Multiple Choice Questions:
[Q. 1] Law of contract is —
(a) not the whole law of agreements nor is it the whole law of obligations.
(b) the whole law of agreements.
(c) the whole law of obligations.
(d) None of the above.
Ans: (a) not the whole law of agreements nor is it the whole law of obligations.
[Q.2] A contract creates—
(a) rights in personam. (b) rights in rem.
(c) only rights and no obligations. (d) only obligations and no rights.
Ans: (a) rights in personam.
[Q.3] An agreement is a voidable contract when it is—
(a) enforceable if certain conditions are fulfilled.
(b) enforceable by law at the option of the aggrieved party.
(c) enforceable by both the parties.
(d) not enforceable at all.
Ans: (b) enforceable by law at the option of the aggrieved party.
4. An agreement not enforceable by law is said to be —
(a) void (b) voidable. (c) unenforceable. (d) illegal.
Ans: (a) void
5. A contract—
(a) may be void as originally entered into.
(b) may become void subsequent to its formation.
(c) cannot become void under any circumstances.
(d) may become void at the will of a party.
Ans: (b) may become void subsequent to its formation.
6. The transactions collateral to an illegal agreement are—
(a) not affected in any manner.
(b) also tainted with illegality.
(c) voidable at the option of the plaintiff.
(d) void.
Ans: (b) also tainted with illegality.
7. A contract is —
(a) a legal obligation. (b) an agreement plus a legal obligation.
(c) consensus ad idem. (d) an agreement plus a legal object.
Ans: (b) an agreement plus a legal obligation.
8. Flaw in capacity to contract may arise from —
(a) lack of free consent. (b) lack of consideration.
(c) minority. (d) absence of legal formalities.
Ans: (c) minority
True or False Questions:
1. All contracts are agreements but all agreements are not contracts. [True]
2. There can be a contract even without consensus ad idem. [False]
3. Law of contract is not the whole law of agreements nor is it the whole law of obligations. [True]
4. The law of contract is the law of those agreements which create obligations, and those obligations which have their sources in agreements. [True]
5. An agreement which is enforceable at the option of either party is a voidable contract. [False]
6. A void contract is one which is void ab initio. [False]
7. A void agreement does not create any legal obligations. [True]
8. An illegal agreement is not only void as between the immediate parties but even the collateral transactions to it become tainted with illegality. [True]
9. All agreements between parties are enforceable in a Court of Law. [False]
10. In some cases, even though a contract may appear to be completed at once, its effects may continue. [True]
11. All void agreements are illegal. [False]
12. In an executed contract both the parties have yet to fulfil their obligations. [False]