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LAW OF CONTRACT

1. The Indian Contract Act came into force on: 

(a) 15th September, 1872 

(b) 1st September, 1872 

(c) 1st October, 1872 

(d) 15th October, 1872. 

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Ans.b

2. The Indian Contract Act, applies to the:  

(a) Whole of India excluding Jammu & Kashmir 

(b) Whole of India including Jammu & Kashmir 

(c) States notified by the Central Government from time to time 

(d) None of the above. 

Ans.b 

3. An agreement consists of reciprocal promises between at least  

(a) four parties. 

(b) six parties. 

(c) three parties. 

(d) two parties. 

Ans.d

4. Every promise and every set of promise forming the consideration for each other is a/an  

(a) contract. 

(b) agreement. 

(c) offer. 

(d) acceptance. 

Ans.b

5. Contract is defined as an agreement enforceable by law, vide Section … of the Indian Contract Act.  

(a) Section 2(e) 

(b) Section 2(f) 

(c) Section 2(h) 

(d) Section 2(i)

Ans.c

6. A agrees to serve B as B’s housekeeper and also to live in adultery

with him at a fixed salary of Rs. 500/- per month. In this situation:

(a) The whole agreement is unlawful and thus it is void

(b) The agreement is lawful and valid as adultery is not an offence in

Indian Contract Act

(c) This first portion of the agreement, being lawful, is a contract

whereas the latter portion is void

(d) The agreement as a whole is void as the lawful portion is not

severable from unlawful portion

Ans.A

7. An agreement without consideration will be

(a) Voidable

(b) Void

(c) Illegal

(d) Inoperative

Ans.B

8. Which one of the following amounts to misrepresentation

(a) Suggestion or representation as a fact of that which is not true by

one who does not believe it to be true

(b) A suggestion or representation made without knowing it to be false,

while honestly believing it to be true

(c) Active concealment of a fact

(d) A promise made without any intention of performing it

Ans.B

9. Ramesh asks his servant to sell his cycle to him at a price less than

the market’s price. Such an agreement between Ramesh and his

servant:

(a) Is a valid contract

(b) Is a contract void ab initio because of undue influence

(c) Is a voidable contract at the option of the servant because the

agreement was affected by undue influence

(d) Is a contract void ab initio because of соercion

Ans.C

10. Which of the following statement is correct:

(a) A lunatic person can never enter into an contract

(b) A lunatic person is legally capable of entering into a contract at any

time

(c) A lunatic person should not enter into a contract

(d) A lunatic person, who is at intervals of sound mind, may contract

during those intervals

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Ans.D

11. A person is said to be of sound mind for the purpose of making a

contract, if at the time when he makes it

(a) He is capable of forming an intention to enter into a contract and is

capable of making a correct choice from the available options

(b) He is capable of understanding it and of forming rational judgement

as to its effects upon his interests

(c) He is capable of taking rational decisions and to the best of his

interest

(d) He is not of unsound mind and knows that he is going to enter into a

contract

Ans.B

12. ‘A’ promises to paint a picture for ‘B’-

(a) ‘A’ may employ a competent person to perform the promise

(b) Representatives of ‘A’ may employ a competent person for the

purpose

(c) ‘A’s’ sons may perform the promise

(d) ‘A’ must perform this promise personally

Ans.D

13. “A” threatened “B” to commit suicide if B did not employ him in

his factory. An agreement so made can be avoidable by B on the

ground of:

(a) Undue influence

(b) Criminal intimidation

(c) Coercion

(d) Duress

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Ans.C

14. P’s son had been missing for some time. P sent his servant Q in

search of son. Thereafter, through hand bill P offered a reward of Rs.

501/- to whoever was able to trace the whereabouts of his son. Q

was successful in tracing the son and brought him to P. Then he came

to know of the reward and claimed it. P refused to pay . In this case:

(a) Q is entitled to the reward because P made a general offer and

whoever fulfills the condition of the offer was entitled the reward. Q had,

infact, fulfilled the condition of the offer

(b) Since Q was not aware of the offer at the time when he acted upon

it, no valid acceptance could come into existence Thus Q is not entitled

to the reward

(c) Since Q was P’s servant and was sent by him to trace the son, he

cannot claim reward

(d) Q is not entitled to the reward. It would be P’s grace if he gives him

Rs. 501vany amount by way of reward

Ans.B

15. If a contract is caused by mistake as to a law not in force in India

i.e. a foreign land such contract is:

(a) Valid and enforceable

(b) Voidable

(c) Void ab initio and unenforceable

(d) Valid but unenforceable

Ans.C

16. A applies to banker for a loan at a time when there is stringency in

the money market. The banker declines to make loan expect at an

unusually high rate of interest. A accepts the loan of these term In this

case:

(a) The contract is vitiated by undue influence

(b) The contract is valid because this is the transaction in the ordinary

course of business

(c) The contract is void because the bank took unfair advantage of

stringency in money market

(d) The contract is voidable at the option of A who was deceived by the

banker

Ans.B

17. Which may render an agreement void:

(a) Coercion causing consent

(b) Undue influence causing consent

(c) Fraud causing consent

(d) Mistake causing consent

Ans.D

18. A sells in auction, to B, a horse which A knows to be unsound. A

says nothing to B about the horse’s unsoundness. In this situation

(a) The contract of sale is valid and it was not the duty of A to disclose

the actual condition of the horse

(b) The contract of sale is void for being vitiated by fraud on A’s part, it

being A’s duty to disclose the truth

(c) The contract of sale is voidable at B’s option bećause of cheating by

A

(d) The contract of sale is voidable at B’s option because of fraud by A

Ans.A

19. Who has said that “an offer need not be made to an ascertained

person, but no contract can arise until it has been accepted by an

ascertained person”

(a) Cheshire & Fifoot

(b) Anson

(c) Lord Atkin

(d) Lord Stowell

Ans.B

20. X’ applied for the principalship of a local college and the

Governing Body passed a resolution appointing him. After the

meeting, one of the members of the Governing body privately

informed him of the resolution. Subsequently the resolution was

rescinded. X claims damages. In this situation:

(a) X cannot claim damages as there was no official communication of

an offer which X could validity accept

(b) X can claim damages as there was a private communication of the

resolution which amounts as a tacit offer to X

(c) X is not qualified for principal ship so he cannot claim damages

(d) The Governing Body cannot rescind the resolution once passed, so X

can claim damages.

Ans.A

21.The Carlill v. Carbolic Smoke Ball Co., case is related to:

(a) Offer and counter offer

(b) Offer to public at large

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(c) Invitation to offer to public at large

d) Offer and revocation of offer

Ans.B

22.On January 2, the defendant sent a letter offering to sell goods to

the plaintiff. The letter added “receiving your answer in the course of

post”. The letter reached the plaintiff on 5th January. On the 6th

January the plaintiff posted his letter of acceptance which reached

defendant on 9th of January. The defendant sold the goods on 8th

January. In this case:

(a) There is no concluded contract between the parties since the

subject matter of the contract i.e. the goods had already been sold by

the defendant before the conclusion of the contract

(b) There is no concluded contract between the parties because by

selling the goods to someone else than the plaintiff the defendant had

impliedly revoked his offer

(c) There is a concluded contract between the parties which was made

on 5th January when the plaintiff received the letter of offer

(d) There is a concluded contract between the parties which came into

existence on 6th January when the plaintiff posted the letter of

acceptance

Ans.D

23. Every agreement in restraint of the marriage of any person other

than a minor-

(a) Is voidable

(c) Is void

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(b) Is illegal

(d) Is valid

Ans.C

24.The decision in Mohori Bibl v. Dharmadas Ghose was given by the:

(a) Supreme Court in 1953

(b) Federal Court in 1947

(c) Privy Council in 1928

(d) Privy Council in 1903

Ans.D

25. The decision in Mohori Bibi v. Dharmadas Ghose case was related

to the:

(a) Offer and its communication

(b) Acceptance and its communication

(c) Undue influence

(d) Capacity of a minor to enter into a contract

Ans.D

26.A sees B’s child drowning in water. He saves the child from

drowning. Later ‘B’ promises to give ‘A’Rs. 1000. In this circumstances:

(a) B’s liability arises in quasi-contract

(b) B’s liability is statutory

(c) B is not liable as there is no contract

(d) B is liable because the agreement is not “nudum pactum”, and is

based on past voluntary service

Ans.D

27. According to Section 2 of the Indian Contract, 1872, when one

person signifies to another his willingness to do or to abstain from

doing anything, with a view to obtain the assent of that other to such

act or abstinence, he is said to make a:

(a) Promise

(b) Consent

(c) Proposal

(d) Communication

Ans.C

28. A proposal, when accepted becomes:

(a) An acceptance

(b) A promise

(c) A consideration for the promise

(d) An agreement

Ans.B

29. A patient in a lunatic asylum, who is at intervals of sound mind–

(a) May not contract

(b) May contract

(c) May contract during those intervals when he is of sound mind

(d) May contract only after he becomes completely of sound mind

Ans.C

30. A bid at an auction sale is:

(a) An implied offer to buy

(b) An implied acceptance of the offer to buy

(c) An express offer to buy

(d) An express acceptance of the other to buy

Ans.A

31. A void agreement means:

(a) Agreement not enforceable by law

(b) Agreement illegal in nature

(c) Agreement not acceptable to Court of law

(d) Agreement violating legal procedure

Ans.A

32. The provision that an agreement not enforceable by law is said to

be void, is contained In:

(a) Section 2(j)

b) Section 2 (f)

(c) Section 2 (g)

(d) Section 2 (i)

Ans.C

33. Number of ingredients of ‘Promise’ is-

(a) Two

b) Three

(c) Four

d) Five

Ans.A

34. The communication of an acceptance, as against the acceptor, is

complete :

(a) When it is put in a course of transmission so as to be out of the

power of the accepter

(b) When the proposer says that he received the acceptance to the

proposal

(c) When it comes to the knowledge of proposer

(d) When the acceptor decides to accept proposal and communicate it

Ans.C

35. The communication of a revocation, a against the person who

makes it, is complete:

(a) When it is put into a course of transmission so as to be out of the

power of the person who makes it

(b) When it comes to the knowledge of the person to whom it is being

made

(c) When the person to whom it is being made, signifies his assent

thereto

(d) All of the above

Ans.A

36. “A” took his wife “B” to England for vacations. Due to some

business emergency A had to go back to his place of work

immediately while leaving B in England owing to her ill-health. A

promised to pay B 300 pounds per week as maintenance during her

stay in England, but failed to pay. If A is sued by B then.”

(a) A is liable for breach of contract

(b) A is not liable because he cannot be presumed to have any intention

to enter into a contract with his wife

(c) A is not liable because of the lack of consideration on the part of B

(d) A is liable because a promise to one’s wife result in a binding

contract even in the absence of a consideration for the promise

Ans.B

37. A promises his son to buy him a Maruti Car if he stands first in his

tenth class Board examination, On the faith of the promise the son

worked hard and stood first in the exam. In this case:

(a) The son can sue A for the car as there was a contract between him

and his father A

(b) The son cannot sue A as the contract was voidable at the option of A

(c)The son can sue A because he worked hard on the faith of A’s

promise and performed his part of the contract

d) The son cannot sue A because in the household domestic setting like

this such promises are not made with the intention to bind the parties

into a valid contract

Ans.D

38. A” offered to sell his house to “B” which B instantly accepted.

Under these circumstances:

(a) A can revoke his offer anytime before the actual sale of the house

b) A can revoke his offer with the consent of B

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(c) A cannot revoke his offer at all

(d) A can revoke his offer even without the consent of B

Ans.C

39. “A” telegraphed “B”, “Will you sell your house, telegraph the

lowest cash price.” B also replied by telegram, “lowest price for the

house of Rs. 15,00,000/- This is a:

(a) Complete Agreement.

(b) Complete Contract

(c) No Contract

(d) Voidable Contract

Ans.C

40. Consensus ad idem means ……

(a) theme of contract

(b) common object

(c) meeting of minds upon the same thing in the same sense

(d) None of the above

Ans.C

41. An agreement is:

(a) Every promise and every set of promises forming the consideration

for each other

(b) Every promise to do something or to abstain from doing something

(c) Signification by one person of the intention to abide by the promise

(d) Promise against a promise

Ans.A

42. A notice in the newspaper inviting tenders is

(a) A proposal

(b) A invitation to proposal

(c) A promise

(d) An invitation for negotiation

Ans.B

43. A catalogue of books, listing price of each book and specifying the

place where the listed books are available is:

a) A promise to make available the book at the listed price

(b) An offer

(c) An invitation to visit the book shop

(d) An invitation to offer

Ans.D

44. A proposal when accepted –

(a) Becomes a promise

(b) Becomes an agreement

(c) Becomes a contract

(d) Becomes a consideration

Ans.A

45. In which of the following statement there is a valid contract:

(a) A promises to pay Rs. 5,000/- to B who saved “A” from drowning in

a river

(b) A promises to pay Rs. 5,000/- to B if India loses in a India-Pakistan

cricket match

(c) A promises to pay Rs. 5,000/- to B if B cross through mount

Himalayas within 3 days on his feet

(d) A promises to pay Rs. 5,000/- to B if B works for A in his smuggling

business

Ans.A

46. A agrees to serve B as B’s housekeeper and also to live in adultery

with him at a fixed salary of Rs. 500/- per month. In this situation:

(a) The whole agreement is unlawful and thus it is void

(b) The agreement is lawful and valid as adultery is not an offence in

Indian Contract Act

(c) This first portion of the agreement, being lawful, is a contract

whereas the latter portion is void

(d) The agreement as a whole is void as the lawful portion is not

severable from unlawful portion

Ans.A

47.A sees B’s child drowning in water. He saves the child from

drowning. Later ‘B’ promises to give ‘A’Rs. 1000. In this circumstances:

(a) B’s liability arises in quasi-contract

(b) B’s liability is statutory

(c) B is not liable as there is no contract

(d) B is liable because the agreement is not “nudum pactum”, and is

based on past voluntary service

Ans.D

48. Which of the following is a contract:

(a) An agreement to do a lawful act by unlawful means

(b) An undertaking in writing duly signed to pay the time barred debt

(c) An agreement in restraint of the lawful trade

(d) An agreement to pay Rs. 1000/- only without consideration

Ans.B

49.In the case of an alternative promise, one branch of which is legal

and the other illegal-

(a) Such a promise can be enforced

(b) Any of its branch cannot be enforced

(c) The legal branch alone can be enforced

(d) With the permission of the court, both the branches can be

enforced

Ans.C

50. A contracts to sing for B at a concert for 1,000 rupees which are

paid in advance. A is too ill to sing-

(a) A is bound only to make compensation to B for the loss of the

profits which B would have made if A had been able to sing but not

bound to refund 1,000 paid in advance

(b) A is neither bound to refund 1,000 rupees paid in advance nor is

bound to make compensation to B for the loss of profits which B would

have made if A had been able to sing.

(c) A is not bound to make compensation to B for the loss of profits

which B would have made if A had been able to sing, must refund to B

the 1,000 rupees paid in advance

(d) A is not bound to make compensation to B for the loss of profits

which B would have made if A had been able to sing must refund to B

half of the amount paid in advance

Ans.C

51. When one party’s consent has been caused as a result of mistake

of fact, the contract is:

(a) Voidable

(b) Void

(c) Valid, and not voidable or void

(d) Unlawful and unenforceable

Ans.C

52. The principal “Restitution stops where repayment begins”, can

be applied with respect to:

(a) Minors only

(b) An alien enemy only

(c) Lunatics and idiots only

(d) Any incapable person

Ans.A

53. A leaves a cow in the custody of B to be taken care of. The cow has

a calf. In the absence of any contract to the contrary-

(a) B is bound to deliver only the cow to A

(b) B is bound to deliver the calf as well as the cow to A

(c) Bis bound to deliver the calf as well as the cow if he is paid half the

price of the calf

(d) B is bound to deliver the calf as well as the cow if he is paid one third of the price of the calf

Ans.B

54. ‘A’ without the request of anybody. extinguishes the fire of B’s

godown. A suffers injury thereby. If B promises to compensate A for

the whole amount he has spent on his treatment, then the contract is:

(a) Valid and enforceable

(b) Unenforceable because of lack of intention to create binding

contract by parties

(c) Void for want of consideration

(d) Voidable at B’s option

Ans.A

55. Which of the following statement is correct in terms of Indian law:

(a) When an acceptance is sent through post the offeror becomes

irrevocably bound by it only at the time when the letter of acceptance

reaches him.

(b)When an acceptance is communicated through the telephone the

offeror becomes irrevocably bound by it only at the time when message

of acceptance reaches his ears

(c)When the acceptance is sent through post, the acceptor becomes

irrevocably bound by it at the time when he puts it in the course of

transmission

(d) When an acceptance is communicated through telephone the

acceptor becomes irrevocably bound by it immediately when he uttered

the message of acceptance, whether or not it reached or understood

by the offeror

Ans.B

56. In an auction sale, if a bid is provisionally accepted subject to the

final approval

(a) It amounts to a concluded contract and bind both the parties

(b) It amounts to no contract and it does not ordinarily bind cither party

until the final approval is given

(c) The bidder i.e. the offeror is bound by his bid while the seller is not

bound

(d) The bidder i.c. the offeror is at liberty to cancel his offer while the

seller is bound by his provisional acceptance

Ans.B

57. According to which section of the Contract Act the performance of

the condition of a proposal is an acceptance of the proposal:

(a) Section 7

(b)Section 8

(c) Section 9

(d) Section 10

Ans.B

58. A contract creates 

(a) rights and obligations of the parties to it. 

(b) obligations of the parties to it. 

(c) mutual understanding between the parties to it. 

(d) mutual lawful rights and obligations of the parties to it. 

Ans.b

59. In agreements of a purely domestic nature, the intention of the parties to create legal relationship is  

(a) to be proved to the satisfaction of the court. 

(b) presumed to exist. 

(c) required to the extent of consideration. 

(d) not relevant at all. 

Ans.a

60. ………………. is forbidden by law.  

(a) Valid contract 

(b) Illegal agreement 

(c) Voidable contract 

(d) Unenforceable contract 

Ans.b

61. A makes a contract with B to beat his business competitor. This is an example of  

(a) valid contract. 

(b) illegal agreement. 

(c) voidable contract. 

(d) unenforceable contract.

Ans.b 

62. Which of the following legal statements is incorrect? 

(a) An agreement enforceable by law is a contract [Section 2] 

(b) All agreements are contracts [Section 10] 

(c) A proposal when accepted becomes a promise [Section 2] 

(d) Every promise and every set of promise forming the consideration for each other is an agreement [Section 2(e)] 

Ans.b

 63. ……………… is made by words written.  

(a) Express contract 

(b) Implied contract 

(c) Tacit contract 

(d) Unlawful contract 

Ans.a

64. Agreement the meaning of which is uncertain is  

(a) Void  

(b) Valid 

(c) Voidable 

(d) Illegal Answer: 

Ans.a

65. Which of the following relationships raise presumption of positive influence?  

(a) Parent and Child 

(b) Religious/ Spiritual Guru and disciple 

(c) Guardian and Ward 

(d) All of the above 

Ans.d

66. Which of the following is false with respect to minors entering a contract?  

(a) An agreement with or by a minor is void ab initio 

(b) A minor can be a beneficiary of a contract 

(c) The contracts involving a minor as a beneficiary may be enforced at the option of the third party 

(d) A minor cannot ratify a contract on attaining majority 

Ans.c

67. Drawing cash from ATM, sale by fall of hammer at an auction sale, etc., are example of  

(a) express contract. 

(b) implied contract. 

(c) tacit contract. 

(d) unlawful contract. 

Ans.b

68. …………….. is a one-sided contract in which only one party has to perform his promise or obligation.  

(a) Void contract 

(b) Illegal agreement 

(c) Unilateral contract 

(d) Bilateral contract 

Ans.c

69. All Contracts are  …………….. 

(a) Offer 

(b) Agreement 

(c) Acceptance 

(d) Transaction 

Ans.b

70. A/an …………… is every Promise and every set of promises , forming consideration for each other 

(a) Offer 

(b) Agreement 

(c) Acceptance 

(d) Transaction 

Ans.b

71. Every agreement and promise enforceable by law is ……………. 

(a) Offer 

(b) Contract 

(c) Acceptance 

(d) Consideration 

Ans.b

72. “A Contract is an agreement creating and defining obligations between the parties” the definition was put forwarded by 

(a) Dr. Ambedkar  

(b) Pollock  

(c) Salmond

(d) N.D.Kapoor 

Ans.c

73. The Law of Contract is nothing but …………… 

(a) A Child of Commercial dealing  

(b) A Child of Religion  

(c) A Child of day to day Politics  

(d) A Child of Economics.  

Ans.a

74. To form a valid contract, there should be atleast …………. 

 (a) Two parties  

(b) Three parties  

(c) Four parties  

(d) Five parties.  

Ans.a

75. Contractual rights and duties are created by …………… 

 (a) State  

(b) Statute  

(c) Parties  

(d) Custom or Usage.

Ans.c  

 76. Agreement is defined by the section …………… of the Indian Contract Act, 1872.  

(a) Section 2(c) 

(b) Section 2(e)  

(c) Section 2(g)  

(d) Section 2(i)  

Ans.b

77. As per section 2(e) of the Indian Contract Act, “Every Promise and every set of promise forming the consideration for each other is a/an  

 (a) Contract  

(b) Agreement  

(c) Offer   

(d) Acceptance  

Ans.b

 78. A promises to deliver his watch to B and, in return, B promises to pay a sum of ` 2,000. There is said to be a/ an  

(a) Agreement  

(b) Proposal  

(c) Acceptance  

(d) Offer 

Ans.a 

79. An Agreement is ………………. 

 (a) Offer  

(b) Offer + Acceptance  

(c) Offer + Acceptance + Consideration  

(d) Contract  

Ans.b

80. A Contract is ……………. 

(a) A promise to do something or abstain from doing something.  

(b) A communication of intention to do something or abstain from doing something  

(c) A set of promises.  

(d) An agreement enforceable by law.  

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Ans.d

81. Contract is defined as an agreement enforceable by Law, vide section ………… of the Indian Contract Act.  

 (a) Section 2(e)  

(b) Section 2(f)  

(c) Section 2(h)  

(d) Section 2(i)  

Ans.c

82. Which of the following is false? An offer to be Valid must 

(a) Contain a term the non- compliance of which would amount to acceptance.  

(b) Intend to create legal relations.   

(c) Have certain and unambiguous terms.  

(d) Be communicated to the person to whom it is made.  

Ans.a

83. Over a cup of coffee in a restaurant, X Invites Y to dinner at his house on a Sunday. Y hires a taxi and reaches X’s house at the appointed time , but x fails to perform his promise. Can Y recover any damages from X?  

 (a) Yes, as y has suffered  

(b) No, as the intention was not to create legal relations.  

(c) Either (a) or (b)  

(d) None of these.  

Ans.b

84. Which one of the following is the best statement about the Indian Contract Act?  

 (a) It is an exhaustive code containing the entire law of contract.  

(b) It is an Act to amend certain parts of the law relating to contracts  

(c) It is an Act to define certain parts of the law relating to contracts and contains only the general principles of contract.  

(d) It is not an exhaustive code containing the entire law of contracts being an Act to define and amend certain parts of law relating to contract.  

Ans.c

85. Which of the following is a contract?  

 (a) A engages B for a certain work and promises to pay such remuneration as shall be fixed. B does the work.  

(b) A and B promise to marry each Other. 

(c) A takes a Seat in a public vehicle  

(d) A invites B to a card party. B accepts the invitation.  

Ans.a

86. For binding contract both the parties to the contract must:  

(a) Agree with each other.    

(b) Put the offer and counter offers. 

(c) Stipulate their individual offer  

(d) Agree upon the same thing in the same sense. 

Ans.d

87. Which one of the following has the correct sequence?  

 (a) Offer, acceptance, consideration, offer.  

(b) Offer, acceptance , consideration, contract  

(c) Contract, acceptance, consideration, offer.  

(d) Offer, consideration, acceptance, contract.  

Ans.b

88. Goods displayed in a Shop window with a price label will amount to:  

(a) Offer  

(b) Acceptance of offer  

(c) Invitation to offer  

(d) Counter offer 

Ans.c

89. What can a catalogue of books, listing price of each book and specifying the place where the listed books are available be termed as?  

 (a) An offer  

(b) An obligation  

(c) An invitation to offer  

(d) A promise to make available the books at the listed place. 

Ans.c 

 90. Which one of the following statements about a valid acceptance of an offer is incorrect?  

 (a) Acceptance should be absolute and unqualified.  

(b) Acceptance should be in the prescribed manner  

(c) Acceptance should be communicated 

(d) Acceptance should be made while the offer is subsisting    

Ans.d

91. A Counter offer is …………… 

 (a) A rejection of the original offer  

(b) An acceptance of the offer 

(c) A bargain  

(d) An invitation to treat 

Ans.a

92. The offer must be ………….. 

(a) Conditional 

(b) Temporary 

(c) Definite  

(d) all of the above 

Ans.c

93. A contract is made where: 

 (a) A buys a book from a shop 

(b) X bids at a public auction. 

(c) X agrees with Y to discover a treasure by magic 

(d) Z agrees to attend the birthday party of his friend 

Ans.a

94. Parol contracts are also known as 

 (a) Simple Contract  

(b) Format Contract 

(c) Void Contract  

(d) Conditional contract 

Ans.a

 95. An offer made by words spoken or written is called: 

 (a) Implied offer 

(b) Express offer 

(c) Formal agreement 

(d) Informal agreement 

Ans.b 

 96. A tender is 

 (a) an offer 

(b) invitation to an offer 

(c) acceptance of offer 

(d) none of the above 

Ans.a

97. An offer stands revoked 

 (a) If the fact of the death or insanity is known to offeree 

(b) By counter offer 

(c) By rejection of offer 

(d) All the above 

Ans.d

98. For an acceptance to be valid, it must be 

 (a) Partial & qualified 

(b) Absolute & unqualified 

(c) Partial & unqualified 

(d) Absolute & qualified 

Ans.b

 99. Acceptance takes place as against the proposer, when 

 (a) When the letter of acceptance is posted by the acceptor 

(b) When the letter of acceptance is received by the proposer 

(c) When the offeree, writes the letter of acceptance, but doesn’t post it 

(d) All the above 

Ans.a

100. Communication of offer is complete when 

(a) The letter is posted to the offeree 

(b) The letter is received by the offeree 

(c) The offer is accepted by the person to whom it is made 

(d) It comes to the knowledge of the offeror that the letter has been received by the offeree 

Ans.b

101. The communication of a proposal is complete when it comes to 

 (a) The knowledge of that person 

(b) The object of the offer 

(c) The intention with which offer is made 

(d) The facts underlying the offer 

Ans.a

102. A person making a proposal is called ………….. 

(a) Promisor  

(b) Vendor  

(c) Contractor  

(d) Promise  

Ans.a

103. Which one of the following will constitute a valid acceptance?  

 (a) An enquiry as to fitness of the subject matter of contract.  

(b) A provisional acceptance  

(c) Addition of a superfluous term, while accepting an offer.  

(d) A conditional acceptance.  

Ans.a

104. Which one of the following statements is true?  

(a) Offer and acceptance are revocable  

(b) Offer and acceptance are irrevocable  

(c) An offer can be revoked but acceptance cannot 

(d) An offer cannot be revoked but acceptance can be revoked.  

Ans.a

105. The Communication of acceptance through telephone is regarded as complete when:  

 (a) Acceptance is spoken on the phone.  

(b) Acceptance comes to the knowledge of party proposing.  

(c) Acceptance is put in the course of transmission.  

(d) Acceptance has done whatever is required to be done by him.  

Ans.b

106. Which one of the following falls into the category of offer?  

 (a) Newspaper advertisement regarding sale. 

(b) Display of goods by a shopkeeper in his window with prices marked on them  

(c) An advertisement for a concert.  

(d) Announcement of reward to the public.   

Ans.d

107. A sees an article marked “Price Rupees Twenty” in B’s shop .He offers B  20 for the article. B refuses to sell saying the article is not for sale. Advice A.  

(a) A cannot force B to sell the article at ` 20  

(b) A can force B to sell the article at ` 20  

(c) A can claim damages  

(d) A can sue B in the Court. 

Ans.a 

 108. Which one of the following statements is incorrect?  

 (a) Oral acceptance is a valid acceptance.  

(b) Mere silence is not acceptance  

(c) Acceptance must be communicated  

(d) Acceptance may not be in the prescribed manner  

Ans.d

109. Consider the following statement: 

(1) There is no difference between the English Law and Indian Law with regard to acceptance through post. (2) Both Under the English Law and the Indian Law a contract is concluded when the letter of acceptance is posted. (3) Under the Indian Law when the Letter of acceptance is posted it is completed only as against the proposer. 

Which of the above statements is/are correct?  

 (a)1 and 2 

(b) 2 alone 

(c) 3 alone 

(d) None 

Ans.c

110. In Commercial and business agreements, the intention of the parties to create legal relationship is   

 (a) Presumed to exist  

(b) To be specifically expressed in writing  

(c) Not relevant or all  

(d) Not applicable.  

Ans.a

111. An agreement is a Voidable Contract when it is  

(a) Enforceable  

(b) Enforceable by Law at the option of the aggrieved party  

(c) Enforceable by both the parties  

(d) Not enforceable at all. 

Ans.b 

 112. A Contract creates………….. 

 (a) Rights in personam  

(b) Rights in rem  

(c) Only rights and no obligations  

(d) Only Obligations and no rights.  

Ans.a

 113. An agreement not enforceable by Law is said to be void under section ……………. of the Indian Contract Act.  

(a) Section 2(a)  

(b) Section 2(b)  

(c) Section 2(f)  

(d) Section 2(g)  

Ans.d

114. When the contract is perfectly valid in its substance but cannot be enforced because of certain technical defects. This is called a/ an-  

 (a) Unilateral Contract  

(b) Bilateral Contract  

(c) Unenforceable Contract  

(d) Void Contract  

Ans.c

 115. The term” Proposal or offer” has been defined in – of the Indian contract Act.  

 (a) Section 2(a)  

(b) Section 2(b)  

(c) Section 2(c)  

(d) Section 2(d)  

Ans.a

 116. The term” Promise” has been defined in ………….. of the Indian Contract Act.  

(a) Section 2(a)  

(b) Section 2(b)  

(c) Section 2(c)  

(d) Section 2(d)  

Ans.b

 117. The person making the proposal is called ………….  

 (a) Promisor  

(b) Promisee  

(c) Participator  

(d) Principal   

Ans.a

118. Offer implied from conduct of parties or from circumstances of the case is called ………..  

(a) Implied offer  

(b) Express offer  

(c) General offer  

(d) Specific offer 

Ans.a

 119. An offer made to a (i) Specific person, or (ii) a group of persons is known as 

(a) Standing offer  

(b) Specific offer  

(c) Special offer  

(d) Separate offer  

Ans.b

 120. Communication of proposal is complete when it comes to the knowledge of ………..  

(a) The person to whom it is made  

(b) The proposer  

(c) Either (a) or (b)  

(d) The Court.  

Ans.a

121. Terms of an offer must be ……… 

 (a) Ambiguous  

(b) Uncertain  

(c) Definite  

(d) Vague

Ans.c  

 122. A contingent contract is 

 (a) Void  

(b) Voidable  

(c) Valid  

(d) Illegal  

Ans.c

123. A contract is said to be discharged or terminated 

 (a) When the rights and obligation are completed  

(b) When the contract becomes voidable  

(c) Both (a) & (b)  

(d) None of the above  

Ans.a

124. Which is not the mode of discharge of contract 

 (a) Performance of contract  

(b) Lapse of time  

(c) Breach of contract  

(d) Injunction 

Ans.d 

 125. A person finds certain goods belonging to some other persons. In such a case, the finder 

 (a) Becomes the owner of that good  

(b) Is under a duty to trace the real owner  

(c) Can sell that good if true owner is not found  

(d) Both (b) & (c)  

Ans.d

126. If in a contract, the time lapses and if the party fails to perform the contract within specified time the contract becomes  

(a) Voidable  

(b) Void  

(c) Illegal  

(d) Enforceable in the court  

Ans.a

127. Change in one or more of the important terms in a contract, it is the case of 

 (a) Novation  

(b) Rescission  

(c) Remission  

(d) Alternation  

Ans.d

128. In both the cases, devolution of joint liabilities and devolution of joint rights, if a promisor dies, who will perform on behalf of him 

 (a) Other promiser   

(b) His legal representation  

(c) Both (a) & (b)  

(d) None of the above  

Ans.c

129. A contract which is impossible to perform is 

 (a) Voidable  

(b) Void  

(c) Illegal  

(d) Enforceable  

Ans.b

130. A party entitled to rescind the contract, loses the remedy where 

(a) He has ratified the contract  

(b) Third party has acquired right in good faith  

(c) Contract is not separable  

(d) All of the above  

Ans.d

131. The special damages i.e. the damages which arises due to some special or unusual circumstances  

(a) Are not recoverable altogether  

(b) Are illegal being positive in nature  

(c) Cannot be claimed as a matter of right  

(d) Can be claimed as a matter of right  

Ans.d

132. Which of the following statement is/are correct  

 (a) Ordinary damages are recoverable  

(b) Special damages are recoverable only if parties know about them  

(c) Remote or indirect damages are not recoverable  

(d) All of these  

Ans.c

133. Exemplary damages are not awarded in such case  

(a) Breach of promise to marry  

(b) Wrongful dishonour & customers cheque by banker  

(c) Breach of any business contract    

(d) None of the above  

Ans.b

134. Damages which the contracting parties fix at the time of contract in case of breach  

 (a) Unliquidated Damages  

(b) Liquidated Damages  

(c) Nominal Damages  

(d) None of the above  

Ans.b

135. A order of court restraining a person from doing a particular act, it’s a case of 

(a) Specific performance  (b) Injunction  (c) Both (a) & (b)  (d) None of the above 

Ans.b 

136. Under the Indian Contract Act, the contract of indemnity is restricted to such cases  

 (a) Where the loss promise to be reimbursed is caused by the conduct of the promisor or any other person  

(b) The loss caused by the any events or accident which does not depend upon conduct of any person  

(c) Both (a) & (b)  

(d) None  

Ans.b

137. What is the ratio of parties in contract of indemnity and contract of guarantee  

 (a) 2 : 3  

(b) 3 : 2  

(c) 1 : 3  

(d) 2 : 1  

Ans.a

138. In contract of indemnity, what is the liability of indemnifier against the indemnified 

 (a) Primary  

(b) Secondary   

(c) No liability  

(d) Both (a) & (b)  

Ans.a

139. In case of contract of guarantee, what is the liability of the surety against the principal debtor 

 (a) Primary  

(b) Secondary  

(c) No liability  

(d) Fully liable  

Ans.b

140. Which is not the case of discharge of surety  

 (a) By notice of revocation  

(b) By death of surety  

(c) If creditor releases the principal debtor  

(d) None of the above  

Ans.d

141. What is the right of the bailee against the goods 

 (a) Owner  

(b) Possessor  

(c) Bailee can sell those goods  

(d) Both (a) & (b)  

Ans.b

142. In case of Contract of guarantee, if the creditor loses or parts with any security which the debtor provides him at time of contract, the surety is discharged to the extent of 

 (a) The value of the security  

(b) The surety can be fully discharged  

(c) The surety can claim damages  

(d) All of the above  

Ans.a

143. Which one is not the duties of bailee  

 (a) The bailee must take care of goods as of his goods.  

(b) The bailee cannot use bailor’s goods in an unauthorised manner.  

(c) The bailee should return the goods without demand on the expiry of the time period.   

(d) He can set up adverse title to the goods.  

Ans.d

 144. A lien which is available only against that property of which the skill and labour have been exercised 

 (a) General Lien  

(b) Particular Lien  

(c) Ordinary Lien  

(d) Both (a) & (b)

Ans.b  

145. Which is not the case of termination of bailment 

 (a) Where the bailee wrongfully uses or disposes of the goods bailed.  

(b) When the period of bailment expires  

(c) When the object of bailment has been achieved  

(d) None of the above  

Ans.d

146. An agency may also arise by 

 (a) Estoppel  

(b) Necessity  

(c) Ratification  

(d) All of the above  

Ans.d

 147. A mercantile agent employed to sell goods which have been placed in his possession or contract to buy goods for his principal 

 (a) Factors  

(b) Brokers  

(c) Del Credere Agent  

(d) Auctioneers  

Ans.a

147. The threat to commit suicide amounts to  

 (a) Coercion  

(b) Undue influence  

(c) Misrepresentation  

(d) Fraud  

Ans.a

 148. Consensus-ad-idem is an essential of   

 (a) Agreement   

(b) Promise  

(c) Both (a) & (b)  

(d) Consideration  

Ans.a

149. Agreement which are not contracts  

 (a) Social Matters  

(b) Relating to partnership  

(c) Domestic Agreements  

(d) Both (a) & (c)  

Ans.b

150. Offeror is ………… 

(a) Party to whom offer is made  

(b) Third party  

(c) Party making an offer   

(d) None of the above  

Ans.c

151. Bailment is a special kind of contract that is widely used in business and in: 

a) Personal affairs  

b) Cultural activities 

c) Academic research 

d) Charitable institution 

Ans.a

152. A transaction in which an owner of a tangible personal property transfers the property such property is known as: 

a) Bailment 

b) Pledge 

c) Hypothecation 

d) Lease 

Ans.a

153. A bailment allows an owner of a personal property to transfer possession of it to another individual for any one of the following purpose; except: 

a) Sale 

b) Transportation 

c) Storage 

d) Lease 

Ans.d

154. An agreement reached between a bailer and a bailee  is  

a) Mortgage 

b) Bailout 

c) Bailment 

d) Codicil 

Ans.c

155. Anyone in possession of goods can create  bailment relationship and becomes: 

a) Bailee 

b) Bailor 

c) Executor 

d) Administrator 

Ans.b

156. In general all of the following are requirement for a bailment; except that the: 

a) Bailor must be in possession of goods 

b) Bailee must intent to possess goods 

c) Bailee must return identical goods 

d) Actual ownership of goods is necessary 

Ans.d

157. The law concerning bailment provides for certain rights and duties of both bailor and bailee, depending on the: 

a) Amount of transaction  

b) Nature of  business 

c) Kind of bailment 

d) Competency in the market 

Ans.c

158. The transfer of goods from a bailor to a _________must actually take 

a) place

b) Landlord 

c)Bailee Lease 

d)Tenant 

Ans.b

159. A bailment for the sole benefit of a bailer usually results in ———— 

a) Borrowing /lending transactions 

b) Spring transaction  

c) Declarative transaction 

d) Autonomous transaction 

Ans.a

160.  A bailment in which only the person who borrows and article gets the benefits is known as: 

a) Bailment for the sole benefits of the bailee 

b) Bailment for the sole benefits of the bailor 

c) Mutual benefit bailment 

d) Constructive bailment 

Ans.a

161.  A person who finds the goods belonging to others and takes them into his possession is called  

a) Finder of goods  

b) Bailor  

c) Pledgor 

d) Pawnee 

Ans.c

162.  Which are the rights of finder of goods 

a) Rights of lien 

b) Right to sue for reward 

c) Right to sale 

d) All of the above 

Ans.d

 163.  A bailment is for a specific period, it terminates on expiry of that period 

a) On the achievement of the subject 

b) On the expiry of the period 

c) Gratuitous bailment 

d) Destruction of the subject matter 

Ans.b

164.  The bailment of goods as security for payment of a debt or performance of a promise 

a) Pledge 

b) Lien 

c) Agency 

d) Bailment 

Ans.a

165.  Pledgee is also known as 

a) Pawnee 

b) Pawnor 

c) Principal 

d) Agent 

Ans.a

166.  Pledgor is also known as 

a) Pawnor 

b) Pawnee 

c) Bailor 

d) Agent 

Ans.a

167.  Pledge is made for______________purpose 

a) Any purpose 

b) Special purpose 

c) Common purpose 

d) None of the above 

Ans.b

168.  Person’s include in pledge 

a) Pledgor and pledgee 

b) Bailor and bailee 

c) Principal and agent 

d) Giver and taker 

Ans.a

169.  The term bailment is derived from a French word “bailor”, which means: a) Depends 

b) Deliver 

c) Selling 

d) Buying 

Ans.b

170.  What is the essence of the bailment 

a) Transfer of ownership 

b) Transfer of possession 

c) A and B 

d) None of these

Ans.b 

 171.  The person delivering the goods for achieving some purpose and returned the same after completion is called 

a) Bailee 

b) Pledgee 

c) Bailor 

d) Agent 

Ans.c

172.  The person who delivered the goods for bailment process is called 

a) Bailee 

b) Bailor 

c) Pawnor 

d) Pawnee 

Ans.a

173. What is the subject matter of bailment 

a) Movable goods 

b) Immovable goods 

c) Perishable goods 

d) All of the above 

Ans.a

174.  No consideration passes between the bailor and bailee 

a) Non gratuitous bailment 

b) Gratuitous bailment 

c) Special bailment 

d) Conditional bailment 

Ans.b

175.  Choose the incorrect; Rights of bailee: 

a) Rights of implied 

b) Bailor’s lien 

c) Termination of bailment 

d) Enforcement of duties of bailor 

Ans.c

176.  Choose the correct one; Duties of bailor 

a) To return the goods 

b) To disclose known faults 

c) Not to set up an adverse title 

d) To return any accretion to the goods 

Ans.b

177.  Right of a person to retain possession of some goods belonging to another until some debts of the person in possession is satisfied 

a) Pledge 

b) Bailment 

c) Lien 

d) Guarantee 

Ans.c

178.  Which of the following is not a type of bailment 

a) Gratuitous  

b) deposit 

c) Sale 

d) Loan for use 

Ans.c

179.  A gives B two suitcases to store for him while he is at a meeting. What is the correct relationship between A and B. 

a) A is the bailee and B is the bailor 

b) A is the bailor and B is the bailee 

c) A and B are both bailees 

d) A and B are both Bailor 

Ans.b

180.  Which of the following is not an example of bailment 

a) A coat check 

b) Valet parking 

c) Dry cleaning 

d) A gift you give someone for their birthday 

Ans.d

181. Law relating to agency is contained in ……. Chapter of the Indian Contract Act. 

a. Chapter IX 

b. Chapter X 

c. Chapter XI 

d. Chapter XII 

Ans.b

182. A person employed to do any act for another person is called. 

a. Agent 

b. Principal 

c. Agency 

d. Bailor 

Ans.a

183. Who has the primary responsibility in agency? 

a. Principal 

b. Agent 

c. Bailor 

d. Bailee 

Ans.a

184. The contract which creates the relationship of an agent and principal 

a. Agency 

b. Bailment 

c. Pledge 

d. Offer 

Ans.a

185. An agent who is appointed to perform a particular act. 

a. General agent 

b. Universal agent 

c. Special agent 

d. Commercial agent 

Ans.c

186. An agent who has authority to do all acts connected with a particular trade, business or employment. 

a. Commission agent 

b. General agent 

c. Del credere agent 

d. Broker 

Ans.b

187. An agent whose authority to bind his principal is almost unlimited. 

a. General agent 

b. Universal agent 

c. Auctioneer 

d. Factor 

Ans.b

188. When does the apparent authority of an agent arise? 

a. When the acts with the usual authority of the job 

b. When the principal gives the agent implied authority to act 

c. When the agent has actual authority to act 

d. When the principal represents to a third party that an agent has the authority to act when in fact he doesn’t 

Ans.d

189. Which one of the following is not a duty of an agent? 

a. Duty to exercise care and skill 

b. Duty to take a commission 

c. Duty to account 

d. Duty to avoid conflict of interest 

Ans.b

190. What is an undisclosed agency? 

a. When a third party is not informed of the exercise of the principal and believes the agent is acting on his own behalf. 

b. When the agent indicates through conduct he is acting as an agent. 

c. When the principal is not in existence. 

d. Where the third party knows there is a principal but doesn’t know his name. 

Ans.a

191. Which of the following statements is incorrect? 

a. An agency may be terminated by death of either party. 

b. An agency may be terminated by express agreement. 

c. An agency agreement can always be terminated by a principal. 

d. Mental incapability of an agent will terminate the agency relationship. 

Ans.c

192. An agency relationship which is made retrospectively is known as an agency by: 

a. Estoppel 

b. Ratification 

c. Necessity 

d. Commerce 

Ans.b

193. Which one of the following statements is incorrect? 

a. An agent creates a loyal relationship between a third party and principal. 

b. All agents are entitled to be paid for their services. 

c. An agency relationship may be created through necessity 

d. An agency relationship may be created through estoppel. 

Ans.b

194. …… is an agent who is appointed to sell goods at a public auction for reward. 

a. Commission agent 

b. Broker 

c. Auctioneer 

d. Factor

Ans.c 

195. ……. Agent acts the role of both a guarantor and an agent 

a. Factor 

b. Del credere agent 

c. Special agent 

d. General agent 

Ans.b

196. Where both the name and existence of the principal are not disclosed in the contract. Such principal is called 

a. Undisclosed principal 

b. Unnamed principal 

c. Named principal 

d. Prohibited principal 

Ans.a

197. Which one of the following is not a duty of an agent? 

a. Right of retainer 

b. Right of lien 

c. Right to remuneration 

d. Right to recover damage 

Ans.d

198. A person employed by, and acting under the control of the original agent is called……. 

a. Substitute agent

b. Co-agent 

c. Sub agent 

d. Universal agent 

Ans.c

199. Which of the following is not a terminator of agency by operation of law? 

a. Expiry of time 

b. Revocation by the principal 

c. Insolvency 

d. Death 

Ans.b

200. A …….. duty is to bring together the buyer and seller and make the sale happen. 

a. Broker’s 

b. Factor’s 

c. Commission agent’s 

d. Del credere agent

Ans.a 

 201. A ……… is a mercantile agent entrusted with the possession of goods for the purpose of selling them. 

a. Commercial agent 

b. Factor 

c. Broker 

d. Commission agent 

Ans.b

202. Which of the following is not a type of commercial agent? 

a. Banker 

b. Special agent 

c. Broker 

d. Commission agent

Ans.b 

203. Which of the following is not a right of the principal? 

a. Right to recover damage 

b. Right to demand account and to claim secret profit made. 

c. Right to remuneration d. To resist the agent’s claim for indemnity.

Ans.c 

 204. Which of the following is not a duty of principal? 

a. To pay remuneration to agent 

b. To indemnify the agent against the consequences of all lawful acts. 

c. Right to be indemnified against consequences of acts done in good faith 

d. Duty to pay money received. 

Ans.d

205. Which of the following is not a non-mercantile agent. 

a. Attorneys 

b. Insurance agent 

c. Factor 

d. Solicitors 

Ans.c

206. Substitute agent is also called 

a. Co-agent 

b. Sub agent 

c. Junior agent 

d. Duplicate agent 

Ans.a

 207. Which of the following is not a termination of agency by acts of the parties. a. Agreement 

b. Revocation by principal 

c. Insolvency 

d. Revocation by agent 

Ans.c

208. Which of the following is not a situation of irrecoverable agency 

a. Where the agency is coupled with interest. 

b. Where the agency has incurred a personal liability. 

c. Where the agent has partly exercised his duty. 

d. Where the agent doesn’t exercise his duty. 

Ans.d

209. Which one of the following is not a duty of an agent? 

a. Duty to exercise care and skill 

b. Duty to take a commission 

c. Duty to account 

d. Duty to avoid conflict of interest 

Ans.b

210. What is an undisclosed agency? 

a. When a third party is not informed of the exercise of the principal and believes the agent is acting on his own behalf. 

b. When the agent indicates through conduct he is acting as an agent. 

c. When the principal is not in existence. 

d. Where the third party knows there is a principal but doesn’t know his name. 

Ans.a

211.  The sale of goods act 1930 deals with the  

a) movable goods only     

b)period of contract 

c) immovable goods     

d)none of the above 

Ans.a

212. Contract of sale may be 

a) agency relationship     

b)sale or agreement 

c)indemnity                

d)guarantee. 

Ans.b

213. Representation of contract for the main purpose are called 

a) warranties     

b)conditions 

c) agreements     

d)members 

Ans.b

214.  Warranty is a contract means 

a) collateral  to main purpose 

b)condition to main purpose 

c)  representation to main purpose 

d)none of the above 

Ans.a

215. A contract for the sale of goods which provides that the property would pass to the buyer on full payment of price and execution of sale deed is known as  

a)sale of approval      

b)hire purchase agreement 

c) sale      

d)agreement to sell 

Ans.d

216. The term goods for the purpose of sale of goods act does not include 

a) actionable      

b)money 

c) immovable property     

d)all of these 

Ans.d

217. A contract for the sale of “future goods is “ 

a) agreement to sell     

b)sale 

c) void       

d)voidable 

Ans.a

218. The merchantable in sec 14(2)defined in 

a) Indian contract act     

b) sale of goods act 

c) English sale of goods act    

d) none if this 

Ans.c

219. In a hire purchase agreement the hirer  

a) must buy  the goods     

b)must return the goods 

c) has an option to buy the goods   

d)not given the possession  of goods 

Ans.c

220. Which of the following is not an implied condition in a contract of sale? 

a) condition as to description    

b)condition as to title 

c) condition as to free from encumbrance  

d)condition as to sample 

Ans.c

221. Which of the following modes of delivery of goods is considered  effective for a valid contract of sale? 

a) constructive delivery     

b)symbolic delivery  

c) actual delivery                 

d)all of this 

Ans.c

222.Delivering the keys of a godown in which goods sold are stored amounts to  

a) delivery by attornment    

b)symbolic delivery 

c) actual delivery     

d)none of these 

Ans.b

223.The unpaid seller can exercise his right of lien over the goods for  

a) any lawful charges     

b)price of goods 

c) storage charges              

 d)all of these 

Ans.d

224. In case on sale of approval the ownership is transferred to the buyer when he  

a) adopts the transactions    

b)accept the goods 

c) fail to return goods             

d)in all the above cases 

Ans.c

225.On the payment of price by the buyer ,if the seller fails to deliver the goods ,then the buyer can file a suit for 

a) refund of price                

b)interest 

c) none of this      

d)both (a )and (b) 

Ans.a

226.An auction sale is complete on the  

a) fall of hammer               

b)delivery of goods 

c) payment of price     

d)both (b) and (c) 

Ans.a

227.where the goods are delivered to a carrier or wharfinger for the purpose of transmission to the buyer, the delivery is 

a) invalid delivery               

b)valid and effective 

c) conditional      

d)none of this 

Ans.b

228.The property in the goods means the 

a) possession of goods     

b)custody of goods 

c) ownership of goods     

d)both(a) and (b) 

Ans.c

229.The goods are the risk of a party who has the 

a) ownership of goods     

b)possession of goods 

c) custody of goods     

d)both (b) and (c) 

Ans.a

230. In Case of an unconditional contract of sale, the property passes to the buyer at the time of making the contract. for this to apply, the goods must be 

a) specific                 

b)in a deliverable state 

c) physically transferred to buyer   

d)both(a) and (b) 

Ans.a

231. In which of the following cases, the unpaid seller loses his right of lien? 

a) delivery of goods to buyer   

b)delivery of goods to carrier 

c) tender of price by buyer   

d) all of these

Ans.c 

232. where in an auction sale, the seller appoints more than one bidder, the sale is 

a) illegal       

b)void 

c)conditional      

d)voidable 

Ans.c

233.  “No one can transfer rights which he himself does not have” that principle carried in 

a) companies act 2013    

b)industrial act 

c) “nemo dat quod non habet”    

d)none of the above 

Ans.c

234. A stipulation which is essential to the main purpose of the contract and if prove false give the buyer a right terminate the contract is legally known as  

a) guarantee             

b)condition 

c) warranty             

d)none of these 

Ans.c

235. In  case a condition is changed to the status of a warranty ,then the buyer 

a)loses the right to reject goods   

b)retains right claim damages only 

c)both (a) and (b) are true   

d)both (a) and (b) are false 

Ans.c

236. The unpaid seller can exercise his right of stoppage of goods in transit where the buyer 

a)refuse to pay price     

b)acts fraudulently 

c)become insolvent     

d)all of these 

Ans.d

237. where by exercising the right of stoppage in transit the unpaid seller regains the possession of goods, then 

a) unpaid seller lien revives   

b)contract of sale in terminated 

c) unpaid seller  lien does not revive  

d)seller’s possession in unlawful 

Ans.c

238. where the seller has expressly reserved his right to bid in the auction to bid in his behalf ,the seller can appoint  

a) only one bidder     

b) two bidders 

c) any number  of bidders   

d) none,seller has no such right 

Ans.a

239. A bidder at an auction sale can withdraw his bid  

a) before fall on hammer    

b)any time during auction 

c) before payment of price   

d)none of these 

Ans.a

240.On sellers wrongful refusal to deliver the unascertained goods to the buyer, the buyer can file a suit for recovery of 

a)goods       

b)damages 

c)both (a) and (b)     

d)none of these  

Ans.d

241.A contract by which one party promises to save the other from loses caused to him by the conduct of the promise himself or by the conduct of any other person is called a ________ 

a) Contract of indemnity   

b) Contract of guarantee 

c) Quasi contract    

d) none of these 

Ans.a

242. The person who promises to make good the loss is called the ___ 

a) Indemnified     

b) None of these 

c) Indemnifier     

d) Indemnifier holder 

Ans.c

243. The person whose loss is to be made good is called the  

a) Indemnifier          

b) Principal Debtor 

c) Indemnity holder      

d) none of these 

Ans.b

244. When a guarantee extends to a single transactions or debt it is called  

a) Retrospective guarantee   

b) Specific Guarantee 

c) Prospective guarantee   

d) Fidelity guarantee 

Ans.b

245. A continuing guarantee may at any time be revoked by the surety as to future transactions by giving a ____ to the creditor. 

a) By notice    

b) By Oral 

c) By death of surety   

d) none of these 

Ans.a

246. ________ is a guarantee given for the good conduct or honesty of a person employed in a particular office. 

a) Fidelity guarantee    

b) Continuing Guarantee 

c) Retrospective guarantee   

d) specific guarantee 

Ans.a

247. When a guarantee given for an existing debt or obligation it is known as  

a) Specific guarantee    

b) fidelity guarantee 

c) Retrospective guarantee    

d) continuing guarantee 

Ans.a

248.  A ______ is a contract to person the promise or to discharge a liability of a third person in case of his default. 

a) Contract of indemnity   

b) contract of guarantee 

c) Implied contract    

d) express contract 

Ans.b

249.  The person who gives the guarantee is called  

a) A surety     

b) Guarantee 

c) Competent     

d) creditor 

Ans.a

250. The person to whom the guarantee is given is called  

a) Indemnifier     

b) Principal debtor 

c) Indemnified 

d) Creditor 

Ans.d

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