Indian Contract Act, 1872 Questions Latest Indian Contract Act, 1872 MCQ Objective Questions a ean tana) Ps PS Ela mee Ce Cl Ll) eee osc ea Paez rele rire) drones ection Download App Question 1: View this Question Online > A general offer of continuing nature is: 1. An offer given to a specific person/persons and continues for a long time " 2. An offer given to any number of people until is retracted 3. An offer which is by Superseded by another offer 4. An offer Which can be accepted anytime and is never called off WBjpore of the aboveISSEY Semele eee Reo EAU meteors once Answer (Detailed Solut 3elow) Option 2: An offer given to any number of people until is retracted Indian Contract Act, 1872 Question 1 Detailed Solution The correct answer is An offemgiven to any number of people until is retracted ’ An offer is defined under Section 2(a) of The Indian Contract Act 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 to such act or abstinence, he is said to make a proposal." Important Points * When a general offer is of continuing nature, it can be accepted by a number of people till itis retracted. * However, when a similar offer requires information regarding a missing thing, it is closed as soon as the first information comes in. Therefore, the correct answer is Option 2. Ee Ce ane ta lia) CBee ec Start Complete Exam Preparation ra ecey Direc ree inarcag vv’Question 2: View this Question Online > Given below are two statements: Statement |: A agrees to sell to B “white ne five hundred or rupees one thousand". This agreement is vi Statement Il: A agrees to selltoB “a Erde of oil” . This agreement is void. In the light of the above , choose the most appropriate answer from the option: ee and Statement II are correct a. tatement | and Statement Il are incorrect 3. Statement is correct but Statement Il is incorrect 4, Statement | is incorrect but Statement Il is correct Answer (Detailed Solution Below) Option 1: Both Statement | and Statement II are correct Indian Contract Act, 1872 Question 2 Detailed Solution © Key Points Section 29 of Indian Contract Act, 1872: Under which of the following conditions can a proposal be revoked according to the Indian Contract Act 1872? A. By the communication of notice of revocation by the proposer to the other party q B. By the failure of the acceptor to fulfila condition of proposal C. By the death or insanity of the proposer D. By the lapse of the time prescribed E. By notice of revocation after the acceptance is communicated. 1. A. Band Donly ». C, DandE only3. A, B,C and D only 4. AIlA, B,C, D,E Answer (Detailed Solution Below) Option 3: A, B, C and D only Indian Contract Act, 1872 Question 3 Detailed Solution © Key Points Proposal: offer made by one person to another, with an intention to enter i contract. * Itis also referred to as an offer. e * The proposal should be definite and certain, and shoul communicated to the person to whom it is made. * Inthe Indian Contract Act 1872, a proposal is defined as a suggestion at * Once the proposal is accepted, it becom or an agreement, forming a binding contract between the i * However, if the proposal is rejected, i oan end and cannot be revived. X » Important Points Section 6 of Indian Contract 2: Revocation how made —A proposal is revoked— 1. by the communication of notice of revocation by the proposer to the other party; 2. by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance; 3. by the failure of the acceptor to fulfil a condition precedent to acceptance; or 4. by the death or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance. Hence the correct answer is A, B, C and D only.eee ec SS ETa merle ee LiCl) pret a icc jownload App Question 4: View this Question Online > Under which section of Indian Contract Act 1872 is 'Contingent Contract defined? 1. Section 32 2. Section31 4 3. Section'37_ ‘ €X...: 39 Answer (Detailed Solution Below) Option 2: Section 31 Indian Contract Act, 1872 Question 4 Detailed Solution © Key Points Section 31 of Indian Contract Act 1872: “Contingent contract” defined—A “contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. # \mportant Points ‘Conti C ‘* AContingent Contract is a type of contract in which the performance of the contract is dependent on the occurrence or non-occurrence of an uncertain event. + In other words, the contract's fulfilment depends upon the occurrence or non-occurrence of a future event that is not certain to happen. * For example, A agrees to sell his house to B if B's loan application is approved. Here, the sale of the house depends on the approval of B's loan application, which is an uncertain event. If B's loan application is not approved, the contract bee¢emes void. + A Contingent Contract becomes enforceable only if the uncertain event occurs. ‘ + If the uncertain event does not occur, the contract becomes void. * The Indian Contract Act provides certain rules and conditions for the enforcement of Contingent Contracts Hence, Section 31 of Indian Contract Act 1872 defines Contingent Contract. * Section 32: Enforcement of contracts contingent on an event happening. * Section 37: Obligation of parties to contracts. * Section 39: Effect of refusal of party to perform promise wholly & India’s #1 Learning Platform PSE la merle) > Clune Tele) SAR eet Crear raed ay PO reaeeesd Creag peered Download App Question 5: View this Question Online > Given below are two statements: one is labeled as Assertion(A) and the other is labeled as Reason(R) Assertion: A contract made under coercion is voidable at the option of the party whose consent was so obtained Reason: Coercion renders contract void ab initio.In the light of the above statements choose the most appropriate answer from the options given belo’ e 1. Both Assertion In are true, and Reason (R) is the correct — n (A) S* and Reason are true, and Reason (R) is not the correct w nation of Assertion (A) 3. Assertion (A) is True, but Reason (R) is False 4. Assertion (A) is False, but Reason (R) is True Answer (Detailed Solution Below) Option 3: Assertion (A) is True, but Reason (R) is False Indian Contract Act, 1872 Question 5 Detailed Solution © Key Points Coercion- Coercion refers to the use of force or threats to make someone do something against their will. Example: A threatens to hurt B if he doesn't give his son, C, a large sum of money. B believes the threat and gives C the money. This agreement is believed to be coerced. > Important Points Assertion: A contract made under coercion is voidable at the option of the party whose consent was so obtained. "CO * Under Section 19 of Indian Contract Act, 1872, if a contract i: under coercion, the party whose consent was obtained b: n as the option to either affirm the contract or void it. * In other words, the contract is voidable at th i ie coerced party. * This means that the coerced party has igh choose whether to continue with the contract or to cai 4 Hence, Assertion is true.Reason: Coercion renders contract void ab initio. * A contract was void AB Initio, or "void from the beginning," as soon as it was made. * Due to the fact that such a contract was never legitimate in the first place, it can never be declared invalid * The parties are returned to their original locations when a court determines an act to be void ab initio since the agreement essentially never happened and had no binding authority on any of the parties. * Acontract with a minor is an illustration of an AB Initio agreement that is void since the minor is an incompetent party to the contract. Hence, Reason is incorrect as coercion is not void from beginning but is voidable on the consent of party involved. Hence, Assertion (A) is True, but Reason (R) is False. Top Indian Contract Act, 1872 MCQ Objective Questions Ce ABS ira) AS lamer) Clu eel) SUR ona (Ea) Day tive Practice Lid MasterClas Question Bank jownload App Question 6 View this Question Online In which of the following cases, the Doctrine of Supervening impossibility will apply? 1. Difficulty in performance 2. Commercial Impossibility 3. Impossibility known to the parties at the time of making of the contract 4. Strikes, Locks-outs, and civil disturbancesAnswer (Detailed ow Option 3: Impos: ee in to the parties at the time of making of the mre wae, Act, 1872 Question 6 Detailed Solution The correct answer is Impossibility known to the parties at the time of making of the contract. \ Doctrine of Supervening Impossibility: * The Indian Contract Act, 1872 states in Section 56, paragraph 2, that if the doctrine of supervening impossibility applies and a contract becomes impossible or illegal to perform after it is formed, it will be void. + It's interesting to note that, generally speaking, the inability to perform a contract is not a reason for failing to do so. + It only applies where this impossibility results from causes outside the parties’ control. They can only be released from any additional contract obligations in that scenario. * Here, Impossibilities are known to the parties at the time of making of the contract that's why it will be applied. Important Points Doctrine of Supervening Impossibility will be applied in following cases: * Destruction of Subject Matter of Contract: A contract is dismissed if, after it is formed, its subject matter is destroyed without any of the parties’ fault. Non-existence or non-occurrence of a particular state of things: There are occasions when a contract is made based on the occurrence or existence of a specific condition. However, if the circumstances that formed the contract's very foundation change or cease to exist, the agreement is null and void Death or Incapacity of Services: If the performance of a contract depends on a party's qualifications or personal skills and that party's demise, illness, or incapacity renders the contract void, the contract may also be discharged by supervening impossibility. This is true because thi contract's implied terms include a man's life. C Change of law or stepping in of a new law: After the creation o contract, it is possible that the law changes or that an amet made to an ordinance, a special act, or a set of gover The contract is discharged since the change ma carry out the terms of the agreement. CG, 4 *,** Outbreak of war: When two parties from separate nations sign in to a contract with one another and a Wal\is subsequently declared between the countries, the contract typicallybecomes void since it cannot be carried out. ’ & The doctrine of Supervening impossibility will not apply in following cases: * Difficulty in performance: The mere fact that it is now more difficult to carry out a contract due to unforeseen circumstances or delays does not deem it to be fulfilled. * Commercial Impossibility: A contract is not discharged for these reasons if an anticipation of larger profits is not met, the required raw material becomes available at a very expensive price due to the start of a war, or if a sudden depreciation of currency happens. + Impossibility due to failure of third party: A contract is also not discharged if it was unable to be carried out because a third party the promisor had depended on defaulted * Strikes, lock-outs, and civil disturbances: Events like strikes, lockouts, or public unrest do not discharge a contract unless the parties explicitly consented to such terms at the time the contract was signed + Failure of one of the objects: In addition to the aforementioned situations, if a contract is made for a number of purposes, the simple failure of one of those purposes does not cancel the agreement. od Ee aR esl Start Complete Exam Preparation acs cy Oren Pepa iced Creer Question? View this Question Online Given below are two statements: Statement I: Display of goods by a shopkeeper with prices marked on them, is not an offer but an invitation to the public to make an offer to buy the goods. Statement Il: Price quotations, catalogues and advertisements in newspaper for sale of an article do constitute a valid offer.ho In the light of the above Sif choose the most appropriate answer from the options ae . Both State tm statement Il are correct ; nee | and Statement Il are incorrect 3, Statement| is correct but Statement Il is incorrect 4. Statement | is incorrect but Statement II is correct Answer (Detailed Solution Below) Option 3 : Statement | is correct but Statement II is incorrect Indian Contract Act, 1872 Question 7 Detailed Solution The correct answer is Statement | is correct but Statement Il is incorrect An offer is a proposal while an invitation to offer is inviting someone to make a proposal. An Invitation to Offer is an act prior to an offer, in which one person induces another person to make an offer to him, it is known as invitation to offer. ¢ * A catalog of goods is offered, but only an invitation an for offer. * Display of goods with price tags in a self-service shop is merely & invitation to offer. ve @ * instead, it is seen as an invitation to offer - thatis, as a consumer to go forth and make an offi advertisements with published price lists al not have an obligation to sell the goods However, an advertisement can contract. A unilateral contract is ct where there is an offer made to the offeree (the perso! ing the offer being the offeror) to do something and upon co of that particular activity, the offeror would do something in return. for you iser. Even “The sellers do ie advertised prices. an offer for a unilateral© Additional information ‘An offer or proposal made by a person cannot legally be regarded as an offer unless it satisfies the following conditions: * Offer must intend to create legal relations * Terms of offer must be certain, definite, and not vague * The offer must be distinguished from a mere declaration of intention * Offer must be distinguished from an invitation to offer ee Pee fara er Start Complete Exam Preparation eA eer Paha Eizeies Creer paca Download App Questions View this @ Which one of the following is a void contract? 1. Unilateral contract 2. Acontract which ceases to be enforceable by law 3. Implied contract eo y 4. Express contract Answer (Detailed Solution Below) Bo 2 : Acontract which ceases to be enforceable by law Indian Contract Act, 1872 Question 8 Detailed SolutionVoid Contract Or Agreement Section 2(j) of the Act defines a void contract as “A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable” . This makes all those contracts that are not enforceable by a court of law void. CBkey Points 1. An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract; 2. Acontract which ceases to be enforceable by law becomes void when it ceases to be enforceable. Therefore, A contract which ceases to be enforceable by law is a void contract. (additions! Information co" eo 1. Unilateral Contract: Ne + A unilateral contract is a contract agreement in whit 7 1 of r promises to pay after the occurrence of a speci * In general, unilateral contracts are most ofte an open request in which they are * An example of a unilateral contra which is usually partially unjgteral the only party with a conti | obli 2. Implied contract: * An implied contract is a legally-binding obligation that derives from actions, conduct, or circumstances of one or more parties in an agreement. * It has the same legal force as an express contract, which is a contract that is voluntarily entered into and agreed on verbally or in writing by two or more parties. 3. Express Contract: * An express contract is a contract whose terms the parties have explicitly set out. This is also termed as a special contract. + In an express contract, all the elements would be specifically stated. In an express contract, the agreement of the parties is expressed in words, either in oral or written form.E Peete rt Start Complete Exam Preparation pou Treacy ere pare cs Download App Question 9 View this Question Online Which one is the correct sequence implied in the Indian Contract Act 1872? (A) Offer of proposal (B) Contract (C) Promise (D) Agreement (E) Acceptance Choose the correct answer from the options given below: 1. (C). (E). (A). (D), (BY 2. (D),.(B), (C), (A), (E) \ 3. (B), (D), (C), (E), (A) 4. (A), (E), (C), (D), (B) Answer (Detailed Solution Below) Option 4: (A), (E), (C), (D), (B) Indian Contract Act, 1872 Question 9 Detailed SolutionThe Indian Contract Act, 1872: + The Indian Contract Act, 1872 defines the term Contract under its section 2(h) as "An agreement enforceable by law". * This Act is based upon the principles of English Common Law. * All agreements are contracts if they are made by the free consent of parties that are involved in the contract, for a lawful consideration with a lawful object, and are not hereby expressed to be void. 0 |Key-Points The following are the correct sequence implied in the Indian Contract Act 1. Offer: According to the Indian Contract Act 1872, the proposal is defined in Section 2 (a) as “when one person will signify to another person his willingness to do or not do something (abstain) with a view to obtain the assent of such person to such an act or abstinence, he is said to make a proposal or an offer.” Cc 2. Acceptance: The Indian Contract Act 1872 defines acceptance in Section (b) as “When the person to whom the proposal has been made si assent thereto, the offer is said to be accepted. Thus the propx accepted becomes a promise.” 3. Promise: Section 2 of the Indian Contract Act wa ines what promises are- When someone expresses hi s to do (or not to do) something, he is said to make a pror other person (to whom the proposal is made) accepts the F al, the proposal becomes a promise. 4, Agreement: An agreement between private parties creating mutual obligations enforceable by law. The basic elements required for the agreement to be a legally enforceable contract are mutual assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality. Agreement = Offer + Acceptance. 5. Contract: The Indian Contract Act, 1872 defines the term “Contract” under its section 2 (h) as “An agreement enforceable by law” . In other words, we can say that a contract is anything that is an agreement and enforceable by the law of the land. 1 “BL Important Point The objective of the Contract Act is to ensure that the rights and obligations arising out of a contract are honored and that legal remedies are madeVARS MNS LOE) AE VO MAELY Saitoh DS Peel Ramet I Es ea Ue the agreement. Therefore, option 4 is the correct answer. & Teeter tric Ce ays SS Ela OL y i) ly Le LC) Pre ocd Mock Tests PCS Cierny Question Bank Execs Download App Question 10 View this Question Online Statement |): Agreement without consideration is always valid. Statement Il): All contracts are agreements but all agreements are not contracts. In the context of the above two statements, which one of the following codes is correct? 1. Statement| and Il both are correct 2. Both Statements land II are incorrect 3. Statement| is incorrect and Statement Il is correct 4. Statement | is correct and Statement Il is incorrect Answer (Detailed Solution Below) Option 3: Statement | is incorrect and Statement II is correct Indian Contract Act, 1872 Question 10 Detailed SolutionStatement |): Explanation: greement without consideration is always valid. Agreement: In legal parlance, the word ‘agreement’ is Used to mean a promise/commitment or a series of reciprocal promises which constitutes consideration for the parties to contract. In'an agreement, one person offers or proposes something to another person, who in turn accepts the same. In other words, offer plus acceptance amounts to the agreement, or we can say that an accepted proposal is an agreement. Therefore, Agreement wit onsideration is always valid is incorrect. Statement Il): All contracts are agreements but all agreements are not contracts. Explanation: Contract Vs. Agreement: An agreement is any understanding or arrangement reached between two or more parties. A contract is a specific type of agreement that, by its terms and elements, is legally binding and enforceable in a court of law. Thus, all contracts are agreements but all eements are not contracts. Thus, option 3 is the correct answer. Tee Rae Start Complete Exam Preparation Rea eos Pra bec es] Mock Tests airs CCS Ore eucs Download App Question tt View this Question Ontine Arrange the following in order of their manifestations: a) Offer b) Acceptance ‘gant aan nck ait sna RePORM NES See eRe cae Di te Rane: TR ° d) Contract Me GY Choose the correct option fi ollowing: O as ~ b, dandc 3, b,c, aandd 4. a,d,c andb Answer (Detailed Solution Below) Option 2: a,b, dandc Indian Contract Act, 1872 Question 11 Detailed Solution The following are listed in order of their manifestations: 1. Offer: According to the Indian Contract Act 1872, proposal is defined in Section 2 (a) as “when one person will signify to another person his willingness to do or not do something (abstain) with a view to obtain the a: of such person to such an act or abstinence, he is said to make a prongs an offer.” 2. Acceptance: The Indian Contract Act 1872 defines acce| (b) as “When the person to whom the proposal. assent thereto, the offer is said to be accepted accepted becomes a promise.” 3. Contract: The Indian Contract Act, 72 de jes the term “Contract” under its section 2 (h) as “An agre: nt en able by law” . In other words, we can say that a contract is an) nat is an agreement and enforceable by the law of the land. Agreement = Offer + Acceptance. in Section 2 signifies his 4, Breach Of Contract: A breach is a failure by a party to fulfill the obligations under a contract. i BImportant PointFirst, there will be an offer made by one party to the other. If the other party accepts the offer, it becomes a contract (if enforceable by law). If the other party fails to perform the obligations of the contract, it will be considered as breaching. Thus, option 2 is the correct answer. eee an pericin) Ree a Start Complete Exam Preparation Par foe aa i Serer ny Cree eas paar Download App Question 12: View this Question Online > In which of the following cases, the Doctrine of Supervening impossibility will apply? 1. Difficulty in performance 2. Commercial Impossibility 3. Impossibility known to the parties at the time of making of the contract 4. Strikes, Locks-outs, and civil disturbances Answer (Detailed Solutign Below) Option 3: Impossibility known to the parties at the time of making of the contract Indian Contract Act, 1872 Question 12 Detailed SolutionThe correct answer is Impossibility known to the parties at the time of making of the contract. © Doctrine of Supervening Impossibility: * The Indian Contract Act, 1872 states in Section 56, paragraph 2, that if the doctrine of supervening impossibility applies and a contract becomes impossible or illegal to perform after it is formed, it will be void. * It's interesting to note that, generally speaking, the inability to perform a contract is not a reason for failing to do so. + It only applies where this impossibility results from causes outside the parties' control. They can only be released from any additional contract obligations in that scenario. * Here, Impossibilities are known to the parties at the time of making of the contract that's why it will be applied. » Important Points Doctrine of Supervening Impossibility will be applied in following cases: * Destruction of Subject Matter of Contract: A contract is dismissed if, after it is formed, its subject matter is destroyed without any of the parties’ fault. Non-existence or non-occurrence of a particular state of things: There are occasions when a contract is made based on the occurrence or existence of a specific condition. However, if the circumstances that formed the contract's very foundation change or cease to exist, the agreement is null and void Death or Incapacity of Services: If the performance of a contract depends on a party's qualifications or personal skills and that party's demise, illness, or incapacity renders the contract void, the contract may also be discharged by supervening impossibility. This is true because the contract's implied terms include a man’s life. GS Change of law or stepping in of a new law: After the creation of a contract, it is possible that the law changes or that an amend made to an ordinance, a special act, or a set of governm tions. The contract is discharged since the change "oN le to carry out the terms of the agreement. Outbreak of war: When two parties from se contract with one another and a war i sie the countries, the contract typic T ical carried out. ‘~ B: Addi f The doctrine of Supervening impossibility will not apply in following cases: ions sign in toa ly declared between oid since it cannot be * Difficulty in performance: The mere fact that it now more difficult toHae eee ee Sree Ee er EUS e ee en ee OLE OURS SES SS ee not deem it to be fulfilled. Commercial Impossibility: A contract is not discharged for these reasons if an anticipation of larger profits is not met, the required raw material becomes available at a very expensive price due to the start of a war, or if a sudden depreciation of currency happens. Impossibility due to failure of third party: A contract is also not discharged if it was unable to be carried out because a third party the promisor had depended on defaulted. Strikes, lock-outs, and civil disturbances: Events like strikes, lockouts, or public unrest do not discharge a contract unless the parties explicitly consented to such terms at the time the contract was signed. Failure of one of the objects: In addition to the aforementioned situations, if a contract is made for a number of purposes, the simple failure of one of those purposes does not cancel the agreement. yoo * India’s #1 Learning Platform “Ere pa Start Complete Exam Preparation ies oh Cees Pecos Cres) Pao Download App Question 13: View this Question Online > Which one of the following is a void contract? 1. Unilateral contract 2. Acontract which ceases to be enforceable by law 3. Implied contract [ , 4. Express contract Ec AlLAt+hn See\ 2 (Detailed Solution Below) Option 2: A contract which ceases to be enforceable by law Indian Contract Act, 1872 Question 13 Detailed Solution Void Contract Or Agreement Section 2(j) of the Act defines a void contract as “A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable” . This makes all those contracts that are not enforceable by a court of law void. @Dkey-Points 1. An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract; 2. A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable. Therefore, A contract which ceases to be enforceable by law is a void contract. Additional Information oO 1, Unilateral Contract: at * A unilateral contract is a contract agreement in eror promises to pay after the occurrence of a sp act. sed when an offeror has * In general, unilateral contracts are most o an open request in which they are ‘willi y for a specified act. + An example of a unilateral cgptrac’ surance policy contract, which is usually partially . In a unilateral contract, the offeror is the only party with a contra bligation. 2. Implied contract: * An implied contract is a legally-binding obligation that derives from actions, conduct, or circumstances of one or more parties in an agreement. * It has the same legal force as an express contract, which is a contract that is voluntarily entered into and agreed on verbally or in writing hy twin ar more nartioc3. Express Contract: + An express contract is a contract whose terms the parties have explicitly set out. This is also termed as a special contract. * In an express contract, all the elements would be specifically stated. In an express contract, the agreement of the parties is expressed in words, either in oral or written form. ee ieee eu! barely Start Complete Exam Preparation Prue ested Drs eee eras Download App Question 14: View this Question Online > Given below are two statements: Statement I: Display of goods by a shopkeeper with prices marked on them, is not an offer but an invitation to the public to make an offer to buy the goods. Statement Il: Price quotations, catalogues and advertisements in newspaper for sale of an article do constitute a valid offer. In the light of the above statements, choose the most appropriate answer from the options given below: 1. Both Statement ! and Statement Il are correct Deut Statement | and Statement Il are incorrect 3. Statement is correct but Statement Il is incorrect 4. Statement | is incorrect but Statement Il is correctAnswer (Detailed Solution Below) Option 3: Statement | is correct but Statement Il is incorrect Indian Contract Act, 1872 Question 14 Detailed Solution The correct answer is Statement | is correct but Statement Il is incorrect © Key Points An offer is a proposal while an invitation to offer is inviting someone to make a proposal. An Invitation to Offer is an act prior to an offer, in which one person induces another person to make an offer to him, itis known ase= invitation to offer. * A catalog of goods is offered, but only an invitation an for offer. * Display of goods with price tags in a self-service shop ‘is merely an invitation to offer. % * instead, it is seen as an invitation to offer - thatis, an invitation for you as a consumer to go forth and make. an offer to the advertiser. Even advertisements with published price | lists are not offers. The sellers do not have an obligation to he goods to you at the advertised prices. However, an advertise! be seen as an offer for a unilateral contract. A unilateral contract is a contract where there is an offer made to the offeree (the person making the offer being the offeror) to do something and upon completion of that particular activity, the offeror would do something in return. ©: Additional Int An offer or proposal made by a person cannot legally be regarded as an offer unless it satisfies the following conditions: * Offer must intend to create legal relations * Terms of offer must be certain, definite, and not vague * The offer must be distinguished from a mere declaration of intention * Offer must be distinguished from an invitation to offer Tee an ete) Start Complete Exam Preparation Rea ect Oars Practice Teas) Reena Crear ExonDownload App Question 15: View this Question Online > Statement |: As per Section 125 of the Indian Contract Act, a contract of indemnity is a contract by which one party promises to save the other party from loss caused to him. Statement Il: The person who promises to indemnify or make good the loss is called the indemnity holder and the person whose loss is made is called indemnifier. m Which of the above statement (s) is/are true? ™ Both | and Il » 4. None of the above Answer (Detailed Solution Below) Option 4: None of the above Indian Contract Act, 1872 Question 15 Detailed Solution Both statements are incorrect. CP xey-Points An explanation for Statement I: Section 125: The promisee in a contract of indemnity, acting within the scopeor nis authority, is entitted to recover trom the promiser- (1) all damages which he may be compelled to pay in any suit in respect of any matter to which the promise to indemnify applies; . (2) all costs which he may be compelled to pay in any such suit if, in bringi or defending it, he did not contravene the orders of the promiser, and as it would have been prudent for him to act in the absence of al Ol of indemnity, or if the promiser authorized him to bring or def iti (3) all sums which he may have paid Aare of any compromise of any such suit, if the compromis: ontrary to the orders of the promiser, and was one which vt have been prudent for the promisee to make in the absence of any contract of indemnity, or if the promiser authorized him to compromise the suit. However, As per Section 124 of the Indian Contract Act, a contract of indemnity is a contract by which one party promises to save the other party from loss caused to him. An explanation for Statement II: There are generally two parties in indemnity contracts: * The Indemnity holder is the one who is protected from any liability. * The Indemnifier is the one who promises to reimburse the Indemnitee for any claims. Therefore, the person who promises to indemnify or make good the loss is called the indemnified, and the person whose loss is made is called the indemnity holder.