Class 12 Law of Contract Mock Test (CBSE)

Topics in Law of Contract

• Essentials of a valid contract
• Offer and acceptance
• Consideration
• Capacity to contract
• Free consent
• Void and voidable agreements
• Performance and discharge of contract
• Breach of contract and remedies

Law of Contract practice questions with answers

1. Q1Multiple choice·1 mark
   Ravi offers to sell his scooter to Meena for Rs 40,000. Meena replies that she will buy it for Rs 35,000. What is the position of Ravi's offer of Rs 40,000?

   1. (a)It remains open, and Meena can still accept it at Rs 40,000.
   2. (b)It stands rejected, because Meena's reply at Rs 35,000 was a counter-offer.
   3. (c)It is accepted, because Meena proposed a payment at a lower price.
   4. (d)It becomes a valid contract at Rs 37,500, the average of both prices.
   Show answer and step marks

   1. Correct option: (b) It stands rejected, because Meena's reply at Rs 35,000 was a counter-offer.+1

   Answer: (b)
2. Q2Multiple choice·1 mark
   Suresh promises to pay Rs 500 to a neighbour's son for reading aloud to his father every evening. The son reads for two weeks at Suresh's request, and then Suresh refuses to pay, saying he never received any benefit himself. Which statement is correct?

   1. (a)Suresh is not bound, because the reading benefited only his father and not Suresh himself.
   2. (b)Suresh is not bound, because there was no written agreement for the reading.
   3. (c)Suresh is bound only if the son reads for at least one month.
   4. (d)Suresh is bound, because the reading done at his request is valid consideration for his promise.
   Show answer and step marks

   1. Correct option: (d) Suresh is bound, because the reading done at his request is valid consideration for his promise.+1

   Answer: (d)
3. Q3Short answer·3 marks
   Anil agreed to deliver 200 bags of rice to Bharat Traders by 5 May at ₹1,200 per bag. On 1 May, Anil informed Bharat Traders in writing that he will not deliver any rice at all. (a) Explain why Anil's refusal on 1 May is a breach of contract even though the delivery date of 5 May has not arrived. [1] (b) If the market price of rice on the date of breach was ₹1,400 per bag, calculate the damages Bharat Traders can claim, showing each step. [2]
   Show answer and step marks

   1. Anil's clear refusal before the due date is an anticipatory breach, as he has shown he will not perform the contract, which entitles the aggrieved party to act immediately.+1
   2. Loss per bag = ₹1,400 − ₹1,200 = ₹200.+1
   3. Total damages = $200 \times 200 = 40{,}000$, so the damages claimable are ₹40,000.+1

   Answer: (a) Anticipatory breach, as Anil clearly refuses to perform before the due date. (b) ₹40,000 (200 bags × ₹200 loss per bag).
4. Q4Short answer·3 marks
   State whether each of the following agreements is void or voidable under the Indian Contract Act, 1872. (a) Sanjay tells Tara that his car has never been in an accident, knowing this to be false. Tara agrees to buy the car for Rs 3,50,000 relying on his statement. Later she finds that the car was in a serious accident. [1] (b) Mohan and Rekha agree that Mohan will pay Rs 5,000 to Rekha if a particular horse wins a race, and Rekha will pay Rs 5,000 to Mohan if it loses. Neither of them owns the horse or has any interest in the race. [1] (c) Dinesh agrees to carry goods across the border for Farida without paying customs duty, in return for Rs 20,000, knowing that such transport is prohibited by law. [1]
   Show answer and step marks

   1. (a) Voidable, because Tara's consent was obtained by fraud, a false statement made by Sanjay knowing it to be false, so Tara may set aside the agreement (Section 19).+1
   2. (b) Void, because an agreement by way of wager is void from the beginning (Section 30).+1
   3. (c) Void, because its object is unlawful, as the transport is prohibited by law (Section 23).+1

   Answer: (a) Voidable (b) Void (c) Void

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