1. The law provides for certain remedies in case there is no real agreement. Which of the following remedy cannot be claimed by the parties? 

(a) The agreement to be considered as void 
(b) The party at fault can be compelled to pay damages  
(c) The contract becomes voidable at the option of the parties 
(d) Right to sell the personal property of the other party 

2. The damages which are accorded to establish the right of decree for breach of contract is called a 

(a) Nominal damages 
(b) Liquidated damages 
(c) Exemplary damages 
(d) Special damages 

3. The damages awarded for breach of promise of marriage or wrongful dishonour of cheque is called as

(a) Nominal damages 
(b) Exemplary damages 
(c) Liquidated damages 
(d) Special damages 

4. A contract by which one party promises to save the other by the loss caused by the conduct of the promisor is called as

(a) Contract of indemnity 
(b) Bailment 
(c) Contract of guarantee 
(d) Contract of warranty

5. The rights of the indemnity holder is covered by 

(a) Section 125 
(b) Section 101 
(c) Section 224 
(d) None of the above 

6. Which of the following remedy is not available to the indemnity holder? 

(a) Right to receive the damages paid by him from the promisor 
(b) Right to receive from the promisor the cost incurred in any suit 
(c) Receive from the promisor an appropriate sum for loss caused to his image  
(d) Receive from the promisor, all sums of money paid by him in terms of compromise of the suit 

7. A contract to perform a promise or discharge the liability of a third party is called

(a) Contract of indemnity 
(b) Contract of agency 
(c) Contract of guarantee 
(d) Contract of warranty 

8. How many parties are there in a contract of indemnity and guarantee respectively? 

(a) 2 and 3 
(b) 3 and 2 
(c) 2 and 5 
(d) 5 and 2 

9. Which of the following statement is true? 

(a) There are three parties in a contract of a guarantee 
(b) The liability of the surety is co- extensive with that of the principal debtor 
(c) A creditor is not bound to proceed against the principle debtor 
(d) All of the above 

10. An agent in NOT personally liable for 

(a) Contract entered with third parties on behalf of employer 
(b) Signs the agreement in his own name 
(c) Where the agent works for foreign principal 
(d) Where the contract expressly provides for the personal liability 

MCQs on Indian Contract Act 1872