1. What is the definition of a contract under Section 2(h) of the Indian Contract Act, 1872?
a) An agreement enforceable by law
b) An agreement made without consideration
c) An agreement made without intention to create legal obligations
d) A contract not in writing
Answer: a) An agreement enforceable by law
2. Which of the following is not a feature of a contract?
a) Offer
b) Acceptance
c) Consideration
d) Intention to harm
Answer: d) Intention to harm
3. A contract is voidable if:
a) It is legally unenforceable
b) It is entered into under coercion
c) There is no offer or acceptance
d) It does not have an agreement
Answer: b) It is entered into under coercion
4. Which of the following can be a valid consideration for a contract?
a) Past consideration
b) Future consideration
c) Present consideration
d) All of the above
Answer: d) All of the above
5. The term ‘Agreement’ under Section 2(e) of the Indian Contract Act refers to:
a) A promise or a set of promises forming the consideration for each other
b) A legally binding document
c) A written contract
d) A contract that can be enforced
Answer: a) A promise or a set of promises forming the consideration for each other
6. Under which of the following circumstances can a minor enter into a contract?
a) A minor can enter into any contract
b) A minor cannot enter into a contract
c) A minor can only enter into contracts for essentials
d) A minor can enter into contracts if the contract is in writing
Answer: c) A minor can only enter into contracts for essentials
7. What is the maximum period of limitation for an action for breach of contract?
a) 2 years
b) 3 years
c) 5 years
d) 10 years
Answer: b) 3 years
8. Which of the following is not a valid contract?
a) Agreement to perform an illegal act
b) Agreement between a minor and an adult for a sale of goods
c) Agreement made by mutual consent
d) Agreement for sale of property
Answer: a) Agreement to perform an illegal act
9. A contract made without consideration is:
a) Void
b) Voidable
c) Enforceable
d) Illegal
Answer: a) Void
10. Which of the following is a type of contract that cannot be discharged by mere performance?
a) Bilateral contract
b) Unilateral contract
c) Executed contract
d) Void contract
Answer: b) Unilateral contract
11. In a contract of sale, the seller is required to deliver goods:
a) Within a reasonable time
b) On the date mentioned in the contract
c) Immediately
d) After a court order
Answer: b) On the date mentioned in the contract
12. If an agreement is not supported by consideration, it is considered:
a) Void
b) Voidable
c) Executed
d) Valid
Answer: a) Void
13. What does “Privity of Contract” mean?
a) Only the parties to a contract can sue or be sued under it
b) A contract can be enforced by anyone
c) A contract is enforceable only if written
d) None of the above
Answer: a) Only the parties to a contract can sue or be sued under it
14. Which of the following is true about a contract made under duress?
a) It is voidable
b) It is valid
c) It is enforceable by law
d) It is illegal
Answer: a) It is voidable
15. The term “Offer” in a contract means:
a) A proposal by one party to another
b) A suggestion for a contract
c) An invitation to make an offer
d) A statement made in good faith
Answer: a) A proposal by one party to another
16. Which of the following is not a ground for the discharge of a contract?
a) Performance
b) Breach
c) Impossibility of performance
d) Increase in consideration
Answer: d) Increase in consideration
17. The ‘Doctrine of Frustration’ applies to:
a) Contracts that are entered into illegally
b) Contracts that become impossible to perform
c) Contracts entered by minors
d) Contracts that are in writing
Answer: b) Contracts that become impossible to perform
18. A contract that is entered into under undue influence is:
a) Voidable
b) Void
c) Enforceable
d) Illegal
Answer: a) Voidable
19. A contract formed without mutual consent is:
a) Valid
b) Voidable
c) Void
d) Illegal
Answer: c) Void
20. What is the essential element of an agreement under Indian Contract Act, 1872?
a) Free consent
b) A written contract
c) A witness to the contract
d) All of the above
Answer: a) Free consent
21. Which of the following is not a type of contract recognized under Indian Contract Act?
a) Executed contract
b) Executory contract
c) Quasi contract
d) No contract
Answer: d) No contract
22. A contract where one party has performed their obligation but the other party has not is called:
a) Executed contract
b) Executory contract
c) Partially executed contract
d) Void contract
Answer: c) Partially executed contract
23. Which of the following can terminate a contract?
a) Lapse of time
b) Death of a party
c) Agreement of both parties
d) All of the above
Answer: d) All of the above
24. Which of the following statements is correct regarding contracts?
a) An agreement can be enforced by law even if it is not supported by consideration
b) A contract requires an agreement and consideration
c) Contracts cannot be discharged under mutual consent
d) A contract is valid if only one party performs
Answer: b) A contract requires an agreement and consideration
25. In the case of a breach of contract, the injured party is entitled to:
a) Nominal damages
b) Actual damages
c) Punitive damages
d) Liquidated damages
Answer: b) Actual damages
Sure! Here are more multiple-choice questions (MCQs) on Contract Law based on the AIBE syllabus.
26. A contract made by a person who is legally incapable of contracting is:
a) Void
b) Voidable
c) Executed
d) Enforceable
Answer: a) Void
27. In case of a contract of sale of goods, the seller must deliver:
a) The goods as per the contract
b) The goods in a new condition
c) The goods only after payment
d) None of the above
Answer: a) The goods as per the contract
28. An agreement made without consideration is:
a) Void
b) Voidable
c) Enforceable by law
d) Illegal
Answer: a) Void
29. A contract made by a person who is of unsound mind is:
a) Voidable
b) Void
c) Valid
d) Enforceable
Answer: b) Void
30. Which of the following is not a valid way of terminating a contract?
a) Mutual agreement
b) Performance
c) Death of a party
d) Expiry of time
Answer: c) Death of a party
31. A contract is said to be executed when:
a) Both parties have performed their obligations
b) One party has performed and the other party has not
c) Neither party has performed
d) The agreement has been made but not yet performed
Answer: a) Both parties have performed their obligations
32. Which of the following is not a defense available in a breach of contract case?
a) Impossibility of performance
b) Lack of consideration
c) Change in market conditions
d) The contract is voidable
Answer: c) Change in market conditions
33. A contract formed by fraud is:
a) Void
b) Voidable
c) Enforceable
d) Illegal
Answer: b) Voidable
34. In which of the following cases a contract can be legally enforced?
a) A contract made under coercion
b) A contract made with a minor
c) A contract with mutual consent
d) A contract made for an illegal purpose
Answer: c) A contract with mutual consent
35. A contract is considered voidable when:
a) It is entered into by a minor
b) The performance of the contract becomes impossible
c) The contract is entered into under undue influence or coercion
d) Both parties do not agree to the contract
Answer: c) The contract is entered into under undue influence or coercion
36. In a contract, when can an agreement be considered legally binding?
a) When made by a minor
b) When made with a person of unsound mind
c) When there is a meeting of minds between the parties
d) When the contract is sealed
Answer: c) When there is a meeting of minds between the parties
37. What is the rule regarding the performance of a contract?
a) A contract must be performed exactly as agreed
b) Performance can be excused if any party violates the terms
c) Performance is not required if one party changes their mind
d) Performance can be postponed indefinitely
Answer: a) A contract must be performed exactly as agreed
38. Which of the following is not an example of express contract?
a) A written agreement to sell a car
b) An oral agreement for a service
c) An agreement implied from the conduct of the parties
d) An email confirmation for purchasing goods
Answer: c) An agreement implied from the conduct of the parties
39. In a contract, when one party fails to perform their obligations, it is known as:
a) Novation
b) Breach
c) Impossibility
d) Discharge
Answer: b) Breach
40. A contract where the performance is left to the discretion of one party is called:
a) Void contract
b) Voidable contract
c) Unilateral contract
d) Bilateral contract
Answer: c) Unilateral contract
41. An agreement between two parties that creates mutual legal obligations is:
a) Contract
b) Promise
c) Proposal
d) Consideration
Answer: a) Contract
42. The primary objective of Consideration in contract law is:
a) To fulfill the parties’ desires
b) To make the agreement legally binding
c) To ensure mutual benefit
d) To validate the contract
Answer: b) To make the agreement legally binding
43. When the terms of a contract are ambiguous, which principle is used to interpret them?
a) Doctrine of frustration
b) Doctrine of consideration
c) Contra proferentem rule
d) Doctrine of equity
Answer: c) Contra proferentem rule
44. Which of the following is not a requirement for a contract to be enforceable by law?
a) Offer
b) Acceptance
c) Intention to create legal relations
d) Writing
Answer: d) Writing
45. An agreement made without free consent is:
a) Void
b) Voidable
c) Executed
d) Executory
Answer: b) Voidable
46. Which of the following contracts is required to be in writing?
a) Contract of sale of goods
b) Contract of insurance
c) Contract to sell land
d) Contract for personal services
Answer: c) Contract to sell land
47. The term “Quasi contract” refers to:
a) A contract without consideration
b) An implied contract
c) A contract that is made under legal compulsion
d) A contract created by law even without an agreement
Answer: d) A contract created by law even without an agreement
48. When a contract becomes legally invalid, it is termed as:
a) Void contract
b) Voidable contract
c) Executed contract
d) Express contract
Answer: a) Void contract
49. A contract entered into with an illegal object is:
a) Void
b) Voidable
c) Enforceable
d) Valid
Answer: a) Void
50. In a contract, the party who makes the promise is called:
a) Promisor
b) Promisee
c) Offeror
d) Offeree
Answer: a) Promisor
51. A contract can be discharged by:
a) Performance
b) Breach
c) Agreement
d) All of the above
Answer: d) All of the above
52. Which of the following is an example of an implied contract?
a) A written agreement for a job
b) A verbal agreement to sell property
c) An agreement implied by a party’s actions
d) A contract entered under duress
Answer: c) An agreement implied by a party’s actions
53. A promise to pay a sum of money in return for a service is an example of:
a) Executed contract
b) Implied contract
c) Express contract
d) Unilateral contract
Answer: c) Express contract
54. The principle of substantial performance applies to which type of contract?
a) Contracts with only monetary obligations
b) Contracts that require complete performance
c) Contracts with conditions precedent
d) Contracts requiring partial performance
Answer: b) Contracts that require complete performance
55. If one party refuses to perform their part of the contract, this is called:
a) Agreement to rescind
b) Breach of contract
c) Performance of contract
d) Performance failure
Answer: b) Breach of contract
56. Capacity to contract is governed by which of the following?
a) Age
b) Mental soundness
c) Free consent
d) All of the above
Answer: d) All of the above
57. Which of the following is an example of a void contract?
a) A contract entered by a minor
b) A contract for the sale of illegal goods
c) A contract for the exchange of promises
d) A contract made with a person of unsound mind
Answer: b) A contract for the sale of illegal goods
58. An agreement made for an unlawful consideration is:
a) Voidable
b) Void
c) Valid
d) Enforceable
Answer: b) Void
59. Privity of contract means:
a) A third party has the right to sue for breach
b) Only parties to the contract can sue or be sued
c) A contract must be in writing
d) The contract is legally enforceable by third parties
Answer: b) Only parties to the contract can sue or be sued
60. A contract in which one party makes a promise in exchange for a future promise is called:
a) Bilateral contract
b) Unilateral contract
c) Executed contract
d) Executory contract
Answer: a) Bilateral contract
61. If a contract is terminated due to an impossibility of performance, it is said to be:
a) Voidable
b) Void
c) Discharged
d) Enforceable
Answer: c) Discharged
62. A conditional contract becomes enforceable only when:
a) A condition precedent is fulfilled
b) A contract is signed
c) A performance is completed
d) Both parties agree
Answer: a) A condition precedent is fulfilled
63. Which of the following is an example of a voidable contract?
a) A contract made under fraud
b) A contract entered into by a minor
c) A contract with an illegal purpose
d) A contract made under undue influence
Answer: d) A contract made under undue influence
64. The doctrine of unconscionable contracts implies:
a) A contract that is voidable due to fraud
b) A contract that is unreasonably one-sided
c) A contract with an illegal subject matter
d) A contract that has mutual consent
Answer: b) A contract that is unreasonably one-sided
65. In a contract, when the terms are clear and unambiguous, they should be:
a) Interpreted as per the intention of the parties
b) Interpreted to favor the party who drafted the contract
c) Interpreted literally
d) Ignored if there is a dispute
Answer: c) Interpreted literally
66. Which of the following would not constitute a valid offer?
a) A proposal made in good faith
b) A proposal made in jest or anger
c) A proposal made with an intention to create legal obligations
d) A proposal made to a specific person
Answer: b) A proposal made in jest or anger
67. In case of a contract of sale of goods, the buyer has the right to:
a) Reject goods even if they are not in conformity with the contract
b) Reject goods only if they are defective
c) Reject goods without any reason
d) Demand a discount on the price
Answer: a) Reject goods even if they are not in conformity with the contract
68. An agreement made without the consent of the other party is:
a) Void
b) Voidable
c) Enforceable
d) Illegal
Answer: b) Voidable
69. A contract is voidable if:
a) It was entered into with mutual consent
b) It is based on an illegal object
c) It involves undue influence or coercion
d) It is made for a lawful consideration
Answer: c) It involves undue influence or coercion
70. A contract that is enforceable by law is called:
a) Valid contract
b) Void contract
c) Voidable contract
d) Illegal contract
Answer: a) Valid contract
71. A contract that involves performing an act without the expectation of compensation is a:
a) Gratuitous contract
b) Bilateral contract
c) Executed contract
d) Void contract
Answer: a) Gratuitous contract
72. A promise made without any consideration is:
a) Void
b) Voidable
c) Valid
d) Executed
Answer: a) Void
73. An agreement made for the sale of goods is subject to:
a) The Indian Contract Act, 1872
b) The Sale of Goods Act, 1930
c) The Specific Relief Act, 1963
d) The Indian Partnership Act, 1932
Answer: b) The Sale of Goods Act, 1930
74. Specific performance is an equitable remedy in a contract case, which means:
a) Payment of damages
b) Forcing a party to fulfill their promise
c) Termination of the contract
d) Cancellation of the contract
Answer: b) Forcing a party to fulfill their promise
75. A contract is discharged by novation when:
a) One party substitutes another party in a contract
b) The terms of the contract are altered
c) The contract becomes impossible to perform
d) The contract is terminated by mutual agreement
Answer: a) One party substitutes another party in a contract
76. A contract that involves illegal consideration is:
a) Voidable
b) Void
c) Executed
d) Executory
Answer: b) Void
77. Which of the following is an example of frustration of contract?
a) One party fails to perform their obligation
b) The subject matter of the contract is destroyed
c) The contract is signed by a minor
d) One party refuses to perform the contract
Answer: b) The subject matter of the contract is destroyed
78. In a contract for goods, delivery is considered to have been made when:
a) The buyer receives the goods at the seller’s premises
b) The goods are delivered to a third party
c) The contract is signed by both parties
d) The goods are handed over to the buyer
Answer: d) The goods are handed over to the buyer
79. Coercion in contract law means:
a) Taking unfair advantage of another party
b) Using threats to induce someone to enter into a contract
c) Offering compensation to the other party
d) Misleading a party into agreement
Answer: b) Using threats to induce someone to enter into a contract
80. Which of the following is a remedy available for breach of contract?
a) Restitution
b) Specific performance
c) Injunction
d) All of the above
Answer: d) All of the above
81. A contract for illegal purpose is:
a) Voidable
b) Void
c) Executory
d) Executed
Answer: b) Void
82. Minor can contract only for:
a) Necessaries
b) Services
c) Goods
d) Real estate
Answer: a) Necessaries
83. In case of anticipatory breach of contract, the aggrieved party can:
a) Wait until the time of performance
b) Immediately sue for damages
c) Discharge the contract
d) Perform their part of the contract
Answer: b) Immediately sue for damages
84. A contract entered into by fraud is:
a) Voidable at the discretion of the party affected
b) Void
c) Enforceable in court
d) Executed
Answer: a) Voidable at the discretion of the party affected
85. A contract that is impossible to perform is:
a) Voidable
b) Void
c) Executed
d) Enforceable
Answer: b) Void
86. A counteroffer is made when:
a) The offer is rejected
b) The offer is accepted with modifications
c) The offer is accepted as is
d) The offer is ignored
Answer: b) The offer is accepted with modifications
87. A contract without consideration is:
a) Valid under all circumstances
b) Voidable
c) Void
d) Enforceable in some cases
Answer: c) Void
88. A contract in which one party promises to perform an act, but there is no corresponding promise from the other party, is:
a) Executed contract
b) Bilateral contract
c) Unilateral contract
d) Void contract
Answer: c) Unilateral contract
89. A contract made by a person who is under the influence of alcohol is:
a) Void
b) Voidable
c) Executed
d) Enforceable
Answer: b) Voidable
90. A contract is formed by an agreement and:
a) Consideration
b) Signature
c) Performance
d) Registration
Answer: a) Consideration
91. Acceptance of an offer must be:
a) Clear and unconditional
b) Conditional
c) In writing
d) Verbal
Answer: a) Clear and unconditional
92. A promise to do something that one is already legally obligated to do is considered:
a) Valid consideration
b) Past consideration
c) Adequate consideration
d) No consideration
Answer: d) No consideration
93. Which of the following is an example of a voidable contract?
a) A contract made under coercion
b) A contract made for illegal goods
c) A contract made with a minor
d) A contract made under a mistake of law
Answer: a) A contract made under coercion
94. A contract of sale of goods must include:
a) Terms of payment
b) Quantity of goods
c) Delivery method
d) All of the above
Answer: d) All of the above
95. In a contract, if the terms are not clear, they should be interpreted:
a) Against the drafter of the contract
b) According to the benefit of one party
c) Based on the reasonable expectations of the parties
d) In favor of the contract
Answer: a) Against the drafter of the contract
96. The principle of “utmost good faith” applies primarily to:
a) Contracts of sale
b) Insurance contracts
c) Contracts for services
d) Contracts of partnership
Answer: b) Insurance contracts
97. The remedy for a breach of a contract where damages are awarded for non-performance is known as:
a) Liquidated damages
b) Punitive damages
c) Compensatory damages
d) Nominal damages
Answer: c) Compensatory damages
98. A contract for service is formed when:
a) An offer is made
b) An agreement is signed
c) There is an exchange of promises
d) Both parties perform the obligations
Answer: c) There is an exchange of promises
99. Which of the following makes an agreement legally unenforceable?
a) Lack of consideration
b) Lack of consent
c) Agreement to do something illegal
d) All of the above
Answer: d) All of the above
100. A contract is executed when:
a) The contract is signed
b) The contract is completely performed by both parties
c) One party has performed their obligation
d) Both parties have given their consent
Answer: b) The contract is completely performed by both parties