Questions for Practice [PDF Library]

8/6/2019 Questions for Practice [PDF Library]

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SectionB: Mercantile Law

1. Which of the following is an exception to the rule that an agreement isrestraint of trade is void-

a) Agreement in restraint of marriageb) Agreement in restraint of carrying of trade after sale of goodwillc) Agreement in restraint of legal proceedingsd) Agreements of trading with enemy

2. Remission is the acceptance of:a) a lesser sum than what was contracted forb) a lesser fulfilment of the promise made.c) Either [a] or [b]d) Neither [a] nor [b]

3. Cundy V. Lindsay case deals with:a) Coercionb) Undue Influence.c) Mistake as to the nature of transaction.d) Mistake as regards identity.


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4. When the performance of a contract becomes impossible, the purposewhich the parties had in mind is frustrated. If the purpose becomes

impossible because of supervening event, the promisor is excusedfrom the performance of the contract. This is known as _______.

a) Doctrine of frustration.b) Initial impossibility.c) Lapse of time.d) Operation of law.

5.

Which of the following is NOT considered as an exception to thedoctrine of caveat emptor?

a) where the seller knowingly conceals the defect which could bediscovered on a reasonable examination.

b) where sale is by description and samplec) where buyer has disclosed the purposed) where goods are bought by description from a seller dealing in

goods of that description.

6. Which is not correct?a) unless otherwise agreed, each of joint promisors may compel

every other joint promisor to contribute equally with himself to the

performance of the promise.

b) If anyone of the joint promisors makes default in makingcontribution, the remaining joint promisors must bear the loss

arising from such default equally.

c) A release of one of the joint promisors by the promisee does notdischarge the other joint promisor.

d) A release of one of the joint promisors by the promisee frees jointpromisor so released from responsibility to the other joint promisor

(s).


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7. Mr.X purchased a used computer from Mr. Y thinking it as a computerimported from England, Mr. Y failed to disclose the fact to Mr. X. On

knowing the fact Mr. X wants to repudiate the contract. Which of the

following statement is correct?

a) Mr. X can repudiate the contract on the ground of fraud.b) Mr. X can repudiate the contract on the ground of

misrepresentation.

c) Mr. X cannot repudiate the contract.d) Mr. X can repudiate the contract on the ground of mistake.

8. The foundation of modern law of damages was laid down in:a) Tinn v. Hoffman.b) Taylor v. Caidwell.c) Hadley v. Baxendale.d) Addis v. Gramophone Co.

9. Which of the following is an exception to the rule that an agreement inrestraint of trade is void?

a) Agreement in restraint of marriageb) Agreement in restraint of carrying of trade after sale of goodwillc) Agreement in restraint of legal proceedingsd) Agreements of trading with enemy.

10.Remission is the acceptance of:a) a lesser sum than what was contracted forb) a lesser fulfilment of the promise made.c) Either [a] or [b]d) Neither [a] nor [b]


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11.An offer may be made to the following:

a) A particular person.

b) A particular group or body of persons.

c) The public at large i.e. the whole world.

d) All of the above.

12.X promise to deliver his watch to Y and, return, B promises to pay a sumof Rs.5, 000 there is to be a/an.

a) Agreementb) Acceptancec) Offerd) Proposal

13.X owns a residential house in Delhi He is entitled to quiet possession andenjoyment of his property. This is called

a) Right in Remb) Right in personamc) Constitution Rightd) None of the above .

14.An unregistered firm is not an:a) Legal association

b) Illegal association

c) Association of persons

d) Proprietorship concern


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15.Henry entered into a hire purchase agreement with Sam in relation to atelevision for Rs.20,000/ on condition that on paying 12 installments of

Rs.2,000/- each the TV would be the property of Henry. After paying 6

installments Henry pledged the television with Richard, who took it in

good faith. Sam wants to recover the television from Richard. Which of

the following statement(s) is/are correct?

a) Sam can recover the television from Richard.b) Sam cannot recover the television from Richard.c) Sam can only recover the price of the television from Henry.d) Henry can validly transfer the title of the television to Richard.

16.X invites y for his sons wedding . Y accepts the invitation In this case ,there is an agreement but no contract , since .

a) There is no considerationb) There is no written documentc) There is no intention to create legal relationshipd) there is no formal acceptance of the offer.

17.X married Y and left for the U.S.A. promising to pay Y Rs 5000 prmonth till such time X was in the U.S.A This is a case of-

a) Valid contractb) Void contractc) Voidable contractd) Social Obligation


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18.X, by a letter 15th March offers to sell, his car to Y, who posts hisacceptance on 20th March. Here which of the option is true for X

a) X can revoke his offer before he receives the letter of acceptanceb) X cannot revoke his order as he becomes bound by the acceptance

on 20th march .

c) X can be revoke his offer after he receiving the letter of acceptanced) None of the above .

19.Which of the following is correct:a) The liability of partners of a firm is unlimited.b) Generally the liability of a member of a company is limited but it

can be unlimited.

c) All of the above.d) The liability of partner of firm is same as a member of any

company.

20.Under Section 201 of The Indian Contract Act, 1872, the termination ofan agents authority can be caused due to

a) Revocation of authority by the agent.b) Renunciation of agency by the principal.c) Both (a) and (b).d) Neither of (a) or (b).

21.The following are the requisites of a valid ratification of a contract ofagency:

a) The whole transaction can be ratified.b) Ratification must be communicated to the party who is sought to e

bound by the act done by the agent.

c) Ratification can be of the acts which the principal had the power todo.



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22.What is the minimum number of partner in a firm?a) 2b) 4c) 10d) 20

23.The following is not a document of title to goods:a) Bill of lading.b) Dock-warrant.c) Stamped acknowledgement for receipt of goods.d) Warehouse keepers certificate.

24.An agreement induced by mistake of fact is void if the followingconditions are fulfilled:

a) Both the parties must be under the same mistake.b) The mistake must be as to some fact.c) The fact must be essential to the agreement.d) All of the above.

25.Contracts may be classified on the basis of their validity, formation orperformance.

Contracts classified on the basis of formation are of the following types:

a) Express Contracts.b) Implied Contracts.c) Quasi Contracts.d) All of the above.


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26.A condition may be treated as warranty in the following cases:a) Where the buyer altogether waives the performance of the

condition.

b) Where the buyer elects to treat the breach of condition as one of awarranty.

c) In both of the above situations.d) In some other situations, but not in the above situations.

27.The difference in consideration under English law and Indian law are:a) Under English law past consideration is no consideration whereas

under Indian Law past consideration is good consideration.

b) Under English law consideration must move from the promiseeonly and no other person whereas under Indian Law consideration

may move from the promisee or any other person.

c) Under English law formal contracts i.e. one which is one in writingdo not require any consideration whereas under Indian Law all

contracts are required to be supported by consideration.


28.Pooja and Bablu are partners in a stationery business. Pooja orders in thefirms name and on the firms letterhead to be supplied with two bags of

wheat at her residence. Is the firm liable to pay the debt?

a) Yesb) Noc) Cant sayd) Depends on Bublu


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29.Implied authority of the partner does not empower him toa) Open a bank account on behalf of the firm in his own name.b) Compromise or relinquish any claim or portion of a claim by the

firm against an outsider.

c) Both of the above.d) None of the above.

30.Compulsory Dissolution includesa) Dissolution by the adjudication of all the partners or of all the

partners but one as insolvent.

b) Dissolution by the business of the firm becoming unlawful.c) All of the above.d) None of the above.

31.Ratification by a minor of a contract entered during minority, even afterhe attains majority is not allowed.

a) The above statement is correct.b) The above statement is partly correct.c) The above statement is incorrect.d) The above statement is irrelevant.

32.A contract between A, B and C was executed whereby A pays money toB for delivering some goods to C. C has not paid any consideration. Can

C enforce the agreement?

a) Yes, as he is the beneficiary of Trust.b) Yes but the same can only be done jointly with A.c) No as C did not pay the consideration.d) A and only A can enforce the agreement.


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33.In case of sale

a)

Property in goods does not pass to the buyer.b) Risk in the goods does not pass to the buyer.c) Both of the above.d) None of the above.

34.Retirement of a existing partner results in:

a)

Dissolution of firmb) Dissolution of partnershipc) Dissolution of friendshipd) Both (a) and (b)

35.The deficiency of the insolvent partner is borne by remaining solventpartners in their:

a) Profit sharing ratiob) Sacrificing ratioc) Capital ratiod) Gain ratio

36.Which of the following is a implied authority of a partner in a firm:a) Withdraw a suit filed on behalf of the firmb) Transfer any immovable property belonging to the firmc) Enter into a partnership on behalf of the firmd) To accept, make and issue negotiable instruments in the firms

name.


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37.X, Y and Z carried on a business for profit but under very specialconditions as to Z, that Z was to contribute neither labour nor money,

and was not to receive any profit, but was to lend his name to the firm. IsZ liable for the debts of the firm?

a) Yes, Z is liable for the debts of the firmb) No, X and Y are liablec) No, as Z had only lent his named) None of these

38.What is the difference between a Joint Hindu Family and a Partnershipa) In a Joint Hindu Family, firm arises by contract whereas in

partnership firm arises from status

b) In a Joint Hindu Family, Karta is liable for all business activitieswhereas in partnership all partners are jointly not liable

c) Death leads to dissolution of partnership whereas it does not leadsto dissolution of family business

d) All of the above

39.A of Mumbai orders B of Delhi for the supply of certain goods. Thestationmaster of Mumbai informs A about arrival of goods but before A

could take delivery, goods are destroyed. Can B get the money for goods?

a) No-property is not transferred to Ab) Yes-property transferred to Ac) No-A has not taken the deliveryd) None of these


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40.Manu asked for a gun at Fens shop, which was licensed for the sale ofguns. While Manu was firing the gun, the gun injured Manu because of

its defect. Can Manu claim damages for the injury?

a) Yes, as the gun is not of merchantable quality and there is a sale ofgoods by quality or fitness.

b) Yes, as the gun has latent defect and there is a sale of goods bysample.

c) Yes, as the gun is not of merchantable quality and there is a sale ofgoods by description.

d)Any of the above.

41.A party who does not suffer any loss in case of breach of contract, isentitled to

a) Statutory damagesb)

Liquidated damagesc) Exemplary damages

d) Nominal damages

42.A master asks his servant to sell his cycle to him at less than the marketprice. This contract can be avoided by the servant on the ground of:

a)

Coercionb) Fraudc) Mistaked) Undue influence


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43.W offers by a letter to sell his car to R for Rs. 95,000. R at the same time,offers by a letter to buy Ws car for Rs. 15,000. The two letters cross each

other in the post. Is there is a concluded `contract between W and R?

a) Yes, there is a concluded contract between W and R.b) No, only crossing of offers.c) Cant say.d) None of these.

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