QN41: According to the Indian Contract Act, 1872, a contract is defined as: Answer: a) An agreement enforceable by law
a) An agreement enforceable by law
b) A written agreement between two parties
c) An oral agreement between two parties
d) A social agreement without legal consequences
Answer
QN42: The Indian Contract Act defines a contract as a legally binding agreement between: Answer: a) Two or more parties
a) Two or more parties
b) Two business entities only
c) A buyer and a seller
d) A company and its employees
Answer
QN43: According to the Indian Contract Act, an agreement becomes a contract when it is: Answer: d) Enforceable by law
a) Written on a stamp paper
b) Signed by both parties
c) Registered with the government
d) Enforceable by law
Answer
QN44: Which of the following is NOT an essential element of a valid contract as per the Indian Contract Act? Answer: c) Written documentation
a) Offer and acceptance
b) Legal consideration
c) Written documentation
d) Capacity to contract
Answer
QN45: The Indian Contract Act recognizes that a contract can be formed through: Answer: c) Any mode of communication
a) Verbal communication only
b) Written communication only
c) Any mode of communication
d) Non-verbal communication only
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QN46: Which of the following is not a type of contract? Answer: d) Rescission contract
a) Express contract
b) Implied contract
c) Void contract
d) Rescission contract
Answer
QN47: Which type of contract is formed by the explicit agreement of the parties, either orally or in writing? Answer: c) Express contract
a) Executed contract
b) Unilateral contract
c) Express contract
d) Quasi contract
Answer
QN48: A contract in which one party promises to do something in exchange for the other party’s promise to do something is known as: Answer: a) Bilateral contract
a) Bilateral contract
b) Unilateral contract
c) Executed contract
d) Void contract
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QN49: Which of the following contracts is considered illegal and unenforceable by law? Answer: d) Void contract
a) Voidable contract
b) Executed contract
c) Unenforceable contract
d) Void contract
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QN50: When a contract is terminated and the parties are released from their obligations, it is known as: Answer: d) Discharge of contract
a) Breach of contract
b) Novation
c) Rescission
d) Discharge of contract
Answer
QN51: Which of the following is not an essential element of a valid contract? Answer: d) Verbal agreement
a) Offer and acceptance
b) Consideration
c) Legal capacity
d) Verbal agreement
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QN52: A contract that is enforceable by law is known as: Answer: d) Valid contract
a) Void contract
b) Executed contract
c) Unenforceable contract
d) Valid contract
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QN53: Which type of contract is formed when one party makes a promise in exchange for an act by the other party? Answer: b) Unilateral contract
a) Bilateral contract
b) Unilateral contract
c) Express contract
d) Quasi contract
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QN54: Which of the following is a type of voidable contract? Answer: c) Void contract
a) Unilateral contract
b) Executed contract
c) Void contract
d) Quasi contract
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QN55: The agreement between the parties must be based on a mutual exchange of something of value, known as: Answer: b) Consideration
a) Offer and acceptance
b) Consideration
c) Legal capacity
d) Verbal agreement
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QN56: Which of the following is not a requirement for the formation of a valid contract? Answer: d) Verbal agreement
a) Offer and acceptance
b) Consideration
c) Intention to create legal relations
d) Verbal agreement
Answer
QN57: A contract is considered to be valid if: Answer: c) It contains all the essential elements of a contract
a) It is made in writing
b) It is signed by both parties
c) It contains all the essential elements of a contract
d) It is witnessed by a lawyer
Answer
QN58: An offer can be terminated by: Answer: b) Revocation by the offeror
a) Acceptance by the offeree
b) Revocation by the offeror
c) Counteroffer by the offeree
d) Consideration by both parties
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QN59: When both parties fulfill their obligations under a contract, it is known as: Answer: d) Discharge of contract
a) Breach of contract
b) Novation
c) Accord and satisfaction
d) Discharge of contract
Answer
QN60: Which of the following is a remedy for non-performance of a contract? Answer: b) Specific performance
a) Rescission
b) Specific performance
c) Liquidated damages
d) Restitution
Answer
QN61: A breach of contract occurs when: Answer: b) One party fails to perform its obligations under the contract
a) Both parties agree to terminate the contract
b) One party fails to perform its obligations under the contract
c) The contract becomes voidable
d) There is a mistake in the contract terms
Answer
QN62: Which of the following is a remedy available to the non-breaching party in case of a breach of contract? Answer: b) Damages
a) Termination of the contract
b) Damages
c) Rescission
d) Novation
Answer
QN63: Which principle governs the capacity of parties in a contract? Answer: b) Principle of competency
a) Principle of legality
b) Principle of competency
c) Principle of consideration
d) Principle of consent
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QN64: Which principle ensures the free consent of parties in a contract? Answer: a) Principle of consensus ad idem
a) Principle of consensus ad idem
b) Principle of promissory estoppel
c) Principle of privity of contract
d) Principle of quasi-contract
Answer
QN65: Which factor affects the capacity of a party to enter into a contract? Answer: a) Age
a) Age
b) Nationality
c) Marital status
d) Educational qualification
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QN66: What does the principle of undue influence refer to? Answer: b) Threats or coercion exerted on one party by another
a) Voluntary agreement between parties
b) Threats or coercion exerted on one party by another
c) Intentional misrepresentation of facts
d) Unilateral mistake made by one party
Answer
QN67: Which principle states that a contract entered into by a person of unsound mind is void? Answer: b) Principle of capacity
a) Principle of privity of contract
b) Principle of capacity
c) Principle of legality
d) Principle of consideration
Answer
QN68: Which principle governs the legality of objects in a contract? Answer: b) Principle of legality
a) Principle of consensus ad idem
b) Principle of legality
c) Principle of capacity
d) Principle of consideration
Answer
QN69: Which of the following contracts would be considered illegal? Answer: b) A contract to commit a criminal act
a) A contract for the sale of legal goods
b) A contract to commit a criminal act
c) A contract for the provision of services
d) A contract for the purchase of property
Answer
QN70: Which factor determines the legality of an object in a contract? Answer: b) The intent of the parties involved
a) The value of the object
b) The intent of the parties involved
c) The location where the contract is signed
d) The presence of a witness
Answer
QN71: What is the consequence of an illegal object in a contract? Answer: c) The contract is unenforceable
a) The contract is voidable
b) The contract is valid
c) The contract is unenforceable
d) The contract is automatically terminated
Answer
QN72: Which principle ensures that contracts with illegal objects cannot be enforced by the courts? Answer: b) Principle of legality of objects
a) Principle of privity of contract
b) Principle of legality of objects
c) Principle of consideration
d) Principle of freedom of contract
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QN73: Which term refers to the fulfillment of obligations under a contract? Answer: a) Performance
a) Performance
b) Discharge
c) Breach
d) Execution
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QN74: What is a material breach of contract? Answer: c) A significant violation that goes to the core of the contract
a) A minor violation of the contract terms
b) A breach that does not affect the overall performance
c) A significant violation that goes to the core of the contract
d) A breach caused by external factors beyond the parties’ control
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QN75: Which method of discharge occurs when both parties agree to end the contract without fulfilling all obligations? Answer: a) Rescission
a) Rescission
b) Novation
c) Accord and satisfaction
d) Impossibility
Answer
QN76: What is the effect of impossibility of performance on a contract? Answer: c) The contract is terminated and both parties are discharged from their obligations
a) The contract becomes void from the beginning
b) The contract remains valid, but the party is excused from performance
c) The contract is terminated and both parties are discharged from their obligations
d) The contract can only be discharged through mutual agreement
Answer
QN77: Which of the following is a valid method of discharging a contract? Answer: a) Frustration
a) Frustration
b) Unilateral termination by one party
c) Failure to negotiate a new contract
d) Non-payment of a contract price
Answer
QN78: What constitutes a breach of contract? Answer: b) Delay in performance without a valid reason
a) Failure to negotiate contract terms
b) Delay in performance without a valid reason
c) Change in market conditions
d) Change of mind by one of the parties
Answer
QN79: Which type of damages are awarded to compensate the non-breaching party for the loss suffered as a result of the breach? Answer: d) Compensatory damages
a) Liquidated damages
b) Punitive damages
c) Nominal damages
d) Compensatory damages
Answer
QN80: What is specific performance as a remedy for breach of contract? Answer: c) Court order requiring the breaching party to fulfill their contractual obligations
a) Monetary compensation awarded to the non-breaching party
b) Termination of the contract
c) Court order requiring the breaching party to fulfill their contractual obligations
d) A penalty imposed on the breaching party
Answer
