Multiple Choice Questions:
1. A contract of life insurance is—
(a) a contract of indemnity. (b) not a contract of indemnity.
(c) a wagering agreement. (d) a contingent agreement.
Ans: (b) not a contract of indemnity. AND (d) a contingent agreement.
2. An agreement, the meaning of which is not certain, is —
(a) void. (b) voidable. (c) valid. (d) illegal.
Ans: (a) void.
3. Which of the following are wagering agreements?
(a) A crossword competition the prizes of which depend upon correspondence of the competitors’ solution with a previously prepared solution.
(b) Picture puzzles.
(c) Share market transactions in which delivery of stocks and shares is intended to be given and taken.
(d) A contract of insurance.
(e) An agreement to buy a ticket for a lottery.
(f) Commercial transactions, if the intention is not to deliver the goods but only to pay the difference in price.
(g) A crossword competition involving a good measure of skill for its successful solution.
Ans: (a) A crossword competition the prizes of which depend upon correspondence of the competitors’ solution with a previously prepared solution.
(e) An agreement to buy a ticket for a lottery.
(f) Commercial transactions, if the intention is not to deliver the goods but only to pay the difference in price. (g) A crossword competition involving a good measure of skill for its successful solution.
4. An agreement to do an impossible act is —
(a) void. (b) voidable. (c) illegal. (d) enforceable under certain circumstances.
Ans: (a) void.
5. A wagering agreement is—
(a) forbidden by law. (b) immoral. (c) opposed to public policy. (d) None of these.
Ans: (a) forbidden by law.
6. What is the obligation of a person who has received advantage under void agreement:
a) He can retain the advantage received with the prior approval of the person from whom he received it
b) He can retain the advantage received without any prior permission from anyone
c) He is bound to restore it or make compensation for it to the person from whom he received it
d) He is bound to restore it or make compensation for it only when a Court order is passed in this behalf
Ans: c) He is bound to restore it or make compensation for it to the person from whom he received it
True or False Questions:
1. An agreement is not a wager if either of the parties may win but cannot lose or may lose but cannot win. [True]
2. A contract of insurance is a wagering agreement. [False]
3. When a contract becomes void, the party who has received any benefit under it must restore it to the other party. [True]
4. A voidable contract becomes void when the party whose consent is not free rescinds the contract. [True]