Passage-based CLAT contract law practice questions covering offer and acceptance, consideration, free consent, breach and damages, and specific performance — with detailed answers and explanations.
A contract requires offer, acceptance, consideration, intention to create legal relations and capacity. Acceptance must be communicated; silence is not acceptance. An offer lapses on expiry of time, rejection, death, or revocation before acceptance.
Raj, a shopkeeper in Pune, sent a signed letter to Anita offering to sell her 100 kg of basmati rice at Rs. 120 per kg, "offer open for 7 days". On Day 3, Anita posted a letter of acceptance. On Day 4 (before the acceptance letter reached Raj), Raj sold the rice to another buyer and emailed Anita withdrawing the offer. The acceptance letter reached Raj on Day 6.
Explanation: Under the postal rule, acceptance by post is effective when posted, not when received. Anita posted her acceptance before Raj’s revocation reached her.
Consideration must move at the desire of the promisor but can move from the promisee or any other person. Past consideration is generally no consideration under English law but is valid under the Indian Contract Act, 1872 if done at the desire of the promisor.
Meera rescued Kabir's daughter from a burning building without being asked. Two days later, Kabir, out of gratitude, promised Meera Rs. 2 lakh as a reward. Kabir later refused to pay. Meera sues for the promised amount.
Explanation: Past consideration is valid under Indian law provided it was done at the desire of the promisor. Here, the rescue was voluntary (not at Kabir’s desire), so the promise may be unenforceable.
A contract can be voidable at the option of the party whose consent was obtained by coercion, undue influence, fraud, or misrepresentation. A voidable contract remains valid until the aggrieved party elects to avoid it.
Vikas, an elderly retired teacher, was persuaded by his nephew Rohit to sell his only residential property to Rohit at half the market value. Rohit had promised to care for Vikas in his old age and repeatedly told him "nobody else will help you." Vikas, relying on this, signed the sale deed. Six months later, realising the actual value, Vikas wants to avoid the contract.
Explanation: A relationship where one party is in a position to dominate the will of the other (here uncle-nephew with dependency) can give rise to undue influence, especially when the transaction is unconscionable.
Breach of contract entitles the aggrieved party to damages. Damages aim to put the party in the position they would have been had the contract been performed. Remoteness of damage is governed by the rule in Hadley v Baxendale — only losses reasonably foreseeable at the time of contract formation are recoverable.
Sharma entered into a contract with Transport Co. to deliver a shipment of perishable goods from Delhi to Mumbai within 48 hours. The Transport Co. delayed delivery by five days, and all goods spoiled. Sharma also lost a lucrative export deal of Rs. 15 lakh that depended on timely delivery. Sharma had not informed the Transport Co. about the export deal.
Explanation: Under Hadley v Baxendale, special or unusual losses are only recoverable if they were known to the other party at the time of contract. Sharma had not informed the Transport Co. about the export deal.
Specific performance is an equitable remedy that compels a party to perform its contractual obligations. It is granted only where damages would be an inadequate remedy — typically in contracts for unique goods or immovable property. The Specific Relief Act 2018 expanded the availability of specific performance in India.
Arun agreed to sell his ancestral heritage painting, dated to the Tanjore school, to Divya for Rs. 5 lakh. After receiving an advance, Arun refused to deliver the painting, arguing that its market value had since doubled. Divya seeks specific performance.
Explanation: Specific performance is an appropriate remedy where the subject matter is unique (such as a specific artwork) because monetary damages would not adequately compensate the buyer.
Offer and acceptance (including postal rule), consideration (especially past consideration under Indian law), free consent (coercion, undue influence, fraud, misrepresentation), breach and damages, and specific performance are the most tested topics.
You should know the principles these cases establish (e.g., the rule in Hadley v Baxendale on remoteness of damage), but memorising case names is not usually necessary.
Under English law, past consideration is generally not valid consideration. Under Section 2(d) of the Indian Contract Act, past consideration is valid if the act was done at the desire of the promisor.
A void contract is not valid from inception and cannot be enforced by either party. A voidable contract is valid and enforceable until the party whose consent was defective elects to avoid it.