Business Law Online MCQ Set 9

QN01. Consideration must move at the desire of:

  1. Promisor
  2. Promisee
  3. Any other person
  4. Any of these
Answer

(A)Promisor

QN02. A minor's liability for 'necessaries' supplied to him

  1. Arises after he attains majority age
  2. Is against only minor's property
  3. Does not arise at all
  4. Arises if minor gives a promise for it
Answer

(B)Is against only minor's property

QN03. When the consent of a party is obtained by fraud, the contract is

  1. Void
  2. Voidable
  3. Valid
  4. Illegal
Answer

(B)Voidable

QN04. An agreement is void if it is opposed to public policy. Which of the following is not covered by heads of public policy.

  1. Trading with an enemy
  2. Trafficking in public offices
  3. Marriage brokerage contracts
  4. Contracts to do impossible acts
Answer

(D)Contracts to do impossible acts

QN05. A, B and C jointly promised to pay Rs.6000 to D. Before the performance of the contract, C dies. Here the contract;

  1. Becomes void on C's death
  2. Should be performed by A and B along with C's legal representatives
  3. Should be performed by A and B alone
  4. Should be renewed between A, B and D
Answer

(B)Should be performed by A and B along with C's legal representatives

QN06. In case of breach of contract, which of the following remedy is available to the aggrieved party?

  1. Suit for recission
  2. Suit for damages
  3. Suit for specific performance
  4. All of these
Answer

(D)All of these

QN07. A agrees to pay Rs.1,00,000 to B if he brings a star from the sky. This is a contingent contract and

  1. Illegal
  2. Valid
  3. Voidable
  4. Void
Answer

(D)Void

QN08. In the above question, the communication of acceptance is complete against A on 28th Dec.1998 and against B on;

  1. 25th Dec.1998
  2. 27th Dec.1998
  3. 28th Dec.1998
  4. 30th Dec.1998
Answer

(D)30th Dec.1998

QN09. Which of the following elements does not affect the free consent of the parties.

  1. Coercion
  2. Fraud
  3. Incompetency
  4. Undue influence
Answer

(C)Incompetency

QN10. Which of the following acts does not fall under the categories of fraud?

  1. Intentional false statement of facts
  2. Active concealment of facts
  3. Innocent false statements
  4. Promise made without intention to perform
Answer

(C)Innocent false statements

QN11. A contract made by mistake about Indian Law, is;

  1. Void
  2. Valid
  3. Voidable
  4. Illegal
Answer

(B)Valid

QN12. An agreement in restraint of marriage is valid incase of the following persons

  1. Minors
  2. Educated
  3. Married
  4. None of these
Answer

(A)Minors

QN13. Where an agreement consists of two parts once legal and the other illegal and the legal part is separable from the illegal one, such legal part is

  1. Void
  2. Valid
  3. Voidable
  4. Illegal
Answer

(B)Valid

QN14. Sometimes, a person finds certain goods belonging to some persons. In such case, the finder

  1. Becomes the owner of the goods and can use them
  2. Is under a duty to trace the true owner and return the goods
  3. Can sell the perishable goods if true owner cannot be found
  4. Both (b) and (c)
Answer

(D)Both (b) and (c)

QN15. When after the formation of a valid contract, an event happens which makes the performance of contract impossible then the contract becomes

  1. Void
  2. Voidable
  3. Valid
  4. Illegal
Answer

(A)Void

QN16. What is legal terminology for the doing or not doing of something which the promisor desires to be done or not done?

  1. Desires
  2. Wishes
  3. Considerations
  4. Promise
Answer

(C)Considerations

QN17. An agreement enforceable by Law is a

  1. Promise
  2. Contract
  3. Obligation
  4. Lawful promise
Answer

(B)Contract

QN18. Which of the following statement is true?

  1. Consideration must result in a benefit to both parties
  2. Past consideration is no consideration in India
  3. Consideration must be adequate
  4. Consideration must be something which a promisor is not already bound to do
Answer

(D)Consideration must be something which a promisor is not already bound to do

QN19. Which of the following statement is true?

  1. A contract with a minor is voidable at the option of the minor
  2. An agreement with the minor can be ratified after he attains majority
  3. A person who is usually of an unsound mind cannot enter into contract even when he is of a sound mind
  4. A person who is usually of an sound mind cannot enter into contract even when he is of a unsound mind
Answer

(D)A person who is usually of an sound mind cannot enter into contract even when he is of a unsound mind

QN20. Which of the following statement is true?

  1. A threat to commit suicide does not amount to coercion
  2. Undue influence involves use of physical pressure
  3. Ignorance of law is no excuse
  4. Silence always amounts to fraud
Answer

(C)Ignorance of law is no excuse

QN21. A contract is discharged by recission which means the;

  1. Change in one or more terms of the contract
  2. Acceptance of lesser performance
  3. Abandonment of rights by a party
  4. Cancellation of the existing contract
Answer

(D)Cancellation of the existing contract

QN22. Generally, which of the following damages are not recoverable?

  1. Ordinary damages
  2. Special damages
  3. Remote damages
  4. Nominal damages
Answer

(C)Remote damages

QN23. A, by a letter dated 25th December 1998, offers to sell his house to B for Rs.10 lakhs. The letter reaches on 27th Dec.1998, who posts his acceptance on 28th Dec. 1998 which reaches A on 30th Dec.1998. Here the communication of offer is completed on;

  1. 25th Dec.1998
  2. 27th Dec.1998
  3. 28th Dec.1998
  4. 30th Dec.1998
Answer

(B)27th Dec.1998

QN24. For entering into a contract, a minor is a person who has not completed the age of;

  1. 16 years
  2. 18 years
  3. 20 years
  4. 21 years
Answer

(B)18 years

QN25. A threatens to kill B if he does not agrees to sell his scooter from him for Rs.1000. Here B's consent is obtained by

  1. A undue influence
  2. Fraud
  3. Coercion
  4. None of these
Answer

(C)Coercion

QN26. Which of the following statement is false?

  1. A contract is not voidable if fraud or misrepresentation does not induce the other party to enter a contract.
  2. A party cannot complain of fraudulent silence or misrepresentation if he had the means of discovering the truth with ordinary means
  3. In case of fraud or misrepresentation, aggrieved party can either rescind or affirm the contract
  4. A party who affirms the contract, can also change his option afterwards if he so decides
Answer

(D)A party who affirms the contract, can also change his option afterwards if he so decides

QN27. The consideration or object of agreement is considered unlawful, if is

  1. Forbidden by law
  2. Fraudulent
  3. Immoral
  4. All of these
Answer

(D)All of these

QN28. An agreement in restraint of marriage, ie, which prevents a person from marrying is

  1. Valid
  2. Voidable
  3. Void
  4. Contingent
Answer

(C)Void

QN29. An agreement to pay money money's worth on the happening or non happening of a specified uncertain event is a

  1. Wagering agreement
  2. Contingent contract
  3. Quasi contract
  4. Uncertain agreement
Answer

(A)Wagering agreement

QN30. A contingent contract dependent on the non happening of specified uncertain event within fixed time can be enforced if the event

  1. Does not happen within fixed time
  2. Becomes impossible before the expiry of fixed time
  3. Happens within the fixed time
  4. Both (a) and (b)
Answer

(D)Both (a) and (b)

QN31. In commercial transactions, time is considered to be of the essence of contract, and if the party fails to perform the contract within specified time, the contract becomes

  1. Voidable at the option of the other party
  2. Void and cannot be enforced
  3. Illegal for non compliance of legal terms
  4. Enforceable in higher court only
Answer

(A)Voidable at the option of the other party

QN32. Which of the following statements is correct?

  1. Ordinary damages are recoverable
  2. Special damage is recoverable only if the parties knew about them
  3. Remote or indirect damages are not recoverable
  4. All of these
Answer

(D)All of these

QN33. A and B both believe that a particular kind of rice is being sold in the market@Rs.3000 per quintel and A sells rice of that kind to B @3000/quintel. But in fact, the market price was Rs.4000, the contract is

  1. Valid
  2. Void
  3. Voidable
  4. Illegal
Answer

(A)Valid

QN34. A sells the goodwill of his business to B and agrees with him to refrain from carrying on a similar business within specified local limits. This contract is

  1. Valid
  2. Void
  3. Voidable
  4. Illegal
Answer

(A)Valid

QN35. A void agreement is one which is

  1. Valid but not enforceable
  2. Enforceable at the portion of both parties
  3. Enforceable at the portion of one party
  4. Not enforceable in a Court of Law
Answer

(D)Not enforceable in a Court of Law

QN36. A proposal when accepted becomes a:

  1. Promise
  2. Contract
  3. Offer
  4. Acceptance
Answer

(A)Promise

QN37. Consideration in sample term means

  1. Anything in return
  2. Something in return
  3. Everything in return
  4. Nothing in return
Answer

(B)Something in return

QN38. Which of the following statement is not true about minor's position in a form?

  1. He cannot become a partner in an existing firm
  2. He can become a partner in an existing firm
  3. He can be admitted only to the benefits of any existing firm
  4. He can become partner on becoming a major
Answer

(B)He can become a partner in an existing firm

QN39. A wrong representation when made without any intention to deceive the other party amounts to

  1. Coercion
  2. Undue influence
  3. Misrepresentation
  4. Fraud
Answer

(C)Misrepresentation

QN40. Which of the following persons can perform the contract?

  1. Promisor alone
  2. Legal representatives of the Promisor
  3. Agent of the Promisor
  4. All of these
Answer

(D)All of these

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