Consideration In Business Law Quiz
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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.
- 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
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