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CBSE Questions for Class 12 Commerce Legal Studies Topics Of Law Quiz 3 - MCQExams.com
CBSE
Class 12 Commerce Legal Studies
Topics Of Law
Quiz 3
In the States of Gujrat and Maharastra, Wagering Agreements are _________.
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illegal
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void
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both (a) and (b)
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neither (a) nor (b)
If in a Contract both legal and illegal part exists, the legal part is separable from illegal part, then the legal part is ________.
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valid
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void
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voidable
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illegal
Execution of a Bond requiring Employees leaving the Organisation before the expiry of the term of Service to pay compensation to the Employer is considered as ________.
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unenforceable agreement
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voidable agreement
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valid agreement
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void agreement
G paid Rs. 1,00,000 to H to influence the head of the Government Organisation in order to provide him some employment. on his failure to provide the job, G sued H for recovery of the amount. Which of the following is correct?
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The contract is valid and G can recover the amount from H
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The contract is void as it is opposed to public policy and G cannot recover
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G can recover the amount with interest
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G can recover the amount of Rs. 1,00,000 and damages.
S, a seller of imitation jewellery, sells his business to B and promises, not to carry on business in imitation jewellery and real jewellery. The agreement is _________.
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valid with regard to Imitation Jewellery; and void as regards Real Jewellery.
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void with regard to Imitation Jewellery; and valid as regards Real Jewellery.
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wholly void
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fully valid
A and B bet as to it whether would rain on a particular day or not - A promising to pay Rs.100 to B if it rained, and B promising an equal amount to A, if it did not. This is an example of __________.
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voidable agreement
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unlawful agreement
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illegal agreement
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wagering agreement
A person enters into an agreement whereby he is bound to do something which is against his public or professional duty. The agreement is _______.
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void on the ground of being opposed to public policy
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valid
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voidable
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illegal
A contingent contract is ______________.
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A contract to do something if some event collateral to such contract does or does not happen
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A contract not to do something if some event collateral to such contract does or does not happen
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A contract to do or not to do something if some event collateral to such contract does or does not happen
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A contract to do or not to do something if some event collateral to such contract does not happen
________ Contracts are Enforceable by Future events.
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Contingent Contract
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Quasi Contract
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Conditional Contract
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Wagering Contract
A promises to pay B Rs. 50,000 if B secures him an employment in the public service or procure the title "Padma Shri". The agreement is ________.
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enforceable
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void
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valid
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voidable
Retiring partner continues to be liable for acts of the firm done ___________.
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Up to the date of giving public notice of retirement
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Up to the close of the financial year in which he retires
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Up to the date of admission of a new partner
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All of the above
An agreement whereby one party assists another in recovering money or property and, in turn share in the proceeds of the action is called _______.
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champerty
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maintenance
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stifling with prosecution
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interference with course of justice
Marriage Brokerage or Brokerage Contracts are ________.
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enforceable
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valid
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void
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voidable
Which of the following act is within the implied authority?
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Receiving payments of debts due to the firm and issuing receipt for it
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Open a banking account in his own name on behalf of the firm
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Withdraw a suit or proceeding filed on behalf of the firm
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Transfer immovable property belonging to the firm
A contract based on the happening or non-happening of a future event is called ________.
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a wagering contract
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a contract marked with uncertainty
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a contingent contract
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an impossible contract
A contract of insurance is a _______________.
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Contract of Guarantee
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Contingent Contract
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Wagering Agreement
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Unilateral Agreement
______is a systematic body of knowledge which studies the cause and effect relationship, and tries to establish a generalization.
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Art
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Science
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Social sience
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History as a subject
The solar lamp uses the ........ energy
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Heat
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Wind
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Light
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None of these
A voidable contract becomes void in case of ___________.
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novation
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impossibility of performance
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restitution
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rescission
The MRTP act has been amended in the year ______.
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1974
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1982
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1991
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1969
Explanation
The MRTP Act
, 1969 was
amended
in 1991 as a part of the new economic reforms set in motion by the Government of that day. The
amendments
reset the objectives enshrined in the original statute of 1969.
The MRTP Act
, before the 1991
amendments
sought to curb such power arising out of a monopoly.
When two persons make identical offers to each other, without having knowledge of each others offer, are known as _________.
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Counter offers
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Standing offers
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Cross offers
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Open offers
Consumer Courts have been established at :
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At three level
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At six level
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At one level
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At nine level
Explanation
Consumer Courts have been established at
Three levels:
1. District level
2. State level
3. National level.
Which of the following is not a correct statement?
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The Indian Contract Act, 1872 came into force on 1st September 1872
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The Indian Contract Act, 1872 lays down the principles, not the rights and duties of the parties
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The Indian Contract Act, 1872 lays down only the rights and duties of the parties
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The Indian Contract Act, 1872 is complete and exhaustive
Which Section of the Indian Contract Act, 1872 describes the modes of revocation of an offer?
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Section 9
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Section 8
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Section 7
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Section 6
'Father of Modern Botany' is
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Pasteur
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Bauhin
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Brunfels
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Theophrastus
Explanation
The swiss botanist Casper Bauhin
(1560-1634) introduced the modern botanical plant names. He
described some 6000 plants known to him in 1623.
In which of these situations a contract becomes void?
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Supervening impossibility of an act
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Contract contingent on happening of an uncertain event
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In both the situations
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In none of the situations
Explanation
Any contract depending upon the possibility of the event prescribed is valid unless the event is impossible or if the contract is contingent on happening of an uncertain event which is wagering contract void under section 30 of the Contract Act, 1872. In the aforementioned both the cases the contract becomes void in nature.
Which is the transaction of Quasi Contract?
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Finder of loss of goods
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Bailment
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Pledge
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None of these
If there is defect in the title of the goods of transferor ____________.
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A holder cannot have good title to the goods
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A holder in due course get good title to the goods
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Holder cannot get good title to the goods if has means to discover the defect in title
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He get good title if he has no means to discover defects in the title of goods
Explanation
If there is defect in the title of the goods of transferor a holder cannot have good title to the goods.
Who is competent to make a valid contract?
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Major
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Sound minded person
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Qualified person by law
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All of the above
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None of these
A ______ is an agreement enforceable by law.
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contract
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valid contract
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void contract
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voidable contract
________ has not been expressly declared void by the Indian Contract Act?
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Agreement made without consideration
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Agreement by a minor or a person of unsound mind
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Agreement in restraint of marriage of a minor
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Agreement of which the consideration and object are unlawful
Explanation
Under the Contract Act, 1872 there are certain agreements which are expressly declared void in the eyes of law which includes:
Section 25 of the act which says that all those agreement which are without consideration are void, unless it is in writing and registered or is a promise to compensate for something done or is a promise to pay a debt barred by limitation law.
Section 11 prescribes people who can enter into a valid contract which includes person who is of the age of majority according to the law to which he is subject, and who is of sound mind and is not disqualified from contracting by any law to which he is subject.
Section 23 provides that those agreements, considerations and objects of which are unlawful i.e. forbidden by law;
or
are of such nature that, if permitted it would defeat the provision of any law or is fraudulent; or
involves or implies, injury to the person or property of another; or
the Court regards it as immoral, or opposed to public policy, are void in nature.
On the other hand Section 26 of the act considers agreements in restraint of marriage void unless the marriage is of a minor and hence it has n
ot been expressly declared void.
Which of the following agreements is/are an agreement expressly declared void by the Indian Contract Act?
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Uncertain agreement
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Agreement in restraint of marriage
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Wagering agreement
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All the above
Explanation
As per section 29 of the Indian Contract Act, 1872, agreements, the meaning of which is not certain, or capable of being made certain, or any uncertain event are void.
As per section 26 of the act, every agreement in restraint of the marriage of any person, other than a minor, is void.
Under Section 30 of the Act, agreements by way of wager are void and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to a person to abide the result of any game or other uncertain event on which any wager is made.
Hence all the above mentioned agreements are void in nature.
Consider the following statements :
1.A quasi-contract is a real or true contract and it is an obligation imposed by law.
2.A quasi-contract arises from a duty of a party and not by promise of any party.
3.A quasi-contract always gives rise to right to personam not in rem.
Which of the above statement/s is/are not correct ?
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Only 1
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Only 3
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1 and 2
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2 and 3
A void agreement is Void _________.
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Ab-intio
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Subsequently
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At the option of one party
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If conditions attached to the contract are not fulfilled
Explanation
A contract that cannot be legally enforced by either party is considered void. Characteristics of a void contract include:
Not legally enforceable
Does not create legal rights or obligations for either party
May be against the law or public policy
Does not require compensation to be paid to either party
May occur if either party signed under duress
A void contract is void as soon as it is created or also known as Void Ab-Initio i.e. void from the beginning and this type of agreement can never be void because it was never a legal contract to begin with.
When a contract is not enforceable at the option of one party is a __________.
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valid contract
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agreement
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voidable contract
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void contract
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all of these
X promises to pay Y Rs. 1,00,000 on his promising to never get married in life. This agreement is not enforceable due to __________________.
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Agreement being in restraint of marriage
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Agreement being opposed to public policy
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Impossibility of objects
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Being immoral in nature
Explanation
As per section 26 of the Contract Act, any contract in restraint of the marriage of any person, other than a minor, is void. In the present case, X has promised Y a sum of money only if he never marries in his life which is a restraint of marriage of Y and hence is void in nature.
X agrees with Y to discover gold through magic. The agreement is void because of _______________.
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Impossibility of objects
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Illegality of objects
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Opposed to public policy
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Encouraging black magic
Explanation
Under section 56 of the Contract Act, agreement to do an act impossible in nature, itself is void. This is also known as Doctrine of Frustration. In the present case, X and Y have agreement of discovering gold through magic which in eyes of law is impossible in nature and hence, is void.
X is indebted to Y. He sells his car to Z. Z promise to play all the debts of X to Y. If Z fails to play, Y has no right to sue Z because
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Z is a stranger to the contract
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Z is stranger to the consideration
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Both
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None
Under section 2(b) if the person to whom the proposal is made signifies this assent the proposal is said to have been
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Promise
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Agreed
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Provisionally agreed
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Tentatively accepted
_________ is/are a valid agreement(s)?
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Agreement restraining the marriage of a minor
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Agreement to marry a particular person
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A contract to refer to arbitration any question which has already arisen
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All the three
Explanation
Section 26 of the Contract act considers agreements in restraint of marriage void unless the marriage is of a minor and hence it has not been declared void and is valid. Also, agreement to marry a particular person is a valid agreement.
Section 28 of the act declares agreement in restraint of legal proceedings to be void with an exception that those contracts by which two or more persons agree to refer to arbitration any question between them which has already arisen, or affect any provision of any law in force for the time being as to references to arbitration. Hence, it is a valid agreement.
X agrees with Y to bring the Moon down to the Earth. This agreement is a _______ agreement.
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valid
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voidable
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void
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illegal
Explanation
Indian Contract Act, 1872 has declared void those agreements, object or consideration of which are uncertain as per section 29 of the act which says that Agreements, the meaning of which is not certain, or capable of being made certain, are void.
In the present case, X has agreed to bring the Moon to the Earth which is an impossible event and hence is void.
X promised Y to pay Rs 10,000 to him if he murders Z. Y murdered Z, but X refuses to pay the promised sum to him. Y cannot enforce the agreement because of _________________.
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Illegality of objects
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Agreement being verbal
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Consideration being inadequate
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Absence of free consent
Explanation
As per section 23 of the Contract Act, those agreements are void which have unlawful considerations. The consideration or object of an agreement is lawful, unless it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies, injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.
In the present case, the consideration of the agreement between X and Y is to murder Z which in itself is an illegal and forbidden act and defeat the provisions of law and hence this agreement cannot be enforced by Y due to illegality of the consideration.
State which of the following agreements are void?
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Agreement to the effect that a suit should be instituted within a short period than prescribed under the Law of Limitation
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An agreement to the effect to extend the period within which an action for breach should be taken
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An agreement by which a party is restricted absolutely from exercising his right under the contract by usual legal proceeding
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All the three
Explanation
Every agreement
by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or
which extinguishes the rights of any party thereto, or discharges any party thereto, from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.
Hence, all the options are restraint in the legal proceedings.
Which of these types of agreements have been treated as "agreement against public policy" by various courts?
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Agreement to form cartels
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Agreement stifling prosecution
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Trading with enemy
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All the three
Explanation
An agreement which is opposed to “Public Policy” cannot be enforced by either of the parties to it as per section 23 of the Contract Act. The question as to whether an agreement is opposed to public policy or not is to be decided on general principles only and not by considering the terms of any particular contract. Courts have developed the concept of 'contrary to public policy' on case to case basis. For example :
All trade with enemies is against public policy. Thus it is unlawful and is void. However, if a contract is made during peace times and later on war breaks out, one of the two things may result, Either the contract is suspended or it stands dissolved depending upon the intention of the parties to contract.
Agreements entered into for using corrupt influence in procuring Government jobs, titles or honours are unlawful and therefore are not enforceable.
In agreement in which one party agrees to drop criminal proceedings pending in a court in consideration of some amount of money, is unlawful. Therefore, such an agreement cannot be enforced except where crime is compoundable.
Agreements between enterprises engaged in identical or similar trade of goods or provision of services including cartels, are presumed to have appreciable adverse effect on competition and, therefore, are anti-competitive and void.
P agrees to give his daughter to Q for concumbage on payment of Rs. 20,This agreement is void because of :
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Illegality of objects
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Inadequacy of consideration
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Minority of daughter
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All the three
Explanation
As per section 23 of Indian Contract Act, 1872, all those agreements, the consideration or object of which is unlawful i.e. it is forbidden by law; 14 or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies, injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.
In the present case, what P is doing is immoral in nature and hence is void because of the illegality of the object agreement.
An agreement by a debtor with the lender to the effect that he would not leave job or further borrow from any body or change his residence is ____________.
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Void being restricting personal freedom
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Voidable
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Illegal
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Valid agreement
Explanation
Indian Contract Act, 1872 has declared those contract which restricts personal freedom as a void contract. This is because anything restricting personal freedom contained in the contract as per section 23 of the act, and contrary to public policy. As in the present case, the agreement requires debtor to not leave job as well as his residence and no further borrowings from anybody which is restricting personal freedom of the debtor and is also restraint of trade under section 27 of the act.
Which of the following agreements is considered agreements in restraint of trade?
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A trade combination which create monopoly.
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A negative covenant operating during the period of employment when the employee is bound to serve his employer exclusively.
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An agreement between the manufacturer or producer and a sole selling agent or distributor whereby the manufacturer agree to sell the goods to the sole selling agent who in turn agree to buy his requirement from any other source.
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None
Explanation
As per section 27 of the Indian Contract Act, 1872, every agreement by which anyone is restrained from exercising a lawful profession or trade or business of any kind, is to that extent void. However, there are certain exceptions to this law based on statutory rule and judicial interpretations which include:
There are provisions in the Partnership act which validate agreements in restraint of trade like Section 11 enables partners during the continuance of the firm to restrict their mutual liberty by agreeing that none of them shall carry on any business other than that of the firm.
Under trade combinations certain regulations as to the opening and closing of business in the market, licensing of traders, supervision and control of dealers and the mode of dealing are not illegal.
Solus or Exclusive dealing agreements
are that a producer or manufacturer likes to market his goods through a sole agent or distributor and the latter agrees in turn not to deal with the goods of any other manufacturer. A producer may, for example, agree to sell all his outputs to one consumer who, in turn, agrees not to buy his requirements from any other source. These agreements are valid in nature.
An agreement of employment does not fall within Section 27. An agreement to serve exclusively for a week, a day, or even for an hour, necessarily prevents the person so agreeing to serve from exercising his calling during that period for anyone else than the person with whom he so agrees.
What is the status of a contract when the consent of a party is caused by coercion?
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Void
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Voidable
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Valid
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Illegal
Under Indian Contract Act
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Person who makes the proposal
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Person who accepts the proposal
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Person who makes the promise
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Person to whom the promise is made
X a Hindu already married having alive wife entered into an agreement to marry another girl. This agreement is _________________.
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Void because second wife is forbidden under hindu marriage law.
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Voidable if he cannot afford the second family.
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Void because court permission not taken
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Perfectly valid
Explanation
Any agreement object and consideration of which is forbidden by law or opposed to public policy is void as per section 23 of the Act. In this case, X has entered into an agreement to marry another girl although he is already married and his wife is alive but here the agreement is based on an act that is forbidden under law i.e. marrying more than once with living first wife is forbidden under Hindu Marriage Act, 1955 and hence, this agreement is unlawful and void.
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