Here are the detailed, comprehensive answers for the legal and commercial questions provided
in your image.
1. What is a Contract? Explain the different types of
Contract.
According to Section 2(h) of the Indian Contract Act, 1872, "An agreement enforceable by law
is a contract." For an agreement to become a contract, it must satisfy essential elements like
free consent, lawful consideration, and capacity of parties.
Types of Contracts
A. On the Basis of Validity:
● Valid Contract: An agreement that satisfies all essential legal requirements and is
enforceable in a court of law.
● Void Contract: A contract that ceases to be enforceable by law. It was valid when made
but became void later due to changes in law or impossibility of performance.
● Voidable Contract: An agreement enforceable by law at the option of one party (the
aggrieved party) but not at the option of the other (usually due to lack of free consent, like
coercion or fraud).
● Unlawful/Illegal Contract: A contract that the law forbids because it involves an illegal
act (e.g., a contract to commit a crime).
B. On the Basis of Formation:
● Express Contract: Made by words, either spoken or written.
● Implied Contract: Inferred from the acts or conduct of the parties or the circumstances of
the case (e.g., boarding a bus implies a contract to pay the fare).
● Quasi-Contract: Not a real contract by intent, but created by law based on the principle
of equity (preventing one person from being unjustly enriched at the expense of another).
C. On the Basis of Performance:
● Executed Contract: Where both parties have fulfilled their respective obligations.
● Executory Contract: Where one or both parties have yet to perform their obligations.
2. Why are agreements without consideration treated
as void? Explain.
Section 25 of the Indian Contract Act states that "an agreement made without consideration
is void." In legal terms, consideration is "Quid Pro Quo", meaning "something in return."
Reasons for this Rule:
● Legal Evidence of Intent: Consideration proves that the parties intended to create a
legally binding relationship rather than just a casual social promise.
● Prevention of Exploitation: It ensures that a party does not get something for nothing. It
maintains a balance of exchange in commercial transactions.
● Cautionary Function: The requirement of consideration makes parties think twice before
entering into a binding commitment.
Exceptions to the Rule (Where agreements without consideration are
valid):
1. Natural Love and Affection: An agreement in writing and registered, made between
near relatives.
2. Compensation for Past Voluntary Services: A promise to compensate someone who
has already voluntarily done something for the promisor.
3. Promise to pay a Time-Barred Debt: A written and signed promise to pay a debt that is
technically expired under the law of limitation.
4. Agency: No consideration is necessary to create an agency.
5. Gifts: Completed gifts (already handed over) do not require consideration.
3. What is a Cheque? State the features of Cheque.
According to the Negotiable Instruments Act, 1881, a cheque is a "Bill of Exchange drawn on
a specified banker and not expressed to be payable otherwise than on demand."
Features of a Cheque:
● Written Instrument: A cheque must always be in writing. Oral orders to pay are not
cheques.
● Unconditional Order: The drawer (account holder) must order the bank to pay without
attaching any conditions (e.g., "pay if he passes the exam" is not a valid cheque).
● Specified Banker: A cheque is always drawn only on a particular bank where the drawer
has an account.
● Payable on Demand: The bank must pay the amount as soon as the cheque is
presented at the counter during banking hours.
● Definite Sum of Money: The amount to be paid must be certain and mentioned in both
figures and words.
● Three Parties Involved:
1. Drawer: The person who signs the cheque.
2. Drawee: The bank on which the cheque is drawn.
3. Payee: The person to whom the money is to be paid.
● Signature: It must be signed by the drawer as per the specimen signature at the bank.
4. What are the rights of Consumers? Explain.
The Consumer Protection Act (2019) provides several rights to protect consumers from
exploitation by manufacturers and service providers.
● Right to Safety: The right to be protected against the marketing of goods and services
that are hazardous to life and property (e.g., faulty electrical appliances or adulterated
food).
● Right to be Informed: The right to know the quality, quantity, potency, purity, standard,
and price of goods so as to protect the consumer against unfair trade practices.
● Right to Choose: The right to be assured, wherever possible, access to a variety of
goods and services at competitive prices.
● Right to be Heard: The right to ensure that consumers' interests will receive due
consideration at appropriate forums.
● Right to Seek Redressal: The right to seek compensation or a remedy against unfair
trade practices or unscrupulous exploitation. This involves the right to get faulty goods
replaced or money refunded.
● Right to Consumer Education: The right to acquire knowledge and skills to be an
informed consumer throughout life.