Multiple Choice Questions:
1. The Court may grant rescission where the contract is —
(a) voidable at the option of the plaintiff. (b) void.
(c) unenforceable. (d) illegal.
Ans: (a) voidable at the option of the plaintiff.
2. The foundation of modern law of damages was laid down in —
(a) Tinn v. Hoffman. (b) Taylor v. Caldwell.
(c) Hadley v. Baxendale. (d) Addis v. Gramophone Co.
Ans: (c) Hadley v. Baxendale.
3. Specific performance may be ordered by the Court when —
(a) the contract is voidable. (b) damages are an adequate remedy.
(c) damages are not an adequate remedy. (d) the contract is uncertain.
Ans: (c) damages are not an adequate remedy.
4. The measure of damages in case of breach of a contract is the difference between the —
(a) contract price and the market price at the date of breach.
(b) contract price and the maximum market price during the term of the contract.
(c) contract price and the price at which the plaintiff might have sold the goods.
(d) contract price and the price fixed by Court.
Ans: (a) contract price and the market price at the date of breach.
5. The Case of Hadley v. Baxendale, (1854) 8 Ex. Ch. 341 deals with —
(a) anticipatory breach of contract. (b) quantum of damages.
(c) supervening impossibility. (d) quasi-contract.
Ans: (b) quantum of damages.
6. Anticipatory breach of a contract takes place —
(a) during the performance of the contract. (b) at the time when the performance is due.
(c) before the performance is due. (d) at the time when the contract is entered into.
Ans: (c) before the performance is due.
7. In case of a wrongful dishonour of a cheque by a banker having sufficient funds to the credit of the customer, the Court may award —
(a) ordinary damages. (b) nominal damages.
(c) exemplary damages. (d) contemptuous damages.
Ans: (c) exemplary damages.
8. Ordinary damages are damages which —
(a) arise in the usual course of things from the breach.
(b) which are in the contemplation of the parties at the time when the contract is made.
(c) are agreed in advance.
(d) are given by way of punishment for breach of contract.
Ans: (a) arise in the usual course of things from the breach.
9. A agreed to sell 100 shares to B at ₹75 per share, delivery to be given on 1st March. B refused to accept delivery on 1st March as price had gone down to ₹60 per share. Subsequently A sold these shares at ₹92 per share.
(a) A cannot recover any damages from B.
(b) A will have to restore to B ₹1,700, i.e., the profit he made.
(c) A can recover damages to be determined by the Stock Exchange.
(d) No further amount is required in the part of A.
Ans: (c) A can recover damages to be determined by the Stock Exchange.
10. Exemplary damages are —
(a) allowed in case of dishonour of a cheque by a banker having sufficient funds.
(b) the difference between the contract price and the market price.
(c) allowed where in case of breach of a contract, the plaintiff has not suffered any loss.
(d) None of these.
Ans: (a) allowed in case of dishonour of a cheque by a banker having sufficient funds.
True or False Questions:
1. Where there is a Right, there is a Remedy. [True]
2. Damages other than those arising from the breach of a contract may be recovered if such damages are in the contemplation of the aggrieved party as the probable result of the breach. [True]
3. Damages for loss of reputation are not generally recoverable. An exception to this rule exists in the case of a banker who wrongfully refuses to honour a customer’s cheque. [True]
4. Specific performance of a contract may, in the discretion of the Court, be granted where damages are an adequate remedy. [False]
5. When through a mutual mistake of the parties, a contract does not express their real intention, either party may institute a suit to have the instrument rectified. [True]
6. Nominal damages are awarded if there is no breach of contract. [False]
7. If special damages are to be claimed, the attendant circumstances must be brought to the notice of the other party. [True]
8. The essence of a penalty is the payment of money stipulated as in terrorem of the offending party. [True]
9. In case of breach of a contract, the injured party is not bound to take all reasonable steps to mitigate the loss caused by the breach. [False]
10. Damages for breach of contract are given by way of punishment for wrong inflicted. [False]