Multiple Choice Questions:
1. Where consent is caused by fraud or misrepresentation, the contract is—
(a) voidable at the option of the aggrieved party. (b) void.
(c) unenforceable. (d) not affected in any manner.
Ans: (a) voidable at the option of the aggrieved party.
2. Where both the parties to an agreement are under a mistake as a matter of fact essential to the agreement, the agreement is —
(a) void. (b) voidable. (c) illegal. (d) not affected at all.
Ans: (a) void.
3. Merely because a contract was caused by one of the parties to it being under a mistake as to a matter of fact, it is not —
(a) voidable. (b) void. (c) affected at all. (d) None of the above.
Ans: (a) voidable.
4. Consent given to a contract under some misrepresentation by the other party makes the contract —
(a) void. (b) invalid. (c) unenforceable. (d) voidable.
Ans: (d) voidable.
6. Fraud exists when it is shown that a false representation has been made —
(a) knowingly. (b) unknowingly.
(c) unintentionally. (d) recklessly, not caring whether it is true or false.
Ans: (a) knowingly & (d) recklessly, not caring whether it is true or false.
[Multiple answers may be correct – 2 Marks question]
7. A mere attempt at deceit by a party to a contract —
(a) is not fraud unless the other party is actually deceived.
(b) is fraud whether the other party has been deceived or not.
(c) amounts to misrepresetation.
(d) None of the above.
Ans: (a) is not fraud unless the other party is actually deceived.
8. When consent to an agreement is obtained by undue influence, the agreement is a —
(a) contract voidable at the option of the party whose consent was so obtained.
(b) void contract.
(c) valid contract.
(d) void agreement.
Ans: (a) contract voidable at the option of the party whose consent was so obtained.
9. Which of the following relationships raise presumption of undue influence?
(a) Landlord and tenant. (b) Parent and child.
(c) Doctor and patient. (d) Fiance and fiancee.
Ans: (b) Parent and child. , (c) Doctor and patient. , & (d) Fiance and fiancee.
[Multiple answers may be correct – 2 Marks question]
10. If there is error in causa, the contract is —
(a) void. (b) voidable. (c) valid. (d) illegal.
Ans: (b) voidable.
11. If there is error in consensus, the agreement is —
(a) void. (b) voidable. (c) avoid. (d) not affected at all.
Ans: (a) void.
12. If there is a fraudulent misrepresentation as to the contents of a document, the contract is —
(a) void. (b) voidable. (c) valid. (d) illegal.
Ans: (b) voidable.
13. If there is a fraudulent misrepresentaiton as to the character of a document, the contract is —
(a) void. (b) voidable. (c) valid. (d) illegal.
Ans: (a) void.
14. The Case of Cundy v. Lindsay, deals with —
(a) coercion. (b) undue influence.
(c) mistake as to the nature of transaction. (d) mistake as regards identity.
Ans: (d) mistake as regards identity.
15. A promise made without the intention of performing it amounts to —
(a) innocent misrepresentation. (b) fraud.
(c) negligent misrepresentation. (d) wrongful misrepresentation.
Ans: (b) fraud.
16. The unlawful detention of any property of a person to obtain his consent to a contract amounts to —
(a) misrepresentation. (b) fraud. (c) undue influence. (d) coercion.
Ans: (d) coercion.
17. What is consent under the Indian Contract Act, 1872:
a) When acceptance of proposal is made by the party to whom the proposal is made
b) When the acceptance is made by another person other than the person to whom the proposal is made
c) When they agree upon the same thing in the same sense
d) When both the parties agree upon a thing in the way it is understood by them
Ans: c) When they agree upon the same thing in the same sense
True or False Questions:
1. When there is no consent, there is no contract. [True]
2. If a person enters into a contract by making a mistake of law through the inducement of another person, he may avoid the contract. [True]
3. If both the parties believe the subject matter of a contract to be in existence, which in fact is nonexistent, the contract is void. [True]
4. A unilateral mistake is not allowed as a defence in avoiding a contract. [True]
5. Misrepresentation is a false statement which the person making it honestly believes it to be true. [True]
6. The aggrieved party loses the right to rescind the contract for fraud if a third party has acquired rights in the subject matter of the contract in good faith and for value. [True]
7. A representation is true when it is made, but to the knowledge of the party making it, becomes untrue before the contract is entered into. If it is not corrected, the other party can correct it. [True]~
8. A contract induced by fraud is voidable at the option of either party to the contract. [False]
9. Mere silence as to facts to affect the willingness of a person to enter into a contract is not fraud. [True]
10. If there is no damage, there is no fraud. [True]
11. There is a presumption of undue influence in the relationship of husband and wife. [False]
12. A threat amounting to coercion must necessarily proceed from a party to the contract. [False]
13. Suicide is no Crime. [True]
14. A threat to commit suicide amounts to coercion. [True]