MCQs

MCQ Law of Contract [Part-4]

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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

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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

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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

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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 

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 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

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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

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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

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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

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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

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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 

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