BUSINESS LAW

AND
ENVIRONMENT

UNIT 1 & 2
1. The term contract is defined as
“an agreement enforceable by law”
in section__of Indian Contract Act, 1872.
 
a.2(e)
b. 2(h)
c. 2(d)
d. 2(g)
1. The term contract is defined as
“an agreement enforceable by law”
in section__of Indian Contract Act, 1872.
 
a.2(e)
b. 2(h)
c. 2(d)
d. 2(g)
2. Which of the following
statements is false?
a. Consideration must be adequate.
b. Consideration may be an act, abstinence
or a return promise.
c. Consideration must be real.
d. Consideration must not be illegal,
immoral or opposed to public policy. 
2. Which of the following
statements is false?

a. Consideration must be adequate.

b. Consideration may be an act, abstinence
or a return promise.
c. Consideration must be real.
d. Consideration must not be illegal,
immoral or opposed to public policy. 
3. Inserting a coin in the slot of a
weighing machine installed at
the railway station is an
example of
a. Implied acceptance
b. Express acceptance
c. No acceptance
d. Offer. 
3. Inserting a coin in the slot of a
weighing machine installed at the
railway station is an example of

a. Implied acceptance
b. Express acceptance
c. No acceptance
d. Offer. 
4. Under which of the following
instances, does the offer lapse?
  a. If it is revoked by the offeror at any time
before its acceptance.
b. If the offeror/offeree dies/becomes insane &
the other party knows it before acceptance.
c. If the offer is not accepted within the
specified time or within a reasonable time.
d. All of the above.
4. Under which of the following
instances, does the offer lapse?
  a. If it is revoked by the offeror at any time
before its acceptance.
b. If the offeror/offeree dies/becomes insane
& the other party knows it before
acceptance.
c. If the offer is not accepted within the
specified time or within a reasonable time.
d. All of the above.
5. 'A' accepts 'B's invitation to dinner
by phone. This is not a contract as

a. There is no consensus between the two

parties
b. Acceptance is given orally
c. There is no intention to create a legal
relationship
d. Both (b) and (c) above
5. 'A' accepts 'B's invitation to dinner
by phone. This is not a contract as

a. There is no consensus between the two

parties
b. Acceptance is given orally
c. There is no intention to create a legal
relationship
d. Both (b) and (c) above
6. Promises forming consideration for each other are known as—
 

a. Independent promises
b. Dependent promises
c. Reciprocal promises
d. Mutual promises
 
6. Promises forming consideration for each other are known as—
 

a. Independent promises
b. Dependent promises
c. Reciprocal promises
d. Mutual promises
 
 7. An agreement made under
coercion, renders the contract

a. Valid
b. Void
c. Voidable
d. Illegal
e. Unenforceable.  
 7. An agreement made under
coercion, renders the contract

a. Valid
b. Void
c. Voidable
d. Illegal
e. Unenforceable.  
8. Which of the following is/are not the
essential elements of a valid offer?

a. Offerer must have an intention to be

bound by his offer.
b. Must be definite.
c. Offer must be made to a specific
person/party and not to public at large.
d. Both (a) and (c) above.
 
8. Which of the following is/are not the
essential elements of a valid offer?

a. Offerer must have an intention to be

bound by his offer.
b. Must be definite.
c. Offer must be made to a specific
person/party and not to public at large.
d. Both (a) and (b) above.
 
9. A Contract entered by mistake of law in India is
 

a. Valid
b. Void
c. Voidable
d. Unlawful
e. Illegal.
9. A Contract entered by mistake of law in India is
 

a. Valid
b. Void
c. Voidable
d. Unlawful
e. Illegal.
10. A proposal when accepted becomes

a. Offer
b. Contract
c. Promise
d. Agreement
10. A proposal when accepted becomes

a. Offer
b. Contract
c. Promise
d. Agreement
11. A contract creates
a. Rights in personam
b. Rights in rem
c. Only rights and no obligations
d. Only obligation and no rights
11. A contract creates
a. Rights in personam
b. Rights in rem
c. Only rights and no obligations
d. Only obligation and no rights
12. Which of the following
agreements is/are valid?
a. Agreement in restraint of legal proceedings,
b. Agreement curtailing period of limitation.
c. Agreement to stiffling prosecution.
d. Agreement by an partner with his partners
not to carry on any business other than that of
firm while he is a partner.
12. Which of the following
agreements is/are valid?
a. Agreement in restraint of legal proceedings,
b. Agreement curtailing period of limitation.
c. Agreement to stiffling prosecution.
d. Agreement by an partner with his partners
not to carry on any business other than that of
firm while he is a partner.
13. Under which modes is a contract said to
have been discharged by operation of law?

a. Performance of the contract by both the

parties.
b. Breach of contract by either of the parties.
c. Lapse of time in performance of the
contract.
d. Insolvency of either of the parties.
13. Under which modes is a contract said to
have been discharged by operation of law?

a. Performance of the contract by both the

parties.
b. Breach of contract by either of the parties.
c. Lapse of time in performance of the
contract.
d. Insolvency of either of the parties.
14. Which of the following relationships do not
raise the presumption of undue influence?

a. Doctor and Patient,

b. Debtor and Creditor,
c. Trustee and Beneficiary,
d. Landlord and Tenant,
e. Both (b) and (d) above.
14. Which of the following relationships do not
raise the presumption of undue influence?

a. Doctor and Patient,

b. Debtor and Creditor,
c. Trustee and Beneficiary,
d. Landlord and Tenant,
e. Both (b) and (d) above.
 15. A minor’s agreement is void. This
proposition is made in

a. Nihal Chand Vs. Jan Khan

b. Sreekrishnan Vs. Kurukshethra
University
c. Mohari Beebi Vs. Dharmodas ghosh
d. Nanjappa Vs. Muthuswamy
 15. A minor’s agreement is void. This
proposition is made in

a. Nihal Chand Vs. Jan Khan

b. Sreekrishnan Vs. Kurukshethra
University
c. Mohari Beebi Vs. Dharmodas ghosh
d. Nanjappa Vs. Muthuswamy
16. 'A' agreed to sell his car to 'B'. His consent was
given at gun point, contract is void as it involves

a. Undue influence
b. Compulsion
c. Coercion
d. Extortion
16. 'A' agreed to sell his car to 'B'. His consent was
given at gun point, contract is void as it involves

a. Undue influence
b. Compulsion
c. Coercion
d. Extortion
17. The contract entered with a lunatic
during the times of his sound mind is

a. Valid
b. Void
c. Void ab initio
d. Voidable
17. The contract entered with a lunatic
during the times of his sound mind is

a. Valid
b. Void
c. Void ab initio
d. Voidable
18. 'A' took up the responsibility of educating 'B' who was a
minor. Which of the following is true?
 

a. 'B' is not liable to reimburse A and can

claim exemption as he is a minor,
b. The contract is void,
c. The minor is liable out of his property to
reimburse A.
d. 'A' can rescind the contract.
18. 'A' took up the responsibility of educating 'B' who was a
minor. Which of the following is true?
 

a. 'B' is not liable to reimburse A and can

claim exemption as he is a minor,
b. The contract is void,
c. The minor is liable out of his property to
reimburse A.
d. 'A' can rescind the contract.
19. An agreement which is enforceable
by law at the option of one or more of
the parties, but not at the option of the
other or others is
a. Void agreement
b. Voidable contract
c. Valid contract
d. Nudum pactum
19. An agreement which is enforceable
by law at the option of one or more of
the parties, but not at the option of the
other or others is
a. Void agreement
b. Voidable contract
c. Valid contract
d. Nudum pactum
 20. An agreement is—

a. Offer
b. Offer + acceptance
c. Offer + acceptance + consideration

d. Contract
 20. An agreement is—

a. Offer
b. Offer + acceptance
c. Offer + acceptance + consideration

d. Contract
21. There is a counter-offer when—

a. the offeree gives conditional

acceptance
b. the offeror makes a fresh offer
c. the offeree makes some query
d. the offeree accepts it.
21. There is a counter-offer when—

a. the offeree gives conditional

acceptance
b. the offeror makes a fresh offer
c. the offeree makes some query
d. the offeree accepts it.
22. A agrees to pay B Rs. 1000/- and B promises to
bring for A stars from heaven. The agreement is

a. void
b. valid
c. voidable
d. void ab initio 
22. A agrees to pay B Rs. 1000/- and B promises to
bring for A stars from heaven. The agreement is

a. void
b. valid
c. voidable
d. void ab initio 
23. ‘Consensus ad-idem’ means—

a. General consensus
b. Meeting of minds upon the same
thing in the same sense
c. Reaching an agreement
d. All the above
23. ‘Consensus ad-idem’ means—

a. General consensus
b. Meeting of minds upon the same
thing in the same sense
c. Reaching an agreement
d. All the above
24. In a contract induced by fraud, the
defrauded party

a. Cannot rescind the contract

b. Cannot rescind the contract but can sue
for damages
c. Cannot sue for damages
d. Can insist that he shall be put in a position
in which he would have been if the
representation made had been true
24. In a contract induced by fraud, the
defrauded party

a. Cannot rescind the contract

b. Cannot rescind the contract but can sue
for damages
c. Cannot sue for damages
d. Can insist that he shall be put in a position
in which he would have been if the
representation made had been true
25. When a person positively asserts
that a fact is true when his information
does not warrant it to be so, though he
believes it to be true, there is—

a. Misrepresentation
b. Fraud
c. Undue influence
d. Coercion
25. When a person positively asserts
that a fact is true when his information
does not warrant it to be so, though he
believes it to be true, there is—

a. Misrepresentation
b. Fraud
c. Undue influence
d. Coercion
26. A bid at an auction sale is

a. An implied offer to buy

b. An express offer to buy
c. An invitation to offer to buy
d. An invitation to come to bid
26. A bid at an auction sale is

a. An implied offer to buy

b. An express offer to buy
c. An invitation to offer to buy
d. An invitation to come to bid
27. Consideration must move at the desire of—

a. the promisor
b. the promisee
c. Promisor or any third party
d. both the promisor and the promisee
27. Consideration must move at the desire of—

a. the promisor
b. the promisee
c. Promisor or any third party
d. both the promisor and the promisee
28. A contract which is wholly performed by
both the parties is called as

a. Unilateral contract
b. Bilateral contract
c. Executed contract
d. Executory contract
28. A contract which is wholly performed by
both the parties is called as

a. Unilateral contract
b. Bilateral contract
c. Executed contract
d. Executory contract
29. When an offer is made to world at large, it is
called General Offer, this preposition can be seen in

a. Carlill v. Carbolic Smoke Ball Case

b. Taylor v. Portington
c. Mohiri Beebi v. Dharmodas Ghose
d. Harris v. Nickerson
29. When an offer is made to world at large, it is
called General Offer, this preposition can be seen in

a. Carlill v. Carbolic Smoke Ball Case

b. Taylor v. Portington
c. Mohiri Beebi v. Dharmodas Ghose
d. Harris v. Nickerson
30. Competency to contract means—
 

a. age of the parties

b. soundness of mind of the parties
c. both age & soundness of mind
d. intelligence of the parties
30. Competency to contract means—
 

a. age of the parties

b. soundness of mind of the parties
c. both age & soundness of mind
d. intelligence of the parties
31. Which is an exception to the rule that "an
agreement in restraint of trade is void"?

a. Agreements restricting personal liberty.

b. Agreement in restraint of legal
proceedings.
c. Agreement in restraint of carrying of
trade after sale of goodwill.
d. Agreements of trading with enemy.
31. Which is an exception to the rule that "an
agreement in restraint of trade is void"?

a. Agreements restricting personal liberty.

b. Agreement in restraint of legal
proceedings.
c. Agreement in restraint of carrying of
trade after sale of goodwill.
d. Agreements of trading with enemy.
32. Which of the following statements is false?

a. A minor cannot be adjudged insolvent,

b. A minor may enter into contract of
apprenticeship,
c. A minor can be an agent of a principal,
d. A minor can be one of the partners on
par with others.
32. Which of the following statements is false?

a. A minor cannot be adjudged insolvent,

b. A minor may enter into contract of
apprenticeship,
c. A minor can be an agent of a principal,
d. A minor can be one of the partners on
par with others.
33. In which of the following cases in a contract
stands discharged by operation of law?

a. By express consent,
b. By novation of terms of contract,
c. By unauthorized alteration of terms of
contract,
d. By destruction of subject matter.
 
33. In which of the following cases in a contract
stands discharged by operation of law?

a. By express consent,
b. By novation of terms of contract,
c. By unauthorized alteration of terms of
contract,
d. By destruction of subject matter.
 
34. Considerations & objects are unlawful when
it is

a. Fraudulent
b. forbidden by law or defeat provision
of any law
c. is immoral & against the public
policy
d. all the above
34. Considerations & objects are unlawful when
it is

a. Fraudulent
b. forbidden by law or defeat provision
of any law
c. is immoral & against the public
policy
d. all the above
35. Which is an exception to the rule that an agreement
without consideration is void?
 

a. Promise to pay a time barred debt.

b. Any agreement entered with love and
affection.
c. Any agreement entered with respect to agency.

d. All of the above.

 
35. Which is an exception to the rule that an agreement
without consideration is void?
 

a. Promise to pay a time barred debt.

b. Any agreement entered with love and
affection.
c. Any agreement entered with respect to agency.

d. All of the above.

 
36. In a contract where time is not specified for performance,
the promisor can perform the contract
 

a. Any time
b. within the shortest time
c. within a reasonable time
d. none of the above
36. In a contract where time is not specified for performance,
the promisor can perform the contract
 

a. Any time
b. within the shortest time
c. within a reasonable time
d. none of the above
37. The measure of damages in case of breach
of a contract is the difference between the—

a. contract price and the market price at the

date of breach
b. contract price and the price fixed by Court
c. contract price and the maximum market
price during the term of contract
d. contract price and the price at which the
plaintiff might have sold the goods
37. The measure of damages in case of breach
of a contract is the difference between the—

a. contract price and the market price at the

date of breach
b. contract price and the price fixed by Court
c. contract price and the maximum market
price during the term of contract
d. contract price and the price at which the
plaintiff might have sold the goods
38. Suit upon QUANTUN MERUIT means

a. As much as damaged
b. As much as assess
c. As much as earned
d. As much as credited
38. Suit upon QUANTUN MERUIT means

a. As much as damaged
b. As much as assess
c. As much as earned
d. As much as credited
39. When two or more persons have made a joint promise, then
unless a contrary intention appears from the contract, all such
persons must fulfil the promise—

a. Jointly
b. Severally
c. Jointly and severally
d. Jointly or severally
 
39. When two or more persons have made a joint promise, then
unless a contrary intention appears from the contract, all such
persons must fulfil the promise—

a. Jointly
b. Severally
c. Jointly and severally
d. Jointly or severally
 
40. An agreement not to raise the plea of limitation is—
 

a. valid & binding

b. void
c. voidable
d. illegal
40. An agreement not to raise the plea of limitation is—
 

a. valid & binding

b. void
c. voidable
d. illegal
41. A contingent contract to do or not to do anything on the
happening of an uncertain future event —
 

a. becomes enforceable only on the happening of that

event
b. is never enforceable
c. becomes enforceable in the immediate possibility
of happening of that event.
d. enforceable since the time of making it
 
41. A contingent contract to do or not to do anything on the
happening of an uncertain future event —
 

a. becomes enforceable only on the happening of that

event
b. is never enforceable
c. becomes enforceable in the immediate possibility
of happening of that event.
d. enforceable since the time of making it
 
41. A contingent contract to do or not to do anything on the
happening of an uncertain future event —
 

a. becomes enforceable only on the happening of that

event
b. is never enforceable
c. becomes enforceable in the immediate possibility
of happening of that event.
d. enforceable since the time of making it
 
42. Specific performance may be ordered by the
Court when—

a. The contract is voidable

b. Damages are an adequate remedy
c. Damages are not an adequate remedy
d. The court can grant recission of contract
 
42. Specific performance may be ordered by the
Court when—

a. The contract is voidable

b. Damages are an adequate remedy
c. Damages are not an adequate remedy
d. The court can grant recission of contract
 
43. If a new contract is substituted in place of an existing
contract it is called—
 

a. Alteration
b. Rescission
c. Novation
d. Waiver
43. If a new contract is substituted in place of an existing
contract it is called—
 

a. Alteration
b. Rescission
c. Novation
d. Waiver
44. A Quasi-contract

a. is a contract
b. is an agreement
c. has only a legal obligation.
d. is none of these
44. A Quasi-contract

a. is a contract
b. is an agreement
c. has only a legal obligation.
d. is none of these
45. A finder of lost goods is a—

a. Bailor
b. Bailee
c. True owner
d. Thief
45. A finder of lost goods is a—

a. Bailor
b. Bailee
c. True owner
d. Thief
 
46. The Court may grant rescission
where the contract is—

a. voidable at the option of the plaintiff

b. void
c. unenforceable
d. illegal
 
46. The Court may grant rescission
where the contract is—

a. voidable at the option of the plaintiff

b. void
c. unenforceable
d. illegal
47. Joint promisors can—

a. not to compel each other to contribute

equally
b. compel each other to contribute equally
c. cannot compel each other to contribute
d. none of the above
47. Joint promisors can—

a. not to compel each other to contribute

equally
b. compel each other to contribute equally
c. cannot compel each other to contribute
d. none of the above
48. Damages awarded to compensate the injured party for the
actual amount of loss suffered by him for breach of contract are
called __________.

a. Ordinary damages
b. Special damages
c. Vindictive damages
d. Nominal damages
 
48. Damages awarded to compensate the injured party for the
actual amount of loss suffered by him for breach of contract are
called __________.

a. Ordinary damages
b. Special damages
c. Vindictive damages
d. Nominal damages
 
49. Damages which an aggrieved party
claim, besides general damages for any loss
he has suffered owing to special
circumstances known to both the parties at
the time of contracting are called

a. Vindictive damages
b. Nominal damages
c. General damages
d. Special damages
49. Damages which an aggrieved party
claim, besides general damages for any loss
he has suffered owing to special
circumstances known to both the parties at
the time of contracting are called

a. Vindictive damages
b. Nominal damages
c. General damages
d. Special damages
50. If time is the essence of the contract and the promisor fails
to perform the contract by the specified time the contract —

a. becomes void
b. remains valid
c. becomes voidable at the instance of the
promisee
d. becomes unenforceable.
 
50. If time is the essence of the contract and the promisor fails
to perform the contract by the specified time the contract —

a. becomes void
b. remains valid
c. becomes voidable at the instance of the
promisee
d. becomes unenforceable.
 
51. The main object of a contract of sale is —

a. transfer of possession of goods

b. transfer of property in goods from
seller to buyer
c. delivery of goods
d. payment of price
51. The main object of a contract of sale is —

a. transfer of possession of goods

b. transfer of property in goods from
seller to buyer
c. delivery of goods
d. payment of price
52. A contingent agreement based on an
impossible event—

a. is void
b. is void till the impossibility is known
c. becomes void on the knowledge of
impossibility
d. all the above
52. A contingent agreement based on an
impossible event—

a. is void
b. is void till the impossibility is known
c. becomes void on the knowledge of
impossibility
d. all the above
53. In indemnity the liability of indemnifier is primary
and independent. In guarantee the liability of surety is.

a. Secondary
b. Primary
c. Partly both
d. None of the above
53. In indemnity the liability of indemnifier is primary
and independent. In guarantee the liability of surety is.

a. Secondary
b. Primary
c. Partly both
d. None of the above
54. According to Section 13(1) of the Negotiable
Instruments Act, a ‘negotiable instrument’ means–

a. a promissory note
b. bill of exchange
c. cheque payable either to order or to
bearer
d. all the above
54. According to Section 13(1) of the Negotiable
Instruments Act, a ‘negotiable instrument’ means–

a. a promissory note
b. bill of exchange
c. cheque payable either to order or to
bearer
d. all the above
55. Conditional contracts are called ________ contracts.
 

a. Absolute
b. Contingent
c. Quasi
d. None of the above
55. Conditional contracts are called ________ contracts.
 

a. Absolute
b. Contingent
c. Quasi
d. None of the above
56. A contract by which one party promises
to save the other from loss caused to him by
the conduct of the promisor himself, or by
conduct of any other person is called a
“contract of--.
a. Guarantee
b. Indemnity
c. Agency
d. none of the above
56. A contract by which one party promises
to save the other from loss caused to him by
the conduct of the promisor himself, or by
conduct of any other person is called a
“contract of--.
a. Guarantee
b. Indemnity
c. Agency
d. none of the above
57. In a sale, there is an implied condition on the part of the seller
that he—
 

a. has a right to sell the goods

b. is in possession of the goods
c. will have the right to sell
d. will acquire the goods
57. In a sale, there is an implied condition on the part of the seller
that he—
 

a. has a right to sell the goods

b. is in possession of the goods
c. will have the right to sell
d. will acquire the goods
58. In the Negotiable Instrument Act there is no
provision requiring a cheque to be dated.

a. true
b. partly true
c. false
d. none of the above
58. In the Negotiable Instrument Act there is no
provision requiring a cheque to be dated.

a. true
b. partly true
c. false
d. none of the above
59. In case of breach of a warranty, the buyer can—
 

a. repudiate the contract

b. claim damages only
c. refuse to pay the price
d. refuse to take delivery of the goods
59. In case of breach of a warranty, the buyer can—
 

a. repudiate the contract

b. claim damages only
c. refuse to pay the price
d. refuse to take delivery of the goods
60. Which of the following can be drawn upon
specific bankers only.

a. Cheque
b. Promissory note
c. Bill of exchange
d. Currency note
60. Which of the following can be drawn upon
specific bankers only.

a. Cheque
b. Promissory note
c. Bill of exchange
d. Currency note
 
61. Crossing of a cheque effects the

a. negotiability of the cheque

b. mode of payment on the cheque
c. both (a) and (b)
d. none of the above
 
61. Crossing of a cheque effects the

a. negotiability of the cheque

b. mode of payment on the cheque
c. both (a) and (b)
d. none of the above
62. A guarantee can be—

a. oral
b. in writing
c. oral or in writing
d. neither (a) or (b)
62. A guarantee can be—

a. oral
b. in writing
c. oral or in writing
d. neither (a) or (b)
63. Consideration must be something which the
promisor—

a. is already bound to do
b. is not already bound to do
c. may voluntarily do
d. none of the above.
 
63. Consideration must be something which the
promisor—

a. is already bound to do
b. is not already bound to do
c. may voluntarily do
d. none of the above.
 
64. A condition is a stipulation which is—

a. essential to the main purpose of contract

of sale
b. not essential to the main purpose of
contract of sale
c. collateral to the main purpose of contract
or sale
d. none of the above
 
64. A condition is a stipulation which is—

a. essential to the main purpose of contract

of sale
b. not essential to the main purpose of
contract of sale
c. collateral to the main purpose of contract
or sale
d. none of the above
 
65. A bill of exchange contains a/an

a. unconditional undertaking
b. unconditional order
c. conditional undertaking
d. conditional order
 
65. A bill of exchange contains a/an

a. unconditional undertaking
b. unconditional order
c. conditional undertaking
d. conditional order
 
66. A continuing guarantee under Section 130 of Indian Contract Act
is—
 
a. revocable absolutely
b. revocable as regards future
transaction
c. irrevocable absolutely
d. either (a) or (b)
 
66. A continuing guarantee under Section 130 of Indian Contract Act
is—
 
a. revocable absolutely
b. revocable as regards future
transaction
c. irrevocable absolutely
d. either (a) or (b)
 
67. Agency stands terminated by the death, insolvency or insanity
of—
 

a. the principal
b. the agent
c. either the principal or the agent
d. the principal and the agent both
67. Agency stands terminated by the death, insolvency or insanity
of—
 

a. the principal
b. the agent
c. either the principal or the agent
d. the principal and the agent both
68. Goods displayed in a shop with a price label
is—

a. an offer
b. an invitation to offer
c. a counter offer
d. none of the above
68. Goods displayed in a shop with a price label
is—

a. an offer
b. an invitation to offer
c. a counter offer
d. none of the above
69. A valid guarantee can be given—

a. irrespective of any debt

b. only if there is no principal debt
c. only if there is a principal debt
d. both (a) & (c)
69. A valid guarantee can be given—

a. irrespective of any debt

b. only if there is no principal debt
c. only if there is a principal debt
d. both (a) & (c)
70. Bailment involves change of

a. Possession
b. Ownership
c. both of them
d. none of the above
 
70. Bailment involves change of

a. Possession
b. Ownership
c. both of them
d. none of the above
 
71. Surety is a person—
 

a. who gives the guarantee

b. to whom the guarantee is given
c. in respect of whose default the
guarantee is given
d. none of the above
 
71. Surety is a person—
 

a. who gives the guarantee

b. to whom the guarantee is given
c. in respect of whose default the
guarantee is given
d. none of the above
 
72. Creditor is a person—

a. who gives the guarantee

b. to whom the guarantee is given
c. in respect of whose default the
guarantee is given
d. none of the above
 
72. Creditor is a person—

a. who gives the guarantee

b. to whom the guarantee is given
c. in respect of whose default the
guarantee is given
d. none of the above
 
73. Pledge made by a mercantile agent is valid
 

a. true
b. partly true
c. false
d. none of the above
73. Pledge made by a mercantile agent is valid
 

a. true
b. partly true
c. false
d. none of the above
74. Surety stands discharged by—
 
a. an agreement between the creditor & a
third party for not to sue the principal
debtor
b. an agreement between the creditor and
the principal debtor
c. both (a) & (b) above
d. neither (a) nor (b)
 
74. Surety stands discharged by—
 
a. an agreement between the creditor & a
third party for not to sue the principal
debtor
b. an agreement between the creditor and
the principal debtor
c. both (a) & (b) above
d. neither (a) nor (b)
 
75. A agents right of particular lien under Section
170 of Indian Contract Act can be exercised—

a. for general balance of accounts and the charges

on account of skill employed & expenses incurred
b. to retain the goods until the receipt of
remuneration for services incurred by him
c. for charges on account of labour or skill
employed or expenses incurred
d. either (a) or (c)
75. A agents right of particular lien under Section
170 of Indian Contract Act can be exercised—

a. for general balance of accounts and the charges

on account of skill employed & expenses incurred
b. to retain the goods until the receipt of
remuneration for services incurred by him
c. for charges on account of labour or skill
employed or expenses incurred
d. either (a) or (c)
76. ‘Bailor’ is a person—
 
a. to whom the goods are delivered
b. through whom the goods are
delivered
c. who delivers the goods
d. who carries the goods.
 
76. ‘Bailor’ is a person—
 
a. to whom the goods are delivered
b. through whom the goods are
delivered
c. who delivers the goods
d. who carries the goods.
 
77. On payment or performance of the liability
the surety is—

a. entitled to the every security which the

creditor has against the principal debtor
b. vested with all the rights the creditor had
against the principal debtor
c. entitled to be indemnified by the principal
debtor
d. all the above
 
77. On payment or performance of the liability
the surety is—

a. entitled to the every security which the

creditor has against the principal debtor
b. vested with all the rights the creditor had
against the principal debtor
c. entitled to be indemnified by the principal
debtor
d. all the above
 
78. Under Section 146 of Indian Contract Act, the
co-sureties are liable to contribute—

a. according to their capacity

b. equally
c. unequally
d. either (a) or (b) or (c)
 
78. Under Section 146 of Indian Contract Act, the
co-sureties are liable to contribute—

a. according to their capacity

b. equally
c. unequally
d. either (a) or (b) or (c)
 
79. Surety on payment or performance of his liability, against the
principal debtor—
 

a. has right like creditor had against

principal debtor
b. has right of subrogation
c. both (a) & (b)
d. either (a) or (b)
 
79. Surety on payment or performance of his liability, against the
principal debtor—
 

a. has right like creditor had against

principal debtor
b. has right of subrogation
c. both (a) & (b)
d. either (a) or (b)
 
80. ‘Bailee’ is a person—
a. to whom the goods are delivered
b. through whom the goods are
delivered.
c. who delivers the goods
d. any of the above depending on the
circumstances
 
80. ‘Bailee’ is a person—
a. to whom the goods are delivered
b. through whom the goods are
delivered.
c. who delivers the goods
d. any of the above depending on the
circumstances
 
81. A pawnee, in the event of default in payment of debt by the
pawner, has a right to—
 

a. retain the goods pledged as collateral

security
b. sue the pawner
c. sell the goods pledged
d. all the above
 
81. A pawnee, in the event of default in payment of debt by the
pawner, has a right to—
 

a. retain the goods pledged as collateral

security
b. sue the pawner
c. sell the goods pledged
d. all the above
 
82. Surety is entitled to be indemnified by the
principal debtor in respect of a sum—

a. rightfully paid
b. wrongfully paid
c. paid rightfully or wrongfully
d. all the above
 
82. Surety is entitled to be indemnified by the
principal debtor in respect of a sum—

a. rightfully paid
b. wrongfully paid
c. paid rightfully or wrongfully
d. all the above
 
83. Under the contract of guarantee, a creditor can avail his
remedies against the principal debtor as well as the surety—

a. true
b. partly true
c. false
d. none of the above
83. Under the contract of guarantee, a creditor can avail his
remedies against the principal debtor as well as the surety—

a. true
b. partly true
c. false
d. none of the above
84. Bailee is bound to take care of goods as—

a. an expert
b. a lay man
c. a man of ordinary prudence
d. both (b) & (c)
84. Bailee is bound to take care of goods as—

a. an expert
b. a lay man
c. a man of ordinary prudence
d. both (b) & (c)
85. If the bailee does any act inconsistent with the conditions
of bailment, with regard to goods the contract becomes—

a. void
b. voidable at the option of the bailor
c. voidable at the option of the bailee
d. valid.
85. If the bailee does any act inconsistent with the conditions
of bailment, with regard to goods the contract becomes—

a. void
b. voidable at the option of the bailor
c. voidable at the option of the bailee
d. valid.
86. Any act is done, without the authority or knowledge of
a person on behalf of that person, that person—

a. can disown the act

b. can ratify the act
c. can disown the act but cannot ratify
the same
d. either ratify or disown the act.
86. Any act is done, without the authority or knowledge of
a person on behalf of that person, that person—

a. can disown the act

b. can ratify the act
c. can disown the act but cannot ratify
the same
d. either ratify or disown the act.
87. After the expiry of time or accomplishment of
purpose of bailment, the bailee is to—

a. return the goods only on demand

b. pay the money equivalent
c. pay the equivalent in other commodity.
d. return the goods without demand
87. After the expiry of time or accomplishment of
purpose of bailment, the bailee is to—

a. return the goods only on demand

b. pay the money equivalent
c. pay the equivalent in other commodity.
d. return the goods without demand
88. Authority of an agent—
 

a. has to be expressed
b. has to be implied
c. can be expressed or implied
d. either (a)/(b)/(c)
88. Authority of an agent—
 

a. has to be expressed
b. has to be implied
c. can be expressed or implied
d. either (a)/(b)/(c)
89. Agency stands terminated by—

a. by the frustration of the objects of agency

due to impossibility
b. by happening of an event rendering the
object of the agency unlawful
c. the destruction of subject matter of
agency
d. none of the above
89. Agency stands terminated by—

a. by the frustration of the objects of agency

due to impossibility
b. by happening of an event rendering the
object of the agency unlawful
c. the destruction of subject matter of
agency
d. none of the above
90. The principle of agency of necessity is—
 
a. unknown to the law of agency
b. applicable in normal situations
c. applicable in emergent situation where
the communication with the principal is
not possible
d. applicable in emergent situations where
communication with the principal is
possible
90. The principle of agency of necessity is—
 
a. unknown to the law of agency
b. applicable in normal situations
c. applicable in emergent situation where
the communication with the principal is
not possible
d. applicable in emergent situations where
communication with the principal is
possible
91. Pledge under Section 172 of the Indian Contract Act has been defined as bailment
of goods as a security for payment of a debt or for performance of a promise—
 

a. true
b. partly true
c. false
d. none of the above
91. Pledge under Section 172 of the Indian Contract Act has been defined as bailment
of goods as a security for payment of a debt or for performance of a promise—
 

a. true
b. partly true
c. false
d. none of the above
92. In pledge, the general property or ownership in ‘goods’
 

a. cannot be transferred to the

b. continues in pledger
c. transferred to the pledge
d. either (a) or (b)
92. In pledge, the general property or ownership in ‘goods’
 

a. cannot be transferred to the

b. continues in pledger
c. transferred to the pledge
d. either (a) or (b)
93. If a sale is by sample as well as by description, the implied
condition is that the goods shall correspond with—
 

a. sample
b. description
c. both sample and description
d. either sample or description
93. If a sale is by sample as well as by description, the implied
condition is that the goods shall correspond with—
 

a. sample
b. description
c. both sample and description
d. either sample or description
94. The pawnee has a right to retain the goods
pledged for payment of—

a. debt interest & all necessary expenses in

respect of goods pledged
b. interest & necessary expenses in respect of
goods other than the one pledged
c. debt other than the debt in respect of goods
pledged
d. all the above
 
94. The pawnee has a right to retain the goods
pledged for payment of—

a. debt interest & all necessary expenses in

respect of goods pledged
b. interest & necessary expenses in respect of
goods other than the one pledged
c. debt other than the debt in respect of goods
pledged
d. all the above
 
95. Principal is a person employed to do any act for another
or to represent in dealings with third person—

a. true
b. partly true
c. false
d. none of the above
95. Principal is a person employed to do any act for another
or to represent in dealings with third person—

a. true
b. partly true
c. false
d. none of the above
96. Principal can revoke the authority given to
the agent at any time—

a. time before the authority has been

exercised
b. time after the authority has been partly
exercised without liability towards the acts
done
c. after the authority has been fully exercised
d. all the above
96. Principal can revoke the authority given to
the agent at any time—

a. time before the authority has been

exercised
b. time after the authority has been partly
exercised without liability towards the acts
done
c. after the authority has been fully exercised
d. all the above
97. CAVEAT EMPTOR means

a. Let the agent beware

b. Let the seller beware
c. Let the buyer beware
d. let the principal beware
97. CAVEAT EMPTOR means

a. Let the agent beware

b. Let the seller beware
c. Let the buyer beware
d. let the principal beware
98. If a price is not determined by the parties in a sale contract the
buyer is bound to pay—
 

a. the price demanded by the seller

b. a reasonable price
c. the price which the buyer thinks is
reasonable
d. none of the above
 
98. If a price is not determined by the parties in a sale contract the
buyer is bound to pay—
 

a. the price demanded by the seller

b. a reasonable price
c. the price which the buyer thinks is
reasonable
d. none of the above
 
99. For the purpose of pledge, delivery of
possession of goods—

a. may be constructive
b. either actual or constructive
c. has to be actual
d. may be symbolic
99. For the purpose of pledge, delivery of
possession of goods—

a. may be constructive
b. either actual or constructive
c. has to be actual
d. may be symbolic
100. Goods may be pledged by—

a. the owner of goods

b. the servant in the absence of owner
c. the person who is left with the goods
for some special purpose
d. all the above.
100. Goods may be pledged by—

a. the owner of goods

b. the servant in the absence of owner
c. the person who is left with the goods
for some special purpose
d. all the above.
Thank you
All the best