Consideration – MCQ on Business Law with Answers

Students should practice Consideration – CA Foundation Business Law MCQ Questions with Answers based on the latest syllabus.

Consideration – Business Law MCQ Questions with Answers

1. If there is no consideration, then _________.
(a) The agreement is void
(b) The agreement is valid
(c) The agreement is illegal
(d) The agreement is voidable
Answer:
(a) The agreement is void

2. A valid consideration has the following essential elements :
(a) It must move at the desire of the promisor
(b) Consideration may be supplied by the promisee or any other person
(c) Consideration may be past, present or future
(d) All the above
Answer:
(d) All the above

3. The latin term “quidpro quo” refers to :
(a) Something in return
(b) Stranger to consideration
(c) Something sensible
(d) Something valuable
Answer:
(a) Something in return

4. A promise to pay a time-barred debt must be :
(a) Oral
(b) Written and signed
(c) Registered
(d) Written and registered
Answer:
(b) Written and signed

5. A stranger to a consideration _________.
(a) Can file a suit
(b) Cannot file a suit
(c) Can file, only with consent of court
(d) Is similar to stranger to a contract
Answer:
(a) Can file a suit

Consideration – MCQ on Business Law with Answers

6. A stranger to a contract _________.
(a) Can file a suit
(b) Can file a suit only with permission of court
(c) Can file a suit, if contract is in writing
(d) Cannot file a suit
Answer:
(d) Cannot file a suit

7. An agreement not supported by consideration is called:
(a) Consensus ad idem
(b) Ignoratia juris non execuset
(c) Ab initio
(d) Nudum Pactum
Answer:
(d) Nudum Pactum

8. Past consideration means _________.
(a) Money received in the past without making even a proposal
(b) The price which is more than the promisee’s expectation
(c) A past act done before the promise is made
(d) None of the above
Answer:
(c) A past act done before the promise is made

9. In India, a person who is stranger to the consideration _________.
(a) Can sue on the contract, if he is a party
(b) Cannot sue the contract
(c) Depends on the parties
(d) Depends on the circumstances
Answer:
(a) Can sue on the contract, if he is a party

10. A promise to pay a time barred debt is enforceable, if some conditions are fulfilled. Which of the following conditions is not required?
(a) It must be signed by the promisor
(b) It must be definite and express
(c) It must be in writing
(d) It must be registered
Answer:
(d) It must be registered

11. X promised Y, a priest, to pay ₹ 10,000 as char-ity. The priest on X’s promise incurred certain liabilities towards the repairing of the temple to the extent of ₹ 7,500. Y, the priest, can recover from X _________.
(a) ₹ 10,000
(b) ₹ 7,500
(c) Nothing
(d) ₹ 7,500 plus damages
Answer:
(b) ₹ 7,500

Consideration – MCQ on Business Law with Answers

State Whether The Following Are True or False:

  1. Inadequacy of consideration does not affect the validity of a contract.
  2. A stranger to the contract can enforce the contract.
  3. Consideration need not be material and may even be abstract.
  4. Consideration must move simultaneously with promise.
  5. A stranger to the consideration can enforce the contract.
  6. Forbearance to sue or compromising disputed claim is no good consideration.
  7. Consideration is essential for the validity of a contract in all cases.
  8. Adequacy of consideration is essential for validity of a contract.
  9. No consideration is required to create agency.
  10. Past consideration is no consideration
  11. According to the doctrine of “Privity of contract”, a stranger to a contract, if he is beneficiary cannot enforce the contract.
  12. Inadequacy of consideration cannot be taken into account by the court in determining whether the consent was given freely.
  13. The manufacture of goods can enforce conditions imposed upon the dealer against the sub-dealer.
  14. In the Indian Law, consideration must move from the promisee only.
  15. In discharge of the whole claim, a party to the contract agrees to accept a lesser amount than due, from the other party is a valid contract inspite of inadequate consideration.
  16. Consideration may move even from a person who is not a party to the contract.
  17. A promise to pay a time barred debt is not enforceable.

Answer:

  1. False
  2. False
  3. True
  4. False
  5. True
  6. False
  7. False
  8. False
  9. True
  10. False
  11. False
  12. False
  13. False
  14. False
  15. True
  16. True
  17. False

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