Nature of Contracts – MCQ on Business Law with Answers

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

Nature of Contracts – Business Law MCQ Questions with Answers

1. Law of contract _______.
(a) Is the whole law of obligations
(b) Is the whole law of agreements
(c) Deals with only such legal obligation which arise from agreement
(d) Deals with social agreements
Answer:
(c) Deals with only such legal obligation which arise from agreement

2. Social agreements are _______.
(a) Enforceable in the courts
(b) Not enforceable in the courts
(c) Subject to legal obligations
(d) Made by social workers.
Answer:
(b) Not enforceable in the courts

3. All contracts _______.
(a) Are agreements
(b) Are not agreements
(c) Do not have legal obligations
(d) Should be in writing
Answer:
(a) Are agreements

Nature of Contracts – MCQ on Business Law with Answers

4. Obligation between parties that form contract _______.
(a) Are all kinds of obligations
(b) Are legal obligation which spring from agreements
(c) Are not voluntary in nature
(d) None of the above
Answer:
(b) Are legal obligation which spring from agreements

5. A contract means an agreement _______.
(a) Which is enforceable by law
(b) Which is not enforceable by law
(c) Which creates social obligation.
(d) Which is in writing.
Answer:
(a) Which is enforceable by law

6. Voidable contract _______.
(a) are enforceable by law if they are not avoided
(b) are not enforceable by law
(c) can be enforced if the court directs
(d) can be enforced with prior permission of Court/ Government
Answer:
(a) are enforceable by law if they are not avoided

7. The terms of agreement _______.
(a) must be certain
(b) must be capable of made certain
(c) unambiguous and clear
(d) all the above.
Answer:
(d) all the above.

8. All illegal agreements _______.
(a) are not void
(b) are not void ab-initio
(c) are void
(d) none of the above
Answer:
(c) are void

9. A void agreement _______.
(a) is illegal
(b) is not void ab-initio
(c) may or may not be illegal
(d) none of the above
Answer:
(c) may or may not be illegal

10. All kinds of obligations between the parties form part of the contract. This statement is _______.
(a) True
(b) False
(c) Partially true
(d) None of the above
Answer:
(b) False

11. A contract is made where:
(a) A buys a book from a shop
(b) X bids at a public auction.
(c) X agrees with Y to discover a treasure by magic.
(d) Z agrees to attend the birthday party of his friend.
Answer:
(a) A buys a book from a shop

12. Right in rem implies:
(a) a right available against the whole world.
(b) a right available against a particular indi-vidual.
(c) a right available against the Government.
(d) none of the above
Answer:
(a) a right available against the whole world.

13. A void contract _______.
(a) is void from the very beginning.
(b) is valid in the beginning but becomes void later on.
(c) is enforceable at the option of one of the contracting parties only.
(d) none of the above.
Answer:
(b) is valid in the beginning but becomes void later on.

Nature of Contracts – MCQ on Business Law with Answers

14. A void agreement is one _______.
(a) which is forbidden by law
(b) enforceable at the option of one of the parties
(c) which is not enforceable by law
(d) enforceable by law
Answer:
(c) which is not enforceable by law

15. An agreement created by words spoken or written is called _______.
(a) express agreement
(b) execute agreement
(c) implied agreement
(d) voidable agreement
Answer:
(a) express agreement

16. Which of the following statements is false _______.
(a) Law of contract is the whole law of obliga-tions
(b) Certain contracts must be in writing
(c) All contracts are agreements
(d) Conditional Contract
Answer:
(a) Law of contract is the whole law of obliga-tions

18. A agree to sell to B a hundred tons of oil. There is nothing whatever to show what kind of oil was intended. The agreement is _______.
(a) Valid
(b) Void for uncertainty
(c) Voidable
(d) Illegal
Answer:
(b) Void for uncertainty

19. A agrees to sell to B my white horse for ₹ 500 or ₹ 1,000. There is nothing to show which of the two prices was to be given. The agreement is _______.
(a) Valid
(b) Void
(c) Voidable
(d) Unenforceable
Answer:
(b) Void

Nature of Contracts – MCQ on Business Law with Answers

State Whether The Following Are True or False:

  1. An agreement and a contract are one and the same thing.
  2. Law of Contract is the whole law of obligations.
  3. Social agreements are enforceable in the Courts.
  4. All contracts should be in writing.
  5. A foreigner is not competent to enter into a contract.
  6. All contracts are not agreements.
  7. The Indian Contract Act, 1872 is a complete code on contracts.
  8. Precedents (Judicial decisions) form an important source of mercantile law.
  9. Voidable contracts are enforceable by law, if they are not avoided.
  10. Mercantile law is applicable to businessman only.
  11. An agreement the meaning of which is not capable of being made certain is void.
  12. An unenforceable contract can be enforced if the technical defect is removed.
  13. A contract is a contract from the time its performance is due and not from the time it is made.
  14. A contract consists in actionable promise or promises.
  15. An agreement with intention to create legal liability is not enforceable in law.
  16. In an executed contract both parties have yet to fulfill their obligations.
  17. All illegal agreements are void but all void agreements are not necessarily illegal.
  18. All void agreements are illegal.
  19. There cannot be a contract to make a contract.
  20. All kinds of obligations between the parties form part of the contract.

Answer:

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

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