Business Law Online MCQ Set 7

QN01. Compromise of dispute claims

  1. is a good consideration for a contract
  2. is not a good consideration for a contract
  3. results in a void agreement
  4. is not permitted by law.
Answer

(A) is a good consideration for a contract

QN02. Contracts made before war with an alien enemy which are against public policy are

  1. suspended and are revived after the war is over.
  2. dissolved
  3. not affected at all
  4. void ab initio
Answer

(B) dissolved

QN03. 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

  1. misrepresentation
  2. fraud
  3. undue influence
  4. coercion.
Answer

(A) misrepresentation

QN04. The Case of Cundy v. Lindsay (1878)deals with

  1. Coercion
  2. undue influence
  3. mistake as to the nature of transaction
  4. mistake as regards identity
Answer

(D) mistake as regards identity

QN05. Promises forming consideration for each other are known as,

  1. independent promises
  2. dependent promises
  3. reciprocal promises.
  4. mutual promises
Answer

(C) reciprocal promises.

QN06. A contract has become more difficult of performance due to some un-contemplated events or delays .The contract

  1. is discharged
  2. is not discharged
  3. becomes void
  4. becomes voidable.
Answer

(B) is not discharged

QN07. The court may grant rescission where the contract is

  1. voidable at the option of the plaintiff
  2. void
  3. unenforceable
  4. illegal
Answer

(A) voidable at the option of the plaintiff

QN08. Quantum meruit means

  1. a non gratuitous promise
  2. an implied promise
  3. as mush as earned
  4. as much as is paid.
Answer

(C) as mush as earned

QN09. In a sale, if the goods are destroyed, the loss falls on

  1. the buyer
  2. the seller
  3. partly on buyer and partly on seller
  4. the seller if price has not been paid
  5. by the buyer.
Answer

(A) the buyer

QN10. The omission of the creditor to sue within the period of limitation

  1. discharges the surety
  2. does not discharge the surety
  3. makes the contract of guarantee void
  4. makes thecontract of guarantee illegal.
Answer

(B) does not discharge the surety

QN11. The case of Satyabrata Ghose v. Mugneeram Bangur & co. (1954) deals with

  1. agreement opposed to public policy
  2. Supervening impossibility
  3. contract of guarantee
  4. agency
Answer

(A) agreement opposed to public policy

QN12. A person enters into an agreement whereby he is bound to do something which is against his public orprofessional duty. The agreement is

  1. void on the ground of public policy
  2. valid
  3. voidable
  4. illegal
Answer

(A) void on the ground of public policy

QN13. A minor enters into a contract for the purchase of certain necessaries, in such case

  1. he is not personally liable to pay
  2. he is liable to pay
  3. his estate is liable to pay
  4. his guardian is liable to pay.
Answer

(C) his estate is liable to pay

QN14. Flaw in a capacity to contract may arise from

  1. want of consideration
  2. unsoundness of mind
  3. illegality of object
  4. uncertainty of object.
Answer

(B) unsoundness of mind

QN15. I there is error in consensus, the agreement is

  1. void
  2. voidable
  3. avoid
  4. illegal
  5. not affected at all.
Answer

(A) void

QN16. An agreement to do an impossible act is,

  1. void
  2. voidable
  3. illegal
  4. enforceable under certain circumstances.
Answer

(A) void

QN17. When a party to a contract transfers his contractual rights to another, it is known as,

  1. rescission of contract
  2. waiver of contract
  3. discharge of contract,
  4. assignment of contract.
Answer

(D) assignment of contract.

QN18. A creditor agrees with his debtor and a third party to accept that third party as his debtor . The contract is discharged by,

  1. performance
  2. alteration
  3. waiver
  4. remission
  5. remission
Answer

(C) waiver

QN19. Anticipatory breach of a contract takes place

  1. during the performance of the contract
  2. at the time when the performance is due.
  3. before the performance is due
  4. at the time when the contract is entered into.
Answer

(C) before the performance is due

QN20. Exemplary damages are

  1. allowed in case of dishounor of a cheque by a banker having sufficient funds
  2. the difference between the contract price and the market price
  3. allowed where in case of breach of a contract, the plaintiff has not suffered any loss.
  4. none of these.
Answer

(A) allowed in case of dishounor of a cheque by a banker having sufficient funds

QN21. The3unlawful detention of any property of a person to obtain his consent to a contract amounts to

  1. misrepresentation
  2. fraud
  3. undue influence
  4. coercion.
Answer

(D) coercion.

QN22. A person is usually of sound mind, but occasionally of sound mind

  1. he may enter in to a contract when he is of sound mind,
  2. he may not make a contract even when he is of sound mind
  3. he cannot enter into a contract at all.
  4. None of the above.
Answer

(A) he may enter in to a contract when he is of sound mind,

QN23. An offer is made to Mani in crowd It

  1. can be accepted by him alone,
  2. may be accepted by any person who hears it.
  3. may be accepted by his brother
  4. may be accepted by his friends.
Answer

(A) can be accepted by him alone,

QN24. A person who is not party t a contract

  1. cannot sue,
  2. can sue,
  3. can sue only in well recognized cases
  4. none of these.
Answer

(C) can sue only in well recognized cases

QN25. The contractual capacity of a company is regulated by

  1. its memorandum of association and the provisions of the companies act, 1956
  2. the terms of contract enteredinto with a third party
  3. its articles of association
  4. its prospectus.
Answer

(A) its memorandum of association and the provisions of the companies act, 1956

QN26. Merely because a contract was caused by one of the parties to it being under a mistake as to a matter of fact, it isnot

  1. voidable
  2. void
  3. affected at all
  4. none of the above.
Answer

(A) voidable

QN27. A wagering agreement is.

  1. forbidden by law,
  2. immoral,
  3. opposed to public policy
  4. none of the above.
Answer

(A) forbidden by law,

QN28. Where the debtor does not expressly intimate or where the circumstances attending on a payment do not indicateany intention, the creditor

  1. may apply it to any lawful debt due
  2. May apply it even to a time barred debt.
Answer

(A) may apply it to any lawful debt due

QN29. A undertakes to paint a picture of B. He dies before he paints the picture. The contract

  1. is discharged by death
  2. becomes voidable
  3. becomes voidable at the option of the legal representatives of A.
  4. will have to be performed by the legal representatives of A.
Answer

(A) is discharged by death

QN30. A quasi contract

  1. is a contract
  2. as an agreement
  3. creates only legal obligation
  4. is none of these
Answer

(C) creates only legal obligation

QN31. S and P go into a shop, S says to the shopkeeper, C let P have the goods and if he does not pay you, I will – This is a

  1. contract of guarantee
  2. contract of indemnity
  3. wagering agreement
  4. quasi contract
Answer

(A) contract of guarantee

QN32. In a sale, the property in goods

  1. is transferred to the buyer
  2. is yet to be transferred to the buyer
  3. may be transferred at a future time
  4. istransferred when goods are delivered to the buyer
  5. is transferred when the buyer pays the price
Answer

(A) is transferred to the buyer

QN33. If a sale is by sample as well as by description, the implied condition is that the goods shall correspond with

  1. sample
  2. description
  3. both sample and description
  4. either sample or description.
Answer

(C) both sample and description

QN34. In a sale, there is an implied condition on the part of the seller that he

  1. has a right to sell the goods
  2. is in possession of the goods
  3. will have the right to sell
  4. will acquire the goods
Answer

(A) has a right to sell the goods

QN35. In case of a wrongful dishonour of a cheque by a banker having funds to the credit of the customer, the court may award

  1. ordinary damages,
  2. nominal damages
  3. exemplary damages
  4. contemptuous damages.
Answer

(C) exemplary damages

QN36. An agreement is a voidable contract when it is

  1. enforceable if certain conditions are fulfilled.
  2. enforceable bylaw at the option of the aggrieved party.
  3. enforceable by both parties d)not enforceable at all.
  4. An agreement not enforceable by law is said to be
Answer

(B) enforceable bylaw at the option of the aggrieved party.

QN37. Acceptance may be revoked by the acceptor

  1. at any time
  2. before the letter of acceptance reaches the offerer
  3. after the letter of acceptance reaches the offeree
  4. before the death of the acceptor.
Answer

(B) before the letter of acceptance reaches the offerer

QN38. Consideration must move at the desire of

  1. the promisor,
  2. the promisee,
  3. promisor or any other third party,
  4. both the promisor and the promisee.
  5. any third party
Answer

(A) the promisor,

QN39. On attaining the age of majority a minor’s agreement

  1. can be ratified by him
  2. cannot be ratified by him
  3. becomes void
  4. becomes valid.
Answer

(B) cannot be ratified by him

QN40. When consent to an agreement is obtained by undue influence, the agreement is a

  1. contract voidable at the option of the party whose consent was so obtained
  2. void contract.
  3. valid contract
  4. void agreement.
Answer

(A) contract voidable at the option of the party whose consent was so obtained

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