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Test: Meaning and Nature of Consideration - Judiciary Exams MCQ


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25 Questions MCQ Test - Test: Meaning and Nature of Consideration

Test: Meaning and Nature of Consideration for Judiciary Exams 2024 is part of Judiciary Exams preparation. The Test: Meaning and Nature of Consideration questions and answers have been prepared according to the Judiciary Exams exam syllabus.The Test: Meaning and Nature of Consideration MCQs are made for Judiciary Exams 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Meaning and Nature of Consideration below.
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Test: Meaning and Nature of Consideration - Question 1
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What is a fundamental requirement for the formation of a contract according to Section 10 of the Indian Contract Act, 1872?

Detailed Solution for Test: Meaning and Nature of Consideration - Question 1
According to Section 10 of the Indian Contract Act, 1872, one of the fundamental requirements for the formation of a contract is that the parties must consent freely. This means that the agreement should not be a result of coercion, undue influence, fraud, misrepresentation, or mistake. Free consent ensures that the parties enter into the contract willingly and without any external pressure. It is essential for the validity and enforceability of a contract.
Test: Meaning and Nature of Consideration - Question 2
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Why is lawful consideration considered an essential component for the formation of a contract?

Detailed Solution for Test: Meaning and Nature of Consideration - Question 2
Lawful consideration is considered an essential component for the formation of a contract because it demonstrates the seriousness of the parties' intentions to be bound by the contract. When each party provides something of value (consideration) to the other, it shows that they are entering into the contract with a genuine commitment. This principle helps ensure that contracts are formed based on mutual agreement and obligation, making them legally enforceable.
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Test: Meaning and Nature of Consideration - Question 3
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What is the primary function of consideration in a contract as per the Indian Contract Act, 1872?

Detailed Solution for Test: Meaning and Nature of Consideration - Question 3
Consideration in a contract, as defined in the Indian Contract Act, 1872, acts as the price paid for fulfilling promises between the promisor and the promisee. This means that consideration is what each party gives or does in exchange for the other's promise.
Test: Meaning and Nature of Consideration - Question 4
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What do reciprocal promises entail according to Section 2(f) of the Indian Contract Act, 1872?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 4
Reciprocal promises, as per Section 2(f) of the Indian Contract Act, 1872, are promises that constitute or contribute to each other's consideration. In other words, these promises involve each party offering something of value to the other as part of the contractual agreement.
Test: Meaning and Nature of Consideration - Question 5
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In the case of Carlill v. Carbolic Smoke Ball Co., what was the court's ruling based on?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 5
The court ruled in favor of the plaintiff in Carlill v. Carbolic Smoke Ball Co. based on the plaintiff's reliance on the product's claim. Despite the unusual nature of the advertisement, the court recognized that the plaintiff had accepted the offer by purchasing and using the product as directed, thus fulfilling the conditions stated in the advertisement.
Test: Meaning and Nature of Consideration - Question 6
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What type of consideration involves a situation where one party is legally obligated to provide something in exchange for a promise from the other party?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 6
Unilateral consideration occurs in a situation where one party is legally obligated to provide something in exchange for a promise from the other party. An example of unilateral consideration is a reward offer where only the person who performs the specified act is entitled to the reward, as stated in the contract.
Test: Meaning and Nature of Consideration - Question 7
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In which type of contract does the consideration move in either direction after the contract is formed, involving a mutual exchange of promises where each party is both a promisor and a promisee?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 7
Bilateral contracts involve consideration that moves in either direction after the contract is formed. In this type of contract, both parties are promisors and promisees, with mutual obligations to perform. An example of a bilateral contract is a typical sales contract where goods are promised to be delivered in exchange for payment.
Test: Meaning and Nature of Consideration - Question 8
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What distinguishes bilateral consideration from unilateral consideration in a contract?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 8
In a bilateral contract, the consideration involves a mutual exchange of promises where both parties are promisors and promisees, bound to perform their respective obligations. This stands in contrast to unilateral consideration, where only one party is legally obligated to provide something in exchange for a promise from the other party.
Test: Meaning and Nature of Consideration - Question 9
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According to Section 24 of The Indian Contract Act, 1872, what is the consequence if any part of a consideration for one or more objects is found to be unlawful?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 9
Section 24 of The Indian Contract Act specifies that if any part of a consideration for one or more objects is unlawful, the entire agreement becomes void. This legal principle ensures that contracts are based on lawful considerations to maintain the integrity and legality of agreements.
Test: Meaning and Nature of Consideration - Question 10
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Which of the following actions renders a consideration unlawful under the Indian Contract Act?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 10
In the Indian Contract Act, involvement of fraud, undertaking actions against public policy, and any act causing harm to individuals or their belongings are conditions that render a consideration unlawful. Understanding these aspects is crucial to ensure the validity and enforceability of contracts under Indian contract law.
Test: Meaning and Nature of Consideration - Question 11
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What does the term "Nudum Pactum" refer to in legal agreements?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 11
"Nudum Pactum, translated as 'Naked Agreement,' signifies a contract that lacks essential consideration and is therefore unenforceable by law. An example would be a scenario where a party offers to sell an item without specifying the price, rendering the agreement void. This legal concept highlights the significance of essential elements in forming a legally binding contract."
Test: Meaning and Nature of Consideration - Question 12
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Why is a contract classified as a "Nudum Pactum"?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 12
"A contract is categorized as a 'Nudum Pactum' when it lacks essential consideration, making it unenforceable under the law. This term emphasizes the necessity of including crucial elements, such as price or terms, in an agreement for it to be legally binding. Without these essential components, the contract becomes void and cannot be enforced by the courts."
Test: Meaning and Nature of Consideration - Question 13
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In what scenario would a contract likely be considered a "Nudum Pactum"?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 13
"A contract is more likely to be deemed a 'Nudum Pactum' when it lacks crucial elements necessary for enforceability, such as consideration or terms. For instance, if a party offers to buy a good without specifying the quantity or price, the agreement would be considered a 'Nudum Pactum' due to the absence of vital details essential for a valid contract. This legal concept underlines the importance of clarity and completeness in contractual agreements to ensure their legality and enforceability."
Test: Meaning and Nature of Consideration - Question 14
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What is a fundamental requirement in contract law that necessitates an exchange of value between parties to support an agreement?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 14
Consideration in contract law is a crucial element that mandates something of value to be exchanged between parties to validate an agreement. It is the benefit each party receives or expects to receive from a contractual deal. Without consideration, a contract may lack enforceability as it signifies a mutual inducement for the parties to enter into the agreement.
Test: Meaning and Nature of Consideration - Question 15
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In which scenario does Section 25 of The Indian Contract Act, 1872 provide exceptions to the consideration requirement?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 15
Section 25 of The Indian Contract Act, 1872 outlines exceptions to the consideration rule, particularly recognizing agreements made in writing and registered, grounded on natural love and affection between closely related individuals. This exception indicates that contracts based on such sentiments can be legally binding even without the exchange of traditional consideration.
Test: Meaning and Nature of Consideration - Question 16
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What legal principle becomes enforceable when a promise is made without formal consideration, and the promisee relies on it to their detriment?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 16
Promissory Estoppel is a legal doctrine where a promise made without the typical consideration becomes enforceable if the promisee relies on it to their detriment. This principle aims to prevent injustice by holding the promisor accountable for their promise if the promisee has reasonably relied on it and suffered a loss as a consequence.
Test: Meaning and Nature of Consideration - Question 17
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What legal principle makes a promise enforceable if the promisee relies on it to their detriment without formal consideration?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 17
Promissory Estoppel is a legal principle where a promise made without formal consideration becomes enforceable if the promisee relies on it to their detriment. This principle is essential in ensuring fairness and justice in contract law by preventing a promisor from unfairly backing out of a promise when the promisee has reasonably relied on it to their detriment.
Test: Meaning and Nature of Consideration - Question 18
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In what scenario is a minor not liable for compensation when they become an adult for voluntary services received earlier?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 18
According to the legal principle discussed, a minor who received voluntary services is not liable for compensation when they become an adult if the services were provided voluntarily. This exception acknowledges the special status of minors in contractual agreements and protects them from undue obligations arising from services received during their minority.
Test: Meaning and Nature of Consideration - Question 19
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Under what circumstance can a debt promise be unenforceable due to the statute of limitations?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 19
One exception to consideration in contract law arises when there is a written promise to pay a debt that is legally unenforceable due to the statute of limitations. The statute of limitations sets a time limit within which legal action can be taken on a debt, and once this period has passed, the debt may become unenforceable in a court of law.
Test: Meaning and Nature of Consideration - Question 20
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What is a key requirement for consideration under the Indian Contract Act regarding the desire of the promisor?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 20
Consideration under the Indian Contract Act necessitates that it must be made at the desire of the promisor. This ensures that the consideration is directly linked to the agreement between the involved parties, emphasizing the importance of mutual assent in forming a valid contract.
Test: Meaning and Nature of Consideration - Question 21
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Which type of consideration involves goods provided before a promise of compensation?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 21
Past consideration refers to instances where something of value is given before a promise is made. In this scenario, goods or services are provided without a prior agreement but form the basis for a subsequent promise or contract. It highlights the retrospective nature of the consideration in certain contractual arrangements.
Test: Meaning and Nature of Consideration - Question 22
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What type of consideration in a contract involves giving something before the promise, such as providing goods before a promise of compensation?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 22
In contract law, past consideration refers to something given or performed before the promise was made. An interesting fact is that past consideration is generally not considered valid because the consideration is not given in exchange for the promise.
Test: Meaning and Nature of Consideration - Question 23
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What is the legal requirement concerning the adequacy of consideration under Indian law?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 23
In Indian law, consideration is not mandated to be of equal value; however, it should still be fair and have legal validity. Courts typically do not intervene in assessing the equivalence of consideration in contracts, emphasizing the principle that parties have the freedom to negotiate terms as long as the agreement is lawful.
Test: Meaning and Nature of Consideration - Question 24
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In Indian law, who can the consideration in a contract come from?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 24
According to Indian law, the consideration in a contract can come from the promisee or any other person involved in the contract. This flexibility allows for a broader range of individuals to contribute to the consideration in a contract, adding complexity to the contractual relationships.
Test: Meaning and Nature of Consideration - Question 25
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What is a key requirement for consideration in a contract to be valid?
Detailed Solution for Test: Meaning and Nature of Consideration - Question 25
Consideration in a contract must be real, not illusory, meaning that it must be genuine and have legal value. This ensures that there is a valid exchange of something of worth between the parties involved, establishing the foundation of a legally binding contract.
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