Quiz: Consideration In Business Law
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Have you ever heard of consideration in business law? 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 being bound. It is representing the relationship between a promise and a deed. This quiz will demonstrate your knowledge of consideration in business law. All the best.
- 1.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)
- 2.As a general rule, an agreement made without consideration is:
- A.
Void.
- B.
Voidable.
- C.
Valid.
- D.
Unlawful.
- 3."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
- 4.The term consideration is used in the sense of quid pro quo which means:
- A.
Some thing for value.
- B.
Some price.
- C.
Some thing in return.
- D.
None of these.
- 5.Which of the following statement is incorrect?
- A.
Consideration is one of the essential elements of a valid contract.
- B.
An act forming consideration must be done at the desire of the promisor.
- C.
Consideration means something which is of some value in the eyes of law. It may be some benefit to the plaintiff or some detriment to the defendant.
- D.
Consideration must always be present as pass or future consideration is not valid consideration.
- 6.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.
- 7.Consideration must move at the desire of ____.
- A.
Promisor
- B.
Promisee
- C.
Promisor or any Third-Party
- D.
Both (a) and (b)
- 8.Consideration ___.
- A.
May move from Promisor.
- B.
Must move form Promisee.
- C.
Must move form Third-Party person.
- D.
May move from promisee or any other.
- 9.Which of the following are the legal requirements (i.e., essential elements ) of a valid consideration? (i) Consideration must be real and not illusory. (ii) Consideration must be of some value in the eyes of law. (iii) Consideration must be adequate. (iv) Consideration must be furnished by the promisee himself.
- A.
(ii), (iii), (iv)
- B.
(i), (ii), (iii), (iv)
- C.
(i), (iii), (iv)
- D.
(i), (ii), (iii)
- 10.Which of the following statements are correct? (i) Consideration may be past, present or future. (ii) Consideration may be either positive or negative. (iii) Consideration must move at the desire of the promisor. (iv) Consideration must be furnished by the promisee himself.
- A.
(i), (iii), (iv)
- B.
(i), (ii), (iv)
- C.
(ii), (iii), (iv)
- D.
(i), (ii), (iii)
- 11.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.
- 12.A promised to obtain for B an 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.
- 13.A promises to pay Rs. 10,000 to B if he brings a star from sky to earth and B agrees to bring the star to earth. In this case, the contract is:
- A.
Valid as three elements namely offer, acceptance and consideration are preset.
- B.
Void, as consideration 'to bring star from sky' is illusory.
- C.
Illegal, as it is made with knowledge of impossibility.
- D.
Contingent as it can be performed on the happening of the contingency.
- 14.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 intervention of the court for enforcement of the contract.
- D.
Binds the promisor (A) to perform the promise by delivering the car to B.
- 15.A promises to give his car to B provided he fetches it from garage. The agreement between A and B is:
- A.
Valid
- B.
Voidable
- C.
Void
- D.
Illegal
- 16.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.
- 17.Consideration must be something which the promisor:
- A.
May voluntarily do.
- B.
Is already bound to do.
- C.
Is not already bound to do.
- D.
Is bound to do under law.
- 18.Consideration:
- A.
Must be adequate to the promise made.
- B.
Need not be adequate to the promise made.
- C.
Must be of greater value than the value of promise.
- D.
Must be of equal value to the value of promise.
- 19.An agreement made with free consent to which the lawful consideration is inadequate, is:
- A.
Void
- B.
Valid
- C.
Voidable
- D.
Unlawful
- 20.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
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