Daily Passage Test for CLAT - Aug 8 MCQs & solutions Free
MCQ Practice Test & Solutions: Daily Passage Test for CLAT - Aug 8 (5 Questions)
You can prepare effectively for CLAT Daily Passage Practice for CLAT with this dedicated MCQ Practice Test (available with solutions) on the important topic of "Daily Passage Test for CLAT - Aug 8". These 5 questions have been designed by the experts with the latest curriculum of CLAT 2026, to help you master the concept.
Test Highlights:
- - Format: Multiple Choice Questions (MCQ)
- - Duration: 10 minutes
- - Number of Questions: 5
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Directions: Read the passage and answer the question that follows.
Part XIII of Constitution contains provisions relating to the freedom of trade, commerce and intercourse within the territory of India. Just as the Legislature cannot take away individual freedom of trade, the individual cannot barter it away by an agreement.
S. 27 of Contract Act says Agreement in restraint of trade is void, i.e. every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is void. The main reason behind this section is that agreements of restraint are unfair and unjustified as they impose an undue restriction on the personal freedom of a contracting party.
There is exception, if a party sells his goodwill to another, he can agree with the buyer that he will not carry on a similar business within the specified local limits.
As per S. 11 Partnership Act, partners during the continuance of the firm to restrict none of them shall carry on any other business than that of the firm and S. 36 of this Act, is related to restrain an outgoing partner from carrying on a similar business within the specified period and specified local limits. The agreement should specify the local limits or the period of restraint, and restrictions imposed must be reasonable.
Agreement of service containing negative covenants is for preventing the employee from working anywhere during period covered by the agreement. Now, trade secrets are main contention for negative covenants. Employer wants to protect his trade secrets because of that employment agreement with negative covenants are generally used. Agreements for protection of confidentiality and trade secrets are not one sided or unfair or unreasonable. Any breach of such clauses on the part of employee can be treated as misconduct.
As per Indian laws, any agreement which is related to restraint of trade and profession shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, it has shown that it has kept such non-compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non-compete clauses in employment contracts as 'restraint of trade' is impermissible under S. 27 of Contract Act, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.
[Extracted, with edits and revisions, from restraint-trade-exceptions-2, blog by taxguru)
Q. Maya buys the top apparel franchise that Archit owned in India. A contract between Archit and Maya states that for the next ten years, Archit won't open another apparel store. Is the contract lawful?
S. 27 of Contract Act says Agreement in restraint of trade is void, i.e. every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is void. The main reason behind this section is that agreements of restraint are unfair and unjustified as they impose an undue restriction on the personal freedom of a contracting party.
There is exception, if a party sells his goodwill to another, he can agree with the buyer that he will not carry on a similar business within the specified local limits.
As per S. 11 Partnership Act, partners during the continuance of the firm to restrict none of them shall carry on any other business than that of the firm and S. 36 of this Act, is related to restrain an outgoing partner from carrying on a similar business within the specified period and specified local limits. The agreement should specify the local limits or the period of restraint, and restrictions imposed must be reasonable.
Agreement of service containing negative covenants is for preventing the employee from working anywhere during period covered by the agreement. Now, trade secrets are main contention for negative covenants. Employer wants to protect his trade secrets because of that employment agreement with negative covenants are generally used. Agreements for protection of confidentiality and trade secrets are not one sided or unfair or unreasonable. Any breach of such clauses on the part of employee can be treated as misconduct.
As per Indian laws, any agreement which is related to restraint of trade and profession shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, it has shown that it has kept such non-compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non-compete clauses in employment contracts as 'restraint of trade' is impermissible under S. 27 of Contract Act, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.
Detailed Solution: Question 1
Directions: Read the passage and answer the question that follows.
Part XIII of Constitution contains provisions relating to the freedom of trade, commerce and intercourse within the territory of India. Just as the Legislature cannot take away individual freedom of trade, the individual cannot barter it away by an agreement.
S. 27 of Contract Act says Agreement in restraint of trade is void, i.e. every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is void. The main reason behind this section is that agreements of restraint are unfair and unjustified as they impose an undue restriction on the personal freedom of a contracting party.
There is exception, if a party sells his goodwill to another, he can agree with the buyer that he will not carry on a similar business within the specified local limits.
As per S. 11 Partnership Act, partners during the continuance of the firm to restrict none of them shall carry on any other business than that of the firm and S. 36 of this Act, is related to restrain an outgoing partner from carrying on a similar business within the specified period and specified local limits. The agreement should specify the local limits or the period of restraint, and restrictions imposed must be reasonable.
Agreement of service containing negative covenants is for preventing the employee from working anywhere during period covered by the agreement. Now, trade secrets are main contention for negative covenants. Employer wants to protect his trade secrets because of that employment agreement with negative covenants are generally used. Agreements for protection of confidentiality and trade secrets are not one sided or unfair or unreasonable. Any breach of such clauses on the part of employee can be treated as misconduct.
As per Indian laws, any agreement which is related to restraint of trade and profession shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, it has shown that it has kept such non-compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non-compete clauses in employment contracts as 'restraint of trade' is impermissible under S. 27 of Contract Act, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.
[Extracted, with edits and revisions, from restraint-trade-exceptions-2, blog by taxguru)
Q. DUST, an artificial intelligence firm with headquarters in the UK, volunteered to work with SYX, an organization with headquarters in India, on the condition that SYX keep all technical knowledge from its staff confidential. The project manager was hired for a five-year term with the requirement that he not serve during that time, even if he left the service earlier. Decide.
S. 27 of Contract Act says Agreement in restraint of trade is void, i.e. every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is void. The main reason behind this section is that agreements of restraint are unfair and unjustified as they impose an undue restriction on the personal freedom of a contracting party.
There is exception, if a party sells his goodwill to another, he can agree with the buyer that he will not carry on a similar business within the specified local limits.
As per S. 11 Partnership Act, partners during the continuance of the firm to restrict none of them shall carry on any other business than that of the firm and S. 36 of this Act, is related to restrain an outgoing partner from carrying on a similar business within the specified period and specified local limits. The agreement should specify the local limits or the period of restraint, and restrictions imposed must be reasonable.
Agreement of service containing negative covenants is for preventing the employee from working anywhere during period covered by the agreement. Now, trade secrets are main contention for negative covenants. Employer wants to protect his trade secrets because of that employment agreement with negative covenants are generally used. Agreements for protection of confidentiality and trade secrets are not one sided or unfair or unreasonable. Any breach of such clauses on the part of employee can be treated as misconduct.
As per Indian laws, any agreement which is related to restraint of trade and profession shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, it has shown that it has kept such non-compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non-compete clauses in employment contracts as 'restraint of trade' is impermissible under S. 27 of Contract Act, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.
Detailed Solution: Question 2
Directions: Read the passage and answer the question that follows.
Part XIII of Constitution contains provisions relating to the freedom of trade, commerce and intercourse within the territory of India. Just as the Legislature cannot take away individual freedom of trade, the individual cannot barter it away by an agreement.
S. 27 of Contract Act says Agreement in restraint of trade is void, i.e. every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is void. The main reason behind this section is that agreements of restraint are unfair and unjustified as they impose an undue restriction on the personal freedom of a contracting party.
There is exception, if a party sells his goodwill to another, he can agree with the buyer that he will not carry on a similar business within the specified local limits.
As per S. 11 Partnership Act, partners during the continuance of the firm to restrict none of them shall carry on any other business than that of the firm and S. 36 of this Act, is related to restrain an outgoing partner from carrying on a similar business within the specified period and specified local limits. The agreement should specify the local limits or the period of restraint, and restrictions imposed must be reasonable.
Agreement of service containing negative covenants is for preventing the employee from working anywhere during period covered by the agreement. Now, trade secrets are main contention for negative covenants. Employer wants to protect his trade secrets because of that employment agreement with negative covenants are generally used. Agreements for protection of confidentiality and trade secrets are not one sided or unfair or unreasonable. Any breach of such clauses on the part of employee can be treated as misconduct.
As per Indian laws, any agreement which is related to restraint of trade and profession shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, it has shown that it has kept such non-compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non-compete clauses in employment contracts as 'restraint of trade' is impermissible under S. 27 of Contract Act, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.
[Extracted, with edits and revisions, from restraint-trade-exceptions-2, blog by taxguru)
Q. In XYZ city, Mohan and Rohan operated a tempo transportation service. In order for Rohan to refrain from carrying on tempo for a period of six months, Mohan agreed to pay Rohan a specific sum of money in exchange for their business agreement. Decide.
S. 27 of Contract Act says Agreement in restraint of trade is void, i.e. every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is void. The main reason behind this section is that agreements of restraint are unfair and unjustified as they impose an undue restriction on the personal freedom of a contracting party.
There is exception, if a party sells his goodwill to another, he can agree with the buyer that he will not carry on a similar business within the specified local limits.
As per S. 11 Partnership Act, partners during the continuance of the firm to restrict none of them shall carry on any other business than that of the firm and S. 36 of this Act, is related to restrain an outgoing partner from carrying on a similar business within the specified period and specified local limits. The agreement should specify the local limits or the period of restraint, and restrictions imposed must be reasonable.
Agreement of service containing negative covenants is for preventing the employee from working anywhere during period covered by the agreement. Now, trade secrets are main contention for negative covenants. Employer wants to protect his trade secrets because of that employment agreement with negative covenants are generally used. Agreements for protection of confidentiality and trade secrets are not one sided or unfair or unreasonable. Any breach of such clauses on the part of employee can be treated as misconduct.
As per Indian laws, any agreement which is related to restraint of trade and profession shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, it has shown that it has kept such non-compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non-compete clauses in employment contracts as 'restraint of trade' is impermissible under S. 27 of Contract Act, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.
Detailed Solution: Question 3
Directions: Read the passage and answer the question that follows.
Part XIII of Constitution contains provisions relating to the freedom of trade, commerce and intercourse within the territory of India. Just as the Legislature cannot take away individual freedom of trade, the individual cannot barter it away by an agreement.
S. 27 of Contract Act says Agreement in restraint of trade is void, i.e. every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is void. The main reason behind this section is that agreements of restraint are unfair and unjustified as they impose an undue restriction on the personal freedom of a contracting party.
There is exception, if a party sells his goodwill to another, he can agree with the buyer that he will not carry on a similar business within the specified local limits.
As per S. 11 Partnership Act, partners during the continuance of the firm to restrict none of them shall carry on any other business than that of the firm and S. 36 of this Act, is related to restrain an outgoing partner from carrying on a similar business within the specified period and specified local limits. The agreement should specify the local limits or the period of restraint, and restrictions imposed must be reasonable.
Agreement of service containing negative covenants is for preventing the employee from working anywhere during period covered by the agreement. Now, trade secrets are main contention for negative covenants. Employer wants to protect his trade secrets because of that employment agreement with negative covenants are generally used. Agreements for protection of confidentiality and trade secrets are not one sided or unfair or unreasonable. Any breach of such clauses on the part of employee can be treated as misconduct.
As per Indian laws, any agreement which is related to restraint of trade and profession shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, it has shown that it has kept such non-compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non-compete clauses in employment contracts as 'restraint of trade' is impermissible under S. 27 of Contract Act, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.
[Extracted, with edits and revisions, from restraint-trade-exceptions-2, blog by taxguru)
Q. According to S. 27 of the Contract Act, why are agreements in restraint of trade considered void?
S. 27 of Contract Act says Agreement in restraint of trade is void, i.e. every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is void. The main reason behind this section is that agreements of restraint are unfair and unjustified as they impose an undue restriction on the personal freedom of a contracting party.
There is exception, if a party sells his goodwill to another, he can agree with the buyer that he will not carry on a similar business within the specified local limits.
As per S. 11 Partnership Act, partners during the continuance of the firm to restrict none of them shall carry on any other business than that of the firm and S. 36 of this Act, is related to restrain an outgoing partner from carrying on a similar business within the specified period and specified local limits. The agreement should specify the local limits or the period of restraint, and restrictions imposed must be reasonable.
Agreement of service containing negative covenants is for preventing the employee from working anywhere during period covered by the agreement. Now, trade secrets are main contention for negative covenants. Employer wants to protect his trade secrets because of that employment agreement with negative covenants are generally used. Agreements for protection of confidentiality and trade secrets are not one sided or unfair or unreasonable. Any breach of such clauses on the part of employee can be treated as misconduct.
As per Indian laws, any agreement which is related to restraint of trade and profession shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, it has shown that it has kept such non-compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non-compete clauses in employment contracts as 'restraint of trade' is impermissible under S. 27 of Contract Act, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.
Detailed Solution: Question 4
Directions: Read the passage and answer the question that follows.
Part XIII of Constitution contains provisions relating to the freedom of trade, commerce and intercourse within the territory of India. Just as the Legislature cannot take away individual freedom of trade, the individual cannot barter it away by an agreement.
S. 27 of Contract Act says Agreement in restraint of trade is void, i.e. every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is void. The main reason behind this section is that agreements of restraint are unfair and unjustified as they impose an undue restriction on the personal freedom of a contracting party.
There is exception, if a party sells his goodwill to another, he can agree with the buyer that he will not carry on a similar business within the specified local limits.
As per S. 11 Partnership Act, partners during the continuance of the firm to restrict none of them shall carry on any other business than that of the firm and S. 36 of this Act, is related to restrain an outgoing partner from carrying on a similar business within the specified period and specified local limits. The agreement should specify the local limits or the period of restraint, and restrictions imposed must be reasonable.
Agreement of service containing negative covenants is for preventing the employee from working anywhere during period covered by the agreement. Now, trade secrets are main contention for negative covenants. Employer wants to protect his trade secrets because of that employment agreement with negative covenants are generally used. Agreements for protection of confidentiality and trade secrets are not one sided or unfair or unreasonable. Any breach of such clauses on the part of employee can be treated as misconduct.
As per Indian laws, any agreement which is related to restraint of trade and profession shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, it has shown that it has kept such non-compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non-compete clauses in employment contracts as 'restraint of trade' is impermissible under S. 27 of Contract Act, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.
[Extracted, with edits and revisions, from restraint-trade-exceptions-2, blog by taxguru)
Q. Under what circumstances can a party sell their goodwill and agree not to carry on a similar business within specified local limits, according to the passage?
S. 27 of Contract Act says Agreement in restraint of trade is void, i.e. every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is void. The main reason behind this section is that agreements of restraint are unfair and unjustified as they impose an undue restriction on the personal freedom of a contracting party.
There is exception, if a party sells his goodwill to another, he can agree with the buyer that he will not carry on a similar business within the specified local limits.
As per S. 11 Partnership Act, partners during the continuance of the firm to restrict none of them shall carry on any other business than that of the firm and S. 36 of this Act, is related to restrain an outgoing partner from carrying on a similar business within the specified period and specified local limits. The agreement should specify the local limits or the period of restraint, and restrictions imposed must be reasonable.
Agreement of service containing negative covenants is for preventing the employee from working anywhere during period covered by the agreement. Now, trade secrets are main contention for negative covenants. Employer wants to protect his trade secrets because of that employment agreement with negative covenants are generally used. Agreements for protection of confidentiality and trade secrets are not one sided or unfair or unreasonable. Any breach of such clauses on the part of employee can be treated as misconduct.
As per Indian laws, any agreement which is related to restraint of trade and profession shall not be binding on the parties and the same shall be null and void. By using the term void ab initio, it has shown that it has kept such non-compete clause in the agreements beyond consideration. Indian courts have also consistently refused to enforce post termination non-compete clauses in employment contracts as 'restraint of trade' is impermissible under S. 27 of Contract Act, and have held them as void and against the public policy because of their potential to deprive an individual of his or her fundamental right to earn a living.
Detailed Solution: Question 5
