Multiple Choice Questions:
1. A contract of insurance is a—
(a) contract of guarantee. (b) contingent contract.
(c) wagering agreement. (d) unilateral agreement.
Ans: (b) contingent contract.
2. Which of the following are contingent contracts?
(a) Contracts of insurance. (b) Contracts of guarantee.
(c) Contracts for the sale of goods on credit. (d) Wagering agreement.
Ans: (a) Contracts of insurance. AND (b) Contracts of guarantee.
3. A contingent contract is—
(a) void. (b) voidable. (c) valid. (d) illegal.
Ans: (c) valid.
4. A contract to pay B ₹10,000 if B’s house is burnt. This is a—
(a) wagering agreement. (b) void agreement.
(c) voidable agreement. (d) contingent contract.
Ans: (d) contingent contract.
5. A agrees to pay B ₹2,000 if a certain ship does not return at Mumbai Port within a year. A’s promise can be enforced when the ship—
(a) arrives Mumbai in a damaged condition during the year.
(b) is lost during the year.
(c) is sunk during the year.
(d) arrives Mumbai in a good condition during the year.
Ans: (b) is lost during the year. AND (c) is sunk during the year.
True or False Questions:
1. An ‘absolute contract’ is one in which the promisor binds himself to performance in any event without any conditions. [True]
2. Where goods are sent on approval, the contract is a contingent one. [True]
3. A contract of insurance is not a contingent contract.
4. Contingent contracts to do or not to do anything if a specified uncertain event happens within a fixed time, become void if the event happens. [False]
5. A wagering agreement is essentially of a contingent nature. [True]
6. In a contingent contract the future event is only collateral. [True]
7. Supervening circumstances which render performance of a promise more difficult and expensive excuse the promisor from performance of his promise. [False]
8. Contracts of indemnity are contingent contracts. [True]