Test: Indian Contract Act 1872 - UGC NET MCQ

- The Assertion is correct because consideration indeed refers to something of value that is exchanged for a promise in a contract.

- The Reason is false because consideration cannot include a promise to perform an action that one is already legally obligated to do; such promises do not constitute valid consideration.

- Since the Reason is not a correct explanation of the Assertion, the correct answer is Option C.

Statement 1 is correct as arbitration involves both parties agreeing to submit their dispute to a neutral party for resolution.
Statement 2 is incorrect; specific performance compels a party to adhere to the contract's terms rather than canceling it.

Thus, only statement 1 is correct.

• The Assertion is true because a valid contract must indeed be capable of performance and not declared void.
• The Reason is false because contracts lacking consideration or involving illegal activities are classified as void, not valid, according to the Indian Contract Act, 1872.
• Since the Assertion is true and the Reason is false, the Reason does not provide a correct explanation for the Assertion.

- The Assertion is true because for consideration to be valid, it must be lawful.

- The Reason is false because consideration can indeed come from the promisee or any other person. Therefore, the Reason does not correctly explain the Assertion.

- Since the Assertion is true and the Reason is false, the correct answer is Option C.

For an acceptance to be valid in a contract, it must be unequivocal and absolute, meaning that it must agree to all terms of the proposal without any modifications or conditions. This ensures that both parties have a clear understanding and agreement, which is fundamental to the formation of a legally binding contract. An interesting fact is that in contract law, any alteration to the original terms offered is considered a counter-offer rather than acceptance, which can lead to further negotiations rather than a finalized agreement.

Statement 1 is correct as the Indian Contract Act of 1872 indeed includes provisions for addressing breaches of contract through remedies such as damages and specific performance.
Statement 2 is incorrect because the act has undergone multiple amendments to adapt to changing economic needs and social contexts in India.

Therefore, the correct answer is Option A.

A valid contract under the Indian Contract Act of 1872 fundamentally requires mutual consent, which is achieved through the processes of offer and acceptance. Both parties must agree to the terms of the contract voluntarily, ensuring that there is a meeting of the minds. While written documentation and witness signatures can enhance the enforceability of a contract, they are not mandatory for a contract to be valid. An interesting additional fact is that oral contracts can also be enforceable under this act, provided they meet the essential elements of a contract.

• The Assertion (A) is true because, in contract law, consideration can indeed be provided by someone other than the promisee, as long as it is lawful.
• The Reason (R) is false since it incorrectly states that consideration must only come from the promisee.
• Therefore, the Reason does not explain the Assertion. Hence, the correct answer is Option B.

Section 2 of the Indian Contract Act, 1872 is crucial as it provides definitions for key legal concepts including contract, agreement, promise, and consideration. Understanding these definitions is fundamental for interpreting contracts and ensuring that they meet legal standards. For instance, the concept of consideration is essential because it refers to what each party offers in a contract, which is necessary for a contract to be legally binding. An interesting fact is that without consideration, a contract may not be enforceable in a court of law, distinguishing it from mere social agreements.

The person who makes an offer in a contract is known as the promisor. This term refers to the individual or party that proposes the terms of the agreement, which the other party, known as the promisee, can either accept or reject. Understanding these roles is crucial for grasping the dynamics of contract law, as each party has specific rights and obligations under the agreement. Interestingly, the clarity of these roles helps prevent disputes, ensuring that both parties are aware of their commitments.