QN81: Which remedy allows the non-breaching party to cancel the contract and be released from any further obligations? Answer: a) Rescission
a) Rescission
b) Specific performance
c) Restitution
d) Mitigation
Answer
QN82: What does the doctrine of mitigation of damages require the non-breaching party to do? Answer: c) Take reasonable steps to minimize the damages caused by the breach
a) Seek alternative remedies for the breach
b) File a lawsuit against the breaching party
c) Take reasonable steps to minimize the damages caused by the breach
d) Request punitive damages in addition to compensatory damages
Answer
QN83: What is a quasi contract? Answer: c) A contract that is implied by law to prevent unjust enrichment
a) A contract that is voidable by either party
b) A contract that is formed by the explicit agreement of the parties
c) A contract that is implied by law to prevent unjust enrichment
d) A contract that is formed through electronic means
Answer
QN84: What is the main characteristic of a quasi contract? Answer: c) It arises in the absence of an actual contract
a) It requires mutual assent between the parties
b) It is based on a written agreement
c) It arises in the absence of an actual contract
d) It is enforceable without consideration
Answer
QN85: Which of the following is not a characteristic of a pledge contract? Answer: c) Ownership transfer of the pledged item
a) Transfer of possession
b) Security for a debt or obligation
c) Ownership transfer of the pledged item
d) Return of the pledged item upon fulfillment of the debt
Answer
QN86: In a bailment contract, the person delivering the goods is known as the: Answer: a) Bailor
a) Bailor
b) Bailee
c) Pledgee
d) Guarantor
Answer
QN87: A bailment without a specific reward or compensation is categorized as: Answer: a) Gratuitous bailment
a) Gratuitous bailment
b) Mutual bailment
c) Ordinary bailment
d) Contractual bailment
Answer
QN88: Which of the following is not a type of special bailment? Answer: d) Bailment for legal purposes
a) Bailment for the sole benefit of the bailor
b) Bailment for the sole benefit of the bailee
c) Bailment for hire
d) Bailment for legal purposes
Answer
QN89: Which of the following is true regarding the liability of a bailee in a pledge contract? Answer: a) The bailee is liable only for gross negligence
a) The bailee is liable only for gross negligence
b) The bailee is not liable for any loss or damage
c) The bailee is liable for ordinary negligence
d) The bailee is liable only if the goods are destroyed
Answer
QN90: In an indemnity contract, the indemnifier promises to: Answer: d) Protect the indemnity holder from loss or damage
a) Pay a specific amount of money to the indemnity holder
b) Provide goods or services as compensation
c) Take responsibility for the actions of the indemnity holder
d) Protect the indemnity holder from loss or damage
Answer
QN91: A guarantee contract involves: Answer: a) A promise to compensate for any loss or default of a third party
a) A promise to compensate for any loss or default of a third party
b) Mutual exchange of goods or services
c) Transfer of ownership of an asset
d) Sharing profits and losses between parties
Answer
QN92: Which of the following is not a type of guarantee contract? Answer: c) Corporate guarantee
a) Specific guarantee
b) Continuing guarantee
c) Corporate guarantee
d) Absolute guarantee
Answer
QN93: The liability of a surety in a guarantee contract is: Answer: b) Secondary
a) Primary
b) Secondary
c) Joint
d) Conditional
Answer
QN94: Under an indemnity contract, the indemnifier’s liability: Answer: b) Extends indefinitely until the indemnity holder is compensated
a) Ceases upon the occurrence of the specified event
b) Extends indefinitely until the indemnity holder is compensated
c) Depends on the value of the indemnity
d) Is limited to a specific period of time
Answer
QN95: Which of the following statements best describes the nature of an agency contract? Answer: a) It involves a legal relationship where one person acts on behalf of another person.
a) It involves a legal relationship where one person acts on behalf of another person.
b) It is a contract between two business entities for the sale of goods or services.
c) It is an agreement where both parties share profits and losses equally.
d) It is a contract that transfers ownership of assets from one person to another.
Answer
QN96: The person who acts on behalf of another person in an agency relationship is known as the: Answer: b) Agent
a) Principal
b) Agent
c) Third party
d) Contractor
Answer
QN97: Which of the following is a characteristic of an agency relationship? Answer: c) Legal authority to make binding contracts
a) Sharing of profits and losses
b) Transfer of ownership of assets
c) Legal authority to make binding contracts
d) Joint management of a business enterprise
Answer
QN98: In an agency contract, the principal is liable for the acts of the agent performed within the scope of: Answer: a) Actual authority
a) Actual authority
b) Apparent authority
c) Implied authority
d) Ostensible authority
Answer
QN99: The termination of an agency relationship can occur through: Answer: d) All of the above
a) Mutual agreement between the principal and agent
b) Expiration of a specified period or completion of a specific task
c) Revocation of authority by the principal
d) All of the above
Answer
QN100: Which of the following is not a method of creating an agency relationship? Answer: d) Joint ownership
a) Express agreement
b) Implied agreement
c) Ratification
d) Joint ownership
Answer
QN101: An agency relationship is created by an express agreement when: Answer: a) Both parties have a written contract specifying their roles and responsibilities.
a) Both parties have a written contract specifying their roles and responsibilities.
b) Both parties verbally agree to act as agent and principal.
c) One party unilaterally appoints the other party as their agent.
d) Both parties engage in a joint venture.
Answer
QN102: Implied agency can be created based on: Answer: d) All of the above
a) The conduct of the parties
b) The title or position of the agent
c) Customary trade practices
d) All of the above
Answer
QN103: Ratification is a method of creating agency when: Answer: a) The principal approves and accepts the agent’s unauthorized actions.
a) The principal approves and accepts the agent’s unauthorized actions.
b) The agent acquires ownership rights over the principal’s assets.
c) The principal grants the agent power of attorney.
d) The agent acts beyond the scope of authority granted by the principal.
Answer
QN104: Which of the following is not a type of agent based on the extent of their authority? Answer: d) Gratuitous agent
a) General agent
b) Special agent
c) Universal agent
d) Gratuitous agent
Answer
QN105: Which of the following is not a duty of a principal towards an agent? Answer: d) Duty to act in the best interest of the agent’s personal goals
a) Duty to compensate the agent for their services
b) Duty to reimburse the agent for expenses incurred
c) Duty to provide the agent with necessary information and instructions
d) Duty to act in the best interest of the agent’s personal goals
Answer
QN106: The termination of an agency relationship due to the death of either the principal or the agent is known as: Answer: c) Termination by operation of law
a) Expiry of the agency
b) Termination by mutual agreement
c) Termination by operation of law
d) Termination by notice
Answer
QN107: Which of the following is true regarding the liability of the principal for the acts of an agent? Answer: b) The principal is not liable if the agent acted without authority.
a) The principal is always personally liable for the acts of the agent.
b) The principal is not liable if the agent acted without authority.
c) The principal is only liable if the agent’s acts result in profit.
d) The principal’s liability is limited to the amount of commission paid to the agent.
Answer
QN108: A sale is distinguished from an agreement to sell based on: Answer: a) The transfer of ownership of goods
a) The transfer of ownership of goods
b) The price at which goods are sold
c) The method of payment used
d) The delivery of goods to the buyer
Answer
QN109: In a hire-purchase agreement, the ownership of the goods: Answer: a) Remains with the seller until the buyer makes all the payments
a) Remains with the seller until the buyer makes all the payments
b) Is immediately transferred to the buyer upon signing the agreement
c) Is shared between the buyer and the seller during the hire period
d) Cannot be transferred under any circumstances
Answer
QN110: Pledge is a special contract that involves: Answer: d) Granting temporary possession of goods as security for a debt
a) Transfer of ownership of goods as security for a debt
b) Lease of goods for a specific period of time
c) Sale of goods with the option to repurchase
d) Granting temporary possession of goods as security for a debt
Answer
QN111: Which of the following is an example of a movable property that can be mortgaged? Answer: c) Shares and debentures
a) Land and buildings
b) Intellectual property rights
c) Shares and debentures
d) All of the above
Answer
QN112: Hypothecation is a type of security where: Answer: b) The borrower pledges movable property as security for a loan
a) The borrower transfers ownership of the asset to the lender
b) The borrower pledges movable property as security for a loan
c) The lender leases the asset to the borrower
d) The lender sells the asset to the borrower with the option to repurchase
Answer
QN113: Lease is a contract where: Answer: c) The lessor grants the lessee the right to use goods for a specified period
a) Ownership of goods is transferred from lessor to lessee permanently
b) Goods are rented out for short durations only
c) The lessor grants the lessee the right to use goods for a specified period
d) The lessee assumes responsibility for any damages to the goods
Answer
QN114: Which of the following is not a type of goods under the Sale of Goods Act? Answer: d) Counterfeit goods
a) Existing goods
b)
Future goods
c) Specific goods
d) Counterfeit goods
Answer
QN115: When does the property in goods pass from the seller to the buyer in a sale contract? Answer: b) At the time of delivery
a) At the time of payment
b) At the time of delivery
c) At the time of agreement
d) At the time of invoicing
Answer
QN116: In the case of specific goods, the property passes when: Answer: c) The goods are identified and set apart from the seller’s stock
a) The buyer pays for the goods
b) The seller delivers the goods to the buyer
c) The goods are identified and set apart from the seller’s stock
d) The buyer signs the purchase agreement
Answer
QN117: In the case of unascertained goods, the property passes when: Answer: d) The goods are identified and appropriated
a) The goods are manufactured
b) The goods are shipped
c) The goods are paid for
d) The goods are identified and appropriated
Answer
QN118: Risk follows the property means that: Answer: a) The buyer bears the risk of loss or damage to the goods
a) The buyer bears the risk of loss or damage to the goods
b) The seller is responsible for any loss or damage to the goods
c) The risk is evenly shared between the buyer and seller
d) The risk is transferred to a third party
Answer
QN119: When does the property pass in a hire-purchase agreement? Answer: d) At the time of final installment payment
a) At the time of signing the agreement
b) At the time of making the first payment
c) At the time of delivery of goods
d) At the time of final installment payment
Answer
QN120: Which of the following statements best defines a condition in a contract of sale? Answer: b) It is a fundamental term that goes to the root of the contract.
a) It is a minor term that is not essential to the main purpose of the contract.
b) It is a fundamental term that goes to the root of the contract.
c) It is a statement of opinion or belief by the seller.
d) It is a term that can be waived or modified by both parties.
Answer
