Indian Contract Act MCQ question and answer

1

The case Frost v. Knight, (1872) LR 7 Ex 111, related to:

A) Anticipatory breach of contract B) Frustration of contract C) Remission of performance of contract D) Discharge of contract by agreement

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Answer & Solution

Answer: Option A

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2

Acceptance to be valid must

A) Be absolute B) Be unqualified C) Both be absolute & unqualified D) Be conditional

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Answer & Solution

Answer: Option C

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3

Who said that 'Acceptance is to offer what a lighted match is to gun powder. Both do something which cannot be undone'?

A) Anson B) Justice Atkin C) Mulla D) Avtar Singh

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Answer & Solution

Answer: Option A

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4

Which of the following is not an agreement in restraint of trade?
1. A sells the goodwill of his business with an agreement not to carry on a similar business within specified local limits, so long as the buyer carries on a similar business.
2. A sells the goodwill of his business with an agreement not to carry on a similar business within India, so long as the buyer carries on a similar business.
3. A sells the goodwill of his business with an agreement not to practice the same trade for 25 years.
4. A sells the goodwill of his business with an agreement not to engage in any business competing or liable to compete in any way with the business for the time being carried on by the buyer.

A) 1, 3 and 4 B) 2, 3 and 4 C) 3 and 4 D) 1 and 3

Discuss

Answer & Solution

Answer: Option D

Solution:

As per Section 27 of the Indian Contract Act, 1872, any agreement that restrains a person from exercising a lawful profession, trade, or business is void, except for the sale of goodwill under reasonable restrictions.

Statement 1 is not an agreement in restraint of trade because a seller can agree not to carry on a similar business within specified local limits, as long as the restriction is reasonable.

Statement 3 is also not an agreement in restraint of trade since the restriction is based on a voluntary goodwill sale agreement, making it enforceable under reasonable limits.

Statement 2 and 4 are agreements in restraint of trade because imposing a nationwide or unlimited restriction is excessive and void under Indian law.

5

Which type of loss are not covered by a contract of indemnity

A) Loss arising from accidents like fire or perils of the sea B) Loss caused by the promisor himself or by a third person C) Loss arising by human agency D) None of the above

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Answer & Solution

Answer: Option A

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6

Which of the following is the correct meaning of "privity of contract":

A) Parties must maintain privacy of contract B) The main object of the contract should be maintained C) Only parties know under what circumstances it was made D) Only parties to a contract can sue on it

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Answer & Solution

Answer: Option D

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7

The correct sequence in formation of contract is

A) Offer, consideration, acceptance, agreement B) Agreement, consideration, offer, acceptance C) Offer, acceptance, agreement, consideration D) Offer, acceptance, consideration, agreement

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Answer & Solution

Answer: Option D

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8

Which of the following cases is considered as a fundamental case on the topic of 'proposal and acceptance' under the Indian Contract Act, 1872?

A) Satyabrat Chose v. Mugneeram & Co. B) Paradin v. Jane C) Mohri Bibi v. Dharmadas Ghose D) M/s. Bhagwandas v. M/s. Girdharilal

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Answer & Solution

Answer: Option D

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9

The communication of acceptance through telephone is regarded as complete when-

A) Acceptance is spoken on telephone B) Acceptance comes to the knowledge of the party proposing C) Acceptance is put in the course of transmission D) Acceptor has done whatever is required to be done by him

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Answer & Solution

Answer: Option B

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10

Match List-I with List-II and select the correct answer using the given below the lists:

List-I (Content)	List-II (Concept)
a. Dominates the will of the other	1. Consideration
b. At the desire of the promisor	2. Quasi-Contract
c. Contract to do or not to do something	3. Undue influence
d. Where a person lawfully does anything for another person	4. Contingent contract

A) a-2, b-3, c-4, d-1 B) a-3, b-1, c-4, d-2 C) a-4, b-2, c-1, d-3 D) a-1, b-4, c-2, d-3

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Answer & Solution

Answer: Option B

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Indian Contract Act MCQ question and answer | Law MCQ question