1) A pays rs 10,000 to B for manufacturing a machine. When it is partly manufactured, the contract is discharged by frustrating. What is the remedy available to parties ?

A) A can recover rs. 10,000 from B

B) A need not to pay any further amount to B

C) B can retain rs.10,000

D) B is entitled only to expenses incurred before the time of discharg

Answer : D

2) Only such damages are recoverable for the breach of contract as :

A) Arise remotely from the breach of contract

B) Arise naturally in the usual course of the things

C) Arise naturally as well as remotely from the breach of contract

D) Arise only specially from breach of contract

Answer : B

3) A stipulation for increased interest from the date of default is known as :

A) Damage

B) Compensation

C) Penalty

D) In liquidated damages

Answer : C

4) Liquidated damages is essentially a :

A) Payment of money stipulated as a warning to the attending party

B) Payment of compensation determined by the court

C) Compensation arbitrarily determined by the aggrieved party

D) Genuine covenanted pre-estimate of damage

Answer : D

5) The primary aim of law of damage is :

A) Punish the party who has committed the breach of contract

B) Enrich the party who sustained the loss in the same

C) Place the party who sustained the loss in the same position as if the contract has been performed

D) Give some type of composition

Answer :  C


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