T.Y B.COM
SEMESTER - 5
MID SEMESTER EXAMINATION
BUSINESS LAW - I
MULTIPLE CHOICE QUESTIONS :
* NATURE OF CONTRACT
* CAPACITY TO CONTRACT
* CONSIDERATION
* OFFER AND ACCEPTANCE
* LEGALITY OF OBJECT
NATURE OF CONTRACT
1. Law of contract is ---
(a) not the whole law of agreements nor is it the whole law of obligations.
(b) the whole law of agreements.
(c) the whole law of obligations.
(d) None of the above.
2. A contract creates ---
(a) rights in persona.
(b) rights in rem.
(c) only rights and no obligations.
(d) only obligations and no rights.
3. An agreement is a voidable contract when it is ---
(a) enforceable if certain conditions are fulfilled.
(b) enforceable by law at the option of the aggrieved party.
(c) enforceable by both the parties.
(d) not enforceable at all.
4. An agreement not enforceable by law is said to be-
(a) voidable.
(b) void.
(c) illegal.
(d) unenforceable.
5. A contract ---
(a) may be void as originally entered into.
(b) may become void subsequent to its formation.
(c) cannot become void under any circumstances.
(d) may become void at the will of a party.
6. The transactions collateral to an illegal agreement are ---
(a) not affected in any manner.
(b) also tainted with illegality.
(c) voidable at the option of the plaintiff.
(d) void.
7. A contract is ---
(a) a legal obligation.
(b) an agreement plus a legal obligation.
(c) consensus ad idem.
(d) an agreement plus a legal object.
8. Flaw in capacity to contract may arise from ---
(a) lack of free consent
(b) lack of consideration.
(c) minority.
(d) absence of legal formalities.
CAPACITY TO CONTRACT
1. An agreement with or by a minor is _______
(a) voidable at the option of the minor.
(b) void.
(c) valid.
(d) voidable at the option of the other party.
2. On attaining the age of majority, a minor's agreement _____
(a) cannot be ratified by him.
(b) can be ratified by him.
(c) becomes valid.
(d) becomes void.
3. A minor, by misrepresenting his age, borrows some money _______
(a) he cannot be sued for fraud.
(b) he can be sued for fraud.
(c) none of the above.
(d) he is liable to return the money.
4. A minor enters into a contract for the purchase of certain necessaries. In such a case-
(a) he is liable to pay.
(b) he is not personally liable to pay.
(c) his guardian is liable to pay.
(d) his estate is liable to pay.
5. A person is usually of unsound mind, but occasionally of sound mind ______
(a) he may enter into a contract when he is of sound mind.
(b) he may not make a contract even when he is of sound mind.
(c) he cannot enter into a contract at all.
(d) None of the above.
6. A contract by an idiot is _______
(a) voidable.
(b) enforceable.
(c) void ab initio.
(d) invalid.
7. Contracts made before war with an alien enemy which are against public policy are ______
(a) suspended and are revived after the war is over.
(b) dissolved.
(c) not affected at all.
(d) void ab initio.
8. The contractual capacity of a company is regulated by _______
(a) its Memorandum of Association and the provisions of the Companies Act, 2013.
(b) the terms of contract entered into with a third party.
(c) its Articles of Association.
(d) its Prospectus.
9. The Case of Mohiri Bibi v. Dharmodas Ghose, (1903) 301 Cal. 539 deals with _______
(a) communication of offer.
(b) communication of acceptance.
(c) a minor's agreement.
(d) fraud.
10. Flaw in capacity to contract may arise from ________
(a) want of consideration.
(b) unsoundness of mind.
(c) illegality of object.
(d) uncertainty of object.
CONSIDERATION
1. Consideration must move at the desire of ---
(a) the promisor.
(b) the promise.
(c) promisor or any third party.
(d) both the promisor and the promise.
2. Consideration ---
(a) must move from the promise.
(b) may move from the promisee or any other person.
(c) may move from the third party.
(d) may move from the promisor.
3. Consideration ---
(a) must be adequate to the promise made.
(b) need not be adequate to the promise made.
(c) must be of reasonable value.
(d) must be of more value than the value of promise made.
4. Consideration must be something which the promisor ---
(a) is not already bound to do.
(b) is already bound to do.
(c) must not do.
(d) may voluntarily do.
5. Compromise of dispute claim ---
(a) is a good consideration for a contract.
(b) is not a good consideration for a contract.
(c) results in a void agreement.
(d) is not permitted by law.
6. A promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor is ---
(a) enforceable.
(b) not enforceable because it is without consideration.
(c) void.
(d) voidable.
7. A person who is not a party to a contract ---
(a) can sue.
(b) cannot sue.
(c) can sue only in well-recognized cases.
(d) None of these.
8. Consideration in a contract ---
(a) may be present or future only.
(b) may be past, present or future.
(c) must be future only.
(d) must be present only.
9. An agreement made without consideration is ---
(a) illegal.
(b) valid.
(c) void
(d) voidable.
OFFER AND ACCEPTANCE
1. Which of the following result/results in an offer?
(a) A declaration of intention
(b) An invitation to offer
(C) An advertisement offering reward to anyone who finds the lost dog of the advertiser
(d) An offer made in a joke.
2. A specific offer can be accepted by ---
(a) any friend of offeror.
(b) any person.
(c) the person to whom it is made.
(d) any friend of offeree.
3. A letter of acceptance sufficiently stamped and duly addressed is put into course of transmission. There is ---
(a) a contract voidable at the option of Acceptor.
(b) a contract voidable at the option of offeror.
(c) no contract at all
(d) a valid contract.
4. Acceptance may be revoked by the acceptor ---
(a) at any time.
(b) before the letter of acceptance reaches the offeror.
(c) after the letter of acceptance reaches the offeror.
(d) before the death of the acceptor.
5. An advertisement to sell a thing by auction is ---
(a) an invitation to offer.
(b) an offer.
(c) a contract.
(d) no offer at all.
6. On the face of the ticket for a journey the words "For conditions see back'" are printed in small print. The passenger ---
(a) is bound by the conditions whether he takes care to read them or not.
(b) is not bound by the conditions.
(c) may not take note of the conditions.
(d) none of the above.
7. An offer is made to Mani in a crowd. It ---
(a) can be accepted by him alone.
(b) may be accepted by any person who hears it.
(c)may be accepted by his brother.
(d) may be accepted by his friends.
8. An acceptance is not according to the mode prescribed but the offerer decides to keep quiet. In such a case, there is
(a) no contract.
(b) a contract.
(c) an unenforceable contract.
(d) avoidable contract.
9. There is a counter-offer when ---
(a) the offeree gives conditional acceptance or introduces a fresh term in acceptance.
(b) the offeror makes fresh offer.
(c) the offeree makes some query.
(d) the offeree accepts it.
10. A makes an offer to B on 10th by a letter which reaches B on 12th. B posts letter of acceptance on 14th which reaches A on 16th. The communication of acceptance is complete as against A on ---
(a) 10th.
(b) 16th.
(c) 12th.
(d) 14th.
LEGALITY OF OBJECT
1. The collateral transactions to an illegal agreement are-
(a) illegal.
(b) void.
(c) not affected at all.
(d) voidable.
2. An agreement made with an alien enemy is-
(a) unlawful on the ground of public policy.
(b) unlay flu because it becomes difficult to be performed.
(c) valid.
(d) voidable.
3. A person enters into an agreement whereby he is bound to do something which is against his pubic or professional duty. The agreement is ---
(a) valid.
(b) void on the ground of public policy.
(c) illegal.
(d) voidable.
4. Regulations as to the opening and closing of business in a market are ---
(a) not unlawful even if they are in restraint of trade
(b) unlawful because they are in restraint of trade.
(c) void.
(d) not valid.
5. An employee, by the terms of his service agreement, is prevented from acceptinga similar engagement after the termination of his service. The restraint is ---
(a) void.
(b) valid.
(c) illegal.
(d) unenforceable.
6. The Case of Norden felt v. Maxim Norden felt Gun Co., (1904) 29 B.L.R. 107 deals with ---
(a) agreements in restraint of legal proceedings.
(b) minor's agreements.
(c) agreements in restraint of trade.
(d) agreements in restraint of marriage.
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