Legal Reasoning Practice Paper on Contracts
Legal Reasoning Practice Paper on Contracts
Question: Indentify the correct option in the following questions of Law of Contract using ordinary prudence
The doctrine of privity of contract means:
A contract without consideration
An unlawful agreement
A stranger to a contract cannot sue
A stranger to contract can sue
Ans. d
Rationale: privity of contract means privacy between the parties to contract thus a stranger to contract can sue.
The law of contract is the law regulating agreements which create obligations. The statement is
True
False
Partly correct
None of the above
Ans. a
Rationale: contract creates obligations in between the parties to contract i.e. they become legally bound to perform their part of liability.
An offer which is allowed to remain open for acceptance over a period of time is known as
Implied offer
Express offer
Specific offer
Standing offer
Ans. d
Rationale: an offer which can be accepted over a period of time is known as standing offer
A bid at an auction sale is
An implied offer to buy
An express offer to buy
An invitation to offer to buy
An invitation to come to bid
Ans. a
Rationale: a bid in the auction sale is an implied offer to buy tendered by the prospective customer
A dress is displayed in the showroom of a shop with a price tag attached to it. A buyer interested in the dress and ready to pay the price mentioned in the tag approached the shopkeeper for purchasing the dress. Which one of the following is correct?
The shopkeeper can refuse to sell the dress
The shopkeeper cannot refuse to sell the dress as the buyer has accepted the offer
In case of refusal, the shopkeeper will be liable for breach of contract
The shopkeeper cannot refuse to sell the dress but may charge higher price
Ans. a
Rationale: display of dress in the showroom is an invitation to offer and not an offer from the buyer. Thus in this case the customer takes offer to the shopkeeper for buying the dress and the shopkeeper has the autonomy to reject it.
A tender is
Offer
Promise
Only a quotation of prices
Agreement
Ans. c
Rationale: a tender is the quotation of prices i.e. an invitation of offer.
An offer of performance is called
Proposal
Contract
Tender
Acceptance
Ans. c
Rationale: offer of performance means invitation of offer and tender is the same.
Which of the following is an invitation to offer?
A catalogue
Bids
Request for loan
All the above
Ans. a
Rationale: catalogue is an invitation to offer i.e. it is a document which invites the customers to bring offers to the seller
A wanted to purchase B’s old car which he wanted to dispose of and therefore sent a telegram to B asking him the lowest price of the car which he would accept. B telegraphed back that he would accept Rs. 55000. On A’s agreeing to but at the price, B refused to sell. In this case
B is liable of breach of contract, as his offer to sell the car was accepted by A
B is not liable of breach of contract
B is not guilty of breach of contract as his telegram stating the price of the car was no more than an invitation to proposal
B is liable for damages
Ans. c
Rationale: when B sent the reply to telegram he only mentioned the price he is willing to accept. It is only an invitation to offer.
Which one of the following falls into the category of offer?
Newspaper advertisement regarding a sale
Display of goods by a shopkeeper in his window with prices marked on them
An advertisement for a concert
Announcement of reward to the public
Ans. d
Rationale: only option d is the valid offer rest are invitations to offer
A consideration is
Doing or abstaining from doing something at the desire of the promisor
A reason for making a proposal
Regard for the condition of other party
None of these
Ans. a
Rationale: According to Section 2(d), Consideration is defined as: "When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or abstain from doing something, such act or abstinence or promise is called consideration for the promise".
Consideration must move at the desire of
The promise
The promisor
Promisor or any third party
Both the promisor and the promisee
Ans. b
Rationale: According to Section 2(d), Consideration is defined as: "When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or abstain from doing something, such act or abstinence or promise is called consideration for the promise".
In India, a person who is stranger to the consideration
Can sue for breach of contract
Cannot sue for breach of contract
Depends on the conditions
None of the above
Ans. a
Rationale: in Indian Contract Act it is not necessary that consideration should flow from parties to contract. The person who has not given consideration still can sue for breach of contract if he is the party or beneficiary to it.
Past consideration means
The price received in the past without making even a proposal of any sort
The price which is more than the promisor expected
The price or service rendered at the desire or request of the promisor in the past followed by a subsequent promise
None of these
Ans. c
Rationale: past consideration is the benefit that you get as a result of making the contract. In other words, each person who signed the contract promised to do something.
A consideration may be
Only in the future
Only in the present
Only in the past
All the above
Ans. d
Rationale: in Indian Contract Act consideration can be past, present or future.
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First published on July 4, 2020.Â