MCQ’s on Indian Contract Act

MCQ’s on Indian Contract Act, 1872 are classified under following chapters. Please click links to directly jump to such chapters. 

1.  Nature of Contracts (100 MCQ’s)
2.  Consideration (100 MCQ’s)
3. Essential Elements of a Contract (100 MCQ’s)
4. Performance of Contract (100 MCQ’s)

Nature of Contracts 

1. Which of the following is an essential element of a valid contract according to the Indian Contract Act, 1872?
A) Agreement by social customs
B) Free consent of the parties
C) Unilateral promises
D) Undefined terms
E) Personal relationships
Answer: B) Free consent of the parties

2. What is the definition of a contract as per Section 2(h) of the Indian Contract Act, 1872?
A) An agreement enforceable by law
B) An agreement between two friends
C) A social contract
D) A voluntary promise
E) An oral agreement
Answer: A) An agreement enforceable by law

3. What must an agreement include to be called a valid contract?
A) Social obligations
B) Legal enforceability
C) A promise only
D) Subjective consent
E) Moral duties
Answer: B) Legal enforceability

4. Which section of the Indian Contract Act defines an agreement?
A) Section 1
B) Section 2(b)
C) Section 2(e)
D) Section 2(h)
E) Section 10
Answer: C) Section 2(e)

5. According to Indian Contract Act, 1872, when does a contract become voidable?
A) When both parties agree
B) When consent is obtained by fraud
C) When the consideration is paid
D) When performance is completed
E) When time lapses
Answer: B) When consent is obtained by fraud

6. The term ‘offer’ in a contract is defined in which section of the Indian Contract Act, 1872?
A) Section 2(a)
B) Section 2(b)
C) Section 2(e)
D) Section 10
E) Section 14
Answer: A) Section 2(a)

7. Which of the following is NOT considered a type of offer?
A) General offer
B) Specific offer
C) Counteroffer
D) Crossoffer
E) Silent offer
Answer: E) Silent offer

8. What is required for the acceptance of a general offer?
A) Acceptance must be communicated orally
B) Offer must be specific
C) Conditions of the offer must be performed
D) Counteroffer must be made
E) Silence from offeree
Answer: C) Conditions of the offer must be performed

9. Which of the following cases established the principle of a general offer?
A) Balfour v. Balfour
B) Carlill v. Carbolic Smoke Ball Co.
C) Lalman Shukla v. Gauri Dutt
D) Felthouse v. Bindley
E) Bhagwandas v. Girdharilal
Answer: B) Carlill v. Carbolic Smoke Ball Co.

10. Under what circumstances can an offer be revoked?
A) After acceptance
B) Before communication of acceptance
C) After consideration is exchanged
D) When the contract is voidable
E) Upon completion of performance
Answer: B) Before communication of acceptance

11. What is NOT required for a valid acceptance under the Indian Contract Act, 1872?
A) Acceptance must be absolute
B) Acceptance must be communicated
C) Acceptance must be conditional
D) Acceptance must be unqualified
E) Acceptance must be timely
Answer: C) Acceptance must be conditional

12. What is a ‘voidable contract’ under Section 2(i) of the Indian Contract Act, 1872?
A) A contract that has no legal effect
B) A contract enforceable at the option of one party
C) A contract void from the beginning
D) A contract without consideration
E) A contract that is fully enforceable
Answer: B) A contract enforceable at the option of one party

13. When does communication of an offer become complete as per the Indian Contract Act?
A) When it is written
B) When the offeror posts the offer
C) When the offeree receives the offer
D) When the offeree accepts the offer
E) When the offeror revokes the offer
Answer: C) When the offeree receives the offer

14. A contract entered by a minor is:
A) Valid
B) Voidable
C) Void ab initio
D) Enforceable
E) Binding
Answer: C) Void ab initio

15. A contract made under undue influence is:
A) Void
B) Voidable at the option of the influenced party
C) Valid
D) Illegal
E) Unenforceable
Answer: B) Voidable at the option of the influenced party

16. Which of the following is considered a contingent contract?
A) A contract to marry
B) A contract to sell goods
C) A contract dependent on a future uncertain event
D) A contract to perform immediately
E) A contract for illegal purposes
Answer: C) A contract dependent on a future uncertain event

17. Which section of the Indian Contract Act deals with revocation of proposals and acceptances?
A) Section 1
B) Section 2
C) Section 3
D) Section 4
E) Section 6
Answer: E) Section 6

18. In which case is silence considered as acceptance?
A) When previous dealings suggest acceptance by silence
B) When communicated verbally
C) When the offeror assumes acceptance
D) When the offeree is aware of the offer
E) Never
Answer: A) When previous dealings suggest acceptance by silence

19. Under the Indian Contract Act, which of the following is NOT a valid consideration?
A) Promise to pay money
B) Performance of an act
C) Illegal activity
D) Forbearance to sue
E) Transfer of property
Answer: C) Illegal activity

20. What type of contract results when one party has already performed their obligation, but the other party’s obligation is still outstanding?
A) Bilateral contract
B) Unilateral contract
C) Executed contract
D) Executory contract
E) Contingent contract
Answer: B) Unilateral contract

Here are more multiplechoice questions based on the Indian Contract Act, 1872:

21. Which section of the Indian Contract Act defines ‘consideration’?
A) Section 2(d)
B) Section 10
C) Section 25
D) Section 12
E) Section 14
Answer: A) Section 2(d)

22. Which of the following conditions must be met for an agreement to become a contract?
A) Legal consideration only
B) Free consent of both parties
C) Mutual love and affection
D) Agreement to agree in the future
E) Informal oral agreement
Answer: B) Free consent of both parties

23. What is meant by “free consent” under the Indian Contract Act, 1872?
A) Consent obtained by coercion
B) Consent given without any force or influence
C) Consent given without knowing the details of the contract
D) Consent obtained by fraud
E) Consent based on an illegal consideration
Answer: B) Consent given without any force or influence

24. Which of the following elements does NOT affect free consent?
A) Fraud
B) Undue influence
C) Mistake
D) Coercion
E) Proper registration
Answer: E) Proper registration

25. What is the legal effect of an agreement made without consideration under the Indian Contract Act?
A) It is void
B) It is voidable
C) It is valid
D) It is enforceable
E) It is illegal
Answer: A) It is void

26. In case of breach of contract, what is the most common remedy provided by law?
A) Punitive action
B) Performance of a contract
C) Specific performance
D) Compensation for damages
E) Imprisonment
Answer: D) Compensation for damages

27. A contract for the sale of goods becomes void if:
A) Both parties agree on terms
B) The subject matter is destroyed
C) One party is dissatisfied
D) The price is renegotiated
E) There is delay in delivery
Answer: B) The subject matter is destroyed

28. Which of the following is NOT a type of contract on the basis of enforceability?
A) Valid contract
B) Voidable contract
C) Illegal contract
D) Executory contract
E) Unenforceable contract
Answer: D) Executory contract

29. Under Section 11, who is competent to contract?
A) A person of any age
B) A person who is intoxicated
C) A person of the age of majority and of sound mind
D) A minor
E) A convicted criminal
Answer: C) A person of the age of majority and of sound mind

30. What happens when a contract is made by a person of unsound mind?
A) It is a valid contract
B) It is a void contract
C) It is voidable at the option of the other party
D) It is enforceable by law
E) It is a contingent contract
Answer: B) It is a void contract

31. A minor’s agreement is:
A) Valid
B) Void from the beginning
C) Voidable at the option of the minor
D) Enforceable only if ratified
E) Valid if the minor consents
Answer: B) Void from the beginning

32. Under the Indian Contract Act, an agreement without consideration is:
A) Void
B) Valid
C) Voidable
D) Illegal
E) Enforceable
Answer: A) Void

33. The legal term for returning a person or thing to the position they were in before entering a contract is:
A) Specific performance
B) Quasicontract
C) Restitution
D) Voidability
E) Coercion
Answer: C) Restitution

34. In which of the following situations can an agreement be declared void under the Indian Contract Act?
A) Both parties have free consent
B) The object of the contract is illegal
C) The contract involves two competent parties
D) Both parties perform their obligations
E) The contract is in writing
Answer: B) The object of the contract is illegal

35. Which of the following best describes a “quasicontract”?
A) An actual contract with consideration
B) A contract formed without the intention to create a legal obligation
C) A contract with no enforceability
D) A contract made by two minors
E) A contract made under coercion
Answer: B) A contract formed without the intention to create a legal obligation

36. Which of the following is a case of ‘undue influence’ in a contract?
A) Threatening to file a lawsuit if the other party does not sign the contract
B) Selling goods to a minor
C) A doctor persuading a patient to sell property at an unfair price
D) A promise to marry made under false pretenses
E) An agreement made by mutual mistake
Answer: C) A doctor persuading a patient to sell property at an unfair price

37. Which of the following statements is true about an “illegal agreement”?
A) It is enforceable by law
B) It is voidable at the option of one party
C) It is automatically void
D) It may be ratified by the courts
E) It is a contingent contract
Answer: C) It is automatically void

38. A ‘contract of indemnity’ is a contract in which:
A) One party promises to save the other from loss caused by the promisor
B) Two parties agree to exchange goods
C) One party transfers goods to another
D) Two parties agree to settle disputes
E) One party promises to sell property
Answer: A) One party promises to save the other from loss caused by the promisor

39. What happens if there is no consensus ad idem between two parties to a contract?
A) The contract is valid
B) The contract is void
C) The contract is enforceable
D) The contract is voidable at one party’s discretion
E) The contract is performed
Answer: B) The contract is void

40. What is meant by the term ‘coercion’ under the Indian Contract Act, 1872?
A) Agreement made under mutual understanding
B) Forcing a party to enter into a contract using unlawful threats
C) Agreement made with free consent
D) Contract made out of moral obligation
E) Agreement made through mutual trust
Answer: B) Forcing a party to enter into a contract using unlawful threats

41. In case of a counteroffer, the original offer:
A) Remains valid until acceptance
B) Is automatically rejected
C) Must be renegotiated
D) Becomes a valid contract
E) Is enforceable without changes
Answer: B) Is automatically rejected

42. A contract becomes void if:
A) It is made without free consent
B) It is performed properly
C) It is based on an immoral consideration
D) It is valid in all respects
E) It is in writing only
Answer: C) It is based on an immoral consideration

43. According to the Indian Contract Act, a contract made under “fraud” is:
A) Void
B) Voidable at the option of the aggrieved party
C) Valid
D) Illegal
E) Unenforceable
Answer: B) Voidable at the option of the aggrieved party

44. What type of contract is created when one person finds lost goods and is obligated to return them to the true owner?
A) Implied contract
B) Contingent contract
C) Quasicontract
D) Executed contract
E) Voidable contract
Answer: C) Quasicontract

45. An agreement in restraint of marriage, other than minor’s marriage, is:
A) Valid
B) Voidable
C) Void
D) Legal
E) Enforceable if agreed upon
Answer: C) Void

46. What is the consequence if the consideration for a contract is illegal?
A) The contract becomes voidable
B) The contract is illegal and void
C) The contract is valid but unenforceable
D) The contract becomes valid once performance starts
E) The contract can be enforced through the court
Answer: B) The contract is illegal and void

47. A ‘contract of guarantee’ is:
A) A contract to perform the promise of another if that person defaults
B) A contract where the goods are delivered
C) A contract to exchange services
D) A contract between two parties
E) A contract with no consideration
Answer: A) A contract to perform the promise of another if that person defaults

Here are more MCQs to complete the set of 100 questions, based strictly on the content of the Indian Contract Act, 1872, from the attached document:

48. Which of the following is NOT a valid contract under the Indian Contract Act, 1872?
A) A contract to perform an illegal activity
B) A contract to sell goods
C) A contract for employment
D) A contract for insurance
E) A contract for lending money
Answer: A) A contract to perform an illegal activity

49. The phrase “consensus ad idem” refers to:
A) Free consent of both parties
B) Agreement on different terms
C) Agreement on the same thing in the same sense
D) Partial acceptance of an offer
E) The mental agreement of only one party
Answer: C) Agreement on the same thing in the same sense

50. Which of the following is NOT considered lawful consideration under the Indian Contract Act?
A) Monetary payments
B) Performance of a lawful service
C) An act prohibited by law
D) Forbearance to sue
E) Transfer of property
Answer: C) An act prohibited by law

51. What happens if an offer is made but not accepted within a reasonable time?
A) The offer remains valid indefinitely
B) The offer is revoked
C) The offer turns into a counteroffer
D) The offer becomes void
E) The offer becomes a contract
Answer: B) The offer is revoked

52. Under which circumstance can an agreement be classified as ‘void ab initio’?
A) If both parties perform their obligations
B) If entered into with free consent
C) If made with a minor or for an illegal purpose
D) If consideration is lawful
E) If performance is ongoing
Answer: C) If made with a minor or for an illegal purpose

53. Which of the following is an essential element of a valid contract under Section 10 of the Indian Contract Act?
A) Presence of a third party witness
B) Offer and acceptance
C) Performance of illegal activities
D) Social obligation
E) Mutual understanding
Answer: B) Offer and acceptance

54. A contract is said to be discharged by frustration when:
A) One party becomes dissatisfied with the contract
B) The performance becomes impossible due to external circumstances
C) The contract is declared illegal
D) The contract is revoked by one party
E) The time of performance is extended
Answer: B) The performance becomes impossible due to external circumstances

55. The communication of acceptance is complete as against the proposer when:
A) It is posted by the offeree
B) It reaches the proposer
C) The offeree starts performing
D) The offeror assumes it is accepted
E) The contract is written
Answer: A) It is posted by the offeree

56. Which of the following contracts is considered void due to uncertainty?
A) A contract with vague terms
B) A contract for sale of goods
C) A contract with specific terms
D) A contract with a defined subject matter
E) A contract with clear consideration
Answer: A) A contract with vague terms

57. In the case of misrepresentation, the contract is:
A) Valid
B) Voidable at the option of the aggrieved party
C) Void from the start
D) Illegal
E) Enforceable by law
Answer: B) Voidable at the option of the aggrieved party

58. The difference between an offer and an invitation to offer is:
A) An offer is an intent to negotiate
B) An invitation to offer is an intent to receive offers
C) An invitation to offer is a final proposal
D) An offer can be revoked anytime
E) An offer is binding once it is made
Answer: B) An invitation to offer is an intent to receive offers

59. Which of the following contracts is void due to being against public policy?
A) A contract to sell a car
B) A contract to engage in fraud
C) A contract for real estate
D) A contract for the sale of goods
E) A contract to perform personal services
Answer: B) A contract to engage in fraud

60. Which of the following is NOT a type of contingent contract?
A) A contract based on a future event
B) A contract dependent on performance by another party
C) A contract based on an uncertain event
D) A contract that is valid regardless of future events
E) A contract that may or may not happen
Answer: D) A contract that is valid regardless of future events

61. The remedy of ‘specific performance’ under the Indian Contract Act applies when:
A) One party seeks damages
B) Monetary compensation is not adequate
C) The contract is void
D) The parties decide to end the contract
E) The contract is terminated
Answer: B) Monetary compensation is not adequate

62. Which of the following is an illegal agreement under the Indian Contract Act?
A) A contract made with a minor
B) A contract to sell goods
C) A contract to pay for personal services
D) A contract to commit a crime
E) A contract for employment
Answer: D) A contract to commit a crime

63. A contract is deemed to be void if:
A) It has a lawful consideration
B) It involves two competent parties
C) It is made with unlawful consideration
D) It involves an express offer and acceptance
E) It is based on lawful performance
Answer: C) It is made with unlawful consideration

64. When can a contract be considered “voidable”?
A) When both parties agree to perform
B) When one party does not consent freely
C) When all conditions are fulfilled
D) When the subject matter is lawful
E) When performance is complete
Answer: B) When one party does not consent freely

65. Which of the following is a case of coercion under the Indian Contract Act?
A) Persuasion using reasonable argument
B) Threatening someone to sign a contract under duress
C) Offering incentives to perform
D) Making an offer in good faith
E) Asking someone to perform an act voluntarily
Answer: B) Threatening someone to sign a contract under duress

66. What is the status of a contract if the consideration is forbidden by law?
A) Void
B) Valid
C) Voidable
D) Unenforceable
E) Contingent
Answer: A) Void

67. Under the Indian Contract Act, if a mistake of fact occurs, the contract is:
A) Valid
B) Voidable at the option of either party
C) Void
D) Enforceable
E) Illegal
Answer: C) Void

68. If one party promises to compensate another for any loss suffered due to the acts of a third party, this is called a:
A) Contract of indemnity
B) Contract of guarantee
C) Contingent contract
D) Quasicontract
E) Executed contract
Answer: A) Contract of indemnity

69. Which of the following would cause a contract to become void?
A) A change in law that makes performance illegal
B) Both parties performing their obligations
C) Minor adjustments in the contract terms
D) A lawful objective
E) A lawful consideration
Answer: A) A change in law that makes performance illegal

70. An offer is deemed to be rejected when:
A) The offeree remains silent
B) The offeree makes a counteroffer
C) The offeror withdraws the offer
D) The offeror performs the contract
E) The offeree performs the contract
Answer: B) The offeree makes a counteroffer

71. What is the status of an agreement to do an impossible act under the Indian Contract Act?
A) Valid
B) Void
C) Voidable
D) Illegal
E) Contingent
Answer: B) Void

72. Under the Indian Contract Act, when is an agreement without consideration enforceable?
A) When it involves family members
B) When it is made out of love and affection
C) When it is a promise to compensate for past voluntary services
D) When it is made orally
E) When it involves business transactions
Answer: C) When it is a promise to compensate for past voluntary services

73. Which of the following scenarios would constitute fraud under the Indian Contract Act?
A) Telling the truth about a product
B) Remaining silent about minor defects
C) Concealing a material fact with intent to deceive
D) Expressing an opinion about a service
E) Offering a product at market price
Answer: C) Concealing a material fact with intent to deceive

Here is the continuation of the MCQs based on the Indian Contract Act, 1872:

74. A contract of guarantee involves how many parties?
A) Two
B) Three
C) Four
D) One
E) Five
Answer: B) Three

75. Which of the following is an example of an “express contract”?
A) A promise made in writing
B) An agreement created through the conduct of the parties
C) An obligation imposed by law
D) A contract to do something illegal
E) A contract without any written terms
Answer: A) A promise made in writing

76. What is a key element of a contingent contract?
A) The event must be certain
B) The event must be uncertain
C) The event must be past
D) The event must be illegal
E) The event must be fully under the control of the parties
Answer: B) The event must be uncertain

77. Which of the following is a legal consequence of coercion under the Indian Contract Act?
A) The contract becomes valid
B) The contract becomes voidable at the option of the coerced party
C) The contract becomes void ab initio
D) The contract becomes enforceable
E) The contract remains unchanged
Answer: B) The contract becomes voidable at the option of the coerced party

78. A contract is said to be “discharged” when:
A) It is fully performed
B) One party refuses to perform
C) It is declared void
D) It is made with consideration
E) It is contingent on a future event
Answer: A) It is fully performed

79. Which of the following conditions is NOT essential for a valid contract?
A) Lawful consideration
B) Competency of parties
C) Coercion
D) Free consent
E) Legal object
Answer: C) Coercion

80. What type of contract is made by the conduct of the parties rather than written or spoken words?
A) Express contract
B) Implied contract
C) Voidable contract
D) Contingent contract
E) Quasicontract
Answer: B) Implied contract

81. Which of the following is NOT a ground for discharging a contract under the Indian Contract Act?
A) Performance
B) Breach
C) Frustration
D) Illegal object
E) Death of one party
Answer: D) Illegal object

82. A contract of indemnity requires:
A) Compensation for damages caused by another party
B) The performance of illegal acts
C) The transfer of immovable property
D) The sale of goods
E) Compensation for a lawful act
Answer: A) Compensation for damages caused by another party

83. Which of the following statements is true about a “void contract”?
A) It is enforceable by law
B) It is enforceable at the option of one party
C) It is void from the start and cannot be enforced
D) It becomes void when performed
E) It can be ratified by mutual consent
Answer: C) It is void from the start and cannot be enforced

84. What happens to a contract if one party makes a mistake about the identity of the subject matter?
A) The contract is valid
B) The contract becomes void
C) The contract is voidable at the option of the mistaken party
D) The contract remains enforceable
E) The contract becomes illegal
Answer: B) The contract becomes void

85. Which of the following is NOT a type of mistake recognized under the Indian Contract Act, 1872?
A) Mistake of law
B) Mistake of fact
C) Mistake of identity
D) Mistake in consideration
E) Mutual mistake
Answer: D) Mistake in consideration

86. Which of the following contracts is valid without consideration according to the Indian Contract Act?
A) A contract of sale
B) A contract for illegal purposes
C) A contract made out of love and affection between close relations
D) A contract between two strangers
E) A contract with mutual consent
Answer: C) A contract made out of love and affection between close relations

87. Which of the following is an example of “misrepresentation” in contract law?
A) A false statement made without intention to deceive
B) A false statement made with intent to deceive
C) A promise made to perform an illegal act
D) A refusal to perform a contract
E) A legal mistake about the law
Answer: A) A false statement made without intention to deceive

88. A contract made with a minor is:
A) Valid
B) Voidable
C) Void ab initio
D) Valid upon ratification
E) Enforceable if beneficial
Answer: C) Void ab initio

89. What happens if a contract is entered into under undue influence?
A) The contract becomes valid
B) The contract becomes voidable at the option of the influenced party
C) The contract becomes void
D) The contract remains enforceable
E) The contract becomes illegal
Answer: B) The contract becomes voidable at the option of the influenced party

90. Which of the following is NOT a form of acceptance under the Indian Contract Act?
A) Conditional acceptance
B) Absolute acceptance
C) Implied acceptance
D) Express acceptance
E) Acceptance by conduct
Answer: A) Conditional acceptance

91. Which of the following elements is NOT essential for an offer to be valid?
A) The offer must be communicated
B) The offer must be made with an intention to create legal obligations
C) The offer must be vague
D) The offer must be specific and definite
E) The offer must be made to a specific person or public
Answer: C) The offer must be vague

92. In which of the following scenarios is acceptance considered valid?
A) The offeree remains silent
B) The offeree explicitly rejects the offer
C) The offeree accepts all the terms without modification
D) The offeree accepts with conditions
E) The offeree accepts only part of the offer
Answer: C) The offeree accepts all the terms without modification

93. What is the legal position of an agreement that lacks a lawful object?
A) Void
B) Voidable
C) Valid
D) Contingent
E) Enforceable
Answer: A) Void

94. When can a contract be terminated due to frustration?
A) When the contract is performed
B) When it is impossible to perform the contract due to unforeseen events
C) When the parties agree mutually
D) When there is a breach
E) When there is an extension of time
Answer: B) When it is impossible to perform the contract due to unforeseen events

95. A person who is legally incompetent to enter into a contract includes:
A) A major
B) A minor
C) A company
D) A business owner
E) A government official
Answer: B) A minor

96. Which of the following is an example of a “voidable contract”?
A) A contract made without free consent
B) A contract made by mutual consent
C) A contract that is fully performed
D) A contract with a lawful object
E) A contract made with legal consideration
Answer: A) A contract made without free consent

97. Which of the following does NOT invalidate a contract?
A) Misrepresentation
B) Undue influence
C) Mistake of law
D) Mistake of fact
E) Fraud
Answer: C) Mistake of law

98. An “invitation to offer” is:
A) An offer that can be accepted immediately
B) An expression of willingness to negotiate
C) A final offer
D) A counteroffer
E) A completed contract
Answer: B) An expression of willingness to negotiate

99. In the case of a “cross offer”, the legal effect is:
A) A binding contract
B) No contract at all
C) A voidable contract
D) A contingent contract
E) An illegal agreement
Answer: B) No contract at all

100. A contract for an illegal object is:
A) Valid and enforceable
B) Void ab initio
C) Voidable at the option of one party
D) Enforceable under certain conditions
E) Contingent upon future events
Answer: B) Void ab initio

Consideration

1. What is the legal definition of consideration as per the Indian Contract Act, 1872?
(a) A promise made by the promisor.
(b) Something given or abstained from at the desire of the promisor.
(c) A payment made in exchange for goods or services.
(d) An act performed without any expectations.

Answer: (b)

2. Consideration in a contract is essential because:
(a) It acts as a reward for the promisor.
(b) It ensures mutual benefit between the parties.
(c) It makes the contract voidable.
(d) It proves that a legal obligation exists.

Answer: (b)

3. Which case is popularly used to define consideration in law?
(a) Chinnayya vs. Ramayya
(b) Misa v. Currie
(c) Durga Prasad v. Baldeo
(d) Bolton v. Modden

Answer: (b)

4. Which of the following is NOT a form of consideration?
(a) Benefit to the promisor
(b) Detriment to the promisee
(c) A past promise
(d) A voluntary promise

Answer: (d)

5. In which of the following cases will the contract still be valid despite the absence of consideration?
(a) When consideration is given by a third party.
(b) When the agreement is based on natural love and affection.
(c) When the promise is to do something legally bound.
(d) When consideration is for a future promise.

Answer: (b)

6. Which statement is true about past consideration?
(a) Past consideration is always invalid.
(b) Past consideration is valid if it was requested by the promisor.
(c) Past consideration only applies to voluntary services.
(d) Past consideration must be in monetary form.

Answer: (b)

7. Which case illustrates the concept that consideration may move from a third party?
(a) Misa v. Currie
(b) Durga Prasad v. Baldeo
(c) Chinnayya vs. Ramayya
(d) Kadarnath v. Gorie Mohammad

Answer: (c)

8. The rule “no consideration, no contract” has exceptions, including:
(a) Contracts made between strangers.
(b) Contracts of agency.
(c) Contracts involving large sums of money.
(d) Contracts involving minor parties.

Answer: (b)

9. Which of the following must be present for an agreement based on natural love and affection to be valid without consideration?
(a) Agreement must be oral.
(b) Agreement must be in writing and registered.
(c) Agreement must be witnessed by a third party.
(d) Agreement must involve monetary compensation.

Answer: (b)

10. Which of the following best describes “executory consideration”?
(a) Consideration that involves a completed act.
(b) Consideration where both parties have completed their promises.
(c) A promise to do something in the future.
(d) Consideration that is invalid.

Answer: (c)

11. The phrase “something in return” in relation to consideration refers to:
(a) Quid pro quo
(b) Compensation
(c) Forbearance
(d) Legal liability

Answer: (a)

12. Consideration must be:
(a) Of equal value to the promise made.
(b) Real and not illusory.
(c) Voluntary and not requested.
(d) Always monetary.

Answer: (b)

13. In which situation would the performance of a legal duty not be valid consideration?
(a) If the promisor agrees to pay for additional services.
(b) If the person is legally bound to perform the act.
(c) If the performance was requested by a third party.
(d) If the performance was requested after the promise was made.

Answer: (b)

14. A promise to pay for a timebarred debt under the Limitation Act is:
(a) Void
(b) Valid without consideration if in writing
(c) Valid only if interest is paid
(d) Invalid

Answer: (b)

15. Consideration must move at the desire of:
(a) The promisee
(b) The promisor
(c) Any third party
(d) Either party

Answer: (b)

16. Which of the following is an example of abstinence as consideration?
(a) Paying for goods delivered.
(b) Agreeing not to file a lawsuit in exchange for a sum of money.
(c) Promising to perform a service in the future.
(d) Providing a loan in exchange for goods.

Answer: (b)

17. Which of the following is not a legal rule regarding valid consideration?
(a) Consideration must move at the desire of the promisor.
(b) Consideration may move from any person.
(c) Consideration must be adequate.
(d) Consideration must be real.

Answer: (c)

18. What is the significance of the case Durga Prasad v. Baldeo?
(a) It confirms that consideration must move from the promisee.
(b) It shows that an act done at the desire of a third party is not valid consideration.
(c) It confirms that past consideration is valid.
(d) It establishes the validity of oral agreements.

Answer: (b)

19. In which situation is a contract valid without consideration?
(a) Promise to pay for voluntary past services.
(b) Promise to provide services in the future.
(c) Agreement made orally between family members.
(d) Promise made under coercion.

Answer: (a)

20. Which of the following examples involves past consideration?
(a) A contract to deliver goods in the future.
(b) A promise made to pay for services already rendered.
(c) A payment made before a contract is agreed.
(d) A loan agreement signed today.

Answer: (b)

21. Consideration need not be:
(a) Adequate.
(b) Real.
(c) Legal.
(d) Immoral.

Answer: (a)

22. Which of the following is an example of valid consideration?
(a) Promising to discover treasure by magic.
(b) Performing a legally required act.
(c) Giving up the right to file a lawsuit in exchange for payment.
(d) Agreeing to an illusory promise.

Answer: (c)

23. In the case of a completed gift:
(a) Consideration is required.
(b) No consideration is required.
(c) Consideration must be monetary.
(d) The gift is invalid without consideration.

Answer: (b)

24. Which legal rule allows third parties to enforce certain contracts?
(a) Doctrine of privity of contract
(b) Doctrine of promissory estoppel
(c) Doctrine of consideration
(d) Doctrine of mutuality

Answer: (b)

25. An agreement without consideration is:
(a) Valid
(b) Voidable
(c) Void
(d) Illegal

Answer: (c)

26. What is a key element of consideration under the Indian Contract Act, 1872?
(a) It must move at the desire of a third party.
(b) It must always be monetary.
(c) It must move at the desire of the promisor.
(d) It must always be legally enforceable.

Answer: (c)

27. According to the Indian Contract Act, 1872, consideration can be:
(a) Past, present, or future.
(b) Past or present only.
(c) Present or future only.
(d) Past only.

Answer: (a)

28. Which of the following examples demonstrates abstinence as consideration?
(a) A seller delivering goods to a buyer.
(b) A person promising not to file a lawsuit in exchange for payment.
(c) A person making a promise to pay for services rendered.
(d) A person paying for a future service.

Answer: (b)

29. Which legal case affirmed that an act done at the desire of a third party is not valid consideration?
(a) Misa v. Currie
(b) Chinnayya vs. Ramayya
(c) Durga Prasad v. Baldeo
(d) Bolton v. Modden

Answer: (c)

30. Consideration that consists in the performance of an act is known as:
(a) Executory consideration.
(b) Past consideration.
(c) Illusory consideration.
(d) Executed consideration.

Answer: (d)

31. Which of the following is NOT a legal rule regarding valid consideration?
(a) Consideration must move at the desire of the promisor.
(b) Consideration must be adequate.
(c) Consideration may move from any person.
(d) Consideration must not be unlawful.

Answer: (b)

32. In the case of Chinnayya vs. Ramayya, the court held that:
(a) Consideration must only move from the promisee.
(b) Consideration may move from a third party.
(c) Consideration must be present for a contract to be valid.
(d) A promise is enforceable even without consideration.

Answer: (b)

33. According to the Indian Contract Act, consideration must not be:
(a) Real.
(b) Adequate.
(c) Illusory.
(d) Voluntary.

Answer: (c)

34. In which of the following scenarios will the absence of consideration still result in a valid contract?
(a) When there is an agreement for charity.
(b) When a gift is exchanged.
(c) When consideration is provided by a third party.
(d) When the contract is for the sale of goods.

Answer: (b)

35. Which of the following is NOT an exception to the rule “No consideration, no contract”?
(a) Compensation for past voluntary services.
(b) Promise to pay timebarred debt.
(c) An agreement made out of natural love and affection.
(d) A promise to pay for future services.

Answer: (d)

36. Consideration is defined in the Indian Contract Act, 1872 under which section?
(a) Section 2(c)
(b) Section 25
(c) Section 2(d)
(d) Section 185

Answer: (c)

37. According to the Indian Contract Act, 1872, a contract without consideration is:
(a) Void.
(b) Valid if made by free consent.
(c) Voidable.
(d) Illegal.

Answer: (a)

38. What does the doctrine of privity of contract state?
(a) Only a party to a contract can sue on it.
(b) A stranger to a contract can sue if consideration is provided.
(c) All parties to a contract must be relatives.
(d) Consideration must always move from the promisee.

Answer: (a)

39. Which of the following is an example of an enforceable contract involving a third party?
(a) A stranger to the contract pays for a service.
(b) A trustee enforces a contract on behalf of the beneficiary.
(c) A witness to the contract claims payment.
(d) A party not involved in the original agreement sues for damages.

Answer: (b)

40. In which scenario can a family member enforce an agreement despite not being a party to the contract?
(a) When the agreement involves compensation for past voluntary services.
(b) When the agreement involves family settlement.
(c) When the agreement is for a future service.
(d) When the family member is a stranger to the agreement.

Answer: (b)

41. A promise made to pay for services already rendered at the request of the promisor is considered:
(a) Past consideration.
(b) Present consideration.
(c) Future consideration.
(d) Illusory consideration.

Answer: (a)

42. Inadequacy of consideration may be taken into account when:
(a) The promisor feels that the consideration is too low.
(b) The promisee claims fraud or undue influence.
(c) The consideration involves monetary payment.
(d) The contract involves a third party.

Answer: (b)

43. The performance of what one is legally bound to perform:
(a) Can be valid consideration.
(b) Cannot be considered valid consideration.
(c) May be considered valid if done voluntarily.
(d) Is only valid if agreed upon by both parties.

Answer: (b)

44. Which example demonstrates “illusory consideration”?
(a) Promising to discover treasure by magic.
(b) Offering money in exchange for services rendered.
(c) Giving up the right to sue in exchange for compensation.
(d) Performing a legal obligation in exchange for payment.

Answer: (a)

45. Which of the following examples would result in a valid contract without consideration under the Indian Contract Act?
(a) A written promise to pay a timebarred debt.
(b) An oral promise to sell goods.
(c) A promise made under coercion.
(d) A promise to pay for future services.

Answer: (a)

46. A promise to pay for past voluntary services is enforceable when:
(a) The promisor was not in existence at the time of the service.
(b) The services were rendered voluntarily at the promisor’s request.
(c) The service was rendered without the promisor’s knowledge.
(d) The service involved no monetary transaction.

Answer: (b)

47. According to the Indian Contract Act, which of the following is NOT valid consideration?
(a) Payment made for goods delivered.
(b) A promise to perform a duty already legally bound.
(c) Compensation given for services rendered.
(d) Abstinence from filing a lawsuit.

Answer: (b)

48. A written promise made to pay for a debt barred by limitation is enforceable if:
(a) It is signed by the promisee.
(b) It is signed by the promisor.
(c) It is an oral agreement between the parties.
(d) It involves payment of interest.

Answer: (b)

49. Which of the following conditions is necessary for an agreement based on natural love and affection to be valid without consideration?
(a) The agreement must involve a third party.
(b) The agreement must be in writing and registered.
(c) The agreement must involve monetary compensation.
(d) The agreement must be made by a witness.

Answer: (b)

50. An agreement without consideration is valid in the case of:
(a) A contract involving minor parties.
(b) A completed gift.
(c) A contract made under duress.
(d) A contract for illegal purposes.

Answer: (b)

51. Which of the following describes an “executory consideration”?
(a) An act that has already been performed.
(b) A promise to perform an act in the future.
(c) An invalid consideration.
(d) A past voluntary service.

Answer: (b)

52. What does the rule “No consideration, no contract” imply?
(a) All contracts require a monetary consideration.
(b) Consideration must always be equal to the value of the promise.
(c) A contract is not enforceable unless it includes consideration.
(d) A contract is always voidable without adequate consideration.

Answer: (c)

53. A promise to not open a business near a competitor’s shop in exchange for payment is an example of:
(a) An executed consideration.
(b) An illusory promise.
(c) Abstinence as consideration.
(d) Invalid consideration.

Answer: (c)

54. In which situation is a promise made without consideration valid?
(a) When the promisor gives a gift in writing.
(b) When the promise is to do something already legally bound.
(c) When consideration moves from a third party.
(d) When the promise is made orally.

Answer: (a)

55. Which of the following is a valid example of consideration moving from a third party?
(a) A promise made between two family members.
(b) An agreement where one person guarantees another’s debt.
(c) A voluntary service performed by a friend.
(d) A promise made between business partners.

Answer: (b)

56. Which of the following cases confirms that consideration may move from a third party?
(a) Chinnayya vs. Ramayya
(b) Misa v. Currie
(c) Bolton v. Modden
(d) Durga Prasad v. Baldeo

Answer: (a)

57. What is the significance of the case *Durga Prasad v. Baldeo*?
(a) It confirms that past consideration is valid.
(b) It shows that consideration must move at the desire of the promisor.
(c) It establishes that an act done at the request of a third party is not valid consideration.
(d) It supports the validity of oral agreements.

Answer: (c)

58. Under the Indian Contract Act, 1872, which of the following would be considered past consideration?
(a) A person promises to pay for a service that was performed last week.
(b) A person agrees to perform a service in the future.
(c) A person delivers goods today in exchange for future payment.
(d) A person refuses to perform a service that was promised.

Answer: (a)

59. Which of the following is NOT considered valid consideration under the Indian Contract Act, 1872?
(a) Payment for goods delivered.
(b) A promise to pay for a past voluntary service.
(c) A promise to perform an illegal act.
(d) A promise to abstain from doing something.

Answer: (c)

60. A contract without consideration is void under Section 25, except when it involves:
(a) A family settlement.
(b) Compensation for involuntary services.
(c) A promise made out of love and affection.
(d) An illegal act.

Answer: (c)

61. Which of the following is a key characteristic of “real consideration” under the Indian Contract Act, 1872?
(a) It must be of adequate value.
(b) It must be legal and enforceable.
(c) It must be paid in monetary form.
(d) It must involve two or more parties.

Answer: (b)

62. In which situation is “inadequacy of consideration” considered relevant in a contract?
(a) When both parties agree on the inadequacy.
(b) When one party claims coercion or undue influence.
(c) When the consideration is monetary.
(d) When the promise involves family members.

Answer: (b)

63. According to the Indian Contract Act, which of the following is NOT an exception to the rule “No consideration, no contract”?
(a) Promise to pay a timebarred debt.
(b) Agreement made out of natural love and affection.
(c) Promise made to perform illegal services.
(d) Promise to compensate for past voluntary services.

Answer: (c)

64. A contract is valid without consideration in the case of a:
(a) Promise to pay for services already rendered.
(b) Promise made under coercion.
(c) Promise to engage in an illegal activity.
(d) Promise made between strangers.

Answer: (a)

65. Under what circumstances can a third party enforce a contract in Indian law?
(a) When the third party is related to one of the contract parties.
(b) When the third party is a beneficiary under a trust.
(c) When the contract is for a future service.
(d) When the third party witnesses the contract.

Answer: (b)

66. Which of the following is an example of a valid contract involving natural love and affection?
(a) A parent promises in writing to transfer property to their child.
(b) A parent verbally promises to give money to a friend.
(c) A person promises to perform a service for a neighbor.
(d) A friend promises to give a loan to a stranger.

Answer: (a)

67. A promise to pay a debt barred by the Limitation Act is enforceable if:
(a) It is made verbally.
(b) It is in writing and signed by the promisor.
(c) It involves a thirdparty guarantee.
(d) It is made after the debt is cleared.

Answer: (b)

68. In which situation would the performance of an act not be considered valid consideration?
(a) When the act is legally required.
(b) When the act benefits both parties.
(c) When the act involves abstinence from an obligation.
(d) When the act is performed voluntarily.

Answer: (a)

69. Which of the following is an exception to the doctrine of privity of contract?
(a) Trust beneficiary.
(b) Future promise.
(c) Voluntary service.
(d) Debt repayment.

Answer: (a)

70. Which of the following contracts would still be enforceable without consideration?
(a) A contract of agency.
(b) A contract involving illegal activities.
(c) A contract made under undue influence.
(d) A contract involving minors.

Answer: (a)

71. What kind of contract is formed when one party promises to pay for services that have already been performed voluntarily?
(a) A contract with past consideration.
(b) A contract with future consideration.
(c) An invalid contract.
(d) An executory contract.

Answer: (a)

72. Under the Indian Contract Act, 1872, when is a completed gift enforceable without consideration?
(a) Only when it is made in the presence of witnesses.
(b) Only when it is made orally.
(c) When the gift is fully transferred and accepted.
(d) When the gift involves monetary value.

Answer: (c)

73. A contract without consideration is void except in which case?
(a) A written and registered agreement based on natural love and affection.
(b) A verbal promise made to a friend.
(c) A promise to deliver services in the future.
(d) A promise to repay a debt that is not timebarred.

Answer: (a)

74. Which of the following would be considered “illusory consideration”?
(a) A promise to bring a person back to life.
(b) A promise to abstain from filing a lawsuit.
(c) A promise to deliver goods for payment.
(d) A promise to perform a past service.

Answer: (a)

75. According to Section 25 of the Indian Contract Act, 1872, which of the following contracts is valid without consideration?
(a) A contract for personal services.
(b) A contract based on natural love and affection, if written and registered.
(c) A contract for future services.
(d) A contract involving monetary exchange.

Answer: (b)

76. The rule of “privity of contract” means:
(a) Only parties to a contract can enforce it.
(b) Third parties can sue if they are affected.
(c) Only the promisor can enforce the contract.
(d) Consideration must always be monetary.

Answer: (a)

77. Which of the following is an example of an agreement valid without consideration?
(a) An oral promise made out of love and affection.
(b) A written and registered promise made out of natural love and affection.
(c) A verbal promise to pay for past voluntary services.
(d) An oral promise to pay for a timebarred debt.

Answer: (b)

78. In which case can a contract be enforceable even if a third party provides the consideration?
(a) When the third party is a family member.
(b) When consideration moves from the promisee or any other person.
(c) When consideration is given after the contract is made.
(d) When the contract is between business partners.

Answer: (b)

79. Which of the following is a valid example of privity of consideration?
(a) A trust beneficiary enforcing their rights under the trust.
(b) A friend enforcing a contract on behalf of a relative.
(c) A third party suing for damages in a contract.
(d) A person receiving payment for services they were not part of.

Answer: (a)

80. A promise made in writing and signed to pay a debt that is timebarred is:
(a) Void.
(b) Valid without consideration.
(c) Valid only if interest is included.
(d) Invalid.

Answer: (b)

81. In which of the following situations is a promise to pay for past voluntary services enforceable?
(a) When the promisor was unaware of the services.
(b) When the services were rendered voluntarily, and the promisor acknowledges them.
(c) When the promise is made orally.
(d) When the services were performed after the promise.

Answer: (b)

82. Which of the following is NOT a requirement for an agreement based on natural love and affection to be valid without consideration?
(a) It must be between parties who are near relatives.
(b) It must be in writing.
(c) It must be registered under the law.
(d) It must involve a monetary benefit.

Answer: (d)

83. A contract without consideration can still be valid in the case of:
(a) A completed gift.
(b) A promise to perform an illegal act.
(c) A contract made under duress.
(d) A contract between business partners.

Answer: (a)

84. A stranger to consideration may still enforce a contract in which of the following situations?
(a) In a family settlement agreement.
(b) In a contract made between friends.
(c) In a business transaction.
(d) In a contract made for future services.

Answer: (a)

85. In the case of a trust, who can enforce a contract without being a party to it?
(a) The trustee.
(b) The settler.
(c) The beneficiary.
(d) The donor.

Answer: (c)

86. Consideration must move at the desire of:
(a) The promisee.
(b) The promisor.
(c) A third party.
(d) The beneficiary.

Answer: (b)

87. According to Section 25 of the Indian Contract Act, a contract without consideration is void except in the case of:
(a) Agency contracts.
(b) Verbal agreements between business partners.
(c) Contracts involving a thirdparty beneficiary.
(d) Contracts made under undue influence.

Answer: (a)

88. A promise to abstain from doing something in exchange for payment is considered:
(a) Illusory consideration.
(b) Adequate consideration.
(c) Real consideration.
(d) Invalid consideration.

Answer: (c)

89. The rule “stranger to a contract cannot sue” is known as:
(a) Doctrine of promissory estoppel.
(b) Doctrine of privity of contract.
(c) Doctrine of undue influence.
(d) Doctrine of free consent.

Answer: (b)

90. Which of the following is a valid exception to the privity of contract rule?
(a) A third party agrees to provide services.
(b) A person benefits under a family settlement.
(c) A promise is made verbally between friends.
(d) A third party pays for the goods delivered.

Answer: (b)

91. In a contract involving a covenant running with the land, the contract can be enforced by:
(a) The original owner of the land only.
(b) The successor of the original owner.
(c) A thirdparty neighbor.
(d) Any relative of the landowner.

Answer: (b)

92. A completed gift is enforceable without consideration because:
(a) It involves monetary compensation.
(b) It is a legally completed transfer of ownership.
(c) It is based on a verbal agreement.
(d) It benefits a third party.

Answer: (b)

93. Which of the following is an example of a promise that can be enforced despite the absence of consideration?
(a) A promise made out of natural love and affection between strangers.
(b) A written promise to pay a timebarred debt.
(c) A promise made under duress.
(d) A promise made for future services.

Answer: (b)

94. A promise to pay for voluntary services already rendered is enforceable when:
(a) The services were not requested by the promisor.
(b) The promisor was in existence at the time of the service.
(c) The services were performed for a third party.
(d) The services were performed after the promise was made.

Answer: (b)

95. Which of the following cases illustrates the principle of “past consideration” being valid?
(a) A promises to pay B for services already rendered.
(b) A agrees to deliver goods next week.
(c) A performs a service after being promised payment.
(d) A promises to pay for future services.

Answer: (a)

96. According to the Indian Contract Act, 1872, consideration must be:
(a) Adequate and of high value.
(b) Legal and real.
(c) Monetary.
(d) Illusory.

Answer: (b)

97. Which of the following is NOT a valid example of consideration?
(a) A promise to abstain from legal action in exchange for payment.
(b) A promise to perform an act one is legally bound to perform.
(c) A promise to deliver goods in exchange for payment.
(d) A promise to compensate for past services.

Answer: (b)

98. In which case is a contract void under the rule of “no consideration, no contract”?
(a) A contract involving natural love and affection.
(b) A contract made for an illegal purpose.
(c) A contract made for a timebarred debt.
(d) A contract made for voluntary past services.

Answer: (b)

99. The Indian Contract Act, 1872 states that consideration need not be:
(a) Monetary.
(b) Adequate.
(c) Legal.
(d) Real.

Answer: (b)

100. Which of the following is required for an agreement to be enforceable under the exception of “natural love and affection”?
(a) The agreement must be between friends.
(b) The agreement must be written and registered.
(c) The agreement must be verbal.
(d) The agreement must involve a third party.

Answer: (b)

Essential Elements of a Contract

1. Which section of the Indian Contract Act defines fraud?  

   a) Section 15  

   b) Section 17  

   c) Section 18  

   d) Section 19  

   e) Section 20  

   Answer: b) Section 17  

 

2. Which of the following statements is true about a minor’s contract?  

   a) A contract with a minor is valid.  

   b) A minor can ratify a contract upon reaching the age of majority.  

   c) A contract with a minor is void-ab-initio.  

   d) A minor cannot be a beneficiary of a contract.  

   e) A minor can be held liable for all contracts.  

   Answer: c) A contract with a minor is void-ab-initio  

 

3. What happens if the object of a contract is found to be unlawful under Section 23?  

   a) The contract is valid.  

   b) The contract is voidable at the option of either party.  

   c) The contract is void.  

   d) The contract can be ratified.  

   e) The contract is enforceable with penalties.  

   Answer: c) The contract is void  

 

4. In which case can silence amount to fraud under Section 17?  

   a) When the party has no duty to speak.  

   b) When the silence does not affect the contract.  

   c) When there is a duty to speak.  

   d) When both parties are aware of the facts.  

   e) When it is a bilateral mistake.  

   Answer: c) When there is a duty to speak  

 

5. Which of the following is NOT a valid defense against a claim of fraud?  

   a) The injured party had means to discover the truth.  

   b) The misrepresentation was made knowingly.  

   c) The silence amounted to fraud.  

   d) There was an active concealment of facts.  

   e) There was no intent to deceive.  

   Answer: e) There was no intent to deceive  

 

6. Under which section is undue influence defined?  

   a) Section 16  

   b) Section 17  

   c) Section 18  

   d) Section 19  

   e) Section 20  

   Answer: a) Section 16  

 

7. What is the effect of undue influence on a contract?  

   a) The contract is valid.  

   b) The contract is void.  

   c) The contract is voidable at the option of the aggrieved party.  

   d) The contract is automatically void.  

   e) The contract is ratifiable by the influenced party.  

   Answer: c) The contract is voidable at the option of the aggrieved party  

 

8. When is a unilateral mistake considered to void a contract under Section 22?  

   a) When both parties are mistaken about the facts.  

   b) When the mistake relates to the identity of the subject matter.  

   c) A contract is not voidable due to unilateral mistake.  

   d) When the mistake is about the price.  

   e) When the mistake is about the title.  

   Answer: c) A contract is not voidable due to unilateral mistake  

 

9. A minor can be a party to which of the following?  

   a) A contract of partnership.  

   b) A contract for the sale of immovable property.  

   c) A contract of guarantee.  

   d) A contract to purchase luxury goods.  

   e) A contract for necessaries of life.  

   Answer: e) A contract for necessaries of life  

 

10. Which of the following is considered a void agreement under the Indian Contract Act?  

    a) Agreement in restraint of marriage  

    b) Agreement with a minor that has lawful consideration  

    c) Agreement to provide a loan  

    d) Agreement to purchase immovable property  

    e) Agreement to form a partnership  

    Answer: a) Agreement in restraint of marriage  

 

11. What is the primary remedy for fraud under the Indian Contract Act?  

    a) The contract remains valid.  

    b) The contract can be rescinded, and damages claimed.  

    c) The contract becomes automatically void.  

    d) The party committing fraud can claim restitution.  

    e) The contract is enforceable with penalties.  

    Answer: b) The contract can be rescinded, and damages claimed  

 

12. Which of the following is NOT considered coercion under Section 15?  

    a) Committing an act forbidden by the IPC.  

    b) Unlawful detention of property.  

    c) Threatening to commit suicide.  

    d) Persuading someone to enter a contract.  

    e) Threatening to detain any property.  

    Answer: d) Persuading someone to enter a contract  

 

13. What is a wagering agreement as per Section 30?  

    a) A valid contract under Indian law.  

    b) A void contract where both parties have control over the event.  

    c) An agreement between two parties over an uncertain event.  

    d) A contract with a lawful object.  

    e) A contract enforceable with damages.  

    Answer: c) An agreement between two parties over an uncertain event  

 

14. Which of the following is an example of fraud?  

    a) A misrepresentation made innocently.  

    b) A promise made without any intention of performing it.  

    c) An error in judgment regarding the price of goods.  

    d) An incorrect opinion shared with the other party.  

    e) Silence about a non-essential fact.  

    Answer: b) A promise made without any intention of performing it  

 

15. What is the legal effect of a contract made under undue influence?  

    a) The contract is enforceable only by the party influenced.  

    b) The contract is voidable at the option of the party influenced.  

    c) The contract is automatically enforceable.  

    d) The contract is ratifiable by either party.  

    e) The contract becomes valid after a certain period.  

    Answer: b) The contract is voidable at the option of the party influenced  

 

16. Which of the following is an exception to the rule that contracts in restraint of trade are void?  

    a) A seller of goodwill agrees not to carry on a competing business.  

    b) A person agrees not to marry for consideration.  

    c) An employee agrees not to work for a competitor indefinitely.  

    d) An individual agrees not to trade outside a certain locality.  

    e) A minor agrees not to enter any contract for a set period.  

    Answer: a) A seller of goodwill agrees not to carry on a competing business  

 

17. What is the effect of a contract involving unlawful consideration under Section 23?  

    a) The contract is void.  

    b) The contract is valid if the consideration is partial.  

    c) The contract is voidable at the option of the guilty party.  

    d) The contract becomes valid with ratification.  

    e) The contract is enforceable with penalties.  

    Answer: a) The contract is void  

 

18. Under Section 68, a minor is liable for which type of contract?  

    a) Contract for luxury goods.  

    b) Contract for necessaries supplied to him.  

    c) Contract for immovable property.  

    d) Contract of partnership.  

    e) Contract for goods that have been misrepresented.  

    Answer: b) Contract for necessaries supplied to him  

 

19. A contract without free consent is considered:  

    a) Valid  

    b) Void  

    c) Voidable  

    d) Illegal  

    e) Enforceable  

    Answer: c) Voidable  

 

20. What is the primary difference between fraud and misrepresentation?  

    a) Fraud does not allow for rescission of the contract.  

    b) Fraud is always unintentional, whereas misrepresentation is intentional.  

    c) Fraud involves an intention to deceive, whereas misrepresentation does not.  

    d) Fraud does not allow for damages, but misrepresentation does.  

    e) Both have the same legal consequences.  

    Answer: c) Fraud involves an intention to deceive, whereas misrepresentation does not  

 

21. What is the age of majority as per the Indian Majority Act, 1875?  

    a) 16 years  

    b) 18 years  

    c) 20 years  

    d) 21 years  

    e) 25 years  

    Answer: b) 18 years  

 

22. A person is said to be of sound mind for the purposes of entering into a contract if:  

    a) They are always sound.  

    b) They are capable of forming a rational judgment.  

    c) They are unsound but occasionally sound.  

    d) They are mentally distressed.  

    e) They are a minor.  

    Answer: b) They are capable of forming a rational judgment  

 

23. Which of the following is NOT a valid contract under the Indian Contract Act?  

    a) Contract with lawful consideration  

    b) Contract with sound mind individuals  

    c) Contract involving coercion  

    d) Contract with free consent  

    e) Contract with a lawful object  

    Answer: c) Contract involving coercion  

 

24. Which of the following agreements is expressly declared void under the Indian Contract Act?  

    a) An agreement with a minor  

    b) An agreement made for legal consideration  

    c) An agreement made by competent parties  

    d) An agreement with lawful object  

    e) An agreement between two major parties  

    Answer: a) An agreement with a minor  

 

25. What happens if one party commits coercion to obtain consent for a contract?  

    a) The contract is void.  

    b) The contract is voidable at the option of the aggrieved party.  

    c) The contract is valid if the other party agrees.  

    d) The contract is ratified by default.  

    e) The contract becomes automatically enforceable.  

    Answer: b) The contract is voidable at the option of the aggrieved party  

 

26. When does a mistake of law affect the validity of a contract?  

    a) When it relates to foreign law.  

    b) When it relates to Indian law.  

    c) When it relates to civil law.  

    d) When it affects only one party.  

    e) When it is about common knowledge.  

    Answer: a) When it relates to foreign law  

 

27. A minor can be held liable for:  

    a) Contracts for goods sold to him.  

    b) Contracts made by his guardian for necessaries.  

    c) Contracts for the purchase of luxury items.  

    d) Contracts for partnership.  

    e) Contracts for immovable property.  

    Answer: b) Contracts made by his guardian for necessaries  

 

28. Which of the following elements vitiates free consent?  

    a) Consideration  

    b) Offer  

    c) Acceptance  

    d) Fraud  

    e) Competency  

    Answer: d) Fraud  

 

29. What is the consequence of a contract made by a person of unsound mind?  

    a) The contract is valid.  

    b) The contract is voidable at the option of the unsound person.  

    c) The contract is void.  

    d) The contract can be ratified.  

    e) The contract becomes enforceable after 6 months.  

    Answer: c) The contract is void  

 

30. Which of the following acts is NOT considered coercion under Section 15?  

    a) Threatening to commit suicide  

    b) Detaining someone’s property unlawfully  

    c) Threatening to file a legal suit  

    d) Committing an act forbidden by the Indian Penal Code  

    e) Detaining a person  

    Answer: c) Threatening to file a legal suit  

 

31. Under which section is misrepresentation defined?  

    a) Section 15  

    b) Section 16  

    c) Section 17  

    d) Section 18  

    e) Section 19  

    Answer: d) Section 18  

 

32. Which of the following factors is necessary for a valid contract?  

    a) Free consent  

    b) Fraud  

    c) Mistake  

    d) Coercion  

    e) Misrepresentation  

    Answer: a) Free consent  

 

33. A contract made with a foreign sovereign is:  

    a) Always void.  

    b) Always valid.  

    c) Valid unless made under undue influence.  

    d) Void unless ratified by a government authority.  

    e) Void unless there is a legal process for its enforcement.  

    Answer: e) Void unless there is a legal process for its enforcement  

 

34. When can a minor’s property be liable under a contract?  

    a) When the minor purchases luxury goods.  

    b) When necessaries are supplied to the minor.  

    c) When the minor enters into a contract for immovable property.  

    d) When the minor buys shares.  

    e) When the minor joins a partnership.  

    Answer: b) When necessaries are supplied to the minor  

 

35. Which of the following statements is TRUE about undue influence?  

    a) It requires physical coercion.  

    b) It applies only between strangers.  

    c) It arises from a fiduciary relationship.  

    d) It always results in a void contract.  

    e) It involves threats of physical harm.  

    Answer: c) It arises from a fiduciary relationship  

 

36. In which case is a contract not enforceable?  

    a) Both parties consent freely.  

    b) The consideration is lawful.  

    c) The contract is made for an unlawful object.  

    d) The object is lawful.  

    e) The parties are competent.  

    Answer: c) The contract is made for an unlawful object  

 

37. An agreement that is impossible to perform is:  

    a) Voidable.  

    b) Valid.  

    c) Void.  

    d) Ratifiable.  

    e) Enforceable under specific circumstances.  

    Answer: c) Void  

 

38. What is the effect of misrepresentation on a contract?  

    a) The contract is void.  

    b) The contract is voidable at the option of the innocent party.  

    c) The contract is automatically valid.  

    d) The contract is enforceable with penalties.  

    e) The contract is enforceable if ratified.  

    Answer: b) The contract is voidable at the option of the innocent party  

 

39. Which of the following is an example of unlawful consideration?  

    a) A promise to repay a loan.  

    b) A contract to sell goods.  

    c) A promise to commit a crime in exchange for money.  

    d) A contract for professional services.  

    e) A loan agreement with lawful interest.  

    Answer: c) A promise to commit a crime in exchange for money  

 

40. What happens to a contract involving an alien enemy during wartime?  

    a) It is valid.  

    b) It is suspended.  

    c) It is ratifiable after the war ends.  

    d) It is void.  

    e) It can be enforced in special courts.  

    Answer: d) It is void  

 

41. A contract involving unlawful consideration is considered:  

    a) Valid  

    b) Void  

    c) Voidable at the option of the guilty party  

    d) Contingent  

    e) Ratifiable  

    Answer: b) Void  

 

42. What happens when both parties are under a mistake as to a matter of fact essential to the agreement?  

    a) The contract is valid.  

    b) The contract is voidable at the option of either party.  

    c) The contract is void.  

    d) The contract can be ratified.  

    e) The contract becomes enforceable after correction.  

    Answer: c) The contract is void  

 

43. Which section of the Indian Contract Act deals with mistake of fact?  

    a) Section 15  

    b) Section 20  

    c) Section 25  

    d) Section 30  

    e) Section 35  

    Answer: b) Section 20  

 

44. Which of the following statements about free consent is correct?  

    a) Consent is always free if both parties agree.  

    b) Consent is free only when it is not caused by coercion, fraud, undue influence, or mistake.  

    c) Free consent cannot be challenged.  

    d) Free consent means parties have signed a written agreement.  

    e) Free consent is assumed in all oral contracts.  

    Answer: b) Consent is free only when it is not caused by coercion, fraud, undue influence, or mistake  

 

45. An agreement made without consideration is:  

    a) Void  

    b) Valid  

    c) Voidable  

    d) Enforceable with penalties  

    e) Contingent  

    Answer: a) Void  

 

46. In which case can a contract be enforced despite a unilateral mistake?  

    a) When the mistake relates to the identity of the person.  

    b) When the mistake is about the price of goods.  

    c) When the mistake is about the quality of goods.  

    d) When the mistake affects both parties.  

    e) When the mistake does not affect the nature of the contract.  

    Answer: e) When the mistake does not affect the nature of the contract  

 

47. Which of the following is a characteristic of fraud under Section 17?  

    a) It is always committed innocently.  

    b) It involves a breach of fiduciary duty.  

    c) It is committed with intent to deceive.  

    d) It can be corrected by mistake.  

    e) It must be agreed to by both parties.  

    Answer: c) It is committed with intent to deceive  

 

48. What is the status of a contract made by a person who is temporarily of unsound mind?  

    a) The contract is valid.  

    b) The contract is void.  

    c) The contract is voidable at the option of the person of unsound mind.  

    d) The contract becomes valid after the person recovers.  

    e) The contract can be ratified.  

    Answer: b) The contract is void  

 

49. A person usually of sound mind, but occasionally of unsound mind, can make a contract:  

   a) Only when they are unsound.  

   b) Only when they are of sound mind.  

   c) Only if the other party agrees.  

   d) When a guardian is involved.  

   e) When they are authorized by a court.  

   Answer: b) Only when they are of sound mind  

 

50. In a contract with a minor, what is the status of the contract if the minor falsely represents himself as a major?  

   a) The contract is void.  

   b) The contract is valid.  

   c) The contract is voidable at the option of the minor.  

   d) The minor can be sued for damages.  

   e) The contract becomes valid upon the minor attaining majority.  

   Answer: a) The contract is void  

 

51. When can an agreement made by a minor be enforced?  

   a) When the agreement is ratified by the minor upon reaching the age of majority.  

   b) When the minor misrepresents his age.  

   c) When the agreement is for necessaries supplied to the minor.  

   d) When the agreement is in the form of a contract for luxury goods.  

   e) When the guardian enters into a contract with a third party.  

   Answer: c) When the agreement is for necessaries supplied to the minor  

 

52. What is the effect of a contract made with an alien enemy during wartime?  

   a) The contract is valid.  

   b) The contract is voidable at the option of the alien enemy.  

   c) The contract is suspended until the end of the war.  

   d) The contract is void.  

   e) The contract is enforceable in specific courts.  

   Answer: d) The contract is void  

 

53. A contract entered into by a minor’s guardian on the minor’s behalf is:  

   a) Always void.  

   b) Always valid.  

   c) Void unless it is for the minor’s benefit.  

   d) Voidable at the option of the minor.  

   e) Enforceable only after the minor reaches majority.  

   Answer: c) Void unless it is for the minor’s benefit  

 

54. In which situation does silence amount to fraud under Section 17?  

   a) When there is a duty to speak.  

   b) When both parties are aware of the facts.  

   c) When the silence does not affect the outcome.  

   d) When the party has no knowledge of the fact.  

   e) When the silence is about a non-material fact.  

   Answer: a) When there is a duty to speak  

 

55. In a contract of guarantee, when is the guarantor liable for the minor’s obligations?  

   a) The guarantor is never liable for a minor’s obligations.  

   b) The guarantor is liable if the contract is for necessaries.  

   c) The guarantor is liable only if the contract was ratified by the minor.  

   d) The guarantor is liable under all circumstances.  

   e) The guarantor is liable only if the minor is of sound mind.  

   Answer: b) The guarantor is liable if the contract is for necessaries.  

 

56. What is the status of an agreement made by a minor for non-necessaries?  

   a) Valid and enforceable.  

   b) Void.  

   c) Voidable at the option of the minor.  

   d) Enforceable if ratified by the guardian.  

   e) Enforceable if the minor is of sound mind.  

   Answer: b) Void.  

 

57. Which of the following statements is true regarding the capacity to contract?  

   a) All persons can enter into contracts.  

   b) Only adults can enter into contracts.  

   c) Minors can enter into any contract.  

   d) Persons of unsound mind can enter into contracts.  

   e) All contracts are enforceable regardless of the parties’ capacity.  

   Answer: b) Only adults can enter into contracts.  

 

58. What is the legal effect of a contract made under a mutual mistake of fact?  

   a) The contract is valid.  

   b) The contract is voidable.  

   c) The contract is void.  

   d) The contract can be ratified.  

   e) The contract is enforceable with penalties.  

   Answer: c) The contract is void.  

 

59. Which of the following contracts is enforceable?  

   a) Contract to commit a crime.  

   b) Contract made under undue influence.  

   c) Contract for the sale of stolen goods.  

   d) Contract for necessaries provided to a minor.  

   e) Contract made with a person of unsound mind.  

   Answer: d) Contract for necessaries provided to a minor.  

 

60. What happens if a contract is made for an unlawful purpose?  

   a) The contract is void.  

   b) The contract is valid if both parties agree.  

   c) The contract is voidable at the option of either party.  

   d) The contract can be enforced with penalties.  

   e) The contract is enforceable if ratified later.  

   Answer: a) The contract is void.  

 

61. Which of the following is a valid defense against a claim of misrepresentation?  

   a) The misrepresentation was made unknowingly.  

   b) The misrepresentation was made intentionally.  

   c) The misrepresentation was about the future.  

   d) The misrepresentation was about a material fact.  

   e) The misrepresentation was made by a third party.  

   Answer: a) The misrepresentation was made unknowingly.  

 

62. What is the effect of a contract made by a person who is intoxicated?  

   a) The contract is valid.  

   b) The contract is void.  

   c) The contract is voidable at the option of the intoxicated person.  

   d) The contract can be ratified once sober.  

   e) The contract is enforceable if the other party was aware of the intoxication.  

   Answer: c) The contract is voidable at the option of the intoxicated person.  

 

63. In which of the following cases can a contract be enforced despite a mistake?  

   a) When the mistake is about the identity of the parties.  

   b) When the mistake is about the subject matter.  

   c) When the mistake is about the price.  

   d) When the mistake does not affect the nature of the contract.  

   e) When the mistake is mutual.  

   Answer: d) When the mistake does not affect the nature of the contract.  

 

64. Which of the following is NOT a requirement for a valid contract?  

   a) Offer and acceptance.  

   b) Lawful consideration.  

   c) Free consent.  

   d) Written form.  

   e) Competent parties.  

   Answer: d) Written form.  

 

65. What is the status of a contract made by a person who is mentally ill?  

   a) The contract is valid.  

   b) The contract is void.  

   c) The contract is voidable at the option of the mentally ill person.  

   d) The contract can be ratified.  

   e) The contract is enforceable if it is for necessaries.  

   Answer: b) The contract is void.  

 

66. Which of the following agreements is enforceable?  

   a) Agreement to commit a tort.  

   b) Agreement to perform an impossible act.  

   c) Agreement made under coercion.  

   d) Agreement for a lawful purpose.  

   e) Agreement made with a minor.  

   Answer: d) Agreement for a lawful purpose.  

 

67. What is the effect of a contract made with an alien enemy?  

   a) The contract is valid.  

   b) The contract is voidable.  

   c) The contract is void.  

   d) The contract can be enforced in specific courts.  

   e) The contract is enforceable if ratified.  

   Answer: c) The contract is void.  

 

68. In a contract of bailment, which party has the right to compensation?  

   a) The bailor.  

   b) The bailee.  

   c) Both parties.  

   d) Neither party.  

   e) Only if the bailment is for reward.  

   Answer: a) The bailor.  

 

69. Which of the following is a characteristic of a contract of sale?  

   a) Transfer of ownership.  

   b) Transfer of possession only.  

   c) No consideration involved.  

   d) It must be in writing.  

   e) It can only be between merchants.  

   Answer: a) Transfer of ownership.  

 

70. What is the legal status of a contract made for an immoral purpose?  

   a) The contract is valid.  

   b) The contract is void.  

   c) The contract is voidable at the option of either party.  

   d) The contract can be enforced with penalties.  

   e) The contract is enforceable if both parties agree.  

   Answer: b) The contract is void.  

 

71. What is the status of a contract made by a minor’s guardian for non-necessaries?  

   a) Valid  

   b) Void  

   c) Voidable at the option of the minor  

   d) Enforceable if ratified  

   e) Valid only if the minor agrees  

   Answer: b) Void  

 

72. Which of the following is a valid contract?  

   a) A contract to perform an illegal act  

   b) A contract made under undue influence  

   c) A contract for the sale of goods  

   d) A contract made with a minor  

   e) A contract made with a person of unsound mind  

   Answer: c) A contract for the sale of goods  

 

73. What happens if a contract is made for an impossible act?  

   a) The contract is valid  

   b) The contract is void  

   c) The contract is voidable  

   d) The contract can be ratified  

   e) The contract is enforceable under specific circumstances  

   Answer: b) The contract is void  

 

74. Which of the following statements is true regarding coercion?  

   a) Coercion involves physical force only  

   b) Coercion can be implied  

   c) Coercion is always illegal  

   d) Coercion requires a threat of harm  

   e) Coercion can occur without threats  

   Answer: d) Coercion requires a threat of harm  

 

75. Under which section is the concept of consideration defined?  

   a) Section 10  

   b) Section 23  

   c) Section 25  

   d) Section 30  

   e) Section 35  

   Answer: c) Section 25  

 

76. What is the effect of a contract made without consideration?  

   a) The contract is valid  

   b) The contract is void  

   c) The contract is voidable  

   d) The contract is enforceable with penalties  

   e) The contract is contingent  

   Answer: b) The contract is void  

 

77. Which of the following is an example of a contingent contract?  

   a) A contract to pay a sum of money on the occurrence of a specified event  

   b) A contract for the sale of goods  

   c) A contract made under duress  

   d) A contract with a minor  

   e) A contract for the performance of an illegal act  

   Answer: a) A contract to pay a sum of money on the occurrence of a specified event  

 

78. What is the legal status of a contract made under a mutual mistake of fact?  

   a) The contract is valid  

   b) The contract is voidable  

   c) The contract is void  

   d) The contract can be ratified  

   e) The contract is enforceable if corrected  

   Answer: c) The contract is void  

 

79. Which of the following is NOT a requirement for a valid contract?  

   a) Offer and acceptance  

   b) Lawful consideration  

   c) Free consent  

   d) Written form  

   e) Competent parties  

   Answer: d) Written form  

 

80. What happens to a contract made with a person who is mentally incapacitated?  

   a) The contract is valid  

   b) The contract is void  

   c) The contract is voidable at the option of the incapacitated person  

   d) The contract can be ratified  

   e) The contract is enforceable if for necessaries  

   Answer: b) The contract is void  

 

81. Which of the following agreements is enforceable?  

   a) Agreement to commit a crime  

   b) Agreement to perform an impossible act  

   c) Agreement made for a lawful purpose  

   d) Agreement made with a minor  

   e) Agreement made under duress  

   Answer: c) Agreement made for a lawful purpose  

 

82. What is the effect of a contract made under fraud?  

   a) The contract is valid  

   b) The contract is voidable at the option of the defrauded party  

   c) The contract is void  

   d) The contract can be enforced with penalties  

   e) The contract becomes valid upon ratification  

   Answer: b) The contract is voidable at the option of the defrauded party  

 

83. In which of the following cases can a minor’s contract be enforced?  

   a) For luxury items  

   b) For necessaries supplied  

   c) For partnership agreements  

   d) For the sale of immovable property  

   e) For contracts made with misrepresentation  

   Answer: b) For necessaries supplied  

 

84. Which of the following is a characteristic of a valid contract?  

   a) It must be in writing  

   b) It must involve consideration  

   c) It must be signed by both parties  

   d) It must be witnessed  

   e) It must be registered  

   Answer: b) It must involve consideration  

 

85. What is the consequence of a contract made under duress?  

   a) The contract is valid  

   b) The contract is voidable  

   c) The contract is void  

   d) The contract can be ratified  

   e) The contract is enforceable with penalties  

   Answer: b) The contract is voidable  

 

86. Which of the following agreements is void under the Indian Contract Act?  

   a) Agreement in restraint of trade  

   b) Agreement to sell goods  

   c) Agreement to provide services  

   d) Agreement to lend money  

   e) Agreement to purchase property  

   Answer: a) Agreement in restraint of trade  

 

87. What is the effect of a contract made with an alien enemy during wartime?  

   a) The contract is valid  

   b) The contract is voidable  

   c) The contract is suspended until the end of the war  

   d) The contract is void  

   e) The contract is enforceable in specific courts  

   Answer: d) The contract is void  

 

88. In a contract of bailment, which party has the right to compensation?  

   a) The bailor  

   b) The bailee  

   c) Both parties  

   d) Neither party  

   e) Only if the bailment is for reward  

   Answer: a) The bailor  

 

89. Which of the following is a valid defense against a claim of misrepresentation?  

   a) The misrepresentation was made unknowingly  

   b) The misrepresentation was made intentionally  

   c) The misrepresentation was about the future  

   d) The misrepresentation was about a material fact  

   e) The misrepresentation was made by a third party  

   Answer: a) The misrepresentation was made unknowingly  

 

90. What is the effect of a contract made with a person who is intoxicated?  

   a) The contract is valid  

   b) The contract is void  

   c) The contract is voidable at the option of the intoxicated person  

   d) The contract can be ratified once sober  

   e) The contract is enforceable if the other party was aware of the intoxication  

   Answer: c) The contract is voidable at the option of the intoxicated person  

 

91. In a contract of guarantee, when is the guarantor liable for the minor’s obligations?  

   a) The guarantor is never liable for a minor’s obligations.  

   b) The guarantor is liable if the contract is for necessaries.  

   c) The guarantor is liable only if the contract was ratified by the minor.  

   d) The guarantor is liable under all circumstances.  

   e) The guarantor is liable only if the minor is of sound mind.  

   Answer: b) The guarantor is liable if the contract is for necessaries.  

 

92. What is the effect of a contract made by a person who is mentally ill?  

   a) The contract is valid.  

   b) The contract is void.  

   c) The contract is voidable at the option of the mentally ill person.  

   d) The contract can be ratified.  

   e) The contract is enforceable if it is for necessaries.  

   Answer: b) The contract is void.  

 

93. Which of the following agreements is enforceable?  

   a) Agreement to commit a tort.  

   b) Agreement made under duress.  

   c) Agreement for a lawful purpose.  

   d) Agreement made with a minor.  

   e) Agreement that is impossible to perform.  

   Answer: c) Agreement for a lawful purpose.  

 

94. What is the consequence of a contract made under duress?  

   a) The contract is valid.  

   b) The contract is voidable.  

   c) The contract is void.  

   d) The contract can be ratified.  

   e) The contract is enforceable with penalties.  

   Answer: b) The contract is voidable.  

 

95. Which of the following agreements is expressly declared void under the Indian Contract Act?  

   a) An agreement with a minor.  

   b) An agreement made for legal consideration.  

   c) An agreement made by competent parties.  

   d) An agreement with lawful object.  

   e) An agreement between two major parties.  

   Answer: a) An agreement with a minor.  

 

96. What happens if one party commits coercion to obtain consent for a contract?  

   a) The contract is void.  

   b) The contract is voidable at the option of the aggrieved party.  

   c) The contract is valid if the other party agrees.  

   d) The contract is ratified by default.  

   e) The contract becomes automatically enforceable.  

   Answer: b) The contract is voidable at the option of the aggrieved party.  

 

97. When does a mistake of law affect the validity of a contract?  

   a) When it relates to foreign law.  

   b) When it relates to Indian law.  

   c) When it relates to civil law.  

   d) When it affects only one party.  

   e) When it is about common knowledge.  

   Answer: a) When it relates to foreign law.  

 

98. A minor can be held liable for:  

   a) Contracts for goods sold to him.  

   b) Contracts made by his guardian for necessaries.  

   c) Contracts for the purchase of luxury items.  

   d) Contracts for partnership.  

   e) Contracts for immovable property.  

   Answer: b) Contracts made by his guardian for necessaries.  

 

99. Which of the following elements vitiates free consent?  

   a) Consideration.  

   b) Offer.  

   c) Acceptance.  

   d) Fraud.  

   e) Competency.  

   Answer: d) Fraud.  

 

100. What is the consequence of a contract made by a person of unsound mind?  

    a) The contract is valid.  

    b) The contract is voidable at the option of the unsound person.  

    c) The contract is void.  

    d) The contract can be ratified.  

    e) The contract becomes enforceable after 6 months.  

    Answer: c) The contract is void.  

The Indian Contract Act, 1872 : Performance of Contract

 

1. What is the meaning of “Performance of Contract” according to the Indian Contract Act?
   A) Signing of the contract by both parties
   B) Fulfilling obligations as per the contract
   C) Terminating the contract
   D) Filing a lawsuit against the promisor
   E) None of these
   Answer: B
2. Which of the following best describes “Actual Performance”?
   A) Offering to perform the contract without completing it
   B) Fulfilling all the obligations under the contract as agreed
   C) Partially fulfilling the contract
   D) Refusing to perform the contract
   E) None of these
   Answer: B
3. What does “Attempted Performance” mean?
   A) Failure to perform the contract
   B) The promisor offers to perform, but the promisee refuses to accept
   C) The contract is terminated before it is completed
   D) A third party performs the contract
   E) Performance of an illegal contract
   Answer: B
4. What must be satisfied for a tender of performance to be valid?
   A) Performance must be made in writing
   B) The tender must be unconditional and at the proper time and place
   C) Only partial performance is acceptable
   D) The tender must include a discount for the promisee
   E) None of the above
   Answer: B
5. Which section of the Indian Contract Act defines performance by the promisor or his agent?
   A) Section 50
   B) Section 41
   C) Section 37
   D) Section 62
   E) Section 43
   Answer: C
6. If a promisor dies, who is responsible for performing the contract?
   A) The contract automatically terminates
   B) The legal representative of the promisor is responsible if the contract does not involve personal skills
   C) The contract becomes void
   D) The promisee must hire someone else to perform
   E) None of these
   Answer: B
7. If a third party performs the promise without authorization, and the promisee accepts it, what happens?
   A) The promisor is still liable
   B) The contract becomes void
   C) The promisor is discharged from liability
   D) The third party becomes liable
   E) The contract needs to be renegotiated
   Answer: C
8. What is the effect of accepting performance from a third person under Section 41?
   A) The contract is terminated
   B) The promisor is discharged from his obligations
   C) The promisee can enforce the contract against both the promisor and the third party
   D) The contract is partially fulfilled
   E) The promisee must compensate the third party
   Answer: B
9. When must joint promisors perform their promise?
   A) Each promisor must perform separately
   B) Joint promisors must perform together, or the promisee may compel any one of them to perform
   C) The promisee can compel all joint promisors to perform equally
   D) Joint promisors are only liable if the promisee agrees in writing
   E) Joint promisors are not liable after the death of one
   Answer: B
10. What happens when one joint promisor dies?
    A) The contract becomes void
    B) The surviving joint promisors and the legal representatives of the deceased promisor must perform
    C) The promisee must discharge the contract
    D) The legal representative alone performs the promise
    E) None of the above
    Answer: B
11. What happens if a joint promisor makes default in performance?
    A) The entire contract is void
    B) The promisee must terminate the contract
    C) The remaining joint promisors must bear the loss equally
    D) The defaulting promisor is the only one liable
    E) The legal representative takes on the liability
    Answer: C
12. Under Section 43, if one joint promisor is compelled to perform, what is his right?
    A) He cannot ask for contributions from other promisors
    B) He can ask the promisee to release him
    C) He is entitled to recover contributions from other joint promisors
    D) He can terminate the contract unilaterally
    E) He must bear the full liability alone
    Answer: C
13. If one joint promisor is released from liability by the promisee, what happens to the other joint promisors?
    A) They are also released from liability
    B) They are still responsible for performing the contract
    C) The contract becomes void
    D) They must enter into a new contract
    E) The promisee must renegotiate the contract
    Answer: B
14. In which case is time considered of essence in a contract?
    A) Time is always of the essence
    B) Only when specifically mentioned in the contract
    C) Never
    D) If the contract involves a sale of goods
    E) When either party declares it
    Answer: B
15. What happens if the promisor does not perform his obligation on time, and time is of the essence?
    A) The contract becomes voidable at the option of the promisee
    B) The promisor has no liability
    C) The promisee must wait for the promisor
    D) The contract is automatically terminated
    E) The promisee cannot claim damages
    Answer: A
16. According to Section 56, what happens when a contract involves doing an impossible act?
    A) The contract is partially void
    B) The contract is void from the beginning
    C) The promisor must compensate the promisee
    D) The contract can still be performed
    E) The parties must renegotiate
    Answer: B
17. If the promisor alone knows the impossibility of performing a contract, what can the promisee claim?
    A) The contract is void, and the promisee cannot claim anything
    B) The promisee can claim compensation for any loss due to nonperformance
    C) The promisee must wait for the promisor
    D) The contract is enforced regardless of impossibility
    E) The promisee must compensate the promisor
    Answer: B
18. What happens in the case of subsequent impossibility of performance?
    A) The contract becomes void
    B) The promisor must still perform the contract
    C) The promisee must compensate the promisor
    D) The contract remains valid but is unenforceable
    E) The parties are free to renegotiate
    Answer: A
19. Which of the following best describes “Novation” under the Indian Contract Act?
    A) The creation of a new contract in place of the old one
    B) Alteration of some terms in the old contract
    C) Cancellation of the contract
    D) Acceptance of lesser performance
    E) None of the above
    Answer: A
20. Which section of the Indian Contract Act deals with the appropriation of payments?
    A) Section 62
    B) Section 61
    C) Section 56
    D) Section 43
    E) Section 59
    Answer: E
21. Which of the following can discharge a contract?
    A) Performance of the contract
    B) Breach of the contract
    C) Novation of the contract
    D) Rescission of the contract
    E) All of the above
    Answer: E
22. Which section of the Indian Contract Act deals with contracts that are impossible to perform?
    A) Section 45
    B) Section 43
    C) Section 56
    D) Section 37
    E) Section 50
    Answer: C
23. A debtor owes multiple debts to the same creditor. What determines how a payment should be appropriated?
    A) The law decides the allocation
    B) The debtor indicates which debt to apply the payment to
    C) The payment is automatically applied to the oldest debt
    D) The creditor alone decides how to appropriate it
    E) The payment must be equally split between all debts
    Answer: B
24. Under Section 57, what happens if a contract includes both legal and illegal promises?
    A) The contract is entirely void
    B) The legal part is enforceable, but the illegal part is void
    C) The promisee must waive the illegal part
    D) The contract is only partially valid
    E) Both parts of the contract are void
    Answer: B
25. If a contract becomes void due to an unforeseen change in the law, what is this type of impossibility called?
    A) Initial impossibility
    B) Postcontractual impossibility
    C) Objective impossibility
    D) Legal impossibility
    E) Contractual frustration
    Answer: B
26. What is the effect of a promisor’s failure to perform a reciprocal promise under Section 54?
    A) The promisee must perform their promise regardless
    B) The promisor cannot demand performance from the other party
    C) The contract is automatically void
    D) The contract is voidable by both parties
    E) The promisor is entitled to compensation
    Answer: B
27. Which of the following can result in the discharge of a contract without performance?
    A) Novation
    B) Rescission
    C) Alteration
    D) Mutual agreement to cancel
    E) All of the above
    Answer: E
28. What happens if neither the debtor nor the creditor makes an appropriation of payment?
    A) The payment is forfeited
    B) The court decides the allocation
    C) The payment is applied in discharge of debts in order of time
    D) The payment is split equally between all debts
    E) The payment is returned to the debtor
    Answer: C
29. In which case does the legal representative of the promisor not have to perform the contract?
    A) When the contract involves personal skills or qualifications
    B) When the promisor dies after offering to perform
    C) When the contract is for the sale of goods
    D) When the legal representative refuses to perform
    E) When the contract is illegal
    Answer: A
30. What does “Remission” refer to under Section 63 of the Indian Contract Act?
    A) Complete termination of the contract
    B) Substitution of a new contract
    C) Acceptance of lesser performance than originally agreed
    D) Offering to perform the contract at a later time
    E) Performance by a third party
    Answer: C
31. What is the consequence if a party refuses to afford reasonable facilities for the other party to perform?
    A) The contract becomes voidable
    B) The promisor is excused from nonperformance
    C) The contract must be renegotiated
    D) The promisor must still perform their promise
    E) The contract is terminated
    Answer: B
32. If the time for performance is not specified in a contract, by when must the performance take place?
    A) Immediately
    B) Within a reasonable time
    C) Before the end of the year
    D) Within 30 days
    E) As soon as the promisor is able
    Answer: B
33. Which of the following sections deals with contracts involving reciprocal promises?
    A) Sections 3740
    B) Sections 4547
    C) Sections 5158
    D) Sections 6062
    E) Sections 4043
    Answer: C
34. What must happen for a rescission of a contract to take effect?
    A) The promisor must provide written notice
    B) It must be communicated in the same way as the original proposal
    C) It must be approved by a third party
    D) The court must authorize it
    E) The contract must have been breached
    Answer: B
35. Under Section 46, if no time for performance is specified, the promise must be performed:
    A) Before the promisee asks for it
    B) At the promisee’s discretion
    C) Within business hours on the day of the contract
    D) Within a reasonable time
    E) After the debtor makes an offer
    Answer: D
36. If a contract is formed for an act that becomes illegal after the contract is made, what is the effect on the contract?
    A) It remains enforceable
    B) It becomes void
    C) It is suspended until the law is changed
    D) It must be modified to comply with the new law
    E) The promisor must perform an alternative act
    Answer: B
37. When can a promisee refuse a valid tender of performance?
    A) When the tender is for partial performance
    B) When the tender is conditional
    C) When the tender is made at an unreasonable time
    D) When the tender is made at an incorrect place
    E) All of the above
    Answer: E
38. If one party to a contract prevents the other party from performing their promise, what happens to the contract?
    A) The contract becomes voidable at the option of the prevented party
    B) The contract is automatically void
    C) The prevented party must perform regardless
    D) The preventing party must provide compensation
    E) The contract must be renegotiated
    Answer: A
39. What is the effect of a novation on the original contract?
    A) The original contract remains enforceable
    B) The original contract is terminated and replaced with a new one
    C) The original contract is suspended
    D) The promisor’s obligations are reduced
    E) The promisee must still perform their obligations
    Answer: B
40. What is required for an agreement to substitute a new contract for an existing one?
    A) Mutual agreement of both parties
    B) The approval of a third party
    C) The contract must be in writing
    D) The contract must be signed in front of witnesses
    E) The promisor must offer compensation
    Answer: A
41. What happens if the promisor fails to perform an obligation that must be performed first in a contract of reciprocal promises?
    A) The contract becomes void
    B) The promisee must perform their obligation regardless
    C) The promisor cannot demand performance of the reciprocal promise
    D) The promisee is liable for damages
    E) The contract is terminated
    Answer: C
42. In the case of joint promisors, what happens when the promisee releases one of them from liability?
    A) All joint promisors are released
    B) The remaining joint promisors are still liable
    C) The contract becomes void
    D) The contract is terminated
    E) The promisee must renegotiate with the remaining promisors
    Answer: B
43. If a contract involves doing something that becomes impossible due to an external event, what is the effect on the contract?
    A) It becomes void
    B) It must be performed regardless
    C) The contract is modified to reflect the changes
    D) The promisor is excused, but the promisee must compensate them
    E) The promisee must find an alternative way to perform
    Answer: A
44. Under Section 38, when can a promisor be excused from nonperformance of a contract?
    A) If the promisee refuses to accept a valid offer of performance
    B) If the promisor finds the performance too difficult
    C) If the performance is no longer profitable
    D) If the promisor is unable to perform due to personal reasons
    E) If the promisor decides to withdraw from the contract
    Answer: A
45. What is the effect of rescission on a contract?
    A) The contract is suspended
    B) The contract is modified
    C) The contract is terminated
    D) The contract becomes voidable
    E) The contract remains enforceable until compensation is paid
    Answer: C
46. Which of the following is not a requirement for a valid tender of performance?
    A) It must be unconditional
    B) It must be made at the proper time and place
    C) It must be made in writing
    D) It must offer to fulfill the entire obligation
    E) It must provide the promisee a reasonable opportunity to inspect
    Answer: C
47. What happens if a contract involves both legal and illegal promises under Section 57?
    A) The contract is void
    B) Only the illegal part is void
    C) The contract must be revised
    D) The contract is unenforceable
    E) The promisee must pay compensation
    Answer: B
48. What is required for a third party to perform a contract on behalf of the promisor?
    A) Authorization from the court
    B) Consent of the promisee
    C) Notification to the promisor
    D) The third party must provide compensation
    E) No conditions are required
    Answer: B
49. Which of the following best describes “Alteration” under the Indian Contract Act?
    A) A complete replacement of the contract
    B) A modification of the terms of the original contract
    C) Termination of the contract
    D) A partial waiver of obligations
    E) None of the above
    Answer: B
50. If neither party appropriates a payment made toward multiple debts, how is the payment applied?
    A) It is applied proportionately across all debts
    B) It is applied to the debts in order of time
    C) It is refunded to the debtor
    D) It is forfeited to the creditor
    E) It is applied to the largest debt
    Answer: B
51. What happens when a party offers performance but the other party refuses to accept it?
    A) The promisor is excused from performance
    B) The contract becomes void
    C) The promisor must perform regardless
    D) The contract must be renegotiated
    E) The contract is terminated
    Answer: A
52. What happens if a contract becomes voidable due to the promisor’s failure to perform on time?
    A) The promisee can enforce the contract
    B) The contract becomes void automatically
    C) The promisee can terminate the contract
    D) The contract must be revised
    E) The promisor can claim damages
    Answer: C
53. When is time considered not essential in a contract?
    A) When explicitly mentioned in the contract
    B) When the subject matter involves a sale of goods
    C) When both parties agree to flexible timing
    D) When the court orders performance at any time
    E) When neither party requests timespecific performance
    Answer: C
54. What happens if a party accepts performance after the agreed time without any objection?
    A) The contract becomes void
    B) The party cannot claim compensation for late performance
    C) The party can still claim damages for late performance
    D) The contract must be renegotiated
    E) The promisor is liable for breach
    Answer: B
55. What is the effect of a contract to perform an impossible act under Section 56?
    A) The contract is partially void
    B) The contract is void from the beginning
    C) The promisor must compensate the promisee
    D) The contract can still be performed with modifications
    E) The parties must renegotiate
    Answer: B
56. Under Section 61, if neither party makes an appropriation, how is the payment applied?
    A) It is split evenly between the debts
    B) It is applied in discharge of debts in order of time
    C) It is applied to the oldest debt first
    D) It is returned to the debtor
    E) It is forfeited to the promisee
    Answer: B
57. What is the effect of a partial performance of a contract if the entire performance is required?
    A) The contract becomes void
    B) The partial performance is accepted as full performance
    C) The promisee may reject the partial performance
    D) The promisor is excused from further performance
    E) The promisor can claim compensation for partial performance
    Answer: C
58. When is a promisee entitled to claim compensation for nonperformance?
    A) When the promisor is unable to perform
    B) When the promisor willfully refuses to perform
    C) When the promisor fails to perform on time
    D) When the performance becomes illegal
    E) When the promisee fails to provide adequate facilities for performance
    Answer: B
59. Which of the following is not a way to discharge a contract?
    A) Performance
    B) Agreement
    C) Novation
    D) Impossibility
    E) Breach
    Answer: D
60. If a promisor dies before the time for performance and the contract does not involve personal skill, who is liable to perform?
    A) The contract is terminated
    B) The promisee must find another promisor
    C) The legal representatives of the promisor
    D) The court must assign someone
    E) No one is liable to perform
    Answer: C
61. What happens when a debtor fails to indicate which debt a payment is meant to discharge?
    A) The creditor must return the payment
    B) The debtor forfeits the payment
    C) The creditor may apply the payment at their discretion
    D) The payment is applied equally to all debts
    E) The payment is voided
    Answer: C
62. In the case of a joint promise, what happens if all promisors die?
    A) The contract is automatically discharged
    B) The legal representatives of all promisors must jointly perform the promise
    C) The promisee can no longer enforce the contract
    D) The contract becomes voidable
    E) The promisee must release the legal representatives from liability
    Answer: B
63. When can a promisee refuse to accept a tender of performance?
    A) When the tender is conditional
    B) When the tender is incomplete
    C) When the tender is made at the wrong time or place
    D) When the tender is for partial performance
    E) All of the above
    Answer: E
64. Which section of the Indian Contract Act explains the rights of joint promisees?
    A) Section 37
    B) Section 42
    C) Section 43
    D) Section 45
    E) Section 50
    Answer: D
65. In which situation does a contract become void due to supervening impossibility?
    A) When the promisor is unwilling to perform
    B) When performance becomes illegal due to a new law
    C) When the promisor’s performance becomes too expensive
    D) When the promisor is absent
    E) When the promisee fails to request performance
    Answer: B
66. Under Section 63, the promisee may:
    A) Dispense with or remit, wholly or in part, the performance of the promise made to him
    B) Extend the time for such performance
    C) Accept any satisfaction he thinks fit instead of the promised performance
    D) All of the above
    E) None of the above
    Answer: D
67. What is the meaning of “Anticipatory Breach”?
    A) The refusal to perform a contract after the due date
    B) The refusal to perform a contract before the performance is due
    C) The failure to perform a contract after partial performance
    D) The refusal to sign the contract after agreement
    E) The alteration of terms in a contract
    Answer: B
68. What is the effect of “Rescission” under the Indian Contract Act?
    A) It suspends the contract
    B) It allows only partial performance of the contract
    C) It terminates the contract completely
    D) It transfers the contract to a third party
    E) It renews the contract
    Answer: C
69. If a promise is to be performed on a certain day, and no time is specified, at what time must the performance take place?
    A) Any time during the day
    B) Within reasonable hours of business on the specified day
    C) Within 24 hours of the promised day
    D) As soon as the promisor is able to perform
    E) At a time requested by the promisee
    Answer: B
70. Which of the following best describes “Waiver” under Section 63 of the Indian Contract Act?
    A) Substitution of a new contract
    B) Acceptance of lesser performance
    C) Termination of the contract
    D) Extension of the contract
    E) Assignment of the contract to a third party
    Answer: B
71. What happens when the performance of reciprocal promises is dependent, and the first promisor fails to perform?
    A) The contract becomes void
    B) The second party must still perform their promise
    C) The second party can claim compensation
    D) The second party is excused from performing
    E) The contract is automatically renewed
    Answer: D
72. When a debtor fails to appropriate a payment, what right does the creditor have?
    A) The creditor can refuse the payment
    B) The creditor may appropriate the payment to any lawful debt
    C) The creditor must return the payment
    D) The creditor must seek legal intervention
    E) The creditor can apply the payment to the largest debt
    Answer: B
73. If time is essential to a contract, and the promisor fails to perform on time, what is the effect?
    A) The promisee can terminate the contract
    B) The contract is automatically void
    C) The promisee must grant an extension
    D) The promisor is excused from performance
    E) The promisee must renegotiate the terms
    Answer: A
74. Under Section 42, in the event of the death of a joint promisor, who is responsible for performance?
    A) The legal representatives of the deceased are solely responsible
    B) The legal representatives and the surviving joint promisors must jointly perform the promise
    C) The promise is extinguished
    D) Only the surviving joint promisors are responsible
    E) The promisee must release the legal representatives from liability
    Answer: B
75. What is the effect of a failure to perform a contract where time is not of the essence?
    A) The contract becomes void
    B) The promisee is entitled to compensation
    C) The promisee must terminate the contract
    D) The promisor must offer full performance regardless of delay
    E) The promisee must wait for the promisor to perform
    Answer: B
76. What is the result of a valid novation under Section 62 of the Indian Contract Act?
    A) The original contract is discharged
    B) The original contract is suspended
    C) The original contract is partially performed
    D) The original contract remains enforceable
    E) The original contract is voided retroactively
    Answer: A
77. If a contract is impossible to perform from the beginning, what is it considered under Section 56?
    A) Void from the beginning
    B) Voidable at the promisee’s option
    C) Partially void
    D) Illegal
    E) Suspended until performance becomes possible
    Answer: A
78. If a joint promisor is unable to contribute to the performance, what happens?
    A) The contract is discharged
    B) The remaining joint promisors must bear the loss equally
    C) The legal representatives of the promisor are liable
    D) The promisee must terminate the contract
    E) The remaining joint promisors must renegotiate
    Answer: B
79. What must the promisor do when the contract does not specify the place of performance?
    A) The promisor must appoint a reasonable place for the performance
    B) The promisor must perform at the place of their choice
    C) The promisee must request the place of performance
    D) The contract becomes void for lack of specificity
    E) The promisor can request the court to decide
    Answer: A
80. When is a contract void under the Indian Contract Act?
    A) When it becomes impossible to perform after it is made
    B) When it is illegal from the start
    C) When it is formed under duress
    D) When one party refuses to perform without reason
    E) All of the above
    Answer: B
81. What is the rule for appropriating payments where neither party has made an appropriation?
    A) The payment is forfeited
    B) The payment is applied proportionally to all debts
    C) The payment is applied to debts in order of time
    D) The payment is refunded to the debtor
    E) The payment is applied to the largest debt first
    Answer: C
82. What happens if the promisee neglects or refuses to afford reasonable facilities for the performance of the contract?
    A) The promisor is excused from performance
    B) The promisor must still perform their part
    C) The contract is terminated
    D) The promisee can claim compensation
    E) The promisee must renegotiate the contract
    Answer: A
83. Under Section 50, when can performance of a contract be made?
    A) At any time agreed upon by the parties
    B) At the discretion of the promisor
    C) At the time sanctioned by the promisee
    D) At a time approved by the court
    E) At the time mentioned in the contract
    Answer: C
84. What is the effect of accepting performance at a time other than agreed upon without objection?
    A) The promisee forfeits the right to claim damages for late performance
    B) The promisor is liable for breach
    C) The contract becomes voidable
    D) The contract must be renegotiated
    E) The promisee can claim partial damages
    Answer: A
85. Which of the following acts would make a contract void under the Indian Contract Act?
    A) An agreement to do something illegal
    B) A contract formed under duress
    C) A contract involving fraud
    D) A contract for an impossible act
    E) All of the above
    Answer: E
86. Under Section 44, what happens if one joint promisor is released from liability by the promisee?
    A) The contract is terminated
    B) The remaining joint promisors are still liable
    C) All joint promisors are released from liability
    D) The promisor is excused from performing
    E) The contract becomes void
    Answer: B
87. When a contract is voidable, the party rescinding the contract must:
    A) Inform the promisor immediately
    B) Perform part of the contract before rescinding
    C) Restore any benefit received under the contract
    D) Refuse further communication with the promisor
    E) Pay damages to the promisor
    Answer: C
88. What happens if a contract becomes void due to the death of the promisor?
    A) The contract is terminated
    B) The legal representatives must perform, unless the contract involves personal skills
    C) The promisee can enforce the contract
    D) The court must assign a new promisor
    E) The promisee must release the promisor’s estate from liability
    Answer: B
89. When is a contract considered discharged by “Performance”?
    A) When all the promises have been fulfilled by both parties
    B) When only one party has performed their obligations
    C) When the court terminates the contract
    D) When one party offers to perform but the other refuses
    E) When one party assigns their performance to a third party
    Answer: A
90. What happens if the promisor fails to provide full performance of an obligation?
    A) The promisee must accept partial performance
    B) The contract becomes void
    C) The promisee can refuse partial performance
    D) The promisor is excused from further performance
    E) The contract is terminated
    Answer: C
91. What is the effect of accepting a lesser sum than what was originally agreed upon in a contract?
    A) The contract is void
    B) The remaining amount can be claimed later
    C) The debt is fully discharged
    D) The promisee must pay damages
    E) The promisee can renegotiate the contract
    Answer: C
92. Which of the following is a valid reason for the discharge of a contract under the Indian Contract Act?
    A) Rescission
    B) Novation
    C) Impossibility of performance
    D) Breach of contract
    E) All of the above
    Answer: E
93. When can the promisee claim damages for nonperformance?
    A) If the promisor fails to perform on time and time is of the essence
    B) If the promisor performs at a time different from what was agreed
    C) If the promisor breaches the contract
    D) All of the above
    E) None of the above
    Answer: D
94. What is the effect of “Merger of Rights” in a contract?
    A) The contract becomes void
    B) The inferior right merges into the superior right, discharging the contract
    C) The contract is partially performed
    D) The promisee must offer compensation
    E) The promisee can enforce the contract in court
    Answer: B
95. When is a contract discharged by “Operation of Law”?
    A) Upon the death of the promisor
    B) Upon the insolvency of the promisor
    C) When a court declares the contract void
    D) When both parties agree to terminate it
    E) All of the above
    Answer: E
96. What is the effect of a “Waiver” on a contract?
    A) The contract is terminated
    B) The contract is modified
    C) The promisee gives up the right to performance
    D) The promisor can avoid performing their promise
    E) The contract becomes void
    Answer: C
97. What is the consequence of a breach of contract under the Indian Contract Act?
    A) The contract is discharged
    B) The injured party can claim compensation
    C) The promisor is excused from further performance
    D) The contract must be revised
    E) The contract is automatically void
    Answer: B
98. What happens if a contract involves doing an illegal act after the contract is made?
    A) The contract becomes void due to illegality
    B) The contract remains valid
    C) The promisor must perform the legal parts of the contract
    D) The court must modify the contract
    E) The promisee can claim compensation
    Answer: A
99. What happens if a party fails to perform a promise that was dependent on another promise being performed first?
    A) The contract is terminated
    B) The dependent party can refuse performance
    C) The dependent party must perform their promise regardless
    D) The promisor is excused from performance
    E) The contract becomes void
    Answer: B
100. What is the result when the promisee accepts partperformance in satisfaction of the whole contract?
     A) The contract is terminated
     B) The contract is modified
     C) The contract is fully discharged
     D) The promisee can claim damages later
     E) The promisor must still perform the remaining part
     Answer: C