1. Which of the following is an essential element of a valid contract under the Indian Contract Act, 1872?
A. A written document
B. Consent of the parties obtained by coercion
C. Lawful consideration
D. Verbal acceptance only
Correct Answer: C. Lawful consideration
Explanation: As per Section 10 of the Indian Contract Act, a contract must have lawful consideration to be valid. Consent must also be free and not obtained by coercion.
2. In a contract of bailment, the person who delivers the goods is called the:
A. Bailee
B. Lessor
C. Bailor
D. Agent
Correct Answer: C. Bailor
Explanation: Under Section 148, the person delivering goods for a purpose under a contract is the bailor; the receiver is the bailee.
3. Which of the following is not a valid mode of terminating an agency?
A. By the principal becoming of unsound mind
B. By mutual agreement
C. By expiry of time
D. By novation
Correct Answer: D. By novation
Explanation: Novation applies to contracts, not specifically agency. Agency can end due to revocation, mutual agreement, completion, or incapacity.
4. Estoppel prevents a person from:
A. Enforcing a legal right
B. Denying a statement made to another who relied on it
C. Entering into a contract
D. Filing a civil suit
Correct Answer: B. Denying a statement made to another who relied on it
Explanation: Estoppel bars a party from denying the truth of a statement previously made, if the other party acted upon it.
5. A lease for more than one year must be:
A. Notarized
B. Registered
C. In oral form
D. Executed on plain paper
Correct Answer: B. Registered
Explanation: As per the Transfer of Property Act, 1882, leases exceeding 12 months must be registered.
6. A gratuitous bailment ends:
A. When the bailee wants
B. Only after delivery
C. When the purpose is completed
D. When the goods are destroyed
Correct Answer: C. When the purpose is completed
Explanation: Gratuitous bailment (without consideration) ends when the purpose is served or time expires.
7. An offer becomes a contract when:
A. It is accepted and communicated
B. It is withdrawn
C. It is made in writing
D. It is posted
Correct Answer: A. It is accepted and communicated
Explanation: A contract is formed when a valid offer is accepted and communicated to the offeror.
8. An agent must not:
A. Be paid
B. Delegate his authority
C. Be competent
D. Be in writing
Correct Answer: B. Delegate his authority
Explanation: An agent cannot delegate authority unless expressly allowed or under necessity.
9. A minor’s agreement is:
A. Voidable
B. Valid
C. Void ab initio
D. Enforceable with guardian’s consent
Correct Answer: C. Void ab initio
Explanation: As per the ruling in Mohori Bibee v. Dharmodas Ghose, a minor’s agreement is void from the beginning.
10. Which one of the following is not essential to constitute a bailment?
A. Delivery of possession
B. Ownership transfer
C. Contract
D. Purpose
Correct Answer: B. Ownership transfer
Explanation: Bailment involves transfer of possession, not ownership.