CLAT Contract Law 3

Question 1

A contract entered into under coercion is:

Accepted Answer

Voidable at the option of the party whose consent was coerced

Answer

Void ab initio

Answer

Valid and binding on both parties

Answer

Unenforceable but not voidable

Question 2

The doctrine of 'privity of contract' means:

Accepted Answer

Only parties to a contract can sue or be sued under it

Answer

A contract must be kept confidential between the parties

Answer

All terms of a contract must be expressly stated

Answer

A contract cannot be assigned to a third party

Question 3

Which of the following is an example of 'quantum meruit'?

Accepted Answer

Payment for services actually rendered when a contract is subsequently found void

Answer

Full payment under a completed valid contract

Answer

Refusal to pay because performance was defective

Answer

Liquidated damages specified in the contract clause

Question 4

Under the Indian Contract Act, which of the following constitutes 'fraud' under Section 17?

Accepted Answer

A suggestion of fact known to be false made by a party to deceive the other

Answer

An innocent misstatement of a material fact

Answer

A mistake by both parties about the subject matter

Answer

Non-disclosure of immaterial facts

Question 5

In the case of 'Carlill v. Carbolic Smoke Ball Co.' (1893), the court held that:

Accepted Answer

A general advertisement can constitute a valid offer if sufficiently definite and intended as such

Answer

Advertisements are always merely invitations to treat

Answer

A unilateral contract cannot be formed by performance

Answer

Consideration must always be monetary to be valid

Question 6

When can a contract be specifically enforced under Indian law?

Accepted Answer

When monetary compensation is not an adequate remedy for its breach

Answer

In all cases of breach as a matter of right

Answer

Only when both parties agree to specific performance

Answer

Only in contracts involving movable goods

Question 7

Under Section 68 of the Indian Contract Act, necessaries supplied to a person incapable of contracting entitle the supplier to:

Accepted Answer

Reimbursement from the incapable person's property

Answer

Payment from the incapable person personally

Answer

No compensation since the contract is void

Answer

Compensation only if the contract was written