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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.

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Nature of contracts Interview Questions & Answers - Learning Mode
Try Nature of contracts Interview Questions & Answers - Exam Mode
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: 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: 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


Answer: (b) Cannot sue upon it
Description: Where a contract is good in substance but because of some technical defect i.e. absence in writing, barred by limitation etc. one or both the parties cannot sue upon it, it is described as unenforceable contract. Source: CoolInterview.com
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: 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: 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 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: ______________ 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: 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


Answer: (a) Rejected
Description: Whhen the offeree offers to qualified acceptance of the offer subject to modification and variations in the terms of original offer, he is said to have made a counter offer. It amounts rejection of the original offer. 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: 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: 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: 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: 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: a voidable contract is one which is ______________.
(a) Not enforceable by either of the parties thereto
(b) Enforceable by either of the parties thereto
(c) Enforceable only with the permission of the court
(d) Enforceable at the option of one of the parties thereto


Answer: (d) Enforceable at the option of one of the parties thereto
Description: As per Section 2(i), voidable contract, "is an agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others." 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: 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


Answer: (c) Standing Offer
Description: Standing, open or continuing offer is an offer allowed to remain open for acceptance over a period of time. Tender for supply of goods is a kind of standing offer. 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: Is the statement true or false:
"All contracts are agreements but all agreements are not contract"
(a) True
(b) False
(c) Partly true
(d) Can't say


Answer: (a) True
Description: As per Section 2(e) of the Indian Contract Act,1872, an agreement is defined as:- "every promise and every set of promise, forming the consideration for each other." Section 2(h) of the Indian Contract Act defines the term contract as "an agreement enforceable by law." in other words,
OFFER+ PROPOSAL= PROMISE
PROMISE+ CONSIDERATION= AGREEMENT
AGREEMENT+ ENFORCEABILITY BY LAW= CONTRACT
Therefore, all contracts before resulting into a contract are agree Source: CoolInterview.com

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Latest 20 Questions
Payment of time- barred debt is: (a) Valid (b) Void (c) Illegal (d) Voidable
Consideration is defined in the Indian Contract Act,1872 in: (a) Section 2(f) (b) Section 2(e) (c) Section 2(g) (d) Section 2(d)
Which of the following is not an exception to the rule, "No consideration, No contract": (a) Natural love and affection (b) Compensation for involuntary services (c) Completed gift (d) Agency
Consideration must move at the desire of: (a) The promisor (b) The promisee (c) The promisor or any other party (d) Both the promisor and the promisee
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
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