Students should practice Void Agreements – CA Foundation Business Law MCQ Questions with Answers based on the latest syllabus.
Void Agreements – Business Law MCQ Questions with Answers
1. The period of limitation for simple contract in India is __________.
(a) 2 years
(b) 3 years
(c) 6 years
(d) 8 years
Answer:
(b) 3 years
2. A void agreement is __________.
(a) Illegal
(b) Enforceable by law
(c) Not enforceable by law
(d) None of these.
Answer:
(c) Not enforceable by law
3. An agreement in restraint of parental rights is __________.
(a) Void
(b) Valid
(c) Voidable
(d) Defective
Answer:
(a) Void
4. An agreement will be unlawful if:
(a) There is no consent
(b) Consent is not free
(c) There is no consideration
(d) The object is forbidden by law
Answer:
(d) The object is forbidden by law
5. An agreement in restraint of marriage is:
(a) Voidable
(b) Void
(c) Valid
(d) Illegal.
Answer:
(b) Void
6. An agreement in restraint of trade is:
(a) Voidable
(b) Valid
(c) Void
(d) Illegal.
Answer:
(c) Void
7. A wagering agreement is:
(a) Voidable
(b) Void
(c) Valid
(d) Illegal.
Answer:
(b) Void
8. A contract of insurance is a :
(a) Contract of guarantee
(b) Contract of indemnity
(c) Wagering agreement
(d) Contingent contract
Answer:
(d) Contingent contract
9. In a wagering agreement:
(a) Both the parties win
(b) Both the parties loose
(c) None of the parties wins
(d) One party wins and the other looses.
Answer:
(d) One party wins and the other looses.
10. A wagering agreement in India is declared by the Contract Act as __________.
(a) Illegal and void
(b) Void but not illegal
(c) Voidable at the option of the aggrieved party
(d) Immoral
Answer:
(b) Void but not illegal
11. Agreement to do an impossible act has been declared __________.
(a) Void
(b) Voidable
(c) Enforceable
(d) None of these
Answer:
(a) Void
12. An agreement which restricts a person’s freedom 9 to marry or to marry any person of his choice is against public policy and is __________.
(a) Lawful
(b) Illegal
(c) Void
(d) None of these
Answer:
(c) Void
13. An agreement of service under which an employ¬ee agrees that he will serve a particular employer for a certain duration and that he will not serve anybody else during that period, is a __________.
(a) Valid agreement
(b) Void agreement
(c) Illegal agreement
(d) None of these
Answer:
(a) Valid agreement
14. If the contract is impossible in itself physically or legally the agreement is __________.
(a) Void contract
(b) Voidable
(c) Void ab initio
(d) None of these
Answer:
(c) Void ab initio
15. M, who is a dealer in mustard oil only, agrees to sell to N ‘500 litres of oil’. This agreement is __________.
(a) Valid contract
(b) Void contract
(c) Voidable contract
(d) Unenforceable contract
Answer:
(a) Valid contract
16. A and B agree that A shall pay ₹ 1000 for which B shall afterwards deliver to A either rice or smuggled opium. In this case __________.
(a) The first agreement is void and the second voidable
(b) The first is voidable and the second is void
(c) The first is valid and the second is void
(d) The first is void and the second is valid
Answer:
(c) The first is valid and the second is void
17. A promises B to pay ₹ 100 if it rains on Monday, and B promises A to pay ₹ 100 if it does not rain on Monday. This agreement is __________.
(a) a valid agreement
(b) a voidable agreement
(c) a wagering agreement
(d) an illegal agreement
Answer:
(c) a wagering agreement
18. P engages B to kill C and borrows ₹ 100 from D to pay B. If D is aware of the purpose of the loan, the transaction is __________.
(a) Valid
(b) Void
(c) Illegal
(d) Not enforceable
Answer:
(c) Illegal
19. A leaves a firm doing a particular business in Mumbai. He agrees with the other partners of the firm not to start a similar business as that of the firm in and around Mumbai for 3 years. This agreement is __________.
(a) Valid
(b) Immoral
(c) Illegal
(d) Void
Answer:
(a) Valid
20. A, while filling up the insurance application form, states his age as 25 believing it to be true. His actual age was 27. The Life Insurance Corporation issued a policy in his favour charging a lower premium than what it should have charged if the actual age had been given. This is a case of __________.
(a) Fraud
(b) Misrepresentation
(c) Undue influence
(d) Mistake of fact
Answer:
(b) Misrepresentation
21. B, having discovered a vein of ore on the estate of A, adopts means to conceal, and does conceal, the existence of the ore from A. Owing to A’s ignorance B is enabled to buy the estate at a low price. The contract is __________.
(a) Valid
(b) Void
(c) Voidable at the option of A
(d) Invalid
Answer:
(c) Voidable at the option of A
22. B let a cabin on hire to P a prostitute, knowing that it would be used for immoral purposes. The agreement is __________.
(a) Enforceable
(b) Valid
(c) Voidable
(d) Void
Answer:
(d) Void
23. A asks B to beat C, promising to compensate B against the consequences. B beats C and is fined ₹ 100. B can recover from A __________.
(a) ₹ 50
(b) ₹ 100
(c) Nothing
(d) ₹ 100 plus damages
Answer:
(a) ₹ 50
24. A enters into an agreement with B who has robbed A of ₹ 10,000 to drop prosecution against him (B) in consideration of B’s returning ₹ 8,000. Afterwards B refused to pay. A can get from B __________.
(a) ₹ 8,000
(b) ₹ 100
(c) Nothing
(d) ₹ 10,000 plus damages
Answer:
(c) Nothing
25. A agrees with B to discover treasure by magic for a consideration of ₹ 500. This is __________.
(a) A void agreement
(b) A void contract
(c) A valid agreement
(d) An unenforceable contract.
Answer:
(a) A void agreement
26. X, a tailor, employed Y as his assistant under an agreement that Y, on termination of his employ¬ment shall not start the business of a tailor. This restraint is __________.
(a) Void
(b) Valid
(c) Illegal
(d) Voidable
Answer:
(a) Void
27. X promises to marry Y after the death of his wife. This agreement is __________.
(a) Valid
(b) Void
(c) Illegal
(d) Invalid
Answer:
(a) Valid
28. A promises B to drop a prosecution which he has instituted against B for robbery, and B promis¬es to restore the value of the things taken. The agreement is __________.
(a) Valid
(b) Void
(c) Voidable
(d) A contract
Answer:
(b) Void
29. Rajeev entered into a contract with Lata to marry her on a fixed date. However, before the marriage date. Rajeev went mad. With reference to the Indian Contract Act which is the valid response?
(a) Lata can’t marry till Rajeev dies
(b) The executers of Rajeev can enforce the contract against Lata
(c) The contract becomes void
(d) All the statements are correct
Answer:
(c) The contract becomes void
State Whether The Following Are True or False:
- An Agreement to discover treasure by magic is valid.
- An Agreement to refer a future dispute to arbitration is perfectly valid.
- Lotteries authorised by the Government are not to be taken as of wagering nature.
- Wagering agreements do not cover insurance contracts.
- A contract by which two or more persons agree to refer their disputes if any to arbitration shall be illegal.
- Insurance contracts are basically wagering contracts.
- Speculative transactions being wagering transactions are void.
- An agreement which extinguishes personal legal rights of the parties is void.
- An agreement the meaning of which is not certain or capable of being made certain is not void.
- Transactions incidental to wagering agreements are not void.
- An illegal contract is fatal to the main contract, but not to collateral transactions.
Answer:
- False
- True
- True
- True
- False
- False
- False
- True
- False
- True
- False