BIEE

CA-CPT
(MERCANTILE LAWS)

CHAPTER 1 - THE INDIAN CONTRACT ACT, 1872

SN/UNIT-1/NATURE OF CONTRACTS

1]

THE INDIAN CONTRACT ACT, 1872 APPLIES TO THE

a) Whole of INDIA including JAMMU & KASHMIR b) Whole of INDIA excluding JAMMU & KASHMIR c) States notified by the government every year d) Northern and eastern Indian states 2] A jus in personam means a right against a) A specific person b) The public at large c) A specific thing d) None of these 3] An offer accepted without knowledge does not confer any legal rights on the acceptor, because A) the offer cannot be accepted without its knowledge. B) there is no such legal provision/decision in this regard. c) the offer is completed when it is communicated. d) both a &c. 4] A void contract is one which is A) Enforceable at the option of one party B) Enforceable at the option of both the parties c) Enforceable at the direction of court d) Not enforceable in a court of law. 5] Which of the following is not an invitation to offer? a) Railway time table b) Prospectus issued by a company c) Display of goods in a shop with price chits attached d) None of these

6] Acceptance is to an offer what a lighted match stick to a train of gunpowder, this statement lays emphasis on what points? a) Once the offer is accepted there can be no revocation of the acceptance b) There can be no acceptance after the revocation of the offer c) Both a & b d) None of these. 7] Which of the following is not a legal requirement of a valid acceptance? A) It must be communicated. b) It must be absolute and unconditional. C) It must be accepted by the person who has the authority to accept. d) It must be presumed from silence if not communicated within specified time. 8] Offer +acceptance = agreement a) True b) False c) Not an agreement d) None of the above 9] A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable. The contract is: a) Void b) Voidable C) illegal d) Voidable agreement 10] A, with a view to obtain the assent of b, says to him, will you purchase my car for Rs.10000. This is an a) Offer b) Acceptance c) Invitation to offer d) Revocation of the offer. 11] A owned two horses, one black and other white. He offered to sell one of the horses to b. while making the offer A had black horse in the mind but b accepted the offer, thinking that it was made for the white horse. In this case one of the essential elements of contract is not present what that is a) Free consent b) Consensus ad idem c) Consideration d) Legality of object 12] Unenforceable contracts are those which cannot be enforced in a court of law because of a) Technical defects b) Absence of consideration

c) Absence of legal obligations d) None of the above

13] A applied for shares in June. The allotment was made in late November. A refused to take the shares. He is not bound to accept the allotment made because a) Acceptance was not communicated b) Acceptance was not made within a reasonable time c) Acceptance was conditional d) None of the above 14] Identity of minds means a) Void ab initio b) Consensus ad idem c) animus possidendi d) a prior 15] the terms of offer must be a) ambiguous b) doubtful c) uncertain d) certain 16] Which of the following statements is true? A) An agreement enforceable by law is a contract. b) An agreement is an accepted proposal. c) Both a and b d) None of these. 17] Jus in REM means: (a) A right against or in respect of a thing. (b) A right against or in respect of a person. (c) Both (a) and (b). (d) None of the above. 18] Contracts may be classified on the basis of their validity, formation or performance. Contracts classified on the basis of performance are of the following types: (a) Executed Contracts. (b) Executory Contracts. (c) Partly Executed or Partly Executory Contracts. (d) All of the above.

19] A proposal may be revoked in the following ways: (a) By notice of revocation. (b) By lapse of time. c) By death or insanity. (d) All of the above. 20] THE LAW OF CONTRACT IN INDIA IS CONTAINED IN A] INDIAN CONTRACT ACT, 1862. B] INDIAN CONTRACT ACT, 1872. C] INDIAN CONTRACT ACT, 1962. D] INDIAN CONTRACT ACT, 1972. 21] When the consent of the party is not free, the contract is a) void b) voidable c) valid d) none of these. 22] which of the following is false? An acceptance: a) must be communicated b) must be absolute and unconditional c) must be accepted by the person having authority to accept d) may be presumed from the silence of the offeree. 23] when the offeree offers to a qualified acceptance of the offer subject to modifications and variations he is said to have made a a) standing, open or continuing offer b) counter offer c) cross offers d) special offers. 24] match the following 1. void contract 2. voidable contract 3. illegal contract a) in case of this collateral agreements are void. b) not enforceable in court of law c) an agreement enforceable by law at the option of one or more of the parties there on but not at the option of other or others. 4.valid contract d) enforceable at the option of both the parties

25] A proposes by letter, to sell a house to B at a certain price. A revokes his proposal by telegram. The revocation is complete as against B when____________. (a) A writes the telegram but the same has not been sent to B (b) A dispatches the telegram (c) B receives the telegram (d) B responds to the telegram

26] Tender for supply of goods is an offer, which is allowed to remain open for acceptance over a period of time. Such offers are _______________. (a) Cross Offer (b) General Offer (c) Standing Offer (d) Unlimited Offer 27] Which of the following statement is true? (a) A threat to commit suicide does not amount to coercion. (b) Undue influence involves use of physical pressure. (c) ignorantia juris non excusat. (d) Silence always amounts to fraud.

ANSWERS
SN/UNIT-1/NATURE OF CONTRACTS Question 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Answer b a a d d c d a a a b a b b Question 15 16 17 18 19 20 21 22 23 24 25 26 27 Answer d c a d d b b d b 1-b,2-c,3-a,4-d. c c c