Indian Contract Act MCQ question and answer

61

Read Assertion (A) and Reason (R) and answer using given below:
Assertion (A): Compensation is recoverable for any loss or damage which the parties knew at the time of the contract as unlikely to result from the breach of the contract.
Reason (R): Because above rule is laid down in Hadley v. Baxendale case.

A) Both (A) and (R) are correct and (R) is correct reason for (A) B) Both (A) and (R) are wrong C) (A) is right, but (R) is wrong D) (R) is right, but (A) is wrong

Discuss

Answer & Solution

Answer: Option B

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62

Where A a tenant, pays the property tax on behalf of owner B, who is bound to pay it, A is

A) Entitled to be reimbursed by B B) Not entitled to reimbursed by B C) Himself have to bear such tax D) Both A and B have to bear such tax equally

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Answer & Solution

Answer: Option A

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63

A contract caused by mistake of law not in force in India:

A) Is void B) Is voidable C) Has the same effect as though it was caused by a mistake of fact D) None of the above

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Answer & Solution

Answer: Option C

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64

A frustration of contract entails if the performance is

A) Commercially impossible B) Restricted by Government rules & regulations C) Destruction of subject matter D) All of the above

Discuss

Answer & Solution

Answer: Option C

Solution:

Frustration of contract refers to a situation where the performance of a contract becomes impossible due to unforeseen events, without the fault of either party.

Commercially impossible
→ If fulfilling the contract becomes commercially unviable due to unexpected circumstances (like drastic changes in the market or supply chain collapse), courts may consider it as frustration, especially if the cost becomes exorbitant or the benefit of the contract is lost.

Restricted by Government rules & regulations
→ If a government law or regulation directly prohibits or restricts the performance of the contract, it constitutes frustration as the legal environment changes beyond the control of either party.

Destruction of subject matter
→ If the core subject matter of the contract is destroyed (e.g., a specific item to be sold is destroyed by fire), the contract becomes void as its performance is no longer possible.

Therefore, all the situations mentioned can lead to frustration of contract, making Option D the correct answer.

65

An agreement to refer the dispute to the arbitrator is valid

A) In respect of disputes already arisen B) In respect of disputes which may arise in future C) Both A and B D) Neither A nor B

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Answer & Solution

Answer: Option C

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66

Whether all agreements made without consideration are void?

A) No B) Yes C) No, if permIssIon from court is obtained D) None of the above

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Answer & Solution

Answer: Option A

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67

A contract with B to pay B Rs. 1,000 if he fails to pay B Rs. 500 on that day.

A) B is entitled to recover form A such compensation, not exceeding Rs. 1,000, as the Court considers reasonable B) B is entitled to recover form A such compensation, not exceeding Rs. 2,000, as the Court considers reasonable C) B is entitled to recover form A such compensation, not exceeding Rs. 3,000, as the Court considers reasonable D) None of these

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Answer & Solution

Answer: Option A

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68

Where one of the parties is under a mistake as to matter of fact the contract is

A) Valid B) Void C) Voidable D) Illegal

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Answer & Solution

Answer: Option A

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69

Which of the following deals with "Continuing guarantee" in the Indian Contract Act, 1872?

A) Section 129 B) Section 126 C) Section 123 D) Section 130

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Answer & Solution

Answer: Option A

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70

Creditor is a person

A) To whom the guarantee is given B) Who gives the guarantee C) In respect of whose default the guarantee is given D) None of the above

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Answer & Solution

Answer: Option A

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Indian Contract Act MCQ question and answer | Law MCQ question