Contract Law MCQ & Objective Questions
Understanding Contract Law is crucial for students preparing for various exams in India. It forms the backbone of legal studies and is often a significant part of the curriculum. Practicing MCQs and objective questions on Contract Law not only enhances your knowledge but also boosts your confidence, helping you score better in exams. Engaging with practice questions allows you to identify important concepts and clarify your understanding of this essential subject.
What You Will Practise Here
Fundamentals of Contract Law: Definitions and key principles
Types of Contracts: Bilateral, unilateral, express, and implied contracts
Essential Elements of a Contract: Offer, acceptance, consideration, and capacity
Void and Voidable Contracts: Differences and implications
Performance and Breach of Contract: Rights and remedies
Contract Law in Real Life: Case studies and practical applications
Important Contract Law Questions for Exams: MCQs with detailed explanations
Exam Relevance
Contract Law is a vital topic in various educational boards, including CBSE and State Boards, as well as competitive exams like NEET and JEE. Students can expect questions that test their understanding of key concepts, definitions, and applications of Contract Law. Common question patterns include scenario-based questions, true or false statements, and direct MCQs that assess the grasp of fundamental principles.
Common Mistakes Students Make
Confusing between void and voidable contracts, leading to incorrect answers.
Overlooking essential elements of a contract, which can affect the understanding of case scenarios.
Misinterpreting terms like offer and acceptance, resulting in errors in MCQs.
Neglecting the importance of consideration in contract formation.
FAQs
Question: What are the essential elements of a valid contract?Answer: The essential elements include offer, acceptance, consideration, capacity, and lawful object.
Question: How can I prepare effectively for Contract Law MCQs?Answer: Regular practice of objective questions and understanding key concepts will enhance your preparation.
Start solving Contract Law MCQs today to test your understanding and improve your exam readiness. The more you practice, the better you will perform in your exams!
Q. In the case of Hyde v. Wrench, what was the significance of the counter-offer?
A.
It created a new contract
B.
It rejected the original offer
C.
It was a mere inquiry
D.
It was accepted by the original offeror
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Solution
The counter-offer rejected the original offer, meaning that the original offer could no longer be accepted.
Correct Answer:
B
— It rejected the original offer
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Q. In the case of Jacob & Youngs v. Kent, what was the primary issue regarding breach of contract?
A.
Quality of materials used
B.
Timeliness of performance
C.
Payment terms
D.
Capacity to contract
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Solution
The primary issue was the quality of materials used, as the builder used a different brand of pipe than specified.
Correct Answer:
A
— Quality of materials used
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Q. In the case of Kearney v. Salomon, what was the primary issue regarding the breach?
A.
Failure to perform on time
B.
Failure to perform to specifications
C.
Failure to provide notice of breach
D.
Failure to pay damages
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Solution
The primary issue was the failure to perform to specifications as outlined in the contract.
Correct Answer:
B
— Failure to perform to specifications
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Q. In the case of Poussard v Spiers and Pond, what was the outcome regarding breach of contract?
A.
The breach was minor
B.
The breach was anticipatory
C.
The breach was fundamental
D.
There was no breach
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Solution
The breach was fundamental as the performer failed to show up for the opening night, which was essential to the contract.
Correct Answer:
C
— The breach was fundamental
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Q. In the case of Raffles v. Wichelhaus, what was the main reason for the court's decision?
A.
Lack of consideration
B.
Mutual mistake
C.
Unconscionability
D.
Impossibility of performance
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Solution
The court found that there was a mutual mistake regarding the identity of the ship, leading to no binding contract.
Correct Answer:
B
— Mutual mistake
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Q. In the case of Routledge v Grant, what was the significance of the time frame in the offer?
A.
Offers can be revoked at any time
B.
Offers are binding once made
C.
Offers must remain open for a specified time
D.
Offers can only be revoked after acceptance
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Solution
The significance was that offers can be revoked at any time before acceptance, even if a time frame is mentioned.
Correct Answer:
A
— Offers can be revoked at any time
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Q. In the case of Sullivan v. O'Connor, what type of damages were the plaintiffs awarded?
A.
Punitive damages
B.
Consequential damages
C.
Compensatory damages
D.
Nominal damages
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Solution
The plaintiffs were awarded compensatory damages for the pain and suffering caused by the botched surgery.
Correct Answer:
C
— Compensatory damages
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Q. In the case of Thomas v Thomas, what was the court's view on consideration?
A.
Consideration must be monetary
B.
Consideration must be sufficient but need not be adequate
C.
Consideration must be adequate
D.
Consideration is not necessary
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Solution
The court held that consideration must be sufficient but need not be adequate, meaning it must have some value.
Correct Answer:
B
— Consideration must be sufficient but need not be adequate
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Q. In the context of property transfer, what is 'performance'?
A.
The act of fulfilling contractual obligations
B.
The act of breaching a contract
C.
The act of negotiating terms
D.
The act of drafting a contract
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Solution
Performance refers to the act of fulfilling the obligations set out in a contract.
Correct Answer:
A
— The act of fulfilling contractual obligations
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Q. In the context of tort law, what is negligence?
A.
A breach of a legal duty.
B.
An intentional act.
C.
A strict liability offense.
D.
A criminal act.
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Solution
Negligence is defined as a breach of a legal duty that results in harm to another party.
Correct Answer:
A
— A breach of a legal duty.
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Q. In the event of a breach, what is the duty of the non-breaching party?
A.
To mitigate damages
B.
To ignore the breach
C.
To terminate the contract immediately
D.
To seek punitive damages
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Solution
The non-breaching party has a duty to mitigate damages, meaning they must take reasonable steps to reduce their losses.
Correct Answer:
A
— To mitigate damages
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Q. In which situation might a court order specific performance as a remedy?
A.
When the contract is for the sale of goods
B.
When the subject matter of the contract is unique
C.
When the parties agree to it
D.
When the breach is minor
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Solution
A court might order specific performance when the subject matter of the contract is unique, such as in real estate transactions.
Correct Answer:
B
— When the subject matter of the contract is unique
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Q. Incorporation of a company provides which of the following benefits?
A.
Limited liability for shareholders
B.
Unlimited liability for directors
C.
Tax exemptions for all income
D.
No regulatory requirements
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Solution
Incorporation provides limited liability for shareholders, protecting their personal assets from the company's debts.
Correct Answer:
A
— Limited liability for shareholders
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Q. Under the Transfer of Property Act, what is required for a valid contract concerning the sale of property?
A.
Written agreement
B.
Registration of the contract
C.
Payment of consideration
D.
All of the above
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Solution
A valid contract for the sale of property requires a written agreement, registration, and payment of consideration.
Correct Answer:
D
— All of the above
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Q. What constitutes a breach of contract?
A.
Failure to perform as specified in the contract
B.
Negotiating a better deal
C.
Changing the terms of the contract unilaterally
D.
All of the above
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Solution
A breach of contract occurs when a party fails to perform as specified in the contract.
Correct Answer:
A
— Failure to perform as specified in the contract
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Q. What constitutes consideration in a contract under the Transfer of Property Act?
A.
A promise to do something
B.
A promise to refrain from doing something
C.
A benefit to one party or a detriment to another
D.
All of the above
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Solution
Consideration can be a promise to do something, a promise to refrain from doing something, or a benefit/detriment to the parties involved.
Correct Answer:
D
— All of the above
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Q. What does 'performance' refer to in contract law?
A.
The act of fulfilling contractual obligations.
B.
The negotiation process.
C.
The drafting of the contract.
D.
The signing of the contract.
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Solution
Performance refers to the act of fulfilling the obligations set forth in a contract.
Correct Answer:
A
— The act of fulfilling contractual obligations.
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Q. What does 'specific performance' mean in the context of contract law?
A.
Monetary compensation for damages
B.
A court order to fulfill the contract
C.
Cancellation of the contract
D.
Modification of the contract terms
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Solution
Specific performance is a court order requiring a party to fulfill their contractual obligations.
Correct Answer:
B
— A court order to fulfill the contract
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Q. What happens if a contract is breached?
A.
The contract is automatically void
B.
The breaching party must pay damages
C.
The contract remains valid
D.
The non-breaching party must continue performance
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Solution
If a contract is breached, the breaching party is typically liable for damages.
Correct Answer:
B
— The breaching party must pay damages
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Q. What happens if an offer is revoked before acceptance?
A.
The offer is still valid
B.
The offeree can still accept
C.
The offer is void
D.
The offer can be accepted later
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Solution
If an offer is revoked before acceptance, it becomes void and cannot be accepted.
Correct Answer:
C
— The offer is void
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Q. What happens if one party breaches a contract?
A.
The contract is automatically void.
B.
The non-breaching party can seek remedies.
C.
Both parties must renegotiate the contract.
D.
The breaching party is always liable for damages.
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Solution
If one party breaches a contract, the non-breaching party can seek remedies for the breach.
Correct Answer:
B
— The non-breaching party can seek remedies.
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Q. What is 'capacity' in contract law?
A.
The ability to perform the terms of the contract.
B.
The legal ability to enter into a contract.
C.
The financial ability to fulfill the contract.
D.
The willingness to negotiate terms.
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Solution
Capacity refers to the legal ability of a party to enter into a contract.
Correct Answer:
B
— The legal ability to enter into a contract.
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Q. What is 'specific performance' in contract law?
A.
A type of damages awarded for breach
B.
A court order to fulfill the terms of the contract
C.
A negotiation tactic
D.
A method of contract termination
Show solution
Solution
Specific performance is a legal remedy where the court orders the breaching party to perform their contractual obligations.
Correct Answer:
B
— A court order to fulfill the terms of the contract
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Q. What is a breach of contract?
A.
Failure to perform any term of a contract
B.
Performing a contract partially
C.
Performing a contract late
D.
All of the above
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Solution
A breach of contract can occur through failure to perform, partial performance, or late performance.
Correct Answer:
D
— All of the above
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Q. What is a common remedy for breach of a marriage contract?
A.
Monetary damages
B.
Specific performance
C.
Annulment of the marriage
D.
Injunction against future actions
Show solution
Solution
Annulment of the marriage is a common remedy for breach of a marriage contract, as it voids the marriage as if it never occurred.
Correct Answer:
C
— Annulment of the marriage
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Q. What is an anticipatory breach?
A.
A breach that occurs after the contract is signed
B.
A party's indication that they will not perform their obligations
C.
A minor failure to perform
D.
A breach that is resolved before it occurs
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Solution
An anticipatory breach occurs when one party indicates they will not perform their contractual obligations.
Correct Answer:
B
— A party's indication that they will not perform their obligations
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Q. What is an example of a unilateral contract?
A.
A contract for the sale of goods.
B.
A reward contract for finding a lost pet.
C.
A lease agreement.
D.
A partnership agreement.
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Solution
A unilateral contract is one where one party makes a promise in exchange for an act, such as a reward for finding a lost pet.
Correct Answer:
B
— A reward contract for finding a lost pet.
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Q. What is consideration in contract law?
A.
A mutual agreement between parties.
B.
Something of value exchanged between parties.
C.
The legal capacity to enter a contract.
D.
The intention to create legal relations.
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Solution
Consideration refers to something of value exchanged between parties in a contract.
Correct Answer:
B
— Something of value exchanged between parties.
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Q. What is consideration in the context of contract formation?
A.
A formal agreement between parties
B.
Something of value exchanged between parties
C.
The intention to enter into a contract
D.
The legal capacity of the parties
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Solution
Consideration refers to something of value exchanged between parties, which is essential for a contract to be enforceable.
Correct Answer:
B
— Something of value exchanged between parties
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Q. What is required for a contract to be considered performed?
A.
Both parties must agree to the terms
B.
All parties must fulfill their obligations
C.
Only one party must fulfill their obligations
D.
The contract must be in writing
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Solution
A contract is considered performed when all parties fulfill their obligations as outlined in the agreement.
Correct Answer:
B
— All parties must fulfill their obligations
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