Breach of Contract and Its Remedies – MCQs

Q1. What is a breach of contract?
A. Violation of criminal law
B. Violation of a promise under a contract
C. Making a new contract
D. Performing the contract early
 Answer: B. Violation of a promise under a contract

Q2. Which of the following is a remedy for breach of contract?
A. Imprisonment
B. Specific performance
C. Oral apology
D. Changing the contract
 Answer: B. Specific performance

Q3. What is meant by “Damages” in contract law?
A. Punishment for default
B. Compensation for loss due to breach
C. Reward for performance
D. Bonus payment
 Answer: B. Compensation for loss due to breach

Q4. Which type of damages are awarded to punish the breaching party?
A. Nominal
B. Compensatory
C. Exemplary
D. Liquidated
 Answer: C. Exemplary

Q5. When no actual loss is suffered, the court may award:
A. Exemplary damages
B. Nominal damages
C. Punitive damages
D. Liquidated damages
 Answer: B. Nominal damages

Q6. A decree for specific performance means:
A. Compensation is paid
B. Contract is cancelled
C. Contract is enforced by court
D. Arrest of party
 Answer: C. Contract is enforced by court

Q7. Injunction is a:
A. Type of consideration
B. Criminal remedy
C. Judicial order to do or not do something
D. Damage claim
 Answer: C. Judicial order to do or not do something

Q8. In a contract, anticipatory breach means:
A. Actual refusal to perform before due date
B. Performance ahead of schedule
C. Modification of contract
D. Acceptance of new terms
 Answer: A. Actual refusal to perform before due date

Q9. Which of the following is not a type of remedy for breach?
A. Damages
B. Specific performance
C. Rescission
D. Oral apology
 Answer: D. Oral apology

Q10. Liquidated damages are:
A. Pre-decided compensation agreed in contract
B. Court-imposed penalty
C. Nominal fines
D. Arbitrary figures
 Answer: A. Pre-decided compensation agreed in contract

Q11. What happens when a party fails to perform a contract without lawful excuse?

A. Contract is automatically renewed
B. It is called a breach of contract
C. Contract is ignored
D. Contract is modified
 Answer: B. It is called a breach of contract

Q12. What type of breach allows the innocent party to rescind the contract?
A. Minor breach
B. Anticipatory breach
C. Fundamental breach
D. Actual breach
 Answer: C. Fundamental breach

Q13. Which remedy aims to put the injured party in the position they would have been in if the contract was performed?
A. Specific performance
B. Damages
C. Injunction
D. Rescission
 Answer: B. Damages

Q14. Which of the following is not an essential element to claim damages?
A. Loss must be proven
B. Loss must be direct
C. Loss must be speculative
D. Loss must be caused by breach
 Answer: C. Loss must be speculative

Q15. What is an injunction?
A. A legal order to stop or compel action
B. A type of damages
C. A contract clause
D. A financial penalty
 Answer: A. A legal order to stop or compel action

Q16. Specific performance is granted by the court only when:
A. Damages are inadequate
B. Parties agree
C. Contract is oral
D. Contract is informal
 Answer: A. Damages are inadequate

Q17. Which of the following is a limitation of specific performance?
A. Only available for contracts involving unique goods
B. Available for all contracts
C. Can be granted without notice
D. Does not require breach
 Answer: A. Only available for contracts involving unique goods

Q18. What kind of damages compensate for indirect or consequential losses?
A. General damages
B. Special damages
C. Nominal damages
D. Liquidated damages
 Answer: B. Special damages

Q19. Which remedy cancels the contract and releases parties from future obligations?
A. Damages
B. Rescission
C. Specific performance
D. Injunction
 Answer: B. Rescission

Q20. Who can claim damages in case of a breach of contract?
A. Only the government
B. The injured party only
C. Anyone related to the contract
D. Third parties
 Answer: B. The injured party only

Q21. A party’s refusal to perform after the contract is made is called:
A. Anticipatory breach
B. Actual breach
C. Minor breach
D. Fundamental breach
 Answer: B. Actual breach

Q22. Which of the following is an example of anticipatory breach?
A. Party performs partially
B. Party refuses to perform before the due date
C. Party performs late
D. Party modifies contract terms
 Answer: B. Party refuses to perform before the due date

Q23. When does a party have the right to sue for damages in anticipatory breach?
A. Immediately after breach
B. After contract expiry
C. After actual breach occurs
D. Only after court order
 Answer: A. Immediately after breach

Q24. Nominal damages are awarded when:
A. Actual loss is suffered
B. No actual loss is proved
C. Loss is speculative
D. Damages are punitive
 Answer: B. No actual loss is proved

Q25. Exemplary damages are:
A. Awarded to compensate loss
B. Awarded to punish the defendant
C. Awarded for breach of minor terms
D. Awarded without proof
 Answer: B. Awarded to punish the defendant

Q26. Liquidated damages are:
A. Fixed in contract
B. Decided by court after breach
C. Based on actual loss
D. Nominal damages
 Answer: A. Fixed in contract

Q27. A breach caused by failure to perform at the right time is called:
A. Anticipatory breach
B. Actual breach
C. Breach of time
D. Fundamental breach
 Answer: C. Breach of time

Q28. When the contract cannot be performed due to impossibility, it is called:
A. Breach of contract
B. Frustration of contract
C. Rescission
D. Modification
 Answer: B. Frustration of contract

Q29. Which of the following is NOT a remedy for breach of contract?
A. Damages
B. Specific performance
C. Injunction
D. Imprisonment
 Answer: D. Imprisonment

Q30. What type of remedy is specific performance?
A. Monetary
B. Equitable
C. Criminal
D. Nominal
 Answer: B. Equitable

Q31. Rescission cancels a contract due to:
A. Fraud or misrepresentation
B. Delay in performance
C. Mutual agreement
D. Breach of minor terms
 Answer: A. Fraud or misrepresentation

Q32. What is the key purpose of damages in breach of contract?
A. Punishment
B. Compensation
C. Cancellation
D. Performance
 Answer: B. Compensation

Q33. When the court orders to stop a party from doing something, it is called:
A. Rescission
B. Injunction
C. Specific performance
D. Damages
 Answer: B. Injunction

Q34. Which of the following is true about damages?
A. Always equal to contract value
B. Must be foreseeable at contract formation
C. Are punitive by nature
D. Are arbitrary
 Answer: B. Must be foreseeable at contract formation

Q35. What happens in a breach of contract due to partial performance?
A. Innocent party can claim damages
B. Contract is void
C. Contract is automatically rescinded
D. No action is taken
 Answer: A. Innocent party can claim damages

Q36. The right to sue for damages lapses after:
A. 1 year
B. 3 years
C. 5 years
D. 10 years
 Answer: B. 3 years

Q37. Which type of breach is considered trivial and does not affect the contract?
A. Minor breach
B. Actual breach
C. Fundamental breach
D. Anticipatory breach
 Answer: A. Minor breach

Q38. Which of the following is NOT true about specific performance?
A. It is discretionary
B. It is granted if damages are inadequate
C. It can be ordered for contracts involving personal service
D. It compels performance of the contract
 Answer: C. It can be ordered for contracts involving personal service

Q39. Can an injured party claim both damages and specific performance simultaneously?
A. Yes, always
B. No, only one remedy can be claimed
C. Yes, if the court allows
D. No, specific performance excludes damages
 Answer: B. No, only one remedy can be claimed

Q40. Which of the following describes “quantum meruit”?
A. Payment for damages
B. Payment for work done when contract is incomplete
C. Compensation for breach
D. Liquidated damages