Attempt CAIIB BRBL Module D Practice Quiz & Download PDF

1. Which of the following is NOT an essential element of a valid contract under the Indian Contract Act, 1872?

Free consent of the parties
Lawful consideration and object
Registration of the contract
Competency of parties to contract

2. A contract entered into by a minor is:

Voidable at the option of the minor
Absolutely void and cannot be ratified
Valid and binding on the minor
Void only if the minor suffers a loss

3. Under the Indian Contract Act, 1872, consent is said to be ‘free’ when it is not caused by:

1, 2, 3, 4 and 5
1, 2 and 3 only
1, 2, 3 and 4 only
3, 4 and 5 only

4. Case Scenario: Ganesh, a bank employee, asked Rekha to sign a loan guarantee deed by threatening that her husband would be prosecuted for a criminal offence if she did not sign. Rekha signed the deed under this pressure. Later, she sought to avoid the guarantee. Which of the following is correct?

1 and 3 only
2 only
1 only
3 and 4 only

5. Under the Indian Contract Act, 1872, an agreement in restraint of trade is:

Always valid
Void, except in cases specifically permitted by law
Voidable at the option of the aggrieved party
Valid if consideration is paid

6. Under the Indian Contract Act, 1872, a contract of indemnity is defined under Section:

Section 126
Section 124
Section 148
Section 172

7. Which of the following rights does an indemnity holder (indemnified party) have under Section 125 of the Indian Contract Act?

1 and 2 only
1, 2 and 3 only
2, 3 and 4 only
All of the above

8. A banker issues a duplicate demand draft at the request of a customer who claims the original is lost. The customer provides an indemnity bond. The original draft is later presented by a third party. Under which legal principle is the bank protected?

Doctrine of Indoor Management
Contract of Indemnity
Law of Estoppel
Doctrine of Subrogation

9. Under the Indian Contract Act, 1872, the liability of a surety is:

Primary and independent
Co-extensive with that of the principal debtor, unless the contract provides otherwise
Secondary and arises only after the creditor has exhausted remedies against the principal debtor
Limited to half the principal debt

10. Case Scenario: Prime Bank sanctioned a term loan of Rs. 50 lakh to M/s Orbit Traders. Mr. Sharma stood as guarantor. Later, the bank, without informing Mr. Sharma, extended the repayment period by one year and also waived 2% penal interest as part of a restructuring. M/s Orbit Traders subsequently defaulted. Can Prime Bank recover from Mr. Sharma?

1 only
2 only
3 and 4 only
1 and 4 only

11. Under the Indian Contract Act, 1872, a continuing guarantee:

Covers a single specific transaction only
Extends to a series of transactions and can be revoked for future transactions
Cannot be revoked under any circumstance
Terminates automatically after 3 years

12. A surety is discharged from liability under a guarantee in which of the following situations?

1 and 4 only
1, 2 and 3 only
2 and 3 only
1, 2, 3 and 4

13. On payment of the guaranteed debt, the surety is entitled to:

1 and 2 only
1, 2 and 3 only
2 and 4 only
All of the above

14. Under the Indian Contract Act, 1872, bailment requires:

1, 2 and 3 only
1 and 4 only
2, 3 and 4 only
All of the above

15. A bailee who mixes the bailor’s goods with his own goods without the bailor’s consent, and the goods cannot be separated, is liable to:

Pay only the cost of separation
Compensate the bailor for any loss caused by such mixing
Compensate the bailor for the full value of his goods
Return a proportionate share of the mixed goods

16. A bank holds customer’s securities in its safe custody (bailment). The customer’s securities are stolen due to the bank’s negligence. The bank is:

1 only
2 and 3 only
2, 3 and 4 only
4 only

17. Under the Indian Contract Act, 1872, a pledge is defined as bailment of goods as security for:

Safe custody
Payment of debt or performance of a promise
Processing or manufacture
Transportation to another place

18. Which of the following rights does a pledgee have under the Indian Contract Act?

1 and 2 only
1, 2 and 3 only
2 and 4 only
All of the above

19. A mercantile agent (factor) who has goods in his possession with the owner’s consent can create a valid pledge in favour of a third party who acts:

1 and 3 only
1 and 2 only
1, 2 and 3 only
All four conditions

20. Under the Indian Contract Act, 1872, which of the following statements about the authority of an agent is CORRECT?

An agent can only act within express authority given by the principal
An agent’s implied authority includes acts ordinarily required to carry out express authority
An agent’s authority cannot be inferred from circumstances
Emergency authority of an agent only applies to real property