Multiple Choice Questions on the Law of Contract (Indian Contract

Act)

Article Shared by  <="" div="" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; font-
size: 13px; vertical-align: bottom; background: transparent; max-width: 100%;">
Multiple choice questions on the law of contract especially compiled for UPSC, civil
services, IAS and Indian Judicial Examinations!

1. Which the following strikes only at document and not transactions?

A. The Transfer of Property Act, 1882
B. The Registration Act, 1908
C. both (A) and (B)
D. None of these
Ans. (B)
2. A stipulation in a bond for payment of compound interest on failure to
pay simple interest at the same rate as was payable upon the principal is not
a penalty within the meaning of:
A. Section 74 of the Indian Contract Act, 1872
B. Section 75 of the Indian Contract Act, 1872
C. Section 76 of the Indian Contract Act, 1872
D. None of these
Ans. (A)
3. A sub-bailee is a person to whom the actual possession of goods is
transferred by someone:
A. who is not himself not an owner of goods
B. who has a present right to possession of them as bailee of the owner
C. both (A) and (B)
D. None of these
Ans. (C)
4. A successful plaintiff in an action for detenue, is, therefore entitled to the
return of the goods or recovery of its value and damages for detention and
is entitled to have been assessed separately:
A. the value of the goods at the date of the assessment
B. damages sustained by him up to that date
C. both (A) and (B)
D. None of these
Ans. (C)
5. A supplies B, a lunatic, with necessaries suitable to his condition in life.
A. A is entitled to be reimbursed from B’s property
B. A is not entitled to be reimbursed from B’s property
C. A is entitled to be given a share in B’s property
D. None of these
Ans. (A)
6. A supplies the wife and children of B, a lunatic, with necessaries suitable
to their condition in life.
A. A is entitled to be reimbursed from B’s property
B. A is not entitled to be reimbursed from B’s property
C. A is entitled to be given a share in B’s property
D. None of these
Ans. (A)
7. A supports B’s infant son. B promise to pay A’s expenses in so doing.
A. This is not a contract
B. This is a contract
C. either (A) or (B)
D. None of these
Ans. (B)
8. A surety is discharged if the creditor, without consent, unconditionally
releases the principal-debtor; the reason for this principle being that:
A. The release extinguishes the principal obligation
B. Such release adversely affects the right of the surety to sue the principal-debtor and
deprives the surety of his right to compel the debtor to perform his own obligation to the
creditor
C. both (A) and (B)
D. None of these
Ans. (C)
9. A transaction by which A promised to pay B and C for consideration
during their joint lives and after the death of one of them, to the survivor,
the consideration moved from B but the agreement was signed by all three,
i.e., A, B and C.
A. There was privity between A and B but not with C
B. There was privity between A and C but not with B
C. There was privity between A on one side and B and C on the other
D. None of these
Ans. (C)
10. A undertakes to deliver a thousand maunds of jute to B on a fixed day
Applying Section 47, Indian Contract Act:
A. A need not apply to B to appoint a reasonable place for the purpose of receiving it,
and must deliver it to him at such place
B. A must apply to B to appoint a reasonable place for the purpose of receiving it, and
can choose to later change the place
C. A must apply to B to appoint a reasonable place for the purpose of receiving it, and
must deliver it to him at such place
D. None of these
Ans. (C)
11. A undertakes to repay B a loan of Rs.1,000 by five equal monthly
instalments with a stipulation that, in default of payment of any instalment,
the whole shall become due.
A. This stipulation is by way of penalty, and the contract cannot be enforced according
to its terms
B. This stipulation is not by way of penalty, and the contract cannot be enforced
according to its terms
C. This stipulation is not by way of penalty, and the contract may be enforced according
to its terms
D. None of these
Ans. (C)
12. A, a builder, contracts to erect and finish a house by the first of January,
in order that B may give possession of it at that time to C, to whom B has
contracted to let it. A is informed of the contract between B and C. A builds
the house so badly that, before the first of January, it falls down and has to
be rebuilt by B, who in consequence, loses the rent which he was to have
received from C, and is obliged to make compensation to C for the breach of
his contract.
A. A must make compensation to B for the cost of rebuilding the house
B. A must make compensation to B for the rent lost
C. A must make compensation to B for the compensation made to C
D. All of them
Ans. (D)
13. A, a decree-holder, and entitled to execution of B’s goods, requires the
officer of the court to seize certain goods, representing them to be the goods
of B. The officer seizes the goods, and issues by C, the true owner of the
goods.
A. A is not liable to indemnify the officer for the sum which he is compelled to pay to C,
in consequence of obeying A’s directions
B. A is partially liable to indemnify the officer for the sum which he is compelled to pay
to C, in consequence of obeying A’s directions
C. A is liable to indemnify the officer for the sum which he is compelled to pay to C, in
consequence of obeying A’s directions
D. None of these
Ans. (C)
14. A, a man enfeebled by disease or age, is induced, by B’s influence over
him as his medical attendant, to agree to pay B an unreasonable sum for his
professional services.
A. B did not employs undue influence
B. B employs undue influence
C. either (A) or (B)
D. None of these
Ans. (B)
15. A, a merchant in Calcutta, has an agent, B, in London to whom a sum of
money is paid on A’s account, with orders to remit. B retains the money for
considerable time. A, in consequence of not receiving the money, becomes
insolvent.
A. B is not liable for the money and interest, from the day on which it ought to have been
paid, according to the usual rate
B. B is liable for any further direct loss – as e.g. by variation of rate of exchange
C. B is liable for the money and interest, from the day on which it ought to have been
paid, according to the usual rate, and for any further direct loss – as e.g. by variation of
rate of exchange – but not further
D. None of these
Ans. (C)
16. A, a merchant in England, directs B, his agent or Bombay, who accepts
the agency, to send him 100 bales of cotton by a certain ship. B, having it in
his power to send the cotton, omits to do so. The ship arrives safely in
England. Soon after her arrival, the price of cotton rises.
A. B is not bound to make good to A profit which he might have made by 100 bales of
cotton at the time the ship arrived
B. B is bound to make good to A any profit he might have made by the subsequent rise
C. B is bound to make good to A profit which he might have made by 100 bales of cotton
at the time the ship arrived. But not any profit he might have made by the subsequent
rise
d. None of these
Ans. (C)
17. A, a money-lender advances Rs.100/- to B, an agriculturist, and by
undue influence, induces B to execute a bond for Rs.200/- with interest at 6
per cent per month.
A. The Court will not set the bond aside and not take any legal action against B
B. The Court may set the bond aside, ordering B to repay the Rs. 100/- with such as may
seem just
C. either (A) or (B)
d. None of these
Ans. (B)
18. A, a ship-owner, contracts with b to convey him from Calcutta to Sydney
in A’s ship, sailing on the first of January, and B pays to A, by way deposit,
one-half of his passage money. The ship does not sail on the first of January
and B, after being, in consequence, detained in Calcutta for some time, and
thereby put to some expense, proceeds to Sydney in another vessel, and, in
consequence, arriving too late in Sydney, loses a sum of money.
A. A is liable to repay to B his deposit, with interest and the expense to which he is put
by his detention in Calcutta, and the excess, if any, of the passage-money paid for the
second ship over that agreed upon the first
B. A is liable to repay to B his deposit, with interest and the expense to which he is put
by his detention in Calcutta, and the excess, if any, of the sum of money which B lost by
arriving in Sydney too late
C. A is liable to repay to B his deposit, with interest and the excess, if any, of the
passage-money paid for the second ship over that agreed upon the first, but not the sum
of money which B lost by arriving in Sydney too late
D. None of these
Ans. (A)
19. A, a signer, contracts with B, the manager of a theatre for two nights in
every week during the next two months, and B engages to pay her a
hundred rupees for each night’s performance. On the sixth night, A willfully
absents herself from the theatre, and B, in consequence rescinds the
contract.
A. B must pay A for the three nights on which she had sung
B. B must pay A for the four nights on which she had sung
C. B must pay A for the five nights on which she had sung
d. None of these
Ans. (C)
20. A, a singer, contracts with B, the manager of a theatre, to sing at his
theatre for two nights in every week during the next two months, and B
engages to pay her 100 rupees for each night’s performance. On the sixth
night, A wilfully absents herself from the theatre, and B, in consequence,
rescinds the contract.
A. B is not entitled to claim compensation the damage which he has sustained through
the non-fulfilment of the contract
B. B is entitled to claim compensation the damage which he has sustained through the
non-fulfilment of the contract
C. A is entitled to claim compensation the damage which she has sustained due to the
rescinding of the contract by B.
D. None of these
Ans. (B)
21. A, a singer, enters into a contract with B, the manager of a theatre, to
sing at his theatre two nights in every week during the next two months,
and B engages to pay her 100 rupees for each night’s performance. On the
sixth night A willfully absent herself from the theatre.
A. B is at liberty to put an end to the contract
B. B cannot put an end to the contract
C. either (A) or (B)
D. None of these
Ans. (A)
22. A, a singer, enters into a contract with B, the manager of a theatre, to
sing at his theatre two nights in every week during the next two months,
and B engages to pay her at the rate of 100 rupees for each night. On the
sixth night A wilfully absents herself. With the assent of B, A sings on the
seventh night.
A. B has signified his acquiescence in the continuance of the contract, and cannot now
put an end to it, but is entitled to compensation for the damage sustained by him
through A’s failure to sing on the sixth night
B. B has signified his acquiescence in the continuance of the contract, and but can still
put an end to it, but is entitled to compensation for the damage sustained by him
through A’s failure to sing on the sixth night
C. B has signified his acquiescence in the continuance of the contract, and cannot now
put an end to it, but is not entitled to compensation for the damage sustained by him
through A’s failure to sing on the sixth night
D. None of these
Ans. (A)
23. A, a tradesman, leaves goods at B’s house by mistake. B treats the goods
as his own.
A. He is not bound to pay A for them
B. He is bound to pay partially A for them
C. He is bound to pay A for them
D. None of these
Ans. (C)
24. A, an agent engaged in carrying on for B a business, in which it is the
custom to invest from time-to-time, at interest, the moneys which may be in
hand, omits to make such investments.
A. A need not make good to B the interest usually obtained by such investments
B. A can partially make good to B the interest usually obtained by such investments
C. A must make good to B the interest usually obtained by such investments
D. None of these
Ans. (C)
25. A, an agent for the sale of goods, having authority to sell on credit, sells
to B on credit, without making the proper and usual inquires as to the
solvency of B. B at the time of such sale is insolvent.
A. A need not make compensation to his principal in respect of any loss thereby
sustained
B. A can partially make compensation to his principal in respect of any loss thereby
sustained
C. A must make compensation to his principal in respect of any loss thereby sustained
D. None of these
Ans. (C)
26. A, an insurance broker, employed by B to effect an insurance on a ship,
omits to see that usual clauses are inserted in the policy. The ship is
afterwards lost. In consequence of the omission of the clauses nothing can
be recovered from the underwriters.
A. A is not bound to make good the loss to B
B. A is bound to partially make good the loss to B
C. A is bound to make good the loss to B
D. None of these
Ans. (C)
27. A, as surety for B, makes a bond jointly with B to C, to secure a loan
from C to B. Afterwards, C obtains from B a further security for the same
debt. Subsequently, C gives up the further security.
A. A is partly discharged
B. A is discharged
C. A is not discharged
D. None of these
Ans. (C)
28. A, at Madras, by letter directs B to sell for him some cotton lying in a
warehouse in Bombay, and afterwards, by letter revokes his authority to
sell, and directs, B to send, the cotton to Madras, B, after receiving the
second-letter, enters into a contract with C, who known of the first letter,
but not of the second for the sale to him of the cotton. C pays B the money,
with which B absconds.
A. C’s payment is not good as against A
B. C’s payment is good as against A
C. either (A) or (B)
D. None of these
Ans. (B)
29. A owns a shop in Serampur, living himself in Calcutta, and visiting the
shop occasionally. The shop is managed by B, and he is in the habit of
ordering goods from C in the name of A for the purposes of the shop, and of
paying for them out of A’s funds without A’s knowledge.
A. B has no implied authority from A to order goods from C in the name of A for the
purposes of the shop
B. B has an implied authority from A to order goods from C in the name of A for his own
purposes
C. B has an implied authority from A to order goods from C in the name of A for the
purposes of the shop
D. None of these
Ans: C
30. A contracts to indemnify B against the consequences of any proceedings
which C may take against B in respect of a certain sum of 200 rupees.
A. This is contract of indemnity
B. This is not a valid contract of indemnity
C. This is contract of stipulation
D. None of these
Ans: A
31. A contracts to marry B, being already married to C, and being forbidden
by the law to which he is subject to practice polygamy. This causes loss to B
A. A need not make compensation to B for the non-performance of his promise
B. A must make compensation to B for the non-performance of his promise
C. Either (A) or (B)
D. None of these
Ans: B
32. A contracts to pay B a sum of money when B marries C. C dies without
being married to B.
A. The contract still can be forced
B. The contract becomes void
C. Either (A) or (B)
D. None of these
Ans: B
33. A contracts to sell and deliver 50 maunds of saltpetre to B, at a certain
price to be paid on delivery. A breaks his promise.
A. B is not entitled to receive from A, by way of compensation, the sum, if any, by which
the contract price falls short of the price for which B might have obtained 50 maunds of
saltpetre of like quality at the time when the saltpetre ought to have been delivered
B. B is entitled to receive from A, by way of compensation, the sum, if any, by which the
contract price does not fall short of the price for which B might have obtained 50
maunds of saltpetre of like quality at the time when the saltpetre ought to have been
delivered
C. B is entitled to receive from A, by way of compensation, the sum, if any, by which the
contract price falls short of the price for which B might have obtained 50 maunds of
saltpetre of like quality at the time when the saltpetre ought to have been delivered
D. None of these
Ans: C
34. A contracts to sell and deliver to B, on the first of January, certain cloth
which B intends to manufacture into caps of a particular kind, for which
there is not demand, except at that season. The cloth is not delivered till
after the appointed time, and too late to be used that year in making the
caps.
A. B is entitled to receive from A, by way of compensation, the difference between the
contract price of the cloth and its market price at the time of delivery
B. B is entitled to receive from A, by way of compensation, the difference between the
contract price of the cloth and the profits which he expected to obtain by making caps
C. B is entitled to receive from A, by way of compensation, the difference between the
contract price of the cloth and the expenses which he has been put to in making
preparation for the manufacture
D. None of these
Ans: A
35. A contracts to take in cargo for B at a foreign port. A’s Government
afterwards declares war against the country in which the port is situated.
A. The contract cannot become void when war is declared
B. The contract becomes partly void when war is declared
C. The contract becomes void when war is declared
D. None of these
Ans: C
36. A contracts with B that, if A practices as a surgeon within Calcutta, he
will pay B Rs. 5,000. A practices as a surgeon in Calcutta.
A. B is entitled to such compensation, not exceeding Rs. 3,000 as the Court considers
reasonable
B. B is entitled to such compensation, not exceeding Rs. 4,000 as the Court considers
reasonable
C. B is entitled to such compensation, not exceeding Rs. 5,000 as the Court considers
reasonable
D. None of these
Ans: C
37. A contracts with B to deliver to him, at a specified price, certain
merchandise on board a ship which cannot arrive for a month, and B
engages to pay for the merchandise within a week from the date of the
contract. B does not pay within a week.
A. A’s promise to deliver and need not be performed
B. A’s promise to deliver and needs to be performed
C. B must make compensation
D. Both (A) and (C)
Ans: D
38. A contracts with B to grow a crop of indigo on A’s land and to deliver it
to B at a fixed rate, and C guarantees A’s performance of this contract. B
diverts a stream of water which is necessary for irrigation of A’s land, and
thereby prevents him from raising the indigo.
A. A is liable on his guarantee
B. A is partly liable on his guarantee
C. A is no longer liable on his guarantee
D. None of these
Ans: C
39. A contracts with B to repair B’s house. B neglects or refuses to point out
to A the places in which his house requires repair.
A. A is excused for the non-performance of the contract if it is caused by such neglect or
refusal
B. A cannot be excused for the non-performance of the contract even if it is caused by
such neglect or refusal
C. B is excused for his negligence or refusal to point out to A the places in which his
house requires repair
D. None of these
Ans: A
40. A delivers a rough diamond to B, a jeweller, to be cut and polished,
which is accordingly done.
A. B is not entitled to retain the stone till he is paid for the services he has rendered
B. B is entitled to retain the stone till he is not paid for the services he has rendered
C. B is entitled to retain the stone till he is paid for the services he has rendered
D. None of these
Ans: C
41. A desires B, who owes him Rs. 100, to send him a note for Rs. 100 by
post.
A. The debt is discharged only when A receives the due amount
B. The debt is discharged as soon as B puts into the post a letter containing the note duly
addressed to A
C. Either (A) or (B)
D. None of these
Ans: B
42. A directs B to sell A’s estate. B boys the estate for himself in the name of
C. A, on discovering that B has bought the estate for himself, may repudiate
the sale:
A. If he can show that B has dishonestly concealed any material fact
B. If he can show that the sale has been disadvantageous to him
C. Either (A) or (B)
D. None of these
Ans: C
43. A directs B, his agent, to buy a certain house for him. . B tells A it cannot
be bought, and buys the house for himself.
A. A cannot, on discovering that B has bought the house, compel him to sell it to A at the
price he gave for it
B. A can, on discovering that B has bought the house, file a suit against him
C. A may, on discovering that B has bought the house, compel him to sell it to A at the
price he gave for it
D. None of these
Ans: C
44. A directs B, his solicitor, to sell his estate by auction, and so employ an
auctioneer for the purpose. B names C, an auctioneer, to conduct the sale.
A. C is a sub-agent, and A’s sub-agent for the conduct of the sale
B. C is not a sub-agent, but B’s agent for the conduct of the sale
C. C is not a sub-agent, but A’s agent for the conduct of the sale
D. None of these
Ans: C
45. A employs B to beat C, and agrees to indemnify him against all
consequence of the act. B thereupon beats C, and to pay damages to C for so
doing.
A. A is liable to indemnify B for those damages
B. A is partially liable to indemnify B for those damages
C. A is not liable to indemnify B for those damages
D. None of these
Ans: C
46. A employs B to recover 100,000 rupees from C, and to lay it out on good
security. B recovers 1,00,000 rupees and lays out 90,000 rupees on good
security, but lays out 10,000 rupees, on security which he ought to have
known to be bad, whereby A loses 2,000 rupees.
A. B is not entitled to remuneration for recovering the 1,00,000 rupees and for investing
the 90,000 rupees. He is entitled to any remuneration for investing the 10,000 rupees,
and he must make good the 2,000 rupees to B
B. B is entitled to remuneration for recovering the 1,00,000 rupees and not for investing
the 90,000 rupees. He is entitled to any remuneration for investing the 10,000 rupees,
and he must make good the 2,000 rupees to B
C. B is entitled to remuneration for recovering the 1,00,000 rupees and for investing the
90,000 rupees. He is not entitled to any remuneration for investing the 10,000 rupees,
and he must make good the 2,000 rupees to B
D. None of these
Ans: C
47. A engages B as clerk to collect money for him. B fails to account for
some of his receipts, and A in consequence calls upon him to furnish
security for his duly accounting. A does not acquaint C with B’s previous
conduct. B afterwards makes default.
A. The guarantee is not invalid
B. The guarantee is partly invalid
C. The guarantee is invalid
D. None of these
Ans: C
48. A entrusts B with negotiable instrument endorsed in blank. B sells them
to C in violation of private orders from A.
A. The sale is not good
B. The sale is partly good
C. The sale is good
D. None of these
Ans: C
49. A fraudulently inform B that A’s estate is free from encumbrance. B
thereupon buys the estate. The estate is subject to a mortgage.
A. B may avoid the contract
B. B may insist on its being carried out, and the mortgage- debt redeemed
C. Either (A) or (B)
D. None of these
Ans: C
50. A gives a recognizance binding him in a penalty of Rs. 500 to appear in
Court on a certain day. He forfeits his recognizance.
A. He is not liable to pay the penalty
B. He is liable to partially pay the penalty
C. He is liable to pay the whole penalty
D. None of these
Ans: C
51. A gives B a bond for the repayment of Rs. 1,000 with interest at 12
percent at the end of six months, with a stipulation that, in case of default,
interest shall be payable at the rate of 75 percent from the date of default.
This is a stipulation by way of penalty.
A. B is only entitled to recover from A such compensation as the Court considers
reasonable
B. B is only entitled to recover from A such compensation he considers reasonable
C. B is not entitled to recover from A such compensation
D. None of these
Ans: A
52. A gives to C a continuing guarantee to the extent of 3,000 rupees for any
oil supplied by C to B on credit. Afterwards B becomes embarrassed, and,
without the knowledge of A, B and C contract that C shall continue to supply
B with oil for ready money, and that the payments shall be applied to the
then, existing debts between B and C.
A. A is liable on his guarantee for any goods supplied after this new arrangement
B. A is not liable on his guarantee for any goods supplied after this new arrangement
C. A is partly liable on his guarantee for any goods supplied after this new arrangement
D. None of these
Ans: B
53. A guarantees C against the misconduct of B in an office to which B is
appointed by C, and of which the duties are defined by an Act of the
Legislature. By a subsequent Act the nature of the office is materially
altered. Afterwards, B misconduct’s himself.
A. A is not discharged by the change from future liability under the guarantee, though
the misconduct of B is in respect of a duty not affected by the later Act
B. A is discharged by the change from future liability under the guarantee, though the
misconduct of B is in respect of a duty affected by the later Act
C. A is discharged by the change from future liability under the guarantee, though the
misconduct of B is in respect of a duty not affected by the later Act
D. None of these
Ans: C
54. A guarantees payment to B, a tea-dealer, to the amount of Rs. 100, for
any tea he may from time to time supply to C. B supplies C with tea to above
the value of Rs. 100, and C pays B for it. Afterward B supplies C with tea to
the value of Rs. 200. C fails to pay.
A. The guarantee given by A was not a continuing guarantee, and he is not accordingly
liable to b to the extent of Rs. 100
B. The guarantee given by A was a continuing guarantee, and he is also liable to B to the
extent of Rs. 200
C. The guarantee given by A was a continuing guarantee, and he is accordingly liable to
B to the extent of Rs. 100
D. None of these
Ans: C
55. A guarantees to B, the extent of 10,000 rupees, that C shall pay all the
bills that B shall draw upon him. B draws upon C, C accepts the bill. A gives
notice of revocation. C dishonors the bill at maturity.
A. A is liable upon his guarantee
B. A is not liable upon his guarantee
C. A is partly liable upon his guarantee
D. None of these
Ans: A
56. A guarantees to C, to the extent of 2,000 rupees, payment for rice to be
supplied by C to B. C supplies to B rice to a less amount than 2,000 rupees
but obtains from A payments of the sum of 2,000 rupees in respect of the
rice supplied.
A. A can recover from B more than the price of the rice actually supplied
B. A can recover from B only the price of the rice actually supplied
C. A cannot recover from B more than the price of the rice actually supplied
D. None of these
Ans: C
57. A having advanced money to his son, B, during his minority, upon B’s
coming of age obtains, by misue of parental influence, a bond from B for a
greater amount than the sum due in respect of the advance.
A. A did not employ undue influence
B. A employs undue influence
C. Either (A) or (B)
D. None of these
Ans: B
58. A hires a horse in Calcutta from B expressly to march to Benaras. A
rides with due care, but marches to Cuttack instead. The horse accidentally
falls and is injured.
A. A is not liable to make compensation to B for the injury to the horse
B. A is partially liable to make compensation to B for the injury to the horse
C. A is liable to make compensation to B for the injury to the horse
D. None of these
Ans: C
59. A hires B’s ship to take in and convey, from Calcutta to the Mauritius, a
cargo to be provided by A, B receiving a certain freight for its conveyance. A
does not provide any cargo for the ship.
A. A cannot claim the performance of B’s promise
B. A must make compensation to B for the loss which B sustains by the non-
performance of the contract
C. Either (A) or (B)
D. Both (A) and (B)
Ans: D
60. A is employed by B by buy from C certain goods, of which C is the
apparent owner, and buys them accordingly. In the course of the treaty for
the sale. A learns that the goods really belonged to D, but B is ignorant of
that fact.
A. B is entitled to set-off a debt owning to him from C against the price of the goods
B. B is partially entitled to set-off a debt owning to him from C against the price of the
goods
C. B is not entitled to set-off a debt owning to him from C against the price of the goods
D. None of these
Ans: C
61. A is employed by B, residing in London, to recover at Bombay a debt due
to B.
A. A may adopt any illegal process necessary for the purpose of recovering the debt, and
may give a valid discharge for the same
B. A may not adopt any legal process necessary for the purpose of recovering the debt,
and may give a valid discharge for the same
C. A may adopt any legal process necessary for the purpose of recovering the debt, and
may give a valid discharge for the same
D. None of these
Ans: C
62. A leaves a cow in the custody of B to be taken care of. The cow has a calf.
A. B is not bound to deliver the calf but the cow to A
B. B is bound to deliver the calf but not the cow to A
C. B is bound to deliver the calf as well as the cow to A
D. None of these
Ans: C
63. A lends a horse, which he knows to be vicious, to B. He does not disclose
the fact that the horse is vicious. The horse runs away. B is thrown and
injured.
A. A is not responsible to B for damage sustained
B. A is partly responsible to B for damage sustained
C. A is responsible to B for damage sustained
D. None of these
Ans: C
64. A makes a contract with B to buy B’s horse if A survives C.
A. This contract cannot be enforced by law unless and until A dies in C’s lifetime
B. This contract cannot be enforced by law unless and until C dies in A’s lifetime
C. This contract can be enforced by law during C and A’s lifetime
D. None of these
Ans: B
65. A owes B 1,000 rupees under a contract. B owes B 1,000 rupees. B order
A to credit C with 1,000 rupees in his books, but C does not assent to the
arrangement.
A. B does not owes C 1,000 rupees, as new contract has been entered into
B. B still owes C 1,000 rupees, even though a new contract has been entered into
C. B still owes C 1,000 rupees, and no new contract has been entered into
D. None of these
Ans: C
66. A owes B 2,000 rupees, B accepts some of A’s goods in reduction of the
debt.
A. The delivery of the goods operates as a part payment
B. The delivery of the goods does not amount to part payment
C. Either (A) or (B)
D. None of these
Ans: A
67. A owes B 5,000 rupees. C pays to B 1,000 rupees and B accepts them, in
satisfaction of his claim on A.
A. This payment is a partial discharge of the whole claim
B. This payment is not a discharge of the whole claim
C. This payment is a discharge of the whole claim
D. None of these
Ans: C
68. A owes B, among other debts, 1,000 rupees upon a promissory note,
which falls due on the first June. He owes B no other debt of that amount.
On the first June A pays to B 1,000 rupees.
A. The payment is to be applied equally to all the debts owed by A
B. The payment is to be applied to the discharge of the promissory note
C. Either (A) or (B)
D. Both (A) and (B)
Ans: B
69. A owes money to B under a contract. The old debt of A to B is at an end.
It is agreed between A, B and C, that B shall thenceforth accept C as his
debtor instead of A.
A. New debt from C to B has been contracted
B. New debt from A to C has been contracted
C. Either (A) or (B)
D. None of these
Ans: A
70. Section 75 of the Indian Contract Act, 1872 must be read as
supplementary to _____________
I. Section 39 of the Indian Contract Act, 1872
II. Section 53 of the Indian Contract Act, 1872
III. Section 55 of the Indian Contract Act, 1872
IV. Section 64 of the Indian Contract Act, 1872
V. Section 65 of the Indian Contract Act, 1872
A. II, III, IV
B. IV, V
C. I, V
D. All of them
Ans. (D)
71. Severance can be effected when the part severed can be removed by
running a through it.
A. blue pencil
B. white pencil
C. black pencil
D. None of these
Ans. (A)
72. Since a contract is concluded by the mere acceptance of an offer, the
terms of the intended or proposed agreement must be indicated with
sufficient definiteness in the offer itself. The terms of the offer must
therefore be definite and certain. Which of the following cases held that the
proposal must be sufficiently definite to permit the conclusion of the
contract by mere acceptance?
A. Coffee Board Bangalore v. Janab Dada Haji Ibrahim Halari
B. Gorakh Nand Yadav v. District Magistrate, Gorakhpur
C. Sanwarmal Goenka v. Soumyendra Chandra Gooptu
D. Nandganj Sihori Sugar Co. Ltd., v. Badri Nath Dixit
Ans. (A)
73. Subject to a contract between the partners, the firm shall indemnify a
partner in respect to payments made and liabilities incurred by him:
A. in the ordinary and proper conduct of the business
B. in doing such act, in an emergency, for the purpose of protecting the firm from loss,
as would be done by a person of ordinary prudence, in his own case, under similar
circumstances
C. both (A) and (B)
D. None of these
Ans. (C)
74. Sub-section 1 of Section 16 of Indian Contract Act, 1872 requires the
Court trying a case to consider which of the following?
A. Are the relations between the donor and the done such that the done is in a position
to dominate the will of the donor?
B. Has the done use that position to obtain an unfair advantage over the donor?
C. either (A) or (B)
D. both (A) and (B)
Ans. (D)
75. Sub-section of which of the following Section of the Indian Contract Act,
1872 shall not affect the provisions of section 111 of the Indian Evidence Act,
1872 (1 of 1872)?
A. Section 7
B. Section 16
C. Section 20
D. None of these
Ans. (B)
76. Suit by bailor or bailee against wrong-doer is dealt under which of the
following in the Indian Contract Act, 1872?
A. Section 176
B. Section 179
C. Section 180
D. Section 178
Ans. (C)
77. Termination of an agency with public authority or a public body may
attract judicial intervention in writ petition:
A. If the termination be unreasonable
B. If the termination be arbitrary
C. If the termination be unconscionable
D. All of them
Ans. (D)
78. Terms of contract relate to statements, assertions, or representations
contained in a written contract which relate to the subject matter of the
contract and:
A. to something to be done
B. to something not be done under the contract
C. has no application to a provision in the nature of a condition precedent to the very
existence or formation of a contract
D. All of them
Ans. (D)
79. The acts or omission contemplated by S. 134 of the Indian Contract Act,
1872, may be those referred to in of the Indian Contract Act:
I. Section 39
II. Section 53
III. Section 54
IV. Section 55
V. Section 63
VI. Section 67
A. II, III, IV
B. IV, V
C. I, VI
D. All of them
Ans. (D)
80. The agency extends to receiving notice on behalf of his principal of
whatever is material to be stated in the course of the proceedings. For this
rule to operate:
I. the agent must be under a duty to communicate
II. the information must be material
III. it must have been obtained in the course of business for which the agent has been
engaged
IV. the agent is not privy to a fraud on the principal
A. I, II
B. II, IV
C. Ill, IV
D. All of them
Ans. (D)
81. The agency type described in S. 202 of the Indian Contract Act, 1872:
A. cannot be revoked by the principal
B. it cannot be terminated by the death, unsoundness of mind or insolvency of the
principal
C. either (A) or (B)
D. None of these
Ans. (C)
82. The agent may be disentitled to relief under S. 226 of the Indian
Contract Act, 1872:
A. If the injury was due to his own contributory negligence
B. If the injury is on the ground of common employment
C. either (A) or (B)
D. None of these
Ans. (C)
83. The application of the principles in Section 45 of the Indian Contract
Act, 1872 may be excluded by statutes, especially those relating to
securities, which provides that:
A. securities payable to one or more persons jointly shall, on death of any of them, be
payable to the survivor or survivors
B. securities payable to one or more persons severally, shall be payable on death of any
of them to any of the survivors or the legal representative(s) of the deceased holder
C. any one or more joint holder can give effectual receipt for interest, unless notice is
given by the other holders to the promisor
D. all of them
Ans. (D)
84. The article of Fuller and Perdue on “The Reliance Interest in Contract
Damages” adopted the method of viewing the remedies for breach of
contract in terms of the interests which the remedies served to protect.
Which of the following interests were identified by them?
A. The expectation interest
B. The reliance interest
C. The restitution interest
D. All of them
Ans. (D)
85. The award of damage involves a detailed investigation of facts:
A. is not normally an appropriate matter for a writ petition under Article 30 or Article
225 of the Constitution, but it might be exercised in extraordinary circumstances, rarely
and sparingly, when no disputed questions of facts arose
B. is not normally an appropriate matter for a writ petition under Article 32 or Article
226 of the Constitution, but it might be exercised in extraordinary circumstances, rarely
and sparingly, when no disputed questions of facts arose
C. is not normally an appropriate matter for a writ petition under Article 33 or Article
227 of the Constitution, but it might be exercised in extraordinary circumstances, rarely
and sparingly, when no disputed questions of facts arose
D. None of these
Ans. (B)
86. The balance to the provisions of Section 11 of the Indian Contract Act,
1872 is found in:
A. Section 66 of the Indian Contract Act, 1872
B. Section 67 of the Indian Contract Act, 1872
C. Section 68 of the Indian Contract Act, 1872
D. None of these
Ans. (C)
87. The branches Section 30 of the Indian Contract Act, 1872 declares:
A. Agreement of wager void
B. Prevents the winner from bringing an action to recover amount won (even under a
substituted contract)
C. Prevents the winner from suing the stakeholder
D. All of them
Ans. (D)
88. The basis of relief on the ground of economic duress is not clear from
the judgment in case of Dai-ichi Karkaria Pvt. Ltd. v. Oil Natural Gas
Commission because:
A. the decision has been given in proceedings seeking interim injunction, where the
Court has to decide whether interim injunction ought to be issued. The decision can be
sustained solely on the equitable principles on which the Court may refuse to grant
injunction
B. the Court has discussed the effect of economic duress as a ground of invalidating a
contract on the basis of a prima facie case in interlocutory proceedings
C. the effect of such duress on the contract, i.e. whether it is voidable for lack of free
consent, or is void being against public policy is not clear from the judgment
D. All of them
Ans. (D)
89. The capacity of a woman to contract is not affected by her marriage
under which of the following?
A. The Hindu Law
B. The Mohammedan Law
C. both (A) and (B)
D. None of these
Ans. (C)
90. The cases in which power under Article 226 or 14 of the Constitution
can be exercised for breaches of alleged obligations of the state, or its
agents, can be divided which of the following types?
I. Where a petitioner makes a grievance of breach of promise on the part of the state in
cases where on assurance or promises made by the state, he has acted to his prejudice
and predicament, but the agreement is short of a contract within the meaning of Article
299 of the Constitution.
II. Where the contract entered into between the person aggrieved and the state is in
exercise of a statutory power under certain Acts or rules framed there under and the
petitioner alleges a breach on the part of the state.
III. Where the contract entered into heaven between the state and the person aggrieved
is non-statutory and purely contractual and the rights and liabilities of the parties are
governed by the terms of the contract and the petitioner complains about breach of such
contract by the State.
IV. Where the contract entered into between the State and the person aggrieved is non
statutory and purely contractual, but such a contract has been cancelled on a ground de
hors any of the terms of the contract, and which is per se violative of Article 14 of the
Constitution.
A. I, III
B. II, IV
C. II, III, IV
D. All of them
Ans. (D)
91. The circumstances in which the creditor must make disclosure to the
proposed surety are:
I. Where the surety has asked specific questions to the creditor
II. Where the bank misleads the surety by volunteering only part of the truth
III. Where the surety makes a statement in the creditor’s presence that demonstrates
that he entirely misunderstands the principal-debtor’s position
IV. Where there is anything that might not naturally be expected to take place between
the principal-debtor and the creditor
A. II, III
B. I, IV
C. I, II
D. All of them
Ans. (D)
92. The conditions which entitle an agent to exceed his authority under the
doctrine of necessity are:
A. That he could not communicate with his principal
B. That the course he took was necessary in the sense that it was in the circumstances
the only reasonable and prudent course to take
C. That he acted bona fide in the interest of the parties concerned
D. All of them
Ans. (D)
93. The consideration for a family arrangement may be preservation of
family property, preservation of peace and honour of the family or the
avoidance of litigation; or avoiding the possibility of a future dispute. In
which of the following cases it was held?
A. Sundar Sahu Gountia v. Chamra Sahu Gauntia
B. Dwarampudi Nagaratnamba v. Kunuku Ramayya
C. Balbhaddar Prasad v. Dhanpat DayaI
D. None of these
Ans. (A)
94. The creditor may file a suit at his option only against the surety. In
which of the following cases it was upheld?
A. K. C. Skaria v. The Government of State of Kerala
B. Purabi Dasgupta v. A run Kumar
C. Infrastructure Leasing and Financial Services Ltd. v. Vijay V. Prabhu
D. None of these
Ans. (C)
95. The decisions of the expert or technical or commercial committees in
scrutinizing the tenders under Section 10 of the Indian Contract Act, 1872
will not be interfered unless:
A. the decision is taken with a mala fide intention
B. the decision is arbitrary
C. either (A) or (B)
D. None of these
Ans. (C)
96. The defence of invalidity of contract for non-compliance of Article 299
must be specifically pleaded, unless it is patent from allegations in the
plaint or evidence adduced by the plaintiff. This question has arisen in
which of the following types of cases:
A. cases under ss. 7 (d) and 9A of the Representation of People’s Act, 1951 in connection
with disqualification from being elected to the Parliament of state legislature
B. where the contracts did not comply with the exact requirements of Article 299 (1)
C. contracts entered in the exercise of statutory powers
D. All of them
Ans. (D)
97. The doctrine of apparent authority applies:
I. where a person allows another who is not his agent to appear as his agent
II. where a principal allows his agent to appear to possess more authority than he
actually has
III. where the principal reserves or limits the authority of an agent which the agent
would have in ordinary course of business, but does make this known to third parties
IV. where the principal allows it to appear that the agent has authority although his
authority has been terminated
A. I, II
B. II, IV
C. Ill, IV
D. All of them
Ans. (D)
98. The doctrine of privity means:
A. That a person cannot acquire rights to liabilities arising under a contract to which he
is not a party
B. That a person cannot be subject to liabilities arising under a contract to which he is
not a party
C. That a contract between A and B can affect the legal rights of C indirectly
D. All of them
Ans. (D)
99. The duty of the disclosure is limited to cases of:
A. unusual features of the transaction
B. unusual features of the risk
C. both (A) and (B)
D. None of these
Ans. (A)
100. The duty of utmost good faith is of universal application to all policies
of insurance although there are differences in the detail affecting the way in
which the duty is applied. In practical application it means that either party
has the right to avoid the contract if:
A. there has been a failure by the other party to disclose a material fact
B. that there has been on the part of the other party a misrepresentation of a material
fact
C. either (A) or (B)
D. None of these
Ans. (C)
101. The English Unfair Contract Act, 1977 covers terms:
A. marking the liability or its enforcement subject to restrictive or onerous conditions
B. excluding or restricting any right or remedy in respect of liability, or subjecting a
person to any prejudice in consequence of his pursuing any right or remedy
C. excluding or restricting rules of evidence or procedure
D. All of them
Ans. (D)
102. The extent of an agent’s authority, whether express or implied,
depends upon:
A. The nature of act or business for which he has been appointed
B. Things which are incidental to the business or are usually done in carrying it out
C. The usual customs and usages of the trade
D. All of them
Ans. (D)
103. The extent of the liability under an indemnity depends on:
A. the nature and terms of the contract
B. the case which must be governed by his own facts and circumstances
C. both (A) and (B)
D. None of these
Ans. (C)
104. The final draft of the Indian Contract Act, 1872 was the work of:
A. Sir James Fitzjames Stephen
B. Sir Frederick Pollock
C. either (A) or (B)
D. both (A) and (B)
Ans. (D)
105. The functions of the provisions of Section 11 of the Indian Contract Act,
1872 relating to personal competency is ___________.
A. to protect those whose mental powers are undeveloped or underdeveloped
B. preventing them from doing themselves an injury by their legal declarations
C. both (A) and (B)
D. None of these
Ans. (C)
106. The general principle of the common law is that in the formation of a
contract:
A. the consideration is given
B. the consideration is to accepted in exchange of a promise
C. both (A) and (B)
D. None of these
Ans. (C)
107. The grounds on which administrative action would be subject to
control by judicial review could be classified as:
A. illegality (namely, failure to give effect to the law that regulates the decision making
power)
B. irrationality, namely Wednesbury unreasonableness, the question ‘whether or not
they [the local authority] have taken into account matters which they ought not have
taken into account, or … have refused to take into account or neglected to take into
account matters which they ought to take into account’
C. procedural impropriety
D. All of them
Ans. (D)
108. The guarantor’s right to indemnification is a right to be reimbursed:
I. the amount which he actually paid for the principal- debtor – with interest
II. because, he is entitled to full indemnification from the principal-debtor
A. I is true but II is false
B. I is false but II is true
C. both (I) and (II) are true
D. None of these
Ans. (C)