Practice Questions on Contract Law for CLAT PG 2026 (Part II)
1. In a lease, the person who grants the lease is called:
A. Lessee
B. Tenant
C. Lessor
D. Bailor
B. Tenant
C. Lessor
D. Bailor
Correct Answer: C. Lessor
Explanation: The lessor grants the lease; the lessee receives it.
Explanation: The lessor grants the lease; the lessee receives it.
2. In an agency, when is the principal bound by acts of the agent?
A. Only when in writing
B. If acts are within agent’s authority
C. If done after contract ends
D. If approved by a third party
B. If acts are within agent’s authority
C. If done after contract ends
D. If approved by a third party
Correct Answer: B. If acts are within agent’s authority
Explanation: The principal is bound by authorized acts of the agent.
Explanation: The principal is bound by authorized acts of the agent.
3. An agreement in restraint of trade is:
A. Valid in all cases
B. Void
C. Enforceable with consent
D. Valid if mutual
B. Void
C. Enforceable with consent
D. Valid if mutual
Correct Answer: B. Void
Explanation: Section 27 makes agreements in restraint of trade void, with limited exceptions.
Explanation: Section 27 makes agreements in restraint of trade void, with limited exceptions.
4. Specific performance is:
A. Criminal remedy
B. Equitable remedy
C. Statutory penalty
D. Administrative relief
B. Equitable remedy
C. Statutory penalty
D. Administrative relief
Correct Answer: B. Equitable remedy
Explanation: It compels a party to perform their contractual obligations.
Explanation: It compels a party to perform their contractual obligations.
5. The duty of care in bailment primarily rests with the:
A. Bailor
B. Bailee
C. Third party
D. Both parties equally
B. Bailee
C. Third party
D. Both parties equally
Correct Answer: B. Bailee
Explanation: The bailee must take reasonable care of goods.
Explanation: The bailee must take reasonable care of goods.
6. A valid contract must have parties who are:
A. Under influence
B. Legally competent
C. Close relatives
D. Literate
B. Legally competent
C. Close relatives
D. Literate
Correct Answer: B. Legally competent
Explanation: Parties must be competent under Section 11 (i.e., not minors, of sound mind).
Explanation: Parties must be competent under Section 11 (i.e., not minors, of sound mind).
7. In agency by ratification, the principal must:
A. Be a minor
B. Know all material facts
C. Refuse liability
D. Be a third party
B. Know all material facts
C. Refuse liability
D. Be a third party
Correct Answer: B. Know all material facts
Explanation: Ratification requires knowledge of all facts by the principal.
Explanation: Ratification requires knowledge of all facts by the principal.
8. Lease and license differ in that:
A. License gives possession
B. Lease gives ownership
C. Lease gives interest in property
D. Both are the same
B. Lease gives ownership
C. Lease gives interest in property
D. Both are the same
Correct Answer: C. Lease gives interest in property
Explanation: Lease transfers interest; license is mere permission.
Explanation: Lease transfers interest; license is mere permission.
9. Which is not a lawful object under contract law?
A. Agreement to sell
B. Agreement to commit theft
C. Agreement for rent
D. Service agreement
B. Agreement to commit theft
C. Agreement for rent
D. Service agreement
Correct Answer: B. Agreement to commit theft
Explanation: Unlawful objects make contracts void.
Explanation: Unlawful objects make contracts void.
10. The maxim “nemo dat quod non habet” applies to which type of contract?
A. Bailment
B. Sale of goods
C. Lease
D. Agency
B. Sale of goods
C. Lease
D. Agency
Correct Answer: B. Sale of goods
Explanation: The maxim means “no one can give what they do not have.” It applies to the sale of goods, where a person cannot transfer better title than they possess.
Explanation: The maxim means “no one can give what they do not have.” It applies to the sale of goods, where a person cannot transfer better title than they possess.
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Ruchika Mohapatra
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