Ch # 6.

Performance of contracts I Page 249

1. Contract is said to be performed when

(a) One party fulfils his promise
(b) Both promisors perform their respective promises
(c) Law dispenses with performance
(d) One of the promisor makes attempted performance

2. Valid tender requires

(a) To be unconditional
(b) To be made at proper place and time
(c) To be made for whole quantity / obligation
(d) All of the above factors

3. Mr. A agrees to supply 100 bags of tea to Mr. B @ Rs.1000/- per Bag on a particular date. Mr. B was
to pay subsequently after the supply of tea. On due date Mr. A supplies tea and Mr. B makes
payment. But, if on due date, Mr. A takes the contracted quantity of tea to Mr. B’s godown and Mr.
B refuses to accept the delivery. State the legal position.
(a) 1st case is attempted performance and 2nd is voidable contract
(b) 1st case is voidable contract and 2nd is attempted performance
(c) 1st case is actual performance and 2nd is attempted performance
(d) 1st case is attempted performance and 2nd is actual performance

4. Payment received by the creditor must be appropriated for discharging debt

(a) Which has been borrowed at last
(b) According to instruction given by the debtor
(c) In a logical sequence of the debts
(d) Which has been borrowed at first

5. Mr. X promises to sell standing timber to Mr. Y. As per the terms of a contract Mr. X will cut and
cord the timber, whereupon Mr. Y will take it away and pay for it. Mr. X cord’s only a part of timber
and neglects to cord the rest. Mr. Y wants to initiate legal proceedings. Suggest him the legal action.
(a) Mr. Y may avoid contract
(b) Mr. Y may claim compensation from Mr. X
(c) Mr. Y does not have any legal remedy
(d) Mr. Y may avoid the contract and claim compensation from Mr. X

6. Mr. Karam owes several debts to Mr. Karim, which are of distinct amount and payable on different
dates. One of the debts has become time-barred which Mr. Karim cannot legally recover from Mr.
Karam. On a particular date Mr. Karam makes a payment, but does not give any instruction. State
the legal position with regard to the appropriation of payment.
(a) Mr. Karim has no right to apply this payment for time-barred debt
(b) Mr. Karam’s instruction has to be followed
(c) Mr. Karim has to obtain court’s advice
(d) Mr. Karim has a right to apply this payment for time-barred debt

7. Mr. B owes to Mr. A Rs.10,000. Mr. A ask Mr. B to deposit this amount in Mr. A’s Bank account. Mr.
B deposits the amount in Mr. A’s account. After sometime bank has stopped functioning and Mr. A
has no information regarding transfer of money to his account. Mr. A is claiming that Mr. B is still
liable to pay him the amount. Is Mr. B liable?
(a) Mr. B has followed instruction of Mr. A so he is discharged from his obligation
(b) Mr. B has committed fraud so he is not discharged from his obligation
Ch # 6. Performance of contracts I Page 250

(c) Mr. B has committed negligence so he is not discharged from his obligation
(d) Mr. B is liable because he failed to perform reasonable care

8. Where a promisor has made an offer of performance to the promisee and the offer has not been
accepted:
(a) The promisor is responsible for non-performance, but he does not lose his rights under the
contract
(b) The promisor is not responsible for non-performance, nor does he thereby lose his rights
under the contract
(c) The promisor is not responsible for non-performance, but he loses his rights under the
contract
(d) The promisor can enforce the performance of the promise

9. Drugs Limited contracts with Supermarket Limited to manufacture and supply 50 cases of a drug
called SuperX. Supermarket Limited pay the contract money, Rs.5.0 million to Drugs Limited but
before delivery takes place the Government introduces a law banning the manufacture and supply
of SuperX. Can Supermarket Limited enforce the contract?
(a) No, the contract is discharged.
(b) No, there is a breach of contract.
(c) Yes, because Supermarket Ltd has already paid the contract price of Rs.5.0 million.
(d) Yes, the contract was legal when it was made.

10. Performance of a contract may be in the form of

(a) actual
(b) attempted
(c) either of these
(d) none of these

11. Performance of contract means

(a) fulfilling all the obligations by a promisee
(b) fulfilling all the obligations by the promisor
(c) performing all the promises and fulfilling all the obligations by all the parties
(d) None of these

12. Rejection of offer to perform is called

(a) Attempted performance
(b) Caveat emptor
(c) Jus in personal
(d) Jus in rem

13. An attempted performance discharge the promisor from his liability

(a) to deliver the goods
(b) to pay the price
(c) to pay the damages
(d) None of these

14. Which is not the essential of valid tender?

(a) Tender must be conditional
(b) Tender must be made at proper place
(c) Tender must be for whole obligation
(d) Tender must be made at a proper time
Ch # 6. Performance of contracts I Page 251

15. Which are the essential of valid tender?

(a) Tender must be unconditional
(b) Tender must be made at proper place
(c) Tender must be to proper person
(d) All of these

16. The Parties to a Contract must

(a) perform their respective promises
(b) offer to perform their respective promises
(c) either of these
(d) neither of these

17. The parties to a contract need not perform when the performance is
(a) dispensed with
(b) excused under the provisions of any law
(c) either of these
(d) neither of these

18. In which of the following cases, the Promisor is at fault?

(a) None of these
(b) Promisor has disabled himself from performing his promise in entirety
(c) Promisor has refused to perform his promise
(d) Both of these

19. A promises to paint a picture for B. A dies before painting picture. Which one of the following is the
correct legal position?
(a) The agreement becomes unlawful
(b) The agreement becomes impossible
(c) The agreement becomes voidable
(d) The agreement is void ab initio

20. Where the Promisor offers to perform to the Promisee, the Promisee is bound
(a) to provide reasonable facilities for the performance
(b) to provide unreasonable opportunity
(c) both of these
(d) neither of these

21. A contracts to repair B’s house. B does not show him the places that require repairs. In this case
(a) A must request B to show the required places
(b) A is excused from non-performance where it is so caused by B’s neglect
(c) B can sue A for non-performance
(d) A can sue B for non-co-operation

22. A entered into contract with B to deliver certain goods to B. A offered the goods to B at proper time
and place, but B refused to accept the goods. In this case,
(a) A does not have any right against B
(b) A can sue B for breach of contract, but not discharged from his liability
(c) A is discharged from his liability and can also sue B for breach of contract
(d) B is not liable for breach of contract
Ch # 6. Performance of contracts I Page 252

23. A owes B total of Rs 25,000. He sends a cheque for Rs 10,000 stating that it shall be appropriated
towards the first sum of Rs 10,000 he took from B. B shall appropriate it
(a) towards any debt due from A
(b) towards any time barred debt due from A
(c) towards any disputed debt due from A
(d) towards that debt as indicated by A

24. A desires B, who owes him Rs 100, to send him a note for Rs 100 by post. B puts into the post a
letter containing the note duly addressed to A.
(a) The debt is discharged as soon as B posts a letter addressed to A
(b) The debt is not discharged even if B posts the letter containing the note duly addressed to A
(c) The debt is discharged as soon as B posts the letter containing the note duly addressed to A
(d) None of these

25. A promise B to sell him 100 bales of cotton, to be delivered next day and B promises A to pay for
them within a month. A does not deliver according to promise.
(a) B’s promises to pay need not be performed. and A must make compensation
(b) A’s promise to deliver must be performed
(c) B’s must clam compensation
(d) B’s promises to pay need not be performed, and A must make compensation

26. A contract to act at a theatre for six months in a consideration of a sum paid in advance by B. On
several occasions, A is too ill to act
(a) The contract becomes void
(b) The contract becomes voidable
(c) The performance can be accepted
(d) Any one of the options

27. A owes B Rs 10,000. A enters into a contract with B and gives his estate to B as mortgage for Rs
5,000 in place of the earlier debt of Rs 10,000.
(a) This is a new contract and extinguishes the old one
(b) This is a new contract but does not extinguish the old one
(c) Both are independent contracts
(d) None of these

28. A hired a music hall to B for performing concerts. The hall accidentally burnt before beginning of
the concert. The contract becomes
(a) void
(b) voidable
(c) illegal
(d) Any of the above

29. Contract is said to be discharged by mutual agreement when:

(a) Change in a contract is made without free consent of the parties
(b) Change in a contract is made by one of the parties
(c) Old contract is substituted by new contract
(d) New contract is substituted by old one

30. Mr. A agreed to supply 100 tonnes of iron-ore to Mr. B on 1st January. On the due date of supply he
took stipulated quantity of iron-ore to Mr. B’s Residence at 12:00 am. This is the case of attempted
performance. This offer of performance or attempted performance is
(a) Valid because the promisor is fulfilling the terms of the contract
(b) Invalid because the place and time of supply is not reasonable
Ch # 6. Performance of contracts I Page 253

(c) Valid because the performance is unconditional

(d) Invalid because the time of supply is not reasonable

31. Acceptance of lesser performance by promisee is

(a) Void
(b) Invalid
(c) Valid
(d) Not allowed

32. Mr. X borrows sum of Rs.10,000/- from Mr. Y on promissory note for six months. On the due date
Mr. X is unable to pay and makes out another promissory note along with the amount of interest.
Existing promissory note is terminated and now how much Mr. X amount is liable to pay to Mr. Y?
(a) It amounts to novation and Mr. X is liable to pay Rs.10000/-
(b) It amounts to novation and Mr. X is liable to pay Rs.10000 + Interest
(c) It amounts to alteration and Mr. X is liable to pay Rs.10000/-
(d) It amounts to alteration and Mr. X is liable to pay Rs.10000 + Interest

33. Remission means

(a) Giving up some rights in favour of promisor
(b) Acceptance of a lesser performance than due in contract
(c) Avoidance of contract by one party
(d) Avoidance of contract by both the parties

34. Attempted performance is equal to actual performance

(a) In case of payment of money
(b) In other cases except payment of money
(c) In case of supply of goods only
(d) In all above cases

35. Mr. A entered to an agreement with Mr. B for selling 100 tonnes of wheat at specified price to him
on 15th March. But, before the due date of delivery the President of Pakistan has passed an
Ordinance, debarring the individuals from supplying more than 5 tonnes of wheat. State the legal
position of the contract between Mr. A and Mr. B.
(a) The contract between Mr. A and Mr. B comes to an end because its performance has becomes
unlawful.
(b) The contract between Mr. A and Mr. B comes to an end because the subject matter of the
contract is destroyed.
(c) The contract between Mr. A and Mr. B comes to an end because of the personal incapacity of
the party.
(d) The contract between Mr. A and Mr. B comes to an end because certain state of things gets
changed.

36. Contract will not be discharged on account of supervening impossibility in case of:
(a) Change in law
(b) Death of promisor in the contract of personal nature
(c) Failure of third party relied upon by the promisor
(d) Non-existence of particular state of thing essential for the performance of a contract

37. Supervening impossibility means

(a) Subsequent impossibility
(b) Initial impossibility
(c) Irrelevant impossibility
(d) Relevant impossibility
Ch # 6. Performance of contracts I Page 254

38. Which of the following statement is true

(a) Partial impossibility does not invalidate a contract
(b) Impossibilities due to conduct of third party will discharge contract
(c) Commercial impossibility affects validity of a contract
(d) Difficulty in performance is a valid ground of supervening impossibility

39. Hanzhalah hired a room in some hotel of Lahore to witness PSL Final Match on 22nd March but due
to the emergency declared by government in the wake of Pandemic Coronavirus, the match was
cancelled. Examine the legality of this contract
(a) Hanzhalah is liable to pay the rent to the hotel
(b) Hanzhalah is excused from the obligation of paying rent to the hotel
(c) Hanzhalah is liable to pay the rent along with interest
(d) Hanzhalah is excused from the obligation due to the personal incapacity

40. The contract is a mutual exchange of promises between two parties when both the promisor do
what they have promised to do, the contract is set to be performed and contract comes to an end.
Performance of contract may be of two types
(a) Legal performance and illegal performance
(b) Conditional performance and unconditional performance
(c) Attempted performance and offer of performance
(d) Actual performance and attempted performance

41. Mr. B chartered Mr. A’s ship and agreed to load it with a cargo at Karachi within 45 days. On the
arrival of the ship at Karachi, Mr. B was unable to supply cargo. Mr. A did not accept the refusal and
continued demanding the cargo. Before the expiry of 45 days war was broken and performance of
the contract became impossible. State the legal position.
(a) Contract is not discharged and Mr. A can demand the performance of the contract
(b) Contract is discharged and Mr. A is not entitled to claim compensation
(c) Contract is discharged and Mr. A is entitled to claim compensation
(d) Contract is not discharged and Mr. A cannot demand anything

42. What is the meaning of novation?

(a) Rescinding of a contract
(b) Alteration of a contract
(c) Change in provisions of a contract
(d) Substituting an old contract for a new one

43. X owes Rs. 10,000 to Y under a contract. It is agreed between X, Y & Z that Y shall henceforth accept
Z as his debtor instead of X for the same amount. Old debt of X is discharged and a new debt from Z
to Y is contracted. This is:
(a) Alteration of contract
(b) Rescission of contract
(c) Novation of contract
(d) Change in contract

44. Which one of the following is not a method by which a contract can be discharged?
(a) Discharge by misrepresentation
(b) Discharge by performance
(c) Discharge by breach
(d) Discharge by agreement
Ch # 6. Performance of contracts I Page 255

45. In relation to discharge by agreement, which one of the following statements is untrue?
(a) If both parties wish to discharge a contract, they must create a written agreement stating that
the contract has been discharged.
(b) Generally, both parties will need to provide consideration for the other's agreement to
discharge.
(c) Under the common law, a contract made by deed can only be discharged via a deed.
(d) A partial discharge of a contract that must be made in writing will usually only be valid if the
agreement to discharge is made in writing.

46. Which of the following is correct?

(a) Performance of contract means contract becomes void
(b) Cancelation of contract cannot discharge a contract
(c) Alteration with the consent of party discharges the contract
(d) None of these

47. Which of the following is incorrect?

(a) Impossibility to perform promise discharges the contract
(b) merger discharges the contract
(c) Initial impossibility discharges the contract
(d) All of these

48. A entered into a contract with B for supply of 100 bicycles. A is planning to get the bicycles to be
manufactured by C. C did not manufacture it. In this case
(a) A is not discharged
(b) A is discharged
(c) Contract becomes void
(d) Contract becomes voidable

49. A contract with Pakistani Cricket Board to play for PSL-2 at Dubai. A fall ill and is advised by doctor
to rest. The contract
(a) is valid
(b) is void ab initio
(c) becomes void
(d) is voidable at A’s option

50. A contract is not considered void by some commercial impossibility.

(a) True
(b) Partly True
(c) False
(d) None of these

51. Which of the following is correct?

(a) Novation means making a new contract in place of an old contract
(b) Alteration means making a new contract in place of an existing one
(c) Performance of contract is not a method of discharge of contract
(d) All of these

52. If the subject matter of a contract is destroyed after formation of the contract, without fault of either
party, the contract
(a) is rendered voidable
(b) becomes void
(c) continues to be valid
(d) becomes unlawful
Ch # 6. Performance of contracts I Page 256

53. A musical hall was agreed to be let out on certain dates, but before those dates the hall was
destroyed by fire. The contract becomes void on the ground of
(a) impossibility of performance
(b) illegality of object
(c) unlawful consideration
(d) All of these

54. When the contract is made for several integrated purposes, failure of one of them
(a) terminates the entire contract
(b) does not terminate the entire contract
(c) makes the contract unlawful
(d) renders the object illegal

55. An obligation under a contract stands discharged by

(a) dispensing with the performance
(b) impossibility of performance
(c) death of the party and contract is personal in nature
(d) All of these

56. A agreed to supply certain goods to B. As a result of an increase in raw material costs, it is no longer
profitable for A to supply them at the agreed rate. In this case
(a) Contract becomes void
(b) Contract is not discharged
(c) A cannot be excused for non performance
(d) none of these

57. __________ indicates that the parties are not further bound under the contract,
(a) Waiver of a Contract
(b) Breach of a Contract
(c) Rescission of a Contract
(d) Discharge of a Contract

58. A contract to sell his scooter to B for Rs 50,000 and B agrees to pay on delivery. Both parties
performed their respective promises. This is called
(a) Waiver
(b) Breach of a Contract
(c) Attempted performance of contract
(d) Actual performance of a Contract

59. A took a house on rent from B. during tenancy, A purchase that house. The earlier contract of
tenancy is
(a) Void
(b) Discharged
(c) Rescinded
(d) Voidable

60. In discharge of contract by novation, the consideration for the new contract is
(a) the discharge of the old contract
(b) separately supplied
(c) decided by the parties
(d) all of these
Ch # 6. Performance of contracts I Page 257

61. In which of the ways can a contract be discharged by agreement between parties?
(a) Remission
(b) Waiver
(c) Either of these
(d) Neither of these

62. If a new contract is substituted in place of an existing contract, it is called

(a) Alteration
(b) Rescission
(c) Novation
(d) Waiver

63. A owes B Rs 50,000, Due date for payment is 25th March. A pay to B Rs 30,000 on 25th March who
accepts it in full satisfaction of the debt. The debt is discharged on account of
(a) remission
(b) Waiver
(c) novation
(d) All of these

64. If a person accepts a lesser sum of money than what was contracted for in discharge of the whole
debt, it is known as
(a) Remission
(b) Breach
(c) Rescission
(d) Alteration

65. In case of Alteration, there is

(a) change to some of the terms and conditions of the original contract
(b) substitution of an existing contract with new one
(c) either of these
(d) neither of these

66. Novation can be made by

(a) change in the terms of the contract
(b) change in the contracting Parties
(c) either of these
(d) neither of these

67. A agreed to supply certain goods to B which were to be imported by C, but it was not known to A. C
failed to import the goods. In this case, the contract is
(a) Discharged
(b) Not discharged
(c) Voidable
(d) Impossible to perform

68. In case the performance of a contract becomes more difficult due to some unexpected events, than
the contract
(a) Becomes void on account of impossibility
(b) Becomes voidable on account difficulty
(c) is discharged on account of impossibility
(d) is not discharged on account of impossibility
Ch # 6. Performance of contracts I Page 258

69. An agreement is void on the ground of initial possibility

(a) Only where it is unknown to the parties
(b) Only where it is known to the parties
(c) Whether it is known or unknown to the parties at the time of agreement
(d) When it is known to the third parties

70. Discharge of contract means ______ of contractual relationship between the parties.
(a) Beginning
(b) Termination
(c) Beginning of ending
(d) (a) and (c) of above

71. When Ram accept Rs.20, 000 in discharge of whole debt of Rs.22, 000. It is known as __________
(a) Rescission
(b) Novation
(c) Alternation
(d) Remission

72. When all or some of the terms of the contract are cancelled. It is known as __________
(a) Rescission
(b) Novation
(c) Alternation
(d) Remission

73. Which of the following may be treated as supervening impossibility?

(a) Outbreak of war
(b) Non-occurrence of a particular state of things.
(c) Destruction of subject matter
(d) All of above

74. Which of the following cannot be treated as supervening impossibility?

(a) Difficult of performance
(b) Commercial impossibility
(c) Impossibility arising due to failure of third person
(d) All of above

75. Gajodhar hired a shop from Shridhar for 2 years and paid the rent of 2 years in advance. After 1
year the shop was destroyed by fire. Which of the following is correct?
(a) Destruction of shop by fire cannot be treated as supervening impossibility and contract is
still alive
(b) Shridhar should arrange same quality of shop in other area.
(c) Contract is discharged due to supervening impossibility and Gajodhar can claim rent for
un-expired part of term
(d) None of above

76. C, an owner of a magazine, engaged P to write a book to be published by installments in his

magazine. After a few installments were published, the magazine was abandoned. In this case _____
(a) P does not have any remedy against C
(b) P can claim payment on quantum meruit for the part already published
(c) P has to complete the book through his own magazine
(d) P should not complete the book at all
Ch # 6. Performance of contracts I Page 259

77. On 27 February 2021, Bilal as owner of Bloodstone Sugar Mills (BSM) entered into a contract with
Amber Bakers to supply 1,000 kgs of sugar on 5 March 2021 at Rs. 70 per kg. On 3 March 2021,
Government issued a notification directing sugar mills to sell all their output to the Government at
fixed rate of Rs. 75 per kg. On the promised date of delivery, Bilal refused to honour the agreement.
Can Amber Bakers recover damages from BSM?
(a) Yes, because the contract was enforceable since it was made before the date of notification
(b) No, because the contract became void on the date of notification
(c) Yes, because BSM earned a profit of Rs. 5 per kg at the expense of Amber Bakers
(d) No, because the contract became voidable on the date of notification

78. Maria borrowed Rs. 500,000 from Amir and promised to repay on 5 January 2022. She used the
funds for giving loan to her brother Junaid. On the due date, Maria requested Amir to take payment
directly from Junaid instead of her. Junaid promised to pay Rs. 500,000 to Amir on 15 March 2022
and Amir agreed. If Junaid makes default, then:
(a) Amir can claim Rs. 500,000 from Maria
(b) Amir can claim Rs. 500,000 from both Maria and Junaid
(c) Amir cannot claim Rs. 500,000 from Maria as there is no contract between them
(d) Amir cannot claim Rs. 500,000 from Junaid as Maria is the principal debtor
Ch # 6. Performance of contracts I Page 260

Sr. No. Answer Sr. No. Answer Sr. No. Answer

1 B 31 C 61 C
2 D 32 B 62 C
3 C 33 B 63 A
4 B 34 D 64 A
5 D 35 A 65 A
6 D 36 C 66 B/D
7 A 37 A 67 B
8 B 38 A 68 D
9 A 39 B 69 C
10 C 40 D 70 B
11 C 41 B 71 D
12 A 42 D 72 C
13 A (N-1) 43 C 73 D
14 A 44 A 74 D
15 D 45 D 75 C
16 C 46 C 76 B
17 C 47 D 77 B
18 D 48 A 78 C
19 B 49 C
20 C 50 A
21 A 51 A
22 C 52 B
23 D 53 A
24 C 54 A
25 A/D 55 D
26 (N-1) 56 B
27 A 57 D
28 A 58 D
29 C 59 B
30 B 60 D

N-1: There is some error in language of the students therefore students are advised to ignore it