1. In a contract of guarantee, the person who undertakes responsibility for the performance of the promise is known as
(a) the person for whose default the assurance is given
(b) the beneficiary of the assurance
(c) the person who provides the guarantee
(d) none of these
2. The statutory definition of a contract of guarantee is contained in
(a) Section 124
(b) Section 125
(c) Section 123
(d) Section 126
3. The provision that defines a contract of indemnity under the Indian Contract Act is
(a) Section 123
(b) Section 125
(c) Section 124
(d) Section 126
4. The fundamental characteristic of liquidated damages is that they represent
(a) a sum imposed by way of punishment
(b) an amount exceeding the likely loss
(c) an amount less than the expected loss
(d) a bona fide pre-estimate of probable loss
5. An amount agreed upon in advance as payable on breach of contract is described as
(a) a penalty
(b) either penalty or liquidated damages
(c) neither penalty nor liquidated damages
(d) liquidated damages
6. The obligation of the aggrieved party to mitigate loss arises
(a) only in anticipatory breach
(b) only when breach occurs at the fixed time of performance
(c) in both anticipatory breach and breach at the time of performance
(d) in neither situation
7. Expenses incurred before the formation of a contract can be claimed as damages
(a) in every situation
(b) as a general rule
(c) only when such expenses were within the contemplation of the parties
(d) never
8. Which of the following factors is irrelevant while assessing the amount of damages?
(a) the intention behind the breach
(b) the manner in which the breach occurred
(c) the actual loss suffered
(d) both intention and manner of breach
9. While calculating damages, which of the following considerations is relevant?
(a) the motive for non-performance
(b) the method of committing the breach
(c) the inconvenience caused due to non-performance
(d) all of the above
10. Damages awarded under Section 73 of the Indian Contract Act are
(a) exemplary in nature
(b) punitive
(c) liquidated
(d) compensatory