Contract Act 1872 MCQS - CSEET

1. Who is known as natural person.

Ans: Natural persons are human beings.

2. Who are artificial person?

Ans: Artificial persons are corporations.

3. Who are called as natural person in Indian Contract Act.

Ans: The general rule is that all natural persons have full capacity to make binding contracts. But the Indian Contract Act, 1872 admits an exception in the case of:

(i) minors,

(ii) lunatics, and

(iii) persons disqualified from contracting by any law to which they are subject.

4. What is mention in section 11 of Indian Contract act.

Ans: Section 11of the Act provides that every “person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject”.

5. Who is called as Lunatic.

Ans: A person of unsound mind is a lunatic.

6. What happen when a person is Lunatic and enter into a contract.

Ans: A person of unsound mind cannot enter into a contract. A lunatic’s agreement is therefore void. But if he makes a contract when he is of sound mind, i.e., during lucid intervals, he will be bound by it.

7. When Consent is not free.

Ans: Consent is not free when it has been caused by coercion, undue influence, misrepresentation, fraud or mistake.

8. what is the basis of a contract.

Ans: The basis of a contract is agreement, i.e., mutual consent.

9. When the parties should mean the something in the same sense and agree voluntarily.

Ans: It is when there is consent, that the parties are said to be consensus ad idem i.e. their minds have met.

10. What happen where there is no consent.

Ans: Where there is no consent, there can be no contract as in the case of mutual mistake.

11. What happen where there is consent.

Ans: Where there is consent, but it is not free, a contract is generally voidable at the option of the party whose consent is not free.

12. What is Fraud as per Indian Contract Act?

Ans: As per Section 7 of the Indian Contract Act, ‘Fraud’ means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract.

13. What are the matters included in the above question.

Ans: — The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;

— The active concealment of a fact by one having knowledge or belief of the fact.

— A promise made without any intention of performing it;

— Any other act fitted to deceive;

— Any such act or omission as the law specially declares to be fraudulent.

14. What do you mean by Fraud.

Ans: Fraud is an untrue statement made knowingly or without belief in its truth or recklessly, carelessly, whether it be true or false with the intent to deceive.

15. What are the chief Ingredients of a fraud. Ans: The chief ingredients of a fraud are:

(i) a false representation or assertion;

(ii) of fact (and not a mere opinion),

(iii) made with the intention that it should be acted upon,

(iv) the representation must have actually induced the other party to enter into the contract and so deceived him,

(v) the party deceived must thereby be indemnified, for there is no fraud without damages, and

(vi) the statement must have been made either with the knowledge that it was false or without belief in its truth or recklessly without caring whether it was true or false.

16. Meaning of Contracts Uberrimae Fidei.

Ans: There are contracts in which the law imposes a special duty to act with utmost good faith i.e., to disclose all material information. Failure to disclose such information will render the contract voidable at the option of other party.

17. Types of Uberrimae Fidei Contracts. Ans: Contracts uberrimaefidei are:

(a) Contract of insurance of all kinds

(b) Company prospectus

(c) Contract for the sale of land

(d) Contracts of family arrangements

18. Coercion is defined under which section .

Ans: Coercion as defined in Section 15.

19. What is Coercion .

Ans: Coercion as defined in Section 15 of the Act means “the committing or threatening to commit any act forbidden by the Indian Penal Code, or unlawful detaining or threatening to detain, any property to the prejudice of any person whatever with the intention of causing any person to enter into an agreement”.

20. What is needed to avoid Coercion.

Ans: There must be a contract made under the threat and that contract should be one sought to be avoided because of coercion.

21. Where can be find Coercion?

Ans: It may be pointed out that coercion may proceed from any person and may be directed against any person, even a stranger and also against goods, e.g., by unlawful detention of goods.

22. Under which section Undue Influence is defined.

Ans: section 16 of the Indian Contract Act.

23. What do you mean by Undue Influence.

Ans: A contract is said to be produced by undue influence “where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other”.

24. What are the elements of Undue Influence. Ans: The elements of undue influence are:

(i) A dominant position, and

(ii) The use of it to obtain an unfair advantage.

25. What do you mean by Unfair Advantage.

Ans: The words “unfair advantage” do not limit the jurisdiction to cases where the transaction would be obviously unfair as between persons dealing on an equal footing.

Legality of Object

26. Under which section Legality of Object is defined.

Ans: Section 10 of the Indian Contract Act, 1872.

27. What do you mean by Legality of Object.

Ans: “All agreements are contracts if they are made by free consent of parties competent to contract for a lawful consideration and with a lawful object...” Therefore, it follows that where the consideration or object for which an agreement is made is unlawful, it is not a contract.