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1. The provisions of about communication of acceptance in various legal systems falls into which
of the following categories?
A. The system of information
B. The system of declaration
C. The mixed or electric system
D. All of them
Ans: D
2. The relation of dependence may arise:
A. From a special authority or confidence committed to the donee
B. From the feebleness in body or mind of the donor
C. Either (A) or (B)
D. None of these
Ans: C
3. The right to surety to indemnity is an incident of the guarantee:
A. The principal-debtor will be liable
B. Without the necessity of any further request for all sums subsequently paid by the surety
under the guarantee as money paid to the use of the principal-debtor
C. Both (A) and (B)
D. None of these
Ans: C
4. The rule of limitation in a foreign country, where the contract is made, may be set up as a
defence to a suit filed in India if:
A. The rule has extinguished the contract
B. The parties were domiciled in that foreign country during the period prescribed by that rule
C. Both (A) and (B)
D. None of these
Ans: C
5. The subject-matter of Section 8 of the Indian Contract Act, 1872 is divided in to:
A. Performance of the conditions of a proposal and
B. Acceptance of any consideration for reciprocal promise which may be offered with a proposal,
C. Both (A) and (B)
D. None of these

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Ans: C
6. The term law in the expression “forbidden by law” would include any enactment or rule of law
for the time being in force in India which would fall under which of the following sub heads?
A. The provisions of any legislative enactment
B. The rules of Hindu or Mahomedan law
C. Other rules for the time being in force in India
D. All of them
Ans: D
7. The terms ‘benefit’ and ‘detriment’ have been used by courts in which of the following senses
in Section 2 of the Indian Contract Act, 1872?
A. Act which value
B. Such acts, the performance of which is not already legal due from promise
C. Both (A) and (B)
D. None of these
Ans: C
8. The theories or juristic bases for the doctrine of frustration were evolved for justifying the
departure from the doctrine of absolute contracts. The main theories are:
I. Implied term theory
II. Basis or foundation of the contracts
III. Just and reasonable solution
IV. Radical change in the obligation under the contracts
A. II, III
B. IV
C. I
D. All of them
Ans: D
9. The UNIDROIT principles expressly provide that in ascertaining the intention of parties, be it
the subjective intention or the ‘reasonableness’ test, regard shall be had to which of the following
circumstances:
I. Preliminary negotiation between the parties
II. Practices which the parties have established between themselves
III. The conduct of the parties subsequent to conclusion of the contract
IV. The nature and purpose of the contract

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V. The meaning commonly given to terms and expressions in the trade concerned
VI. Usages
A. I, II, IV, V
B. Ill, IV, VI
C. IV, V
D. All of them
Ans: D
10. The use of the word person in Section 2 (c) of the Indian Contract Act, 1872 indicates:
A. Just a human being
B. It must be given extended sense to include governments
C. Both (A) and (B)
D. None of these
Ans: B
11. The word ‘loss or damage may be:
A. Harm to person
B. Harm to property
C. Injury to economic position
D. All of them
Ans: D
12. The word ‘signifies’ in the definition of S. 2 of the Indian Contract Act, 1872 indicates:
A. That the offer must be communicated to the person to whom it is made
B. That the offer need not be communicated to the person to whom it is made
C. Either (A) or (B)
D. None of these
Ans: A
13. Time and place for performance of promise, where time is specified and no application to be
made in which of the following in the Indian Contract Act, 1872
A. Section 42
B. Section 36
C. Section 47
D. Section 40
Ans: C
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14. To constitute a bailment, the actual or constructive possession of specific movable property
(goods) must be vacated by:
A. Its owner or possessor (bailor)
B. His agent duly authorised for that purpose, in favour of another per son (the bailee)
C. Either (A) or (B)
D. None of these
Ans: C
15. To which of the following the lien claimable under S. 221 of the Indian Contract Act is confined
to?
A. Commission
B. Disbursement
C. Services in respect of the specific property
D. All of them
Ans: D
16. Unconscionable contract is an:
A. Agreement that is so outrageously unfair to one party that a Court refuses to enforce it in a
Court of law
B. Agreement that is so outrageously unfair to one party which can still be enforced it in a Court
of law
C. Either (A) or (B)
D. None of these
Ans: A
17. Under Section 18 of the Indian Contract Act, 1872, misrepresentation falls under:
A. A statement of fact, which is false, would be misrepresentation if the maker believes it to be
true, but which is not justified by the information he possesses
B. Any breach of duty which gains an advantage to the person committing it by misleading
another to his prejudice, there being no intention to deceive
C. Causing a party to an agreement to make a mistake as to the substance of the thing which is
the subject of the agreement, even though done innocently
D. All of them
Ans: D
18. Under Section 55 of the Indian Contract Act a vendor has no right to make time of the essence
of the contract unless:
A. The vendor is able, ready and willing to proceed to completion

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B. When the vendor purports to make time of the essence of the contract, the purchaser must be
guilty of such default as to entitle the vendor to rescind the contract, subject to it being done by a
reasonable notice
C. Both (A) and (B)
D. None of these
Ans: C
19. Under Section 55 of the Indian Contract Act, 1872 the intention of the parties can be
ascertained from:
I. The express words used in the contract
II. The nature of the property which forms the subject matter of the contract
III. The nature of the contract itself
IV. The surrounding circumstances
A. II, III
B. IV
C. I
D. All of them
Ans: D
20. Under which of the following any provision of the Indian Contract Act, 1872 would be void, if
inconsistent with the fundamental rights?
A. Article 11 of the Constitution of India
B. Article 12 of the Constitution of India
C. Article 13 of the Constitution of India
D. Article 14 of the Constitution of India
Ans: C
21. Under which of the following bailee is not responsible on re-delivery to bailor without title in
the Indian Contract Act, 1872?
A. Section 166
B. Section 159
C. Section 163
D. Section 160
Ans: A
22. Under which of the following circumstances as per the Special Relief Act, 1963, the Court may
refuse to rescind the contract in a suit for rescission?

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I. The plaintiff was has expressly or implied ratified the contract
II. Due to change in circumstances after the making of the contract (not due to the act of the
defendant himself), the parties cannot be substantially restored to the positions in which they
stood when the contract was made
III. Third parties have during the subsistence of the contract, acquired rights in good faith without
notice and for value
IV. Only a part of the contract is sought to be rescinded and such part is not severable from the
rest of the contract
A. I, III
B. II, IV
C. IV
D. All of them
Ans: D
23. Under which of the following pawnee is not to retain for debt or promise other than that for
which goods pledged in the Indian Contract Act, 1872?
A. Section 174
B. Section 171
C. Section 173
D. Section 178
Ans: A
24. Unless the terms of the guarantee provide other, the surety is entitled to claim relief from the
principal-debtor immediately:
A. As often as he pays anything under his guarantee as it falls due
B. And is not required to pay the whole debt due from the principal-debtor before compelling
reimbursement
C. Both (A) and (B)
D. None of these
Ans: C
25. Void contract is:
A. A contract which ceases to be enforceable by law but is in effect
B. A contract which ceases to be enforceable by law is no longer enforceable
C. Either (A) or (B)
D. None of these
Ans: B
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26. What are the conditions for the application of the S. 235 of the Indian Contract Act?
I. The agent has made an untrue representation that he is authorised agent of another (which
may also be a representation as to the extent of authority of the agent)
II. The representation relates to fact
III. The third party has been misled or induced to deal with the agent on the faith of such
representation
IV. The principal has repudiated or refused to ratify the transaction
V. The third party has suffered a loss in consequence
A. I, II
B. II, IV
C. Ill, IV
D. All of them
Ans: D
27. What is the purpose of the rule of mitigation?
A. To prevent the waste of limited resources in society which forces the innocent party, the
plaintiff to find a substitute after the defendant’s breach
B. To enable the defendant to commit efficient breach of contract where the defendant
deliberately would break his contractual relationship for a better opportunity
C. Both (A) and (B)
D. None of these
Ans: C
28. When a statute clearly covers a case, it is hardly necessary to refer to decisions. In which of
the following cases it was so upheld?
A. Lala Kapurchand Godhav. MirNawab Himayatalikhan Azamjah
B. State of Madras v. Gannon Durkerley & Co. Ltd.
C. Firm Kanhaiyalal v. Dineshchandra
D. Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas and Co.
Ans: A
29. When did the Indian Contract Act, 1872 come into force?
A. September 1
B. September 5
C. September7
D. September 10

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Ans: A
30. When the guarantee is expressed to be a continuing guarantee and to apply to the balance for
time-to- time owing by the principal-debtor to the creditor times runs:
A. Only from the date when each of such balance is constituted by the excess of total debits over
total credits
B. Not from the date when each advance is made to the principal-debtor
C. Either (A) or (B)
D. None of these
Ans: A
31. Where a contract is one of guarantee:
A. The surety need not be called upon to pay unless the principal-debtor has committed a default
B. The surety is entitled to all the rights, viz, of discharge, subrogation of securities, indemnity
from the principal-debtor, etc. provided in ss. 133 to 145; though an indemnifier is entitled to
rights given by ss. 140 and 141
C. Both (A) and (B)
D. None of these
Ans: C
32. Where the bailment is for hire, it may be:
I. Hiring the use of goods
II. Hiring the use of labour or work on or with regard to the goods
III. Hiring of custody i.e. of services in keeping the goods
IV. Hiring of carriage of goods
A. I, II
B. II, IV
C. Ill, IV
D. All of them
Ans: D
33. Where the law is codified, it is of little avail enquire what is the law apart from such
codification. The code itself must be looked to as the guide in the matter. This refers to which of
the following cases:
A. Burn & Co. v. McDonald
B. Produce Brokers Co. Ltd. v. Olympia Oil and Cake Co. Ltd.
C. Moult v. Halliday

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D. Llyod v. Guibert
Ans: A
34. Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer
may sue the seller for:
A. Damages for non-delivery
B. Specific performance subject to the provisions of the Specific Relief Act, 1963
C. Breach of warranty in which event the buyer may set up against the seller such breach in
diminution or extinction of the price or sue the seller for damages for breach of warranty
D. All of them
Ans: D
35. Which of the deals with the effect of novation, rescission and alteration of contract in the
Indian Contract Act, 1872?
A. Section 68
B. Section 50
C. Section 61
D. Section 62
Ans: D
36. Which of the following Amendment Acts inserted Section 19A into the Indian Contract Act?
A. Indian Contract (Amendment) Act, 1899 (6 of 1899)
B. Indian Contract (Amendment) Act, 1899 (7 of 1899)
C. Indian Contract (Amendment) Act, 1899 (8 of 1899)
D. Indian Contract (Amendment) Act, 1899 (9 of 1899)
Ans: A
37. Which of the following are essential conditions of pledge?
A. Bailment of goods
B. Bailment by way of security
C. Security of payment of debt
D. All of them
Ans: D
38. Which of the following are the conditions for the application of Section 70 of the Indian
Contract Act, 1872?
A. The goods are to be delivered lawfully or something has to be done for another person lawfully

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B. The thing done or the goods delivered must be done or delivered without intention to do so
gratuitously
C. The person to whom goods are to delivered enjoys the benefit thereof
D. All of them
Ans: D
39. Which of the following are the requirements for the application of the provisions of Section 69
of the Indian Contract Act, 1872?
A. The plaintiff must have made an actual or virtual payment of money
B. The plaintiff must have been compelled to pay this money to a third party
C. The defendant must have been legally liable to pay the third party. Though the plaintiff would
usually stand in some kind of relationship to the person for whom he paid, no relationship of
privity is necessary to give a right of action
D. All of them
Ans: D
40. Which of the following binds the principal under S. 229 of the Indian Contract Act?
A. Notice or intimation given to an agent
B. Knowledge of any fact material to such transaction acquired by the agent
C. Either (A) or (B)
D. None of these
Ans: C
41. Which of the following cases S. 235 of the Indian Contract Act, 1872 does not apply?
A. The case of a man who represents that he has authority from another when he has no
authority whatever
B. The case of a man who represents that he has certain authority from another when he has
authority of another description
C. The case of an agent whose authority is terminated without his knowledge
D. Both (A) and (B)
Ans: D
42. Which of the following conditions are essential before the application of the second
paragraph of Section 56 of Indian Contract Act, 1872?
A. A valid and subsisting contract before the parties
B. There must be some part of the contract yet to be performed
C. The contract after it is entered into becomes impossible of performance
D. All of them
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Ans: D
43. Which of the following damages are punitive in nature?
A. Aggravated damages
B. Exemplary damages
C. Both (A) and (B)
D. None of these
Ans: B
44. 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
Ans: A
45. Which of the following deals with “when agent cannot delegate” in the Indian Contract Act,
1872?
A. Section 190
B. Section 191
C. Section 185
D. Section 181
Ans: A
46. Which of the following deals with “when principal may revoke agent’s authority” in the Indian
Contract Act, 1872?
A. Section 203
B. Section 205
C. Section 192
D. Section 204
Ans: A
47. Which of the following deals with agent’s accounts in the Indian Contract Act, 1872?
A. Section 211
B. Section 219
C. Section 213
D. Section 210

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Ans: C
48. Which of the following deals with agent’s duty on termination of agency by principal’s death
or insanity in the Indian Contract Act, 1872?
A. Section 200
B. Section 203
C. Section 209
D. Section 204
Ans: C
49. Which of the following deals with agent’s duty to pay sums received for principal in the Indian
Contract Act, 1872?
A. Section 211
B. Section 219
C. Section 218
D. Section 210
Ans: C
50. Which of the following deals with agreement in restraint of marriage void in the Indian
Contract Act, 1872?
A. Section 22
B. Section 26
C. Section 19
D. Section 20
Ans: B
51. Which of the following deals with agreement to do impossible act in the Indian Contract Act,
1872?
A. Section 52
B. Section 56
C. Section 55
D. Section 59
Ans: B
52. Which of the following deals with agreement void where both parties are under mistake as to
matter of fact in the Indian Contract Act, 1872?
A. Section 14
B. Section 18

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C. Section 19
D. Section 20
Ans: D
53. Which of the following deals with agreements by way of wager, void in the Indian Contract
Act, 1872?
A. Section 22
B. Section 30
C. Section 19
D. Section 20
Ans: B
54. Which of the following deals with agreements void, if consideration and objects unlawful in
part in the Indian Contract Act, 1872?
A. Section 22
B. Section 28
C. Section 19
D. Section 24
Ans: D
55. Which of the following deals with communication, acceptance and revocation of proposals in
the Indian Contract Act, 1872?
A. Section 1
B. Section 2
C. Section 3
D. Section 4
Ans: C
56. Which of the following deals with contract caused by mistake of one party as to matter of fact
in the Indian Contract Act, 1872?
A. Section 14
B. Section 22
C. Section 19
D. Section 10
Ans: B
57. Which of the following deals with definition of “Undue influence” in the Indian Contract Act,
1872?

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A. Section 14
B. Section 18
C. Section 19
D. Section 16
Ans: D
58. Which of the following deals with Effect of mistakes as to law in the Indian Contract Act,
1872?
A. Section 21
B. Section 18
C. Section 19
D. Section 10
Ans: A
59. Which of the following deals with enforcement of contracts contingent on an event happening
in the Indian Contract Act, 1872?
A. Section 22
B. Section 28
C. Section 19
D. Section 32
Ans: D
60. Which of the following deals with how revocation of proposal is made in the Indian Contract
Act, 1872?
A. Section 2
B. Section 6
C. Section 3
D. Section 4
Ans: B
61. Which of the following deals with liability of co-sureties bound in different sums in the Indian
Contract Act, 1872?
A. Section 149
B. Section 135
C. Section 147
D. Section 140
Ans: C
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62. Which of the following deals with reimbursement of person paying money due by another, in
payment of which he is interested in the Indian Contract Act, 1872?
A. Section 68
B. Section 50
C. Section 69
D. Section 59
Ans: C
63. Which of the following deals with skill and diligence required from agent in the Indian
Contract Act, 1872?
A. Section 211
B. Section 212
C. Section 215
D. Section 210
Ans: B
64. Promises, express or implied are dealt under which of the following of the Indian Contract
Act, 1872?
A. Section 9
B. Section 2
C. Section 3
D. Section 4
Ans. (A)
65. Promisor not bound to perform, unless reciprocal promise ready and willing to perform is
dealt under which of the following in the Indian Contract Act, 1872?
A. Section 51
B. Section 50
C. Section 55
D. Section 59
Ans. (A)
66. Quasi or Constructive Contracts is one where an implied contract has also been applied to a
class of obligations which are imposed or created by law without regard to the assent of the party
bound:
A. On the ground that they are dictated by reason and justice
B. Which are allowed to be enforced by an action ex contractu, for there is no agreement

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C. But they are clothed with the semblance of contract for the purpose of remedy
D. All of them
Ans. (D)
67. Reciprocal contract is:
A. A contract in which the consideration consists of mutual promises
B. A bilateral agreement
C. both (A) and (B)
D. None of these
Ans. (C)
68. Reimbursement under Section 69 of the Indian Contract Act, 1872 claimed ___________ from
the date on which the money was paid.
A. within a year
B. within two years
C. within three years
D. within three and a half years
Ans. (C)
69. Relation between principal and person duly appointed by agent to act in business of agency
A. Section 180
B. Section 190
C. Section 185
D. Section 194
Ans. (D)
70. Representees may be:
A. persons to whom the representation is directly made and their principals
B. persons to whom the representor intended the representation to be passed
C. members of class at which the representation was directed
D. All of them
Ans. (D)
71. Right of person dealing with agent personally liable is discussed under which of the following
in the Indian Contract Act, 1872?
A. Section 238
B. Section 222

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C. Section 236
D. Section 233
Ans. (D)
72. Right of principal when agent deals, on his own account, in business of agency without
principal’s consent is dealt under which of the following in the Indian Contract Act, 1872?
A. Section 211
B. Section 219
C. Section 217
D. Section 215
Ans. (D)
73. Section 11 of the Indian Contract Act, 1872 deals with which of the following?
A. personal capacity arising from age
B. personal capacity arising from soundness of mind
C. personal capacity arising from the provisions of law
D. All of them
Ans. (D)
74. Section 127 provides that ______________ is sufficient consideration for the guarantee.
A. anything done
B. a promise made for the benefit of the principal-debtor
C. either (A) or (B)
D. None of these
Ans. (C)
75. Section 128 of the Indian Contract Act, 1872 explains the quantum of surety’s obligation:
A. When the terms of the contract do not limit it
B. When the terms of the contract limit it
C. either (A) or (B)
D. None of these
Ans. (A)
76. Section 134 of the Indian Contract would not apply where the release or discharge:
A. is not caused at the instance
B. is not caused by any act of the creditor
C. either (A) or (B)
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D. None of these
Ans. (C)
77. Section 135 of the Indian Contract Act, 1872 deals with:
A. The case in which the surety is discharged by a contract between the creditor and the principal-
debtor, entered into without the surety’s consent, to give time to, or not to sue, the principal-
debtor
B. The case of mere forbearance to sue as distinguished from forbearance springing from a
contract and provides that the surety shall not be discharged in such a case
C. both (A) or (B)
D. None of these
Ans. (C)
78. Section 13 8 of the Indian Contract Act, 1872 is a necessary consequence of the principle laid
down in___________ and must be taken as a deliberate extension of a rule which in the common
law
A. S. 44; is limited to the case of co-sureties contracting severally and not jointly
B. S. 44; is limited to the case of co-sureties contracting severally
C. S. 44; is limited to the case of co-sureties contracting jointly
D. None of these
Ans. (A)
79. Section 139 of the Indian Contract Act, 1872 is a residual section, the object of which is to:
A. Ensure that no arrangement different from that contained in the surety’s contract is forced
upon him
B. Ensure the surety, if he pays the debt, has the benefit of every remedy which the creditor has
against the principal-debtor
C. both (A) and (B)
D. None of these
Ans. (C)
80. Section 17(1) defines which of the following ingredients?
I. There should be a suggestion as to a fact
II. The fact suggested should not be true
III. The suggestion should have been made by a person who does not believe it to be true
IV. The suggestion should be made with intent either to deceive or to induce the other party to
enter into contract
A. I, II, IV

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B. II, IV
C. III. IV
D. All of them
Ans. (D)
81. Section 201 of the Indian Contract Act is not exhaustive. An agency may be terminated by
other modes such as:
I. my mutual agreement
II. completion of the term of agency by expiry of time agreed upon
III. destruction of the subject-matter of the agency
IV. the agency becoming subsequently unlawful
V. Dissolution of the principal firm
A. I, II
B. II, IV
C. Ill, V
D. All of them
Ans. (D)
82. Section 202 of the Indian Contract Act, 1872 does not require that the documents authorising
the agent:
A. contain reference to the interest of the agent secured by the document
B. give the power to appropriate the amounts collected towards any debt due to the agent
C. either (A) or (B)
D. None of these
Ans. (C)
83. Section 227 of the Indian Contract Act, 1872, provides that where the agent exceeds the
authority and does certain acts, the principal would be bound only by those acts which are
authorised, provided:
A. they can be separated from unauthorised acts
B. they cannot be separated by those acts that are beyond authorisation
C. both (A) and (B)
D. None of these
Ans. (C)
84. Section 27 of the Specific Relief Act gives power to the Courts to adjudge rescission of a
contract where a contract is unlawful:

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A. for causes not apparent on its face
B. the defendant is more to blame than the plaintiff
C. both (A) and (B)
D. None of these
Ans. (C)
85. Section 39 deals with:
A. refusal or renunciation by the promisor to perform
B. disabling himself from performing the promise in its entirety
C. either (A) or (B)
D. None of these
Ans. (C)
86. Section 41 of the Indian Contract Act applies to cases of:
A. assignment
B. subrogation
C. both (A) and (B)
D. None of these
Ans. (A)
87. Section 65 of the Indian Contract Act, 1872 provides that when the contract becomes void,
any person who has received any advantage under it is:
A. bound to restore it
B. make compensation for it to the person from whom it was received
C. either (A) or (B)
D. None of these
Ans. (C)
88. Section 69 of the Indian Contract Act, 1872 embodies which of the following doctrines?
A. Doctrine of frustration
B. Doctrine of unjust enrichment
C. Doctrine of implied contract
D. None of these
Ans. (B)
89. Section 72 of the Indian Contract Act, 1872 has been restricted to cases of payment of
delivery:

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A. made by mistake
B. made under coercion
C. either (A) or (B)
D. None of these
Ans. (C)
90. Section 74 of the Indian Contract Act, 1872 applies to:
A. Compromise decrees
B. It is open to a court executing such decree to go behind it if it contains a stipulation which is by
way of penalty
C. both (A) and (B)
D. None of these
Ans. (C)
91. Section 74 of the Indian Contract Act, 1872 requires proofs of:
A. general damages
B. actual or quantum of damages
C. either (A) or (B)
D. None of these
Ans. (A)
92. Where there are two courts which would normally have the jurisdiction, an agreement to file
suit in one of those courts alone, is:
(a) void
(b) valid
(c) voidable
(d) unenforceable.
Ans. (b)
93. An obligation under a contract stands discharged:
(a) by proper performance
(b) by dispensation with the performance
(c) by death of the contracting party if the contract is personal in nature
(d) all the above.
Ans. (d)
94. Under assignment of contract:

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(a) benefits under the contract can be assigned without the consent of other party
(b) burden under the contract cannot be assigned without the consent of other party
(c) both (a) & (b)
(d) neither (a) nor (b).
Ans. (c)
95. In cases of refusal to perform by one party, the other party:
(a) can ignore the notice of refusal for the time being and wait till the time when the contract is to
be executed
(b) can treat the repudiation as wrongful putting an end to the contract
(c) can waive his right to rescission by acquiescence
(d) all the above.
Ans. (d)
96. A contract is not frustrated:
(a) by commercial impossibility
(b) by imposition of government restrictions or orders
(c) by destruction of subject matter of contract
(d) all the above.
Ans. (a)
97. Under section 73 of the Contract Act:
(a) special damages cannot be claimed
(b) special damages can be claimed if the party breaking the contract is made known of the
special circumstances at any time before the breach
(c) special damages can be claimed if the party breaking the contract is made known of the
special circumstances at the time of contract
(d) none of the above.
Ans. (c)
98. Section 73 of the Contract Act applies to contract:
(a) for sale of moveable properties
(b) for sale of immoveable properties
(c) both (a) & (b)
(d) none of the above.
Ans. (c)

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99. In cases of general offer, for a valid contract:
(a) the acceptor need not have the knowledge of the offer
(b) the acceptor must have the knowledge of the offer before acceptance by performance
(c) the acceptor may acquire the knowledge of the offer after the performance of the condition
amounting to acceptance
(d) none of the above.
Ans. (b)
100. The principle, performance of a condition is a sufficient acceptance without notification is
contained in:
(a) section 8
(b) section 7
(c) section 6
(d) section 9.
Ans. (a)

101. No contract can arise:

(a) if the offer is not made to an ascertained person
(b) if the offer is made to an ascertained person
(c) if the acceptance is made by an unascertained person
(d) if the acceptance is made by an ascertained person.
Ans. (c)
102. An acceptance containing additions, limitations or other modifications shall amount to:
(a) rejection of the offer
(b) a valid acceptance
(c) a counter offer
(d) both (a) & (c).
Ans. (d)
103. On approval of tender:
(a) a concluded contract arises immediately
(b) a concluded contract arises only when an order is placed on the basis of tender
(c) the tender is converted into a standing offer
(d) both (b) & (c).

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Ans. (d)
104. A clause in the tender authorising the party inviting tenders to terminate the contract at any
time for future supplies:
(a) destroys the very basis of the contract & the clause is void
(b) does not destroy the basis of the contract & the clause is valid
(c) makes the entire contract void
(d) makes the contract voidable.
Ans. (b)
105. Presumption of undue influence can be raised in cases of:
(a) apparently unconscious bargaining
(b) relationship of parties being such that one party is in a position to dominate the will of the
other
(c) contract with pardanashin lady
(d) all the above.
Ans. (d)
106. Mere silence is not fraud unless:
(a) there is a duty to speak
(b) the silence is deceptive
(c) there is a change in the circumstances to be brought to the notice of other party
(d) all the above.
Ans. (d)
107. Frustration of contract implies:
(a) commercial hardship
(b) physical impossibility due to disappearance of the subject matter of the contract or the object
has failed to materialise
(c) both (a) & (b)
(d) neither (a) nor (b) nor (c).
Ans. (b)
108. A, in consideration of B’s discounting, at A’s request, bills of exchange for C, guarantees to B,
for twelve months, the due payment of all such bills to extent of 5,000 rupees. B discounts bills
for C to the extent of 2,000 rupees. Afterwards, at the end of three months, A revokes the
guarantee.
A. This revocation does not discharge A from all liability to B for any subsequent discount. But A is
liable to b for the 2,000 rupees on default of C
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B. This revocation discharge A from all liability to B for any subsequent discount. But A is not
liable to b for the 2,000 rupees on default of C
C. This revocation discharge A from all liability to B for any subsequent discount. But A is liable to
b for the 2,000 rupees on default of C
D. None of these
Ans. (C)
109. A, in consideration that B will employ C in collecting the rents of B’s zamindari, promises B to
be responsible, to the amount of 5,000 rupees, for the due collection and payment by C of those
rents.
A. This is discontinuing guarantee
B. This is a continuing guarantee
C. This is stipulation by penalty
D. None of these
Ans. (B)
110. A, intending to deceive B, falsely represents that 500 maunds of indigo are made annually at
A’s factory, and thereby induces B to buy the factory.
A. The contract is not voidable only at the option of B
B. The contract is voidable only at the option of B
C. either (A) or (B)
D. None of these
Ans. (B)
111. A, on board an English ship on the high seas, causes B to enter into an agreement by an act
amounting to criminal intimidation under the Indian Penal Code (45 of 1860). A afterwards sues B
for breach of contract in Calcutta
A. A has not employed coercion, as his act is not an offence by the law of England
B. A has not employed coercion, as Section 506 of the Indian Penal Code (45 of 1860) was not in
force at that time when or place where the act was done
C. A has employed coercion, although his act is not an offence by the law of England, and
although section 506 of the Indian Penal Code (45 of 1860) was not in force at that time when or
place where the act was done
D. None of these
Ans. (C)
112. A, the captain of B’s ship, signs bills of landing without having received on board the goods
mentioned therein.
A. The bills of lading are not void as between B and the pretended consignor

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B. The bills of lading are partially void as between B and the pretended consignor
C. The bills of lading are void as between B and the pretended consignor
D. None of these
Ans. (C)
113. A, the owner of a boat, contracts with B to take a cargo of jute to Mirzapur, for sale at that
place, starting on a specified day. The boat, owing to some avoidable cause, does not start at the
time appointed, whereby the arrival of the cargo at Mirzapur is delayed beyond the time when it
would have arrived if the boat had sailed according to the contract. After that date, and before
the arrival of the cargo, the price of jute falls.
A. The measure of the compensation payable to B by A is the sum of the price for which B could
have obtained for the cargo at Mirzapur at the time when it would have arrived if forwarded in
due course, and its market price at the when it actually arrived
B. The measure of the compensation payable to B by A is the difference between the price which
B could have obtained for the cargo at Mirzapur at the time when it would have arrived if
forwarded in due course, and its market price at the when it actually arrived
C. either (A) and (B)
D. None of these
Ans. (B)
114. A, who is a dealer in coconut-oil only, agrees to sell to B ‘one hundred tons of oil’.
A. The nature of A’s trade affords no indication of the meaning of the words, and A has entered
into a contract for the sale of one hundred tons of coconut-oil
B. The nature of A’s trade affords an indication of the meaning of the words, and A has entered
into a contract for the sale of one hundred tons of coconut-oil
C. either (A) or (B)
D. None of these
Ans. (B)
115. A, who is B’s mukhtar, promises to exercise his influence, as such, with B in favour of C, and C
promises to pay 1,000 rupees to A.
A. The agreement is void, because it is immoral
B. The agreement is not void, because it is not immoral
C. either (A) or (B)
D. None of these
Ans. (A)
116. A, who owes 500 rupees worth of rice to B. A is acting as agent for C in the transaction, but B
has neither knowledge nor reasonable ground of suspicion that such is the case.

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A. C can compel B to take the rice without allowing him to set-off A’s debt
B. C cannot compel B to take the rice by allowing him to set-off A’s debt
C. C cannot compel B to take the rice without allowing him to set-off A’s debt
D. None of these
Ans. (C)
117. A, who owes money to B, a money-lender, undertakes to repay him by delivering to him 10
maunds of grain on a certain date, and stipulates that, in the event of his not delivering the
stipulated amount by the stipulated date, he shall be liable to deliver 20 maunds. This is a
stipulation by way penalty.
A. B is only entitled to reasonable consideration in case of breach
B. B is not entitled to reasonable consideration in case of breach
C. either (A) or (B)
D. None of these
Ans. (A)
118. A, without authority, buys goods for B, Afterwards B sells them to C on his own account.
A. B’s conduct does not imply a ratification of the purchase made for him by A
B. B’s conduct implies a ratification of the purchase made for A by him
C. B’s conduct implies a ratification of the purchase made for him by A
D. None of these
Ans. (C)
119. A, without B’s authority, lends B’s money to C. Afterwards B accepts interest on the money
from C.
A. B’s conduct does not imply a ratification of the loan
B. B’s conduct implies a partial ratification of the loan
C. B’s conduct implies a ratification of the loan
D. None of these
Ans. (C)
120. A’s estate is sold for arrears of revenue under the provisions of an Act of the Legislature, by
which the defaulter is prohibited from purchasing the estate. B, upon an understanding with A,
becomes the purchaser, and agrees to convey the estate to A upon receiving form him the price
which B has paid.
A. The agreement is not void, as it does renders the transaction, in effect, a purchase by the
defaulter, and would not defeat the object of the law

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B. The agreement is void, but it does not render the transaction, in effect, a purchase by the
defaulter, and would not defeat the object of the law
C. The agreement is void, as it renders the transaction, in effect, a purchase by the defaulter, and
would so defeat the object of the law
D. None of these
Ans. (C)
121. A’s son has forged B’s name to a promissory note. B under threat of prosecuting A’s son,
obtains a bond from A for the amount of the forged note.
A. If B sues on this bond, the Court will not set the bond aside
B. If B sues on this bond, the Court may set the bond aside
C. either (A) or (B)
D. None of these
Ans. (B)
122. Accessory contract is made for assuring the performance of a prior contract by the same
parties or by:
A. Suretyship
B. Mortgage
C. Pledge
D. All of them
Ans. (D)
123. According to UN Draft Convention on Independent Guarantees and Stand-by Letters of
Credit, the guarantor may refuse payment under the guarantee if the demand is improper. A
demand may be improper if:
A. Any document is forged
B. No payment is due on the basis asserted in the demand and the supporting documents
C. Judging by the type and purpose of the undertaking, the demand has no conceivable basis
D. All of them
Ans. (D)
124. According to UN Draft Convention on Independent Guarantees and Stand-by Letters of
Credit, judging by the type and purpose of the undertaking, the demand has no conceivable basis
if:
I. The contingency or risk against which the undertaking was designed to secure the beneficiary
has undoubtedly not materialised

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II. The underlying obligations of the principal/applicant has been declared invalid by a Court or
arbitral tribunal, unless the undertaking indicates that such contingency falls within the risk to be
covered by the undertaking
III. The secured obligation has undoubtedly been fulfilled to the satisfaction of the beneficiary
IV. Fulfilment of the underlying obligation has clearly been prevented by wilful misconduct of the
beneficiary
A. II, III, IV
B. Ill, IV
C. I, IV
D. All of them
Ans. (D)
125. Acquittal contract is a discharge from an obligation by:
A. Deed
B. Prescription
C. Tenure
D. All of them
Ans. (D)
126. Affirmation of contract is a:
A. The confirmation by behaviour that a contract is valid, as opposed to trying to get out of it for
some good reason.
B. It may be by declaration of intention, inferred from, say, selling goods bought under the
contract, or allowing time to elapse without pursuing a remedy
C. either (A) and (B)
D. None of these
Ans. (C)
127. Agent not entitled to remuneration for business misconducted comes under which of the
following in the Indian Contract Act, 1872?
A. Section 220
B. Section 219
C. Section 215
D. Section 210
Ans. (A)
128. Agent to be indemnified against consequences of acts done in good faith is discussed under
which of the following in the Indian Contract Act 1872?
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A. Section 220
B. Section 219
C. Section 226
D. Section 223
Ans. (D)
129. Agent to be indemnified against consequences of lawful acts is discussed under which of the
following in the Indian Contract Act, 1872?
A. Section 220
B. Section 219
C. Section 222
D. Section 210
Ans. (C)
130. Agent’s authority may be expressed or implied under which of the following in the Indian
Contract Act, 1872?
A. Section 186
B. Section 190
C. Section 185
D. Section 181
Ans. (A)
131. Which of the following deals with an agent’s duty in conducting principal’s business in the
Indian Contract Act, 1872?
A. Section 211
B. Section 219
C. Section 215
D. Section 210
Ans. (A)
132. Agent’s lien on principal’s property comes under which of the following in the Indian
Contract Act, 1872?
A. Section 220
B. Section 221
C. Section 226
D. Section 210
Ans. (B)
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133. Which of the following deals with an agent’s responsibility for sub-agent appointed without
authority in the Indian Contract Act, 1872?
A. Section 180
B. Section 190
C. Section 193
D. Section 181
Ans. (C)
134. Although there may be apparent consent to the terms between the parties, real consent may
not be found, hence agreement is negative in which of the following situations?
A. offers and acceptance do not coincide
B. mistake as to identity of the person contracted with
C. mistake in relation to a written document: non est factum
D. All of them
Ans. (D)
135. An action for breach of contract, at the option of the plaintiff, can be brought at the place:
A. where the defendant voluntarily resides or carries on business
B. where the defendant personally works for gain
C. where the cause of action wholly or in part arises
D. either of them
Ans. (D)
136. An agent is:
A. A person employed to do act or for another
B. A person employed to represent another in dealings with third persons
C. either (A) and (B)
D. None of these
Ans. (C)
137. An agent of a foreign company for sale of its machine agreed with the purchaser that the
purchaser will deduct his commission and pay the balance of price to the company.
A. The purchaser was not liable to the agent for the commission
B. The agent was liable to the purchaser for the commission
C. The purchaser was liable to the agent for the commission
D. None of these

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Ans. (C)
138. An agent of a foreign company for sale of its machine agreed with the purchaser that the
purchaser will deduct his commission and pay the balance of price to the company. The purchaser
was liable to the agent for the commission. In which of the following cases was it upheld?
A. Continental and Eastern Agencies v. Coal India Limited
B. Bhatinda Chemicals v. M V. “Z-Press Nuptse”.
C. State of Gujarat v. Vora Fiddali.
D. S.N. Prasad v. Monnet Finance Ltd.
Ans. (A)
139. An agent sustaining loses in his agency has a right to be recouped by his principal for such
losses and a suit to enforce and suit enforce it is governed by_________.
A. Art. 65 of Scheduled I of the Limitation Act, 1963
B. Art. 75 of Scheduled I of the Limitation Act, 1963
C. Art. 83 of Scheduled I of the Limitation Act, 1963
D. None of these
Ans. (C)
140. An agreement between a husband and a deserting wife whereby the husband promised a
weekly maintenance and she promised to indemnify him against all debts and not to pledge his
credit, is an agreement for consideration.
A. She had forfeited her right of maintenance by the desertion
B. She did not forfeit her right of maintenance by the desertion
C. She had partly forfeited her right to maintenance by the desertion
D. None of these
Ans. (B)
141. An agreement between two neighbouring firms carrying on the same business, not to
employ servants in their respective employment during the previous five years, was held to be
void as being unreasonable and excessive in the interest of the parties because:
A. it applied to all employees without distinction between those for example who did manual
labour and those who possessed of trade secrets or confidential information
B. the real reason of the agreement was the proximity of the two firms and there was no
provision for limiting the duration of the period while the proximity continued
C. both (A) and (B)
D. None of these
Ans. (C)

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142. An application by an employee seeking voluntary retirement benefits can be withdrawn any
time before it is accepted by the employer. In which of the following cases it was upheld?
A. Saurabh Prasad v. DLF Universal Ltd
B. Ceilena v. Ulhas
C. Food Corporation of India v. Ramesh Kumar
D. None of these
Ans. (C)
143. An auctioneer’s request for bids is not an offer, but an invitation to the customers to bid; the
bid constitutes the offer, which is accepted by the auctioneer in a customary manner, usually by
the fall of hammer. Which of the following cased held that the bidder may withdraw the bid until
it is accepted?
A. Firm Durga Prasad Mutsaddi Lal v. Firm Rulia Mal Doogar Mal
B. Tata Cellular v. Union of India
C. Bengal Coal Co. Ltd., v. Homee Wadia & Co.
D. Joravarmull Champalal v. Jeygopaldas Chanshamdas
Ans. (D)
144. Anticipatory breach of contract is:
A. The refusal by any party to a contract before the due date for performance, to perform,
B. His disabling himself from being able then to perform
C. either (A) or (B)
D. None of these
Ans. (C)
145. Any condition to be performed by the creditor, to render the principal-debtor liable:
A. must be performed before the surety can be liable
B. must be immediately performed after the surety is made liable
C. either (A) or (B)
D. None of these
Ans. (A)
146. Any one of joint promisors may be compelled to perform under which of the following in the
Indian Contract Act, 1872?
A. Section 42
B. Section 36
C. Section 43

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D. Section 40
Ans. (C)
147. Application for performance on certain day to be at proper time and place is dealt under
which of the following in the Indian Contract Act, 1872?
A. Section 42
B. Section 36
C. Section 43
D. Section 48
Ans. (D)
148. Apportionment of relief or compensation obtained by such suits is dealt under which of the
following in the Indian Contract Act, 1872?
A. Section 176
B. Section 171
C. Section 181
D. Section 178
Ans. (C)
149. As a general rule, interest can be awarded only if:
A. it is payable by custom
B. if there is an agreement, either express or implied, to pay interest
C. under the provisions of any substantive law entitling the plaintiff to recover the same
D. all of them
Ans. (D)
150. As per principle mentioned in the second paragraph of Section 56 of the Indian Contract Act,
1872, a promise is discharged if, for some cause which the promisor could not prevent,
performance may become impossible by:
I. change in law rendering a contract unlawful or impossible of performance
II. destruction or non-existence of the specific subject matter assumed by the parties to exist or
continue in existence
III. the non-existence of a state of things assumed as the foundation of the contract
IV. such circumstances intervening which render the performance within the time in the way
contemplated, impossible, although, performance of the contract according to its terms may be
literally possible, the death or disability of the promisor, where the promise was to perform
something in person
A. II, III

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B. IV
C. I
D. All of them
Ans. (D)
151. B accepts A’s proposal by a letter sent by post. The communication of the acceptance is
complete.
A. As against B, when the letter is posted; as against A, when the letter is received by B
B. As against A, when the letter is received; as against B, when the letter is posted by A
C. As against A, when the letter is posted; as against B, when the letter is received by A
D. None of these
Ans. (C)
152. B contracts to build a ship for C for a given sum, to be paid by instalments as the work
reaches certain stages. A becomes surety to C for B’s due performance of the contract. C, without
the knowledge of A, prepays to B the last two instalments.
A. A is partly discharged by this pre-payment
B. A is not discharged by this pre-payment
C. A is discharged by this pre-payment
D. None of these
Ans. (C)
153. B holds land in Bengal, on a lease granted by A, the zamindar. The revenue payable by A to
the Government being in arrear, his land is advertised for sale by the Government. Under the
revenue law, the consequence of such sale will be annulment of B’s lease. B, to prevent the sale is
the consequent annulment of his own lease, pays to be the Government the sum due from A.
A. A is not bound to make good to B the amount so paid
B. A is partly bound to make good to B the amount so paid
C. A is bound to make good to B the amount so paid
D. None of these
Ans. (C)
154. B is indebted to C and A is surety for the debt. C demands payment from A, and on his
refusal sues him for the amount. A defends the suit, having reasonable grounds for doing so, but
he is compelled to pay the amount of the debt with costs.
A. He cannot recover from B the amount paid by him for costs
B. He can recover from B only the principal debt
C. He can recover from B the amount paid by him for costs, as well as the principal debt

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D. None of these
Ans. (C)
155. B owes A 2,000 rupees. A desires B to pay the amount to A’s account with C, a banker. B, who
also banks with C, orders the amount to be transferred from his account to A’s credit, and this is
done by C. Afterwards, and before A knows of the transfer, C fails.
A. There has been a good payment by B
B. There has been no payment by B
C. either (A) or (B)
D. None of these
Ans. (A)
155. B owes to C a debt guaranteed by A. The debt becomes payable. C does not due B for a year
after the debt has become payable.
A. A is partly discharged from his surety ship
B. A is discharged from his surety ship
C. A is not discharged from his surety ship
D. None of these
Ans. (C)
156. B revokes his acceptance to A’s proposal by telegram. The revocation is complete:
A. As against A and B, when the telegram is dispatched
B. As against A and B, when the telegram when A receives it
C. As against B when the telegram is dispatched, and as against A when it reaches him
D. None of these
Ans. (C)
157. Which one of the following is correct:
(a) past consideration is no consideration
(b) consideration can be past, present or future
(c) consideration can only be present
(d) consideration can only be present & future.
Ans. (b)
158. Past consideration is valid in:
(a) England only
(b) India only

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(c) both in England & India
(d) neither in England nor in India.
Ans. (c)
159. An agreement not to raise the plea of limitation is:
(a) valid & binding
(b) void
(c) voidable
(d) illegal.
Ans. (b)
160. A letter of acceptance sent by post is lost in transit:
(a) there is a concluded contract as the letter of acceptance is put in the course of transmission
(b) there is no concluded contract as the acceptance has not come to the knowledge of the
proposer
(c) there is no concluded contract as the acceptance has not been communicated to the proposer
(d) all the above.
Ans. (a)
161. When the consent to the contract is caused by coercion, the contract under section 19 is:
(a) valid
(b) voidable
(c) void
(d) illegal.
Ans. (b)
162. A’s son forged B’s name to a promissory note. B under threat of prosecuting A’s son obtains a
bond from A for the amount of the forged note. If B sues on this bond the court:
(a) has no jurisdiction in this case
(b) must not set aside the bond
(c) may set aside the bond
(d) none of above.
Ans. (c)
163. When the consent is caused by misrepresentation, the contract under section 19 is:
(a) valid
(b) void

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(c) voidable
(d) illegal.
Ans. (c)
164. When the consent is caused by undue influence, the contract under section 19A is:
(a) valid
(b) void
(c) voidable
(d) illegal.
Ans. (c)
165. Where both the parties are under mistake as to matter of fact, the contract under section 20
is:
(a) voidable
(b) void
(c) valid
(d) illegal.
Ans. (b)
166. 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.
Ans. (a)
167. Considerations & objects are unlawful where it is:
(a) forbidden by law or defeat the provision of any law
(b) which is fraudulent
(c) which is immoral & against the public policy
(d) all the above.
Ans. (d)
168. If only a part of the consideration or object is unlawful, the contract under section 24 shall
be:
(a) valid
(b) voidable

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(c) void
(d) illegal.
Ans. (c)
169. A contract without consideration under section 25 is:
(a) valid
(b) voidable
(c) void
(d) illegal.
Ans. (c)
170. Consideration should be something in return of promise which:
(a) both the law and parties regard, as having some value
(b) only law regards a having some value
(c) only the parties regard some value
(d) only adequate value necessary.
Ans. (a)
171. If the proposer prescribes the mode & manner of acceptance, the acceptance:
(a) can be in any manner & mode
(b) should be in the manner & mode prescribed
(c) can be in any reasonable mode & manner
(d) all the above.
Ans. (b)
172. Parties are not competent to contract if any of them is:
(a) minor
(b) insane
(c) declared unqualified
(d) all the above.
Ans. (d)
173. Consent is free under section 14 if not caused by:
(a) coercion & undue influence
(b) fraud and misrepresentation
(c) mistake subject to the provisions of sections 20, 21 and 22

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(d) all the above.
Ans. (d)
174. Consent under section 13 means:
(a) agreeing on the same thing in the same sense
(b) agreeing on the same thing at the same time
(c) agreeing on the same thing at different time
(d) agreeing on different things at different times.
Ans. (a)
175. A contract which is valid initially however, ceases to be enforceable subsequently,
the contract:
(a) remains valid
(b) becomes voidable when it ceases to be enforceable
(c) becomes void when it ceases to be enforceable
(d) becomes void since inception.
Ans. (c)
176. Agreements, the meaning of which is not certain or not capable of being made certain under
section 29 is:
(a) void
(b) voidable
(c) illegal
(d) valid.
Ans. (a)
177. An agreement in restraint of trade under section 27 is:
(a) valid
(b) voidable
(c) void
(d) unenforceable.
Ans. (c)
178. An agreement in restraint of trade is valid under section 27 if relates to:
(a) sale of goodwill
(b) mutual adjustment
(c) business contingency

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(d) none of the above.
Ans. (a)
179. An agreement not to pursue any legal remedy to enforce the rights under section 28 is:
(a) valid
(b) voidable
(c) void
(d) unenforceable.
Ans. (c)
180. An agreement not to persue legal remedies but to refer the dispute to the arbitrator, under
section 28 is:
(a) valid
(b) voidable
(c) void
(d) unenforceable.
Ans. (a)
181. 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) & (b)
(d) neither (a) nor (b).
Ans. (c)
182. An agreement by way of wager under section 30 is:
(a) void
(b) voidable
(c) valid
(d) unenforceable.
Ans. (a)
183. An agreement in connection with horse-racing under section 30 is:
(a) unlawful
(b) void
(c) voidable
(d) valid.
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Ans. (d)
184. An agreement in restraint of marriage under section 26 is:
(a) void
(b) voidable
(c) valid
(d) unenforceable.
Ans. (a)
185. If only a part of the consideration or object is unlawful, the contract under section 24 shall
be:
(a) valid to the extent the same are lawful
(b) void to the extent the same are unlawful
(c) void as a whole
(d) valid as a whole.
Ans. (c)
186. An agreement shall be void on account of:
(a) mistake of fact by one party
(b) mistake of fact by both the parties
(c) mistake of foreign law
(d) both (a) & (b).
Ans. (b)
187. A, B and C are sureties to D for the sum of 3,000 rupees lent to E. E makes default in
payment.
A. A and B are liable, as between themselves, to pay 1,000 rupees each
B. A and C are liable, as between themselves, to pay 1,000 rupees each
C. A, B and C are liable, as between themselves, to pay 1,000 rupees each
D. None of these
Ans: C
188. A, B and C are under a joint promise to pay D 3,000 rupees. C is unable to pay anything and A
is compelled to pay the whole.
A. A is entitled to receive 1,500 rupees from B
B. A is not entitled to receive any money from B
C. A is entitled to receive 1,500 rupees from C

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D. None of these
Ans: A
189. A, B and C jointly promise to pay D 3,000 rupees.
A. D may compel A to pay him 3,000 rupees
B. D may compel B to pay him 3,000 rupees
C. D may compel C to pay him 3,000 rupees
D. All of them
Ans: D
190. A, B and C, as sureties for D, enter into three several bonds, each in a different penalty,
namely, A in the penalty of 10,000 rupees, B in that of 20,000 rupees, C that of 40,000 rupees,
conditioned for D’s duly accounting to E. D makes default to the extent of 40,000 rupees.
A. A is liable to pay 15000 rupees, and B and C 1000 rupees each
B. A is liable to pay 5000 rupees, and B and C 10000 rupees each
C. A is liable to pay 10000 rupees, and B and C 1500 rupees each
D. None of these
Ans: C
191. A, B and C jointly promise to pay D the sum of 3,000 rupees. C is compelled to pay the whole.
A is insolvent, but his assets are sufficient to pay one-half of his debts.
A. C is entitled to receive 1250 rupees from A’s estate, and 500 rupees from B
B. C is entitled to receive 500 rupees from A’s estate, and no money from B
C. C is entitled to receive 500 rupees from A’s estate, and 1,250 rupees from B
D. None of these
Ans: C
192. A, being B’s agent for the sale of goods, induces C to buy them by misrepresentation, which
he was not authorized by B to make.
A. The contract is not voidable, as between B and C, at the option of C
B. The contract is partially voidable, as between B and C, at the option of C
C. The contract is voidable, as between B and C, at the option of C
D. None of these
Ans: C
193. A, being entitled to an estate for the life of B, agrees to sell it to C, B was dead at the time of
the agreement, but both parties were ignorant of the fact.
A. The agreement cannot be voided

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B. The agreement is void
C. Either (A) or (B)
D. None of these
Ans: B
194. A, being owner of a ship and cargo, authorizes B to procure an insurance for 4,000 rupees on
the ship. B procures a policy for 4,000 rupees on the ship, and another for the like sum on the
cargo.
A. A is bound to pay the premium for the policy on the ship
B. A is bound to pay the premium for the policy on the cargo
C. A is bound to pay the premium for the policy on the ship, but not the premium for the policy
on the cargo
D. None of these
Ans: C
195. A, contracts to buy B’s ship for 60,000 rupees, but breaks his promise.
A. A must pay to B, by way of compensation, the excess, if any, of the contract price for which B
can obtain for the ship at the time of the breach of promise
B. A must pay to B, by way of compensation, a partial amount of the contract price for which B
can obtain for the ship at the time of the breach of promise
C. A must pay to B, by way of compensation, the excess, if any, of the contract price over the price
which B can obtain for the ship at the time of the breach of promise
D. None of these
Ans: C
196. A, having contracted with B to supply B with 1,000 tons of iron at 100 rupees a ton, to be
delivered at a stated time, contracts with C for the purchase of 1,000 tons of iron at 80 rupees a
ton, telling C that he does so for the purpose of performing his contract with B. C fails to perform
his contract with A, who cannot procure other iron, and B, in consequence, rescinds the contract.
A. C must pay to A 5000 rupees, being the profit which A would have made by the performance of
his contract with B
B. C must pay to A 10,000 rupees, being the profit which A would have made by the performance
of his contract with B
C. C must pay to A 20,000 rupees, being the profit which A would have made by the performance
of his contract with B
D. None of these
Ans: C
197. A, who is a dealer in coconut-oil only, agrees to sell to B ‘one hundred tons of oil’.

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A. The nature of A’s trade affords no indication of the meaning of the words, and Ahas entered
into a contract for the sale of one hundred tons of coconut-oil
B. The nature of A’s trade affords an indication of the meaning of the words, and Ahas entered
into a contract for the sale of one hundred tons of coconut-oil
C. Either (A) or (B)
D. None of these
Ans: B
198. A contracts to marry B, being already married to C, and being forbidden by the law to which
he is subject to practice polygamy. This causes loss to B
A. A need not make compensation to B for the nonperformance of his promise
B. A must make compensation to B for the nonperformance of his promise
C. either (A) or (B)
D. None of these
Ans. (B)
199. A contracts to pay a sum of money to B on a day specified. A does not pay the money on that
day. B, in consequence of not receiving the money on that day, is unable to pay his debts, and is
totally ruined.
A. A is liable to make good to B anything except the principal sum he contracted to pay, together
with interest upon the day of payment
B. A is liable to partially make good to B anything except the principal sum he contracted to pay,
together with interest upon the day of payment
C. A is not liable to make good to B anything except the principal sum he contracted to pay,
together with interest upon the day of payment
D. None of these
Ans. (C)
200. A contracts to pay B a sum of money when B marries C. C dies without being married to B.
A. The contract still can be forced
B. The contract becomes void
C. either (A) or (B)
D. None of these
Ans. (B)

201. A contract to repair B’s house in a certain manner, and receives payment in advance. A
repairs the house, but not according to contract.

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A. B is not entitled to recover from A the cost of making the repair conform to the contract
B. B is entitled to partly recover from A the cost of making the repair conform to the contract
C. B is entitled to recover from A the cost of making the repair conform to the contract
D. None of these
Ans. (C)
202. A contracts to sell and deliver 50 maunds of saltpetre to B, at a certain price to be paid on
delivery. A breaks his promise.
A. B is not entitled to receive from A, by way of compensation, the sum, if any, by which the
contract price falls short of the price for which B might have obtained 50 maunds of saltpetre of
like quality at the time when the saltpetre ought to have been delivered
B. B is entitled to receive from A, by way of compensation, the sum, if any, by which the contract
price does not fall short of the price for which B might have obtained 50 maunds of saltpetre of
like quality at the time when the saltpetre ought to have been delivered
C. B is entitled to receive from A, by way of compensation, the sum, if any, by which the contract
price falls short of the price for which B might have obtained 50 maunds of saltpetre of like
quality at the time when the saltpetre ought to have been delivered
D. None of these
Ans. (C)
203. A contracts to sell and deliver 500 bales of cotton to B on a fixed day. A knows nothing of B’s
mode of conducing his business. A breaks the promise, and B, having no cotton, is obliged to close
his mill.
A. A is responsible to B for the loss caused to B by closing of the mill
B. A is not responsible to B for the loss caused to B by closing of the mill
C. either (A) or (B)
D. None of these
Ans. (B)
204. A contracts to sell and deliver to B, on the first of January, certain cloth which B intends to
manufacture into caps of a particular kind, for which there is not demand, except at that season.
The cloth is not delivered till after the appointed time, and too late to be used that year in making
the caps.
A. B is entitled to receive from A, by way of compensation, the difference between the contract
price of the cloth and its market price at the time of delivery
B. B is entitled to receive from A, by way of compensation, the difference between the contract
price of the cloth and the profits which he expected to obtain by making caps
C. B is entitled to receive from A, by way of compensation, the difference between the contract
price of the cloth and the expenses which he has been put to in making preparation for the
manufacture
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D. None of these
Ans. (A)
205. A contracts to supply B with a certain quantity of iron at a fixed price, being a higher price
than that for which A could procure and deliver the iron. B wrongfully refuses to receive the iron.
A. B must pay to A, by way of compensation, the sum of the contract price of the iron and the
sum for which A could have obtained and delivered it
B. B must pay to A, by way of compensation, the difference between the contract price of the iron
and the sum for which A could have obtained and delivered it
C. either (A) or (B)
D. None of these
Ans. (B)
206. A contracts to take in cargo for B at a foreign port. A’s Government afterwards declares war
against the country in which the port is situated.
A. The contract cannot become void when war is declared
B. The contract becomes partly void when war is declared
C. The contract becomes void when war is declared
D. None of these
Ans. (C)
207. A contracts with B for a fixed price to build a house for b within a stipulated time, B
supplying the necessary timber. C guarantees A’s performance of the contract. B omits to supply
then timber.
A. C is not discharged from his suretyship
B. C is partly discharged from his suretyship
C. C is discharged from his suretyship
D. None of these
Ans. (C)
208. A contracts with B that, if A practices as a surgeon within Calcutta, he will pay B Rs. 5,000. A
practices as a surgeon in Calcutta.
A. B is entitled to such compensation, not exceeding Rs.3,000 as the Court considers reasonable
B. B is entitled to such compensation, not exceeding Rs.4,000 as the Court considers reasonable
C. B is entitled to such compensation, not exceeding Rs.5,000 as the Court considers reasonable
D. None of these
Ans. (C)

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209. A contracts with B to deliver to him 250 maunds of rice before the 1st of May. A delivers 130
maunds only before that day and none after. B retains the 130 maunds after the 1st of May.
A. He is not bound to pay A for them
B. He is bound to pay A for them
C. He is partially bound to pay A for them
D. None of these
Ans. (B)
210. A contracts with B to deliver to him, at a specified price, certain merchandise on board a ship
which cannot arrive for a month, and B engages to pay for the merchandise within a week from
the date of the contract. B does not pay within a week.
A. A’s promise to deliver and need not be performed
B. A’s promise to deliver and needs to be performed
C. B must make compensation
D. both (A) and (C)
Ans. (D)
211. A contracts with B to execute certain builders’ work for a fixed price B supplying the
scaffolding and timber, and the work cannot be executed.
A. A need not execute the work
B. B is bound to make compensation to A for any loss caused to him by the non-performance of
the contract
C. either (A) or (B)
D. both (A) and (B)
Ans. (D)
212. A contracts with B to grow a crop of indigo on A’s land and to deliver it to B at a fixed rate,
and C guarantees A’s performance of this contract. B diverts a stream of water which is necessary
for irrigation of A’s land, and thereby prevents him from raising the indigo.
A. A is liable on his guarantee
B. A is partly liable on his guarantee
C. A is no longer liable on his guarantee
D. None of these
Ans. (C)
213. A contracts with B to make and deliver to B, by a fixed day, for a specified price, a certain
piece of machinery. A does not deliver the piece of machinery at the time specified, and, in
consequences of this; B is obliged to procure another at a higher price than the which he was to
have paid to A, and is prevented from performing a contract which B had made with a third
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person at the time of his contract with A (but which had not been then communicated to A), and
is compelled to make compensation for breach of that contract.
A. A must pay to B, by way of compensation, the sum of the contract price of the price of
machinery and the sum paid by B for another, but not the sum paid by B to the third person by
way of compensation
B. A must pay to B, by way of compensation, the difference between the contract price of the
price of machinery and the sum paid by B for another, along the sum paid by B to the third person
by way of compensation
C. A must pay to B, by way of compensation, the difference between the contract price of the
price of machinery and the sum paid by B for another, but not the sum paid by B to the third
person by way of compensation
D. None of these
Ans. (C)
214. A contracts with B to repair B’s house. B neglects or refuses to point out to A the places in
which his house requires repair.
A. A is excused for the non-performance of the contract if it is caused by such neglect or refusal
B. A cannot be excused for the non-performance of the contract even if it is caused by such
neglect or refusal
C. B is excused for his negligence or refusal to point out to A the places in which his house
requires repair
D. None of these
Ans. (A)
215. A contractual provision security deposit in a commercial contract cannot be questioned:
A. on the basis of its quantum
B. on the ground that the other party does not have a similar liability
C. either (A) or (B)
D. None of these
Ans. (C)
216. A delivers a rough diamond to B, a jeweller, to be cut and polished, which is accordingly
done.
A. B is not entitled to retain the stone till he is paid for the services he has rendered
B. B is entitled to retain the stone till he is not paid for the services he has rendered
C. B is entitled to retain the stone till he is paid for the services he has rendered
D. None of these
Ans. (C)

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217. A delivers to B, a common carrier, a machine, to be conveyed, without delay, to A’s mill,
informing B that this mill is stopped for want of machine. B unreasonably delays the delivery of
the machine, and A, in consequence, loses a profitable contract with the Government.
A. A is entitled to receive from B, by way of compensation, the average amount of profit which
would have been made by the working of the mill during the time that delivery of it was delayed,
along with the loss sustained through loss of the Government contract
B. A is entitled to receive from B, by way of compensation, the average amount of profit which
would have been made by the working of the mill during the time that delivery of it was delayed,
but not the loss sustained through loss of the Government contract
C. A is not entitled to receive from B, by way of compensation, the average amount of profit
which would have been made by the working of the mill during the time that delivery of it was
delayed, but the loss sustained thought loss of the Government contract
D. None of these
Ans. (B)
218. A desires B, who owes him Rs.100, to send him a note for Rs.100 by post.
A. The debt is discharged only when A receives the due amount
B. The debt is discharged as soon as B puts into the post a letter containing the note duly
addressed to A
C. either (A) or (B)
D. None of these
Ans. (B)
219. A directs B to see A’s estate. B, on looking over the estate before selling it, finds a mine on
the estate which is unknowns to A. B informs A that he wishes to buy the estate for himself, but
conceals the discovery of the mine. A allows B to buy in ignorance of the existence of the mine. A,
on discovering that B knew of the mine at the time he bought the estate:
A. may repudiate the sale at his option
B. may adopt the sale at his option
C. either (A) or (B)
D. None of these
Ans. (C)
220. A directs B to sell A’s estate. B boys the estate for himself in the name of C. A, on discovering
that B has bought the estate for himself, may repudiate the sale:
A. if he can show that B has dishonestly concealed any material fact
B. if he can show that the sale has been disadvantageous to him
C. either (A) or (B)
D. None of these
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Ans. (C)
221. A directs B to sell goods for him, and agrees to give B five per cent commission on the price
fetched by the goods. A afterwards by letter, revokes B’s authority. B after the letter is sent, but
before he receives it, sells the goods for 100 rupees.
A. The sale is not binding on A, and B is entitled to five rupees as his commission
B. The sale is binding on A, and B is not entitled to five rupees as his commission
C. The sale is binding on A, and B is entitled to five rupees as his commission
D. None of these
Ans. (C)
222. A directs B, his agent, to buy a certain house for him. B tells A it cannot be bought, and buys
the house for himself.
A. A cannot, on discovering that B has bought the house, compel him to sell it to A at the price he
gave for it
B. A can, on discovering that B has bought the house, file a suit against him
C. A may, on discovering that B has bought the house, compel him to sell it to A at the price he
gave for it
D. None of these
Ans. (C)
223. A directs B, his agent, to pay certain money to C, A dies, and D takes out probate to his will.
B, after A’s death, but before hearing of it, pays the money to C.
A. The payment is not as against D, the executor
B. The payment is good as against D, the executor
C. either (A) or (B)
D. None of these
Ans. (B)
224. A directs B, his solicitor, to sell his estate by auction, and so employ an auctioneer for the
purpose. B names C, an auctioneer, to conduct the sale.
A. C is a sub-agent, and A’s sub-agent for the conduct of the sale
B. C is not a sub-agent, but B’s agent for the conduct of the sale
C. C is not a sub-agent, but A’s agent for the conduct of the sale
D. None of these
Ans. (C)
225. A employs B as a bricklayer in building a house, and puts up the scaffolding himself. The
scaffolding is un-skilfully put up, and B is in consequence hurt.

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A. A need not make compensation to B
B. A must make compensation to B
C. either (A) or (B)
D. None of these
Ans. (B)
226. A employs B to beat C, and agrees to indemnify him against all consequence of the act. B
thereupon beats C, and to pay damages to C for so doing.
A. A is liable to indemnify B for those damages
B. A is partially liable to indemnify B for those damages
C. A is not liable to indemnify B for those damages
D. None of these
Ans. (C)
227. A employs B to recover 1,000 rupees from C. Through B’s misconduct the money is not
recovered.
A. B is entitled to remuneration from his services, and must make good the loss
B. B is entitled to no remuneration from his services, and need not make good the loss
C. B is entitled to no remuneration from his services, and must make good the loss
D. None of these
Ans. (C)
228. A employs B to recover 100,000 rupees from C, and to lay it out on good security. B recovers
1,00,000 rupees and lays out 90,000 rupees on good security, but lays out 10,000 rupees, on
security which he ought to have known to be bad, whereby A loses 2,000 rupees.
A. B is not entitled to remuneration for recovering the 1,00,000 rupees and for investing the
90,000 rupees. He is entitled to any remuneration for investing the 10,000 rupees, and he must
make good the 2,000 rupees to B
B. B is entitled to remuneration for recovering the 1,00,000 rupees and not for investing the
90,000 rupees. He is entitled to any remuneration for investing the 10,000 rupees, and he must
make good the 2,000 rupees to B
C. B is entitled to remuneration for recovering the 1,00,000 rupees and for investing the 90,000
rupees. He is not entitled to any remuneration for investing the 10,000 rupees, and he must make
good the 2,000 rupees to B
D. None of these
Ans. (C)
229. A empowers B to let A’s house. Afterwards A lets it himself.
A. This is not an implied revocation of B’s authority
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B. This is an implied revocation of A’s authority
C. This is an implied revocation of B’s authority
D. None of these
Ans. (C)
230. A engages B as clerk to collect money for him. B fails to account for some of his receipts, and
A in consequence calls upon him to furnish security for his duly accounting. A does not acquaint C
with B’s previous conduct. B afterwards makes default.
A. The guarantee is not invalid
B. The guarantee is partly invalid
C. The guarantee is invalid
D. None of these
Ans. (C)
231. A enters into a contract with B to sell him 100 bales of cotton, and afterwards discover that B
was acting as agent for C.
A. A may sue B for the price of the cotton
B. A may sue C for the price of the cotton
C. A may sue either B or C, or both, for the price of the cotton
D. None of these
Ans. (C)
232. A entrusts B with negotiable instrument endorsed in blank. B sells them to C in violation of
private orders from A.
A. The sale is not good
B. The sale is partly good
C. The sale is good
D. None of these
Ans. (C)
233. A finds B’s purse and gives it to him. B promises to give ARs. 50/-
A. This is not a contract
B. This is a contract
C. either (A) or (B)
D. None of these
Ans. (B)

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234. A fraudulently inform B that A’s estate is free from encumbrance. B thereupon buys the
estate. The estate is subject to a mortgage.
A. B may avoid the contract
B. B may insist on its being carried out, and the mortgage- debt redeemed
C. either (A) or (B)
D. None of these
Ans. (C)
235. A gives a guarantee to C for goods supplied by C to B C supplies goods to B, and afterwards B
becomes embarrassed and contracts with his creditors (including C to assign to them his property
in consideration) of their releasing him from their demands.
A. Here B is not released from his debt by the contract with C, and A is discharged from his surety
ship
B. Here B is released from his debt by the contract with C, and A is not discharged from his surety
ship
C. Here B is released from his debt by the contract with C, and A is discharged from his surety ship
D. None of these
Ans. (C)
236. A gives a recognizance binding him in a penalty of Rs.500 to appear in Court on a certain day.
He forfeits his recognizance.
A. He is not liable to pay the penalty
B. He is liable to partially pay the penalty
C. He is liable to pay the whole penalty
D. None of these
Ans. (C)
237. A gives authority to B to sell A’s land, and to pay himself, out of the proceeds, the debts due
to him from A.
A. A can revoke this authority but cannot terminate it by his insanity or death
B. A cannot revoke this authority, but it can be terminated by his insanity or death
C. A cannot revoke this authority, nor can it be terminated by his insanity or death
D. None of these
Ans. (C)
238. A gives B a bond for the repayment of Rs.1,000 with interest at 12 percent at the end of six
months, with a stipulation that, in case of default, interest shall be payable at the rate of 75
percent from the date of default. This is a stipulation by way of penalty.

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A. B is only entitled to recover from A such compensation as the Court considers reasonable
B. B is only entitled to recover from A such compensation he considers reasonable
C. B is not entitled to recover from A such compensation
D. None of these
Ans. (A)
239. A gives cloth to B, a tailor, to make into a coat; B promises A to deliver the coat as soon as it
is finished, and to give A three months, credit for the price.
A. B is entitled to retain the coat until he is paid
B. B is not entitled to retain the coat until he is not paid
C. B is not entitled to retain the coat until he is paid
D. None of these
Ans. (C)
240. A gives to C a continuing guarantee to the extent of 3,000 rupees for any oil supplied by C to
B on credit. Afterwards B becomes embarrassed, and, without the knowledge of A, B and C
contract that C shall continue to supply B with oil for ready money, and that the payments shall
be applied to the then, existing debts between B and C.
A. A is liable on his guarantee for any goods supplied after this new arrangement
B. A is not liable on his guarantee for any goods supplied after this new arrangement
C. A is partly liable on his guarantee for any goods supplied after this new arrangement
D. None of these
Ans. (B)
241. A guarantee caused but the misrepresentation may be invalid if the misrepresentation has
been effected by a third party with the creditor’s knowledge or assent. The guarantee may,
therefore be affected by the misrepresentation by the principal-debtor, or a third party on the
grounds of:
A. agency
B. notice
C. both (A) and (B)
D. None of these
Ans. (C)
242. A guarantees C against the misconduct of B in an office to which B is appointed by C, and of
which the duties are defined by an Act of the Legislature. By a subsequent Act the nature of the
office is materially altered. Afterwards, B misconduct’s himself.
A. A is not discharged by the change from future liability under the guarantee, though the
misconduct of B is in respect of a duty not affected by the later Act
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B. A is discharged by the change from future liability under the guarantee, though the misconduct
of B is in respect of a duty affected by the later Act
C. A is discharged by the change from future liability under the guarantee, though the misconduct
of B is in respect of a duty not affected by the later Act
D. None of these
Ans. (C)
243. A guarantees payment to B of the price of five sacks of flour to be delivered by B to C and to
be paid for in a month. B delivers five sacks to C. C pays for them. Afterwards B delivers four sacks
to C, which C does not pay for.
A. The guarantee given by A is a continuing guarantee, and according he is liable for the price of
the four sacks
B. The guarantee given by A is a continuing guarantee, but not the price of the four sacks
C. The guarantee given by A was not a continuing guarantee, and according he is not liable for the
price of the four sacks
D. None of these
Ans. (C)
244. A guarantees payment to B, a tea-dealer, to the amount of Rs.100, for any tea he may from
time to time supply to C. B supplies C with tea to above the value of Rs.100, and C pays B for it.
Afterward B supplies C with tea to the value of Rs.200. C fails to pay.
A. The guarantee given by A was not a continuing guarantee, and he is not accordingly liable to B
to the extent of Rs.100
B. The guarantee given by A was a continuing guarantee, and he is also liable to B to the extent of
Rs.200
C. The guarantee given by A was a continuing guarantee, and he is accordingly liable to B to the
extent of Rs.100
D. None of these
Ans. (C)
245. A guarantees to B the payment of a bill of exchange by C, the acceptor. The bill is dishonored
by C.
A. A is liable only for the amount of the bill
B. A is liable only for any interest and charges which may have become due on it
C. either (A) or (B)
D. both (A) and (B)
Ans. (D)

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246. A guarantees to B, the extent of 10,000 rupees, that C shall pay all the bills that B shall draw
upon him. B draws upon C, C accepts the bill. A gives notice of revocation. C dishonours the bill at
maturity.
A. A is liable upon his guarantee
B. A is not liable upon his guarantee
C. A is partly liable upon his guarantee
D. None of these
Ans. (A)
247. A guarantees to C payment for iron to be supplied by him to B to B the amount of 2,000 tons.
B and C have privately agreed and B should pay five rupees per ton beyond the market price, such
excess to be applied in liquidation of an old debt. This agreement is concealed from A.
A. A is partly liable as a surety
B. A is liable as a surety
C. A is not liable as a surety
D. None of these
Ans. (C)
248. The agent has a right to be indemnified:
(a) for all the consequences of all lawful acts done by the agent
(b) for all the consequences of all unlawful acts done in good faith by the agent
(c) for all the consequences of unlawful acts, known to be unlawful, but not criminal acts
(d) both (a) & (b).
Ans. (a)
249. Which of the following rights is/are not available to the agent:
(a) right to retain
(b) right to compensation
(c) right to sell
(d) all the above.
Ans. (c)
250. Which of the following rights is/are available to the agent:
(a) right to remuneration & compensation
(b) right to retain
(c) right to indemnity
(d) all the above.
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Ans. (d)
251. B, the proprietor of a newspaper, publishes, at A’s request, a libel upon C in the paper, and A
agrees to identify B against the consequences of the publication, and all costs and damages of any
action in respect thereof. B is sued by C and has to pay damages, and also incurs expenses. Decide
in the light of section 224 of the Indian Contract Act, 1872:
(a) A is not liable to B upon indemnity
(b) A is liable to B upon indemnity
(c) A is not liable to C upon indemnity
(d) none of above.
Ans. (a)
252. Which of the following cases is related to letter of intent:
(a) D.R.S.A. v. M/s. Bindal Agrochemical Ltd., AIR 2006 SC 871
(b) Union of India v. Maddala Thathaiah, AIR 1966 SC 1724
(c) Patna Regional Dev. Authority v. Rashtriya Pariyojna Nirman Nigam, AIR 1966 SC 2074
(d) Bhagwandas v. Girdharilal and. Co., AIR 1966 SC 543.
Ans. (a)
253. If only a part of the consideration or object is unlawful, the contract under Section 24 of the
Indian Contract Act, 1872 shall be:
(a) Valid to the extent the same are lawful
(b) Void to the extent the same are unlawful
(c) Void as a whole
(d) Valid as a whole.
Ans. (b)
254. A contract may be vitiated by:
(i) Fraud
(ii) Mistake
(iii) Frustration
(iv) Undue influence.
Find correct answer using codes: Codes:
(a) Only (i) is correct
(b) Only (i) and (ii) and correct
(c) Only (i), (ii) and (iii) are correct
(d) All are correct.
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Ans. (d)
255. A entrusts B with negotiable instruments endorsed in blank. B sells them to C in violation of
private orders from A. The sale is:
(a) bad
(b) good
(c) no legal identity
(d) depends on the court.
Ans. (b)
256. A owes B, under a contract, a sum of money, the amount of which has not been ascertained.
A, without ascertaining the amount, gives to B, and B, in satisfaction thereof accepts the sum of
Rs. 2000. This is a discharge of –
(a) whole debt
(b) part debt
(c) earnest money
(d) previous debt.
Ans. (a)
257. In which of the following judgments it was told that: “the principle of unjust enrichment
cannot be extended to give a right to the State to recover or realize vend fee after the concerned
statute for realisation or recovery of vend fee has been struck down”:
(a) Somaiya Organics (India) Ltd. v. State of Uttar Pradesh, AIR 2001 SC 1725
(b) V.R. Subramanyam v. B. Thayapa, (1961) 3 SCR 663
(c) Jugapatiraja v. Sadnusannama, AIR 1916 Mad 980
(d) none of the above.
Ans. (a)
258. In which of the following cases, the Supreme Court held that the time was essence of
contract:
(a) A.K. Lakshmipathi v. R.S. Pannalal, AIR 2010 SC 577
(b) Ceilena v. Ulhas, AIR 2010 SC 603
(c) Khanapuram v. Adm. Officer, AIR 2010 SC 615
(d) H.D.F.C. Bank Ltd. v. J.J. Mannan, AIR 2010 SC 618.
Ans. (a)
259. In which case it was held that if arbitrator acts in disregard of the contract and without
jurisdiction then he commits legal misconduct:
(a) Beed District Central Co-operative Bank Ltd. v. State of Maharashtra (2006)
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(b) Food Corporation of India v. Chandu Construction (2007)
(c) Gurpreet Singh v. Union of India (2005)
(d) Saurabh Prasad v. DLF Universal Ltd. (2004)
Ans. (b)
260. If instead of avoiding the contract the contractor accepts the belated performance
of reciprocal obligation on the part of the employer, the innocent party i.e., the contractor, cannot
claim compensation for any loss occasioned by the non-performance of the reciprocal promise by
the employer at the time agreed, unless at the time of such acceptance, he gives notice to the
promisor of his intention to do so. In which case it was held:
(a) State of Kerala v. M.A. Mathai (2007)
(b) Punjab State Civil Supplies Co-op. Ltd. v. Sikander Singh (2006)
(c) Shin Satellite Public Co. Ltd. v. Jain Studios Limited (2005)
(d) K.C. Skaria v. The Government of State of Kerala (2004).
Ans. (a)
261. In which case it was held that when charge or pledge is enforced by way of sale of the
pledged or hypothecated goods the sale is for consideration and falls within the ambit of section
2(xxi) of Limitation Act:
(a) Federal Bank Ltd. v. State of Kerala (2007)
(b) Hardev Singh v. Gurmail Singh (2006)
(c) Jatinder Nath v. Chopra Land Developers (2005)
(d) none of the above.
Ans. (a)
262. In which of the following cases it was held that the “Liability of guarantor is coextensive with
that of principal debtors”:
(a) Infrastructure Leasing & Financial Services Ltd. v. Vijay V. Prabhu, AIR 2010 Bom 72.
(b) Manita Khurana v. Indra Khurana, AIR 2010 Del 69.
(c) Bar Council of Delhi v. Surender, AIR 2010 Del 75
(d) Purabi Dasgupta v. Arun Kumar, AIR 2010 Gau 66.
Ans. (a)
263. A valid Lease can be determined by:
(a) efflux of time
(b) frustration
(c) force majure
(d) none of the above.
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Ans. (a)
264. “Deed of cancellation of contract amounts to rescission of contract and any rescission must
be only bilateral” This contention was held in case of:
(a) E.R. Kalaiban v. I.G. of Registration Chennai, AIR 2010 Mad 18.
(b) K.L. Sahoo v. L/C, AIR 2010 Ori 19
(c) A.K. Mahato v. State of Bihar, AIR 2010 Pat 19
(d) Md. Moinuddin v. Md. Mustafa, AIR 2010 Pat 224.
Ans. (a)
265. Almost all insurances other than……………………….. insurances are contracts of indemnity:
(a) life & personal accident
(b) marine & general
(c) fire & life
(d) none of the above
Ans. (a)
266. Contract cannot be said to be void on ground of:
(a) over consideration
(b) inadequacy of consideration
(c) over consideration or inadequacy of consideration
(d) neither (a) nor (b).
Ans. (d)
267. Bank guarantee is independent contract between:
(a) creditor and debtor
(b) bank and beneficiary
(c) buyer and seller
(d) none of the above.
Ans. (b)
268. The indemnity-holder can recover all costs he has been compelled to pay in suit to which the
promise to indemnify relates if:
A. the promisor had authorised him to bring or to defend the suit
B. in bringing or defending the suit he had not contravened the orders of the promisor, and had
acted in a prudent manner
C. either (A) or (B)

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D. None of these
Ans. (C)
269. The Indian Contract Act, 1872 continued to in operation by virtue of:
A. Article 371 (1) of the Constitution of India
B. Article 372 (1) of the Constitution of India
C. Article 373 (1) of the Constitution of India
D. Article 374 (1) of the Constitution of India
Ans. (B)
270. The ingredients of a pawn are:
A. The property pledged should actually or constructively delivered to the pawnee
B. A pawnee has a only special property in the pledge, the general property remains in the
pawnor and wholly reverts to him on discharge of the debt
C. both (A) and (B)
D. None of these
Ans. (C)
271. The language of the second paragraph of the present section is open to which of the
following construction?
A. The bailor is under a duty to take reasonable care to make the goods reasonably safe for the
purpose for which he knows they have been hired
B. The bailor is under a duty to supply goods that are reasonably safe, the only defence being that
the defect is latent one that could not be discovered by any care or skill
C. There is an absolute guarantee of fitness
D. All of them
Ans. (D)
272. The largest number of cases decided under the original paragraph related to stipulations
providing for interest. Those stipulations may be divided into which of the following classes?
I. Stipulations for payment on interest at a higher rate on default on the part of debtor to pay the
principal of part thereof or interest on the due date
II. Stipulation for payment on default of compound interest
III. Stipulations for payment of interest at a specified rate if the principal or part thereof is not
paid on the due date
IV. Stipulations for payment of interest at a lower rate if interest paid on due dates
V. Stipulations for payment of interest from the date of the bond, but at an exorbitant rate
A. II, III, IV
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B. IV, V
C. I, V
D. All of them
Ans. (D)
273. The law throws its protection around pardanashin woman by reason:
A. of the purda
B. of those disabilities which arise out of the seclusion which the pardanshin women suffer
C. both (A) and (B)
D. None of these
Ans. (C)
274. The liability of the surety could not be enforced:
A. Where the original contract was unenforceable for want of registration
B. Where the parties were entitled to equities under the doctrine of part performance
C. both (A) and (B)
D. None of these
Ans. (C)
275. The nature of a fidelity guarantee gives rise:
A. to a duty of more excessive disclosure than is required in the case of a guarantee for payment
of debt
B. to a duty of nominal disclosure than is required in the case of a guarantee for payment of debt
C. either (A) or (B)
D. None of these
Ans. (A)
276. The obligation of the bailee ____________ is the essence of bailment
A. to return the goods
B. to deal with the goods according to the directions
C. either (A) or (B)
D. None of these
Ans. (C)
277. The pawnee cannot retain the goods for payment of any other debt or performance of any
promise other than that for which the goods are pledged, unless:
A. There is a specific contract to the effect as stated in S. 174 of the Indian Contract Act, 1872

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B. The pawnee falls in any of the categories of persons mentioned in S. 171 of the Indian Contract
Act, 1872 entitled to a general lien
C. either (A) or (B)
D. None of these
Ans. (C)
278. The plaintiff is awarded nominal damages when:
I. the defendant’s breach of contract has in fact caused no loss to the plaintiff
II. the defendant has committed a technical breach of contract and the plaintiff had no intention
of performing his terms
III. the plaintiff fails to prove the loss that he may have suffered from the breach of contract
IV. he has suffered actual damage, which has arisen, not from the defendant’s wrongful act, but
from the conduct of the plaintiff himself, or an external event
V. the plaintiff merely seeks to establish the infringement of his legal right, without being
concerned about actual loss.
A. II, III
B. IV
C. I, V
D. All of them
Ans. (D)
279. The principal is liable to the unauthorised acts of the agent if:
A. by word
B. by conduct
C. he induces a third party to believe that the unauthorised acts are within the scope of agent’s
authority
D. All of them
Ans. (D)
280. The principle of quasi-estoppel or promissory estoppel more aptly called is that when one
party to a contract in the absence of a fresh consideration agrees not to enforce his rights, an
equity will be raised in favour of another party, but subject to the qualification that:
A. the other party has changed his position
B. the promisor can resile from his promise on giving reasonable notice – may not be formal –
giving the promisee a reasonable opportunity of resuming his position
C. the promise only becomes final and irrevocable if the promisee cannot his position
D. all of them

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Ans. (D)
281. The principle of unjust enrichment could not give a right to the state to recover or realise
vend fee after the statue has been struck down. In which of the following cases it was upheld?
A. HDFC Bank Ltd. v. J. J. Mannan
B. P. T. Reddy v. Jyoti Reddy
C. Somaiya Organics (India) Ltd v. State of Uttar Pradesh
D. None of these
Ans. (C)
282. The principle on which the law accords protection to pardanashin women is founded on
A. equity
B. good conscience
C. both (A) and (B)
D. None of these
Ans. (C)
283. The provisions of Section 128 of the Indian Contract Act, 1872 does not apply to:
A. a surety for a person ordered to keep good behaviour
B. consequences of recovery of debt
C. both (A) and (B)
D. None of these
Ans. (C)
284. The relation of dependence may arise:
A. from a special authority or confidence committed to the donee
B. from the feebleness in body or mind of the donor
C. either (A) or (B)
D. None of these
Ans. (C)
285. The right to appoint is subject to which of the following exceptions?
I. Where the act to be performed is personal in character
II. Where the transaction is required by statute to be done by or to be evidenced by the signature
of the principal himself
III. Where the competency to do the act arises by virtue of the holding of some public office

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IV. Where the competency arises by virtue of some power, authority, or duty of a personal nature
and requiring skill or discretion for its exercise
V. Where the statute imposes on a person a duty which he is not free to delegate
A. I, II
B. II, IV
C. III, V
D. All of them
Ans. (D)
286. The right to surety to indemnity is an incident of the guarantee:
A. the principal-debtor will be liable
B. without the necessity of any further request for all sums subsequently paid by the surety under
the guarantee as money paid to the use of the principal-debtor
C. both (A) and (B)
D. None of these
Ans. (C)
287. The rule in Section 204 of the Indian Contract Act, 1872 is connected with the principal’s duty
to indemnify the agent under:
A. S. 222 of the Indian Contract Act
B. S. 223 of the Indian Contract Act
C. S. 224 of the Indian Contract Act
D. None of these
Ans. (A)
289. The rule of limitation in a foreign country, where the contract is made, may be set up as a
defence to a suit filed in India if:
A. the rule has extinguished the contract
B. the parties were domiciled in that foreign country during the period prescribed by that rule
C. both (A) and (B)
D. None of these
Ans. (C)
290. The rules against penalty under Section 74 of the Indian Contract Act, 1872, do not apply
where:
A. the obligation is one of debt
B. a sum is payable on an event other than breach

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C. stipulated sum is payable upon the exercise by one party of an option to terminate the contract
D. all of them
Ans. (D)
291. The subject-matter of Section 8 of the Indian Contract Act, 1872 is divided in to:
A. performance of the conditions of a proposal and
B. acceptance of any consideration for reciprocal promise which may be offered with a proposal,
C. both (A) and (B)
D. None of these
Ans. (C)
292. The term ‘pardanashin’ means:
A. screened from view
B. placed behind a screen
C. veiled
D. All of them
Ans. (D)

Ans. (D)
291. The subject-matter of Section 8 of the Indian Contract Act, 1872 is divided in to:
A. performance of the conditions of a proposal and
B. acceptance of any consideration for reciprocal promise which may be offered with a proposal,
C. both (A) and (B)
D. None of these
Ans. (C)
292. The term ‘pardanashin’ means:
A. screened from view
B. placed behind a screen
C. veiled
D. All of them
Ans. (D)
293. A agrees to sell a horse worth Rs.1,000/- for Rs.10/-. A denies that his consent to the
agreement was freely given.

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A. The inadequacy of the consideration is a fact which the court should take into account in
considering whether or not A’s consent was freely given
B. The adequacy of the consideration is a fact which the court should take into account in
considering whether or not A’s consent was freely given
C. The inadequacy of the consideration is a fact which the court should take not into account in
considering whether or not A’s consent was freely given
D. None of these
Ans. (A)
294. A agrees to sell B’s hundred tons of oil’. There is nothing whatever to show what king of oil
was intended.
A. The agreement is void for uncertainty
B. The agreement is not void in spite of the uncertainty
C. either (A) of (B)
D. None of these
Ans. (A)
295. A agrees to sell his house to B for 10,000 rupees. Here, B’s promise to pay the sum of 10,000
rupees is the consideration for A’s promise to sell the house, and A’s promise to sell the house is
the consideration for B’s promise to pay the 10,000 rupees.
A. These are unlawful considerations
B. These are lawful considerations
C. either (A) or (B)
D. None of these
Ans. (B)
296. A promises to pay B 1,000 rupees at the end of the six months. If C, who owes that sum to B,
fails to pay it. B promises to grant time to C accordingly. Here, the promise of each party is the
consideration for the promise of the other party.
A. These are unlawful considerations
B. These are lawful considerations
C. either (A) or (B)
D. None of these
Ans. (B)
297. A agrees to sell to B ‘one thousand maunds of rice at a price to be fixed by C’. As the price is
capable of being made certain.
A. There is no uncertainty here to make the agreement void

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B. There is uncertainty here to make the agreement void
C. There is uncertainty but the agreement cannot be made void
D. None of these
Ans. (A)
298. A agrees with B to discover treasure by magic.
A. The agreement is not voided
B. The agreement is partly void
C. The agreement is void
D. None of these
Ans. (C)
289. A and B agree that A shall pay B 1,000 rupee, for which B shall afterwards deliver to A either
rice or smuggled opium.
A. It is a contract
B. It is a void agreement
C. either (A) or (B)
D. both (A) and (B)
Ans. (D)
290. A and B agree that A shall sell B a house for 10,000 rupees, but that if B uses it as a gambling
house, he shall pay A 50,000 rupees for it.
A. It is a contract
B. It is a void agreement
C. either (A) or (B)
D. both (A) and (B)
Ans. (D)
291. A and B contract that A shall build a house for B at a fixed price.
A. A’s promise to build the house must be performed before B’s promise to pay for it
B. A’s promise to build the house can be delayed before B’s promise to pay for it
C. either (A) or (B)
D. None of these
Ans. (A)
292. A and B contract that A shall deliver goods to B to be paid for by B on delivery.
A. A need not deliver the goods, unless B is ready and willing to pay for the goods on delivery

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B. B need not pay for the goods unless A is ready and willing to deliver them on payment
C. both (A) and (B)
D. either (A) or (B)
Ans. (C)
293. A and B contract that B shall execute some work for A for a thousand rupees. B is ready and
willing to execute the work accordingly, but A prevents him from doing so.
A. The contract is not voidable at the option of B; and if he elects to rescind it, he is entitled to
recover from A compensation for any loss which he has incurred by its non-performance
B. The contract is voidable at the option of B; and if he elects to rescind it, he is not entitled to
recover from A compensation for any loss which he has incurred by its non-performance
C. The contract is voidable at the option of B; and if he elects to rescind it, he is entitled to recover
from A compensation for any loss which he has incurred by its non-performance
D. None of these
Ans. (C)
294. A and B jointly owe 100 rupees to C, A alone pays the amount to C, and B, not knowing of
this fact, pays 100 rupees over again to C.
A. C is not bound to repay the amount to B
B. C is bound to partially repay the amount to B
C. C is bound to repay the amount to B
D. None of these
Ans. (C)
295. A and B make a joint and several promissory note to C. A makes it, in fact, as surety for B,
and C knows this at the time when the note is made.
A. The fact that A to the knowledge of C, made the note as surety for B, is answer to a suit by C
against A upon the note
B. The fact that A to the knowledge of C, made the note as surety for B, is partly an answer to a suit
by C against A upon the note
C. The fact that A to the knowledge of C, made the note as surety for B, is no answer to a suit by C
against A upon the note
D. None of these
Ans. (C)
296. A authorizes B, a merchant in Calcutta, to recover the moneys due to A from C & Co. B
instructs D, a solicitor, to take legal proceeding against C & Co for the recovery of the money.
A. D is a sub-agent, but is not solicitor for A
B. D is not a sub-agent, but is solicitor for B
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C. D is not a sub-agent, but is solicitor for A
D. None of these
Ans. (C)
297. A bails a barrel of Cape flour worth Rs.45, to B, B, without A’s consent, mixes the flour with
country flour of his own, worth Rs.25 a barrel.
A. B need not compensate A for the loss of his flour
B. B must partially compensate A for the loss of his flour
C. B must compensate A for the loss of his flour
D. None of these
Ans. (C)
298. A borrows Rs.100 from B and gives him a bond for Rs.200, payable by five yearly instalments
of Rs.40, with a stipulation that in default of payment of any instalment, the whole shall become
due.
A. This is a stipulation by way of penalty
B. This is not a stipulation by way of penalty
C. either (A) or (B)
D. None of these
Ans. (A)
299. A claim for compensation under s 55 of the Indian Contract Act, 1872 would be barred, if the
promise accepts performance after the stipulated time, unless he had given notice to the
promisor of his intention to claim compensation at the time of the delayed acceptance. In which
of the following cases it was upheld?
A. Punjab State Civil Supplies Co-op. Ltd. v. Sikander Singh
B. Gurpreet Singh v. Union of India
C. State of Kerala v. M. A. Mathai
D. None of these
Ans. (C)
300. A consignment insured for transit was damaged. The insurer settled the claim with the
insured, took from the insured a letter of subrogation-cum-special power of attorney, and filed a
complaint in the name before the Consumer Forum. It was held that the insurer could file a
complaint in the name of the insured as his power of attorney holder of insured, or jointly with
the insured under the subrogation. It did not matter whether the subrogation was based in
common law not put in writing, or was evidenced by an instrument or letter. In which of the
following cases it was upheld:
A. Md. Moinuddin v. Md. Mustafa

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B. Bar Council of Delhi v. Surender
C. Economic Transport Organization v. Charan Spinning Mill
D. None of these
Ans. (C)
301. A consigns goods to B for sale, and gives him instructions not to sell under a fixed price. C,
being ignorant of B’s instruction, enters into a contract with B to buy the goods at a price lower
than the reserved price.
A. A is not bound by the contract
B. A is partially bound by the contract
C. A is bound by the contract
D. None of these
Ans. (C)
302. A consigns provisions to B at Calcutta, with directions to send them immediately to C, at
Cuttack.
A. B may not sell the provisions at Calcutta, if they will not bear the journey to Cuttack without
spoiling
B. B may partly sell the provisions at Calcutta, if they will not bear the journey to Cuttack without
spoiling
C. B may sell the provisions at Calcutta, if they will not bear the journey to Cuttack without spoiling
D. None of these
Ans. (C)
303. A contract between a debtor and a creditor that the debtor should sell and the creditor
should accept any property in satisfaction of the debt, may operate, in which of the following
ways?
A. The contract by itself may operate as an absolute discharge of the debt, giving the creditor
thereafter only the remedy by way of the specific performance of the contract
B. It may operate only as a conditional discharge of the debt giving the creditor in case of the
debtor’s default a right to claim either performance of the contract or if he elects to put an end to
it, the payment of the debt
C. The contract may be an independent transaction in the sense that it does not affect the rights of
the creditors or the obligations of the debtor till the sale is actually completed
D. All of them
Ans. (D)
304. A contract of guarantee involves:
A. creditor

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B. surety
C. principal debtor
D. All of them
Ans. (D)
305. A contract to sing for B at a concert for 1,000 rupees, which are paid in advance. A is too ill to
sing.
A. A is not bound to make compensation to B for the loss of the profits which B would have made if
A had been able to sing
B. A is not bound to make compensation or refund to B
C. A must refund to B the 1,000 rupees paid in advance
D. both (A) and (C)
Ans. (D)
306. 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
Ans. (A)
307. A contract would not be discharged by the impossibility, even though the supervening event
makes performance impossible or unlawful if:
I. The contract is absolute in terms and can be held to cover the frustrating events
II. The contract makes full and complete provision for a given contingency
III. It can be reasonably supposed to be within the contemplation of the parties to the contract at
the time they made the contract
IV. Where the event is such that any of the parties could foresee or could have foreseen with
reasonable diligence
V. If only a portion of the contract becomes impossible or difficult to perform
VI. If despite the supervening events, the object and purpose of the contract is not rendered
useless, and the contract can be performed substantially in accordance with the original intention of
the parties, though not literally in accordance with the language of the agreement
A. II, III
B. IV, V
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C. I, VI
D. All of them
Ans. (D)
308. A contracts to buy of B, at a stated price, 50 maunds of rice, no time being fixed for delivery.
A afterwards informs B that he will not accept the rice if tendered to him.
A. B is not entitled to receive from A, by way of compensation, the amount, if any, by which the
contract price exceeds that which B can obtain for the rice at the time when A informs B that he will
not accept it
B. B is entitled to receive from A, by way of compensation, the amount, if any, by which the contract
price does not exceed that which B can obtain for the rice at the time when A informs B that he will
not accept it
C. B is entitled to receive from A, by way of compensation, the amount, if any, by which the contract
price exceeds that which B can obtain for the rice at the time when A informs B that he will not
accept it
D. None of these
Ans. (C)
309. A contracts to deliver to B at his warehouse, on the first March, 1873, 100 bales of cotton of
a particular quality. In order to make an offer of performance with the effect stated in this
section, under any such circumstances so that B may have a reasonable opportunity of satisfying
himself that the thing offered is cotton of the quality contracted for, and that there are 100 bales
A. A can bring the cotton to B’s warehouse any day
B. A must bring the cotton to B’s warehouse on the appointed day
C. A need not bring the cotton to B’s warehouse at all
D. None of these
Ans. (B)
310. A contracts to indemnify B against the consequences of any proceedings which C may take
against B in respect of a certain sum of 200 rupees.
A. This is contract of indemnity
B. This is not a valid contract of indemnity
C. This is contract of stipulation
D. None of these
Ans. (A)
311. _______ of the Indian Contract Act, 1872 prescribes that the acceptance must be made in a
reasonable manner. If the proposer has prescribed a manner of acceptance, the acceptance must
be made in that manner, if not so made, there is a contract only if the proposer ‘accepts the
acceptance’

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A. Section 7(2)
B. Section 7(3)
C. Section 7(4)
D. None of these
Ans: A
312. _______ describes a voidable contract as one which is enforceable by the law at the option
of the parties, but not at the option of the others.
A. Section 2 (g) of the Indian Contract Act, 1872
B. Section 2 (h) of Indian Contract Act, 1872
C. Section 2 (i) of Indian Contract Act, 1872
D. None of these
Ans: C
313. A agrees to buy from B a certain horse. It turns out that the horse was dead at the time of
the bargain, though neither party was aware of the fact.
A. The agreement cannot be voided
B. The agreement is void
C. Either (A) or (B)
D. None of these
Ans: B
314. A agrees to pay B 1,000 rupees if B will marry A’s daughter C. C was dead at the time of the
agreement.
A. The agreement is void
B. The agreement is not void
C. Either (A) or (B)
D. None of these
Ans: A
315. A agrees to pay B a sum of money if a certain ship does not return. The ship is sunk.
A. The contract cannot be enforced when the ship sinks
B. The contract can be enforced when the ship sinks
C. Either (A) or (B)
D. None of these
Ans: B

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316. A contracts to let his ship to B for a year, from the first of January, for a certain price. Freights
rise, and, on the first of January, the hire obtainable for the ship is higher than the contract price.
A breaks his promise. He must pay to B, by way of compensation, a sum equal to the difference
between the contract price and the price for which B could hire a similar ship for a year on and
form the first January.
A. He must pay to B, by way of compensation, twice the difference between the contract price and
the price for which B could hire a similar ship for a year on and form the first January.
B. He must pay to B, by way of compensation, a sum equal to the difference between the contract
price and the price for which B could hire a similar ship for a year on and form the first January
C. either (A) and (B)
D. None of these
Ans. (B)
317. ‘A’ agrees to let her daughter ‘B’ for hire to ‘C’ for concubinage, without the consent of ‘B’,
the contract is:
(a) void as the consent of ‘B’ the daughter has not taken
(b) void being immoral
(c) voidable at the instance of ‘B’
(d) valid as ‘A’ & ‘C’ entered into contract with their free consent.
Ans. (b)
318. ‘X’ in consideration of Rs. 10,000 lent by Y & Z, provides Y & Z jointly to repay them that sum
with interest on a specified day. Y dies. The right to claim the performance:
(a) is available to Y’s representatives alone
(b) is available to Z alone
(c) is available to Y’s representatives & Z both
(d) is available to Y’s representatives & after the death of Z, his representatives.
Ans. (c)
319. The doctrine of impossibility of performance rendering contracts void is based on:
(a) implied term
(b) just & reasonable solution
(c) supervening impossibility
(d) unjust enrichment.
Ans. (c)
320. The age of majority for the purpose of Contract Act is:
(a) 18 years

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(b) 21 years
(c) 16 years for girls & 18 years for boys
(d) 18 years for girls & 21 years for boys.
Ans. (a)
321. A contract signed between two countries without specifying as to which country’s law shall
govern in cases of dispute:
(a) it shall be governed by the law of the country where the proposal was made
(b) it shall be governed by the law of the country where the contract was concluded
(c) it shall be governed by the law of the country which the parties intended to apply, i.e., where the
contract is localised
(d) it shall be governed by the law where the contract is performed.
Ans. (c)
322. The damages under section 73 of Indian Contract Act are:
(a) liquidated
(b) compensatory
(c) penal
(d) none of the above.
Ans. (b)
323. While determining damages which of the following are taken into account:
(a) motive of breach
(b) manner of breach
(c) inconvenience caused by non-performance
(d) all the above.
Ans. (c)
324. Which of the following is not relevant in determining of quantum of damage:
(a) motive
(b) manner
(c) loss suffered
(d) both (a) & (b).
Ans. (a)
325. Pre-contract expenditure may be recovered as damage:
(a) generally

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(b) always
(c) only if it is within the contemplation of parties
(d) none of the above.
Ans. (c)
326. Duty to mitigate damages on the part of injured party arises:
(a) in cases of anticipatory breach
(b) in cases of breach at the time fixed for performance of the contract
(c) both (a) & (b)
(d) either (a) or (b).
Ans. (d)
327. A sum fixed before hand as amount of compensation payable in the event of breach of
contract is called:
(a) liquidated damages
(b) penalty
(c) either (a) or (b)
(d) neither (a) nor (b)
Ans. (c)
328. The essense of liquidated damage is:
(a) genuine pre-estimate of damage
(b) less than probable damage
(c) more than probable damage
(d) payment of money in terrorem.
Ans. (a)
389. A contract of indemnity as a contract by which one party promises to save the other party
from the loss caused to him by the conduct of the promisor himself or of any other person, has
been defined:
(a) under section 124
(b) under section 123
(c) under section 125
(d) under section 126.
Ans. (a)
390. A contract of guarantee has been defined:

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(a) under section 123
(b) under section 124
(c) under section 125
(d) under section 126.
Ans. (d)
391. Surety is a person:
(a) in respect of whose default the guarantee is given
(b) who gives the guarantee
(c) to whom the guarantee is given
(d) none of the above.
Ans. (b)
392. 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.
Ans. (a)
393. A guarantee:
(a) has to be in writing
(b) can be oral
(c) can be oral or in writing
(d) neither (a) or (b).
Ans. (c)
394. Liability of the surety is:
(a) conditional on default
(b) independent of default
(c) can be conditional and can be independent
(d) either (a) or (b).
Ans. (a)
395. A valid guarantee can be given:
(a) only if there is no principal debt

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(b) only if there is a principal debt
(c) irrespective of any debt
(d) both (a) & (c).
Ans. (b)
396. A guarantee to be valid:
(a) can only be of a present debt
(b) can be of past debt if some further debt is incurred after the guarantee
(c) cab be of future debt if some debt is incurred after the guarantee
(d) all the above.
Ans. (d)
397. A guarantee obtained by misrepresentation or concealment is:
(a) invalid
(b) valid
(c) voidable
(d) illegal.
Ans. (a)
398. Which of the following is a valid guarantee:
(a) guarantee of a minor’s debt
(b) guarantee of a debt of a company acting ultra vires in obtaining the loan
(c) both (a) & (b)
(d) neither (a) nor (b).
Ans. (a)
399. The liability of the surety:
(a) is co-extensive with that of the principal debtor
(b) extends to the whole of the amount for which the principal debtor is liable
(c) both (a) & (b)
(d) neither (a) nor (b).
Ans. (a)
400. Under the contract of guarantee, the liability of the surety:
(a) can be limited
(b) cannot be limited & has to extend to the whole of the amount due from the principal debtor

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(c) can be extended to penalties also
(d) both (b) & (c).
Ans. (b)
401. A guarantee which extends to a series of transactions under section 129 is called:
(a) an absolute guarantee
(b) a continuing guarantee
(c) an invalid guarantee
(d) a conditional guarantee.
Ans. (b)
402. A continuing guarantee applies to:
(a) a specific transaction
(b) a specific number of transactions
(c) any number of transactions
(d) reasonable number of transactions.
Ans. (a)
403. A continuing guarantee under section 130 is:
(a) revocable absolutely
(b) irrevocable absolutely
(c) revocable as regards future transaction
(d) either (a) or (b).
Ans. (c)
404. The liability of surety on his death under section 131 in case of continuing guarantee:
(a) is terminated absolutely
(b) does not stand terminated as regards past transaction
(c) stands terminated as regards future transaction
(d) both (b) & (c).
Ans. (c)
405. The surety stands discharged:
(a) by revocation
(b) by death
(c) by variance in terms of the contract without his consent

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(d) in (a), (b) & (c) above.
Ans. (c)
406. Under the contract of guarantee, a creditor:
(a) has to avail his remedies first against the principal debtor
(b) can avail his remedies against the principal debtor as well as the surety
(c) can avail his remedy against the surety alone
(d) both (b) & (c).
Ans. (a)
407. Surety stands discharged:
(a) by an agreement between the creditor and the principal debtor
(b) by an agreement between the creditor & a third party for not to sue the principal debtor
(c) both (a) & (b) above
(d) neither (a) nor (b).
Ans. (a)
408. Under a contract of guarantee:
(a) if principal debtor is not liable, guarantor is not liable
(b) if principal debtor is not liable, guarantor is liable
(c) if principal debtor is liable, guarantor is liable
(d) all the above.
Ans. (c)
409. In a contract of guarantee:
(a) there are two parties and one contract
(b) there are two parties and two contracts
(c) there are three parties & three contracts
(d) there are three parties & one contract.
Ans. (d)
410. In case of co-sureties, release of one surety by the creditor:
(a) amounts to discharge of other sureties
(b) does not amount to discharge of other sureties
(c) amounts to discharge of the surety so released vis-a-vis co-sureties as well
(d) none of the above.

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Ans. (b)
411. On payment or performance of the liability the surety:
(a) is invested with all the rights the creditor had against the principal debtor
(b) is entitled to the every security which the creditor has against the principal debtor
(c) is entitled to be indemnified by the principal debtor
(d) all the above.
Ans. (a)
412. A guarantees to C, to the extent of 2,000 rupees, payment for rice to be supplied by C to B. C
supplies to B rice to a less amount than 2,000 rupees but obtains from A payments of the sum of
2,000 rupees in respect of the rice supplied.
A. A can recover from B more than the price of the rice actually supplied
B. A can recover from B only the price of the rice actually supplied
C. A cannot recover from B more than the price of the rice actually supplied
D. None of these
Ans. (C)
413. A guarantor may recover from the principal-debtor, the costs of defending an action brought
against him by the creditor:
A. If he undertook the defence with the debtor’s authority
B. Reasonably defended the proceedings in the debtor’s interest
C. The costs were for some reason unavoidably incurred, but not if he has incurred costs solely for
his own benefit
D. All of them
Ans. (D)
414. A having advanced money to his son, B, during his minority, upon B’s coming of age obtains,
by misuse of parental influence, a bond from B for a greater amount than the sum due in respect
of the advance.
A. A did not employ undue influence
B. A employs undue influence
C. either (A) or (B)
D. None of these
Ans. (B)
415. A hires a carriage of B. The carriage is unsafe, though B is not aware of it, and A is injured.
A. B is not responsible to A for the injury

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B. B is partly responsible to A for the injury
C. B’s responsible to A for the injury
D. None of these
Ans. (C)
416. A hires a horse in Calcutta from B expressly to march to Banaras. A rides with due care, but
marches to Cuttack instead. The horse accidentally falls and is injured.
A. A is not liable to make compensation to B for the injury to the horse
B. A is partially liable to make compensation to B for the injury to the horse
C. A is liable to make compensation to B for the injury to the horse
D. None of these
Ans. (C)
417. A hires B’s ship to go to Bombay, and there takes on board, on the first of January, a cargo,
which A is to provide, and to bring it to Calcutta, the freight to be paid when earned. B’s ship does
not go to Bombay, but A has opportunities of procuring suitable conveyance for the cargo upon
terms as advantageous as those on which he had chartered the ship. A avails himself of those
opportunities, but is put to trouble and expense in doing so.
A. A is not entitled to receive compensation from B in respect of such trouble and expense
B. A is entitled to receive partial compensation from B in respect of such trouble and expense
C. A is entitled to receive compensation from B in respect of such trouble and expense
D. None of these
Ans. (C)
418. A hires B’s ship to take in and convey, from Calcutta to the Mauritius, a cargo to be provided
by A, B receiving a certain freight for its conveyance. A does not provide any cargo for the ship.
A. A cannot claim the performance of B’s promise
B. A must make compensation to B for the loss which B sustains by the non-performance of the
contract
C. either (A) or (B)
D. both (A) and (B)
Ans. (D)
419. A instructs B, a merchant, to buy a ship for him. B employs a ship-surveyor of good
reputation to choose a ship for A. The surveyor makes the choice negligently and the ship turns
out to be unseaworthy and is lost.
A. B is but not the surveyor is, responsible to A
B. B and the surveyor is, responsible to A

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C. B is not, but the surveyor is, responsible to A
D. None of these
Ans. (C)
420. A is employed by B by buy from C certain goods, of which C is the apparent owner, and buys
them accordingly. In the course of the treaty for the sale. A learns that the goods really belonged
to D, but B is ignorant of that fact.
A. B is entitled to set-off a debt owning to him from C against the price of the goods
B. B is partially entitled to set-off a debt owning to him from C against the price of the goods
C. B is not entitled to set-off a debt owning to him from C against the price of the goods
D. None of these
Ans. (C)
421. A is employed by B to buy from C goods of which C is the apparent owner. A was, before he
was so employed a servant of C, and then learnt that the goods really belonged to D, but B is
ignorant of the fact.
A. In spite of the knowledge of his agent, B may not setoff against the price of the goods a debt
owing to him from C
B. In spite of the knowledge of his agent, B may partially set-off against the price of the goods a
debt owing to him from C
C. In spite of the knowledge of his agent, B may set-off against the price of the goods a debt owing
to him from C
D. None of these
Ans. (C)
422. A is employed by B, residing in London, to recover at Bombay a debt due to B.
A. A may adopt any illegal process necessary for the purpose of recovering the debt, and may give a
valid discharge for the same
B. A may not adopt any legal process necessary for the purpose of recovering the debt, and may
give a valid discharge for the same
C. A may adopt any legal process necessary for the purpose of recovering the debt, and may give a
valid discharge for the same
D. None of these
Ans. (C)
423. A is entitled to succeed to an estate at the death of B, B dies; C having received intelligence
of B’s death, prevents the intelligence reaching A, and thus induces A to sell him his interest in the
estate.
A. The sale is not voidable at the option of A

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B. The sale is voidable at the option of A
C. either (A) or (B)
D. None of these
Ans. (B)
424. A leaves a cow in the custody of B to be taken care of. The cow has a calf.
A. B is not bound to deliver the calf but the cow to A
B. B is bound to deliver the calf but not the cow to A
C. B is bound to deliver the calf as well as the cow to A
D. None of these
Ans. (C)
425. A lends a horse to B for his own riding only. B allows C, a member of his family, to ride the
horse. C rides with care, but the horse accidentally fall and is injured.
A. B is not liable to make compensation to A for the injury done to the horse
B. B is partly liable to make compensation to A for the injury done to the horse
C. B is liable to make compensation to A for the injury done to the horse
D. None of these
Ans. (C)
426. A lends a horse, which he knows to be vicious, to B. He does not disclose the fact that the
horse is vicious. The horse runs away. B is thrown and injured.
A. A is not responsible to B for damage sustained
B. A is partly responsible to B for damage sustained
C. A is responsible to B for damage sustained
D. None of these
Ans. (C)
427. A lets to B, for hire, a horse for his own riding. B drives the horse in his carriage.
A. This is not, at the option of A, a termination of the bailment
B. This is partly, at the option of A, a termination of the bailment
C. This is, at the option of A, a termination of the bailment
D. None of these
Ans. (C)
428. A makes a contract with B to buy B’s horse if A survives C.
A. This contract cannot be enforced by law unless and until A dies in C’s lifetime

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B. This contract cannot be enforced by law unless and until C dies in A’s lifetime
C. This contract can be enforced by law during C and A’s lifetime
D. None of these
Ans. (B)
429. A makes a contract with B to sell a horse to B at a specified price, if C, to whom the horse had
been offered, refuses to buy him.
A. This contract cannot be enforced by law unless and until A refuses to sell the horse
B. This contract cannot be enforced by law unless and until C refuses to buy the horse
C. The contract cannot be enforced by law unless and until C refuses to buy the horse
D. None of these
Ans. (C)
430. A owes B 1,000 rupees under a contract. B owes B 1,000 rupees. B order A to credit C with
1,000 rupees in his books, but C does not assent to the arrangement.
A. B does not owes C 1,000 rupees, as new contract has been entered into
B. B still owes C 1,000 rupees, even though a new contract has been entered into
C. B still owes C 1,000 rupees, and no new contract has been entered into
D. None of these
Ans. (C)
431. A owes B 10,000 rupees, A enters into an arrangement with B, and gives B a mortgage of his
(A’s) estate for 5,000 rupees in place of the debt of 10,000 rupees.
A. This is new contract
B. This extinguishes the old contract
C. This further renews the old contract
D. both (A) and (B)
Ans. (D)
432. A owes B 2,000 rupees, B accepts some of A’s goods in reduction of the debt.
A. The delivery of the goods operates as a part payment
B. The delivery of the goods does not amount to part payment
C. either (A) or (B)
D. None of these
Ans. (A)
433. A owes B 5,000 rupees. A pays to B, and B accepts, in satisfaction of the whole debt, 2,000
rupees paid at the time and place at which the 5,000 rupees were payable.
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A. Partial debt is discharged
B. The whole debt is not discharged
C. The whole debt is discharged
D. None of these
Ans. (C)
444. A owes B 5,000 rupees. C pays to B 1,000 rupees and B accepts them, in satisfaction of his
claim on A.
A. This payment is a partial discharge of the whole claim
B. This payment is not a discharge of the whole claim
C. This payment is a discharge of the whole claim
D. None of these
Ans. (C)
445. A owes B, 2,000 rupees, and is also indebted to other creditors. A makes an arrangement
with his creditors, including B, to pay them a [composition] of eight annas in the rupee upon their
respective demands.
A. Payments to B of 1,000 rupees is a partial discharge of B’s demand
B. Payments to B of 1,000 rupees is not a discharge of B’s demand
C. Payments to B of 1,000 rupees is a discharge of B’s demand
D. None of these
Ans. (C)
446. A owes B, among other debts, 1,000 rupees upon a promissory note, which falls due on the
first June. He owes B no other debt of that amount. On the first June A pays to B 1,000 rupees.
A. The payment is to be applied equally to all the debts owed by A
B. The payment is to be applied to the discharge of the promissory note
C. either (A) or (B)
D. both (A) or (B)
Ans. (B)
447. A owes B, under a contract a sum of money the amount of which has not been ascertained.
A, without ascertaining the amount, gives to B, and B, in satisfaction thereof, accepts, the sum of
2,000 rupees.
A. This is a partial discharge of the whole debt, whatever may be its amount
B. This is not discharge of the whole debt, whatever may be its amount
C. This is discharge of the whole debt, whatever may be its amount

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D. None of these
Ans. (C)
448. A owes money to B under a contract. The old debt of A to B is at an end. It is agreed between
A, B and C, that B shall thenceforth accept C as his debtor instead of A.
A. New debt from C to B has been contracted
B. New debt from A to C has been contracted
C. either (A) or (B)
D. None of these
Ans. (A)
449. A owes to B, among other debts, the sum of 567 rupees. B writes to A and demands payment
of this sum. A sends to B 567 rupees.
A. The payment is to be applied equally to all the debts owed by A
B. The payment is to be applied to the discharge of the promissory note
C. either (A) or (B)
D. both (A) and (B)
Ans. (B)
450. A owns a shop in Serampur, living himself in Calcutta, and visiting the shop occasionally. The
shop is managed by B, and he is in the habit of ordering goods from C in the name of A for the
purposes of the shop, and of paying for them out of A’s funds without A’s knowledge.
A. B has no implied authority from A to order goods from C in the name of A for the purposes of the
shop
B. B has an implied authority from A to order goods from C in the name of A for his own purposes
C. B has an implied authority from A to order goods from C in the name of A for the purposes of the
shop
D. None of these
Ans. (C)
451. A owns B Rs.1,000/-, but the debt is barred by the Limitation Act. A signs a written promise
to pay B Rs.500/- on account of the debt.
A. This is not a contract
B. This is a contract
C. either (A) or (B)
D. None of these
Ans. (B)

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452. A party to a contract may lose its contractual rights or benefits under the contract because of
the undue influence of the third party where:
A. he was in conspiracy with the third party exercising undue influence
B. he was the agent of the third party exercising undue influence
C. either (A) or (B)
D. None of these
Ans. (C)
453. A pays B 1,000 rupees in consideration of B’s promising to marry C, A’s daughter. C is dead at
the time of the promise.
A. The agreement is void
B. The agreement is not void, and B must repay A the 1,000 rupees.
C. B must repay A the 1,000 rupees.
D. both (A) and (C)
Ans. (D)
454. A person shall be deemed to have traded with the enemy, if he had any commercial, financial
or other intercourse or dealings with, or for the benefits of, an enemy, and, in particular, if he has:
A. supplied any goods to or for the benefit of the enemy or obtained any goods from an enemy, or
traded in or carried, any goods consigned to or from an enemy or destined for or coming from
enemy territory
B. paid or transmitted any money, negotiable instrument or security for money to or for the benefit
of an enemy or to take place in enemy territory
C. performed any obligation to, or discharged an obligation of, an enemy, whether the obligation
was undertaken before or after the commencement of the provisions
D. all of them
Ans. (D)
455. A pledger cannot compel the pledgee to exercise the power of sale as a means of discharging
or satisfying the decree. His only rights are:
A. In case the pledgee exercises the power, to insist that it should be honestly and properly done
and the sale proceeds applied to the debt
B. In case the pledgee does not exercise the power, to redeem the pledge on payment of the debt
or so much of it as remains otherwise unpaid
C. In case the sale is improperly exercised, to get damages caused thereby
D. All of them
Ans. (D)
456. A principal is liable for the agent’s fraud acting within the scope of his authority?
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A. Whether the fraud is committed for the benefit of the principal
B. Whether the fraud is committed for the benefit of the agent
C. either (A) or (B)
D. None of these
Ans. (C)
457. A principal is:
A. A person for whom such act is done, or who is represented
B. A person for whom one is represented
C. either (A) or (B)
D. None of these
Ans. (C)
458. A promise to abstain from suing can be a consideration, but only when the person suing has
a subsisting right to sue. Therefore, non-payment of instalment of a debt fixed under the Debt
Collection act, which had become barred under the Act, cannot be a good consideration of a
promise to pay these instalments by a third party. In which of the following cases it was held?
A. Bank of New India Ltd., v. G. Govinda Prabhu
B. Tulsidas Nathudas v. Narayan Ajabrao Raut
C. Lakshmi Chand v. Niader Mai
D. Kedarnath Gangagopal Misra v. Sitaram Narayan Moharil
Ans. (B)
459. A promise to deliver goods to B on a certain day on payment of Rs.1,000. A dies before that
day.
A. A’s representatives are not bound to deliver the goods to B, and B is not bound to pay the
Rs.1000 to A’s representatives
B. A’s representatives are bound to deliver the goods to B, but B is not bound to pay the Rs.1000 to
A’s representatives
C. A’s representatives are bound to deliver the goods to B, and B is bound to pay the Rs.1000 to A’s
representatives
D. None of these
Ans. (C)
460. A promise to paint a picture for B by a certain day, at a certain price. A dies before the day.
A. The contractor cannot be enforced by A’s representatives only
B. The contractor cannot be enforced either by B’s representatives only
C. The contractor can be enforced by A’s representatives and not by B
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D. both (A) and (B)
Ans. (D)
461. A promises B to drop a prosecution which he has instituted against B for robbery, and B
promises to restore the value of the things taken.
A. The agreement is not void, as its object is unlawful
B. The agreement is void, as its object is lawful
C. The agreement is void, as its object is unlawful
D. None of these
Ans. (C)
462. A promises B to sell him one hundred bales of merchandise, to be delivered next day, and B
promises A to pay for them within a month. A does not deliver according to his promise.
A. B’s promise to pay need not be performed
B. B’s promise to pay needs to be performed
C. A must make compensation
D. both (A) and (C)
Ans. (D)
463. A promises to deliver goods at B’s warehouse on first January. On that day A brings the goods
to B’s warehouse, but after the usual hour for closing it, and they are not received.
A. A has performed his promise
B. A has not performed his promise
C. either (A) or (B)
D. None of these
Ans. (B)
464. A promises to maintain B’s child, and B promises to pay A 1,000 rupees yearly for the
purpose. Here the promise of each party is the consideration for the promise of the other party.
They are lawful considerations.
A. These are unlawful considerations
B. These are lawful considerations
C. either (A) or (B)
D. None of these
Ans. (B)
465. A promises to obtain for B an employment in the public service and B promises to pay 1,000
rupees to A.

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A. The agreement is void, as the consideration for it is unlawful
B. The agreement is void, but the consideration is not unlawful
C. The agreement is not void, as the consideration is not unlawful
D. None of these
Ans. (A)
466. A promises to paint a picture for B. B afterwards forbids him to do so.
A. A needs to perform the promise
B. A is no longer bound to perform the promise
C. B cannot forbid A
D. None of these
Ans. (B)
467. A promises to pay B a sum of money if a certain ship does not return within a year.
A. The contract cannot be enforced if the ship does not return with the year, or is burnt within the
year
B. The contract may be enforced if the ship does not return with the year, or is burnt within the year
C. either (A) or (B)
D. None of these
Ans. (B)
468. A promises to pay B a sum of money if a certain ship returns within a year.
A. The contract cannot be enforced if the ship returns within the year; and can be enforced only if
the ship is burnt within the year
B. The contract may be enforced if the ship returns within the year; and becomes void if the ship is
burnt within the year
C. either (A) or (B)
D. None of these
Ans. (B)
469. A promises to pay B a sum of money. A may perform this promise,
A. by personally paying the money to B
B. by causing it to be paid to B by another
C. either (A) or (B)
D. both (A) and (B)
Ans. (D)

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470. A promises to pay B a sum of money, if A dies before the time appointed for payment,
A. his representative must perform the promise
B. his representative must employ some proper person to do so
C. either (A) or (B)
D. both (A) and (B)
Ans. (D)
471. A promises to superintend, on behalf of B, a legal manufacturer of indigo, and an illegal
traffic in other articles. B promises to pay to A a salary of 10,000 rupees a year.
A. The agreement is not void, the object of A’s promise, and the consideration for B’s promise, being
in part unlawful
B. The agreement is void, the object of A’s promise, and the consideration for B’s promise, being in
fully unlawful
C. The agreement is void, the object of A’s promise, and the consideration for B’s promise, being in
part unlawful
D. None of these
Ans. (C)
472. A promises, for a certain sum paid to him by B, to make good to B the value of his ship if it is
wrecked on a certain voyage. Here, A’s promise is the consideration for B’s payment, and B’s
payment is the consideration for A’s promise.
A. These are unlawful considerations
B. These are lawful considerations
C. either (A) or (B)
D. None of these
Ans. (B)
473. A promises, for no considerations, to give to B Rs.1,000/-
A. This is a void agreement
B. This is not a void agreement
C. either (A) or (B)
D. None of these
Ans. (A)
474. A proposes, by a letter sent by post, to sell his house to B. B accepts the proposal by a letter
sent by post.
A. A cannot revoke his proposal at any time before or at the moment when B posts his letter of
acceptance.

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B. A may revoke his proposal at any time before or at the moment when B posts his letter of
acceptance, but can afterwards
C. A may revoke his proposal at any time before or at the moment when B posts his letter of
acceptance, but not afterwards
D. None of these
Ans. (C)
475. A proposes, by a letter sent by post, to sell his house to B. B accepts the proposal by a letter
sent by post.
A. B cannot revoke his acceptance at any time before or at the moment when the letter
communicating it reaches A.
B. B may revoke his acceptance at any time before or at the moment when the letter
communicating it reaches A, but can afterwards
C. B may revoke his acceptance at any time before or at the moment when the letter
communicating it reaches A, but not afterwards
D. None of these
Ans. (C)
476. A proposes, by letter, to sell a house to B at a certain price.
A. The communication of the proposal is complete when the letter is posted was posted by A
B. The communication of the proposal is complete when B receives the letter
C. either (A) or (B)
D. None of these
Ans. (B)
477. A puts M as apprentice to B, and gives a guarantee to B for M’s fidelity. B promises on his
part that he will at least once month, see M makes up the cash. B omits to see this done as
promised, and M embezzles.
A. A is liable to B on his guarantee
B. A is partly liable to B on his guarantee
C. A is not liable to B on his guarantee
D. None of these
Ans. (C)
478. A railway company refused to deliver up certain goods to the consignee except upon the
payment of an illegal charge for carriage. The consignee pays the sum charged in order to obtain
the goods.
A. He is not entitled to recover so much of the charge as was illegally excessive
B. He is entitled to recover over and above the charge as was illegally excessive
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C. He is entitled to recover so much of the charge as was illegally excessive
D. None of these
Ans. (C)
479. A revokes his proposal made to B by telegram. The revocation is complete:
A. As against A and B, when the telegram is dispatched
B. As against A and B, when the telegram when B receives it
C. As against A, when the telegram is dispatched. It is complete as against B when B receives it
D. None of these
Ans. (C)
480. A saves B’s property from fire.
A. A is entitled to compensation from B, if the circumstances show that he intended to act
gratuitously
B. A is not entitled to compensation from B, whatever the circumstances show that his intentions
C. A is not entitled to compensation from B, if the circumstances show that he intended to act
gratuitously
D. None of these
Ans. (C)
481. A sells certain merchandise to B, warranting it to be of a particular quality, and B, in reliance
upon the warranty, sells it to C with a similar warranty. The goods prove to be not according to
the warranty, and B becomes liable to pay C a sum of money by way of compensation.
A. B is not entitled to be reimbursed this sum by A
B. B is entitled to be partially reimbursed this sum by A
C. B is entitled to be reimbursed this sum by A
D. None of these
Ans. (C)
482. Contracts may be of two classes, one where consideration is executed and the other where it
is executor. This distinction was approved by the Supreme Court in which of the following cases?
A. Board of Revenue Madras v. Annamalai & Co. (Pvt.) Ltd.
B. Suraj Narain Dube v. Sukhu Aheer
C. Union of India v. Chaman lal Loona and Co.
D. Lala Babu Ram v. Ganga Devi
Ans: C
483. Co-sureties need:

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A. Not be bound under the same contract
B. The right to contribution being independent of any agreement for that purpose
C. Both (A) and (B)
D. None of these
Ans: C
484. Decisions under Section 178 of the Indian Contract Act may be divided into which of the
following groups according to the character of the pawnor’s possession?
I. Pledge by a commission agent employed to sell goods or by a broker employed to sell goods on
jangad terms i.e. on terms that he shall take offers to his principal, who accept or reject them
II. Pledge by seller who has been left in possession of the goods sold
III. Pledge by a person in bare custody of goods
IV. Pledge by a person who has agreed to buy goods under a hire purchase agreement and who has
not made default in payment of the instalments
V. Pledge by a person entrusted with goods for a specific purpose
A. I, II
B. II, IV
C. Ill, V
D. All of them
Ans: D
485. Disclosure or non-disclosure of principal is immaterial for application of:
A. S. 230(1) of the Indian Contract Act, 1872
B. S. 230(2) of the Indian Contract Act, 1872
C. S. 230(3) of the Indian Contract Act, 1872
D. None of these
Ans: A
486. Effect of failure to perform at fixed time, in contract in which time is essential is dealt under
which of the following in the Indian Contract Act, 1872?
A. Section 55
B. Section 50
C. Section 52
D. Section 59
Ans: A

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487. Except the equitable principles, in terms which of the following sections of the Indian
Contract Act, 1872 cannot be applied to transactions where the bond is given to the Court in view
of the fact that there is no creditor as required by S. 126 of the Indian Contract Act, 1872?
A. Section 133
B. Section 135
C. Section 139
D. All of them
Ans: D
488. Fiduciary contract:
A. An agreement by which a person delivers a thing to another on the condition that he will restore
it to him
B. A contract based on mutual trust and confidence
C. Both (A) and (B)
D. None of these
Ans: C
489. Period of limitation for a suit against pawnee to recover the thing pledged is:
(a) 1 year from the date of pawn
(b) 3 years from the date of pawn
(c) 12 years from the date of pawn
(d) 30 years from the date of pawn.
Ans. (c)
490. The pawnee has a right to retain the goods pledged:
(a) for payment of debt interest & all necessary expenses in respect of goods pledged
(b) for payment of debt other than the debt in respect of goods pledged
(c) for payment of interest & necessary expenses in respect of goods other than the one pledged
(d) all the above.
Ans. (a)
491. The pawnee has no right to retain the goods:
(a) for payment of necessary expenses in respect of goods pledged
(b) for payment of extraordinary expenses incurred in the preservation of goods
(c) for payment of debt or interest in respect of goods pledged
(d) none of the above.

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Ans. (b)
492. Which of the following is an offer:
(a) A bid at an auction sale
(b) Banker’s catalogue of charges
(c) Menu card at a restaurant
(d) All of the above.
Ans. (a)
493. If a future event on which a contract is contingent is the way in which a person will act at an
unspecified time, the event shall be considered to become impossible:
(a) When such person does anything which renders it impossible that he should so act within any
definite time,
(b) Otherwise than under further contingencies
(c) Both (a) and (b) above
(d) None of the above.
Ans. (c)
494. In which case it was held that a contract through telephone is concluded at the place where
acceptance is heard:
(a) Lalman Shukla v. Gauri Dutt, (1913) XL ALJR 489 (All)
(b) Carlill v. Carbolic Smoke Ball Co., (1981-4) All ER Rep. 127
(c) Bhagwandas Goverdhandas Kedia v. M/s. Girdhari Lai Parshottamdas and Co., AIR 1966 SC 543
(d) Satyabrata Ghose v. Mugneeram Bangur and Co., AIR 1954 SC
Ans. (c)
495. ‘A’ applies to a banker for a loan at a time when there is stringency in the money market. The
banker declines to make the loan except at an unusually high rate of interest. ‘A’ accepts the loan
on these terms. In this case the contract is:
(a) vitiated by undue influence
(b) valid because this is a transaction in the ordinary cause of business
(c) void because the banker took unfair advantage of stringency in the money market
(d) voidable at the option of ‘A’ who was deceived by the banker.
Ans. (b)
496. ‘A’ contract to sing for ‘B’ at a concert for Rs. 50,000 which are paid in advance ‘A’ is too ill to
sing on the day of the concert. The consequence is:
(a) ‘A’ is bound to make compensation to ‘B’ for the loss of the profits which ‘B’ would have made if
‘A’ had been able to sing
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(b) ‘A’ is bound to refund to ‘B’ Rs. 50,000 paid in advance
(c) ‘A’ can be forced to sing at the concert
(d) ‘A’ is bound to refund only that money out of Rs. 50,000 that he has not spent.
Ans. (b)
497. Where persons reciprocally promise, firstly to do certain things which are legal and secondly,
under specified circumstances, to do certain other things which are illegal the:
(a) first set of promise is a contract, but the second is a void agreement
(b) first set of promise is voidable but the second set is a void agreement
(c) entire set of promises is void
(d) entire set of promises is valid.
Ans. (a)
498. In which of the following cases, a contingent contract becomes void:
(a) If the contract contemplates the happening of the event within a certain time, and event does
not happen or its happening becomes impossible
(b) If the performance is made to depend upon an event which is already impossible
(c) If the event contemplated does not happen
(d) Both (a) and (b) above.
Ans. (d)
499. If the pawner makes a default in payment of debt, at the stipulated time:
(a) the pawnee has a right to sell the goods pledged without notice to the pawner
(b) the pawnee has a right to sell the goods pledged after giving a reasonable notice of sale to the
pawner
(c) has no right to sell the goods pledged but has a right to retain the goods as collateral security for
the debt
(d) neither has a right to sell the goods nor retain the goods as collateral security but has a right to
sue for pawner upon the debt.
Ans. (b)
500. Goods may be pledged:
(a) by the owner of goods
(b) by the servant in the absence of owner
(c) by the person who is left with the goods for some special purpose
(d) all the above.
Ans. (a)

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501. Which of the following is correct
(a) pledge made by a mercantile agent is valid
(b) pledge made by a person in possession under voidable contract is valid
(c) pledge by a person having a limited interest is valid to the extent of that interest
(d) all the above.
Ans. (a)
502. Agent is a:
(a) person employed to do any act for another or to represent in dealings with third person
(b) person for whom the act is done or who is represented in dealings with third person
(c) person from whom the person employed to do any act, has to get die work done
(d) all the above.
Ans. (a)
503. Principal is a:
(a) person employed to do any act for another or to represent in dealings with third person
(b) person for whom the act is done or who is so represented in dealings with third persons
(c) person from whom, the person employed to do any act, has to get the work done
(d) all the above.
Ans. (b)
504. Amongst the following who is an agent:
(a) a domestic servant
(b) a person aiding another in the performance of his legal or contractual obligations of third
persons
(c) a person who tills another’s field
(d) none of the above.
Ans. (c)
505. Amongst the following who is not an agent:
(a) an independent buyer
(b) a person who advices another in matters of business
(c) a procurement agent
(d) all the above.
Ans. (c)
506. Two or more persons can be employed to act as agents:
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(a) jointly
(b) severally
(c) jointly & severally
(d) either (a) or (b) or (c).
Ans. (d)
507. An authority given to two or more persons is generally given:
(a) jointly
(b) severally
(c) jointly & severally
(d) either (a) or (b) or (c).
Ans. (a)
508. An agent appointed by more than one principal is liable:
(a) severally
(b) jointly
(c) jointly & severally
(d) either (a) or (b) or (c).
Ans. (d)
509. Who can appoint an agent:
(a) a minor of sound mind
(b) a major of sound mind
(c) a person of unsound mind
(d) both (a) & (b).
Ans. (b)
510. Who can become an agent:
(a) a major of sound mind
(b) a major of unsound mind
(c) a minor of sound mind
(d) a minor of unsound mind.
Ans. (a)
511. Authority of an agent:
(a) has to be expressed

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(b) has to be implied
(c) can be expressed or implied
(d) either (a) or (b) or (c).
Ans. (c)
512. A wife has an implied authority of the husband to buy articles of household necessity:
(a) if the wife is living with her husband
(b) if the wife is living separately
(c) if the wife is living with her husband not in a domestic establishment
(d) if the wife gets a reasonable allowance from the husband for her needs.
Ans. (a)
513. The principle of agency of necessity is:
(a) unknown to the law of agency
(b) applicable in normal situations
(c) applicable in emergent situations where communication with the principal is possible
(d) applicable in emergent situation where the communication with the principal is not possible.
Ans. (d)
514. An agent can lawfully employ a sub-agent:
(a) originally
(b) if the ordinary custom of trade permits
(c) if the nature of the agency permits
(d) both (b) & (c).
Ans. (b)
515. In case of a sub-agent lawfully appointed, which of the following is correct:
(a) as regards third parties the sub-agent binds the principal as an original agent can
(b) as regards third parties, the sub-agent cannot bind the principal as an original agent
(c) as regards third parties the sub-agent can bind only the original agent, who has appointed the
sub-agent
(d) as regards third parties, the sub-agent can neither bind the principal nor the original agent.
Ans. (a)
516. For the acts of sub-agent, lawfully appointed:
(a) the agent is not responsible to the principal
(b) the agent is responsible to the principal
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(c) the sub-agent is responsible to the principal directly
(d) the sub-agent is not responsible to the principal.
Ans. (b)
517. In case of fraud & wilful wrong by the sub- agent:
(a) the sub-agent is directly liable to the agent
(b) the sub-agent & the agent both are liable to the principal
(c) the agent alone is liable to the principal
(d) both (a) & (b).
Ans. (a)
518. A person whom the agent names to act for the principal in the business of agency, under the
express or implied authority to name, is called:
(a) sub-agent
(b) substituted agent
(c) agent
(d) procured agent.
Ans. (b)
519. For the acts of the substituted agent:
(a) the agent is responsible to the principal
(b) the agent is not responsible to the principal
(c) the substituted agent is not responsible to the principal
(d) none of the above.
Ans. (a)
520. Substituted agent is liable to the principal:
(a) only in case of fraud & wilful default
(b) irrespective of fraud & wilful default, in all cases
(c) alongwith the agent
(d) both (a) & (c).
Ans. (b)
521. In case the sub-agent is not lawfully appointed, for the acts of such sub-agent, the agent
appointing the sub-agent is liable:
(a) towards the principal only
(b) towards the third parties only

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(c) towards the principal and third parties both
(d) towards none.
Ans. (c)
522. Any act is done, without the authority or knowledge of a person on behalf of that person,
that person:
(a) can disown the act
(b) can ratify the act
(c) either ratify or disown the act
(d) can disown the act but cannot ratify the same.
Ans. (c)
523. Ratification of an act:
(a) has to be express only
(b) has to be implied
(c) can be either express or implied
(d) has to be both expressed and implied.
Ans. (c)
524. Ratification takes effect:
(a) prospectively
(b) retrospectively
(c) prospectively or retrospectively depending on the facts & circumstances of case
(d) prospectively or retrospectively depending on the agreement between the parties.
Ans. (b)
525. Which of the following acts cannot be ratified:
(a) lawful or unlawful acts capable of being done by the agent
(b) where knowledge of facts to the ratifying person is defective
(c) act which are unauthorised at the time of its being done
(d) all the above.
Ans. (b)
526. Agency can be terminated:
(a) by revocation by the principal
(b) by notice of renunciation by the agent
(c) by efflux of time
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(d) either (a) or (b).
Ans. (d)
527. Agency stands terminated:
(a) by the death, insolvency or insanity of the principal
(b) by the death, insolvency or insanity of the agent
(c) by the death, insolvency or insanity of either the principal or the agent
(d) by the death, insolvency or insanity of the principal and the agent both.
Ans. (c)
528. Which of the following is correct:
(a) agency stands terminated by the destruction of subject matter of agency
(b) agency stands terminated by happening of an event rendering the object of the agency unlawful
(c) agency stands terminated by the frustration of the objects of agency due to impossibility
(d) none of the above.
Ans. (d)
529. Principal can revoke the authority given to the agent:
(a) at any time before the authority has been exercised
(b) at any time after the authority has been partly exercised without liability towards the acts done
(c) at any time after the authority has been fully exercised
(d) all the above.
Ans. (a)
530. An authority given by two or more principals can be terminated:
(a) by notice of revocation or renunciation given by or to all the principals
(b) by notice of revocation or renunciation given by or to any one of the principals
(c) by notice of revocation or renunciation given by or to both the principals if there are only two
principals
(d) none of the above.
Ans. (a)
531. With the termination of authority of an agent:
(a) the authority of sub-agent or substituted agent does not come to an end
(b) the authority of sub-agent comes to an end but not of substituted agent
(c) the authority of sub-agent does not come to an end but that of a substituted agent
(d) the authority of sub-agent and substituted agent both comes to an end.
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Ans. (d)
532. If the amount due to the agent for commission or remuneration is not paid or accounted for,
the agent:
(a) has a right of lien only over the movable property of the principal
(b) has a right of lien only over the immovable property of the principal
(c) has a right of lien over the goods, papers and property movable or immovable of the principal
(d) does not have a right of lien over the papers.
Ans. (c)
533. Right of lien, of an agent:
(a) is extinguished by his parting with the possession of the goods
(b) is extinguished by destruction of goods accidentally
(c) both (a) & (b) are correct
(d) neither (a) nor (b) is correct.
Ans. (a)
534. When a sub-contractor had under-taken some part of the work in connection with the
project which was entrusted to contractor, he cannot be treated as:
(a) agent
(b) sub-agent
(c) sub-contractor
(d) none of the above.
Ans. (b)
535. There can also be………… by estoppel:
(a) ownership
(b) possession
(c) fraud
(d) sale.
Ans. (d)
536. Under the Contract Act, if the existing cause of action gets substituted by new cause of
action arising out of agreement, then:
(a) the admiralty claim is maintainable
(b) the admiralty claim is not maintainable
(c) admiralty claim is superseded by other claims

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(d) changes in cause of action does not affect admiralty claim.
Ans. (b)

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