Illegal, Wagering and Uncertain Agreements — MCQs

All questions with answers and explanations

Read the full set here, or use the practice card above to test yourself one question at a time.

1. X agrees to sell his car to B for ₹50,000 or ₹1,00,000, with nothing in the agreement showing which price was meant. This agreement is:

   • Voidable at B's option
   • Void for uncertainty under Section 29 (correct answer)
   • Valid, with the lower price applying by default
   • Void for being a wagering agreement

   Explanation. Since the price term has no fixed, ascertainable meaning and nothing in the agreement resolves which figure applies, it is void for uncertainty under Section 29.

2. In Gherulal Parakh v. Mahadeodas Maiya, the Supreme Court held that a partnership formed to carry on wagering transactions is:

   • Illegal under Section 23, since wagering is immoral
   • Not illegal — wagering agreements are void under Section 30, but not immoral or unlawful under Section 23 (correct answer)
   • Void for uncertainty
   • Automatically dissolved by operation of law

   Explanation. The Court held that wagering agreements are void under Section 30 but are not 'immoral' or otherwise unlawful under Section 23 — so a partnership formed to conduct a wagering business is not itself illegal.

3. A collateral agreement connected to a main agreement that is merely VOID (but not illegal):

   • Is automatically tainted and unenforceable
   • Generally survives and remains enforceable (correct answer)
   • Becomes a wagering agreement itself
   • Must be registered separately to be valid

   Explanation. A collateral deal made to further an illegal purpose is tainted. If the main agreement is merely void, such as a wager, a collateral deal is not automatically tainted (Gherulal Parakh v. Mahadeodas Maiya). This is the key practical difference between void and illegal.

4. Section 29 makes an agreement void when:

   • Its meaning is uncertain and not capable of being made certain (correct answer)
   • One party is a minor
   • It involves a wagering transaction
   • It restrains a lawful trade

   Explanation. Section 29 voids agreements whose meaning is uncertain, or not capable of being made certain — a ground entirely distinct from unlawfulness, minority, or wagering.

5. An agreement to sell goods 'at the market price on the date of delivery' is:

   • Void for uncertainty, since no fixed price is stated
   • Not void under Section 29, since the price is capable of being made certain by reference to the market rate (correct answer)
   • Void as a wagering agreement
   • Voidable at the seller's option only

   Explanation. Section 29 voids only agreements whose meaning is not certain or capable of being made certain. A reference to the market price on the date of delivery makes the price capable of being made certain, as in illustration (e), so the agreement is not void.

6. Under Section 58, where an alternative promise has one legal and one illegal branch:

   • The whole agreement is void
   • Only the legal branch can be enforced (correct answer)
   • Only the illegal branch is void ab initio but the rest is voidable
   • The court chooses either branch

   Explanation. Section 58: in an alternative promise, one branch legal and the other illegal, the legal branch alone can be enforced. Illustration: rice (valid) or smuggled opium (void).

7. A pays B 1,000 rupees for B's promise to marry C, A's daughter, but C is already dead. Under Section 65:

   • B keeps the money
   • The agreement is void but B must repay the 1,000 rupees (correct answer)
   • The agreement is valid
   • A must pay B damages

   Explanation. Section 65, Illustration (a): the agreement is void, but a person who received an advantage under it must restore it.

8. Under Section 57, if reciprocal promises include a second set that is illegal, the first (legal) set is:

   • Void with the second set
   • A contract, while the second set is a void agreement (correct answer)
   • Voidable
   • Unenforceable until the court severs it

   Explanation. Section 57: the first set of promises is a contract; the second is a void agreement.

9. Under Section 30, which of the following is NOT rendered unlawful by the section?

   • A bet on a cricket match
   • A subscription towards a horse-race prize of 500 rupees or more (correct answer)
   • A bet on an election
   • A bet on a card game

   Explanation. Section 30 exempts subscriptions or contributions towards a plate, prize or sum of 500 rupees or more for the winner of a horse-race.

10. A agrees to sell B 'my white horse for rupees five hundred or rupees one thousand'. The agreement is:

    • Valid
    • Void for uncertainty (correct answer)
    • Voidable
    • Illegal

    Explanation. Section 29, Illustration (f): nothing shows which price was to be paid.

11. A, a dealer in coconut oil only, agrees to sell B 'one hundred tons of oil'. The agreement is:

    • Void for uncertainty
    • A contract for coconut oil, as A's trade shows the meaning (correct answer)
    • Voidable
    • A wager

    Explanation. Section 29, Illustration (c): the nature of A's trade shows the meaning.