Q.1 What is the primary purpose of contract law?
To punish wrongdoers
To enforce promises
To regulate crimes
To govern political systems
Explanation - Contract law ensures that agreements made between parties are legally binding and enforceable.
Correct answer is: To enforce promises
Q.2 Which of the following is NOT an essential element of a valid contract?
Offer
Acceptance
Intention to create legal relations
Friendship
Explanation - A valid contract requires offer, acceptance, and intention to create legal relations, but friendship alone does not make a contract binding.
Correct answer is: Friendship
Q.3 What does 'consideration' mean in contract law?
The thought behind an agreement
A benefit or detriment exchanged
Moral obligation
A polite gesture
Explanation - Consideration refers to something of value given in exchange for a promise.
Correct answer is: A benefit or detriment exchanged
Q.4 Which of these contracts is VOID?
Contract to sell illegal drugs
Contract to buy a car
Contract to rent a house
Contract to purchase books
Explanation - Agreements involving illegal activities are void and unenforceable.
Correct answer is: Contract to sell illegal drugs
Q.5 What does 'capacity to contract' mean?
Having enough money to contract
Legal ability to enter into a contract
Willingness to agree
Knowledge of the law
Explanation - Capacity means the party is legally recognized as capable of entering into a contract (e.g., not a minor, not mentally incapacitated).
Correct answer is: Legal ability to enter into a contract
Q.6 A contract made with a minor is generally:
Valid
Void
Voidable
Enforceable
Explanation - Contracts with minors are usually voidable at the minor’s option, to protect them from exploitation.
Correct answer is: Voidable
Q.7 Which case established the principle of offer and acceptance?
Carlill v Carbolic Smoke Ball Co
Donoghue v Stevenson
Hadley v Baxendale
Balfour v Balfour
Explanation - This case confirmed how a unilateral contract can be formed through offer and acceptance.
Correct answer is: Carlill v Carbolic Smoke Ball Co
Q.8 What happens if a contract is made under duress?
It is valid
It is voidable
It is enforceable
It is binding regardless
Explanation - Contracts entered under duress are not freely consented to and are voidable at the victim’s choice.
Correct answer is: It is voidable
Q.9 Which term best describes 'an agreement not intended to be legally binding'?
Social agreement
Commercial contract
Unilateral agreement
Bilateral contract
Explanation - Social agreements, like promises among friends, usually lack intention to create legal relations.
Correct answer is: Social agreement
Q.10 What is a unilateral contract?
A contract with one-sided consideration
A promise in exchange for an act
A contract signed by one party only
A contract with mutual promises
Explanation - In unilateral contracts, one party promises something in return for the performance of an act by the other party.
Correct answer is: A promise in exchange for an act
Q.11 What does 'breach of contract' mean?
Breaking the terms of the agreement
Changing the law
Cancelling an offer
Negotiating a new deal
Explanation - A breach occurs when one party fails to perform as promised under the contract.
Correct answer is: Breaking the terms of the agreement
Q.12 Which remedy is commonly sought in contract law?
Damages
Imprisonment
Fine by government
Community service
Explanation - Damages are monetary compensation awarded to the injured party for breach of contract.
Correct answer is: Damages
Q.13 What does 'specific performance' require?
Payment of money
Cancellation of the contract
Performance of contractual obligations
Imprisonment of the breaching party
Explanation - Specific performance is a court order requiring a party to fulfill their contractual duties.
Correct answer is: Performance of contractual obligations
Q.14 Which of the following is NOT a type of misrepresentation?
Fraudulent
Negligent
Innocent
Implied
Explanation - Misrepresentation can be fraudulent, negligent, or innocent, but 'implied' is not recognized as a category.
Correct answer is: Implied
Q.15 Which case established the postal rule in contract law?
Adams v Lindsell
Carlill v Carbolic Smoke Ball Co
Donoghue v Stevenson
Hadley v Baxendale
Explanation - The postal rule was established in Adams v Lindsell, holding that acceptance is effective once posted.
Correct answer is: Adams v Lindsell
Q.16 What does 'voidable contract' mean?
A contract never valid
A contract valid until avoided
A contract illegal
A contract unenforceable by law
Explanation - Voidable contracts are valid but can be set aside by one of the parties due to specific circumstances like duress or misrepresentation.
Correct answer is: A contract valid until avoided
Q.17 What is 'privity of contract'?
Only parties to a contract can enforce it
Contracts must be private
Contracts must be written
Third parties can enforce contracts
Explanation - The doctrine of privity means only those directly involved in the contract can sue or be sued under it.
Correct answer is: Only parties to a contract can enforce it
Q.18 Which of the following is an example of an invitation to treat?
Advertisement in a newspaper
Signed agreement
Accepted offer
Promise to marry
Explanation - Advertisements are generally treated as invitations to treat, not binding offers.
Correct answer is: Advertisement in a newspaper
Q.19 What is the effect of a mistake in contract law?
Always makes contract void
May make contract voidable
Has no effect
Always enforceable
Explanation - Mistakes may render a contract voidable depending on their nature and impact on consent.
Correct answer is: May make contract voidable
Q.20 What is an express term?
A term implied by law
A term stated clearly in the contract
A term assumed by custom
A hidden condition
Explanation - Express terms are explicitly agreed upon and stated in the contract.
Correct answer is: A term stated clearly in the contract
Q.21 What is the difference between bilateral and unilateral contracts?
Bilateral has two parties, unilateral has one
Bilateral involves mutual promises, unilateral is a promise for an act
Unilateral contracts are illegal
Bilateral contracts require writing
Explanation - Bilateral contracts involve promises on both sides, while unilateral contracts require one party to act to accept.
Correct answer is: Bilateral involves mutual promises, unilateral is a promise for an act
Q.22 Which type of damages aim to put the injured party in the position they would have been in if the contract was performed?
Nominal damages
Compensatory damages
Punitive damages
Liquidated damages
Explanation - Compensatory damages are awarded to cover actual losses and restore the injured party’s position.
Correct answer is: Compensatory damages
Q.23 Which of the following contracts must be in writing under the Statute of Frauds?
Contracts for sale of land
Contracts for groceries
Contracts for personal services
Contracts for clothing
Explanation - The Statute of Frauds requires certain contracts, such as those involving land, to be in writing.
Correct answer is: Contracts for sale of land
Q.24 What is the usual remedy for anticipatory breach of contract?
Immediate right to sue
Wait until performance date
Contract becomes void
Specific performance only
Explanation - When anticipatory breach occurs, the innocent party may sue immediately without waiting for the due date.
Correct answer is: Immediate right to sue
Q.25 Which case is associated with remoteness of damages in contract law?
Hadley v Baxendale
Carlill v Carbolic Smoke Ball Co
Adams v Lindsell
Balfour v Balfour
Explanation - This case established the principle of foreseeability in determining recoverable damages for breach of contract.
Correct answer is: Hadley v Baxendale