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Topics of Law Test 16

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Topics of Law Test 16
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Weekly Quiz Competition
  • Question 1
    1 / -0
    Which of the following restraint is not valid restraint?
    Solution
    As per section 27 of Contract Act, Every agreement by which anyone is restrained from exercising a lawful profession or trade or business of any kind, is to that extent void. However, there are certain exceptions to this rule:
    • One who sells goodwill of a business with a buyer to refrain from carrying on a similar business, within specified local limits so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein provided that such limits appear to the Court reasonable, regard being had to the nature of business. 
    • Regulations as to the opening and closing of business in the market, licensing of traders, supervision and control of dealers and the mode of dealing are not invalid and is a valid restraint.
    • Agreements of service often contain negative covenants preventing the employee from working elsewhere during the period covered by the agreement and there is no rule of public interest which prevents a transfer of them against the employer’s will being restrained but an agreement to restrain an employee from competing with his employer after the termination of employment may not be allowed by the courts. Hence, an agreement restraining the employee from doing any job after retirement is not a restraint and is void under section 27.

  • Question 2
    1 / -0
    X says to Y, I shall sell my CAR to you. Will you buy it? Y responded by saying yes, I shall buy it. This agreement is not valid because of __________________.
    Solution
    An agreement requires offer, acceptance, consideration as well as free consent of the parties to it. All these elements must be fixed or specified and not vague or uncertain as it will render the agreement void. In this case too, X has offered to sell his car to Y but has not specified about the car as well as price of the car . This means that the object of this agreement is uncertain and hence is void in nature.
  • Question 3
    1 / -0
    A contract is said to be discharged when _________________.
    Solution
    When parties enter into a contract, each has rights and duties that are spelled out in the agreement. When the sides perform their rights and duties, the contract is then discharged. In these cases, discharge of contract refers to an agreement that's fully performed. This means the contractual relationship is now terminated and contract now ceases to operate . However, parties can terminate an agreement even if they don't fulfill their primary contractual obligations.
  • Question 4
    1 / -0
    As per section 37 of the Contract Act parties to the contract must _________.
    Solution
    As per section 37 of the Contract Act, the parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or of any other law. Promises bind the representatives of the promisors in case of the death of such promisors before performance, unless a contrary intention appears from the contract. 
  • Question 5
    1 / -0
    Waiver under the Contract Act means _________________.
    Solution
    A waiver is the voluntary relinquishment or surrender of some known right or privilege. This has been provided under section 63 of the Contract Act, which says that every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance,or may accept instead of it any satisfaction which he thinks fit. The promisee has the right to let go or abandon the rights attached with the contract and further discahrge the contract. 
  • Question 6
    1 / -0
    A waiver of contract ________________.
    Solution
    As per section 63 of the act, a contract may be discharged by agreement between the parties to waive their rights arising from the contract. Thus, in case of waiver, the person who is entitled to any right under the contract, intentionally relinquishes them without consideration and without a new agreement. 
  • Question 7
    1 / -0
    Performance of a contract takes place when parties to the contract fulfils the contractual obligations _________.
    Solution
    Performance of contract' means fulfillment of the obligations by the parties. The parties who make the contract must fulfill their obligations according to the terms laid down in the contract. Performance of contract is one of the methods to discharge a contract.  
    A contract should be performed at the time specified and at the place agreed upon as well as in the manner provided in the contract. When this has been accomplished, the parties are discharged automatically and the contract is discharged eventually.
  • Question 8
    1 / -0
    ________ is not a void.
    Solution
    • Section 30 of the Indian Contract Act talks about wagering agreements, which reads  “agreements by way of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made.”
    • As per section 27 of the act, every agreement by which anyone is restrained from exercising a lawful profession or trade or business of any kind, is to that extent void.
    • Under section 26, every agreement in restraint of the marriage of any person, other than a minor, is void.
    • Contingent contracts, on the other hand, are the ones where the promisor performs his obligation only when certain conditions are met. If two or more parties enter into a contract to do or not do something, if an event which is collateral to the contract does or does not happen, then it is a contingent contract. These types of agreements are generally valid in nature. Under section 32 of the act, A contingent contract might be based on the happening of an uncertain future event. In such cases, the promisor is liable to do or not do something if the event happens. If the happening of the event becomes impossible, then the contingent contract is void. 
  • Question 9
    1 / -0
    Which of the following restraint of trade is valid?
    Solution
    Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. However, there is an exception to this law which says, one who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business. Therefore, if there is an agreement between the traders regarding regulation or fixing of price then such agreement cannot be said to be of restraint of trade.
  • Question 10
    1 / -0
    Who can demand performance of a contract _______________.
    Solution
    It is only the promisee who can demand performance of the promise under a contract, for, the general rule is that "a person cannot acquire rights under a contract to which he is not a party". A third party cannot demand performance of the contract even if it was made for his benefit. In case of the death of the promisee, his legal representatives are entitled to enforce the performance of the contract against the promisor.
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