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Indian Contract Act, 1872 Practice Test

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The Indian Contract Act of 1872 is a legal framework that regulates contracts in India and is applicable to all states except Jammu & Kashmir. It was first published on April 25, 1872, and has 266 sections. The act is based on English Common Law and has been amended several times to keep up with changing economic conditions. The act defines a contract as an agreement that is enforceable by law. It also defines an agreement as every promise and every set of promises that form the consideration for each other. A valid contract is formed when certain essential elements are present,... Show more

The Indian Contract Act of 1872 is a legal framework that regulates contracts in India and is applicable to all states except Jammu & Kashmir. It was first published on April 25, 1872, and has 266 sections. The act is based on English Common Law and has been amended several times to keep up with changing economic conditions.

The act defines a contract as an agreement that is enforceable by law. It also defines an agreement as every promise and every set of promises that form the consideration for each other. A valid contract is formed when certain essential elements are present, including:
Offer and acceptance
Lawful consideration
Capacity to contract
Free consent
Lawful object
Certainty of terms

All the signing parties must consider getting something in return in the form of rights, profits, interests, etc.. A contract will be deemed illegal if it is unlawful, can challenge or attack any section of any law, cause harm to any individual, or if the Court considers it to be immoral.
The act covers the following topics: What is a contract, Essentials of a contract, Types of contract based on validity, Types of contract based on formation, and Types of contract based on performance.

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Indian Contract Act, 1872 Practice Test

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1. Under which of the following circumstances as per the Special Relief Act, 1963, the Court may refuse to rescind the contract in a suit for rescission?
I. The plaintiff was has expressly or implied ratified the contract
II. Due to change in circumstances after the making of the contract (not due to the act of the defendant himself), the parties cannot be substantially restored to the positions in which they stood when the contract was made
III. Third parties have during the subsistence of the contract, acquired rights in good faith without notice and for value
IV. Only a part of the contract is sought to be rescinded and such part is not severable from the rest of the contract

All of theseI, IIIII, IVIV

2. A guarantee:

can be oral or in writingneither of these.has to be in writingcan be oral

3. Which of the deals with the effect of novation, rescission and alteration of contract in the Indian Contract Act, 1872?

Section 68Section 61Section 62Section 50

4. Unless the terms of the guarantee provide other, the surety is entitled to claim relief from the principal-debtor immediately:

As often as he pays anything under his guarantee as it falls dueAnd is not required to pay the whole debt due from the principal-debtor before compelling reimbursementBoth of theseNone of these

5. In a contract of guarantee:

there are two parties and two contractsthere are two parties and one contractthere are three parties & one contract.there are three parties & three contracts

6. Which of the following are the requirements for the application of the provisions of Section 69 of the Indian Contract Act, 1872?

The defendant must have been legally liable to pay the third party. Though the plaintiff would usually stand in some kind of relationship to the person for whom he paid, no relationship of privity is necessary to give a right of actionAll of theseThe plaintiff must have made an actual or virtual payment of moneyThe plaintiff must have been compelled to pay this money to a third party

7. A agrees to sell B’s hundred tons of oil’. There is nothing whatever to show what king of oil was intended.

either (A) of (B)The agreement is not void in spite of the uncertaintyThe agreement is void for uncertaintyNone of these

8. The term law in the expression “forbidden by law” would include any enactment or rule of law for the time being in force in India which would fall under which of the following sub heads?

All of theseThe rules of Hindu or Mahomedan lawThe provisions of any legislative enactmentOther rules for the time being in force in India

9. 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 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 contrA 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 contractA 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 contractNone of these

10. Under the contract of guarantee, a creditor:

can avail his remedies against the principal debtor as well as the suretyhas to avail his remedies first against the principal debtoreither of these.can avail his remedy against the surety alone

11. A’s son has forged B’s name to a promissory note. B under threat of prosecuting A’s son, obtains a bond from A for the amount of the forged note.

If B sues on this bond, the Court will not set the bond asideIf B sues on this bond, the Court may set the bond asideNone of theseEither of these

12. Which of the following deals with agreement to do impossible act in the Indian Contract Act, 1872?

Section 55Section 52Section 56Section 59

13. 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.

None of theseB is entitled to such compensation, not exceeding Rs.5,000 as the Court considers reasonableB is entitled to such compensation, not exceeding Rs.3,000 as the Court considers reasonableB is entitled to such compensation, not exceeding Rs.4,000 as the Court considers reasonable

14. Which of the following rights is/are available to the agent:

right to retainall of these.right to remuneration & compensationright to indemnity

15. The right to surety to indemnity is an incident of the guarantee:

The principal-debtor will be liableBoth of theseWithout 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-debtorNone of these

16. B accepts A’s proposal by a letter sent by post. The communication of the acceptance is complete.

As against A, when the letter is posted; as against B, when the letter is received by AAs against A, when the letter is received; as against B, when the letter is posted by AAs against B, when the letter is posted; as against A, when the letter is received by BNone of these

17. Section 13 8 of the Indian Contract Act, 1872 is a necessary consequence of the principle laid down in___________ and must be taken as a deliberate extension of a rule which in the common law

S. 44; is limited to the case of co-sureties contracting jointlyNone of theseS. 44; is limited to the case of co-sureties contracting severally and not jointlyS. 44; is limited to the case of co-sureties contracting severally

18. A finds B’s purse and gives it to him. B promises to give ARs. 50/-

This is a contractThis is not a contractNone of theseEither of these

19. Which of the following deals with communication, acceptance and revocation of proposals in the Indian Contract Act, 1872?

Section 4Section 3Section 2Section 1

20. 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.

It is a contractEither of theseboth of theseIt is a void agreement

21. Under Section 18 of the Indian Contract Act, 1872, misrepresentation falls under:

Causing a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement, even though done innocentlyA statement of fact, which is false, would be misrepresentation if the maker believes it to be true, but which is not justified by the information he possessesAll of theseAny breach of duty which gains an advantage to the person committing it by misleading another to his prejudice, there being no intention to deceive

22. Which of the following deals with reimbursement of person paying money due by another, in payment of which he is interested in the Indian Contract Act, 1872?

Section 50Section 69Section 68Section 59

23. Considerations & objects are unlawful where it is:

which is immoral & against the public policyforbidden by law or defeat the provision of any lawwhich is fraudulentall of these.

24. Which of the following are the conditions for the application of Section 70 of the Indian Contract Act, 1872?

The goods are to be delivered lawfully or something has to be done for another person lawfullyAll of theseThe person to whom goods are to delivered enjoys the benefit thereofThe thing done or the goods delivered must be done or delivered without intention to do so gratuitously

25. The damages under section 73 of Indian Contract Act are:

penalnone of these.liquidatedcompensatory

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