11/13/2020 Multiple Choice Questions on the Law of Contract (Indian Contract Act)

Multiple Choice Questions on the Law of

Contract (Indian Contract Act)
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Multiple choice questions on the law of contract especially compiled for UPSC,
civil services, IAS and Indian Judicial Examinations!

1. Which the following strikes only at document and not transactions?

A. The Transfer of Property Act, 1882

B. The Registration Act, 1908

C. both (A) and (B)

D. None of these

Ans. (B)

2. A stipulation in a bond for payment of compound interest on failure

to pay simple interest at the same rate as was payable upon the
principal is not a penalty within the meaning of:

A. Section 74 of the Indian Contract Act, 1872

B. Section 75 of the Indian Contract Act, 1872

C. Section 76 of the Indian Contract Act, 1872

D. None of these

Ans. (A)

3. A sub-bailee is a person to whom the actual possession of goods is

transferred by someone:
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A. who is not himself not an owner of goods

B. who has a present right to possession of them as bailee of the owner

C. both (A) and (B)

D. None of these

Ans. (C)

4. A successful plaintiff in an action for detenue, is, therefore entitled

to the return of the goods or recovery of its value and damages for
detention and is entitled to have been assessed separately:

A. the value of the goods at the date of the assessment

B. damages sustained by him up to that date

C. both (A) and (B)

D. None of these

Ans. (C)

5. A supplies B, a lunatic, with necessaries suitable to his condition in

life.

A. A is entitled to be reimbursed from B’s property

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B. A is not entitled to be reimbursed from B’s property

C. A is entitled to be given a share in B’s property

D. None of these

Ans. (A)

6. A supplies the wife and children of B, a lunatic, with necessaries

suitable to their condition in life.

A. A is entitled to be reimbursed from B’s property

B. A is not entitled to be reimbursed from B’s property

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C. A is entitled to be given a share in B’s property

D. None of these

Ans. (A)

7. A supports B’s infant son. B promise to pay A’s expenses in so doing.

A. This is not a contract

B. This is a contract

C. either (A) or (B)

D. None of these

Ans. (B)

8. A surety is discharged if the creditor, without consent,

unconditionally releases the principal-debtor; the reason for this
principle being that:

A. The release extinguishes the principal obligation

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B. Such release adversely affects the right of the surety to sue the principal-debtor
and deprives the surety of his right to compel the debtor to perform his own
obligation to the creditor

C. both (A) and (B)

D. None of these

Ans. (C)

9. A transaction by which A promised to pay B and C for consideration

during their joint lives and after the death of one of them, to the
survivor, the consideration moved from B but the agreement was
signed by all three, i.e., A, B and C.

A. There was privity between A and B but not with C

B. There was privity between A and C but not with B

C. There was privity between A on one side and B and C on the other

D. None of these

Ans. (C)

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11/13/2020 Multiple Choice Questions on the Law of Contract (Indian Contract Act)

10. A undertakes to deliver a thousand maunds of jute to B on a fixed

day Applying Section 47, Indian Contract Act:

A. A need not apply to B to appoint a reasonable place for the purpose of receiving
it, and must deliver it to him at such place

B. A must apply to B to appoint a reasonable place for the purpose of receiving it,
and can choose to later change the place

C. A must apply to B to appoint a reasonable place for the purpose of receiving it,
and must deliver it to him at such place

D. None of these

Ans. (C)

11. A undertakes to repay B a loan of Rs.1,000 by five equal monthly

instalments with a stipulation that, in default of payment of any
instalment, the whole shall become due.

A. This stipulation is by way of penalty, and the contract cannot be enforced

according to its terms

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B. This stipulation is not by way of penalty, and the contract cannot be enforced
according to its terms

C. This stipulation is not by way of penalty, and the contract may be enforced
according to its terms

D. None of these

Ans. (C)

12. A, a builder, contracts to erect and finish a house by the first of

January, in order that B may give possession of it at that time to C, to
whom B has contracted to let it. A is informed of the contract between
B and C. A builds thehouse so badly that, before the first of January, it
falls down and has to be rebuilt by B, who in consequence, loses the
rent which he was to have received from C, and is obliged to make
compensation to C for the breach of his contract.

A. A must make compensation to B for the cost of rebuilding the house

B. A must make compensation to B for the rent lost

C. A must make compensation to B for the compensation made to C

D. All of them

Ans. (D)

13. A, a decree-holder, and entitled to execution of B’s goods, requires

the officer of the court to seize certain goods, representing them to be
the goods of B. The officer seizes the goods, and issues by C, the true
owner of the goods.

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A. A is not liable to indemnify the officer for the sum which he is compelled to pay
to C, in consequence of obeying A’s directions

B. A is partially liable to indemnify the officer for the sum which he is compelled
to pay to C, in consequence of obeying A’s directions

C. A is liable to indemnify the officer for the sum which he is compelled to pay to
C, in consequence of obeying A’s directions

D. None of these

Ans. (C)

14. A, a man enfeebled by disease or age, is induced, by B’s influence

over him as his medical attendant, to agree to pay B an unreasonable
sum for his professional services.

A. B did not employs undue influence

B. B employs undue influence

C. either (A) or (B)

D. None of these

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Ans. (B)

15. A, a merchant in Calcutta, has an agent, B, in London to whom a

sum of money is paid on A’s account, with orders to remit. B retains
the money for considerable time. A, in consequence of not receiving
the money, becomes insolvent.

A. B is not liable for the money and interest, from the day on which it ought to
have been paid, according to the usual rate

B. B is liable for any further direct loss – as e.g. by variation of rate of exchange

C. B is liable for the money and interest, from the day on which it ought to have
been paid, according to the usual rate, and for any further direct loss – as e.g. by
variation of rate of exchange – but not further

D. None of these

Ans. (C)

16. A, a merchant in England, directs B, his agent or Bombay, who

accepts the agency, to send him 100 bales of cotton by a certain ship.
B, having it in his power to send the cotton, omits to do so. The ship

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arrives safely in England. Soon after her arrival, the price of cotton
rises.

A. B is not bound to make good to A profit which he might have made by 100
bales of cotton at the time the ship arrived

B. B is bound to make good to A any profit he might have made by the subsequent
rise

C. B is bound to make good to A profit which he might have made by 100 bales of
cotton at the time the ship arrived. But not any profit he might have made by the
subsequent rise

d. None of these

Ans. (C)

17. A, a money-lender advances Rs.100/- to B, an agriculturist, and by

undue influence, induces B to execute a bond for Rs.200/- with
interest at 6 per cent per month.

A. The Court will not set the bond aside and not take any legal action against B

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B. The Court may set the bond aside, ordering B to repay the Rs. 100/- with such
as may seem just

C. either (A) or (B)

d. None of these

Ans. (B)

18. A, a ship-owner, contracts with b to convey him from Calcutta to

Sydney in A’s ship, sailing on the first of January, and B pays to A, by
way deposit, one-half of his passage money. The ship does not sail on
the first of January and B, after being, in consequence, detained in
Calcutta for some time, and thereby put to some expense, proceeds to
Sydney in another vessel, and, in consequence, arriving too late in
Sydney, loses a sum of money.

A. A is liable to repay to B his deposit, with interest and the expense to which he is
put by his detention in Calcutta, and the excess, if any, of the passage-money paid
for the second ship over that agreed upon the first

B. A is liable to repay to B his deposit, with interest and the expense to which he is
put by his detention in Calcutta, and the excess, if any, of the sum of money which
B lost by arriving in Sydney too late

C. A is liable to repay to B his deposit, with interest and the excess, if any, of the
passage-money paid for the second ship over that agreed upon the first, but not
the sum of money which B lost by arriving in Sydney too late

D. None of these

Ans. (A)

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19. A, a signer, contracts with B, the manager of a theatre for two

nights in every week during the next two months, and B engages to pay
her a hundred rupees for each night’s performance. On the sixth
night, A willfully absents herself from the theatre, and B, in
consequence rescinds the contract.

A. B must pay A for the three nights on which she had sung

B. B must pay A for the four nights on which she had sung

C. B must pay A for the five nights on which she had sung

d. None of these

Ans. (C)

20. A, a singer, contracts with B, the manager of a theatre, to sing at

his theatre for two nights in every week during the next two months,
and B engages to pay her 100 rupees for each night’s performance. On
the sixth night, A wilfully absents herself from the theatre, and B, in
consequence, rescinds the contract.

A. B is not entitled to claim compensation the damage which he has sustained

through the non-fulfilment of the contract

B. B is entitled to claim compensation the damage which he has sustained

through the non-fulfilment of the contract

C. A is entitled to claim compensation the damage which she has sustained due to
the rescinding of the contract by B.

D. None of these

Ans. (B)

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21. A, a singer, enters into a contract with B, the manager of a theatre,

to sing at his theatre two nights in every week during the next two
months, and B engages to pay her 100 rupees for each night’s
performance. On the sixth night A willfully absent herself from the
theatre.

A. B is at liberty to put an end to the contract

B. B cannot put an end to the contract

C. either (A) or (B)

D. None of these

Ans. (A)

22. A, a singer, enters into a contract with B, the manager of a theatre,

to sing at his theatre two nights in every week during the next two
months, and B engages to pay her at the rate of 100 rupees for each
night. On the sixth night A wilfully absents herself. With the assent of
B, A sings on the seventh night.

A. B has signified his acquiescence in the continuance of the contract, and cannot
now put an end to it, but is entitled to compensation for the damage sustained by
him through A’s failure to sing on the sixth night

B. B has signified his acquiescence in the continuance of the contract, and but can
still put an end to it, but is entitled to compensation for the damage sustained by
him through A’s failure to sing on the sixth night

C. B has signified his acquiescence in the continuance of the contract, and cannot
now put an end to it, but is not entitled to compensation for the damage sustained
by him through A’s failure to sing on the sixth night

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D. None of these

Ans. (A)

23. A, a tradesman, leaves goods at B’s house by mistake. B treats the

goods as his own.

A. He is not bound to pay A for them

B. He is bound to pay partially A for them

C. He is bound to pay A for them

D. None of these

Ans. (C)

24. A, an agent engaged in carrying on for B a business, in which it is

the custom to invest from time-to-time, at interest, the moneys which
may be in hand, omits to make such investments.

A. A need not make good to B the interest usually obtained by such investments

B. A can partially make good to B the interest usually obtained by such

investments

C. A must make good to B the interest usually obtained by such investments

D. None of these

Ans. (C)

25. A, an agent for the sale of goods, having authority to sell on credit,
sells to B on credit, without making the proper and usual inquires as
to the solvency of B. B at the time of such sale is insolvent.
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A. A need not make compensation to his principal in respect of any loss thereby
sustained

B. A can partially make compensation to his principal in respect of any loss

thereby sustained

C. A must make compensation to his principal in respect of any loss thereby

sustained

D. None of these

Ans. (C)

26. A, an insurance broker, employed by B to effect an insurance on a

ship, omits to see that usual clauses are inserted in the policy. The
ship is afterwards lost. In consequence of the omission of the clauses
nothing can be recovered from the underwriters.

A. A is not bound to make good the loss to B

B. A is bound to partially make good the loss to B

C. A is bound to make good the loss to B

D. None of these

Ans. (C)

27. A, as surety for B, makes a bond jointly with B to C, to secure a loan

from C to B. Afterwards, C obtains from B a further security for the
same debt. Subsequently, C gives up the further security.

A. A is partly discharged

B. A is discharged
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C. A is not discharged

D. None of these

Ans. (C)

28. A, at Madras, by letter directs B to sell for him some cotton lying in
a warehouse in Bombay, and afterwards, by letter revokes his
authority to sell, and directs, B to send, the cotton to Madras, B, after
receiving the second-letter, enters into a contract with C, who known
of the first letter, but not of the second for the sale to him of the
cotton. C pays B the money, with which B absconds.

A. C’s payment is not good as against A

B. C’s payment is good as against A

C. either (A) or (B)

D. None of these

Ans. (B)

29. 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

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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

30. 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

31. 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 non-performance of his promise

B. A must make compensation to B for the non-performance of his promise

C. Either (A) or (B)

D. None of these

Ans: B

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32. 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

33. 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

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34. 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

D. None of these

Ans: A

35. 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

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36. 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

37. 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

38. 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.
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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

39. 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

40. 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

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C. B is entitled to retain the stone till he is paid for the services he has rendered

D. None of these

Ans: C

41. 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

42. 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

Ans: C

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43. 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

44. 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

45. 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

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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

46. 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

47. 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.

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A. The guarantee is not invalid

B. The guarantee is partly invalid

C. The guarantee is invalid

D. None of these

Ans: C

48. 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

49. 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

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50. 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

51. 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.

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

52. 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.

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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

53. 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

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

54. 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.

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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

55. 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 dishonors 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

56. 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
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C. A cannot recover from B more than the price of the rice actually supplied

D. None of these

Ans: C

57. A having advanced money to his son, B, during his minority, upon
B’s coming of age obtains, by misue 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

58. A hires a horse in Calcutta from B expressly to march to Benaras.

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

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59. 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

60. 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

61. A is employed by B, residing in London, to recover at Bombay a

debt due to B.
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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

62. 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

63. 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

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D. None of these

Ans: C

64. 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

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

65. 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

66. 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

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B. The delivery of the goods does not amount to part payment

C. Either (A) or (B)

D. None of these

Ans: A

67. 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

68. 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) and (B)

Ans: B

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69. 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

70. Section 75 of the Indian Contract Act, 1872 must be read as

supplementary to _____________

I. Section 39 of the Indian Contract Act, 1872

II. Section 53 of the Indian Contract Act, 1872

III. Section 55 of the Indian Contract Act, 1872

IV. Section 64 of the Indian Contract Act, 1872

V. Section 65 of the Indian Contract Act, 1872

A. II, III, IV

B. IV, V

C. I, V

D. All of them

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Ans. (D)

71. Severance can be effected when the part severed can be removed
by running a through it.

A. blue pencil

B. white pencil

C. black pencil

D. None of these

Ans. (A)

72. Since a contract is concluded by the mere acceptance of an offer,

the terms of the intended or proposed agreement must be indicated
with sufficient definiteness in the offer itself. The terms of the offer
must therefore be definite and certain. Which of the following cases
held that the proposal must be sufficiently definite to permit the
conclusion of the contract by mere acceptance?

A. Coffee Board Bangalore v. Janab Dada Haji Ibrahim Halari

B. Gorakh Nand Yadav v. District Magistrate, Gorakhpur

C. Sanwarmal Goenka v. Soumyendra Chandra Gooptu

D. Nandganj Sihori Sugar Co. Ltd., v. Badri Nath Dixit

Ans. (A)

73. Subject to a contract between the partners, the firm shall

indemnify a partner in respect to payments made and liabilities
incurred by him:
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A. in the ordinary and proper conduct of the business

B. in doing such act, in an emergency, for the purpose of protecting the firm from
loss, as would be done by a person of ordinary prudence, in his own case, under
similar circumstances

C. both (A) and (B)

D. None of these

Ans. (C)

74. Sub-section 1 of Section 16 of Indian Contract Act, 1872 requires

the Court trying a case to consider which of the following?

A. Are the relations between the donor and the done such that the done is in a
position to dominate the will of the donor?

B. Has the done use that position to obtain an unfair advantage over the donor?

C. either (A) or (B)

D. both (A) and (B)

Ans. (D)

75. Sub-section of which of the following Section of the Indian

Contract Act, 1872 shall not affect the provisions of section 111 of the
Indian Evidence Act, 1872 (1 of 1872)?

A. Section 7

B. Section 16

C. Section 20
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D. None of these

Ans. (B)

76. Suit by bailor or bailee against wrong-doer is dealt under which of

the following in the Indian Contract Act, 1872?

A. Section 176

B. Section 179

C. Section 180

D. Section 178

Ans. (C)

77. Termination of an agency with public authority or a public body

may attract judicial intervention in writ petition:

A. If the termination be unreasonable

B. If the termination be arbitrary

C. If the termination be unconscionable

D. All of them

Ans. (D)

78. Terms of contract relate to statements, assertions, or

representations contained in a written contract which relate to the
subject matter of the contract and:

A. to something to be done

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B. to something not be done under the contract

C. has no application to a provision in the nature of a condition precedent to the

very existence or formation of a contract

D. All of them

Ans. (D)

79. The acts or omission contemplated by S. 134 of the Indian Contract

Act, 1872, may be those referred to in of the Indian Contract Act:

I. Section 39

II. Section 53

III. Section 54

IV. Section 55

V. Section 63

VI. Section 67

A. II, III, IV

B. IV, V

C. I, VI

D. All of them

Ans. (D)

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80. The agency extends to receiving notice on behalf of his principal of

whatever is material to be stated in the course of the proceedings. For
this rule to operate:

I. the agent must be under a duty to communicate

II. the information must be material

III. it must have been obtained in the course of business for which the agent has
been engaged

IV. the agent is not privy to a fraud on the principal

A. I, II

B. II, IV

C. Ill, IV

D. All of them

Ans. (D)

81. The agency type described in S. 202 of the Indian Contract Act,
1872:

A. cannot be revoked by the principal

B. it cannot be terminated by the death, unsoundness of mind or insolvency of the

principal

C. either (A) or (B)

D. None of these

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Ans. (C)

82. The agent may be disentitled to relief under S. 226 of the Indian
Contract Act, 1872:

A. If the injury was due to his own contributory negligence

B. If the injury is on the ground of common employment

C. either (A) or (B)

D. None of these

Ans. (C)

83. The application of the principles in Section 45 of the Indian

Contract Act, 1872 may be excluded by statutes, especially those
relating to securities, which provides that:

A. securities payable to one or more persons jointly shall, on death of any of them,
be payable to the survivor or survivors

B. securities payable to one or more persons severally, shall be payable on death

of any of them to any of the survivors or the legal representative(s) of the
deceased holder

C. any one or more joint holder can give effectual receipt for interest, unless
notice is given by the other holders to the promisor

D. all of them

Ans. (D)

84. The article of Fuller and Perdue on “The Reliance Interest in

Contract Damages” adopted the method of viewing the remedies for
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breach of contract in terms of the interests which the remedies served

to protect. Which of the following interests were identified by them?

A. The expectation interest

B. The reliance interest

C. The restitution interest

D. All of them

Ans. (D)

85. The award of damage involves a detailed investigation of facts:

A. is not normally an appropriate matter for a writ petition under Article 30 or

Article 225 of the Constitution, but it might be exercised in extraordinary
circumstances, rarely and sparingly, when no disputed questions of facts arose

B. is not normally an appropriate matter for a writ petition under Article 32 or

Article 226 of the Constitution, but it might be exercised in extraordinary
circumstances, rarely and sparingly, when no disputed questions of facts arose

C. is not normally an appropriate matter for a writ petition under Article 33 or

Article 227 of the Constitution, but it might be exercised in extraordinary
circumstances, rarely and sparingly, when no disputed questions of facts arose

D. None of these

Ans. (B)

86. The balance to the provisions of Section 11 of the Indian Contract

Act, 1872 is found in:

A. Section 66 of the Indian Contract Act, 1872

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B. Section 67 of the Indian Contract Act, 1872

C. Section 68 of the Indian Contract Act, 1872

D. None of these

Ans. (C)

87. The branches Section 30 of the Indian Contract Act, 1872 declares:

A. Agreement of wager void

B. Prevents the winner from bringing an action to recover amount won (even
under a substituted contract)

C. Prevents the winner from suing the stakeholder

D. All of them

Ans. (D)

88. The basis of relief on the ground of economic duress is not clear
from the judgment in case of Dai-ichi Karkaria Pvt. Ltd. v. Oil Natural
Gas Commission because:

A. the decision has been given in proceedings seeking interim injunction, where
the Court has to decide whether interim injunction ought to be issued. The
decision can be sustained solely on the equitable principles on which the Court
may refuse to grant injunction

B. the Court has discussed the effect of economic duress as a ground of

invalidating a contract on the basis of a prima facie case in interlocutory
proceedings

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C. the effect of such duress on the contract, i.e. whether it is voidable for lack of
free consent, or is void being against public policy is not clear from the judgment

D. All of them

Ans. (D)

89. The capacity of a woman to contract is not affected by her

marriage under which of the following?

A. The Hindu Law

B. The Mohammedan Law

C. both (A) and (B)

D. None of these

Ans. (C)

90. The cases in which power under Article 226 or 14 of the

Constitution can be exercised for breaches of alleged obligations of
the state, or its agents, can be divided which of the following types?

I. Where a petitioner makes a grievance of breach of promise on the part of the

state in cases where on assurance or promises made by the state, he has acted to
his prejudice and predicament, but the agreement is short of a contract within the
meaning of Article 299 of the Constitution.

II. Where the contract entered into between the person aggrieved and the state is
in exercise of a statutory power under certain Acts or rules framed there under
and the petitioner alleges a breach on the part of the state.

III. Where the contract entered into heaven between the state and the person
aggrieved is non-statutory and purely contractual and the rights and liabilities of
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the parties are governed by the terms of the contract and the petitioner complains
about breach of such contract by the State.

IV. Where the contract entered into between the State and the person aggrieved is
non statutory and purely contractual, but such a contract has been cancelled on a
ground de hors any of the terms of the contract, and which is per se violative of
Article 14 of the Constitution.

A. I, III

B. II, IV

C. II, III, IV

D. All of them

Ans. (D)

91. The circumstances in which the creditor must make disclosure to

the proposed surety are:

I. Where the surety has asked specific questions to the creditor

II. Where the bank misleads the surety by volunteering only part of the truth

III. Where the surety makes a statement in the creditor’s presence that
demonstrates that he entirely misunderstands the principal-debtor’s position

IV. Where there is anything that might not naturally be expected to take place
between the principal-debtor and the creditor

A. II, III

B. I, IV

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C. I, II

D. All of them

Ans. (D)

92. The conditions which entitle an agent to exceed his authority

under the doctrine of necessity are:

A. That he could not communicate with his principal

B. That the course he took was necessary in the sense that it was in the
circumstances the only reasonable and prudent course to take

C. That he acted bona fide in the interest of the parties concerned

D. All of them

Ans. (D)

93. The consideration for a family arrangement may be preservation

of family property, preservation of peace and honour of the family or
the avoidance of litigation; or avoiding the possibility of a future
dispute. In which of the following cases it was held?

A. Sundar Sahu Gountia v. Chamra Sahu Gauntia

B. Dwarampudi Nagaratnamba v. Kunuku Ramayya

C. Balbhaddar Prasad v. Dhanpat DayaI

D. None of these

Ans. (A)

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94. The creditor may file a suit at his option only against the surety. In
which of the following cases it was upheld?

A. K. C. Skaria v. The Government of State of Kerala

B. Purabi Dasgupta v. A run Kumar

C. Infrastructure Leasing and Financial Services Ltd. v. Vijay V. Prabhu

D. None of these

Ans. (C)

95. The decisions of the expert or technical or commercial committees

in scrutinizing the tenders under Section 10 of the Indian Contract
Act, 1872 will not be interfered unless:

A. the decision is taken with a mala fide intention

B. the decision is arbitrary

C. either (A) or (B)

D. None of these

Ans. (C)

96. The defence of invalidity of contract for non-compliance of Article

299 must be specifically pleaded, unless it is patent from allegations in
the plaint or evidence adduced by the plaintiff. This question has
arisen in which of the following types of cases:

A. cases under ss. 7 (d) and 9A of the Representation of People’s Act, 1951 in
connection with disqualification from being elected to the Parliament of state
legislature
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B. where the contracts did not comply with the exact requirements of Article 299
(1)

C. contracts entered in the exercise of statutory powers

D. All of them

Ans. (D)

97. The doctrine of apparent authority applies:

I. where a person allows another who is not his agent to appear as his agent

II. where a principal allows his agent to appear to possess more authority than he
actually has

III. where the principal reserves or limits the authority of an agent which the
agent would have in ordinary course of business, but does make this known to
third parties

IV. where the principal allows it to appear that the agent has authority although
his authority has been terminated

A. I, II

B. II, IV

C. Ill, IV

D. All of them

Ans. (D)

98. The doctrine of privity means:

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A. That a person cannot acquire rights to liabilities arising under a contract to

which he is not a party

B. That a person cannot be subject to liabilities arising under a contract to which

he is not a party

C. That a contract between A and B can affect the legal rights of C indirectly

D. All of them

Ans. (D)

99. The duty of the disclosure is limited to cases of:

A. unusual features of the transaction

B. unusual features of the risk

C. both (A) and (B)

D. None of these

Ans. (A)

100. The duty of utmost good faith is of universal application to all

policies of insurance although there are differences in the detail
affecting the way in which the duty is applied. In practical application
it means that either party has the right to avoid the contract if:

A. there has been a failure by the other party to disclose a material fact

B. that there has been on the part of the other party a misrepresentation of a
material fact

C. either (A) or (B)

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D. None of these

Ans. (C)

101. The English Unfair Contract Act, 1977 covers terms:

A. marking the liability or its enforcement subject to restrictive or onerous

conditions

B. excluding or restricting any right or remedy in respect of liability, or subjecting

a person to any prejudice in consequence of his pursuing any right or remedy

C. excluding or restricting rules of evidence or procedure

D. All of them

Ans. (D)

102. The extent of an agent’s authority, whether express or implied,

depends upon:

A. The nature of act or business for which he has been appointed

B. Things which are incidental to the business or are usually done in carrying it
out

C. The usual customs and usages of the trade

D. All of them

Ans. (D)

103. The extent of the liability under an indemnity depends on:

A. the nature and terms of the contract

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B. the case which must be governed by his own facts and circumstances

C. both (A) and (B)

D. None of these

Ans. (C)

104. The final draft of the Indian Contract Act, 1872 was the work of:

A. Sir James Fitzjames Stephen

B. Sir Frederick Pollock

C. either (A) or (B)

D. both (A) and (B)

Ans. (D)

105. The functions of the provisions of Section 11 of the Indian

Contract Act, 1872 relating to personal competency is ___________.

A. to protect those whose mental powers are undeveloped or underdeveloped

B. preventing them from doing themselves an injury by their legal declarations

C. both (A) and (B)

D. None of these

Ans. (C)

106. The general principle of the common law is that in the formation
of a contract:

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A. the consideration is given

B. the consideration is to accepted in exchange of a promise

C. both (A) and (B)

D. None of these

Ans. (C)

107. The grounds on which administrative action would be subject to

control by judicial review could be classified as:

A. illegality (namely, failure to give effect to the law that regulates the decision
making power)

B. irrationality, namely Wednesbury unreasonableness, the question ‘whether or

not they [the local authority] have taken into account matters which they ought
not have taken into account, or … have refused to take into account or neglected
to take into account matters which they ought to take into account’

C. procedural impropriety

D. All of them

Ans. (D)

108. The guarantor’s right to indemnification is a right to

be reimbursed:

I. the amount which he actually paid for the principal- debtor – with interest

II. because, he is entitled to full indemnification from the principal-debtor

A. I is true but II is false

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B. I is false but II is true

C. both (I) and (II) are true

D. None of these

Ans. (C)

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