Consideration In Business Law Quiz

25 Questions | Total Attempts: 9196

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Consideration In Business Law Quiz - Quiz

Have you ever heard of consideration in business law? Want to take a quiz? Consideration is a concept of English common law. It is required for simple contracts called contracts by deed. With common law, both parties must offer consideration before a contract is bound. It represents the relationship between a promise and a deed. This Consideration In Business Law quiz will demonstrate your knowledge of consideration in business law. All the best.


Questions and Answers
  • 1. 
    As a general rule, an agreement made without consideration is:
    • A. 

      Void.

    • B. 

      Voidable.

    • C. 

      Valid.

    • D. 

      Unlawful.

  • 2. 
    All agreements made without consideration are void.
    • A. 

      True, as there is no exception to this rule.

    • B. 

      False, as there are certain exceptions to this rule.

  • 3. 
    Consideration must move at the desire of ____.
    • A. 

      Promisor

    • B. 

      Promisee

    • C. 

      Promisor or any Third-Party

    • D. 

      Both (a) and (b)

  • 4. 
    If the consideration to an agreement is furnished by a stranger and not by the promisee himself, the agreement will be void.
    • A. 

      True, as the consideration must be furnished by the promisee.

    • B. 

      False, as the law requires that there must be some consideration, who furnished it is immaterial.

  • 5. 
    A promised to obtain for B employment in the public service, and B promised to pay Rs.5 lakhs to A. In this case, the agreement is:
    • A. 

      Void.

    • B. 

      Voidable.

    • C. 

      Valid.

    • D. 

      None.

  • 6. 
    A promises to give his car to B provided he fetches it from the garage. In this case, B's act of fetching the car from the garage:
    • A. 

      Is valid consideration as it satisfies the requirement of the act being done at the desire of the promisor.

    • B. 

      Is not a valid consideration as such an act cannot be regarded as valuable consideration.

    • C. 

      Entitles him to seek the intervention of the court for enforcement of the contract.

    • D. 

      Binds the promisor (A) to perform the promise by delivering the car to B.

  • 7. 
    A promises to give his car to B provided he fetches it from the garage. The agreement between A and B is:
    • A. 

      Valid

    • B. 

      Voidable

    • C. 

      Void

    • D. 

      Illegal

  • 8. 
    Where an act forming consideration is the performance of existing obligations between the parties, it is regarded that there is:
    • A. 

      No Consideration.

    • B. 

      Inadequate Consideration.

    • C. 

      Past consideration.

    • D. 

      None of these.

  • 9. 
    An agreement made with free consent to which the lawful consideration is inadequate is:
    • A. 

      Void

    • B. 

      Valid

    • C. 

      Voidable

    • D. 

      Unlawful

  • 10. 
    A agrees to sell his car wroth Rs. 10,000. to B for Rs.20,000 only because A's consent is obtained by coercion. In this case, the agreement is:
    • A. 

      Void

    • B. 

      Valid

    • C. 

      Voidable

    • D. 

      Unlawful

  • 11. 
    Under English Law, the consideration must move from the promisee and promisee alone. The consideration furnished a stranger is no consideration.
    • A. 

      True.

    • B. 

      False.

  • 12. 
    The forbearance to sue is regarded as:
    • A. 

      Invalid Consideration.

    • B. 

      No Consideration.

    • C. 

      Valid Consideration.

    • D. 

      None of these.

  • 13. 
    Compromise of disputed claims is:
    • A. 

      Valid Consideration.

    • B. 

      Invalid Consideration.

    • C. 

      Forbidden by Law.

    • D. 

      Unlawful Consideration.

  • 14. 
    The consideration for an agreement may be:
    • A. 

      Past.

    • B. 

      Present.

    • C. 

      Future.

    • D. 

      All of these.

  • 15. 
    Consideration for an agreement may be:
    • A. 

      May be present, past, or future.

    • B. 

      May be present or future only.

    • C. 

      May be past or present only.

    • D. 

      Must be present only.

  • 16. 
    An agreement without consideration is void. This general rule is recognized under:
    • A. 

      Sec 2(d)

    • B. 

      Sec 10

    • C. 

      Sec 25

    • D. 

      None.

  • 17. 
    All agreements made without consideration are void.
    • A. 

      True, as there are no exceptions to this rule.

    • B. 

      False, as there are certain exceptions to this general rule.

  • 18. 
    For the enforcement of an agreement without consideration based on natural love and affection, which of the following condition is not required?
    • A. 

      It must be between near relatives.

    • B. 

      It must be ratified by the Court of Law.

    • C. 

      It must be in writing.

    • D. 

      It must be in registered.

  • 19. 
    The absence of consideration shall not affect the validity of the gift actually made.
    • A. 

      True, as it is recognized, under Section 25 of the Indian Contract Act.

    • B. 

      False, as the gift is always made of some consideration.

  • 20. 
    A contract of the agency made without consideration is valid. It is recognized under:
    • A. 

      Section 25.

    • B. 

      Section 185.

    • C. 

      Section 25, Explanation 1

    • D. 

      Judicial Precedents.

  • 21. 
    The rule of privity of contract is provided in:
    • A. 

      Section 2(d).

    • B. 

      Section 25.

    • C. 

      Section 25, Explanation 1

    • D. 

      Judicial Precedents.

  • 22. 
    As per the rule of privity of contract:
    • A. 

      A stranger to a contract cannot sue

    • B. 

      A stranger to consideration cannot sue

    • C. 

      A stranger to a contract can sue

    • D. 

      A stranger to consideration can use

  • 23. 
    A stranger to contract (I,e., a person who is not a party to the contract ) cannot enforce the contract because of the applicability of the doctrine of:
    • A. 

      Privity of Consideration.

    • B. 

      Privity of Contract.

    • C. 

      No Consideration, No Contract.

    • D. 

      Section 25, Explanation II.

  • 24. 
    The term 'consideration' in legal terms is defined in:
    • A. 

      Sec 2(a).

    • B. 

      Sec 2(b)

    • C. 

      Sec 2(c)

    • D. 

      Sec 2(d)

  • 25. 
    "Consideration is the price for which the promise of other is bought, and the promise thus given for value is enforceable." This definition is given by:
    • A. 

      Salmond

    • B. 

      Pollock

    • C. 

      Anson

    • D. 

      None