Business Law Online MCQ Set 10

QN01. A contingent contract is;

  1. Void
  2. Voidable
  3. Valid
  4. Illegal
Answer

(C)Valid

QN02. A voidable contract is one which;

  1. Can be enforced at the option of the aggrieved party
  2. Can be enforced at the option of the both parties
  3. Cannot be enforced in a court of laws
  4. Court prohibits
Answer

(A)Can be enforced at the option of the aggrieved party

QN03. A agrees to sell his car worth Rs. I00000 lakh to B for rs.20000 and A's consent was obtained by coercion. Here, the agreement is;

  1. Void
  2. Valid
  3. Voidable
  4. Unlawful
Answer

(C)Voidable

QN04. When one party is in a position to dominate the will of another and uses his superior position to obtain the consent of a weaker party, the consent is said to be obtained by;

  1. Coercion
  2. Undue influence
  3. Fraud
  4. Misrepresentation
Answer

(B)Undue influence

QN05. As per Section 20, the contract is void, on account of bilateral mistake of fact. But as per Section 22, if there is mistake of only one party, then the contract is;

  1. Void
  2. Valid
  3. Voidable
  4. Illegal
Answer

(B)Valid

QN06. A agrees to pay Rs.50000 to B if he kills C. the agreement is

  1. Void
  2. Valid
  3. Voidable
  4. Contingent
Answer

(A)Void

QN07. A agrees to sell his car to B at a price which B may be able to pay. This agreement is

  1. Void
  2. Valid
  3. Voidable
  4. Contingent
Answer

(A)Void

QN08. A agrees to pay Rs.1000 to B if a certain ship returns within a year. However, the ship sinks within the year. In this case, the contract becomes

  1. Valid
  2. Void
  3. Voidable
  4. Illegal
Answer

(B)Void

QN09. Where the performance of a promise by one party depends on the prior performance of promise by the other party, such reciprocal promises fall under category of

  1. Mutual and Concurrent
  2. Conditional and dependent
  3. Mutual and independent
  4. Both (a) and (b)
Answer

(B)Conditional and dependent

QN10. Standing offer means

  1. Offer allowed to remain open for acceptance over a period of times
  2. Offer made to the public in general
  3. When the offeree offers to qualified acceptance of the offer
  4. Offer made to a definite person
Answer

(A)Offer allowed to remain open for acceptance over a period of times

QN11. An agreement which is enforceable by law at the portion of one or more of the parties thereon but not at the option of the other or others is a:

  1. Valid Contract
  2. Void Contract
  3. Voidable Contract
  4. Illegal Contract
Answer

(C)Voidable Contract

QN12. When the consent of a party is not free, the contract is:

  1. Void
  2. Voidable
  3. Valid
  4. Illegal
Answer

(B)Voidable

QN13. Which of the following statement is false?

  1. Generally a stranger to a contract can not sue
  2. A verbal promise to pay a time barred debt is valid
  3. Completed gifts need no consideration
  4. No consideration is necessary to create an agency
Answer

(B)A verbal promise to pay a time barred debt is valid

QN14. Which of the following is not an exception to the rule - No consideration, No contract.

  1. Compensation for involuntary services
  2. Love & Affection
  3. Contract of agencies
  4. Gift
Answer

(A)Compensation for involuntary services

QN15. Moral pressure is involved in the case of

  1. Coercion
  2. Undue influence
  3. Misrepresentation
  4. Fraud
Answer

(B)Undue influence

QN16. An agreement the object or consideration of which is unlawful, is:

  1. Void
  2. Valid
  3. Voidable
  4. Contingent
Answer

(A)Void

QN17. When prior to the due date of performance, the promisor absolutely refuses to perform the contract, it is known as:

  1. Abandonment of a contract
  2. Remission of contract
  3. Actual breach of contract
  4. Anticipatory breach of contract
Answer

(D)Anticipatory breach of contract

QN18. A contract depend on the happening or non happening of the future uncertain event, is a

  1. Uncertain contract
  2. Contingent contract
  3. Void contract
  4. Voidable contract
Answer

(B)Contingent contract

QN19. An agreement made with free consent to which the consideration is lawful but inadequate is;

  1. Void
  2. Valid
  3. Voidable
  4. Unlawful
Answer

(B)Valid

QN20. A contract with the minor, which is beneficial for him, is;

  1. Void ab initio
  2. Voidable
  3. Valid
  4. Illegal
Answer

(C)Valid

QN21. When the consent to an agreement is obtained by coercion, the agreement is voidable at the option of

  1. Either party to the agreement
  2. A party whose consent was so obtained
  3. A party who obtained the consent
  4. None of these
Answer

(B)A party whose consent was so obtained

QN22. Where the consent of both the parties is given by mistakes, the contract is;

  1. Void
  2. Valid
  3. Voidable
  4. Illegal
Answer

(A)Void

QN23. A mistake as to law not in force in India has the same effect as;

  1. Mistake of fact
  2. Mistake of Indian Law
  3. Fraud
  4. Misrepresentation
Answer

(A)Mistake of fact

QN24. An agreement in restraint of legal proceedings is void. It does not cover an agreement which

  1. Restrict absolutely the parties from enforcing their legal rights.
  2. Cuts short the period of limitation
  3. Discharges a party from liability or extinguishes the rights of a party
  4. Provides for a reference to arbitration instead of court of law
Answer

(D)Provides for a reference to arbitration instead of court of law

QN25. The basis of 'quasi contractual relations' is the

  1. Existence of a valid contract between the parties
  2. Prevention of unjust enrichment at the expense of others
  3. Provision contained in section 10 of the Contract Act
  4. Existence of a voidable contract between the parties
Answer

(B)Prevention of unjust enrichment at the expense of others

QN26. The special damages ie, the damages which arise due to so a special or unusual circumstances

  1. Are not recoverable altogether
  2. Are illegal being punitive in nature
  3. Cannot be claimed as a matter of right
  4. Can be claimed as a matter of right
Answer

(C)Cannot be claimed as a matter of right

QN27. When the offeree offers to qualified acceptance of the offer subject to modifications and variations he is said to have made a

  1. Standing, open or continuing offer
  2. Counter offer
  3. Cross offer
  4. Special offer
Answer

(B)Counter offer

QN28. Which is the following is false? An offer to be valid must;

  1. Intend to create legal relations
  2. Have certain and unambiguous terms
  3. Contain a term the non-compliance of which would amount to acceptance
  4. Be communicated to the person to whom it is made
Answer

(C)Contain a term the non-compliance of which would amount to acceptance

QN29. An offer may lapse by

  1. Revocation
  2. Counter Offer
  3. Rejection of offer by offeree
  4. All of these
Answer

(D)All of these

QN30. Which of the following statement is true?

  1. There can be a stranger to a contract
  2. There can be a stranger to a consideration
  3. There can be a stranger to a contract & consideration
  4. None of the above
Answer

(B)There can be a stranger to a consideration

QN31. Ordinarily, a minor's agreement is

  1. Void ab initio
  2. Voidable
  3. Valid
  4. Unlawful
Answer

(A)Void ab initio

QN32. The threat to commit suicide amounts to

  1. Coercion
  2. Undue influence
  3. Misrepresentation
  4. Fraud
Answer

(A)Coercion

QN33. On the valid performance of the contractual obligations by the parties, the contract;

  1. Is discharged
  2. Becomes enforceable
  3. Becomes void
  4. None of these
Answer

(A)Is discharged

QN34. In case of anticipatory breach, the aggrieved party may treat the contract;

  1. As discharged and bring an immediate action for damages
  2. As operative and wait till the time for performance arrives
  3. Exercise option either (a) or (b)
  4. None of these
Answer

(C)Exercise option either (a) or (b)

QN35. A contingent contract depend on the happening of the future uncertain event can be enforced when the event;

  1. Happens
  2. Becomes impossible
  3. Doesn't happen
  4. Either of these
Answer

(A)Happens

QN36. On the acceptance of an offer by a offeree

  1. Only the acceptor becomes bound by accepting the offer
  2. Only the offeror becomes bound as his terms are accepted
  3. Both the acceptor and offeree becomes bound by the contract
  4. None of these
Answer

(C)Both the acceptor and offeree becomes bound by the contract

QN37. Which of the following persons are not competent to contract?

  1. Minors
  2. Persons of unsound mind
  3. Persons disqualified by law
  4. All of these
Answer

(D)All of these

QN38. When the consent of a party is obtained by coercion undue influence, fraud or misrepresentation, the contract is;

  1. Void
  2. Voidable
  3. Valid
  4. Illegal
Answer

(B)Voidable

QN39. Where the consent of a party is obtained by misrepresentation, the contract is;

  1. Valid
  2. Void
  3. Voidable
  4. Illegal
Answer

(C)Voidable

QN40. A agrees to pay Rs.5 lakhs to B procures an employment for A in Income Tax Department. This agreement is

  1. Void
  2. Valid
  3. Voidable
  4. Contingent
Answer

(A)Valid

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