Law of Contracts — Practice

Question 1

Principle: The display of goods with a price tag is an invitation to offer, not an offer.
Facts: A shop displays a shirt marked ₹500. A customer picks it up and says, 'I'll take it for ₹500,' but the shopkeeper refuses to sell.
Is the shopkeeper bound to sell?
(a) Yes, the price tag was an offer the customer accepted (b) No, the display was only an invitation to offer (c) Yes, because the shirt was on display (d) No, only because the customer was rude

Accepted Answer

(b) No.

The display is an invitation to offer. The customer's statement is the offer, which the shopkeeper is free to decline. There is no contract.

Question 2

Principle: A counter-offer destroys the original offer, which cannot then be accepted.
Facts: A offers to sell his car to B for ₹3,00,000. B replies, 'I'll pay ₹2,50,000.' A refuses. B then says, 'Fine, I'll pay ₹3,00,000.'
Is A bound to sell at ₹3,00,000?
(a) Yes, B finally agreed to the price (b) No, B's ₹2,50,000 reply was a counter-offer that destroyed the original offer (c) Yes, because A first offered that price (d) No, only because A had already refused once

Accepted Answer

(b) No.

B's ₹2,50,000 reply was a counter-offer, which destroyed A's original ₹3,00,000 offer. That offer no longer existed for B to accept later, so there is no contract.

Question 3

Principle: Consideration need not be adequate; it must only be real and lawful, and consent must be free.
Facts: A, of his own free will, agrees to sell his watch worth ₹10,000 to B for just ₹100.
Is this a valid contract?
(a) No, ₹100 is far too low (b) Yes, consideration need not be adequate where consent is free (c) No, because the watch is worth more (d) Yes, only if B is a relative

Accepted Answer

(b) Yes.

Adequacy of consideration is not required. Since A consented freely, the low price does not invalidate the contract.

Question 4

Principle: An agreement with a minor is void ab initio and cannot be enforced against the minor.
Facts: R, aged 16, agrees to buy a motorcycle on credit from a dealer and later refuses to pay. The dealer sues R for the price.
Can the dealer recover the price from R on the contract?
(a) Yes, R agreed to buy it (b) No, an agreement with a minor is void from the beginning (c) Yes, because R took the motorcycle (d) No, only if R returns the motorcycle first

Accepted Answer

(b) No.

A minor's agreement is void ab initio, so the dealer cannot sue R on the contract. (A motorcycle bought on credit is not a 'necessary', so that exception does not help the dealer either.)

Question 5

Principle: A person who supplies necessaries suited to a minor's condition in life may recover a reasonable price from the minor's property.
Facts: S supplies basic food and clothing to M, a 15-year-old orphan with property but no guardian. M does not pay.
Can S recover?
(a) No, all agreements with minors are unenforceable (b) Yes, a reasonable price for necessaries from M's property (c) Yes, the full amount personally from M (d) No, because M is an orphan

Accepted Answer

(b) Yes.

Necessaries supplied to a minor are recoverable — but only a reasonable price, and from the minor's property, not from the minor personally.

Question 6

Principle: When consent to an agreement is caused by coercion, the contract is voidable at the option of the party whose consent was so caused.
Facts: A threatens to set fire to B's shop unless B sells him his land. Frightened, B signs the sale.
What is the status of the contract?
(a) Valid and binding on B (b) Voidable at B's option (c) Void from the beginning (d) Voidable at A's option

Accepted Answer

(b) Voidable at B's option.

B's consent was caused by coercion, so the contract is voidable at B's choice — B may either affirm or rescind it. It is not automatically void, and the option belongs to the victim (B), not A.

Question 7

Principle: Where both parties to an agreement are mistaken about a fact essential to the agreement, the agreement is void.
Facts: A agrees to buy a specific painting from B. Unknown to both, the painting had been destroyed in a fire the night before the agreement.
What is the status?
(a) Valid — A must pay for the painting (b) Void — both parties were mistaken about the painting's existence (c) Voidable at A's option (d) Voidable at B's option

Accepted Answer

(b) Void.

Both parties were mistaken about a fact essential to the agreement (the very existence of the subject matter). A bilateral mistake of essential fact makes the agreement void, not merely voidable.

Question 8

Principle: A wagering (betting) agreement is void, and no suit lies to recover anything won on such a wager.
Facts: A and B bet ₹5,000 on the result of a cricket match. A's team wins, but B refuses to pay. A sues B.
Can A recover the ₹5,000?
(a) Yes, A won the bet fairly (b) No, a wagering agreement is void and unenforceable (c) Yes, because B agreed to the bet (d) No, only because there was no written agreement

Accepted Answer

(b) No.

A wagering agreement is void; no suit lies to recover winnings. A cannot enforce the bet regardless of having won.

Question 9

Principle: Acceptance must be communicated; an offeror cannot treat the other party's silence as acceptance.
Facts: A writes to B, 'I offer to sell my bike for ₹20,000. If I do not hear from you by Friday, I shall assume you have accepted.' B says nothing.
Is there a contract on Friday?
(a) Yes, B did not object (b) No, silence cannot be treated as acceptance (c) Yes, because A set a clear deadline (d) No, only because ₹20,000 is too high

Accepted Answer

(b) No.

Silence is not acceptance, and an offeror cannot impose a contract by declaring that silence will count as consent. Without communicated acceptance, no contract arises.

Practice — Law of Contracts

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