Quiz 1: Mid-Course Assessment

Question 1 of 5

Which of the following is the most accurate statement of the relationship between an agreement and a contract under the Indian Contract Act, 1872?

AAn agreement is the same thing as a contract; the terms are interchangeable in Indian law. BA contract requires consideration; an agreement does not. CAll contracts are agreements, but not all agreements are contracts. An agreement becomes a contract only when it is enforceable by law. DAn agreement must be in writing; a contract can be oral or written.

Question 2 of 5

A shop displays a watch with a price tag of Rs. 25,000. A customer enters and offers to buy it. The shopkeeper refuses to sell. The customer sues for breach of contract. What is the most accurate legal position?

AThe shopkeeper is bound by the price tag and the contract was formed when the customer offered to buy. BThe price tag is an offer; the customer accepted it by offering Rs. 25,000; a contract was formed; the shopkeeper is in breach. CThe price tag is an invitation to offer, not an offer. The customer's statement was the offer. The shopkeeper was free to refuse to accept it. DPrice tags are always offers in Indian law; the shopkeeper is liable to deliver.

Question 3 of 5

Under Section 2(d) of the Indian Contract Act, consideration:

AMust move only from the promisee to the promisor. BCan move from the promisee or any other person at the desire of the promisor. CMust be of value at least equal to the value of the promise. DCannot include refraining from doing something.

Question 4 of 5

Party A offers to sell goods to Party B at Rs. 10,000. Party B replies 'I accept, but at Rs. 9,000.' Party A then refuses to sell at any price. Which of the following best describes the legal position?

AParty B's reply was a valid acceptance and Party A is now in breach. BParty B's reply was a counter-offer, which terminated the original offer. No contract was formed and Party A is not bound. CParty A's original offer remains open and Party A must sell at Rs. 10,000. DBoth parties are bound to negotiate in good faith to find a middle price.

Question 5 of 5

Which of the following statements about consideration is correct under Indian law?

APast consideration is not valid consideration. BInadequate consideration automatically voids a contract. CPast consideration can be valid consideration if the original act was at the desire of the promisor. DConsideration must always be in monetary form.

Quiz 1 — Mid-Course