Chapter-3 Law of Contract — Online MCQ Test
LEGAL STUDIES · Grade 12 · CBSE(NCERT)
Practice Chapter-3 Law of Contract with a free chapter-wise online MCQ test.
This chapter covers: contract - offer - acceptance - consideration - free consent - capacity to contract - breach of contract.
AI-generated questions from basic to board-exam level, with instant results and explanations.
Chapter-3 Law of Contract — Important Questions & Answers
What is the definition of a contract according to the Indian Contract Act, 1872?
- A. An agreement between two parties to exchange goods
- B. An agreement enforceable by law
- C. A written document signed by both parties
- D. A verbal promise made between friends
Answer: B. An agreement enforceable by law
A contract is defined as an agreement enforceable by law between two or more parties with the intention to create legal relations.
A contract is defined as an agreement enforceable by law between two or more parties with the intention to create legal relations.
Which of the following is NOT an essential element of a valid contract?
- A. Offer and acceptance
- B. Consideration
- C. Registration with the government
- D. Free consent
Answer: C. Registration with the government
Registration with the government is not an essential element of a valid contract. The essential elements are offer, acceptance, consideration, free consent, and capacity of parties.
Registration with the government is not an essential element of a valid contract. The essential elements are offer, acceptance, consideration, free consent, and capacity of parties.
What is an offer in the context of contract law?
- A. A promise made by one party
- B. An expression of willingness to enter into a contract on specified terms, made so as to show that the person making it is willing to be bound if accepted
- C. A question asked to another person
- D. A suggestion for doing business
Answer: B. An expression of willingness to enter into a contract on specified terms, made so as to show that the person making it is willing to be bound if accepted
An offer is a clear expression of willingness to contract on definite terms, indicating that the offeror will be bound upon acceptance by the offeree.
An offer is a clear expression of willingness to contract on definite terms, indicating that the offeror will be bound upon acceptance by the offeree.
Acceptance is the __________ of an offer by the offeree.
- A. Rejection
- B. Modification
- C. Absolute and unqualified assent
- D. Conditional approval
Answer: C. Absolute and unqualified assent
Acceptance is the absolute and unqualified assent to all the terms of the offer, without any modifications or conditions.
Acceptance is the absolute and unqualified assent to all the terms of the offer, without any modifications or conditions.
Priya offers to sell her car to Arjun for Rs. 5 lakh. Arjun says, 'I will buy it for Rs. 4.5 lakh.' This statement by Arjun is:
- A. An acceptance of the offer
- B. A counter-offer
- C. A rejection of the offer
- D. An invitation to treat
Answer: B. A counter-offer
When the offeree modifies the terms of the original offer, it constitutes a counter-offer, not an acceptance. The counter-offer extinguishes the original offer.
When the offeree modifies the terms of the original offer, it constitutes a counter-offer, not an acceptance. The counter-offer extinguishes the original offer.
Which of the following statements best distinguishes between 'offer' and 'invitation to treat'?
- A. An offer is always in writing, while invitation to treat is verbal
- B. An offer is a definite proposal to contract, while invitation to treat is merely an invitation to make offers
- C. An invitation to treat is binding, while an offer is not
- D. They are the same thing in contract law
Answer: B. An offer is a definite proposal to contract, while invitation to treat is merely an invitation to make offers
An offer is a definite proposal with the intention to be bound upon acceptance, while an invitation to treat (like a shop displaying goods) is merely an invitation for customers to make offers.
An offer is a definite proposal with the intention to be bound upon acceptance, while an invitation to treat (like a shop displaying goods) is merely an invitation for customers to make offers.
Sameer offers to sell his house to Priya for Rs. 50 lakh on a specific date. Before Priya accepts, Sameer dies. The offer:
- A. Remains valid and Priya can still accept
- B. Is automatically terminated by the death of the offeror
- C. Becomes the responsibility of Sameer's legal heirs
- D. Remains valid for one year after his death
Answer: B. Is automatically terminated by the death of the offeror
An offer is terminated by the death or insanity of the offeror. When Sameer died, his offer to Priya was automatically terminated, and she can no longer accept it.
An offer is terminated by the death or insanity of the offeror. When Sameer died, his offer to Priya was automatically terminated, and she can no longer accept it.
Neha promises to pay Rs. 10,000 to Ananya for cleaning her house. After Ananya completes the work, Neha refuses to pay. Ananya's best remedy would be to:
- A. File a complaint with the police for theft
- B. File a civil suit for damages claiming breach of contract
- C. Threaten Neha with violence
- D. Claim the house as compensation
Answer: B. File a civil suit for damages claiming breach of contract
Ananya has performed her part of the contract and Neha has breached it by refusing to pay. Ananya's remedy is to file a civil suit for damages to recover the amount owed under the contract.
Ananya has performed her part of the contract and Neha has breached it by refusing to pay. Ananya's remedy is to file a civil suit for damages to recover the amount owed under the contract.
Vikram agrees to sell his car to Deepak. The agreement states the price as Rs. 5 lakh, but due to a printing error, the written contract shows Rs. 50 lakh. If Vikram refuses to sign the corrected document, Deepak can:
- A. Enforce the contract for Rs. 50 lakh
- B. Seek rectification of the contract to reflect the true agreement of Rs. 5 lakh
- C. Claim damages from Vikram for fraud
- D. Declare the contract void and claim compensation
Answer: B. Seek rectification of the contract to reflect the true agreement of Rs. 5 lakh
When a written contract contains a clerical error that does not reflect the true agreement of the parties, the court can order rectification to correct the document to match the original intention, provided there is clear evidence of the mutual understanding.
When a written contract contains a clerical error that does not reflect the true agreement of the parties, the court can order rectification to correct the document to match the original intention, provided there is clear evidence of the mutual understanding.
Sneha enters into a contract with a bank to obtain a loan. At the time of signing, she is in a state of intoxication but understands the terms. The contract is:
- A. Absolutely void because she was intoxicated
- B. Valid if she understood the terms, as understanding is key to contractual capacity
- C. Voidable at her option because intoxication affects the mind and she may not have had full capacity
- D. Always enforceable by the bank regardless of her condition
Answer: C. Voidable at her option because intoxication affects the mind and she may not have had full capacity
A person who is intoxicated may lack sound mind, affecting their capacity to contract. Even if they understood the terms, the contract may be voidable at their option as intoxication can impair judgment and render the person incapable of entering into a valid contract.
A person who is intoxicated may lack sound mind, affecting their capacity to contract. Even if they understood the terms, the contract may be voidable at their option as intoxication can impair judgment and render the person incapable of entering into a valid contract.