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Nature of contracts Interview Questions & Answers - Learning Mode
COOLINTERVIEW.COM MERCANTILE LAW INTERVIEW QUESTIONS NATURE OF CONTRACTS INTERVIEW QUESTIONS QUESTIONS & ANSWERS - LEARNING MODE

Nature of contracts Interview Questions & Answers - Learning Mode

A contract which ceases to be enforceable by law becomes void when it cases to be enforceable. A voidable contract is a contract which a enforceable at the option of one party but not at the option of other party. Nature: A void contract was valid when it was made. The purpose of a contract is to establish the agreement that the parties have made and to fix their rights and duties in accordance with that agreement. The courts must enforce a valid contract as it is made, unless there are grounds that bar its enforcement.

Try Nature of contracts Interview Questions & Answers - Exam Mode

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Nature of contracts Interview Questions & Answers - Learning Mode
Try Nature of contracts Interview Questions & Answers - Exam Mode
Question: Goods displayed in a shop window with a price label will amount to: a) Offer b) Acceptance of Offer c) Invitation to offer d) Counter offer

Answer: (c) Invitation to offer
Description: Goods displayed of a shop window with a price label will amount invitation to offer since the shopkeeper making an invitation invites others to make an offer to him. It is prelude to an offer inviting negotiations or preliminary discussions.
Source: CoolInterview.com
Question: Legal obligation means a duty enforceable by:
(a) Law
(b) Society
(c) Custom
(d) none of the above


Answer: (a) Law
Description: To create a valid contract, the parties should have the intention to create a legal obligation between them which must not be only moral but also legal i.e. a duty enforceable by law. Source: CoolInterview.com
Question: If entire specified goods is perished before entering into contract of sale, the contract is
(a) Valid
(b) Void
(c) Voidable
(d) Cancelled


Answer: (b) Void
Description: If entire specified goods is perished before entering into contract of sale, the contract is void. This contarct cannot be enforced by law. Such contract which cannot be enforced becomes void. Source: CoolInterview.com
Question: An agreement enforceable by law is:
(a) Obligation
(b) Promise
(c) Proposal
(d) Contract


Answer: (d) Contarct
Description: As per Section 2(h) of the Indian Contract Act, 1872 the term contract is defined as:"an agreement enforceable by law." Source: CoolInterview.com
Question: ______________ contracts are also caled contracts with executed consideration.
(a) Unilateral
(b) Completed
(c) Bilateral
(d) Executory


Answer: (b) Completed
Description: Completed contracts are also called contracts with executed consideration i.e. the consideration for the promise in a contract is given or executed. Source: CoolInterview.com
Question: The Law of Contract extends to _________
(a) Whole of India
(b) Whole of India except the state of Jammu and Kashmir
(c) North India only
(d) South India only


Answer: (b) Whole of India except the state of Jammu and Kashmir
Description: The Law relating to contracts is contained in the Indian Contract Act,1872, the act came into force on the first day of September 1872 and it applies to the whole of India except the state of Jammu and Kashmir. Source: CoolInterview.com
Question: S offered a reward to anyone who returns his lost dog. F bought the dog to S withouh having heard the offer. Which of the following is correct?
(a) F is entitled to the reward
(b) F is not entitled to the reward
(c) S has to find the dog himself
(d) No reward can be given for the return of lost dog


Answer: (b) F is not entitled to the reward.
Description: An offer must be communicated to the person to whom it is made. One can accept the offer only when he knows about it thus an offer accepted without its knowledge does not confer any legal right on the acceptor. Hence in this case it was held that F was not entitled to the reward because F cannot be said to have accepted the offer which he did not know. Source: CoolInterview.com
Question: A promise is a:
(a) Consideration
(b) Contract
(c) An accepted proposal
(d) Proposal


Answer: (c) An accepted proposal
Description: According to Section 2(b) of the Indian Contract Act, 1872, "When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. Proposal when accepted becomes a promise." In other words, when an offer is accepted it becomes a promise. Therefore, promise is an accepted proposal. Source: CoolInterview.com
Question: A sells some smuggled goods at Rs. 100. The contract is void on the ground:
(a) Illegality
(b) Opposed to public policy
(c) Fraudulent
(d) None of the above


Answer: (a) Illegality
Description: Illegal contracts are contract which the law forbids to be made e.g. selling smuggled goods. All illegal contracts are void. The court will not enforce such a contract. Hence, when A sells smuggled goods at Rs. 100 it is void on the ground of being illegal. Source: CoolInterview.com
Question: Specific offer can be communicated to__________
(a) All the parties of contract
(b) General public in universe
(c) Specific person
(d) None of the above


Answer: (c) Specific person
Description: When an offer is made to a definite person, it is known as specific offer and such an offer can be accepted only by that specified person. Source: CoolInterview.com
Question: Which of the following promises is enforceable? a) X promises to pay Rs.5,000/- to Y who saved him from drowning b) X promises to pay Rs. 5,000/- to his son c) X promises to denote Rs 5,000/- to an officer's club d) X promises to pay Rs 5,000/- as additional fees to his advocate for winning a suit

Answer: (a) X promises to pay Rs.5,000/- to Y who saved him from drowning
Description: The promise by X to pay Y who saved him from drowning is enforceable as there is completion of "quid pro quo" i.e. something in return of. In this case X's life was saved hence he is held liable to pay the amount to Y.
Source: CoolInterview.com
Question: In case of illegal agreements, the collateral agreements are: a) valid b) Voidable c) Void d) None

Answer: (c) Void
Description: An illegal agreement is one the object of which is unlawful. Such an agreement cannot be enforced by law. In case of illegal agreemnets even
the collateral agreements become void. Source: CoolInterview.com
Question: An Executed Consideration is:
(a) An act of mutual exchange of promises
(b) An act done in the expectation of a proposal
(c) An act done in response to a positive promise
(d) All of the above


Answer: (c) An act done in response to a positive promise
Description: A consideration which consists of the performnance, it is "executed" i.e. an act done in response to a positive promise. Where it consists only of a promise it is executory. For example where A pays Rs. 5,000 to B to deliver certain quantity of rice, to which B agrees, here consideration for B is executed by 'A' as he has already paid Rs 5,000 where as B's promise is executory as he is yet to deliver the rice. Source: CoolInterview.com
Question: A specific offer can be accepted by ___________.
(a) Any person
(b) Any friend to offeror
(c) The person to whom it is made
(d) Any friend of offeree


Answer: (c) The person to whom it is made
Description: When offer is made to a definite person, it is known as specific offer and such offer can be accepted by that specified persons only. Source: CoolInterview.com
Question: When an offer is made to the world at large, it is ____________ offer.
(a) Counter
(b) Special
(c) General
(d) None of the above


Answer: (c) General
Description: An offer made to the public in general can be accepted by anyone to do the desired act is known as General Offe. Section 8 of the Indian Contract Act points out that performance of the conditions of a proposal is an acceptance of the proposal. Source: CoolInterview.com
Question: _________ amounts to rejection of the original offer.
(a) Cross offer
(b) Special offer
(c) Standing offer
(d) Counter offer


Answer: (d) Counter offer
Description: When the offeree offers to qualified acceptance of the offer subject to modifications and variations in the terms of original offer, he is said to have made a counter offer. Counter offer amounts to rejection of the original offer. Thus option (d) is the correct answer. Source: CoolInterview.com
Question: H, a coolie in uniform at the railway station carried the luggage of Z, a passenger, from the platform to the taxi stand without being asked by Z to do so and Z did not attempt to stop him from carrying the luggage. In this case, Z _______ to make payment to H:
(a) Is bound
(b) Is not bound
(c) Is free
(d) None of the above


Answer: (a) Is bound
Description: Since the coolie is in uniform, therefore it is clear that he is performing a service by carrying the luggage of the passenger from the platform to the taxi stand. Although, Z has not asked the coolie to carry his luggage but he also didnot try to stop him. Thus, it is a case of implied acceptance and therefore, he is bound to make a reasonable payment to coolie. Source: CoolInterview.com
Question: An offer is made with an intention to have negotiation from other party. This type of offer is:
(a) Invitation to offer
(b) Valid offer
(c) Voidable
(d) None of the above


Answer: (a) Invitation to offer
Description: Invitation to offer is an attempt to induce offer and precedes a definite offer, example an advertisement given to sell something. Such advertisements are offers to negotiate offers to receive offers. Hence, an offer made with an intention to have negotiation from other party is an invitation to offer. Source: CoolInterview.com
Question: When offer is made to a definite person, it is known as
(a) Special Offer
(b) Counter Offer
(c) Cross Offer
(d) General Offer


Answer: (a) Special Offer
Description: When offer is made to a definite person, it is known as specific offer and such offer can be accepted by that specified person only. Source: CoolInterview.com
Question: For a binding contract both the parties to the contract must:
(a) Agree upon the same thing in the same sense
(b) Put the offers and counter offer
(c) Stipulate their individual offer and consideration
(d) Not agree with each other


Answer: (a) Agree upon the same thing in the same sense
Description: As per Section 13, "two or more parties are said to have consented when they agree upon the same thing in the same sense i.e, consensus - ad- idem". It is an essential element that is required to make a valid contarct. Putting the offers and counter offer results in rejection of the original offer. Source: CoolInterview.com

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Latest 20 Questions
An offer which is open for acceptance over a period of time is: (a) Cross Offer (b) Counter Offer (c) Standing Offer (d) Implied Offer
Specific offer can be communicated to__________ (a) All the parties of contract (b) General public in universe (c) Specific person (d) None of the above
_________ amounts to rejection of the original offer. (a) Cross offer (b) Special offer (c) Standing offer (d) Counter offer
A advertises to sell his old car by advertising in a newspaper. This offer is caleed: (a) General Offer (b) Special Offer (c) Continuing Offer (d) None of the above
In case a counter offer is made, the original offer stands: (a) Rejected (b) Accepted automatically (c) Accepted subject to certain modifications and variations (d) None of the above
In case of unenforceable contract having some technical defect, parties (a) Can sue upon it (b) Cannot sue upon it (c) Should consider it to be illegal (d) None of the above
If entire specified goods is perished before entering into contract of sale, the contract is (a) Valid (b) Void (c) Voidable (d) Cancelled
______________ contracts are also caled contracts with executed consideration. (a) Unilateral (b) Completed (c) Bilateral (d) Executory
A offers B to supply books @ Rs 100 each but B accepts the same with condition of 10% discount. This is a case of (a) Counter Offer (b) Cross Offer (c) Specific Offer (d) General Offer
_____________ is a game of chance. (a) Conditional Contract (b) Contingent Contract (c) Wagering Contract (d) Quasi Contract
There is no binding contract in case of _______ as one's offer cannot be constructed as acceptance (a) Cross Offer (b) Standing Offer (c) Counter Offer (d) Special Offer
An offer is made with an intention to have negotiation from other party. This type of offer is: (a) Invitation to offer (b) Valid offer (c) Voidable (d) None of the above
When an offer is made to the world at large, it is ____________ offer. (a) Counter (b) Special (c) General (d) None of the above
Implied contract even if not in writing or express words is perfectly _______________ if all the conditions are satisfied:- (a) Void (b) Voidable (c) Valid (d) Illegal
A specific offer can be accepted by ___________. (a) Any person (b) Any friend to offeror (c) The person to whom it is made (d) Any friend of offeree
An agreement toput a fire on a person's car is a ______: (a) Legal (b) Voidable (c) Valid (d) Illegal
"Holiday Packages" announced as an advertisement are an example of _________: (a) Offer (b) Counter Offer (c) Invitation to Offer (d) None of the above
A match fixing contract between a player and a broker is a: (a) Valid Contract (b) Unenforceable Contract (c) Void Contract (d) Illegal Contract
When a bookseller sells a book on cash payment then it is called as ___________: (a) Unilateral Contract (b) Bilateral Contract (c) Executed Contract (d) Executory Contract
____________ agreements are created by situation: (a) Written (b) Oral (c) Void (d) Implied
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