CAF-4 · Chapter 7
Contingent and quasi-contracts MCQs with Answers
12 multiple-choice questions on Contingent and quasi-contracts for CAF-4 Business Law Dynamics. Try each one before revealing the answer and explanation.
Practise this chapter interactivelyQuestion 1
A contract to do or not to do something, if some event, collateral to such contract, does or does not happen, is called a:
- A) Quasi-contract
- B) Wagering agreement
- C) Contingent contract
- D) Void contract
Show answer & explanation
Answer: C) Contingent contract
This is the legal definition of a contingent contract under Section 31.
Question 2
A contingent contract to do something if an uncertain future event happens can be enforced by law:
- A) As soon as the contract is signed.
- B) Only when that event has happened.
- C) If the event becomes impossible.
- D) If both parties agree later.
Show answer & explanation
Answer: B) Only when that event has happened.
Section 32 states that contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened.
Question 3
If a contingent contract is based on an event which becomes 'impossible', the contract becomes:
- A) Voidable.
- B) Valid.
- C) Void.
- D) Illegal.
Show answer & explanation
Answer: C) Void.
According to Section 32, if the event becomes impossible, such contracts become void.
Question 4
Azam promises to pay Babar Rs. 10,000 if Babar marries Chanda. Chanda marries David. What happens to the contract between Azam and Babar?
- A) It remains valid for 10 years.
- B) It becomes void because the event (marriage to Babar) is now considered impossible.
- C) It is voidable at Babar's option.
- D) David is now liable to pay the money.
Show answer & explanation
Answer: B) It becomes void because the event (marriage to Babar) is now considered impossible.
Under Section 34, if the event is the future conduct of a person, the event is considered impossible if that person does something that renders it impossible that he should so act.
Question 5
Which of the following is NOT a characteristic of a 'quasi-contract'?
- A) It is based on a formal agreement between parties.
- B) It is imposed by law.
- C) It is based on the principle of 'no one should be unjustly enriched'.
- D) It creates a right in personam (against a specific person).
Show answer & explanation
Answer: A) It is based on a formal agreement between parties.
Quasi-contracts (relations resembling contracts) are NOT based on any agreement or offer/acceptance; they are created by law to prevent injustice.
Question 6
A person who finds goods belonging to another and takes them into his custody, is subject to the same responsibility as a:
- A) Thief.
- B) Bailee.
- C) Owner.
- D) Agent.
Show answer & explanation
Answer: B) Bailee.
Section 71 states that a finder of goods has the same responsibility as a bailee (duty to take care and return to the owner).
Question 7
A person to whom money has been paid, or anything delivered, by 'mistake' or under 'coercion', must:
- A) Keep it as a gift.
- B) Repay or return it.
- C) Only return it if the court orders.
- D) Pay 50% of the value back.
Show answer & explanation
Answer: B) Repay or return it.
Section 72 creates a quasi-contractual obligation to return money or property received by mistake or coercion.
Question 8
Where a person lawfully does anything for another person, not intending to do so 'gratuitously' (for free), and such other person enjoys the benefit thereof, the latter is bound to:
- A) Thank the person.
- B) Make compensation or restore the thing.
- C) Ignore the person.
- D) Return 50% of the benefit.
Show answer & explanation
Answer: B) Make compensation or restore the thing.
Section 70 (Quantum Meruit) requires a person who enjoys a non-gratuitous benefit to pay for it.
Question 9
If an agreement is discovered to be void, any person who has received any advantage under such agreement is bound:
- A) To keep the advantage.
- B) To restore it, or make compensation for it, to the person from whom he received it.
- C) To pay a fine to the government.
- D) To donate it to charity.
Show answer & explanation
Answer: B) To restore it, or make compensation for it, to the person from whom he received it.
Section 64/65 (Restitution) requires the restoration of benefits received under void or voidable contracts.
Question 10
Azam, a tradesman, leaves goods at Babar's house by mistake. Babar treats the goods as his own and consumes them. Is Babar bound to pay Azam?
- A) No, because there was no contract.
- B) Yes, under the principle of quasi-contract (Section 70).
- C) No, it was Azam's fault for being careless.
- D) Only if Azam sends a legal notice.
Show answer & explanation
Answer: B) Yes, under the principle of quasi-contract (Section 70).
Since Babar enjoyed the benefit of the goods and Azam did not intend them to be a gift, Babar must pay for them.
Question 11
A contingent contract to do something if a specified uncertain event DOES NOT happen within a fixed time can be enforced when:
- A) The time has expired and the event has not happened.
- B) Before the time expires, it becomes certain the event will not happen.
- C) Both A and B.
- D) Never.
Show answer & explanation
Answer: C) Both A and B.
Section 35 states such contracts can be enforced when the time expires without the event happening, or if it becomes certain the event won't happen before the time is up.
Question 12
Agreements contingent on impossible events are:
- A) Voidable.
- B) Valid.
- C) Void.
- D) Suspended.
Show answer & explanation
Answer: C) Void.
Section 36 states that contingent agreements to do or not to do anything, if an impossible event happens, are void, whether the impossibility was known or not.