List of top Legal Studies Questions on Contract Law asked in CLAT

Principle: The consideration or object of an agreement is unlawful if it is forbidden by law. Every agreement with an unlawful object or consideration is void. Facts: 'X' promises to pay 'Y' Rs. 50,000 if 'Y' commits a crime, and 'X' further promises to indemnify 'Y' against any liability. 'Y' agrees to act.
Principle: The consideration or object of an agreement is unlawful if the Court regards it as opposed to public policy. Facts: 'X' promises to secure a public service job for 'Y', and 'Y' promises to pay Rs. 5,00,000 to 'X'.
Principle: 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. The expression of willingness/desire results in a valid proposal only when it is made/addressed to some person(s). Facts: 'X' makes the following statement in an uninhabited hall: "I wish to sell my mobile phone for Rs. 1,000."
P, Q and K made a joint promise to give S a sum of Rs. 3000. S recovered the whole amount from P. Q was declared insolvent and cannot give anything. Which statement out of the following is correct?
X went to Y's house and forgot his bag which contained 1 kg sweets. Y's children consumed the sweets. Decide the liability of Y.
X, a married woman, agreed to live in adultery with B and also agreed to serve him as his housekeeper. In return, B agreed to pay X Rs. 500 per month for living in adultery and Rs. 500 per month for housekeeping. The agreement is:
Ramu applied for the post of Director in an organization. The governing body of the organization passed a resolution appointing him to the post. After the meeting, one of the members of the governing body informed him privately of the resolution. Subsequently, the resolution was rescinded. Ramu claims damages. Which one of the following is the correct legal proposition in the case?
Assertion (A): A person claims compensation for his non-gratuitous act.
Reason (R): A person who enjoys benefit from lawful, non-gratuitous act of another must compensate him even though there is no contract.
Assertion (A): A void contract is not necessarily illegal.
Reason (R): Every illegal contract is void.
Principle: Proposal (communication) + Acceptance (communication) + Consideration = Contract. The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.
Facts: X’s nephew absconded from home. He sent his servant in search of the boy. After the servant had left, X by handbills offered to pay Rs. 501 to anybody finding his nephew. The servant came to know of this offer only after he had already traced the missing child. He brought an action to recover the reward.
Principle: Agreements, the meaning of which is not certain, or not capable of being made certain, are void.
Facts: A horse was bought for a certain price coupled with a promise to give Rs. 500 more if the horse is proved lucky.
Principle: Mere silence as to the facts likely to affect the willingness of a person to enter into a contract is not a fraud, unless the circumstances of the case are such that, on close examination, it is found to be the duty of the person keeping silent to speak, or unless his silence is, in itself, equivalent to speech.
Facts: X sells by auction to Y, a horse which X knows to be of unsound state of mind. X says nothing to V about the horse's unsound state of mind. Give the correct answer—
Principle: When one person signifies to another his willingness to do or abstain from doing anything, with a view to obtaining the assent of that person to such an act or abstinence, he is said to have made a proposal.
Fact: "Ramanuj telegraphed to Shyam Sunder, writing: \emph{Will you sell me your Rolls Royce Car? Telegram the lowest cash price.}" Shyam Sunder replied by telegram: \emph{"Lowest price for Car is Rs. 20 lakh."} Ramanuj immediately sent his consent through telegram stating: \emph{"Agree to buy the Car for Rs. 20 lakh asked by you."} Shyam Sunder refused to sell the car.
Principle: Every person, who is of the age of majority, is competent to contract according to the law to which he is subject.
Facts: A minor mortgaged his house in favour of Thakur Das, a money lender, to secure a loan of Rs. 20,000. A part of this, i.e., Rs. 10,500 was actually advanced to him. While considering the proposed advance, the attorney for the money lender received information that the plaintiff was still a minor. The minor then sued to cancel the mortgage on the ground of being underage at the time of execution. The money lender prayed for a refund of Rs. 10,300 from the minor.
Principle: A person is of sound mind for making a contract if, at the time of making it, he is capable of understanding it and forming a rational judgment about its effect on his interests.
Facts: Mr. X, usually of sound mind but occasionally of unsound mind, enters into a contract with Mr. V when he was of unsound mind. Later, Mr. Y, upon learning this, wants to sue Mr. X.

Rules:
A. A minor is a person who is below the age of eighteen. However, where a guardian administers the minor’s property the age of majority is twenty-one.
A. A minor is not permitted by law to enter into a contract. Hence, where a minor enters into a contract with a major person the contract is not enforceable. This effectively means that neither the minor nor the other party can make any claim on the basis of the contract.
A. In a contract with a minor, if the other party hands over any money or confers any other benefit on the minor, the same shall not be recoverable from the minor unless the other party was deceived by the minor to hand over money or any other benefit. The other party will have to show that the minor misrepresented her age, he was ignorant about the age of the minor and that he handed over the benefit on the basis of such representation.
Facts: Ajay convinces Bandita, a girl aged 18 that she should sell her land to him. Bandita’s mother Chaaru is her guardian. Nonetheless Bandita, without the permission of Chaaru, sells the land to Ajay for a total sum of rupees fifty lakh, paid in full and final settlement of the price. Chaaru challenges this transaction claiming that Bandita is a minor and hence the possession of the land shall not be given to Ajay. Thus Ajay is in a difficult situation and has no idea how to recover his money from Bandita.

Rules
A. The act of using threats to force another person to enter into a contract is called coercion.
B. The act of using influence on another and taking undue advantage of that person is called undue influence.
C. In order to prove coercion, the existence of the use of threat, in any form and manner, is necessary. If coercion is proved, the person who has been so threatened can refuse to abide by the contract.
D. In order to prove undue influence, there has to be a pre-existing relationship between the parties to a contract. The relationship has to be of such a nature that one is in a position to influence the other. If it is proven that there has been undue influence, the party who has been so influenced need not enforce the contract or perform his obligation under the contract.
Facts: Aadil and Baalu are best friends. Aadil is the son of multi-millionaire business person, Chulbul who owns Maakhan Pharmaceuticals. Baalu is the son of a bank employee, Dhanraj. One day, Aadil is abducted from his office by Baalu. Chulbul receives a phone call from Dhanraj telling him that if he does not make Baalu the CEO of Maakhan Pharmaceuticals, Aadil will be killed. Chulbul reluctantly agrees to make Baalu the CEO. Subsequently Chulbul and Baalu sign an employment contract. However as soon as Aadil is released and safely returns home, Chulbul tells Baalu that he shall not enforce the employment contract. Baalu and Dhanraj are not sure as to what is to be done next.

A formal instrument by which one person empowers another to represent him is known as
A right to recover time barred debt is
A nominal sum given as a token for striking a sale is called

Principles: 1. If A is asked to do something by B, B is responsible for the act, not A.
2. If A, while acting for B commits a wrong, A is responsible for the wrong, not B.
3. If A is authorized to do something for B, but in the name of A without disclosing B’s presence, both A and B may be held liable.
Facts: Somu contracted with Amar where Amar would buy a pump set to be used in Somu’s farm. Such a pump set was in short supply in the market. Gulab, a dealer, had such a pump set and he refused to sell it to Amar. Amar threatened Gulab of serious consequences if he failed to part with the pump set. Gulab filed a complaint against Amar.
Proposed decision:
(a) Amar alone is liable for the wrong though he acted for Somu.
(b) Amar is not liable for the wrong, though he is bound by the contract with Somu.
(c) Somu is bound by the contract and liable for the wrong.
(d) Both Somu and Amar are liable for the wrong.
Suggested reasons:
(i) Amar committed the wrong while acting for the benefit for Somu.
(ii) Amar cannot do while acting for Somu something which he cannot do while acting for himself.
(iii) Both Amar and Somu are liable since they are bound by the contract.
(iv) Somu has to be responsible for the act Amar committed for Somu’s benefit.

All contracts are agreements. All agreements are accepted offers. Which of the following derivations is correct?
No minor can enter into a contract of work. Working in a shop can be done only by a contract. Which derivation is correct?
A contract contravening public policy is void. There cannot be a general definition of public policy. Which is the correct derivation?