Contract Of Law Test-6


50 Questions MCQ Test Legal Reasoning for CLAT | Contract Of Law Test-6


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QUESTION: 1

Principal: A gift comprising existing property is valid and a gift comprising future property is void.

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’.  

Solution:
QUESTION: 2

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

Solution:
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 Subsequently, the resolution was rescinded by the governing body.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.

Q. Which one of the following is the correct legal proposition in the case? 

Solution:
QUESTION: 4

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

Solution:
QUESTION: 5

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

Solution:
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

Solution:

The correct option is C.
the contract is formulated from the date of dispatch of the letter.whether the letter is received by the proposer or not or the letter has been lost due to the post office negligence.
 

QUESTION: 7

A Lease Agreement is a form of:

Solution:
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.

Q. Can this agreement be enforced by law?

Solution:
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.

Solution:
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. 

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.

Q. What is the status of the contract? 

Solution:
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 ₹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.

Q. Is Shivani entitled to the reward? 

Solution:
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:

Solution:
QUESTION: 13

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

Solution:

The correct option is D.

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 prelude to an offer inviting negotiations or preliminary discussions

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.

Solution:
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.

Solution:
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.

Solution:
QUESTION: 17

All contracts are agreements 
All agreements are accepted offers
Q. Which of the following derivation is correct?

Solution:
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

Solution:
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 X has capacity to contract

Solution:
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.

Q. Issue: is the servant entitled to reward

Solution:
QUESTION: 21

The doctrine of privity of contract means

Solution:

The correct option is D.
The doctrine of privity of contract is a common law principle which provides that a contract cannot confer rights or impose obligations upon any person who is not a party to the contract. The premise is that only parties to contracts should be able to sue to enforce their rights or claim damages as such.

QUESTION: 22

A situation when two parties make identical offers to each other in ignorance of each other offer is known as

Solution:
QUESTION: 23

A notice in the newspaper inviting tenders is

Solution:
QUESTION: 24

The agreement which is not legally enforceable is known as

Solution:
QUESTION: 25

An offer was sent by post, the acceptor wrote accepted on the letter, put it in his drawer & forgot about it. The transaction is 

Solution:
QUESTION: 26

‘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

Solution:
QUESTION: 27

Mistake of both the parties about the subject matter renders an agreement

Solution:
QUESTION: 28

‘A’ contracts to pay ‘B’ Rs. 1,000 if the B’s house is burnt. This is a 

Solution:
QUESTION: 29

An agreement to do an impossible act has been declared

Solution:
QUESTION: 30

‘A’ and ‘B’ contract to marry each other. Before the date fixed for marriage, ‘A’ goes mad. The contract becomes…………………..

Solution: A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, becomes void
QUESTION: 31

Principle: If a party consent has been obtained by misrepresentation, the party to whom the misrepresentation has been made may reject the contract

Facts: J is in need of a house for immediate occupation and hence approaches S, the owner of a house. The house is in a visibly precarious condition and requires a few repairs in order to make it habitable. However, S tells J that the house is good for lodging and J signs the leases agreement with S. J then finds out the actual state of the house and seeks to reject the contract

Solution:

The correct option is B.
It is clear from the principle. There was misrepresentation of facts.

QUESTION: 32

Principle: when one party to the contract is in such relation with the other party as to be able to dominate his/her will, and uses this superior position to obtain the other party consent to a contract, she is said to have exercise undue influence

Facts: A’s grandfather has 3 sons one of them being A’s father. A’s grandfather gifts his best properties to A. A’s two uncles sue their father i.e. A’s grandfather stating that his consent to the gift has been obtained through the exercise of undue influence.

Solution:
QUESTION: 33

Principle: Agreement by way of wager is void and no suit lies for recovering anything won by such wager

Facts: Mr. X and Mrs. Y enter into a contract with R who is an expert in betting on horse racing. Both pay a sum of Rs. 2000 to R to bet on a particular horse. R followed the instructions and he won a sum of Rs. 20 lakhs

Solution:
QUESTION: 34

Principle: For a contract an offer has to be made that is accepted and there is consensus ad idem

Facts: A goes to a shop and asks the shopkeeper to deliver rice at his residence in their previous dealings of about 12 years; he had always ordered the Basmati variety of rice. The shopkeeper stores five varieties of rice. He delivers krishnakali variety. A had wanted basmati. Shopkeeper wants to enforce the contract

Solution:

B is the correct option. consensus ad idem means in agreement. To make a valid contract the parties have to agree on the same terms which is not present here.

QUESTION: 35

Principle: Any person who has received any unjust benefit, he/she must return it to the right/owner

Facts: A and B had similar sounding names. The postman delivered a parcel meant for B at A’s residence, by mistake

Solution:
QUESTION: 36

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

Solution:
QUESTION: 37

Mere silence is no fraud unless           

Solution:
QUESTION: 38

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

Solution:

C is the correct option.Approval or confirmation of a previous contract or other act that would not otherwise be binding in the absence of such approval. By promising to pay 3000 in place of 10000, they have ratified the contract which is perfectly valid and very much enforceable .

QUESTION: 39

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

Solution:
QUESTION: 40

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.

Q.
Chaaru is justified in challenging the sale transaction because:

Solution:
QUESTION: 41

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.

Q.

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

Solution:
QUESTION: 42

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.

Q.

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

Solution:
QUESTION: 43

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.

Q.

Which of the following is correct?

Solution:

C is the correct option.Ajay should not be allowed to recover because as per principle 3 “the money  shall not be recoverable from the minor unless the other party was deceived by the minor to hand over money or any other benefit“ and in this case  Ajay induced Bandita, a minor, to sell the land.

QUESTION: 44

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.

Q.

Which of the following is correct?

Solution:
QUESTION: 45

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.

Solution:

Anupama is the buyer of the house and before buying it it is her responsibility to check all the conditions of the house before purchasing if it needs any repairs or not and in this case the repairs were clearly visible.

QUESTION: 46

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.

Q.
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 reward

Solution:
QUESTION: 47

A voidable contract is one which is:

Solution:
QUESTION: 48

A voidable contract is one which is:

Solution:

According to Section 2 of The Indian Contract Act.

QUESTION: 49

“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:

Solution:
QUESTION: 50

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

Solution:

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