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Mercantile Laws Test - 8

Description: Mercantile Laws Test - 8
Number of Questions: 40
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Tags: Mercantile Laws Test - 8 Mercantile Laws
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The following conditions must exist so that a promise to pay for the past voluntary services is binding.

  1. The services should have been rendered voluntarily.

  2. The services must have been rendered for the promisor.

  3. They must be in existence at the time when the services were rendered and must have intended to compensate the promise.

  4. All of these


Correct Option: D

In case of a firm carrying on the business of banking

  1. there should be at least seven members and maximum number of members should not exceed fifty

  2. there should be at least two members and maximum number of members should not exceed ten

  3. there should be at least ten members and maximum number of members should not exceed twenty

  4. there should be at least two members and maximum number of members should not exceed fifty


Correct Option: B

A collateral event is an event

  1. the performance for which is neither directly promised nor it is the entire consideration for the promise

  2. the performance for which is directly promised

  3. it is the entire consideration for the promise

  4. the performance which is agreed upon by the parties in a Court of Law


Correct Option: A

Champerty means

  1. an agreement to trade with the enemy owing allegiance to a government at war with India

  2. an agreement whereby a person promises to maintain a suit, by money or otherwise, in which he has no interest

  3. an agreement whereby a person agrees to help another in a litigation in exchange of a share of the result of the litigation

  4. an agreement to stifle criminal prosecutions tend to be a perversion or an abuse of justice


Correct Option: C

A person who has been induced to enter into a contract by misrepresentation has the following remedies

  1. affirm the contract and insist on the misrepresentation being made good, if possible.

  2. rescind the contract.

  3. rely upon the misrepresentation as a defence to an action on the contract.

  4. all of these.


Correct Option: D

The rights of a principal are the following:

  1. Right to recover damages.

  2. Right to obtain an account of secret profits and recover them and resist a claim for remuneration.

  3. Right to resist agent's claim for indemnity against incurred liability.

  4. All of these


Correct Option: D

A person to whom money has been paid or anything delivered by mistake,

  1. becomes the owner of such money or those goods

  2. must repay the money or return those goods

  3. is allowed to sell the goods and retain the money realized from such sale

  4. has no obligation to return the money; he may do so only as a good gesture


Correct Option: B

Following conditions are implied in a contract of sale of goods unless the circumstances of the contract show a different intention:

  1. condition as to non - existence of encumbrances

  2. condition as to undisturbed possession

  3. both (1) and (2)

  4. none of these


Correct Option: D

A promises to paint a picture for B at a certain price. Which of the following is not correct?

  1. A is not bound to perform the promise himself.

  2. A can appoint some other painter to paint the picture on his behalf.

  3. A dies before painting the picture, the contract can be enforced either by representatives of A or by B.

  4. All of these


Correct Option: D

An agreement of partnership may be

  1. expressed or implied from the act done by partners

  2. oral or in writing

  3. both (1) and (2)

  4. none of these


Correct Option: C

Which one of the offers is a valid offer?

  1. A garment store gave the following advertisement in a newspaper - “special sale for tomorrow only. Men's night suits reduced from Rs. 200 to Rs. 100.”

  2. P says to Q, “I will sell you a digital camera.” P owns three different types of digital cameras of various prices.

  3. An auctioneer displays a refrigerator before a gathering in an auction sale.

  4. A advertises in a leading daily newspaper that he would pay Rs. 2000 to anyone who finds and returns his lost dog.


Correct Option: D

Dissolution of a firm may take place

  1. by the adjudication of all the partners or of all the partners but one as insolvent

  2. as a result of any agreement between all the partners

  3. by the business of the firm becoming unlawful

  4. all of these


Correct Option: D

In case of a sale, the buyer

  1. can pass a goods title to a bonafide purchaser

  2. cannot pass a goods title to a bonafide purchaser

  3. both (1) and (2)

  4. none of these


Correct Option: A

The following persons can enter into contracts as per the provisions of The Indian Contract Act, 1872:

  1. alien enemy

  2. foreign sovereigns or accredited representatives of a foreign state

  3. insolvents and convicts

  4. none of these


Correct Option: D

Which of the following is correct?

  1. Free consent is not important, if consideration is preset, even if the consideration is inadequate.

  2. Anticipatory breach and anticipatory bail are actually the same thing.

  3. The concept of damage allows one to make some gain out of it.

  4. All of these


Correct Option: D

Remedies available for breach of contract are

  1. dissolution of the firm

  2. charging extra fees from the party committing the breach

  3. suit for specific performance

  4. none of these


Correct Option: C

A person to whom money has been paid or anything delivered under coercion,

  1. becomes the owner of such money or those goods

  2. is allowed to sell the goods and retain the money realized from such sale

  3. has no obligation to return the money, he may do so only as a good gesture

  4. must repay the money or return those goods


Correct Option: D

A sale implies an agreement

  1. plus conveyance of property and creates jus in personam

  2. plus conveyance of property and creates jus in rem

  3. no conveyance of property and creates jus in rem

  4. no conveyance of property and creates jus in personam


Correct Option: B

If the terms of a contract are expressly agreed upon (whether by words spoken or written) at the time of formation of the contract, the contract is said to be ________.

  1. express contracts

  2. implied contracts

  3. quasi contracts

  4. none of these


Correct Option: A

Which of the following case laws relate to the definition of contract of sale?

  1. Rajlikhee Devi v. Bhoot Nath, 1900

  2. State of Madras v.Gannon Dunkerly and Co. Limited, 1958

  3. Khawaja Md. Khan v. Hussaini Begum, 1910

  4. Suppu Ammal v. Subramanian, 1910


Correct Option: B

According to Section 14 of The Indian Contract Act, 1872, consent is said to be free when it is not caused by

  1. misrepresentation

  2. undue Influence

  3. coercion

  4. all of these


Correct Option: D

In India the age of majority is regulated by

  1. The Indian Majority Act, 1875.

  2. The Indian Minority Act, 1875.

  3. The Indian Contract Act, 1872.

  4. The Constitution of India.


Correct Option: A

Agreement entered into by a minor is

  1. void as against the minor

  2. illegal

  3. unlawful

  4. unenforceable by the minor


Correct Option: A

Partner by holding out is governed by Section of _______ The Indian Partnership Act, 1932.

  1. 28

  2. 17

  3. 30

  4. 11


Correct Option: A

Where both parties to a contract of sale are under a mistake as to a matter of fact, essential to such contract, then the contract is

  1. illegal

  2. void

  3. still enforceable

  4. none of these


Correct Option: B

Sale is an

  1. executed contract

  2. executory contract

  3. both (1) and (2)

  4. none of these


Correct Option: A

If the offeree offers to qualified acceptance of the offer subject to modifications and variations in the terms of original offer, he is said to have made a

  1. special offer

  2. counter offer

  3. continuing offer

  4. cross offer


Correct Option: B

Interest on advances by a partner to his firm may be payable

  1. @ 6% per annum

  2. @ 8% per annum

  3. @ 8.5% per annum

  4. at any rate


Correct Option: A

The law dealing with the partnerships is contained in

  1. The Indian Partnership Act, 1932

  2. The Indian Partnership Act, 1930

  3. The Indian Partnership Act, 1872

  4. The Indian Partnership Act, 2006


Correct Option: A

Seller means a person who

  1. sells goods

  2. agrees to sell goods

  3. sells or agrees to sell goods

  4. has sold goods


Correct Option: C

Conditions and warranties

  1. must be expressed

  2. must be implied if not expressed

  3. may either be expressed or implied

  4. none of these


Correct Option: C

Delivery of a thing in token of a transfer of something else is known as

  1. actual delivery

  2. constructive delivery

  3. delivery by acknowledgment

  4. none of these


Correct Option: D

A is not a minor. A agrees to B for Rs. 1,00,000/- that A will never marry. Promise of A is

  1. binding

  2. not binding

  3. enforceable

  4. illegal


Correct Option: B

The rule of caveat emptor does not apply in the case of

  1. fitness for buyer's purpose

  2. sale under a patent or trade name

  3. usage of trade or consent by fraud

  4. all of these


Correct Option: D

________ is/are the exception(s) to the general rule, no consideration no contract.

  1. Natural love and affection

  2. Compensation for past voluntary services

  3. Promise to pay a time barred debt

  4. All of these


Correct Option: D

An offer should be distinguished from

  1. invitation to treat an offer

  2. mere communication of information in the course of negotiation

  3. statement of intention

  4. all of these


Correct Option: D

________ is/are the 'document of title to goods'.

  1. Railway receipt or multimodal transport document

  2. Warrant or order for delivery of goods

  3. Warehouse keeper's certificate

  4. All of these


Correct Option: D

A agrees to pay B Rs. 500/- if a particular ship does not return to the port. The ship was sunk. The contract

  1. can be enforced by B

  2. cannot be enforced by B

  3. is a wagering contract

  4. is unlawful, illegal and against public policy


Correct Option: A

D believes blue colour to be black colour, for any reason whatsoever. He has a garment shop. He sells one blue colour shirt to M, representing it to be black colour. M knows nothing about colours. M believes D and accepts the blue colour to be black colour. Later on M`s mother explains M that the colour of the shirt is actually blue and not black. It is a clear case of

  1. misrepresentation

  2. fraud

  3. unintentional fraud

  4. cheating


Correct Option: A

A and B are the only two partners in a firm. B was murdered by C, who wanted to become a partner of the firm, but B has raised objections to it. A now wants to take D as a partner in the said firm. D is father of C. In light of the situation answer, which of the following is correct?

  1. The original partnership is dissolved.

  2. The original partnership is not dissolved and A and D can continue.

  3. A and D has to enter into a fresh agreement and create a new partnership.

  4. Both (1) and (3)


Correct Option: D
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