Tamilnadu State Board New Syllabus Samacheer Kalvi 11th Commerce Guide Pdf Chapter 29 Elements of Contract Text Book Back Questions and Answers, Notes.
Tamilnadu Samacheer Kalvi 11th Commerce Solutions Chapter 29 Elements of Contract
11th Commerce Guide Elements of Contract Text Book Back Questions and Answers
I Choose the Correct Answer
Question 1.
An agreement enforceable by law is a ………………..
(a) Enforceable acceptance
(b) Accepted offer
(c) Approved promise
(d) Contract
Answer:
(d) Contract
Question 2.
Every promise and every set of promises, forming the consideration for each other, is an
(a) Agreement
(b) Contract
(c) Offer
(d) Acceptance
Answer:
(a) Agreement
Question 3.
Void agreement signifies ……………….
(a) Agreement illegal in nature
(b) Agreement not enforceable by law
(c) Agreement violating legal procedure
(d) Agreement against public policy
Answer:
(b) Agreement not enforceable by law
Question 4.
Acceptance to be valid must ………………….
(a) Be absolute
(b) Be unqualified
(c) Both be absolute & unqualified
(d) Be conditional
Answer:
(c) Both be absolute & unqualified
Question 5.
A contract with or by a minor is a ……………
(a) Valid contract
(b) Void contract
(c) Voidable contract .
(d) Voidable at the option of either party
Answer:
(d) Voidable at the option of either party
II. Very Short Answer Questions
Question 1.
What is law?
Answer:
Law means a ‘set of rules’ which governs our behaviour and relating in a civilized society.
Question 2.
Why should one know the law?
Answer:
One should know the law to which he/she is subjected to hecausç ignorance of law is no excuse.
Question 3.
Can a minor enter into a Contract?
Answer:
As per the Indian Contract Act 1872, a contract entered by or with a minor is void as well as void-abinitio. Which means it has no legal effect from the very beginning.
Question 4.
Who can enter into a Contract?
Answer:
The Indian Contract Act specifies that every person is competent to contract provided he/she
- Is of the age of majority according to the law which he/she is subject to, and
- Who is of sound mind and
- Is not disqualified from contracting by any law to which he is subject to, an alien enemy, foreign sovereigns and accredited representative of a foreign state, insolvents, and convicts are not competent to contract.
Question 5.
Define Contract
Answer:
Contract 2(h) An agreement enforceable by Law is a Contract.
III Short Answer Questions
Question 1.
Define Offer:
Answer:
According to section 2(a) of Indian Contract Act Offer is defined as “When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other person either to such act or abstinence, he is said to make a proposal”.
Question 2.
What do you mean by Agreement?
Answer:
An “agreement” means ‘a promise or a set of promises’ forming consideration for each other. A promise arises when a proposal is accepted. By implication, an agreement is an accepted proposal. In other words, an agreement consists of an ‘offer’ and its ‘acceptance’.
Agreement = offer / Proposal + Acceptance
Question 3.
Define a Voidable Contract:
Answer:
According to Section 2 (i) of the Indian Contract Act 1872, a voidable contract is, “An agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a voidable contract”.
Question 4.
What do you mean by Revocation?
Answer:
The Revocation means the withdrawal of an offer power of attorney.
Question 5.
Who is a promisor, promisee?
Answer:
Promisor: The person who has become obliged through a promise is known as a promisor
Promisee: The person to whom the promise has been made is known as the promisee.
IV Long Answer Questions
Question 1.
Explain the essentials of a Valid Contract:
Answer:
- Offer and Acceptance: There must be two parties to an agreement namely one party making the offer and the other party accepting it.
- Legal Relationship: The parties must have the intention to create legal relations between them. An agreement of Social or domestic nature is not at all a contract.
- Lawful Consideration (quid pro quo) : As per Contract Act under Sec.2(d) Consideration means something in return. A contract without consideration becomes invalid.
- Lawful Object (Section 23) : The object of the agreement should be lawful and legal. It must not be immoral, illegal or opposed to public policy.
- Free Consent (Section 13 & 14) : Consent of the parties must be free and genuine. Consent means agreeing upon the same thing in the same sense at the same time i.e. there should be a consensus – ad – idem. Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation, or mistake.
- The capacity of Parties (Section 11): The parties to a contract must have the capacity (legal ability) to make a valid contract.
- The certainty of Terms (Section 29): The agreement should be clear to the parties of the agreement. The agreement must be precise.
- Possibility of Performance (Section 56) : The terms of the agreement should be capable of performing. An agreement to do an act, impossible in itself cannot be enforced.
- Not declared Void: The agreement should be such that it should be capable of being enforced by law. Certain agreements have been expressly declared illegal or void by the law.
- Necessary Legal Formalities: A contract may be oral or in writing. Where a particular type of contract is required by law to be in writing and registered, it must comply with necessary formalities as to writing, registration, and attestation.
Question 2.
Difference between Contract and Agreement.
Answer:
Basis of Difference |
Contract |
Agreement |
1. Definition | A contract is an agreement enforceable by law | An agreement is every promise or every set of promises forming consideration |
2. Enforceability | Every contract is enforceable | Every promise is not enforceable |
3. Interrelationship | A contract includes an agreement | An agreement does not include a contract |
4. Validity | Only legal agreements are called contracts | An agreement may be both legal or illegal |
5. Legal Obligation | Every contract contains a legal ‘ obligation. | It is not necessary for every agreement to have a legal obligation. |
Question 3.
Explain the classification of Contract on the basis of the Validity.
Answer:
- Valid Contract: An agreement which fulfills all the essentials prescribed by law on the basis of its creation. For example, S offers to sell his car for Rs.2,00,000 to T. T agrees to buy it. It is a Valid Contract.
- Void Contract 2(j): A contract which ceases to be enforceable by law. A contract which does not satisfy any of the essential elements of a valid contract is said to be Void.
- Voidable Contract 2(i): An agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a voidable contract.
- Illegal Contract: It is a contract which is forbidden by law. All illegal agreements are Void but all void agreements or contracts are not necessarily illegal. A contract that is immoral or opposed to public policy is illegal in nature.
- Unenforceable Contract: Where a contract is unenforceable because of some technical defect i.e. absence in writing barred by imitation etc. If the parties perform the contract it will be valid, but the court will not compel them if they do not.
Question 4.
Explain the classification of Contract on the basis of the Formation.
Answer:
Express Contract:
A contract made by the word spoken or written. According to Section.9, in so far as the proposal or acceptance of any promise is made in words, the promise is said to be express. For example, P says to Q ‘will you buy my bicycle for Rs.l,000?” Q says to P “Yes”.
Implied Contract:
The implied contract is one, which is not expressly written but understood by the conduct of parties. Where the proposal or acceptance of any promise is made otherwise than in words, the promise is said to be implied. For example, A gets into a public bus, there is an implied contract that he will pay the bus fare.
Quasi Contract:
It is a contract created by law. Actually, there is no contract. It is based on the principle that “a person shall not be allowed to enrich himself unjustly at the expense of the other”. In other words, it is an obligation of one party to another imposed by law independent of an agreement between the parties.
Tacit Contract:
A contract is said to be tacit when it has to be inferred from the conduct of the parties. For example, obtaining cash through an automatic teller machine, sale by fall of the hammer of an auction sale.
Question 5.
Explain the classification of Contract on the basis of the Performance.
Answer:
1. Executed Contract: A contract in which both the parties have fulfilled their obligations under the contract. For example X contracts to buy a car from Y by paying cash, Y instantly delivers his car.
2. Executory Contract: A contract in which both the parties are yet to fulfill their obligations, is said to be an executory contract. For example, A agrees to buy B’s cycle by promising to pay cash on 15th June. B agrees to deliver the cycle on 20th June.
3. Unilateral Contract: A unilateral contract is a one-sided contract in which only one party has performed his promise or obligation, the other party has to perform his promise or obligation.
For example, X promises to pay Y a sum of Rs. 10,000 for the goods to be delivered by Y. X paid the money and Y is yet to deliver the goods.
4. Bilateral Contract: A contract in which both the parties commit to performing their respective promises is called a bilateral contract. For example, R offers to sell his fiat car to S for Rs. 10,00,000 on acceptance of R’s offer by S, there is a promise by R to Sell the car and there is a promise by S to purchase the car, there are two promises.
11th Commerce Guide Elements of Contract Additional Important Questions and Answers
I. Choose the Correct Answer
Question 1.
Contracts classified on the basis of performance are
a. executed contracts
b. executory contracts
c. partly executed or partly executory contracts
d. all of the above
Answer:
d. all of the above
Question 2.
A contract in which, under the terms of a contract, nothing remains to be done by either party is known as
a. executed contract
b. executory contract
c. unilateral contract
d. none of the above
Answer:
a. executed contract
Question 3.
All illegal agreements are void, but all void agreements are not illegal.
a. True
b. Partly true
c. False
d. None of the above
Answer:
a. True
Question 4.
A appoints B as his agent, by way of a power of attorney. This is an example of
a. express contract
b. implied contract
c. tacit contract
d. unlawful contract
Answer:
a. express contract
Question 5.
A contract creates
a. rights in person
b. rights in parties
c. no obligations
d. only obligations and no rights
Answer:
a. rights in person
Question 6.
The Contract Act came into force
a. from 1 September 1972.
b. before 1 September 1882.
c. from 1 September 1872.
d. after 1 September 1872.
Answer:
c. from 1 September 1872.
II. Very Short Answer Questions:
Question 1.
What is meant by Tacit Contract?
Answer:
A Contract is said to be tacit when it has to be inferred from the conduct of the parties. For example, obtaining cash through an automatic teller machine, sale by fall of the hammer of an auction sale.
Question 2.
What are all the two parts of the Indian Contract Act?
Answer:
- General Contract
- Special Contract
Question 3.
What do you mean by Acceptance?
Answer:
According to section 2(b) of the Indian Contract Act 1872, When the person to whom the proposal is made, signifies his assent thereto. the proposal is said to be accepted.
III Short Answer Questions.
Question 1.
Write a short note on Bilateral Contract.
Answer:
A contract in which both the parties commit to performing their respective promises is called a bilateral contract. For example, R offers to sell his fiat car to S for Rs. 10,00,000 on acceptance of R’s offer by S, there is a promise by R to Sell the car and there is a promise by S to purchase the car, there are two promises.
Question 2.
What are all the types of agreements?
Answer:
Agreements are all in the following types: Agreement no enforceable by law – Any essential of a valid contract is not available. An agreement enforceable by law – All essentials of a valid contract are available.
Question 3.
Explain the term Consideration:
Answer:
As per section 2(d) When at the desire of the promisor, the promisee or any other person has done or abstained from doing something or does or abstains from doing something or promises to do or abstain from doing something, such act or abstinence or promise is called a consideration for the promise.
IV Long Answer Questions:
Question 1.
Write a note on the Indian Contract Act.
Answer:
The Indian Contract Act occupies the most important place in Commercial Law. Without Contract Act, it would have been difficult to carry on a trade or any other business activity. The main object of the contract action is to assure that the rights and obligations which arise out of the contract are carried out and in case of failure to do so, the remedies are made available to the affected party. The Indian Contract Act is so much infused in the daily lives that it affects all.
Every purchase that one does, or a loan taken from a banker, or a ride one takes in a bus and many other transactions of daily life have its impact by Contract Act. The English common law is the basis for the development of the Indian Contract Act 1872. The Act came into force on 1st September 1872 and applies to the whole of India except the state of Jammu and Kashmir. This Act applies to the usage of trade and lays down the general principles.