THE INDIAN CONTRACT ACT, 1872
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Subjective Questions:
Ch 1: Nature of Contract:
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1. What is the object and nature of the law of contract?
2. “The Indian Contract Act, 1872 is not a complete code dealing with all branches of the law of contract.” Comment.
3. “The parties to a contract, in a sense, make the law for themselves.” Comment.
4. “All agreements are not contracts but all contracts are agreements.” Discuss the statement explaining the essential elements of a valid contract.
5. Describe the essentials of a valid contract. When does an agreement become void?
6. (a) “The law of contract is not the whole law of agreements, nor is it the whole law of obligations.” Discuss.
(b) What tests would you apply to ascertain whether an agreement is a contract?
7. Illustrate the correlative nature of rights and obligations arising from a contract.
8. Illustrate the distinction between void, voidable and illegal agreements. Discuss the validity of agreements collateral to such agreements.
9. Distinguish between the following classes of contracts:
(a) Express and Implied contracts
(b) Executed and Executory contracts
(c) Valid, Void and Voidable contracts
(d) Void agreements and Void contracts.
10. “In commercial and business agreements, the presumption is that the parties intend to create legal relations.” Discuss.
11. “As regards the legal effects, there is no difference between a contract in writing and a contract made by word of mouth.” Discuss.
12. Write short notes on: Unenforceable contract, Executed contract, Obligation, Consensus ad idem. Unilateral contract, Quasi-contract.
13. ‘To create a contract there must be a common intention of the parties to enter into legal obligation’. Discuss.
Ch 2: Offer & Acceptance:
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1. What is an ‘offer’? When is it complete? State the rules of a valid offer.
2. Discuss briefly the law relating to communication of offer, acceptance and revocation. When may an offer and acceptance be revoked?
3. What essential conditions are necessary to convert a proposal into a promise?
4. How can an offer be accepted? State briefly the rules relating to the communication of acceptance. Can there be a tacit acceptance of an offer? How can an offer be accepted by acting upon it?
5. How and on what grounds does a proposal stand revoked? Is there any time limit after which revocation of a proposal cannot be made?
6. Explain what is meant by (a) lapse of an offer, and (b) a counter-offer.
7. (a) Is an agreement to agree in future a contract?
(b) “There cannot be a contract to make a contract.” Comment.
8. Is an offer made in haste or under great emotional excitement a valid offer?
9. Illustrate how silence by the offeree may sometimes constitute an acceptance of an offer.
10. If the letter of acceptance of an offer is lost in postal transit, is the offerer bound by the acceptance?
11. “An acceptance to be effective must be communicated to the offerer.” Are there any exceptions to this rule?
12. Comment on the following statements:
(a) A mere mental acceptance not evidenced by words or conduct is, in the eyes of the law, no acceptance.
(b) Acceptance is to offer what a lighted match is to gunpowder. It produces something which cannot be recalled or undone,
(c) A contract is formed when the acceptor has done something to signify his intention to accept, not when he has made up his mind to do so.
(d) The offer and the acceptance bring the parties together, but the law requires some further evidence of their intention to create an obligation.
(e) Performance of the conditions of a proposal is an acceptance of the proposal.
(f) An agreement may be made in any manner whatsoever provided the parties are in communication.
(g) Whereas an offer is not held to be made until it is brought to the knowledge of the offeree, acceptance may, in certain circumstances, be held to be made though it has
not come to the knowledge of the offerer.
13. Analyse the law relating to ‘offer’ and ‘acceptance’ in the making of a contract in India.
14. What are the essentials of a valid offer?
15. What conditions are necessary for converting a proposal into a promise; a promise into an agreement and an agreement into a contract? Illustrate your answer.
16. Write a short note on the Proposal and invitation to the proposal.
Ch 3: Consideration:
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1. Define consideration. Why is it essential in a contract? What are the legal rules regarding consideration?
2. Give some instances of consideration, other than the payment of money, sufficient to support a contract.
3. Define consideration and point out the salient features of the term ‘consideration’ as defined in the Indian Contract Act.
4. Discuss types of consideration. What will happen if consideration is missing in an agreement?
5. Explain consideration as an element of a valid contract and discuss the effect of (a) total absence, and (b) inadequacy of consideration.
6. “Insufficiency of consideration is immaterial but an agreement without consideration is void.” Comment.
7. Will you regard the following as good consideration to support a contract: (a) Forbearance to sue; (b) Compromise of disputed claims and (c) Performance of a pre-existing legal and/or contractual obligation?
8. “A contract without consideration is void.” Comment.
9. Explain the term ‘consideration’ and state the exceptions to the rule: “No consideration, no contract.”
10. “A man cannot acquire rights under a contract to which he is not a party.” Discuss. Are there any exceptions to this rule?
11. “A stranger to a contract cannot sue.” Are there any exceptions to this rule?
12. Consider the doctrine of privity of contract and give an account of the exceptions to the doctrine.
Ch 4: Capacity to Contract:
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1. State briefly the law relating to competence of parties to a contract.
2. What do you understand by ‘capacity to contract’? What is the effect of agreements made by persons not qualified to contract?
3. What do you know about contracts entered into with a minor from the legal point of view in India? Do you know of any contracts with a minor to be valid? What are they?
4. What are necessaries? When is a minor liable on a contract for necessaries?
5. What is the legal effect of a minor’s misrepresentation of his age while entering into an agreement?
6. Discuss with suitable illustrations the law relating to validity of contracts by minors.
7. Examine the legal position of (a) a minor promisor, (b) a minor promisee, and (c) a minor agent. 8. Name some persons, other than minors, who are not competent to contract.
Ch 5: Free Consent:
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1. “Two or more persons are said to consent when they agree upon the same thing in the same sense.” Explain this statement and give illustrations.
2. “An agreement requires a meeting of the minds.” Comment.
3. Discuss the law relating to the effect of mistake on contracts.
4. Explain and illustrate the effect of mistake of fact on contracts.
5. Explain, with illustrations, the effect of mistake of fact on an agreement, with reference to
(a) mistake relating to subject matter,
(b) mistake relating to the identity of the parties, and
(c) mistake relating to the nature of the transaction.
6. “It is a rule of law that if a person intends to contract with A, B cannot give himself any night under the contract.” Discuss.
7. “Fundamental error will not prevent a contract from coming into existence unless the mistake is as to the identity of the other party as opposed to his attributes.” Discuss.
8. What is misrepresentation? Distinguish it from fraud.
9. What remedies are available to a person induced to enter into a contract by (a) misrepresentation which is not fraudulent, and (b) fraud?
10. “Mere silence as to facts is not fraud.” Discuss.
11. “Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that regard being had to them, it is the duty of the person keeping silence to speak or unless his silence is equivalent to speech.” Explain.
12. Define fraud and point out its effect on the validity of an agreement. Give suitable examples to illustrate your answer.
13. (a) “An attempt at deceit which does not deceive is not fraud.” Explain.
(b) It is the duty of a contracting party to disclose all material facts to the other party. When does non-disclosure of material facts amount to fraud?
14. When is a contract said to be induced by ‘undue influence’? When is a party deemed to be in a position to dominate the will of another? What is the effect of undue influence on a contract?
15. (a) When is consent said to be given under ‘coercion? What is its effect on the contract? Also discuss the position of the parties to a contract entered into under coercion.
(b) Does a threat to commit suicide amount to coercion?
Ch 6: Legality of Object & Consideration:
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1. Under what circumstances is the object or consideration of a contract deemed unlawful? Illustrate with examples.
2. What is an illegal agreement? What are the effects of illegality?
3. “No action is allowed on an illegal agreement.” What are the exceptions to this rule?
4. “In cases of equal guilt, the position of the defendant is better than that of the plaintiff.” Comment.
Ch 7: Void Agreements:
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1. What are void agreements and void contracts? Is the party who has received some benefit under a void contract bound to restore it to the other party?
2. What are agreements by way of wagers? What are the legal effects of such agreements? Is a contract of insurance a wager?
3. What tests would you apply to determine if, or not, an agreement is by way of wager?
4. “Insurance contracts are basically wagering agreements.” Comment.
Ch 8: Contingent Contracts:
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1. Explain the meaning of a contingent contract. What are the rules relating to contingent contracts?
2. What do you understand by a contingent contract? Discuss how far the contingency may be dependent on the act of a party.
3. Distinguish between a wagering agreement and a contingent contract. Discuss the rules regarding enforcement of contingent contracts.
Ch 9: Performance of Contract:
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1. What do you understand by performance of a contract?
2. What are the rules of law relating to time and place of performance of a contract?
3. When is time deemed to be the essence of a contract in the performance of the contract and with what consequences?
4. Give with illustrations the provisions of the Indian Contract Act relating to the performance of reciprocal promises.
5. What are the essential requisites of a valid tender of performance? What is the effect of refusal by the promisee to accept correct tender of goods and money?
6. Under what circumstances need a contract not be performed?
7. State the rules relating to appropriation of payments made by a debtor to his creditor.
8. What do you mean by assignment of contracts? What conditions should be fulfilled for assignment of contracts? What is assignment by operation of law?
9. Discuss the law relating to the rights and liabilities of joint promisors in a contract. Also explain the devolution of joint liabilities.
10. Write short notes on: (a) Assignment of contract. (b) Time as the essence of the contract. (c) Performance of contract.
Ch 10: Discharge of Contract:
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1. What are the various ways in which a contract may be discharged?
2. Write a note on discharge of a contract by consent.
3. Discuss fully the law relating to novation of contracts.
4. “Impossibility of performance is, as a rule, not an excuse for non-performance of a contract.” Discuss.
5. Discuss the effects of supervening impossibility on the performance of a contract.
6. Does an impossibility which arises subsequent to the formation of a contract excuse the promisor from performing the contract in all cases?
7. How far are liabilities of the parties to a contract affected by supervening impossibility?
8. Explain, with illustrations, what is meant by the frustration of a contract.
9. “If the frustration of a contract goes, either by the destruction of the subject matter or by reason of such long interruption or delay that the performance is really in effect that of a different contract, and the parties have not provided what in that event is to happen, the performance of the contract is to be regarded as frustrated.”—Goddard, J., in Tatem v. Gamboa, (1939] 1 K.B. 142. Explain and comment on this statement.
10. “The doctrine of frustration has often been said to depend on adding a term to the contract by implication.” Comment.
11. Explain breach of contract as a mode of discharge of contract.
12. What do you understand by ‘anticipatory breach of contract’? State the rights of the promisee in case of such breach.
Ch 11: Remedies for Breach of Contract:
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1. What remedies are available to an aggrieved party on the breach of contract?
OR: What is breach of contract? What are its remedies?
2. State briefly the principles on which damages are awarded on the breach of a contract.
3. “If a contract is broken, the law will endeavour, so far as money can do it, to place the injured party in the same position as if the contract had been performed.” Comment.
4. Examine critically the rule in Hadley v. Baxendale, and indicate to what extent the said rule is applicable in India.
5. “The damages which the other party ought to receive in respect of breach of a contract should be such as may fairly and reasonably be considered either arising naturally from such breach of contract itself or such as may reasonably be supposed to have been in the contemplation of both the parties at the time they made the contract, as the probable result of the breach of it.” Comment.
6. Define: Special Damages; Exemplary Damages; Nominal Damages; Liquidated Damages; Injunction.
7. Explain and illustrate the circumstancesin which a party may maintain action for breach of a contract without having himself fully performed his own obligation under the contract.
8. “Where a party to a contract refuses altogether to perform, or is disabled from performing his part of it, the other party has a right to rescind it.” Discuss fully this statement in the light of the provisions of the Indian Contract Act, 1872.
9. What is the distinction between ‘liquidated damages’ and ‘penalty’ and what bearing has this distinction in India upon the question of compensation on the breach of a contract?
10. If the damages are fixed in the contract itself, can the party in breach of the contract be bound to pay full amount mentioned therein?
11. Under what circumstances is a party entitled to specific performance?
12. When does a claim on quantum meruit arise?