Multiple Choice Questions on Indian Contract Act
Q 1. “A” who is a lunatic, accepts a proposal for the sale of one of his plots of land to ‘B’ for Rs. 5000/- during one of his sane intervals. Before ‘B’ could take possession of the land, “A” lapsed into insanity again. Which one of the following depicts the correct legal position?
(a) “B” cannot enforce the contract.
(b) “B” must wait till “A” becomes sane and then enforce the contract.
(c) The contract is valid and enforceable
(d) “A” has no capacity to enter into contract and hence the contract is void.
Q 2. “X” makes a contract with “Y” to sell his motorcycle at a specified price if “Z” to whom the motorcycle had already been offered refuses to purchase. Is this a valid contract?
(a) No it is void for uncertainly.
(b) No, as it depends, upon the will of Z and Z may not take any decision during his life time.
(c) Yes, as it is a contingent contract which will be enforceable if and when “Z” refuses to purchase the motorcycle.
(d) No, because the time of performance by “X” is not certain.
Q 3. A quantum meruit claim might arise in situations some of which are contractual and others quasi contractual. The plaintiff in the present case entered into an agreement to write for a periodical and as per the agreement he was to receive a lump sum amount on completion of his work. When the plaintiff had written part of the work, the defendant had abandoned the project. The plaintiff was held entitled to sue for the work already done, because the plaintiff’s claim was:
(a) contractual
(b) tortuous
(c) quasi contractual
(d) partly contractual and party tortuous.
Q 4 . Consider the following propositions:
- If the frustration is self-induced it can be a defence for breach of contract.
- Self-induced frustration can never be a defence for breach of contract.
- The burden of proving that frustration was self-induced is on the party who is alleging that it was so induced. Of the above propositions:
(a) l and 3 are valid (b) 2 alone is valid
(c) 3 alone is valid ( d) 2 and 3 are valid
Q 5 . “C” let a music hall to “X” for a series of music concerts for certain days. The hall was completely destroyed by fire before the scheduled date of concerts. In this case:
(a) “C” cannot be discharged from performance of the contract.
(b) The contract becomes voidable at the option of “X”.
(c) The contract is discharged by impossibility of performance.
(d) The contract is void ab initio.
Q 6. In case of anticipatory breach of contract, an aggrieved party:
(a) cannot claim any remedy as performance is still executor.
(b) may wait till the date of performance.
(c) does not have the right to terminate the contract.
(d) has the right to claim performance at any time.
Q 7. The defence of “non est factum” is available to the contracting party who has committed mistake as to the:_______________?
(a) Nature of contract
(b) Identity of the other contracting party
(c) Quality of the promise made by other contracting party
(d) Quality of the subject matter of the contract
Q 8. All innocent promises collateral to the main illegal promise contained in a contract will be regarded as:________________?
(a) valid
(b) void
(c) illegal
(d) voidable
Q 9. “A” owes “B” Rs. 3000, “C” pays to “B”, Rs. 2000 and “B” accepts it in satisfaction of his claim against “A’. This payment:_______________?
(a) is not a discharge of the whole claim.
(b) is a discharge of the entire claim.
(c) can be a discharge only when the balance is paid.
(d) will be a discharge only if the amount is paid by “A”.
Q 10. The case of Hochester v. De La Tour deals with:_____________?
(A) Quasi-Contract
(B) Promissory estoppel
(C) Exemplary damages
(D) Capacity to contract for an insane man at sane intervals.
Answers of Indian Contract Act MCQ’s
Answer 1 :- (c)
Explanation- The contract is valid and enforceable. This problem is based upon Section 12 of Contract Act. A can make valid contract at the time of sane intervals.
Ans. 2 (c)
Explanation – According to Section 32, contingent contracts to do or not to do anything in an uncertain future event happens, cannot be enforced by law unless and until that event has happened. Thus a contract between “X” and “Y” is a valid contract, as it is a contingent contract, which will be enforceable and when “Z” refuses to purchase the motorcycle.
Ans. 3 (a)
Explanation Where a party has in the performance of his contract done some work or rendered some service and the further performance has been made useless by the other party, he may recover reasonable compensation for the work or service. Claims under the doctrine of quantum meriut have been allowed by the courts under Section 65 of ICA.
Ans. 4 (d)
Explanation- The essence-of frustration is that it should not be self – induced. It should not be due to the act or election of the party. Frustration operates automatically to discharge the contract.
Ans.5 (c)
Explanation – Doctrine of Impossibility under Section 56 applies with full force “where the actual and specific subject matter of the contract has ceased to exit. A promise to let out a music hall had frustrated on the destruction of the hall.
Ans 6. (d)
Explanation – An anticipatory repudiation occurs when, prior to the promised date of performance, the promisor absolutely repudiates the contract. It is an announcement by the contracting party of his intention not to fulfill the contract and that he will no longer be bound by it. This kind of anticipatory has certain effects upon rights of the parties. In the first place, the other Party is excused from performance or from further performance.
Ans. 7 (a)
Explanation- The defence of “non est factum” enables a person who has signed a contract to say that it is not his document because he signed it under some mistake. It was evolved by the court to relieve illiterate or blind people from the effect of a contract which they could not read and which was not properly explained to them. But subsequently it was extended to others. This extension occurred through the judgement of Byles J. in Foster Vs. Mackinnon .( 1869) LR 4 CP 704.
Ans 8. (c)
Explanation – A collateral transaction means a transaction subsidiary to the main transaction.
If the main transaction is illegal, a collateral transaction will also be tainted with the same illegality. But if, the main transaction is only void, its collateral transaction will remain enforceable. The only material difference between an illegal and void agreements relates to their effect upon the collateral transactions.
Ans 9 . (b)
Explanation – This problem is based upon the illustration (c) of Section 63. Section 63 allows a party to a contract to dispense with the performance of the contract by the other party, or to extend the time for performance or to accept any other satisfaction instead of performance. The effect of the provision is that the party who has the right to demand the performance of a contract may:-
( 1 ) remit or dispense with it wholly or in part or
(2) extend the time for performance, or
(3) accept any other satisfaction instead of performance.
Ans. 10 (C), Self Explanatory.