Rescission of Contracts MCQ Quiz - Objective Question with Answer for Rescission of Contracts - Download Free PDF

The correct answer is 'Sec.27 - Rescission of contracts'

Key Points

• Specific Relief Act, 1963:
  • The Specific Relief Act, 1963, governs specific reliefs in Indian law, which are granted under special circumstances when damages are not adequate to rectify a wrong.
  • It focuses on remedies related to the enforcement of individual civil rights rather than penal provisions.
• Explanation for Sec.27:
  • Section 27 of the Specific Relief Act does not deal with the rescission of contracts; it pertains to the enforcement of contracts related to personal rights or obligations that cannot be assigned.
  • Rescission of contracts is actually governed under Section 29 of the Act, not Section 27.
  • Therefore, the combination of Section 27 and "Rescission of contracts" is incorrect.

Additional Information

• Section 30 - Cancellation of Instruments:
  • Section 30 deals with the cancellation of instruments, allowing a person to seek relief when an instrument (such as a contract or deed) is void or voidable and may cause harm if left outstanding.
  • This is a correct combination as per the Specific Relief Act, 1963.
• Section 34 - Declaration of status or right:
  • Section 34 provides relief for individuals seeking a declaration of their legal status or rights. It enables a person to approach the court to declare their entitlement without necessarily seeking further consequential relief.
  • This combination is accurate as per the Act.
• Section 39 - Mandatory Injunction:
  • Section 39 pertains to mandatory injunctions, which compel a party to perform a specific act to prevent the breach of an obligation or rectify a wrongful act.
  • This is also a correct combination under the Specific Relief Act, 1963.

The correct is Section 26

Key PointsSection- 26. Agreement in restraint of marriage, void.—
Every agreement in restraint of the marriage of any person, other than a minor, is void.

The correct answer is option 4.Key Points

• Section 41 under chapter 8 (Perpertual Injunction) of Specific Relief Act 1963 deals with injunction when refused.
• It states an injunction cannot be granted:
  • To restrain any person from prosecuting a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings;
  • To restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought;
  • To restrain any person from applying to any legislative body;
  • To restrain any person from instituting or prosecuting any proceeding in a criminal matter;
  • To prevent the breach of a contract the performance of which would not be specifically enforced;
  • To prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will be a nuisance;
  • To prevent a continuing breach in which the plaintiff has acquiesced;
  • When equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust;
  • If it would impede or delay the progress or completion of any infrastructure project or interfere with the continued provision of relevant facility related thereto or services being the subject matter of such project.
  • When the conduct of the plaintiff or his agents has been such as to disentitle him to be the assistance of the court;
  • When the plaintiff has no personal interest in the matter.

Additional Information

• ​Section 37 deals with temporary and perpetual injunctions.
• It says temporary injunctions are such as are to continue until a specific time, or until the further order of the court, and they may be granted at any stage of a suit, and are regulated by the Code of Civil Procedure, 1908 (5 of 1908).
• A perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit; the defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff..

The correct answer is OPTION 3.

Key Points

• Section 27 of the Specific Relief Act, 1963, provides for When rescission may be adjudged or refused.
• It states that —(1) Any person interested in a contract may sue to have it rescinded, and such rescission may be adjudged by the court in any of the following cases, namely:—
  (a) where the contract is voidable or terminable by the plaintiff;
  (b) where the contract is unlawful for causes not apparent on its face and the defendant is more to blame than the plaintiff.
  (2) Notwithstanding anything contained in sub-section (1), the court may refuse to rescind the contract—
  (a) where the plaintiff has expressly or impliedly ratified the contract; or
  (b) where, owing to the change of circumstances which has taken place since the making of the contract (not being due to any act of the defendant himself), the parties cannot be substantially restored to the position in which they stood when the contract was made; or
  (c) where third parties have, during the subsistence of the contract, acquired rights in good faith without notice and for value; or (d) where only a part of the contract is sought to be rescinded and such part is not severable from the rest of the contract.
  Explanation.—In this section “contract” in relation to the territories to which the Transfer of Property Act, 1882 (4 of 1882), does not extend, means a contract in writing.

The correct answer is Option 4.

Key PointsSections 27 to 30 of the Specific Relief Act, 1963 deal with the rescission of a contract. It is a type of legal redressal. 

• Section 27 deals with a situation where the rescission may be adjudged or refused.
• Section 28 deals with rescission in cases of contracts for the sale or lease of immovable property, the specific performance of which has been decreed.
• Section 29 deals with an alternative prayer for rescission in a suit for a specific performance and
• Section 30 envisages that the court may order the rescinding party to act in a manner that would restore equity.

Additional Information Sri Pawan Kumar Dalmia v. Sri Biligowda (2021)

• In this case, the plaintiffs claimed that the defendants did not have sufficient title to the property and wanted to rescind the contract while claiming back the earnest money from them. The plaintiffs lost the case at the trial stage but later on at the appellate stage, the Karnataka High Court decided in favour of the plaintiff’s right to rescission of the contract as the defendants had misrepresentation themselves in having proper title to the property and ordered the payment of the earnest money back to the plaintiffs/ appellants.  

The correct answer is option 4.Key Points

• Section 41 under chapter 8 (Perpertual Injunction) of Specific Relief Act 1963 deals with injunction when refused.
• It states an injunction cannot be granted:
  • To restrain any person from prosecuting a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings;
  • To restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought;
  • To restrain any person from applying to any legislative body;
  • To restrain any person from instituting or prosecuting any proceeding in a criminal matter;
  • To prevent the breach of a contract the performance of which would not be specifically enforced;
  • To prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will be a nuisance;
  • To prevent a continuing breach in which the plaintiff has acquiesced;
  • When equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust;
  • If it would impede or delay the progress or completion of any infrastructure project or interfere with the continued provision of relevant facility related thereto or services being the subject matter of such project.
  • When the conduct of the plaintiff or his agents has been such as to disentitle him to be the assistance of the court;
  • When the plaintiff has no personal interest in the matter.

Additional Information

• ​Section 37 deals with temporary and perpetual injunctions.
• It says temporary injunctions are such as are to continue until a specific time, or until the further order of the court, and they may be granted at any stage of a suit, and are regulated by the Code of Civil Procedure, 1908 (5 of 1908).
• A perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit; the defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff..

The correct answer is option 1.Key Points 

• Section 39 of the Specific Relief Act, 1963, empowers the court to grant a mandatory injunction to prevent the breach of an obligation.
• A mandatory injunction is a court order that compels a party to perform certain acts or obligations. This is in contrast to a prohibitory injunction, which restrains a party from doing a particular act.
• Under Section 39, the court may grant a mandatory injunction when it believes that the injunction is necessary to prevent the breach of an obligation arising from a contract or a trust. The purpose is to enforce the specific performance of a contractual or other legal obligation, rather than providing mere monetary compensation.
• For example, if a party has agreed to deliver certain goods under a contract but refuses to do so, the court may grant a mandatory injunction to compel that party to fulfill their contractual obligation by delivering the goods.
• It's important to note that the granting of a mandatory injunction is at the discretion of the court and is usually considered when damages (monetary compensation) would not be an adequate remedy. The court will consider various factors, including the nature of the obligation, the feasibility of enforcing the injunction, and the overall circumstances of the case, before deciding whether to grant a mandatory injunction.

The correct answer is OPTION 3.

Key Points

• Section 27 of the Specific Relief Act, 1963, provides for When rescission may be adjudged or refused.
• It states that —(1) Any person interested in a contract may sue to have it rescinded, and such rescission may be adjudged by the court in any of the following cases, namely:—
  (a) where the contract is voidable or terminable by the plaintiff;
  (b) where the contract is unlawful for causes not apparent on its face and the defendant is more to blame than the plaintiff.
  (2) Notwithstanding anything contained in sub-section (1), the court may refuse to rescind the contract—
  (a) where the plaintiff has expressly or impliedly ratified the contract; or
  (b) where, owing to the change of circumstances which has taken place since the making of the contract (not being due to any act of the defendant himself), the parties cannot be substantially restored to the position in which they stood when the contract was made; or
  (c) where third parties have, during the subsistence of the contract, acquired rights in good faith without notice and for value; or (d) where only a part of the contract is sought to be rescinded and such part is not severable from the rest of the contract.
  Explanation.—In this section “contract” in relation to the territories to which the Transfer of Property Act, 1882 (4 of 1882), does not extend, means a contract in writing.

The correct answer is Option2

Key Points

•  Section 34 allows any person entitled to legal character or right to bring a suit against anyone denying or interested to deny their title.
• The court, at its discretion, may make a declaration regarding the entitlement without the plaintiff seeking further relief.
• The proviso states that the court shall not make a declaration if the plaintiff, capable of seeking additional relief beyond a mere declaration, fails to do so.
• The explanation clarifies that a trustee of property is considered a "person interested to deny" a title adverse to the title of someone not in existence, and for whom, if in existence, the trustee would be responsible.

The correct answer is 'Sec.27 - Rescission of contracts'

Key Points

• Specific Relief Act, 1963:
  • The Specific Relief Act, 1963, governs specific reliefs in Indian law, which are granted under special circumstances when damages are not adequate to rectify a wrong.
  • It focuses on remedies related to the enforcement of individual civil rights rather than penal provisions.
• Explanation for Sec.27:
  • Section 27 of the Specific Relief Act does not deal with the rescission of contracts; it pertains to the enforcement of contracts related to personal rights or obligations that cannot be assigned.
  • Rescission of contracts is actually governed under Section 29 of the Act, not Section 27.
  • Therefore, the combination of Section 27 and "Rescission of contracts" is incorrect.

Additional Information

• Section 30 - Cancellation of Instruments:
  • Section 30 deals with the cancellation of instruments, allowing a person to seek relief when an instrument (such as a contract or deed) is void or voidable and may cause harm if left outstanding.
  • This is a correct combination as per the Specific Relief Act, 1963.
• Section 34 - Declaration of status or right:
  • Section 34 provides relief for individuals seeking a declaration of their legal status or rights. It enables a person to approach the court to declare their entitlement without necessarily seeking further consequential relief.
  • This combination is accurate as per the Act.
• Section 39 - Mandatory Injunction:
  • Section 39 pertains to mandatory injunctions, which compel a party to perform a specific act to prevent the breach of an obligation or rectify a wrongful act.
  • This is also a correct combination under the Specific Relief Act, 1963.

The correct is Section 26

Key PointsSection- 26. Agreement in restraint of marriage, void.—
Every agreement in restraint of the marriage of any person, other than a minor, is void.

The correct answer is All of the above

Key Points

• Under the Specific Relief Act, 1963, particularly in Sections 27 and 28, the rescission of contracts (i.e., cancellation or annulment) may be adjudged or refused based on several grounds: Grounds where rescission may be adjudged or refused:
• Where the contract is voidable or terminable by the plaintiff
  • – As per Section 27(1), the court can rescind a contract that is voidable or terminable at the plaintiff’s option.
• In case of unlawful contract
  • – Rescission may be refused if the contract is unlawful, especially when both parties are at fault.
• Where the defendant is more to blame than the plaintiff
  • The court may grant rescission if the defendant bears greater blame for the circumstances leading to the request.

Additional Information

• Option 1 only – Incomplete; ignores other valid grounds.
• Option 2 only – Only refers to one scenario where rescission may be refused.
• Option 3 only – A valid factor, but not the only one.

The correct answer is option 4.Key Points

• Section 41 under chapter 8 (Perpertual Injunction) of Specific Relief Act 1963 deals with injunction when refused.
• It states an injunction cannot be granted:
  • To restrain any person from prosecuting a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings;
  • To restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought;
  • To restrain any person from applying to any legislative body;
  • To restrain any person from instituting or prosecuting any proceeding in a criminal matter;
  • To prevent the breach of a contract the performance of which would not be specifically enforced;
  • To prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will be a nuisance;
  • To prevent a continuing breach in which the plaintiff has acquiesced;
  • When equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust;
  • If it would impede or delay the progress or completion of any infrastructure project or interfere with the continued provision of relevant facility related thereto or services being the subject matter of such project.
  • When the conduct of the plaintiff or his agents has been such as to disentitle him to be the assistance of the court;
  • When the plaintiff has no personal interest in the matter.

Additional Information

• ​Section 37 deals with temporary and perpetual injunctions.
• It says temporary injunctions are such as are to continue until a specific time, or until the further order of the court, and they may be granted at any stage of a suit, and are regulated by the Code of Civil Procedure, 1908 (5 of 1908).
• A perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit; the defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff..

The correct answer is Option 4.

Key PointsSections 27 to 30 of the Specific Relief Act, 1963 deal with the rescission of a contract. It is a type of legal redressal. 

• Section 27 deals with a situation where the rescission may be adjudged or refused.
• Section 28 deals with rescission in cases of contracts for the sale or lease of immovable property, the specific performance of which has been decreed.
• Section 29 deals with an alternative prayer for rescission in a suit for a specific performance and
• Section 30 envisages that the court may order the rescinding party to act in a manner that would restore equity.

Additional Information Sri Pawan Kumar Dalmia v. Sri Biligowda (2021)

• In this case, the plaintiffs claimed that the defendants did not have sufficient title to the property and wanted to rescind the contract while claiming back the earnest money from them. The plaintiffs lost the case at the trial stage but later on at the appellate stage, the Karnataka High Court decided in favour of the plaintiff’s right to rescission of the contract as the defendants had misrepresentation themselves in having proper title to the property and ordered the payment of the earnest money back to the plaintiffs/ appellants.  

The correct option is Option 3.

Key Points

• Section 27: When rescission may be adjudged or refused—
  1. Any person interested in a contract may sue to have it rescinded, and such rescission may be adjudged by the court in any of the following cases, namely:—
     • where the contract is voidable or terminable by the plaintiff.
     • where the contract is unlawful for causes not apparent on its face and the defendant is more to blame than the plaintiff.
  2. Notwithstanding anything contained in sub-section (1), the court may refuse to rescind the contract— 
     • where the plaintiff has expressly or impliedly ratified the contract.
     • where, owing to the change of circumstances which has taken place since the making of the contract (not being due to any act of the defendant himself), the parties cannot be substantially restored to the position in which they stood when the contract was made.
     • where third parties have, during the subsistence of the contract, acquired rights in good faith without notice and for value.
     • where only a part of the contract is sought to be rescinded and such part is not severable from the rest of the contract.
• Explanation.—In this section “contract” in relation to the territories to which the Transfer of Property Act, 1882 (4 of 1882), does not extend, means a contract in writing.