Law of Contract Questions and Answers Part-1

1. Section ------------ of Indian Contract Act defines a contract of Indemnity
a) Section 127
b) Section 124
c) Section 125
d) Section 130

Answer: b

2. A contract by which one party promises the other party to save from loss which may be caused either by the conduct of the promissor or by the conduct of any other person is called as --------
a) Contract of Bailment
b) Contract of Guarantee
c) Contract of Pledge
d) Contract of Indemnity

Answer: d

3.In a contract of Indemnity there are --------
a) 3 parties and one contract
b) 2 parties and 2 contracts
c) 3 parties and 3 contracts
d) 2 parties and one contract

Answer: d

4.A Contract of Indemnity is -------
a) Void Agreement
b) Quasi Contract
c) Contingent Contract
d) Wagering Contract

Answer: c

5. A -------------- is a contract to perform the promise or discharge the liability of a third person in case of his default.
a) Contract of Guarantee
b) Contract of Bailment
c) Contract of Indemnity
d) Contract of Pledge

Answer: a

6.A Contract of Guarantee is a -------------- agreement
a) Bipartite agreement
b) Tripartite agreement
c) Either (A) or (B)
d) None of these

Answer: b

7.Surety is a person who ------------
a) Who gives the guarantee
b) To whom the guarantee is given
c) In respect of whose default the guarantee is given
d) None of the above

Answer: a

8.Liability of surety is ----------------------
a) Conditional on default
b) Independent of default
c) Can be conditional or independent
d) None of the above

Answer: a

9.A continuing guarantee applies to ------
a) Reasonable number of transactions
b) Any number of transactions
c) A series of transactions
d) A specific transaction

Answer: c

10. A surety can be discharged from his liability by -----
a) By Notice
b) By Novation
c) By his Death
d) All the above

Answer: d