COMMON PROFICIENCY TEST

LAW2241 ( Mercantile Law )

1) An agreement made without consideration is valid under section 25 of the Indian Contract Act, 1872 if
o The agreement is expressed in writing
o The agreement is made on account of natural love and affection of the parties to the agreement stand in
a near relation to each other.
o The document is registered under the law for the time being in force for registration of such document.
o All of the above
2) As per Section 11 of the Indian Contract Act, 1872 every person is competent to contract provided he:
o is of the age of majority according to law to which he is subject.
o is of sound mind
o is not disqualified from contracting by any law to which he is subject.
o All of the above
3) A person employed to do any act for another or to represent and another in dealings with the third
parties is:
o Principal
o Agent
o Servant
o Bailee
4) When the consent of a party is not free, the contract is
o Void
o Voidable
o Valid
o Illegal
5) Moral pressure is involved in the case of
o Coercion
o Undue Influence
o Misrepresentation
o Fraud
6) A agrees to pay Rs. 1000 to B if it rains, And B promises to pay a like amount to A, if it does not rain,
this agreement is called
o Quasi Contract
o Contingent Contract
o Wagering agreement
o Voidable contract
7) When offer is made to a definite person, it is known as
o General Offer
o Cross Offer
o Counter Offer
o Special Offer
8) An agreement to pay money's worth on the happening or non-happening of a specified uncertain event,
is a
o Wagering agreement
o Contingent contract
o Quasi contract
o Uncertain agreement
9) A contingent contract dependent on the happening of specified uncertain event within fixed time can be
enforced if the event
o Does not happen within fixed time
 o Becomes impossible before the expiry of fixed time
o Happened within the fixed time
o Both (a) and (b)
10) Essentials of Contract of Sale are
o At least 2 parties
o Subject matter must be goods
o None of the above
o Both (a) and (b)
11) The heir of the deceased partner
o Has a right to become a partner in the firm of the deceased partner.
o Does not have a right to become a partner in the firm of the deceased partner
o Can becomes a partner in the firm of the deceased partner only if the surviving partners give their
consent in this regard
o Both (b) and (c)
12) Valid contract:
o In case of this collateral agreement are void.
o Not enforceable in a court of law
o An agreement enforceable by law at the option of one or more of the parties thereon but not at the
option of the other or others
o Enforceable at the option of the parties.
13) A person to whom money has been paid, or anything delivered under coercion
o Becomes the owner of such money or those goods
o Is allowed to sell the goods and retain the money realized from such sale
o Has no obligation to return the money, he may do so only a good gesture.
o Must repay the money or return those goods.
14) Following conditions are implied in a Contract of Sale of Goods unless the circumstances of the
contract show a different intention:
o Condition as to title
o Sale by description:
o Sale by sample
o All of the above
15) A minor may be :
o A partner of a firm
o Representative of the firm
o Entitled to carryon the business of the firm
o Admitted to the benefits of the partnership
16) A partnership firm is compulsorily dissolved where
o All partner have becomes insolvent
o Firm's business has become unlawful
o The fixed term has expired
o In cases (a) and (b) only.
17) A partnership may be registered with
o Registrar of companies
o Registrar of partners
o Registrar of firms
o District court
18) Dissolution by agreement is:
o Dissolution by the adjudication of all the partner or of all the partner but one as insolvent
o Dissolution as a result of any agreement between all the partners
 o Dissolution by the business of the firm becoming unlawful
o All of the above
19) Types of partner includes
o Active partner
o Sleeping partner
o Nominal partner
o All of the above
20) There can be a stranger to a consideration but a stranger to a contract signifies that a consideration
may move from _______
o Promisee or any other person
o Promisee
o Promisor
o An independent person
21) Coercion involves _______
o Physical force
o Mental pressure
o Moral pressure
o Threat
22) _______ does not exist
o Liability for special damages
o Liability for exemplary damages
o Liability for nominal damages
o Liability for disciplinary damages
23) Recission means _______
o Substituting a new contract for the old one
o Cancellation of the old contract
o Modifying or altering the terms of contract so that it has the effect of substituting a new contract for the
old one
o Dispensing away the performance of the promise made by the other party
24) A _______ agreement is one, which is enforceable at the option of one party
o Voidable
o void
o valid
o illegal
25) The position of stranger to a contract and that of stranger to consideration is _______
o Partially different
o Partially same
o Entirely different
o Same
26) Agreement to share profits _______
o Implies an agreement to share losses
o Does not necessarily mean an agreement to share losses
o Must be coupled with an agreement to share losses
o Is same as agreement to share losses
27) A person who is mentally derange due to same mental strain or other personal experience and suffers
from intermittent intervals of sanity and insanity is _______
o Idiot person
o Lunatic person
o Intoxicated person
 o All of the above
28) The relationship of principal and agent may arise by _______
o Express or implied agreement
o Ratification
o Operation of law
o All of the above
29) Goods are said to be in a deliverable state when _______
o The buyer may take delivery of them
o The buyer would, under contract, be bound to take delivery of them
o The seller is in a position to deliver them
o All of the above
30) A contract to pay B Rs. 2,00,000/- if B's house is destroyed by fire. It is _______
o A wagering contract
o A contingent contract
o A wagering contract plus a contingent contract
o Neither a contingent contract nor a wagering contract
31) Rights of an unpaid seller include _______
o Right against the goods
o Right of stoppage in transit
o Right of re-sale
o All of the above
32) Seller' means a person who _______
o Sells goods
o Agrees to sell goods
o Sells or agree to sell goods
o Has sold goods
33) Where in an auction sale, the seller appoints more than one bidder, the sale is _______
o Void
o Illegal
o Conditional
o Voidable
34) Goods are said to be in a deliverable state when _______
o The buyer may take delivery of them
o The buyer would, under contract be bound to take delivery of them
o The seller is in a position to deliver them
o All of the above
35) A person who finds goods belonging to another and takes them into his custody _______
o Becomes the owner of those goods thereafter
o Is subject to the same responsibility as a bailee
o Is allows to sell them and retain the money realized from such sale
o Has no obligation to return those goods, he may do so only as a good gesture
36) Each of the partner is _______
o Principals as well agents
o Only agents of the firm
o Only representatives of the firm
o Only co-partners of the firm
37) True test of partnership is
o Sharing of profits
o Sharing of profits and losses
 o mutual agency
o Existence of an agreement to share profits of the business
38) Registration of firm is _______
o Compulsory
o Optional
o Occasional
o None of the above
39) A contracted with Housing Corporation for construction of number of houses. In calculating his price
for the houses, A by mistake deducted a particular sum twice over. The Corporation affixed its seal to the
contract, which correctly represented its intention
o The contract is now binding
o The contract can be avoided by A
o There is no contract at all since there no consensus ad idem
o The contract is not binding
40) Return of goods is possible in case of ________________________.
o Sale
o Bailment
o Exchange
o None of the above