Practice Contract Law Questions for CLAT 2026
Practice these Contract Law Questions for CLAT 2026 and test your preparation today!
1. Which of the following is NOT an essential element of a valid bailment?
a) Delivery of goods
b) Transfer of ownership
c) Purpose of return or disposal as per the bailor’s directions
d) Existence of a contract
b) Transfer of ownership
c) Purpose of return or disposal as per the bailor’s directions
d) Existence of a contract
Answer: b) Transfer of ownership
2. If the bailee makes unauthorized use of the goods bailed, the bailor can:
a) Reclaim the goods immediately
b) Sue for damages only after expiry of the bailment period
c) Sell the goods to recover losses
d) Convert the bailment into a pledge
b) Sue for damages only after expiry of the bailment period
c) Sell the goods to recover losses
d) Convert the bailment into a pledge
Answer: a) Reclaim the goods immediately
3. The bailor is liable to compensate the bailee if:
a) The bailee fails to return the goods
b) The goods are inherently defective and cause loss to the bailee
c) The bailee misuses the goods
d) The bailee sub-bails the goods without permission
b) The goods are inherently defective and cause loss to the bailee
c) The bailee misuses the goods
d) The bailee sub-bails the goods without permission
Answer: b) The goods are inherently defective and cause loss to the bailee
4. The duty of the bailee to return the goods arises when:
a) The bailor demands the goods before the agreed time
b) The purpose of the bailment is achieved
c) The bailee uses the goods for personal benefit
d) The goods perish due to an Act of God
b) The purpose of the bailment is achieved
c) The bailee uses the goods for personal benefit
d) The goods perish due to an Act of God
Answer: b) The purpose of the bailment is achieved
5. If a bailment is for the mutual benefit of both parties, it is called:
a) Gratuitous bailment
b) Absolute bailment
c) Non-contractual bailment
d) Bailment for consideration
b) Absolute bailment
c) Non-contractual bailment
d) Bailment for consideration
Answer: d) Bailment for consideration
6. A pledge is a special kind of bailment where:
a) Goods are delivered for repair or safekeeping
b) Ownership of the goods is transferred
c) Goods are given as security for payment of a debt or performance of a promise
d) The pledgee has no rights over the goods
b) Ownership of the goods is transferred
c) Goods are given as security for payment of a debt or performance of a promise
d) The pledgee has no rights over the goods
Answer: c) Goods are given as security for payment of a debt or performance of a promise
7. The pledgee’s right to sell the pledged goods arises when:
a) The pledgor demands the goods before payment of the debt
b) The pledgor fails to repay the debt within the agreed period
c) The pledgee decides to terminate the pledge contract at will
d) The pledgee has held the goods for more than six months
b) The pledgor fails to repay the debt within the agreed period
c) The pledgee decides to terminate the pledge contract at will
d) The pledgee has held the goods for more than six months
Answer: b) The pledgor fails to repay the debt within the agreed period
8. Which of the following is a valid pledge?
a) A debtor pledging stolen goods
b) A servant pledging his master’s goods without permission
c) A person pledging goods obtained under a void contract
d) A mercantile agent pledging goods with the owner’s consent
b) A servant pledging his master’s goods without permission
c) A person pledging goods obtained under a void contract
d) A mercantile agent pledging goods with the owner’s consent
Answer: d) A mercantile agent pledging goods with the owner’s consent
9. In a pledge, if the pledgee sells the goods without giving reasonable notice to the pledgor, the sale is:
a) Valid and legally binding
b) Voidable at the option of the pledgor
c) Considered a bailment instead of a pledge
d) Automatically rescinded by law
b) Voidable at the option of the pledgor
c) Considered a bailment instead of a pledge
d) Automatically rescinded by law
Answer: b) Voidable at the option of the pledgor
10. If the pledged goods are lost due to the negligence of the pledgee, the pledgee is:
a) Not liable for any loss
b) Liable to compensate the pledgor for the value of the goods
c) Required to return different goods of the same value
d) Entitled to recover the debt despite the loss
b) Liable to compensate the pledgor for the value of the goods
c) Required to return different goods of the same value
d) Entitled to recover the debt despite the loss
Answer: b) Liable to compensate the pledgor for the value of the goods
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Ruchika Mohapatra
Contributing author
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