Contract / Civil Law Test-1

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Contract / Civil Law Test-1

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Question 1
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Which one of the following element is not necessary for a contract ?

A
Competent parties

B
Reasonable terms and conditions.

C
Free consent

D
Lawful consideration

Solution

A supplier must not offer to enter into an agreement to supply any goods or services at a price or on terms that are unfair, unreasonable or unjust, and must not negotiate an agreement for the supply of any goods or services in a manner that is unfair, unreasonable or unjust.
So, the correct option is 'B '
Question 2
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Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is called:

A
Voidable at the option of sufferer

B
Illegal

C
Void

D
Not enforceable in a court.

Solution

A void contract cannot be enforced by law. An agreement to carry out an illegal act is an example of a void agreement.
Example , a contract between drug dealers and buyers is a void contract simply because the terms of the contract are illegal. In such a case, neither party can go to court to enforce the contract.
Question 3
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Patricia ’s employer fired her after only three months in the job, in breach of a twelve-month employment contract. Patricia is entitled to recover as damages

A
Her salary for twelve months.

B
Her salary for nine months.

C
Her salary for nine months, less what she could have earned in another job had she made reasonable efforts to find another suitable job.

D
Nothing, because employment contracts must provide for liquidated damages.

Solution

She already worked three months so those three months salary is obligatory for the employer to provide in addition to the salary of the rest of the nine months of employment provided in the contract.
This measure of damages reflects the effect of her so-called “duty ”to mitigate.
Question 4
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Principle: If a party to the contract offers to fulfill his part of the contract and the other party declines, the first party is freed from his obligations.
Facts: A contracts with B to deliver 100 bales of cotton to him. The scheduled delivery date is 19.10.2014. A rings up on 1.10.2014 and tells him he is bringing the cotton to his house for delivery. B tells him he can ’t accept the delivery because he doesn ’t have the space to store it. Is A free from his contractual obligations?

A
No, A ’s contractual obligations was to deliver the cotton on the 19^th . He cannot offer to fulfill it before that

B
Yes, the date of delivery is not important

C
Yes, B has refused delivery

D
No, it ’s on the wrong date

Solution

The agreed date for delivery is 19^th and hence he cannot bring the order beforehand
Question 5
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Principle: Agreement void where both parties are under mistake as to matter of fact.
Facts: A agrees to sell to B a specific cargo of goods supposed to be on its way from England to Bombay. It turns out that before the day of the bargain the ship conveying the cargo had been cast away and the goods lost. Neither party was aware of these facts.

A
The agreement is void

B
The agreement is valid

C
The agreement is voidable

D
None of the above

Solution

A void contract cannot be enforced by law. An agreement to carry out an illegal act is an example of a void agreement.
Example: A contract between drug dealers and buyers is a void contract simply because the terms of the contract are illegal.
In such a case, neither party can go to court to enforce the contract.
Question 6
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Principle: When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal. The expression of willingness/desire results in a valid proposal only when it is made/addressed to some person (s).
Facts: ‘X ’makes the following statement in an uninhabited hall. ‘I wish to sell my mobile phone for Rs. 1000.

A
‘X ’made a statement that resulted in a promise

B
‘X ’made a statement that resulted in an agreement

C
‘X ’made a statement that did not result in any proposal

D
None of the above

Solution

It 's a mere statement. Nobody heard him hence no proposal was made. It 's not an offer to somebody either. It 's a simple statement by X. It 's 'I wish 'not 'I will sell it to you for this amount.
Question 7
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Principle: A proposal (offer) should be made with an intention that after its valid acceptance, a legally binding promise or agreement will be created. The test for the determination of such intention is not subjective, rather it is objective. The intension of the parties is to be ascertained from the terms of the agreement and the surrounding circumstance under which such an agreement is entered into.
As a general rule, in the case of arrangements regulating social relations, it follows as a matter of course that the parties do not intend legal consequences to follow. On the contrary, as a general rule, in the case of arrangements regulating business affairs, it follows as a matter of course that the parties intend legal consequences to follow. However, the above rules are just presumptive in nature and hence can be rebutted.
Facts: One morning while having breakfast, ‘X ’, the father, says to ‘Y ’(X ’s son), in a casual manner, ‘I shall buy a motorbike for you if you get through the CLAT ’.
Q.
Which of the following derivations is correct?

A
‘X ’made a statement that resulted in an enforceable promise.

B
‘X ’made a statement that resulted in a valid proposal

C
‘X ’made a statement that resulted in an enforceable agreement

D
‘X ’made a statement that did not result in any enforceable agreement

Solution

Personal relationship are not subject to matter of agreements.
Question 8
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Principle: Acceptance (of offer) must be communicated by the offeree to the offeror so as to give rise to a binding obligation. The expression ‘by the offeree to the offeror ’includes communication between their authorized agents.
Facts: ‘X ’made an offer to buy Y ’s property for a stipulated price. ‘Y ’accepted it and communicated his acceptance to ‘Z ’, a stranger.

A
Y ’s acceptance resulted in an agreement

B
Y ’s acceptance did not result in any agreement

C
Y ’s acceptance resulted in a contract

D
Y ’s acceptance resulted in a promise

Solution

It 's true that Y has accepted the proposal and has communicated it to Z but here Z is a stranger and not an authorised agent . Moreover , if Z would have been an authorised agent he had to communicate the acceptance of proposal by Y to the Offeror X. But here it is not such case so the acceptance does not result in any agreement as the Offeror is unknown of the acceptance by Y.
Question 9
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Principle: Acceptance should be made while the offer is still subsisting. The offeror is free to retract his offer at any time before his offer gets accepted by offeree. Once the offer is withdrawn or is lapsed, it is not open to be accepted so as to give rise to a contract. Similarly, if a time is prescribed within which the offer is to be accepted, then the offer must be accepted within the prescribed time. And if no time is prescribed, then the acceptance must be made within a reasonable time. ‘What is a reasonable time ’, is a question of fact which is to be determined by taking into account all the relevant facts and surrounding circumstances.
Facts: ‘X ’makes an offer to ‘Y ’to sell his equipment for Rs.1000.00. No time is specified for the acceptance. ‘Y ’sends his reply two years after receiving the offer.

A
There arises a contract between ‘X ’and ‘Y ’to sell/buy the equipment in question for Rs. 1000.00

B
There does not arise any contract between ‘X ’and ‘Y ’to sell/buy equipment in question for Rs. 1000.00

C
‘X ’is bound by his offer and hence cannot reject the acceptance made by ‘Y ’

D
There arises a promise by ‘Y ’to buy the equipment

Solution

The question “what is a reasonable time ”is, in each particular case, a question of fact. So for every contract there is specified time, therefore option 'B '
Question 10
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Principle: Minor ’s agreement is void from the very beginning. It can never be validated. It cannot be enforced in the court of law.
Facts: ‘A ’, a boy of 16 yrs of age, agrees to buy a camera from ‘B ’, who is a girl of 21yrs of age.

A
There arises a contract between ‘A ’and ‘B ’to sell/buy the camera in question

B
There arises an enforceable agreement between ‘A ’and ‘B ’to sell/buy the camera in question

C
There does not arise any contract between ‘A ’and ‘B ’to sell/buy the camera in question

D
There arises avoidable contract between ‘A ’and ‘B ’to sell/buy the camera in question

Solution

Here A is minor so it is void from starting no matter whether B is major.
Hence, C is the correct answer because the contract with a minor is void abinitio i.e void from starting.

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Contract / Civil Law Test-1

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Question 1

Competent parties

Reasonable terms and conditions.

Free consent

Lawful consideration

Solution

Question 2

Voidable at the option of sufferer

Illegal

Void

Not enforceable in a court.

Solution

Question 3

Her salary for twelve months.

Her salary for nine months.

Her salary for nine months, less what she could have earned in another job had she made reasonable efforts to find another suitable job.

Nothing, because employment contracts must provide for liquidated damages.

Solution

Question 4

No, A ’s contractual obligations was to deliver the cotton on the 19th . He cannot offer to fulfill it before that

Yes, the date of delivery is not important

Yes, B has refused delivery

No, it ’s on the wrong date

Solution

Question 5

The agreement is void

The agreement is valid

The agreement is voidable

None of the above

Solution

Question 6

‘X ’made a statement that resulted in a promise

‘X ’made a statement that resulted in an agreement

‘X ’made a statement that did not result in any proposal

None of the above

Solution

Question 7

‘X ’made a statement that resulted in an enforceable promise.

‘X ’made a statement that resulted in a valid proposal

‘X ’made a statement that resulted in an enforceable agreement

‘X ’made a statement that did not result in any enforceable agreement

Solution

Question 8

Y ’s acceptance resulted in an agreement

Y ’s acceptance did not result in any agreement

Y ’s acceptance resulted in a contract

Y ’s acceptance resulted in a promise

Solution

Question 9

There arises a contract between ‘X ’and ‘Y ’to sell/buy the equipment in question for Rs. 1000.00

There does not arise any contract between ‘X ’and ‘Y ’to sell/buy equipment in question for Rs. 1000.00

‘X ’is bound by his offer and hence cannot reject the acceptance made by ‘Y ’

There arises a promise by ‘Y ’to buy the equipment

Solution

Question 10

There arises a contract between ‘A ’and ‘B ’to sell/buy the camera in question

There arises an enforceable agreement between ‘A ’and ‘B ’to sell/buy the camera in question

There does not arise any contract between ‘A ’and ‘B ’to sell/buy the camera in question

There arises avoidable contract between ‘A ’and ‘B ’to sell/buy the camera in question

Solution

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No, A ’s contractual obligations was to deliver the cotton on the 19^th . He cannot offer to fulfill it before that