MCQ Question Bank on Indian Contract Act, 1872 [500+ Objective Questions with Answers]- Part 3

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For Question No. 1 to 100, click here.

For Question No. 101 to 200, click here.

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.

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

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)

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 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)

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

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.

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

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)

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.

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

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)

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.

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.

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)

(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.

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)

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

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

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

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

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

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)

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.

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

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

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

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

B. Bar Council of Delhi v. Surender

C. Economic Transport Organization v. Charan Spinning Mill

D. None of these

Ans. (C)

For Question No. 301 to 400, click here.

For Question No. 401 to 536, click here.

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