Contract Act MCQ Quiz in मराठी - Objective Question with Answer for Contract Act - मोफत PDF डाउनलोड करा

The correct answer is "When an indivisible contract for a lumpsum is partly performed."

Key Points Quantum Meruit:

• The phrase "as much as is earned" is literally translated as "quantum meruit."
• When one party to a contract is prevented from completing his contract performance by the other party, he can sue for quantum meruit.
• As a result, he must be compensated fairly for the portion of the contract that he has already completed.

Important Points

•  Quantum Meruit is, payment in proportion to the amount of work done, where one of his parties has fulfilled part of his promise and then the contract person is breached, then a claim for quantum merit arises.
• When the original contract is discharged, i.e. when the indivisible contract for a lump sum amount of a debt is partly executed, then the claim of quantum merit cannot be successful.

The correct answer is Only 2

Key Points

• The Indian Contract Act codifies the way we enter into a contract, execute it and the way we implement its provisions. The act is divided into total 266 sections. Important sections among those are
  • Section 1 to 75 – General Provisions
  • Section 76 to 123 – Sales of Goods.
  • Section 124 to 147 – Indemnity and Guarantee.
  • Section 148 to 181 – Bailment and Pledges.
  • Section 182 to 238 – Agency.
  • Section 239 to 266 – Partnership.
• There are specific areas that deal with property, movable goods, etc. In 1930 the sections related to Sales and Goods were separated and Sales and Goods act was enacted. 
• Similarly Indian Partnership Act 1932 was enacted by separating partnership related section from the Indian Contract Act 1872.
• Also, the Indian Contract Act 1872 is not retrospective in nature which means a contract entered into before 1st September 1872, even though to be performed after passing of this Act is not affected by this Act.
• Hence, the basic framework of contracting is covered in the Indian Contract Act and it is an important area of law.

Important Points

Features of Indian Contract Act 1872:

• There must be a valid contract among the parties involved.
• A valid contract is enforceable by law.
• A valid contract must involve at least two parties.
• There must be an intention of the parties to enter the contract.
• The parties must be competent or should be of a sound mind to perform the contract.
• Any person disqualified by the law if enters into a contract then such contract becomes invalid
• The intention of the parties and the contract must be lawful in nature and any unlawful intentions lead to invalidity of the contract.
• The contract must be practical so that it can be performed and must be possible to perform by the parties involved.
• There must be a consideration for fulfilling the contract.
• Remedies in the case of breach
  • In case of breach, an aggrieved party can file for damages which is dealt by the Indian Contract Act
  • Also Specific Relief Act 1963 can also be used for specific cases.
• Major cases related to contract in India:

1. Laxman Shukla VS Gauri Dutt 1930, related to communication of offer.
2. Mohori Bibee VS Dharmodas Ghose, related to minors capacity to contract.

• In 1930 and 1932 the government separated some sections from the Indian Contract Act and created separate act to deal with them. These acts are

1. Sale of Goods Act, 1930.
2. Indian Partnership Act, 1932

The correct answer is novation.

Key Points

• Section 62 of the Indian Contract Act, 1872 deals with the Effect of novation, rescission, and alteration of contract.
• It states that —If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract, need not be performed.
• When the parties to a contract agree to substitute the existing contract for a new contract, that is called novation.

The correct answer is Option 3.

Key Points

• Balfour v. Balfour (1919) 2KB 571 primarily highlights the significance of intention to create legal obligations.
• The "intention to create legal obligations" is a fundamental principle in contract law that determines whether parties entering into an agreement intend for it to be legally enforceable.
• For a contract to be valid and legally binding, both parties must possess the intention to be bound by the terms of the agreement. This intention refers to the willingness of the parties to enter into a legally enforceable contract rather than a casual promise, social arrangement, or mere expression of goodwill.

The correct answer is all of the above.

Key Points

• Sections 68-72 of the Indian Contract Act deals with quasi-contracts.
• Section 68 states claim for necessaries supplied to person incapable of contracting, or on his account—If a person, incapable of entering into a contract, or any one whom he is legally bound to support, is supplied by another person with necessaries suited to his condition in life, the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person.
• Section 69 states reimbursement of person paying money due by another, in payment of which he is interested—A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other.
• Section 70 states obligation of person enjoying benefit of non-gratuitous act—Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.

Key Points

 Section 126 of The Indian Contract Act, 1872 defines a guarantee as a contract to perform the promise, or discharge the liability, of a third person in case of his default.

• The person who gives the guarantee is called the ‘surety’; the person in respect of whose default the guarantee is given is called the ‘principal debtor’, and the person to whom the guarantee is given is called the ‘creditor‘.

illustration:

• ​Assuming party A and party B enter into a contract with Party C as the surety. Now according to this contract of guarantee Party B has to pay Party A a sum of Rs. 1000, but fails to do so for any variety of reasons. Now Party C will now be liable to discharge the 1000 Rs. to Party A.

Basic Essentials for Contract of Guarantee under the Indian Contract Act: 
Along the lines of every other type of contract, a contract of guarantee in the Indian Contract Act also has certain basic essentials of a Contract of Guarantee that make it valid. Those essentials can be classified into the following:

1. Agreement by all Parties

• All three parties who are the creditor, principal debtor and surety must agree to the terms of the contract.

2.Liability

• In all contracts of guarantee, the creditor can only ask the surety to discharge the liability after the principal debtor has not discharged his promise i.e. the liability.

3. Existence of debt

• No contract of guarantee can exist without a debt for consideration which is accepted by the law. Additionally, if the debt is barred by a time limit or has become void, the surety will not be liable.

4. Consideration

•  This means that any benefit received by the principal debtor can be considered as a suitable consideration.

5. Two forms of a guarantee contract

• Contracts of guarantee can be of two forms, either verbal or written

6. Essentials of a Valid Contract

• This means that just like any other contract, a contract of guarantees requires certain common essentials of a contract such as acceptance, intention to contract, acceptance, ability to contract, the legality of the contract, creation of a legal relationship, lawful object if any, legal consideration, free and fair consent, performance standards, legal formalities etc.

7. All facts must be brought to light

• The creditor must inform the surety of all the facts that affect his liability. Concealment of any facts will invalidate the contract.
• This is highlighted in section 143 of the Indian Contracts Act, 1872

8.No misrepresentation of facts

• The guarantee should not be obtained through misrepresenting facts to the surety.
• Though not all facts need to be mentioned to him, any facts that affect the surety’s extent in the liability must be brought to his notice accurately.
• This can be seen in Section 142 of The Indian Contracts Act.

The correct answer is Option 4. 

Key Points Section 124.   "Contract of indemnity" defined

• A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person, is called a contract of indemnity.

Illustration: 

• A contracts to indemnify B against the consequences of any proceedings which C may take against B in respect of a certain sum of 200 rupees. This is a contract of indemnity.
• A tells B, the shopkeeper, “Give Z the Goods, I will see you paid” - this contract is indemnity. 

This definition provides the following essential elements –

1. There must be a loss.
2. The loss must be caused either by the promisor or by any other person (in Indian context loss is to be caused by only by a human agency.)
3. Indemnifier is liable only for the loss.

Thus, it is clear that this contract is contingent in nature and is enforceable only when the loss occurs. 

Additional InformationThis was held in the case of United Commercial Bank vs Bank of India AIR 1981.

• In this case, Supreme Court held that the courts should not grant injunctions restraining the performance of contractual obligations arising out of a letter of credit or bank guarantee if the terms of the conditions have been fulfilled.
• It held that such LoCs or bank guarantees impose on the banker an absolute obligation to pay.

In the case of Mohit Kumar Saha vs New India Assurance Co AIR 1997, Calcutta HC held that: 

• the indemnifier must pay the full amount of the value of the vehicle lost to theft as given by the surveyor.
• Any settlement at lesser value is arbitrary and unfair and violates Article 14 of the constitution. 

The correct answer is option 1.Key Points

•  Section 126 of Indian Contract Act 1872 deals with  “Contract of guarantee”, “surety”, “principal debtor” and “creditor”.
• A “contract of guarantee” is a contract to perform the promise, or discharge the liability, of a third person in case of his default.
• The person who gives the guarantee is called the “surety”; the person in respect of whose default the guarantee is given is called the “principal debtor”, and the person to whom the guarantee is given is called the “creditor”. A guarantee may be either oral or written.