Chapter: Business Laws and Special Contracts
1.

The Indian contract act come into force

A. from 1 september 1972
B. before 1 september 1882
C. from 1 september 1872
D. after 1 september 1872
Answer» C. from 1 september 1872
2.

Contract with minor is

A. illegal
B. valid
C. void
D. voidable
Answer» C. void
3.

Agreement caused by a bilateral mistake of fact is-

A. void
B. voidable
C. illegal
D. valid
Answer» A. void
4.

Which of these is a wagering contract?

A. insurance contract
B. teji mandi contract
C. lottery
D. all of these
Answer» C. lottery
5.

Consideration must move at the desire of-

A. third party
B. the promisee
C. the promisor
D. none of these
Answer» C. the promisor
6.

A contract entered into between the parties by words is called-

A. express contract
B. implied contract
C. quasi contract
D. specific contract
Answer» A. express contract
7.

When an offer can be accepted only by the person to whom it is made, it is called-

A. express offer
B. general offer
C. specific offer
D. implied offer
Answer» C. specific offer
8.

A promise to subscribe to a charity is a

A. void agreement
B. void contract
C. voidable contract
D. valid contract
Answer» A. void agreement
9.

A contract for the benefit of a minor entered into by his manager is

A. illegal
B. voidable
C. void
D. valid
Answer» D. valid
10.

Two or more persons are said to consent when they agree upon

A. the same thing in the same sense
B. the same thing in any sense
C. the same thing in a specific sense
D. none of these
Answer» C. the same thing in a specific sense
11.

The term “Quid pro quo” means:

A. something in return
B. something important
C. something of value
D. something relevant
Answer» A. something in return
12.

Which of the following is not an essential element of a valid contract:

A. adequacy of consideration
B. capacity to contract
C. free consent
D. none of the above
Answer» A. adequacy of consideration
13.

If a contract provides for the payment of a certain amount on breach of a contract, such payment is termed as:

A. special damages
B. nominal damages
C. liquidated damages
D. compensatory damages
Answer» C. liquidated damages
14.

Which of the following case is not covered by the concept of supervening impossibility?

A. destruction of subject matter
B. death or incapacity of the promisor
C. outbreak of war
D. difficulty of performance
Answer» D. difficulty of performance
15.

Under the Contract Act, 1872 a person is said to be of sound mind for the purpose of making a contract if:

A. he is not illiterate and can read and understand the terms of the contract.
B. he is capable of understanding the contract and forming a rational judgement as to its effect upon his interests.
C. he is of the age of majority and is not disqualified from contracting by any law to which he is subject.
D. he is not suffering from any mental disease or distress.
Answer» B. he is capable of understanding the contract and forming a rational judgement as to its effect upon his interests.
16.

A positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true is said to be a:

A. fraud
B. misrepresentation
C. mistake
D. misinterpretation
Answer» B. misrepresentation
17.

A minor can:

A. be an agent
B. be a principal
C. both
D. none of these
Answer» A. be an agent
18.

Choose the incorrect statement: To constitute a wager, following elements should be present in the agreement:

A. uncertain event
B. each party must pay in a win or lose situation
C. neither party should have any contract over the event
D. there should be a promise to pay money only
Answer» D. there should be a promise to pay money only
19.

The Indian Contract Act, 1872 applies to the

A. whole of india including jammu & kashmir
B. whole of india excluding jammu & kashmir
C. states notified by the government every year
D. northern and eastern indian states
Answer» B. whole of india excluding jammu & kashmir
20.

A jus in personam means a right against

A. a specific person
B. the public at large
C. a specific thing
D. none of these
Answer» A. a specific person
21.

Which of the following statement is true

A. an agreement enforceable by law is a contract
B. an agreement is an accepted proposal
C. both (a) and (b)
D. none of these
Answer» C. both (a) and (b)
22.

A contract is made where

A. x agrees with y to discover a treasure by magic
B. x bids at a public auction
C. x takes a sit in a public omni bus
D. x promises in writing to give rs. 500 to y
Answer» C. x takes a sit in a public omni bus
23.

A void agreement is one which is

A. valid but not enforceable
B. enforceable at the option of both the parties
C. enforceable at the option of one party
D. not enforceable in a court of law
Answer» D. not enforceable in a court of law
24.

In case of void agreements, collateral transactions are

A. also void
B. unenforceable
C. not affected
D. illegal
Answer» C. not affected
25.

General offer can be accepted by

A. any person
B. specific person
C. any person having notice of it
D. none of these
Answer» A. any person
26.

Which of the following does not constitute valid acceptance

A. it has been communicated
B. it is absolute and unqualified
C. it has been presumed from silence of offeree
D. the offer has been accepted by the proper person
Answer» C. it has been presumed from silence of offeree
27.

Which of the following is not the legal requirements of a valid offer

A. it must be communicated to the offeree
B. it must be made with a view to obtain offeree's assent
C. it must express offeree's final willingness
D. it must be made to a specific person and not to public at large
Answer» D. it must be made to a specific person and not to public at large
28.

As a general rule, an agreement made without consideration is

A. void
B. valid
C. voidable
D. unlawful
Answer» A. void
29.

An agreement made with free consent to which the consideration is lawful but inadequate, is

A. void
B. valid
C. voidable
D. unlawful
Answer» B. valid
30.

For the enforcement of a promise to pay a time-barred debt without consideration, which of the following condition is not required?

A. it must be in writing
B. it must be definite and express
C. it must be signed by the promisor
D. it must be registered in court of law
Answer» D. it must be registered in court of law
31.

A contract is discharged by the breach when a party to a contract

A. refuses to perform his promise
B. fails to perform his promise
C. disables himself from performing his part of the promise
D. all of the above
Answer» D. all of the above
32.

Which of the following is incorrect?

A. the impossibility to perform a promise discharges the contract
B. a merger discharges the contract
C. an initial impossibility discharges the contract
D. all of the above
Answer» C. an initial impossibility discharges the contract
33.

The doctrine of impossibility of performance, rendering a contract void, is based on

A. a commercial impossibility
B. a supervening impossibility
C. just and reasonable ground
D. an unjust enrichment
Answer» B. a supervening impossibility
34.

Because of supervening event, the promisor is excused from the performance of the contract. This is known as

A. a doctrine of frustration
B. an initial impossibility
C. a doctrine of ultra-vires
D. an operation of law
Answer» A. a doctrine of frustration
35.

Which of the following is correct?

A. a novation means making a new contract in the place of an old contract
B. an alteration means making a new contract in the place of an existing one
C. the performance of a contract is not a method of discharge of contract
D. all of the above
Answer» A. a novation means making a new contract in the place of an old contract
36.

_________ indicates that the parties are not further bound under the contract

A. waiver of a contract
B. breach of a contract
C. rescission of a contract
D. discharge of a contract
Answer» D. discharge of a contract
37.

X contracts to sell his scooter to Y for Rs. 50,000 and Y agrees to pay on delivery. Both the parties perform their promises. This is called

A. a waiver
B. breach of a contract
C. an attempted performance of contract
D. an actual performance of a contract
Answer» D. an actual performance of a contract
38.

Assignment by the operation of law takes place

A. by the mutual consent of the parties
B. by the will of either party
C. when the subject matter of a contract ceases to exist
D. by the death of a party to a contract
Answer» D. by the death of a party to a contract
39.

The original contract needs not to be performed, if there is

A. rescission of contract
B. novation of contract
C. alteration of contract
D. all of the above
Answer» D. all of the above
40.

Rescission of a contract means

A. the termination of the contract
B. the renewal of the contract
C. the alteration of the contract
D. the substitution of the new contract in the place of the earlier one
Answer» A. the termination of the contract
41.

When the parties mutually agree to change certain terms of the contract. This is called

A. a rescission of the contract
B. the novation of a contract
C. an alteration of a contract
D. a remission of a contract
Answer» C. an alteration of a contract
42.

If a person accepts a lesser sum of money than what was contracted for, in the discharge of the whole debt, it is known as

A. a waiver
B. a remission
C. an alteration
D. a rescission
Answer» B. a remission
43.

Intentional relinquishment of a right under the contract is called

A. a waiver
B. a breach
C. a rescission
D. an alteration
Answer» A. a waiver
44.

Where a party to contract transfers his rights under the contract to another person, it is legally known as

A. novation of a contract
B. rescission of a contract
C. waiver of a contract
D. assignment of a contract
Answer» D. assignment of a contract
45.

Performance of a contract means

A. fulfilling all the obligations by the promisee
B. fulfilling all the obligations by the promisor
C. performing all the promises, and fulfilling all the obligations by all the parties
D. both (a) & (b)
Answer» C. performing all the promises, and fulfilling all the obligations by all the parties
46.

Offer to perform is called

A. attempted performance
B. caveat emptor jus in rem
C. jus in personam
D. jus in rem caveat emptor
Answer» A. attempted performance
47.

Which is not the essential of a valid tender?

A. tender must be conditional
B. tender must be made at a proper place
C. tender must be for obligation
D. tender must be made at proper time
Answer» A. tender must be conditional
48.

An offer of performance is known as a/an

A. offer
B. proposal
C. tender
D. acceptance
Answer» C. tender
49.

The offer to perform the contract must be

A. unconditional
B. conditional
C. rational
D. provisional
Answer» A. unconditional
50.

The promises forming consideration for each other are called

A. reciprocal promises
B. mutual promises
C. independent promises
D. none of the above
Answer» A. reciprocal promises
51.

Ex turpi causa non oritur action means?

A. from an illegal cause, no action arises
B. from an illegal cause action may arises
C. from an legal cause action may arises
D. from an legal cause action may not arises
Answer» A. from an illegal cause, no action arises
52.

Consideration and object of an agreement is unlawful if it

A. is fraudulent
B. is possible
C. is impossible
D. all of the above
Answer» A. is fraudulent
53.

The stifling agreement is

A. wagering
B. contingent
C. voidable
D. void
Answer» D. void
54.

Which of the following agreements are valid?

A. uncertain agreements
B. wagering agreements
C. agreements to do impossible events
D. none of the above
Answer» D. none of the above
55.

In which of the following agreements, restraint of trade is valid?

A. agreement with buyer of goodwill
B. trade combinations not opposed to public policy
C. partnership agreements
D. all of the above
Answer» D. all of the above
56.

An uncertain agreement is

A. voidable
B. void
C. valid
D. illegal
Answer» B. void
57.

An illegal agreement is

A. not enforceable by law
B. prohibited under law
C. either (a) & (b)
D. both (a) & (b)
Answer» D. both (a) & (b)
58.

Which of the following is not a feature of a wagering agreement?

A. chances of gain or loss
B. uncertainty of future event
C. neither party have control over future event
D. neither parties should have an interest in the event
Answer» D. neither parties should have an interest in the event
59.

An athletic competitions are valid because they are

A. games of skill
B. just games
C. game of luck
D. all of the above
Answer» A. games of skill
60.

Share market transactions with a clear intention only to settle the price difference are

A. wagering agreements
B. not wagering agreements
C. contingent contracts
D. voidable agreements
Answer» A. wagering agreements
61.

Which of these are not opposed to public policy?

A. trading with enemy
B. stifling prosecution
C. compromise of compoundable offences
D. agreement to commit a crime
Answer» C. compromise of compoundable offences
62.

Where a person agrees to maintain a suit, in which he has no interest, the proceeding is known as

A. champerty
B. maintenance
C. stifling with prosecution
D. interference with course of justice
Answer» B. maintenance
63.

An agreement whereby one party assists another in recovering money or property and in turn share in the proceeds of the action is called

A. champerty
B. maintenance
C. stifling with prosecution
D. trafficking the public office
Answer» A. champerty
64.

Which of the following is a contingent contract?

A. contract of insurance
B. contract for doing impossible acts
C. marriage contract
D. wagering agreements
Answer» A. contract of insurance
65.

Consent means parties agreeing on

A. the terms of contract
B. some terms of contract
C. the same thing in the same sense
D. any matter of contract
Answer» C. the same thing in the same sense
66.

_________ means forcibly compelling a person to enter into a contract

A. intimidation
B. fraud
C. mistake
D. coercion
Answer» D. coercion
67.

Duress under English contract law is similar to

A. undue influence
B. coercion
C. fraud
D. misrepresentation
Answer» B. coercion
68.

Ubberima fidei means

A. bad faith
B. utmost good faith
C. good faith
D. no faith at all
Answer» B. utmost good faith
69.

When one of the parties is under a mistake as to a matter of fact essential to the agreement, it is called

A. unilateral mistake
B. bilateral mistake
C. partial mistake
D. incomplete mistake
Answer» A. unilateral mistake
70.

The maxim ‘Ignoranlia juris non excusa’ stands for

A. law will not punish ignorant people
B. law will punish illiterate people
C. ignorant people can excuse law
D. ignorance of law of land is no excuse
Answer» D. ignorance of law of land is no excuse
71.

The case of ‘no consent’, i.e., when there is no consent at all, is described by Salmond as

A. error in causa
B. error in consensus
C. consensus ad idem
D. offer and acceptance
Answer» B. error in consensus
72.

Capacity to contract means

A. the parties are financially sound to make contracts
B. the parties are physically able to enter into contracts
C. the parties are legally competent to enter into contracts
D. all of the above
Answer» C. the parties are legally competent to enter into contracts
73.

Competence to contract means

A. age of the parties
B. soundness of the mind of the parties
C. both (a) & (b)
D. intelligence of the parties
Answer» C. both (a) & (b)
74.

A minor’s agreement is void. This was held in the case of

A. mohiri bibee vs. dharmadas ghosh
B. salma begam vs. jan mohamed khan
C. balfour vs. balfour
D. chinnaiya vs. ramaiya
Answer» A. mohiri bibee vs. dharmadas ghosh
75.

A minor can be

A. ratify his agreement after attaining majority
B. be directed by the court for specific performance of the contract
C. always plead his minority
D. be held liable for cheques issued by him
Answer» C. always plead his minority
76.

A minor’s guardian is not liable to the creditor for breach of contract by the minor, if the contract is for __________

A. supply of necessaries
B. supply of non-necessaries
C. supply of services
D. all of the above
Answer» D. all of the above
77.

The doctrine of restitution refers to the restoration of property or goods, obtained by false representation. This doctrine is

A. beneficial to minors
B. not applicable to minors
C. applicable to minors
D. none of the above
Answer» C. applicable to minors
78.

A consideration in a contract

A. may be any thing
B. nothing in return
C. something in return
D. may be illusory
Answer» C. something in return
79.

A consideration may be

A. past
B. present
C. future
D. either (a) or (b) or (c)
Answer» D. either (a) or (b) or (c)
80.

An agreement not supported by the consideration is called

A. nudum pactum
B. an invalid consideration
C. ab initio
D. namo dat quod non habet
Answer» A. nudum pactum
81.

The consideration is to be moved sometime after the formation of a contract, it is known as

A. present consideration
B. executory consideration
C. past consideration
D. executed consideration
Answer» B. executory consideration
82.

The term privity of contract means

A. stranger to contract
B. contract is private
C. first party to contract
D. second party to contract
Answer» A. stranger to contract
83.

A proposal may consist of a promise for

A. doing an act
B. abstaining from doing an act
C. either (a) or (b)
D. returning the consideration
Answer» C. either (a) or (b)
84.

A offers to sell his car on internet, it is

A. an express offer
B. an implied offer
C. a particular offer
D. no offer
Answer» A. an express offer
85.

The offer which is allowed to remain open for the acceptance over a period of time is known as a/an

A. standing offer
B. specific offer
C. special offer
D. implied offer
Answer» A. standing offer
86.

The offer made to a specific person or group of persons is known as a

A. standing offer
B. specific offer
C. special offer
D. separate offer
Answer» B. specific offer
87.

Terms of the offer must be

A. ambiguous
B. uncertain
C. definite
D. vague
Answer» C. definite
88.

When a person invites the other party to make an offer, he is said to make a/an

A. proposal
B. offer
C. invitation to offer
D. acceptance
Answer» C. invitation to offer
89.

Price lists, catalogues, advertisements in newspapers and enquiries from customers are

A. offers
B. invitations to offer
C. acceptances
D. cross offers
Answer» B. invitations to offer
90.

Goods displayed in a shop with a price label is

A. an offer
B. an invitation to offer
C. a counter-offer
D. a contra-offer
Answer» B. an invitation to offer
91.

When the offers made by two persons to each other containing similar terms of bargain cross each other in post, they are known as

A. cross offers
B. implied offers
C. direct offers
D. express offers
Answer» A. cross offers
92.

Which of the following is not the mode of the lapse of an offer?

A. lapse of time
B. case against the offeror
C. insanity of the offeror
D. failure to accept condition precedent
Answer» B. case against the offeror
93.

Contract is defined as an agreement enforceable by law, vide section . . . . . of the Indian Contract Act

A. 2 (e)
B. 2 (f)
C. 2 (h)
D. 2 (i)
Answer» C. 2 (h)
94.

When the contract is perfectly valid but cannot be enforced because of certain technical defects. This is called

A. unilateral contract
B. bilateral contract
C. unenforceable contract
D. void contract
Answer» C. unenforceable contract
95.

Where a contract has to be inferred from the conduct of parties, it is called

A. express contract
B. implied contract
C. tacit contract
D. unlawful contract
Answer» B. implied contract
96.

Where the obligation in a contract is outstanding on the part of both parties, it is called

A. void contract
B. illegal agreement
C. valid contract
D. bilateral contract
Answer» D. bilateral contract
97.

A contract in which, under the terms of a contract, nothing remains to be done by either party is known as

A. executed contract
B. executory contract
C. unilateral contract
D. none of the above
Answer» A. executed contract
98.

A contract in which, under the terms of a contract, one or both the parties have still to perform their obligations in future is known as

A. executed contract
B. executory contract
C. unilateral contract
D. none of the above
Answer» B. executory contract
99.

The unpaid seller can exercise his right of lien over the goods for

A. price of goods
B. storage charges
C. any lawful charges
D. all of these
Answer» A. price of goods
100.

An auction sale is complete on the

A. fall of hammer
B. delivery of goods
C. payment of price
D. both (b) and (c)
Answer» A. fall of hammer
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