 . It must be made with an intention to deceive the other party.

4 . The person making a misrepresentation should not believe it to be true.

Solution:
QUESTION: 10

A contracts with B to buy a necklace, believing it is made of pearls whereas in fact it is made of imitation pearls of no value. B knows that A is mistaken and takes no steps to correct the error. Now A wants to cancel the contract on the basis of fraud. Which of the following statement is correct?

Solution:
QUESTION: 11

 Mr. J invited all his close friends for a dinner on the occasion of the successful completion of his research. He wanted to take good care of his friends and accordingly be arranged a very lavish dinner in a star hotel. On the day, to his shock and surprise the friends could not turn up to the dinner, consequently all the dishes and money were wasted. He was terribly disappointed. In the above situation which of the following remedies is/are available to Mr. J for the loss caused to him?

Solution:
QUESTION: 12

G paid Rs. 1,00,000 to H to influence the head of the Government Organisation in order to provide him some employment. On his failure to provide the job, G sued H for recovery of the amount. Which of the following is correct?

Solution:
QUESTION: 13

M a popular singer, enters into a contract with the manager of a theatre, to sing at the theatre two evenings a week for the next two months and the manager of the theatre agrees to pay him at the rate of Rs. 1000 for each performance. From the sixth evening onwards, M absents himself from the theatre. In this context, which of the following remedies is/are available to the manager of the theatre against M?

Solution:
QUESTION: 14

Ram, Rohit and Kiran jointly borrowed Rs. 2,00,000 from Rahim by executing a promissory note. Rohit and Kiran are not traceable. Rahim wants to recover the entire amount from Ram. Ram objected this move by saying he is liable to pay 1/3 of the debt only. Which of the following statement(s) is correct?

Solution:
QUESTION: 15

At the time of marriage between A and B, A’s father promised to B’s parents that he will pay five thousand rupees per month to B after her marriage with his son. On his failure to pay the amount B wants to sue A’s father for the amount promised by him at the time of her marriage with A. Which of the following statement(s) is correct?

Solution:
QUESTION: 16

V purchased a used computer from P thinking it as a computer imported from USA, P failed to disclose the fact to V. On knowing the fact V wants to repudiate the contract.
Which of the following statement(s) is correct?

Solution:
QUESTION: 17

An auctioneer in Mumbai advertised in a newspaper that a sale of office furniture would be held on December 23, 2003. a broker came from Hyderabad to attend the auction, but all the furniture was withdrawn. The broker from Hyderabad sued the auctioneer for loss of his time and expenses. Which of the following statement(s) is correct?

Solution:
QUESTION: 18

Ankit, aged 17 years, falsely representing himself to be of 22 years, enters into an agreement to sell his property to Praveen and receives from Praveen a sum of Rs. 10,00,000 in advance.
Out of this sum, Ankit buys an imported car worth Rs. 5,50,000 and spends the rest on a pleasure trip to France. After Ankit attained majority, Praveen sues him for the conveyance of the property or, in the alternative, for the refund of Rs. 10,00,000 and damages. The agreement between Ankit and Praveen is:

Solution:

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