More Multiple Choice Questions on Law of Equity
Question 41
The principle of equity is incorporated in the Indian legal system under:
a) Common Law principles
b) Indian Constitution, Article 14
c) Statutory Law and Judicial Precedents
d) Customary Practices
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Answer: c) Statutory Law and Judicial Precedents
Explanation: The principles of equity are embedded in Indian law through statutes such as the Specific Relief Act, 1963, and are also upheld in judicial decisions that rely on fairness and justice.
Question 42
The equitable doctrine of “Subrogation” applies in cases of:
a) Unjust enrichment
b) Transfer of property
c) Insurance claims and suretyship
d) Formation of trusts
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Answer: c) Insurance claims and suretyship
Explanation: Subrogation allows one party (e.g., an insurer) to step into the shoes of another (e.g., the insured) to claim reimbursement or enforce rights after fulfilling an obligation.
Question 43
Which of the following maxims ensures that equity treats all litigants fairly?
a) Equity regards as done that which ought to be done
b) He who seeks equity must do equity
c) Equity is equality
d) Equity follows the law
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Answer: b) He who seeks equity must do equity
Explanation: This maxim ensures that a claimant seeking relief under equity must also act fairly and fulfill their obligations. It emphasizes the principle of reciprocal fairness.
Question 44
Which equitable remedy involves canceling a contract or transaction?
a) Injunction
b) Rectification
c) Rescission
d) Specific Performance
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Answer: c) Rescission
Explanation: Rescission is an equitable remedy that voids a contract or agreement, restoring the parties to their original positions, often applied in cases of fraud or misrepresentation.
Question 45
Which type of trust is created by operation of equity and not by the express intention of parties?
a) Express Trust
b) Constructive Trust
c) Public Trust
d) Discretionary Trust
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Answer: b) Constructive Trust
Explanation: A constructive trust is imposed by equity to prevent unjust enrichment or fraud, even though the parties did not expressly intend to create a trust.
Question 46
The doctrine of “marshalling” in equity is used in cases of:
a) Equal distribution of liabilities
b) Managing competing claims of creditors
c) Delayed payment of debts
d) Mistaken identity in contracts
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Answer: b) Managing competing claims of creditors
Explanation: The doctrine of marshalling ensures that if a debtor has multiple assets securing debts owed to different creditors, the creditors can be satisfied equitably without prejudicing the others.
Question 47
The principle “Equity regards as done that which ought to be done” is particularly relevant to:
a) Anticipatory breach of contract
b) Transfer of property
c) Specific performance of contracts
d) Criminal law cases
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Answer: c) Specific performance of contracts
Explanation: This maxim applies when equity assumes that obligations that should have been performed as per a contract are considered done to ensure fairness in legal remedies.
Question 48
Equity generally intervenes when:
a) Common law provides adequate remedies
b) Strict legal rights cause unjust outcomes
c) Criminal law fails to prosecute
d) Customary practices contradict statutory law
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Answer: b) Strict legal rights cause unjust outcomes
Explanation: Equity intervenes to prevent rigid application of common law rules from leading to unfair results, providing remedies that align with principles of fairness and justice.
Question 49
Injunctions are classified as an equitable remedy because they:
a) Punish the wrongdoer
b) Prevent future violations of rights
c) Only apply to criminal offenses
d) Depend solely on statutory law
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Answer: b) Prevent future violations of rights
Explanation: Injunctions are preventive remedies issued by courts to restrain a party from doing an act (prohibitory) or compel them to perform an act (mandatory), ensuring protection of rights.
Question 50
Which of the following doctrines ensures that a property held by one party for another’s benefit must be handed over?
a) Doctrine of Lis Pendens
b) Doctrine of Constructive Trust
c) Doctrine of Marshalling
d) Doctrine of Laches
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Answer: b) Doctrine of Constructive Trust
Explanation: Constructive trusts arise to ensure that property held wrongfully or unfairly by one party is transferred to the rightful owner or beneficiary to prevent unjust enrichment.
Question 51
Which maxim of equity applies to cases of fraud or misrepresentation?
a) Equity regards the substance rather than the form
b) Delay defeats equity
c) Equity will not permit a statute to be used as a cloak for fraud
d) He who comes to equity must come with clean hands
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Answer: c) Equity will not permit a statute to be used as a cloak for fraud
Explanation: This maxim ensures that legal provisions cannot be exploited to perpetrate fraud or misrepresentation, reinforcing the principle of fairness in equity.
Question 52
A party is barred by “acquiescence” in equity when:
a) They have delayed enforcing their rights
b) They have actively consented to the act
c) They remain silent while rights are being violated
d) They breach a statutory obligation
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Answer: c) They remain silent while rights are being violated
Explanation: Acquiescence occurs when a party, through their inaction or silence, implies consent to the violation of their rights, barring them from seeking equitable relief later.
Question 53
What is the primary goal of equitable remedies?
a) Awarding monetary damages
b) Compensating financial losses
c) Enforcing fairness and justice
d) Prosecuting criminal offenders
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Answer: c) Enforcing fairness and justice
Explanation: Equitable remedies, such as injunctions and specific performance, focus on providing justice and fairness in cases where monetary compensation is insufficient.
Question 54
The equitable principle of “undue influence” is primarily concerned with:
a) Fraudulent transactions
b) Misrepresentation of facts
c) Abuse of position of trust or power
d) Negligent misstatements
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Answer: c) Abuse of position of trust or power
Explanation: Undue influence occurs when one party in a position of dominance unfairly influences another party to obtain an advantage, rendering agreements voidable in equity.
Question 55
Which equitable principle ensures that a contract is interpreted based on the actual intention of the parties?
a) Equity follows the law
b) Equity regards the substance rather than the form
c) He who seeks equity must do equity
d) Equity aids the vigilant, not the indolent
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Answer: b) Equity regards the substance rather than the form
Explanation: This maxim ensures that equity focuses on the true intention and purpose behind a transaction, rather than rigidly adhering to technical formalities.
Question 56
Which of the following doctrines prevents inconsistent legal claims?
a) Doctrine of Estoppel
b) Doctrine of Acquiescence
c) Doctrine of Election
d) Doctrine of Subrogation
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Answer: c) Doctrine of Election
Explanation: The doctrine of election prevents a party from claiming inconsistent rights or remedies, ensuring consistency and fairness in legal proceedings.
Question 57
What is a “mandatory injunction”?
a) An order preventing someone from doing something
b) An order compelling someone to perform a specific act
c) A punishment for disobeying court orders
d) A statutory obligation
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Answer: b) An order compelling someone to perform a specific act
Explanation: A mandatory injunction directs a party to perform a specific act, often to undo a wrongful action or comply with a legal obligation.
Question 58
The equitable principle of “clean hands” implies:
a) A party must not violate statutory provisions
b) A party seeking relief must act fairly and honestly
c) A party must have no prior legal disputes
d) A party must ensure no delay in filing a case
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Answer: b) A party seeking relief must act fairly and honestly
Explanation: The “clean hands” doctrine requires a claimant to demonstrate fairness, honesty, and good conduct in relation to the matter for which they seek equitable relief.
Question 59
In Indian law, equity is often used to:
a) Punish offenders
b) Address gaps in common law
c) Resolve conflicts between customary and statutory law
d) Enforce criminal penalties
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Answer: b) Address gaps in common law
Explanation: Equity supplements common law by addressing gaps and ensuring fairness in cases where legal remedies are inadequate.
Question 60
The principle “Equity aids the vigilant, not the indolent” primarily discourages:
a) Deliberate fraud
b) Delay in enforcing rights
c) Multiple legal remedies
d) Breach of fiduciary duty
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Answer: b) Delay in enforcing rights
Explanation: This maxim ensures that equitable relief is granted only to those who actively pursue their claims without undue delay, promoting vigilance in legal matters.
