Question: Define a contract as per the Indian Contract Act, 1872. Answer: According to the Indian Contract Act, 1872, a contract is an agreement enforceable by law that creates legal obligations between two or more parties.
Question: What are the essential elements of a valid contract? Answer: The essential elements of a valid contract are offer, acceptance, consideration, capacity to contract, free consent, lawful object, and lawful consideration.
Question: What is the meaning of “consideration” in a contract? Answer: Consideration is something of value that is exchanged between the parties to a contract. It can be in the form of money, goods, services, or any benefit conferred upon the other party.
Question: Who are competent to enter into a contract as per the Indian Contract Act? Answer: A person who is of the age of majority, of sound mind, and not disqualified by any law to which they are subject is competent to enter into a contract.
Question: Define ‘void agreement.’ Answer: A void agreement is a contract that lacks one or more essential elements or is expressly declared void by law from the beginning. It is unenforceable by law and does not create any legal rights or obligations.
Question: Differentiate between a void agreement and a voidable contract. Answer: A void agreement is void from the beginning and lacks legal effect, while a voidable contract is initially valid but can be voided by one of the parties due to certain circumstances like coercion, undue influence, or fraud.
Question: What is the effect of an agreement that is discovered to be void? Answer: An agreement that is discovered to be void has no legal effect, and the parties are not bound to perform their obligations under it.
Question: Can an agreement with a minor be considered a valid contract? Answer: No, agreements with minors are generally void ab initio (from the beginning) as they lack the capacity to contract.
Question: Define ‘contingent contract.’ Answer: A contingent contract is a contract that depends on the occurrence or non-occurrence of a specified uncertain event.
Question: When does a contingent contract become enforceable? Answer: A contingent contract becomes enforceable only when the uncertain event on which it depends occurs or does not occur.
Question: Can a contingent contract based on a future uncertain event be enforced? Answer: Yes, a contingent contract based on a future uncertain event can be enforced if the event becomes certain to happen or not to happen.
Question: What is the difference between a ‘void’ and a ‘voidable’ contract? Answer: A void contract is void from the beginning and has no legal effect, while a voidable contract is initially valid but can be voided by one of the parties under specific circumstances.
Question: What is the legal position if a party to a voidable contract chooses to ratify it? Answer: If a party to a voidable contract chooses to ratify it, the contract becomes valid and enforceable from the date of ratification as if it were never voidable.
Question: Can a contract made by a person of unsound mind be considered valid? Answer: No, a contract made by a person of unsound mind is void ab initio, i.e., void from the beginning.
Question: Define ‘free consent’ in a contract. Answer: Free consent means that the contracting parties must agree to the terms of the contract without any coercion, undue influence, fraud, misrepresentation, or mistake.
Question: What is ‘coercion’ in the context of a contract? Answer: Coercion refers to the act of forcing someone to enter into a contract by using threats, physical force, or the abuse of authority.
Question: Define ‘undue influence’ in a contract. Answer: Undue influence occurs when one party takes unfair advantage of their dominant position over the other party to obtain their consent to the contract.
Question: Explain the term ‘misrepresentation’ in a contract. Answer: Misrepresentation is a false statement of fact made by one party to induce the other party to enter into the contract.
Question: What is the effect of misrepresentation on a contract? Answer: Misrepresentation can make the contract voidable at the option of the innocent party.
Question: What is the ‘doctrine of frustration’ in a contract? Answer: The doctrine of frustration applies when an unforeseen event occurs that makes the contract impossible to perform, resulting in the termination of the contract.
Question: Define ‘breach of contract.’ Answer: Breach of contract occurs when one party fails to perform their obligations under the contract without any lawful excuse.
Question: What are the remedies available to an innocent party in case of a breach of contract? Answer: The remedies available to an innocent party in case of a breach of contract include damages, specific performance, injunction, and quantum meruit.
Question: When can specific performance be granted in a contract? Answer: Specific performance can be granted when damages would not adequately compensate the innocent party, and the subject matter of the contract is unique or rare.
Question: Can a contract be discharged by performance? Answer: Yes, a contract can be discharged by performance when both parties fulfill their respective obligations under the contract.
Question: What is ‘Novation’ in the context of a contract? Answer: Novation is the substitution of an existing contract with a new contract, either between the same parties or with new parties.
Question: What is the effect of a ‘void’ contract on collateral transactions? Answer: A collateral transaction, which is dependent on a void contract, is also void.
Question: Explain the concept of ‘quasi-contracts.’ Answer: Quasi-contracts are legal obligations imposed by the law in the absence of a contract. These obligations are based on the principle of restitution and are meant to prevent unjust enrichment.
Question: Can a contract be oral, or must it always be in writing? Answer: A contract can be oral unless specifically required to be in writing by law or if it falls under the ambit of the Indian Registration Act.
Question: Define ‘privity of contract.’ Answer: Privity of contract refers to the relationship that exists between the parties to a contract, and they alone have rights and obligations arising from the contract.
Question: Can third parties benefit from a contract? Answer: Generally, third parties cannot enforce the terms of a contract unless the contract contains a provision for their benefit (i.e., third-party beneficiary).
Question: What is the significance of the ‘postal rule’ in the acceptance of a contract? Answer: The postal rule states that acceptance of an offer is complete as soon as the letter of acceptance is posted, even if it is not received by the offeror.
Question: When is an agreement considered a valid contract? Answer: An agreement becomes a valid contract when all the essential elements of a contract are present, and it is enforceable by law.
Question: What is the difference between a ‘void’ and ‘voidable’ contract in terms of enforceability?
Answer: A void contract is not enforceable by law from the beginning, whereas a voidable contract is initially valid but can be voided by one of the parties under certain circumstances.
Question: Can a minor enter into a contract for necessaries? Answer: Yes, a minor can enter into a contract for necessaries (goods and services essential for their survival).
Question: When does an offer become void? Answer: An offer becomes void when it is not accepted within the specified or reasonable time, or if it is rejected by the offeree.
Question: What is the rule regarding communication of acceptance? Answer: Acceptance must be communicated to the offeror by the offeree for the contract to be formed.
Question: Can silence be considered as acceptance of an offer? Answer: In general, silence cannot be considered as acceptance unless there is a specific understanding or custom in the context of the transaction.
Question: Define ‘unilateral contract.’ Answer: A unilateral contract is a contract in which one party makes a promise in exchange for the performance of an act by the other party.
Question: What is the impact of a minor misrepresenting their age in a contract? Answer: If a minor misrepresents their age, it does not change the fact that the contract with them is still voidable.
Question: Under what circumstances can a contract be rescinded by the court? Answer: A court can rescind a contract if it is affected by coercion, undue influence, fraud, or misrepresentation.
Question: Can an agreement with a minor be ratified once they attain the age of majority? Answer: No, agreements with minors remain void, and they cannot be ratified even after the minor attains the age of majority.
Question: Can past consideration be considered valid consideration in a contract? Answer: No, past consideration (consideration provided before the formation of the contract) is not valid consideration.
Question: What is the effect of an agreement that is impossible to perform? Answer: An agreement that is impossible to perform is void.
Question: What is the difference between ‘void’ and ‘voidable’ contracts? Answer: A void contract is void ab initio (from the beginning) and lacks legal effect, while a voidable contract is initially valid but can be voided by one of the parties under certain circumstances.
Question: Can a minor be held liable for a contract for necessaries? Answer: Yes, a minor can be held liable for a contract for necessaries, but only to the extent of the value of the goods or services provided.
Question: Define ‘anticipatory breach’ of contract. Answer: Anticipatory breach of contract occurs when one party clearly communicates their intention not to perform their obligations before the time for performance arrives.
Question: What is the effect of a minor providing a false age representation during the contract negotiation? Answer: If a minor provides a false age representation during contract negotiation, it does not affect the contract’s voidability.
Question: Can consideration be past, present, or future? Answer: Consideration must always move from the promisee, and it can be past, present, or future as long as it is of some value in the eyes of the law.
Question: Can a minor be a beneficiary of a contract made by an adult? Answer: Yes, a minor can be a beneficiary of a contract made by an adult, but they cannot enforce the contract personally due to their incapacity.
Question: Is an agreement enforceable if it is made without any consideration? Answer: In general, an agreement without consideration is not enforceable, except in certain cases where it is enforceable under the doctrine of promissory estoppel.
