MCQ's On Business Law

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MCQ’s on Business Law

1. S agrees to sing in M’s theatre . S dies in the meanwhile the contract is

a. Void                                 b. Discharged                         c. Voidable                


d. Illegal

(Ans: b)

2. Breach of contract can be of ____________ breach

A. Actual                         b. Anticipatory                        c. Both A & B                


d. None of the above

(Ans: b)

3. Minor can be an

a. Agent                         b. Partner                         c. Surety                        d.


None of the above

(Ans: a)

4. Consideration can simply be explained as

a. Profit                         b. Income                         c. Benefit                        d.


Acceptance

(Ans: c)

5. Inadequacy of Consideration in a Contract

a. Will make it void              b. Will not Make it Void                c. Will make it


illegal                 d. Will make it wager

(Ans: b)

MCQs on Contract of Agency


6. Legal relationship between the middleman and the businessperson is
governed by

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a. law of business                      b. law of Surety                      c. law of agency   
d. None of the above

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(Ans: c)

7. Person who is represented by the agent is called the

a. Principal                      b. Principle                      c. Middle man                     


d. None of the above

(Ans: a)

8. The ______ does not usually get any rights or responsibilities under the
Contract

a. Principal                      b. Agent                      c. Surety                      d. None


of the above

(Ans: b)

9. ___________ of the agent is to act on behalf of principal is must

a. Consideration                      b. Rule                      c. Intention                      d.


None of the above

(Ans: c)

Other MCQ’s on Contract Act


10. What ever a person can do personally , he can do through an agent
exemption to this is

a. Marriage                      b. Doctor                      c. Advocate                      d. All


of the above

(Ans: d)

11. Agent is specifically appointed by the principal for a particular task or


a general function. This type of appointment is called as
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a. Ratification                      b. Express                      c. Implied                      d.
Necessity

(Ans: b)

12. Ratification of an Agent can be done for a

a. Part of the contract                      b. Whole Contract                      c. Both a &


b                      d.None of the above

(Ans: b)

13. Agency when it is ratified it must be communicated to the

a. Agent                      b. Principal                      c. Third Party                      d. All


of the above

(Ans: c)

14. Ratification can be done for the act which is done on behalf of

a. Agent                      b. Third party                      c. Principal                      d.


All of the above

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(Ans: c)

15. where it is assumed that the principal has authorized the person to
act as his agent this type of Agency is created by

A. Ratification                      b. Estoppel                      c. Implication                   


d. Express.

(Ans: c)

MCQs on Sale of Goods Act:


16. ______________ goods are a part of Future goods.

a. ascertained              b. unascertained            c. existing            d. Contingent


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(Ans: d)

17.______________________  goods are the goods the acquisition of which by


the seller may or may not happen.

a. ascertained            b. Contingent             c. existing            d. future

(Ans: b)

18. In a contract of sale, parties make certain statement which is called as

a. contract             b. agreement             c. promises            d. stipulations

(Ans: d)

19. In a contract of sale, parties make certain ____________ i.e., agree to


certain terms.

a. contract            b. agreement            c. stipulations            d. promises

(Ans: c)

MCQ’s on Condition and Warranty


20. Condition as to Title is an example of

a. Implied warranty            b. Express condition             c. implied condition      


d. Express warranty

(Ans: c)

21. Condition as to Quality or Fitness is an example of

a. Implied warranty             b. Express condition            c. Express warranty      


d. implied condition

(Ans: d)

22. Condition as to wholesome is an example of

a. Implied warranty            b. Express condition            c. implied condition      


d. Express warranty
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(Ans: c)

23. Condition as to Merchantable Quality is an example of

a. Implied warranty             b. Express condition            c. Express warranty      


d. implied condition

(Ans: d)

MCQ’s on Delivery of Goods


24. The goods are free from any charge or burden of 3rd party is an
example of

a. Implied warranty             b. Express condition            c. Express warranty      


d. implied condition

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(Ans: a)

25. Warranty of Quiet Possession is an example of

a. Implied warranty             b. Express condition             c. Express warranty      


d. implied condition

(Ans: a)

26. “It is not the seller’s duty to point out defects of his own goods.” This
concept is also known as

a. Unfair Trade Practices             b. Caveat Emptor            c. Buyer duty          


d. Buyer Kingdom

(Ans: b)

27. “The buyer must inspect the goods to find out if they will suit his
purpose” this concept is also known as

a. Caveat Emptor            b. Let the buyer beware            c. Caution buyer          
d. None of the above
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(Ans: d)

28. As per section 2(12), of the Sale of Goods Act, quality of goods
include

A. State of goods            B. Conditions of goods            C. Both (a) and (b)        
D. None of above

(Ans: c)

29. The term “goods” in the sale of goods means

(a) specific goods only              (b) ascertained goods only            (c)


ownership            (d) subject matter.

(Ans: d)

Other MCQ’s on SOG Act


30. Under section 2(6) of the Sale of Goods Act, 1930 ‘future goods’
means

(a) goods which are not yet in existence                        (b) unascertained


goods

(c) ascertained goods                                                          (d) specific goods

(Ans: a)

31. A stipulation in contract of sale with reference to goods which are the
subject there of may be

a. A condition             b. A warranty             c. Both (a) and (b)             d. None


of above

(Ans: c)

32. Transfer of actionable claim(s) is governed by

a. The Transfer of Property Act, 1882             b. The Sale of Goods Act, 1930

c. The Indian Contract Act, 1872                       d. all the above.


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(Ans: a)

1. when predefined rules are enforced or bind on people it is called as

a)Act     b) Law        c) Section        d) all of the above

Answer. b) Law

2. Contract Act deals under which branch of Law

a ) Commercial                b) International                             c) Cyber                  


d) None of the above

Answer. a ) Commercial

3. Which of the following is not a branch of Law

a ) Commercial               b) International                   c) Mercantile                  d)


Legal

Ans. d) Legal

4. A contract is a/an _________________ made between two or more parties


which the Law will enforce.

a ) Offer                     b) Transaction                  c) Agreement                  d)


none of the above

Answer. c) Agreement

5. All Contract is a/an ______________

a ) Offer                  b) Agreement                  c) Acceptance                  d)


Transaction

Ans. b) Agreement

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6. 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) Agreement

7. Every agreement and promise enforceable by law is ______________

a)Offer                  b) Contract                  c) Acceptance                  d)


Consideration

Answer. b) Contract

8. “A Contract is an agreement creating and defining obligations between the


parties” the definition was defined by

a)Dr. Ambedkar                  b) Pollock                  c) Salmonds                  d)


N.D.Kapoor

Ans. C) salmonds

9. A contract when both the parties have fulfilled their Obligations is called as
_____________________ contract

a)Valid                  b) executed                  c) Void                  d) Unilateral

(Ans: b) executed  )

10. An offer made to the whole world is called as __________________________

a)General Offer                  b) Special Offer                  c) Standing offer            


d) Implied offer

(Ans: a)

Set II
Here is a Set No. II of Indian Indian Contract Act 1872 Multiple choice
questions with answers.

11. ___________________ contract is made by spoken words


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a)implied                  b) Express                  c) void                   d) special

(Ans: b)

12. Where a contract is been understood by from the conduct of parties it is


__________________ contract

a)implied                  b) Express                  c) void                  d) special

(Ans: a)

13. The person who makes an offer is called ________________

a)seller                  b) offerer                  c) offeree                  d) Promisee

(Ans: b)

14. Contract = _____________________ + _________________________

a ) Agreement+ Offer                                    b ) Agreement + consideration

c ) Agreement + enforceable by law                  d ) None of the above

(Ans: c)

15. Agreement = ___________________ + _______________________

a ) Consideration + Offer                                     b ) Acceptance +


consideration

c ) Offer + Acceptance                                    d ) None of the above

(Ans: c)

16. The party who initiates the offer is called as

a ) Offeror                  b) offeree                  c) Acceptor                  d) First Party


(Ans: a)

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17. The person who accepts the offer is called as

a ) Offeror                   b) acceptee                   c) offeree                   d) None of


the above

(Ans: c)

18. The offer must be _____________

a ) Conditional                   b ) Temporary                  c) Definite                  d) all


of the above

(Ans: c)

19. Acceptance must be absolute and _________________

a ) Conditional                  b) prior                  c) Unconditional                   d) all


of the above

20. The acceptance must be communicated to the _______________ .

a ) Offeror                  b) acceptee                  c) offeree                   d) None of


the above

(Ans: a)

21. The acceptance must be communicated by the _______________ .

a ) Offeror                  b) acceptee                   c) offeree                  d) None of


the above

(Ans: c)

22. In business agreements people intend to enter in to ___________


relationship

a)Social                   b) Commerce                  c) Legal                   d) all of the


above

(Ans: c)

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23. A invited B for his sister marriage and B accepts to attend. This is an
example of ___________ Agreement

a ) Family                  b) Social                   c) Legal                  d) None of the


above

(Ans: b)
24. X invited Y for his marriage and Y accepts to attend. But Y did not go to
the function . In this case X can

a ) Sue Y                   b) Cannot sue                  c) Claim damages                  d)


Cancel the contract

(Ans: b)

25. The benefit move from one party to another in a contract is called as

a ) Income                  b) Consideration                   c) Transfer                   d)


None of the Above

(Ans: b)

Set III
Set III of MCQs on Indian Contract Act 1872:

1. The Consideration can be

a Present                                                 b Past                                    


c.  Future                                              d all of the above

Ans: d
2. The consideration must be ___________ and Lawful

a Money                              b Equal                                                     c
conditional                                         d Real

Ans. d

3. A Contract without any consideration is

a Illegal                  b legal                                          c Void                               


d Valid
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Ans. c

4. ______________ is not a part of Exemptions to contact without consideration is


void

a Love & affection                        b Charity                     c Time barred debt     


d Social agreements

Ans. d

5. A/an _____________ is not a capable person to enter into a Contract

a Agent                     b NRI                       c illiterate                                    d


Minor

Ans. d

6. The persons who are not capable to enter into a Contract does not include

a Minor            b Agent                                 c Drunken                                  d


Convict

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Ans. b

7. The contract entered with a minor is ________________ contact

a Void                              b Valid                 c illegal                              d Family

Ans. a

8. Free consent is the consent which is obtained Without

a Undue influence                       b Force               c fraud                       d all of


the above

Ans. d

9. The acceptance of offer may be made


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a by Words                 b by conduct                               c either a or b               
d neither a nor b

Ans. c

10. A specific offer is the one which is made

a by A to B                  b Father to his 4 sons                   c Teacher to his


students              d all a,b & c

Ans. d

11. An offer to sell his car in internet is ______________________ offer

a Specific                     b. Implied                  c. Expressed                        d. Not


an offer at all

Ans. c

12. The offer made to a group of persons is known as ____________ offer

a Specific                          b. Implied                      c. Standing                  d.


Special

Ans. a

13. To make a valid general offer , it is must for the offeree to be known to the
offeror at the time of making the offer.

a True                                 b Partly true                  c False                      d None


of the above

Ans. c

14. To make a valid specific offer , it is must for the offeree to be known to the
offeror at the time of making the offer.

a True                                    b Partly true                      c False                       


d None of the above

Ans. a

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15. The terms of offer must be intended to create legal relations

a True                           b Partly true                                     c False                   d


None of the above

Ans, a

16. Which of the following is not a part of valid offer

a. Intention to create legal relations                            b. Unconditional terms

c. Certainty of the terms                                             d. None of the above

Ans. b

16. When a person invites the other party to make an offer, he is said to make.

a Offer                                  b Proposal                      c Invitation to offer           


d Acceptance

Ans. c

17. A dress displayed in a showroom with price tag is an example of

a Offer                                      b Proposal                            c Invitation to offer 


d Acceptance

Ans. c

18. X offers to sell his horse to Y for rs.300000 Y says that he would buy if X
agrees to give the horse for 250000. This is an example of

a. Implied offer                     b. Express offer                 c. Specific offer             


d. Counter offer

Ans. d

19. The Specific offer can be accepted by

a. Any person                  b. Friend of the offeror                 c. Only the person
to whom it is made             d. Friend of offeree

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Ans. c

20. The general offer can be accepted by

a. Communication of acceptance                                    b. Complying with the


conditions of offer

c. Mental acceptance                                                      d. Making a counter


offer

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Ans. b

Set IV
Set IV of Indian Contract Act 1872 MCQs:

21. The acceptance can precede an offer.

a True                b Partly true                c False                d None of the above

Ans. c

22. The object of the contract should be legal moral and should not be
against

a Parties               b public Policy                 c Government                         d


contract

Ans. b

23. An agreement which is not enforceable by Law is called ______________


agreement

a Valid            b Void            c Legal             d special

Ans. b

24. Agreement by incompetent parties is called as _________________ agreement

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a Valid                    b Void                    c Legal                d special

Ans. b

25. Agreement in restrain of ____________________ is a void agreement

a. Trade                     b.Marriage                     c. Legal Proceedings             


d.all of the above

Ans. d

26. One party agrees to pay money on the happening of some uncertain
event in consideration of the other party’s promise to pay if the event does
not happen such agreements is called as _______________ agreement

a. Valid                  b.Wager                          c. Waiver             d. Special

Ans. c

27. A threatens to kill B if B does not enters into contact with A. So B enters in
the contract with A. Here the consent of B is obtained by_____________

a. Coercion                     b. Fraud                     c. Misrepresentation                   


d. Undue influence.

Ans. a

28. The agreement entered without free consent is called as ___________


contract

a. Valid                      b.Void                  c. Voidable                          d. Wager

Ans. c

29. When a Boss compels his employee to enter into a contract and obtain his
consent by using his authority it means the consent is obtained by

a. Coercion                  b. Fraud                  c. Misrepresentation                         


d. Undue influence.

Ans. d

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30. Offer to perform a contract is called as __________________

a. Attempted performance                      b. Caveat emptor                  c. Just in


rem                  d. just in personam

Ans. a

31. Which is not essential for a valid tender

a. Conditional                           b. Proper place                     c. Proper time         


d. Proper person

Ans. a

32. Attempted performance is also called as

a. Executed performance               b. Valid performance          c. Wager             


d.Tender

Ans. d

33. A agrees to marry B and B promises to bring back the life of dead mother
of A, the agreement is

a. Void                                          b. Valid                c. Illegal               d.


Voidable

Ans. a

34. If a new contract is substituted in place of an old contract it is called as

a. Alteration              b. Novation                c. Waiver                d. Rescission

Ans. b

35.  The original contract need not to be performed when there is a _________
of contact

A. Recission                 b. Novation               c. Alteration                d. All of the


above

Ans. d
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36. Which of the way of discharge of contract is not a part of discharge by
Mutual agreement

a. Novation              b. Wiaver                   c. Wager                       d. Remission

Ans : c

1. Meaning of contract

1. It an agreement

2. It an agreement enforceable by law

3. It is a promise enforceable by law

4. None of the above

2. The Indian Contract Act, 1872 is now applicable to

1. Whole India including Jammu & Kashmir and ladakh Union


Territory

2. Whole India except Jammu & Kashmir

3. Whole India Including Jammu & Kashmir

4. Whole India Including ladakh Union Territory

3. The Indian Contract Act was applicable from

1. 1 August 1872

2. 1 September 1872

3. 1 September 1871

4. 1 August 1871

4. Which section of the Act provides the name of the Act

1. Rule1

2. Section 1

3. Rule 2

4. Section 2

5. Contract means

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1. Promise + enforceability

2. Offer+ enforceability

3. Offer+enforceability + consideration

4. None of the above

6. Agreement means

1. Offer + acceptance

2. Proposal + consideration

3. agreement+ enforceability

4. None of the above

7. The first step of contract is


1. Offer

2. Agreement

3. Acceptance

4. None of the above

8. Term provided in any Act, can be used in

1. Same Act only

2. All Act

3. Some specific Act

4. None of the above

9. Ram made a contract with Shyam but they forgot to decide the
consideration, this will be considered as

1. An agreement

2. A Contract

3. An offer only

4. None of the above

10.Indian Contract Act 1872 is falls under category of

1. Mercantile Law

2. Civil Law

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3. Commercial Law

4. None of the above


Free MCQ for Business Law CA Foundation November 2020 Exams

Answer Key

1. (b) 2. (a) 3.(b) 4. (b) 5.(a) 6.(d) 7. (a) 8. (a) 9. (c) 10. (a)

1. Which the following strikes only at document and not


transactions?
A. The Transfer of Property Act, 1882
B. The Registration Act, 1908
C. both (A) and (B)
D. None of these
Ans. (B)
2. A stipulation in a bond for payment of compound interest
on failure to pay simple interest at the same rate as was
payable upon the principal is not a penalty within the
meaning of:
A. Section 74 of the Indian Contract Act, 1872
B. Section 75 of the Indian Contract Act, 1872
C. Section 76 of the Indian Contract Act, 1872
D. None of these
Ans. (A)
3. A sub-bailee is a person to whom the actual possession of
goods is transferred by someone:
A. who is not himself not an owner of goods
B. who has a present right to possession of them as bailee of the owner
C. both (A) and (B)
20
D. None of these
Ans. (C)
4. A successful plaintiff in an action for detenue, is,
therefore entitled to the return of the goods or recovery of
its value and damages for detention and is entitled to have
been assessed separately:
A. the value of the goods at the date of the assessment
B. damages sustained by him up to that date
C. both (A) and (B)
D. None of these
Ans. (C)
5. A supplies B, a lunatic, with necessaries suitable to his
condition in life.
A. A is entitled to be reimbursed from B’s property
B. A is not entitled to be reimbursed from B’s property
C. A is entitled to be given a share in B’s property
D. None of these
Ans. (A)
6. A supplies the wife and children of B, a lunatic, with
necessaries suitable to their condition in life.
A. A is entitled to be reimbursed from B’s property
B. A is not entitled to be reimbursed from B’s property
C. A is entitled to be given a share in B’s property
D. None of these
Ans. (A)
7. A supports B’s infant son. B promise to pay A’s expenses
in so doing.
A. This is not a contract
B. This is a contract
C. either (A) or (B)
D. None of these
Ans. (B)
8. A surety is discharged if the creditor, without consent,
unconditionally releases the principal-debtor; the reason
for this principle being that:
A. The release extinguishes the principal obligation
B. Such release adversely affects the right of the surety to sue the
principal-debtor and deprives the surety of his right to compel the
debtor to perform his own obligation to the creditor
21
C. both (A) and (B)
D. None of these
Ans. (C)
9. A transaction by which A promised to pay B and C for
consideration during their joint lives and after the death of
one of them, to the survivor, the consideration moved from
B but the agreement was signed by all three, i.e., A, B and C.
A. There was privity between A and B but not with C
B. There was privity between A and C but not with B
C. There was privity between A on one side and B and C on the other
D. None of these
Ans. (C)
10. A undertakes to deliver a thousand maunds of jute to B
on a fixed day Applying Section 47, Indian Contract Act:
A. A need not apply to B to appoint a reasonable place for the purpose
of receiving it, and must deliver it to him at such place
B. A must apply to B to appoint a reasonable place for the purpose of
receiving it, and can choose to later change the place
C. A must apply to B to appoint a reasonable place for the purpose of
receiving it, and must deliver it to him at such place
D. None of these
Ans. (C)
11. A undertakes to repay B a loan of Rs.1,000 by five equal
monthly instalments with a stipulation that, in default of
payment of any instalment, the whole shall become due.
A. This stipulation is by way of penalty, and the contract cannot be
enforced according to its terms
B. This stipulation is not by way of penalty, and the contract cannot be
enforced according to its terms
C. This stipulation is not by way of penalty, and the contract may be
enforced according to its terms
D. None of these
Ans. (C)
12. A, a builder, contracts to erect and finish a house by the
first of January, in order that B may give possession of it at
that time to C, to whom B has contracted to let it. A is
informed of the contract between B and C. A builds
the house so badly that, before the first of January, it falls
down and has to be rebuilt by B, who in consequence, loses
22
the rent which he was to have received from C, and is
obliged to make compensation to C for the breach of his
contract.
A. A must make compensation to B for the cost of rebuilding the house
B. A must make compensation to B for the rent lost
C. A must make compensation to B for the compensation made to C
D. All of them
Ans. (D)
13. A, a decree-holder, and entitled to execution of B’s
goods, requires the officer of the court to seize certain
goods, representing them to be the goods of B. The officer
seizes the goods, and issues by C, the true owner of the
goods.
A. A is not liable to indemnify the officer for the sum which he is
compelled to pay to C, in consequence of obeying A’s directions
B. A is partially liable to indemnify the officer for the sum which he is
compelled to pay to C, in consequence of obeying A’s directions
C. A is liable to indemnify the officer for the sum which he is
compelled to pay to C, in consequence of obeying A’s directions
D. None of these
Ans. (C)
14. A, a man enfeebled by disease or age, is induced, by B’s
influence over him as his medical attendant, to agree to pay
B an unreasonable sum for his professional services.
A. B did not employs undue influence
B. B employs undue influence
C. either (A) or (B)
D. None of these
Ans. (B)
15. A, a merchant in Calcutta, has an agent, B, in London to
whom a sum of money is paid on A’s account, with orders to
remit. B retains the money for considerable time. A, in
consequence of not receiving the money, becomes insolvent.
A. B is not liable for the money and interest, from the day on which it
ought to have been paid, according to the usual rate
B. B is liable for any further direct loss – as e.g. by variation of rate of
exchange
C. B is liable for the money and interest, from the day on which it
ought to have been paid, according to the usual rate, and for any
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further direct loss – as e.g. by variation of rate of exchange – but not
further
D. None of these
Ans. (C)
16. A, a merchant in England, directs B, his agent or
Bombay, who accepts the agency, to send him 100 bales of
cotton by a certain ship. B, having it in his power to send the
cotton, omits to do so. The ship arrives safely in England.
Soon after her arrival, the price of cotton rises.
A. B is not bound to make good to A profit which he might have made
by 100 bales of cotton at the time the ship arrived
B. B is bound to make good to A any profit he might have made by the
subsequent rise
C. B is bound to make good to A profit which he might have made by
100 bales of cotton at the time the ship arrived. But not any profit he
might have made by the subsequent rise
d. None of these
Ans. (C)
17. A, a money-lender advances Rs.100/- to B, an
agriculturist, and by undue influence, induces B to execute a
bond for Rs.200/- with interest at 6 per cent per month.
A. The Court will not set the bond aside and not take any legal action
against B
B. The Court may set the bond aside, ordering B to repay the Rs. 100/-
with such as may seem just
C. either (A) or (B)
d. None of these
Ans. (B)
18. A, a ship-owner, contracts with b to convey him from
Calcutta to Sydney in A’s ship, sailing on the first of January,
and B pays to A, by way deposit, one-half of his passage
money. The ship does not sail on the first of January and B,
after being, in consequence, detained in Calcutta for some
time, and thereby put to some expense, proceeds to Sydney
in another vessel, and, in consequence, arriving too late in
Sydney, loses a sum of money.
A. A is liable to repay to B his deposit, with interest and the expense to
which he is put by his detention in Calcutta, and the excess, if any, of

24
the passage-money paid for the second ship over that agreed upon the
first
B. A is liable to repay to B his deposit, with interest and the expense to
which he is put by his detention in Calcutta, and the excess, if any, of
the sum of money which B lost by arriving in Sydney too late
C. A is liable to repay to B his deposit, with interest and the excess, if
any, of the passage-money paid for the second ship over that agreed
upon the first, but not the sum of money which B lost by arriving in
Sydney too late
D. None of these
Ans. (A)
19. A, a signer, contracts with B, the manager of a theatre for
two nights in every week during the next two months, and B
engages to pay her a hundred rupees for each night’s
performance. On the sixth night, A willfully absents herself
from the theatre, and B, in consequence rescinds the
contract.
A. B must pay A for the three nights on which she had sung
B. B must pay A for the four nights on which she had sung
C. B must pay A for the five nights on which she had sung
d. None of these
Ans. (C)
20. A, a singer, contracts with B, the manager of a theatre, to
sing at his theatre for two nights in every week during the
next two months, and B engages to pay her 100 rupees for
each night’s performance. On the sixth night, A wilfully
absents herself from the theatre, and B, in consequence,
rescinds the contract.
A. B is not entitled to claim compensation the damage which he has
sustained through the non-fulfilment of the contract
B. B is entitled to claim compensation the damage which he has
sustained through the non-fulfilment of the contract
C. A is entitled to claim compensation the damage which she has
sustained due to the rescinding of the contract by B.
D. None of these
Ans. (B)
21. A, a singer, enters into a contract with B, the manager of
a theatre, to sing at his theatre two nights in every week
during the next two months, and B engages to pay her 100
25
rupees for each night’s performance. On the sixth night A
willfully absent herself from the theatre.
A. B is at liberty to put an end to the contract
B. B cannot put an end to the contract
C. either (A) or (B)
D. None of these
Ans. (A)
22. A, a singer, enters into a contract with B, the manager of
a theatre, to sing at his theatre two nights in every week
during the next two months, and B engages to pay her at the
rate of 100 rupees for each night. On the sixth night A
wilfully absents herself. With the assent of B, A sings on the
seventh night.
A. B has signified his acquiescence in the continuance of the contract,
and cannot now put an end to it, but is entitled to compensation for
the damage sustained by him through A’s failure to sing on the sixth
night
B. B has signified his acquiescence in the continuance of the contract,
and but can still put an end to it, but is entitled to compensation for
the damage sustained by him through A’s failure to sing on the sixth
night
C. B has signified his acquiescence in the continuance of the contract,
and cannot now put an end to it, but is not entitled to compensation
for the damage sustained by him through A’s failure to sing on the
sixth night
D. None of these
Ans. (A)
23. A, a tradesman, leaves goods at B’s house by mistake. B
treats the goods as his own.
A. He is not bound to pay A for them
B. He is bound to pay partially A for them
C. He is bound to pay A for them
D. None of these
Ans. (C)
24. A, an agent engaged in carrying on for B a business,
in which it is the custom to invest from time-to-time, at
interest, the moneys which may be in hand, omits to make
such investments.

26
A. A need not make good to B the interest usually obtained by such
investments
B. A can partially make good to B the interest usually obtained by such
investments
C. A must make good to B the interest usually obtained by such
investments
D. None of these
Ans. (C)
25. A, an agent for the sale of goods, having authority to sell
on credit, sells to B on credit, without making the proper
and usual inquires as to the solvency of B. B at the time of
such sale is insolvent.
A. A need not make compensation to his principal in respect of any
loss thereby sustained
B. A can partially make compensation to his principal in respect of any
loss thereby sustained
C. A must make compensation to his principal in respect of any loss
thereby sustained
D. None of these
Ans. (C)
26. A, an insurance broker, employed by B to effect an
insurance on a ship, omits to see that usual clauses are
inserted in the policy. The ship is afterwards lost. In
consequence of the omission of the clauses nothing can be
recovered from the underwriters.
A. A is not bound to make good the loss to B
B. A is bound to partially make good the loss to B
C. A is bound to make good the loss to B
D. None of these
Ans. (C)
27. A, as surety for B, makes a bond jointly with B to C, to
secure a loan from C to B. Afterwards, C obtains from B a
further security for the same debt. Subsequently, C gives up
the further security.
A. A is partly discharged
B. A is discharged
C. A is not discharged
D. None of these
Ans. (C)
27
28. A, at Madras, by letter directs B to sell for him some
cotton lying in a warehouse in Bombay, and afterwards, by
letter revokes his authority to sell, and directs, B to send,
the cotton to Madras, B, after receiving the second-letter,
enters into a contract with C, who known of the first letter,
but not of the second for the sale to him of the cotton. C pays
B the money, with which B absconds.
A. C’s payment is not good as against A
B. C’s payment is good as against A
C. either (A) or (B)
D. None of these
Ans. (B)
29. A owns a shop in Serampur, living himself in Calcutta,
and visiting the shop occasionally. The shop is managed by
B, and he is in the habit of ordering goods from C in the
name of A for the purposes of the shop, and of paying for
them out of A’s funds without A’s knowledge.
A. B has no implied authority from A to order goods from C in the
name of A for the purposes of the shop
B. B has an implied authority from A to order goods from C in the
name of A for his own purposes
C. B has an implied authority from A to order goods from C in the
name of A for the purposes of the shop
D. None of these
Ans: C
30. A contracts to indemnify B against the consequences of
any proceedings which C may take against B in respect of a
certain sum of 200 rupees.
A. This is contract of indemnity
B. This is not a valid contract of indemnity
C. This is contract of stipulation
D. None of these
Ans: A
31. A contracts to marry B, being already married to C, and
being forbidden by the law to which he is subject to practice
polygamy. This causes loss to B
A. A need not make compensation to B for the non-performance of his
promise

28
B. A must make compensation to B for the non-performance of his
promise
C. Either (A) or (B)
D. None of these
Ans: B
32. A contracts to pay B a sum of money when B marries C. C
dies without being married to B.
A. The contract still can be forced
B. The contract becomes void
C. Either (A) or (B)
D. None of these
Ans: B
33. A contracts to sell and deliver 50 maunds of saltpetre to
B, at a certain price to be paid on delivery. A breaks his
promise.
A. B is not entitled to receive from A, by way of compensation, the
sum, if any, by which the contract price falls short of the price for
which B might have obtained 50 maunds of saltpetre of like quality at
the time when the saltpetre ought to have been delivered
B. B is entitled to receive from A, by way of compensation, the sum, if
any, by which the contract price does not fall short of the price for
which B might have obtained 50 maunds of saltpetre of like quality at
the time when the saltpetre ought to have been delivered
C. B is entitled to receive from A, by way of compensation, the sum, if
any, by which the contract price falls short of the price for which B
might have obtained 50 maunds of saltpetre of like quality at the time
when the saltpetre ought to have been delivered
D. None of these
Ans: C
34. A contracts to sell and deliver to B, on the first of
January, certain cloth which B intends to manufacture into
caps of a particular kind, for which there is not demand,
except at that season. The cloth is not delivered till after the
appointed time, and too late to be used that year in making
the caps.
A. B is entitled to receive from A, by way of compensation, the
difference between the contract price of the cloth and its market price
at the time of delivery

29
B. B is entitled to receive from A, by way of compensation, the
difference between the contract price of the cloth and the profits
which he expected to obtain by making caps
C. B is entitled to receive from A, by way of compensation, the
difference between the contract price of the cloth and the expenses
which he has been put to in making preparation for the manufacture
D. None of these
Ans: A
35. A contracts to take in cargo for B at a foreign port. A’s
Government afterwards declares war against the country in
which the port is situated.
A. The contract cannot become void when war is declared
B. The contract becomes partly void when war is declared
C. The contract becomes void when war is declared
D. None of these
Ans: C
36. A contracts with B that, if A practices as a surgeon within
Calcutta, he will pay B Rs. 5,000. A practices as a surgeon in
Calcutta.
A. B is entitled to such compensation, not exceeding Rs. 3,000 as the
Court considers reasonable
B. B is entitled to such compensation, not exceeding Rs. 4,000 as the
Court considers reasonable
C. B is entitled to such compensation, not exceeding Rs. 5,000 as the
Court considers reasonable
D. None of these
Ans: C
37. A contracts with B to deliver to him, at a specified price,
certain merchandise on board a ship which cannot arrive
for a month, and B engages to pay for the merchandise
within a week from the date of the contract. B does not pay
within a week.
A. A’s promise to deliver and need not be performed
B. A’s promise to deliver and needs to be performed
C. B must make compensation
D. Both (A) and (C)
Ans: D
38. A contracts with B to grow a crop of indigo on A’s land
and to deliver it to B at a fixed rate, and C guarantees A’s
30
performance of this contract. B diverts a stream of water
which is necessary for irrigation of A’s land, and thereby
prevents him from raising the indigo.
A. A is liable on his guarantee
B. A is partly liable on his guarantee
C. A is no longer liable on his guarantee
D. None of these
Ans: C
39. A contracts with B to repair B’s house. B neglects or
refuses to point out to A the places in which his house
requires repair.
A. A is excused for the non-performance of the contract if it is caused
by such neglect or refusal
B. A cannot be excused for the non-performance of the contract even if
it is caused by such neglect or refusal
C. B is excused for his negligence or refusal to point out to A the places
in which his house requires repair
D. None of these
Ans: A
40. A delivers a rough diamond to B, a jeweller, to be cut
and polished, which is accordingly done.
A. B is not entitled to retain the stone till he is paid for the services he
has rendered
B. B is entitled to retain the stone till he is not paid for the services he
has rendered
C. B is entitled to retain the stone till he is paid for the services he has
rendered
D. None of these
Ans: C
41. A desires B, who owes him Rs. 100, to send him a note
for Rs. 100 by post.
A. The debt is discharged only when A receives the due amount
B. The debt is discharged as soon as B puts into the post a letter
containing the note duly addressed to A
C. Either (A) or (B)
D. None of these
Ans: B

31
42. A directs B to sell A’s estate. B boys the estate for himself
in the name of C. A, on discovering that B has bought the
estate for himself, may repudiate the sale:
A. If he can show that B has dishonestly concealed any material fact
B. If he can show that the sale has been disadvantageous to him
C. Either (A) or (B)
D. None of these
Ans: C
43. A directs B, his agent, to buy a certain house for him. . B
tells A it cannot be bought, and buys the house for himself.
A. A cannot, on discovering that B has bought the house, compel him
to sell it to A at the price he gave for it
B. A can, on discovering that B has bought the house, file a suit against
him
C. A may, on discovering that B has bought the house, compel him to
sell it to A at the price he gave for it
D. None of these
Ans: C
44. A directs B, his solicitor, to sell his estate by auction, and
so employ an auctioneer for the purpose. B names C, an
auctioneer, to conduct the sale.
A. C is a sub-agent, and A’s sub-agent for the conduct of the sale
B. C is not a sub-agent, but B’s agent for the conduct of the sale
C. C is not a sub-agent, but A’s agent for the conduct of the sale
D. None of these
Ans: C
45. A employs B to beat C, and agrees to indemnify him
against all consequence of the act. B thereupon beats C, and
to pay damages to C for so doing.
A. A is liable to indemnify B for those damages
B. A is partially liable to indemnify B for those damages
C. A is not liable to indemnify B for those damages
D. None of these
Ans: C
46. A employs B to recover 100,000 rupees from C, and to
lay it out on good security. B recovers 1,00,000 rupees and
lays out 90,000 rupees on good security, but lays out 10,000
rupees, on security which he ought to have known to be bad,
whereby A loses 2,000 rupees.
32
A. B is not entitled to remuneration for recovering the 1,00,000
rupees and for investing the 90,000 rupees. He is entitled to any
remuneration for investing the 10,000 rupees, and he must make
good the 2,000 rupees to B
B. B is entitled to remuneration for recovering the 1,00,000 rupees
and not for investing the 90,000 rupees. He is entitled to any
remuneration for investing the 10,000 rupees, and he must make
good the 2,000 rupees to B
C. B is entitled to remuneration for recovering the 1,00,000 rupees
and for investing the 90,000 rupees. He is not entitled to any
remuneration for investing the 10,000 rupees, and he must make
good the 2,000 rupees to B
D. None of these
Ans: C
47. A engages B as clerk to collect money for him. B fails to
account for some of his receipts, and A in consequence calls
upon him to furnish security for his duly accounting. A does
not acquaint C with B’s previous conduct. B afterwards
makes default.
A. The guarantee is not invalid
B. The guarantee is partly invalid
C. The guarantee is invalid
D. None of these
Ans: C
48. A entrusts B with negotiable instrument endorsed in
blank. B sells them to C in violation of private orders from
A.
A. The sale is not good
B. The sale is partly good
C. The sale is good
D. None of these
Ans: C
49. A fraudulently inform B that A’s estate is free from
encumbrance. B thereupon buys the estate. The estate is
subject to a mortgage.
A. B may avoid the contract
B. B may insist on its being carried out, and the mortgage- debt
redeemed
C. Either (A) or (B)
33
D. None of these
Ans: C
50. A gives a recognizance binding him in a penalty of Rs.
500 to appear in Court on a certain day. He forfeits his
recognizance.
A. He is not liable to pay the penalty
B. He is liable to partially pay the penalty
C. He is liable to pay the whole penalty
D. None of these
Ans: C
51. A gives B a bond for the repayment of Rs. 1,000 with
interest at 12 percent at the end of six months, with a
stipulation that, in case of default, interest shall be payable
at the rate of 75 percent from the date of default. This is a
stipulation by way of penalty.
A. B is only entitled to recover from A such compensation as the Court
considers reasonable
B. B is only entitled to recover from A such compensation he considers
reasonable
C. B is not entitled to recover from A such compensation
D. None of these
Ans: A
52. A gives to C a continuing guarantee to the extent of 3,000
rupees for any oil supplied by C to B on credit. Afterwards B
becomes embarrassed, and, without the knowledge of A, B
and C contract that C shall continue to supply B with oil for
ready money, and that the payments shall be applied to the
then, existing debts between B and C.
A. A is liable on his guarantee for any goods supplied after this new
arrangement
B. A is not liable on his guarantee for any goods supplied after this
new arrangement
C. A is partly liable on his guarantee for any goods supplied after this
new arrangement
D. None of these
Ans: B
53. A guarantees C against the misconduct of B in an office
to which B is appointed by C, and of which the duties are
defined by an Act of the Legislature. By a subsequent Act the
34
nature of the office is materially altered. Afterwards, B
misconduct’s himself.
A. A is not discharged by the change from future liability under the
guarantee, though the misconduct of B is in respect of a duty not
affected by the later Act
B. A is discharged by the change from future liability under the
guarantee, though the misconduct of B is in respect of a duty affected
by the later Act
C. A is discharged by the change from future liability under the
guarantee, though the misconduct of B is in respect of a duty not
affected by the later Act
D. None of these
Ans: C
54. A guarantees payment to B, a tea-dealer, to the amount
of Rs. 100, for any tea he may from time to time supply to C.
B supplies C with tea to above the value of Rs. 100, and C
pays B for it. Afterward B supplies C with tea to the value of
Rs. 200. C fails to pay.
A. The guarantee given by A was not a continuing guarantee, and he is
not accordingly liable to b to the extent of Rs. 100
B. The guarantee given by A was a continuing guarantee, and he is
also liable to B to the extent of Rs. 200
C. The guarantee given by A was a continuing guarantee, and he is
accordingly liable to B to the extent of Rs. 100
D. None of these
Ans: C
55. A guarantees to B, the extent of 10,000 rupees, that C
shall pay all the bills that B shall draw upon him. B draws
upon C, C accepts the bill. A gives notice of revocation. C
dishonors the bill at maturity.
A. A is liable upon his guarantee
B. A is not liable upon his guarantee
C. A is partly liable upon his guarantee
D. None of these
Ans: A
56. A guarantees to C, to the extent of 2,000 rupees,
payment for rice to be supplied by C to B. C supplies to B rice
to a less amount than 2,000 rupees but obtains from A

35
payments of the sum of 2,000 rupees in respect of the rice
supplied.
A. A can recover from B more than the price of the rice actually
supplied
B. A can recover from B only the price of the rice actually supplied
C. A cannot recover from B more than the price of the rice actually
supplied
D. None of these
Ans: C
57. A having advanced money to his son, B, during his
minority, upon B’s coming of age obtains, by misue of
parental influence, a bond from B for a greater amount than
the sum due in respect of the advance.
A. A did not employ undue influence
B. A employs undue influence
C. Either (A) or (B)
D. None of these
Ans: B
58. A hires a horse in Calcutta from B expressly to march to
Benaras. A rides with due care, but marches to Cuttack
instead. The horse accidentally falls and is injured.
A. A is not liable to make compensation to B for the injury to the horse
B. A is partially liable to make compensation to B for the injury to the
horse
C. A is liable to make compensation to B for the injury to the horse
D. None of these
Ans: C
59. A hires B’s ship to take in and convey, from Calcutta to
the Mauritius, a cargo to be provided by A, B receiving a
certain freight for its conveyance. A does not provide any
cargo for the ship.
A. A cannot claim the performance of B’s promise
B. A must make compensation to B for the loss which B sustains by
the non-performance of the contract
C. Either (A) or (B)
D. Both (A) and (B)
Ans: D
60. A is employed by B by buy from C certain goods, of
which C is the apparent owner, and buys them accordingly.
36
In the course of the treaty for the sale. A learns that the
goods really belonged to D, but B is ignorant of that fact.
A. B is entitled to set-off a debt owning to him from C against the price
of the goods
B. B is partially entitled to set-off a debt owning to him from C against
the price of the goods
C. B is not entitled to set-off a debt owning to him from C against the
price of the goods
D. None of these
Ans: C
61. A is employed by B, residing in London, to recover at
Bombay a debt due to B.
A. A may adopt any illegal process necessary for the purpose of
recovering the debt, and may give a valid discharge for the same
B. A may not adopt any legal process necessary for the purpose of
recovering the debt, and may give a valid discharge for the same
C. A may adopt any legal process necessary for the purpose of
recovering the debt, and may give a valid discharge for the same
D. None of these
Ans: C
62. A leaves a cow in the custody of B to be taken care of. The
cow has a calf.
A. B is not bound to deliver the calf but the cow to A
B. B is bound to deliver the calf but not the cow to A
C. B is bound to deliver the calf as well as the cow to A
D. None of these
Ans: C
63. A lends a horse, which he knows to be vicious, to B. He
does not disclose the fact that the horse is vicious. The horse
runs away. B is thrown and injured.
A. A is not responsible to B for damage sustained
B. A is partly responsible to B for damage sustained
C. A is responsible to B for damage sustained
D. None of these
Ans: C
64. A makes a contract with B to buy B’s horse if A survives
C.
A. This contract cannot be enforced by law unless and until A dies in
C’s lifetime
37
B. This contract cannot be enforced by law unless and until C dies in
A’s lifetime
C. This contract can be enforced by law during C and A’s lifetime
D. None of these
Ans: B
65. A owes B 1,000 rupees under a contract. B owes B 1,000
rupees. B order A to credit C with 1,000 rupees in his books,
but C does not assent to the arrangement.
A. B does not owes C 1,000 rupees, as new contract has been entered
into
B. B still owes C 1,000 rupees, even though a new contract has been
entered into
C. B still owes C 1,000 rupees, and no new contract has been entered
into
D. None of these
Ans: C
66. A owes B 2,000 rupees, B accepts some of A’s goods in
reduction of the debt.
A. The delivery of the goods operates as a part payment
B. The delivery of the goods does not amount to part payment
C. Either (A) or (B)
D. None of these
Ans: A
67. A owes B 5,000 rupees. C pays to B 1,000 rupees and B
accepts them, in satisfaction of his claim on A.
A. This payment is a partial discharge of the whole claim
B. This payment is not a discharge of the whole claim
C. This payment is a discharge of the whole claim
D. None of these
Ans: C
68. A owes B, among other debts, 1,000 rupees upon a
promissory note, which falls due on the first June. He owes
B no other debt of that amount. On the first June A pays to B
1,000 rupees.
A. The payment is to be applied equally to all the debts owed by A
B. The payment is to be applied to the discharge of the promissory
note
C. Either (A) or (B)
D. Both (A) and (B)
38
Ans: B
69. A owes money to B under a contract. The old debt of A to
B is at an end. It is agreed between A, B and C, that B shall
thenceforth accept C as his debtor instead of A.
A. New debt from C to B has been contracted
B. New debt from A to C has been contracted
C. Either (A) or (B)
D. None of these
Ans: A
70. Section 75 of the Indian Contract Act, 1872 must be read
as supplementary to _____________
I. Section 39 of the Indian Contract Act, 1872
II. Section 53 of the Indian Contract Act, 1872
III. Section 55 of the Indian Contract Act, 1872
IV. Section 64 of the Indian Contract Act, 1872
V. Section 65 of the Indian Contract Act, 1872
A. II, III, IV
B. IV, V
C. I, V
D. All of them
Ans. (D)
71. Severance can be effected when the part severed can be
removed by running a through it.
A. blue pencil
B. white pencil
C. black pencil
D. None of these
Ans. (A)
72. Since a contract is concluded by the mere acceptance of
an offer, the terms of the intended or proposed agreement
must be indicated with sufficient definiteness in the offer
itself. The terms of the offer must therefore be definite and
certain. Which of the following cases held that the proposal
must be sufficiently definite to permit the conclusion of the
contract by mere acceptance?
A. Coffee Board Bangalore v. Janab Dada Haji Ibrahim Halari
B. Gorakh Nand Yadav v. District Magistrate, Gorakhpur
C. Sanwarmal Goenka v. Soumyendra Chandra Gooptu
D. Nandganj Sihori Sugar Co. Ltd., v. Badri Nath Dixit
39
Ans. (A)
73. Subject to a contract between the partners, the firm shall
indemnify a partner in respect to payments made and
liabilities incurred by him:
A. in the ordinary and proper conduct of the business
B. in doing such act, in an emergency, for the purpose of protecting
the firm from loss, as would be done by a person of ordinary
prudence, in his own case, under similar circumstances
C. both (A) and (B)
D. None of these
Ans. (C)
74. Sub-section 1 of Section 16 of Indian Contract Act, 1872
requires the Court trying a case to consider which of the
following?
A. Are the relations between the donor and the done such that the
done is in a position to dominate the will of the donor?
B. Has the done use that position to obtain an unfair advantage over
the donor?
C. either (A) or (B)
D. both (A) and (B)
Ans. (D)
75. Sub-section of which of the following Section of the
Indian Contract Act, 1872 shall not affect the provisions of
section 111 of the Indian Evidence Act, 1872 (1 of 1872)?
A. Section 7
B. Section 16
C. Section 20
D. None of these
Ans. (B)
76. Suit by bailor or bailee against wrong-doer is dealt under
which of the following in the Indian Contract Act, 1872?
A. Section 176
B. Section 179
C. Section 180
D. Section 178
Ans. (C)
77. Termination of an agency with public authority or a
public body may attract judicial intervention in writ
petition:
40
A. If the termination be unreasonable
B. If the termination be arbitrary
C. If the termination be unconscionable
D. All of them
Ans. (D)
78. Terms of contract relate to statements, assertions, or
representations contained in a written contract which relate
to the subject matter of the contract and:
A. to something to be done
B. to something not be done under the contract
C. has no application to a provision in the nature of a condition
precedent to the very existence or formation of a contract
D. All of them
Ans. (D)
79. The acts or omission contemplated by S. 134 of the
Indian Contract Act, 1872, may be those referred to in of the
Indian Contract Act:
I. Section 39
II. Section 53
III. Section 54
IV. Section 55
V. Section 63
VI. Section 67
A. II, III, IV
B. IV, V
C. I, VI
D. All of them
Ans. (D)
80. The agency extends to receiving notice on behalf of his
principal of whatever is material to be stated in the course
of the proceedings. For this rule to operate:
I. the agent must be under a duty to communicate
II. the information must be material
III. it must have been obtained in the course of business for which the
agent has been engaged
IV. the agent is not privy to a fraud on the principal
A. I, II
B. II, IV
C. Ill, IV
41
D. All of them
Ans. (D)
81. The agency type described in S. 202 of the Indian
Contract Act, 1872:
A. cannot be revoked by the principal
B. it cannot be terminated by the death, unsoundness of mind or
insolvency of the principal
C. either (A) or (B)
D. None of these
Ans. (C)
82. The agent may be disentitled to relief under S. 226 of the
Indian Contract Act, 1872:
A. If the injury was due to his own contributory negligence
B. If the injury is on the ground of common employment
C. either (A) or (B)
D. None of these
Ans. (C)
83. The application of the principles in Section 45 of the
Indian Contract Act, 1872 may be excluded by statutes,
especially those relating to securities, which provides that:
A. securities payable to one or more persons jointly shall, on death of
any of them, be payable to the survivor or survivors
B. securities payable to one or more persons severally, shall be payable
on death of any of them to any of the survivors or the legal
representative(s) of the deceased holder
C. any one or more joint holder can give effectual receipt for interest,
unless notice is given by the other holders to the promisor
D. all of them
Ans. (D)
84. The article of Fuller and Perdue on “The Reliance
Interest in Contract Damages” adopted the method of
viewing the remedies for breach of contract in terms of the
interests which the remedies served to protect. Which of the
following interests were identified by them?
A. The expectation interest
B. The reliance interest
C. The restitution interest
D. All of them
Ans. (D)
42
85. The award of damage involves a detailed investigation of
facts:
A. is not normally an appropriate matter for a writ petition under
Article 30 or Article 225 of the Constitution, but it might be exercised
in extraordinary circumstances, rarely and sparingly, when no
disputed questions of facts arose
B. is not normally an appropriate matter for a writ petition under
Article 32 or Article 226 of the Constitution, but it might be exercised
in extraordinary circumstances, rarely and sparingly, when no
disputed questions of facts arose
C. is not normally an appropriate matter for a writ petition under
Article 33 or Article 227 of the Constitution, but it might be exercised
in extraordinary circumstances, rarely and sparingly, when no
disputed questions of facts arose
D. None of these
Ans. (B)
86. The balance to the provisions of Section 11 of the Indian
Contract Act, 1872 is found in:
A. Section 66 of the Indian Contract Act, 1872
B. Section 67 of the Indian Contract Act, 1872
C. Section 68 of the Indian Contract Act, 1872
D. None of these
Ans. (C)
87. The branches Section 30 of the Indian Contract Act, 1872
declares:
A. Agreement of wager void
B. Prevents the winner from bringing an action to recover amount
won (even under a substituted contract)
C. Prevents the winner from suing the stakeholder
D. All of them
Ans. (D)
88. The basis of relief on the ground of economic duress is
not clear from the judgment in case of Dai-ichi Karkaria Pvt.
Ltd. v. Oil Natural Gas Commission because:
A. the decision has been given in proceedings seeking interim
injunction, where the Court has to decide whether interim injunction
ought to be issued. The decision can be sustained solely on the
equitable principles on which the Court may refuse to grant injunction

43
B. the Court has discussed the effect of economic duress as a ground of
invalidating a contract on the basis of a prima facie case in
interlocutory proceedings
C. the effect of such duress on the contract, i.e. whether it is voidable
for lack of free consent, or is void being against public policy is not
clear from the judgment
D. All of them
Ans. (D)
89. The capacity of a woman to contract is not affected by
her marriage under which of the following?
A. The Hindu Law
B. The Mohammedan Law
C. both (A) and (B)
D. None of these
Ans. (C)
90. The cases in which power under Article 226 or 14 of the
Constitution can be exercised for breaches of alleged
obligations of the state, or its agents, can be divided which
of the following types?
I. Where a petitioner makes a grievance of breach of promise on the
part of the state in cases where on assurance or promises made by the
state, he has acted to his prejudice and predicament, but the
agreement is short of a contract within the meaning of Article 299 of
the Constitution.
II. Where the contract entered into between the person aggrieved and
the state is in exercise of a statutory power under certain Acts or rules
framed there under and the petitioner alleges a breach on the part of
the state.
III. Where the contract entered into heaven between the state and the
person aggrieved is non-statutory and purely contractual and the
rights and liabilities of the parties are governed by the terms of the
contract and the petitioner complains about breach of such contract
by the State.
IV. Where the contract entered into between the State and the person
aggrieved is non statutory and purely contractual, but such a contract
has been cancelled on a ground de hors any of the terms of the
contract, and which is per se violative of Article 14 of the Constitution.
A. I, III
B. II, IV
44
C. II, III, IV
D. All of them
Ans. (D)
91. The circumstances in which the creditor must make
disclosure to the proposed surety are:
I. Where the surety has asked specific questions to the creditor
II. Where the bank misleads the surety by volunteering only part of
the truth
III. Where the surety makes a statement in the creditor’s presence that
demonstrates that he entirely misunderstands the principal-debtor’s
position
IV. Where there is anything that might not naturally be expected to
take place between the principal-debtor and the creditor
A. II, III
B. I, IV
C. I, II
D. All of them
Ans. (D)
92. The conditions which entitle an agent to exceed his
authority under the doctrine of necessity are:
A. That he could not communicate with his principal
B. That the course he took was necessary in the sense that it was in the
circumstances the only reasonable and prudent course to take
C. That he acted bona fide in the interest of the parties concerned
D. All of them
Ans. (D)
93. The consideration for a family arrangement may be
preservation of family property, preservation of peace and
honour of the family or the avoidance of litigation; or
avoiding the possibility of a future dispute. In which of the
following cases it was held?
A. Sundar Sahu Gountia v. Chamra Sahu Gauntia
B. Dwarampudi Nagaratnamba v. Kunuku Ramayya
C. Balbhaddar Prasad v. Dhanpat DayaI
D. None of these
Ans. (A)
94. The creditor may file a suit at his option only against the
surety. In which of the following cases it was upheld?
A. K. C. Skaria v. The Government of State of Kerala
45
B. Purabi Dasgupta v. A run Kumar
C. Infrastructure Leasing and Financial Services Ltd. v. Vijay V.
Prabhu
D. None of these
Ans. (C)
95. The decisions of the expert or technical or commercial
committees in scrutinizing the tenders under Section 10 of
the Indian Contract Act, 1872 will not be interfered unless:
A. the decision is taken with a mala fide intention
B. the decision is arbitrary
C. either (A) or (B)
D. None of these
Ans. (C)
96. The defence of invalidity of contract for non-compliance
of Article 299 must be specifically pleaded, unless it is
patent from allegations in the plaint or evidence adduced by
the plaintiff. This question has arisen in which of the
following types of cases:
A. cases under ss. 7 (d) and 9A of the Representation of People’s Act,
1951 in connection with disqualification from being elected to the
Parliament of state legislature
B. where the contracts did not comply with the exact requirements of
Article 299 (1)
C. contracts entered in the exercise of statutory powers
D. All of them
Ans. (D)
97. The doctrine of apparent authority applies:
I. where a person allows another who is not his agent to appear as his
agent
II. where a principal allows his agent to appear to possess more
authority than he actually has
III. where the principal reserves or limits the authority of an agent
which the agent would have in ordinary course of business, but does
make this known to third parties
IV. where the principal allows it to appear that the agent has authority
although his authority has been terminated
A. I, II
B. II, IV
C. Ill, IV
46
D. All of them
Ans. (D)
98. The doctrine of privity means:
A. That a person cannot acquire rights to liabilities arising under a
contract to which he is not a party
B. That a person cannot be subject to liabilities arising under a
contract to which he is not a party
C. That a contract between A and B can affect the legal rights of C
indirectly
D. All of them
Ans. (D)
99. The duty of the disclosure is limited to cases of:
A. unusual features of the transaction
B. unusual features of the risk
C. both (A) and (B)
D. None of these
Ans. (A)
100. The duty of utmost good faith is of universal
application to all policies of insurance although there are
differences in the detail affecting the way in which the duty
is applied. In practical application it means that either party
has the right to avoid the contract if:
A. there has been a failure by the other party to disclose a material fact
B. that there has been on the part of the other party a
misrepresentation of a material fact
C. either (A) or (B)
D. None of these
Ans. (C)
101. The English Unfair Contract Act, 1977 covers terms:
A. marking the liability or its enforcement subject to restrictive or
onerous conditions
B. excluding or restricting any right or remedy in respect of liability,
or subjecting a person to any prejudice in consequence of his pursuing
any right or remedy
C. excluding or restricting rules of evidence or procedure
D. All of them
Ans. (D)
102. The extent of an agent’s authority, whether express or
implied, depends upon:
47
A. The nature of act or business for which he has been appointed
B. Things which are incidental to the business or are usually done in
carrying it out
C. The usual customs and usages of the trade
D. All of them
Ans. (D)
103. The extent of the liability under an indemnity depends
on:
A. the nature and terms of the contract
B. the case which must be governed by his own facts and
circumstances
C. both (A) and (B)
D. None of these
Ans. (C)
104. The final draft of the Indian Contract Act, 1872 was the
work of:
A. Sir James Fitzjames Stephen
B. Sir Frederick Pollock
C. either (A) or (B)
D. both (A) and (B)
Ans. (D)
105. The functions of the provisions of Section 11 of the
Indian Contract Act, 1872 relating to personal competency is
___________.
A. to protect those whose mental powers are undeveloped or
underdeveloped
B. preventing them from doing themselves an injury by their legal
declarations
C. both (A) and (B)
D. None of these
Ans. (C)
106. The general principle of the common law is that in the
formation of a contract:
A. the consideration is given
B. the consideration is to accepted in exchange of a promise
C. both (A) and (B)
D. None of these
Ans. (C)

48
107. The grounds on which administrative action would be
subject to control by judicial review could be classified as:
A. illegality (namely, failure to give effect to the law that regulates the
decision making power)
B. irrationality, namely Wednesbury unreasonableness, the question
‘whether or not they [the local authority] have taken into account
matters which they ought not have taken into account, or … have
refused to take into account or neglected to take into account matters
which they ought to take into account’
C. procedural impropriety
D. All of them
Ans. (D)
108. The guarantor’s right to indemnification is a right to
be reimbursed:
I. the amount which he actually paid for the principal- debtor – with
interest
II. because, he is entitled to full indemnification from the principal-
debtor
A. I is true but II is false
B. I is false but II is true
C. both (I) and (II) are true
D. None of these
Ans. (C)

49
Group II
BUSINESS Law Paper
–I
Fundamental Principles of Law of Contract and Allied Laws
Sample Multiple Choice Questions

Put (√) across the right option


1. Promises which form the consideration or part of the consideration for each other are
called as
1. Mutual promises
2. Reciprocal promises
3. Promises
4. Written Promises

2. Performance of the conditions of a proposal, or the acceptance of any consideration for a


reciprocal promise which may be offered with a proposal, is an--------------------of the
proposal
1. Acceptance
2. Mutual Acceptance
3. Written Acceptance
4. Reciprocal Promise

3. All agreements are-------------------if they are made by the free consent of parties
competent to contract, for a lawful consideration and with a lawful object, and are not
hereby expressly declared to be void.
1. Standard forms of contracts
2. Contracts
3. Enforceable Contracts
4. Quasi contracts.

4. When, at the desire of the promisor, the promisee or any other person has done or
abstained from doing, or does or abstains from doing, or promises to do or to abstain from
doing, something, such act or abstinence or promise is called a consideration for the promise
is defined under ------------------
50
1. Section 2(e)

Group II
BUSINESS Law Paper
–I
Fundamental Principles of Law of Contract and Allied Laws
Sample Multiple Choice Questions

Put (√) across the right option


1. Promises which form the consideration or part of the consideration for each other are
called as
5. Mutual promises
6. Reciprocal promises
7. Promises
8. Written Promises

2. Performance of the conditions of a proposal, or the acceptance of any consideration for a


reciprocal promise which may be offered with a proposal, is an--------------------of the
proposal
5. Acceptance
6. Mutual Acceptance
7. Written Acceptance
8. Reciprocal Promise

5. All agreements are-------------------if they are made by the free consent of parties
competent to contract, for a lawful consideration and with a lawful object, and are not
hereby expressly declared to be void.
1. Standard forms of contracts
2. Contracts
51
3. Enforceable Contracts
4. Quasi contracts.

6. When, at the desire of the promisor, the promisee or any other person has done or
abstained from doing, or does or abstains from doing, or promises to do or to abstain from
doing, something, such act or abstinence or promise is called a consideration for the promise
is defined under ------------------

2. Section 2(e)

52
3. Section 2(f)
4. Section 2 (a)
5. Section 2(d)
6. Every promise and every set of promises,------------------------------------------is an
agreement

1. In exchange for each another


2. Forming the consideration for each other
3. Mutually agreed
4. Partially agreed

6. When consent to an agreement is caused by coercion, fraud or misrepresentation,


the agreement is a contract---------------------whose consent was so caused.

1. valid

2. void ab initio

3. Legally enforceable

4. voidable at the option of the party.


7. A--------------------is a contract to do or not to do something, if some event, collateral to
such contract, does or does not happen.
1. Contingent contract
2. Quasi Contract
3. Express of Implied Contract
4. Indemnity Contract

8. A person who finds goods belonging to another, and takes them into his custody, is
subject to the same responsibility as a
1. Bailor
2. Indemnifier
3. Bailee
4. Guarantor

9. If the parties to a contract agree to----------a new contract for it, or to rescind or alter it,
the original contract, need not be performed.
1. Alter
2. Amend
3. Substitute
4. Modify
10. When an agreement is discovered to be void, or when a contract becomes void, any
person who has received any----------under such agreement or contract is bound to restore
it, or to make compensation for it to the person from whom he received it.
1. Advantage
2. Benefit
3. Consideration
4. Favour

Answer key

1. ------ 2. 2. ---------------- 1. 3. -------------- 2

4.----- 4 5. ------------- 2. 6. -----------2.

7.--------1 8. ----------- 3. 9. ----------3

10. ------2.
Group II - BUSINESS Law
PAPER II—GLOBAL TRADE UNDER WORLD TRADE ORGANISATION

Sample Multiple Choice Questions


Put (√) across the right option
1. The Bretton Woods Conference, formally known as the ------------------------------------
-----, held in Bretton Woods, New Hampshire, United States from July 1 to 22,
1944, in which 730 delegates from all 44 Allied nations participated.
1. United Nations Monetary and Financial Conference
2. United Nations Human Rights Conference
3. United Nations Conference on Sustainable Development

4. United Nations Conference on the World Financial and Economic Crisis and Its
Impact on Development.

2. In,--------------the World Trade Organization, a formal international organization to


regulate trade, was established. It is the most important development in the history of
international trade law.
1. 1995
2. 1997
3. 1999
4. 2001

3. The purposes and structure of the organization is governed by the Agreement


Establishing the World Trade Organization, also known as the ----------------------------
-----------. It does not specify the actual rules that govern international trade in specific
areas.
1. Marrakesh Agreement.
2. General Agreement on Trade and Tariff
3. North American Free Trade Agreement.
4. The World Trade Organization Trade-Related Aspects of Intellectual Property Rights
(TRIPS)
4.--------------------------------------------is a basic principle of GATT/WTO that prohibits
discrimination between imported and domestically produced goods with respect to
internal taxation or other government regulation.
1. National treatment
2. Trade Embargo
3. Free Trade

4. Special and differential treatment

5.-----------------------------------------------ensures that every time a WTO Member lowers


a trade barrier or opens up a market, it has to do so for the like goods or services from
all WTO Members, without regard of the Members‘ economic size or level of
development.

1. The Most Favoured Nation principles.

2. Cross Border Transactions

3. Principles of International Trade Laws

4. All of the Above.

6. The purpose of--------------------------------------is to safeguard national financial interests


preventing capital flight, commercial fraud, and customs duty evasion, for instance and to
compensate for inadequacies in administrative infrastructures.

1. Pre- Shipment Inspection

2. Trade-Related Investment Measures (TRIMs) Agreement

3. Import Licensing

4. Valuation of Goods at Customs

7. The WTO secretariat, based in-----------------has around 600 staff and is headed by a
Director-General.

1. Geneva,

2.Urugay,

3. London,

4. Venice,

8. The Agreement on the Application of Sanitary and Phytosanitary Measures sets out the basic rules
for -----------------------------------------------
1. protecting intellectual property rights

2. food safety and animal and plant health standards.

3. customized goods

4. settlement of disputes

9--------------------------------is an international treaty of the World Trade Organization

1. Agreement on Agriculture (AoA)

2. Trade Related Aspects of Intellectual Property Rights

3. The United Nations Commission on International Trade Law (UNCITRAL)

4. Trans-Pacific Partnership Agreement

10--------------------------is the central pillar of the multilateral trading system, and the WTO‘s
unique contribution to the stability of the global economy

1. Dispute settlement

2. Negotiation

3. Trade Restrictions

4. Parallel Imports.

Answer key

1.------------1
2. ----- 1
3. ------ 2
4. ------ 1

5. 2

6. 1

7.— 1.

8. 2

9. --- 1 10. --------- 1


Group - II BUSINESS Law
PAPER III — CORPORATE LAW

Sample
Multiple Choice Questions
Put (√) across the right
option

1. Section 203 of the Companies Act 2013 deals with the appointment of a------------------.
1. Trustee
2. Company secretary
3. Director
4. Promoter
2. Indian company law make it----------------for every Indian listed, and every other entity
having more than rupees ten crore (100 million) paid up capital, to have a whole
time company secretary
1. Mandatory
2. Optional
3. Exclusive
4. Compulsory
3. The National Company Law Tribunal is a---------------------------------in India that
adjudicates issues relating to Indian companies. The tribunal was established under
the Companies Act 2013 and was constituted on 1 June 2016 by the government of India.
1. Judicial body
2. Executive Body
3. Quasi-judicial body
4. State

4. The Charter of the Company is known as ----------------------------

1. Bye laws
2. Memorandum of Association
3. Articles of Association
4. Prospectus
5. The name of the Company can be changed by ---------------------
1. Ordinary resolution
2. Special resolution
3. With approval of Union Government
4. A special resolution with approval of Central Government

6. An act of the company must not be beyond the object clause otherwise it will be ------
---------------------- and cannot be ratified even if all the member wish to ratify.
1. ultra vires and therefore, void
2. voidable
3. illegal
4. intra vires.

7. The share capital of a Company may be reduced by ----------------------


1. An ordinary Resolution
2. Special Resolution
3. A resolution of the Board of Directors
4. With permission from the Company Law Board

8. The--------------on equity share in not cumulative.


1. Percentage
2. Dividend
3. Profit
4. Loss

9. A person cannot act as a managing director in more than--------Company


1. one
2. two
3. four
4. five
10.The amount of minimum subscription may be learnt by --------------------

1. memorandum

2. articles

3. prospectus

4. records of general meetings.

*********************************************************************

Answer key

1. ------ 2 2. ----------------------- 1
3. ------- 3 4. ----------------------- 2

5.---------4 6. ---------------- 1.

7.---------- 2 8. ----------------- 2

9. ------2 10. ----------- 3.

Group II------Business law


Paper IV
LAWS RELATING TO Customs and Foreign Exchange
Multiple Choice Questions Sample

1.means any authority competent to pass any order


or decision under Customs Act 1962, but does not include the Board,
[Commissioner (Appeals)] or Appellate Tribunal.

1. Competent Authority
2. Adjudicating authority
3. Quasi-Judicial Authority
4. Chief Metropolitan Magistrate

2. means the [waters


extending into the sea up to the limit of contiguous zone of India
under section 5 of the Territorial Waters, Continental Shelf, Exclusive
Economic Zone and other Maritime Zones Act, 1976 (80 of 1976) and
includes any bay, gulf, harbour, creek or tidal river;]

1. Territorial waters
2. Free Economic Zones
3. Harbour or creek
4. Indian customs waters

3. "illegal import" means the import of any goods in--------------of the


provisions of this Act or any other law for the time being in force;
1. Contravention
2. Accordance
3. Support
4. All of the above

4. The exporter of any goods shall make entry thereof by presenting to the
proper officer in the case of goods to be exported in a vessel or aircraft, a

-------------------, and in the case of goods to be exported by land, a bill of


export in the prescribed form.

1. Bill of Lading

2. Shipping bill

3. Clearance Receipt

4. Insurance Premium Receipt


5. are the two primary statutes
that govern the entry and exit of goods into or from the country.
1. The Customs Act 1962 and the Customs Tariff Act, 1975
2. Sale of Good Act, 1930
3. Indian Contract Act, 1860
4. Goods and Services Tax Act, 2017

6. 'EXIM Bank' means the------------------------established under the Export-Import Bank of


India Act, 1981 (28 of 1981);

1. Export-Import Bank of India

2. Export Import House

3. State Bank OF India

4. Export import Policy

7. 'Export' includes the taking or sending out of goods by land, sea or air, on consignment or
by way of sale, lease, hire-purchase, or under any other arrangement by whatever name
called, and in the case of software, also includes transmission through any -----------------

1. Social Media
2. Electronic Media
3. Digital Media
4. Print Media

8. ‗Export value' in relation to export by way of lease or hire-purchase or under any other
similar arrangement, includes the-----------, by whatever name called, payable in respect of
such lease or hire-purchase or any other similar arrangement.

1. Deficits

2. Loans

3. Charges

4. Premium
9. The purpose of------------------------is to control the flow of goods, transports and personal
effects into (Import) and out (Export) of a country. Every country has own laws and
regulation on Import and Export which is enforced by its customs authority.

1. Custom Duty

2. Customs Law

3. Customary Norms

4. Custom Tariff

10. -------------------------------- defines "prohibited goods" means any goods the import or export of
which is subject to any prohibition under this Act or any other law for the time being in force but
does not include any such goods in respect of which the cond itions subject to which the goods are
permitted to be imported or exported have been complied with;

1. Section 2 (33) of Customs Act 1962

2. Section 2(34) of Customs Act 1962

3. Section 2(31) of Customs Act 1962

4. Section 2(12) of Customs Act 1962

**********************************************************************************

*******

Answer key

1. ------- 1 2.------------ 4

3. --------- 1. 4. ----- -- ---- ---2

5. --------- 1. 6. -------- 1.

7. -------- 2. 8. -------3

9. ------- 2. 10. ------- 1.


Group II------Business law
Paper V - MCQs on Law of Insurance 2020 Online Exam.

1. The IRD Act has established the Insurance Regulatory and Development Authority
(―IRDA‖ or ―Authority‖) as a statutory regulator to regulate and promote the
insurance industry in India and to protect the interests of holders of ---------------
1. Foreign Direct Investments
2. Insurance policies.
3. Fixed Deposits
4. Mutual Funds

2. For the purposes of calculating the investments, the amount of deposits made with the
RBI by the insurer in respect of his life insurance business shall be deemed to be -----
----- invested in Government securities.
1. Returns
2. Capital
3. Assets
4. Stock

3. Insurance companies and insurance agents, in India, are subject to tax for the ----------
----------------------------- received by them respectively, under the Indian Income Tax
Act, 1963 (―Income Tax Act‖).
1. Premiums and the commissions
2. Annuity
3. Gratuity.
4. Pension

4. Insurance helps to

1. Prevent adverse situations from occurring


2. Reduce the financial consequences of adverse situations
3. Negate all consequences of adverse situations
4. Make assets continuously productive.
5. Which of the following terms matches closest with ‗Family Floater‘?
1. Health insurance
2. Property insurance
3. Accidental injury
4. Consequential loss

6. In cases where a Life Insurance Agent collects the premium from the policyholder
and remits it to the insurer‘s office, he is acting as an agent of
1. IRDA
2. The Insurance Company
3. The Policyholder
4. The broker

7. A policy where the policyholder makes a one-time payment of premium, is known as

1. Money-back policy
2. Single premium policy
3. Salary Savings Scheme policy
4. Half-yearly policy.

8. As per structured formula under the Motor Vehicle Act, victims of fatal injuries are
paid compensation on the basis of:
1. Age and sex
2. Age and number of dependents
3. Income and size of family
4. Age and income

9. The minimum paid up capital required for a General Insurance Company is Rs.
1. 25 crores
2. 50 crores
3. 75 crores
4. 100 crores

10...............principle in insurance means maximum truth.


1. subrogation
2. causa Proxima
3. insurable interest
4. uberrima fides

Answer key
1.------2 2------- 3

3. ------- 1 4. --------2

5. ------- 1 6. ------- 2

7. ------- 2 8. ------ 4
9. ----------- 4 10. --------- 4
Group II------Business law
Paper VI- MCQs on Banking Law 2020 Online Exam.

1. The Reserve Bank of India was established in the year

1. 1949

2. 1954

3. 1935

4. 1934.

2. Co-operative Credit banks function in India at

1. Central
2. State
3. Primary at village level
4. All of the above.

3. Six banks having demand and time liabilities exceeding-----crores were nationalized
in 1980

1. 200
2. 500
3. 700
4. 150

4. Commercial Banks do not perform

1. Availability of Credit

2. Promotion of trade
3. Banker to the Government
4. Regional development.
5. Central bank does not

1. Custodian of cash reserves


2. Deal with customers directly
3. Monopoly of note issue
4. Maintains international currency.

6. Business which the RBI may transact is provided in Section

1. 12.
2. 17
3. 7.
4. 35

7. Instruments of Credit Control

1. Bank rate
2. Open market operations
3. Variable Cash Reserve Ratio
4. All of the above.

8. Unit banking, Branch banking, Group banking and Mixed banking are

1. Structure of Commercial Banks


2. Types of Banks
3. None of the above
4. All of the above.

9. Similarity between Central Bank and Commercial Bank is

1. Branch expansion
2. Deal in money
3. Controller of credit
4. None of the above.

10. The RBI has

1. Issue Department

2. Agricultural Department

3. Department of reserves and statistics


4. All of the above.

Answer key
1. -------3. 2. ------ 4

3. --------1. 4. ---------3.

5. ---------- 2. 6. --------- 2.

7. --------- 4. 8. --------- 1.

9. -------- 2. 10. ----------- 4.

1. An agreement enforceable by law is a 

1. Promise

2. Contract 

3. Obligation 

4. Lawful promise
2. Every promise and every set of promises, forming the consideration for
each other, is an 

1. agreement

2. Contract 

3. Obligation 

4. Lawful promise

3. A proposal when accepted becomes a 

1. Promise

2. Contract

3. Offer

4. Acceptance

1
4. When at the desire of the promisor, the promisee or any other person
has done or abstained from doing or does or abstained from doing or
promises to do or to abstain from doing something, such act or
abstinence or promise under section 2(d) is called

1. Reciprocal promise 

2. Consideration for the promise

3. Counter offer 

4. acceptance

5. Promises which form the consideration or part thereof, for each other
under section 2(f) are called 

1. Acceptances for different proposals

2. Agreements

3. Reciprocal promises

4. Consideration

6. Which is correct 

1. Proposal + acceptance = promise 

2. Promise + consideration = agreement 

3. Agreement + enforceability = contract 

4. All the above 

7. In a valid contract, what comes first 

1.  Enforceability 

2. Acceptance 

3. Promise

4. Proposal

8. A contract with or by a minor is  

1. Valid contract 

2. Void contract 

3. Voidable contract 

4. Voidable at the option of either party


2
9. Enforceable agreements are the one 

1. Made by free contract 

2. Parties to the contract are competent to enter into an


agreement 

3. Having lawful consideration and lawful object 

4. All of the above 

10.Competency to contract relates to 

1. Age of the parties 

2. Soundness of mind of the parties 

3. Both age and soundness of mind 

4. Intelligence of the parties 

11.Which one of the following is correct? 

1. Past consideration is no consideration 

2. Consideration can be past, present or future 

3. Consideration can only be present 

4. Consideration can only be present and future 

12.Past consideration is valid in 

1. England only 

2. India only 

3. Both in England and India

4. Neither in England nor in India 

13.Consideration should be something in return of promise which

1. Both the law and parties regard, as having some value 

2. Only law regards a having some value

3. Only parties regard some value

4. Only adequate value necessary 

14.Contract Act, 1872 doesn’t includes 

1. Social agreements 
3
2. Commercial agreement 

3. Domestic Agreement

4. a& c 

5. None of the above 

15.An agreement becomes a contract when 

1. These is some consideration for it 

2. Parties are competent to contract 

3. Their consent is free and their object is lawful 

4. All of the above 


Free MCQ for Business Law

Answer Key 

1. (b)     2. (a)     3. (a)     4. (b)     5. (c)     6. (d)     7. (d)     8. (b)     9. (d)    


10. (c)      
11. (b) 12. (c)    13. (a)     14. (d)     15. (d)  

4
Question: In which form of the contract, the property in the goods passes to the
buyer immediately:
(a) agreement to sell
(b) hire purchase
(c) sale
(d) installment to sell
Ans. (c)

Question: Rajinder makes the following statement while negotiating the sale of his
car, “This is the sharpest car on the market.” His statement may support a claim for:
(a) misrepresentation
(b) fraud
(c) fraud and misrepresentation
(d) none of the above
Ans. (d)

Question: A partnership at will is one:


(a) which does not have any deed
(b) which does not have any partner
(c) which does not provide for how long the business will continue
(d) which cannot be dissolved.
Ans. (c)

Question: _____ is included in the implied authority of a partner.


(a) To submit to arbitration a dispute relating to the firm’s business.
(b) To pledge a security goods of the firm for obtaining loan for the firm
(c) To enter into another partnership on behalf of the firm
(d) To open a bank account on behalf of the firm in the partner own name
Ans. (b)

Question: A firm is the name of:


(a) The Partners
(b) The minors in the firm.
(c)

The business under which the firm carries on business


(d) The collective name under which it caries on business.
Ans. (d)

Question: Which of the following is not the right of a partner i.e., which he cannot
claim as a matter of right?
(a) Right to take part in business
(b) Right to have access to account books
5
(c) Right to share profits
(d) Right to receive remuneration.
Ans. (d)

Related: Quantitative Aptitude Practice Questions

Question: Every partner has the right to:


(a) Take part in the business of the firm
(b) To share exclusive profits
(c) To use the property of the firm for personal purposes
(d) Pay taxes
Ans. (a)

Question: To constitute a partnership, the agreement must be in:


(a) In writing
(b) In Oral
(c) Either in written or in Oral
(d) Neither in writing Nor in Oral
Ans. (c)

Question: Ramesh and Suresh entered into a contract whereby Ramesh agreed to


sell Suresh 1,00000 worth of illegal drugs. This is an example of a:
(a) quasi contract
(b) void contract
(c) voidable contract
(d) secondary party beneficiary contract
Ans. (b)

Question: Which of the following is false? An offer to be valid must:


(a) Intend to create legal relations
(b) Have certain & unambiguous terms
(c) Contain a term the non-compliance of which would amount to acceptance
(d) Be communicated to the person to whom it is made.
Ans. (c)

Question: An agreement is void if it is opposed to public policy. Which of the


following is not covered by heads of public policy?
(a) Trading with an enemy
(b) Trafficking in public offices
(c) Marriage brokerage contracts
(d) Contracts to do impossible acts
Ans. (d)

Related: list of Nationalised banks


6
Question: A minor’s liability for ‘necessaries’ supplied to him;
(a) Arises after he attains majority age
(b) Is against only minor’s property
(c) Does not arise at all
(d) Arises if minor gives a promise for it.
Ans. (b)

Question: Which of the following persons can perform the contract?


(a) Promisor alone
(b) Legal representatives of promisor
(c) Agent of the promisor
(d) All of these
Ans. (d)

Question: Which of the following statement is true?


(a) Consideration must result in a benefit to both parties
(b) Past consideration is no consideration in India.
(c) Consideration must be adequate.
(d) Consideration must be something, which a promisor is not already bound to do.
Ans. (d)

Question: Which of the following is not an exception to the rule – No


Consideration, No Contract?
(a) Compensation for involuntary services.
(b) Love & Affection.
(c) Contract of Agency
(d) Gift.
Ans. (a)

Question: Impossibility arising subsequently to formation of a contract is


(a) Pre-contractual contract
(b) Supervening impossibility
(c) Initial Impossibility
(d) None of these
Ans. (b)

Question: Generally, which of the following damages are not recoverable?


(a) Ordinary damages
(b) Special damages
(c) Remote damages
(d) Nominal damages
Ans. (c)

7
Question: Which of the following is not an implied condition in a contract of sale?
(a) Condition as to title
(b) Condition as to description
(c) Condition as to free from encumbrance
(d) Condition as to sample
Ans. (c)

Question: Which of the following is not a form of delivery?


(a) Constructive delivery
(b) Structured delivery
(c) Actual delivery
(d) Symbolic delivery
Ans. (b)

Question: Which one or more of the following resolution need not be filed with the
registrar
(a) Special resolution
(b) A resolution of Board relating to appointment of a managing director
(c) A resolution approving the appointment of a sole selling agent
(d) An ordinary resolution
Ans. (c)

Question: Doctrine of Caveat Emptor means


(a) let the seller beware
(b) let the buyer beware
(c) let the creditor beware
(d) none of the above
Ans. (b)

Related: Reasoning (Blood Relations) Question Bank

Question: Mercantile Agent is having an authority to


(a) sell or consign goods
(b) raise money on the security of goods
(c) sell or buy goods
(d) any of the above
Ans. (d)

Question: _____ is one sided contract in which only one party has to perform his
part of promise
(a) Unilateral contract
(b) Illegal
(c) Bilateral

8
(d) enforceable
Ans. (a)

Question: A mistake as to a law not in force in India has the same effect as:
(a) mistake of fact
(b) mistake of Indian law
(c) fraud
(d) misrepresentation
Ans. (a)

Question: A, B and C jointly promised to pay Rs. 60,000 to D. Before performance


of the contract, C dies. Here, the contract
(a) becomes void on C’s death.
(b) should be performed by A and B along with C’s legal representatives.
(c) should be performed by A and B alone
(d) should be renewed between A, B and D.
Ans. (b)

Question: In the absence of agreement to the contrary all partners are:


(a) Not entitled to share profits
(b) Entitled to share in capital ratio.
(c) Entitled to share in proportion to their ages
(d) Entitled to share profits equally.
Ans. (d)

Question: Which of the following meeting can be held more than once in a


calendar year?
(a) E.G.M.
(b) S.G.M.
(c) A.G.M.
(d) None of the above
Ans. (a)

Question: The term “goods” under Sale of Goods Act, 1930 does not include
(a) goodwill
(b) actionable claims
(c) stocks and shares
(d) harvested crops
Ans. (b)

Related: CPT syllabus

Question: The most important element in partnership is:


(a) Business
9
(b) Sharing of Profits
(c) Agreement
(d) Business to be carried on by all or any of them acting for all.
Ans. (d)

Question: Active partner is one who:


(a) Takes part in the business of the firm
(b) Actively participates in co-curricular activities
(c) Actively shares the profits
(d) Makes a show of authority
Ans. (a)

Question: Om Jewelers wrote a letter to James, “We have received an exceptionally


fine Vintage Car which we will sell to you at a very favorable price.”
(a) The letter is an offer to sell
(b) A valid offer cannot be made by letter
(c) The letter contains a valid offer which will terminate within a reasonable time
(d) The letter lacks one of the essential elements of an offer.
Ans. (c)

Question: An offer may lapse by:


(a) Revocation
(b) Counter Offer
(c) Rejection of Offer by Offeree.
(d) All of these.
Ans. (d)

Question: Which of the following statement is true?


(a) An agreement is an unaccepted proposal.
(b) An agreement enforceable by law is a contract.
(c) An agreement can only consist of an offer.
(d) An agreement can only consist of an acceptance.
Ans. (b)

Question: Consideration must move at the desire of


(a) Promisor
(b) Promisee
(c) Any other person
(d) Any of these
Ans. (a)

Related: As a Citizen of India you have these Fundamental Rights

10
Question: In case of illegal agreements, the collateral agreements are ___ .
(a) Valid
(b) Void
(c) Voidable
(d) None of these.
Ans. (b)

Question: Which of the following is not disability of an unregistered firm?


(a) It cannot file a suit against third parties
(b) Its partners cannot file a suit against a firm.
(c) It cannot claim a set-off exceeding Rs. 100
(d) It cannot be sued by a third party.
Ans. (d)

Related: Fundamental Accounting Question Bank for CPT

Question: Which of the following is false? An acceptance:


(a) Must be communicated
(b) Must be absolute and unconditional.
(c) Must be accepted by a person having authority to accept.
(d) May be presumed from silence of offeree.
Ans. (d)

Question: Return of partly paid shares by the shareholders to the company is


_______
(a) Surrender
(b) Forfeiture
(c) Lien
(d) None of the above
Ans. (a)

Question: Binoy purchased a can of Juice from The Mini Mall. After he finished
drinking the Juice, Binoy noticed that the can contained dead insects stuck on the
inside bottom of the can. In a strict product liability tort action against The Mini
Mall, Binoy must prove, among other things, that:
(a) The The Mini Mall is a merchant selling Juice
(b) The The Mini Mall knew or should have known of the defective condition.
(c) The The Mini Mall had prior notice of other similar problems with Juice products.
(d) The The Mini Mall actually placed the dead insects into the can.
Ans. (a)

Question: Which of the following statement is false? Consideration:


(a) Must move at the desire of the promisor

11
(b) May move from any person.
(c) Must be illusory
(d) Must be of some value.
Ans. (c)

Question: Which of the following company can held the AGM on public holiday
______
(a) Public company
(b) Private company
(c) Govt. company
(d) Association not for profits
Ans. (d)

Question: A void agreement is one which is


(a) Valid but not enforceable
(b) Enforceable at the option of both the parties.
(c) Enforceable at the option of one party
(d) Not enforceable in a court of law.
Ans. (d)

Question: Which of the following statement is true?


(a) A contract with a minor is voidable at the option of the minor.
(b) An agreement with a minor can be ratified after he attains majority.
(c) A person who is usually of an unsound mind cannot enter into contract even
when he is of a sound mind.
(d) A person who is usually of a sound mind cannot enter into contract when he is
of unsound mind.
Ans. (d)

Question: The law of contract in India is contained in


(a) Indian Contract Act, 1862
(b) Indian Contract Act, 1962
(c) Indian Contract Act, 1872
(d) Indian Contract Act, 1972
Ans. (c)

Question: The body of law which establishes rights between persons and provides
for redress for violation of those rights is known as:
(a) Criminal Law
(b) Civil Law
(c) The Uniform Commercial Code
(d) Stare decisis
Ans. (c)
12
Question: Which of the following statement is true?
(a) A threat to commit suicide does not amount to coercion.
(b) Undue influence involves use of physical pressure.
(c) Ignorance of law is no excuse
(d) Silence always amounts to fraud.
Ans. (c)

Related: General Economics CA Common Proficiency Test

Question: Which one of the following is not true?


(a) Document showing title is different from document of title.
(b) Bill of lading is a document of title to goods.
(c) Specific goods can be identified and agreed upon at the time of the contract of
Sale.
(d) None of the above.
Ans. (d)

Question: Quorum should be present at the


(a) Commencement of meeting
(b) Middle of the meeting
(c) End of the meeting
(d) Any time during meeting
Ans. (a)

Question: The amount unclaimed on redemption is transferred to ________fund.


(a) Investor education & protection
(b) Children welfare
(c) Workmen compensation fund
(d) None of the above
Ans. (a)

Question: A proposal when accepted becomes a


(a) Promise
(b) Contract
(c) Offer
(d) Acceptance.
Ans. (a)

Question: Sia threw a knife at Ellie, intending to injure her severely. However, Sia
missed Ellie. Ellie saw the knife just as it whizzed by her head, missing it by about
one inch. As a result, Ellie was very scared. Ellie sued Sia for assault and battery.
Which of the following is most correct?
(a) Sia will be liable for battery, but not assault.

13
(b) Sia will be liable for assault, but not battery.
(c) Sia will be liable for assault and for battery.
(d) Sia will not be liable for either assault or battery because this is only a criminal
matter.
Ans. (b)

Question: The Sale of Goods Act, 1930 deals with


(a) sale
(b) mortgage
(c) pledge
(d) all of the above.
Ans. (a)

Question: Which one of the following is/are document of title to goods?


(a) railway receipt
(b) wharfinger’s certificate.
(c) warehouse keeper’s certificate
(d) all of the above
Ans. (d)

Question: On the valid performance of the contractual obligations by the parties,


the contract
(a) is discharged
(b) becomes enforceable
(c) becomes void
(d) none of these
Ans. (a)

Question: Which one of the following is not an implied warranty?


(a) Warranty as to undisturbed possession
(b) Warranty as to existence of encumbrance
(c) Disclosure of dangerous nature of goods
(d) Warranty as to quality or fitness by usage of trade
Ans. (b)

Related: Which Banks are National Banks in India?

Question: A contract is discharged by rescission which means the


(a) change in one or more terms of the contract
(b) acceptance of lesser performance.
(c) abandonment of rights by a party
(d) cancellation of the existing contract.
Ans. (d)

14
Question: Unsecured debentures does not require any registration because it is
not secured by ____
(a) Fixed
(b) Floating charge
(c) Both (a) & (b)
(d) None of the above
Ans. (c)

Question: Which of the following statements is correct concerning the “reasonable


person” standard in tort law?
(a) The reasonable person standard varies from person to person.
(b) The reasonable person standard focuses on the defendant’s subjective mental
state rather than on the defendant’s behavior.
(c) A person with a physical disability must act as would a reasonable person with
the same disability.
(d) A person with a mental disability must act as would a person with the same
mental disability.
Ans. (c)

15
7. Section 2(f)
8. Section 2 (a)
9. Section 2(d)
10. Every promise and every set of promises,------------------------------------------is an
agreement

5. In exchange for each another


6. Forming the consideration for each other
7. Mutually agreed
8. Partially agreed

6. When consent to an agreement is caused by coercion, fraud or misrepresentation,


the agreement is a contract---------------------whose consent was so caused.

5. valid

6. void ab initio

7. Legally enforceable

8. voidable at the option of the party.


11. A--------------------is a contract to do or not to do something, if some event, collateral to
such contract, does or does not happen.
1. Contingent contract
2. Quasi Contract
3. Express of Implied Contract
4. Indemnity Contract

12. A person who finds goods belonging to another, and takes them into his custody, is
subject to the same responsibility as a
1. Bailor
2. Indemnifier
3. Bailee
4. Guarantor

13. If the parties to a contract agree to----------a new contract for it, or to rescind or alter it,
the original contract, need not be performed.
1. Alter
2. Amend
3. Substitute
4. Modify
14. When an agreement is discovered to be void, or when a contract becomes void, any
person who has received any----------under such agreement or contract is bound to restore
it, or to make compensation for it to the person from whom he received it.
1. Advantage
2. Benefit
3. Consideration
4. Favour

Answer key

1. ------ 2. 2. ---------------- 1. 3. -------------- 2

4.----- 4 5. ------------- 2. 6. -----------2.

7.--------1 8. ----------- 3. 9. ----------3

10. ------2.
Group II - BUSINESS Law
PAPER II—GLOBAL TRADE UNDER WORLD TRADE ORGANISATION

Sample Multiple Choice Questions


Put (√) across the right option
1. The Bretton Woods Conference, formally known as the ------------------------------------
-----, held in Bretton Woods, New Hampshire, United States from July 1 to 22,
1944, in which 730 delegates from all 44 Allied nations participated.
5. United Nations Monetary and Financial Conference
6. United Nations Human Rights Conference
7. United Nations Conference on Sustainable Development

8. United Nations Conference on the World Financial and Economic Crisis and Its
Impact on Development.

4. In,--------------the World Trade Organization, a formal international organization to


regulate trade, was established. It is the most important development in the history of
international trade law.
1. 1995
2. 1997
3. 1999
4. 2001

5. The purposes and structure of the organization is governed by the Agreement


Establishing the World Trade Organization, also known as the ----------------------------
-----------. It does not specify the actual rules that govern international trade in specific
areas.
5. Marrakesh Agreement.
6. General Agreement on Trade and Tariff
7. North American Free Trade Agreement.
8. The World Trade Organization Trade-Related Aspects of Intellectual Property Rights
(TRIPS)
4.--------------------------------------------is a basic principle of GATT/WTO that prohibits
discrimination between imported and domestically produced goods with respect to
internal taxation or other government regulation.
6. National treatment
7. Trade Embargo
8. Free Trade

9. Special and differential treatment

10.----------------------------------------------ensures that every time a WTO Member lowers


a trade barrier or opens up a market, it has to do so for the like goods or services from
all WTO Members, without regard of the Members‘ economic size or level of
development.

5. The Most Favoured Nation principles.

6. Cross Border Transactions

7. Principles of International Trade Laws

8. All of the Above.

6. The purpose of--------------------------------------is to safeguard national financial interests


preventing capital flight, commercial fraud, and customs duty evasion, for instance and to
compensate for inadequacies in administrative infrastructures.

5. Pre- Shipment Inspection

6. Trade-Related Investment Measures (TRIMs) Agreement

7. Import Licensing

8. Valuation of Goods at Customs

7. The WTO secretariat, based in-----------------has around 600 staff and is headed by a
Director-General.

1. Geneva,

2.Urugay,

5. London,

6. Venice,

8. The Agreement on the Application of Sanitary and Phytosanitary Measures sets out the basic rules
for -----------------------------------------------
5. protecting intellectual property rights

6. food safety and animal and plant health standards.

7. customized goods

8. settlement of disputes

11------------------------------is an international treaty of the World Trade Organization

5. Agreement on Agriculture (AoA)

6. Trade Related Aspects of Intellectual Property Rights

7. The United Nations Commission on International Trade Law (UNCITRAL)

8. Trans-Pacific Partnership Agreement

12--------------------------is the central pillar of the multilateral trading system, and the WTO‘s
unique contribution to the stability of the global economy

5. Dispute settlement

6. Negotiation

7. Trade Restrictions

8. Parallel Imports.

Answer key

1.------------1
2. ----- 1
3. ------ 2
4. ------ 1

5. 2

6. 1

7.— 1.

8. 2

9. --- 1 10. --------- 1


Group - II BUSINESS Law
PAPER III — CORPORATE LAW

Sample
Multiple Choice Questions
Put (√) across the right
option

5. Section 203 of the Companies Act 2013 deals with the appointment of a------------------.
1. Trustee
2. Company secretary
3. Director
4. Promoter
6. Indian company law make it----------------for every Indian listed, and every other entity
having more than rupees ten crore (100 million) paid up capital, to have a whole
time company secretary
1. Mandatory
2. Optional
3. Exclusive
4. Compulsory
7. The National Company Law Tribunal is a---------------------------------in India that
adjudicates issues relating to Indian companies. The tribunal was established under
the Companies Act 2013 and was constituted on 1 June 2016 by the government of India.
1. Judicial body
2. Executive Body
3. Quasi-judicial body
4. State

8. The Charter of the Company is known as ----------------------------

1. Bye laws
2. Memorandum of Association
3. Articles of Association
4. Prospectus
5. The name of the Company can be changed by ---------------------
5. Ordinary resolution
6. Special resolution
7. With approval of Union Government
8. A special resolution with approval of Central Government

6. An act of the company must not be beyond the object clause otherwise it will be ------
---------------------- and cannot be ratified even if all the member wish to ratify.
5. ultra vires and therefore, void
6. voidable
7. illegal
8. intra vires.

7. The share capital of a Company may be reduced by ----------------------


5. An ordinary Resolution
6. Special Resolution
7. A resolution of the Board of Directors
8. With permission from the Company Law Board

11. The--------------on equity share in not cumulative.


1. Percentage
2. Dividend
3. Profit
4. Loss

12. A person cannot act as a managing director in more than--------Company


1. one
2. two
3. four
4. five
13.The amount of minimum subscription may be learnt by --------------------

5. memorandum

6. articles

7. prospectus

8. records of general meetings.

*********************************************************************

Answer key

1. ------ 2 2. ----------------------- 1
3. ------- 3 4. ----------------------- 2

5.---------4 6. ---------------- 1.

7.---------- 2 8. ----------------- 2

9. ------2 10. ----------- 3.

Group II------Business law


Paper IV
LAWS RELATING TO Customs and Foreign Exchange
Multiple Choice Questions Sample

1.means any authority competent to pass any order


or decision under Customs Act 1962, but does not include the Board,
[Commissioner (Appeals)] or Appellate Tribunal.

5. Competent Authority
6. Adjudicating authority
7. Quasi-Judicial Authority
8. Chief Metropolitan Magistrate

2. means the [waters


extending into the sea up to the limit of contiguous zone of India
under section 5 of the Territorial Waters, Continental Shelf, Exclusive
Economic Zone and other Maritime Zones Act, 1976 (80 of 1976) and
includes any bay, gulf, harbour, creek or tidal river;]

5. Territorial waters
6. Free Economic Zones
7. Harbour or creek
8. Indian customs waters

3. "illegal import" means the import of any goods in--------------of the


provisions of this Act or any other law for the time being in force;
5. Contravention
6. Accordance
7. Support
8. All of the above

4. The exporter of any goods shall make entry thereof by presenting to the
proper officer in the case of goods to be exported in a vessel or aircraft, a

-------------------, and in the case of goods to be exported by land, a bill of


export in the prescribed form.

7. Bill of Lading

8. Shipping bill

9. Clearance Receipt

10. Insurance Premium Receipt


11. are the two primary statutes
that govern the entry and exit of goods into or from the country.
5. The Customs Act 1962 and the Customs Tariff Act, 1975
6. Sale of Good Act, 1930
7. Indian Contract Act, 1860
8. Goods and Services Tax Act, 2017

12.----------------------------------------------------'EXIM Bank' means the established under the


Export-Import Bank of
India Act, 1981 (28 of 1981);

5. Export-Import Bank of India

6. Export Import House

7. State Bank OF India

8. Export import Policy

9. 'Export' includes the taking or sending out of goods by land, sea or air, on consignment or
by way of sale, lease, hire-purchase, or under any other arrangement by whatever name
called, and in the case of software, also includes transmission through any -----------------

1. Social Media
2. Electronic Media
3. Digital Media
4. Print Media

10.-----------------------------------------------‗Export value' in relation to export by way of


lease or hire-purchase or under any other similar arrangement, includes the , by
whatever name called, payable in respect of
such lease or hire-purchase or any other similar arrangement.

5. Deficits

6. Loans

7. Charges

8. Premium
9. The purpose of------------------------is to control the flow of goods, transports and personal
effects into (Import) and out (Export) of a country. Every country has own laws and
regulation on Import and Export which is enforced by its customs authority.

5. Custom Duty

6. Customs Law

7. Customary Norms

8. Custom Tariff

10. -------------------------------- defines "prohibited goods" means any goods the import or export of
which is subject to any prohibition under this Act or any other law for the time being in force but
does not include any such goods in respect of which the cond itions subject to which the goods are
permitted to be imported or exported have been complied with;

5. Section 2 (33) of Customs Act 1962

6. Section 2(34) of Customs Act 1962

7. Section 2(31) of Customs Act 1962

8. Section 2(12) of Customs Act 1962

**********************************************************************************

*******

Answer key

1. ------- 1 2.------------ 4

3. --------- 1. 4. ----- -- ---- ---2

5. --------- 1. 6. -------- 1.

7. -------- 2. 8. -------3

9. ------- 2. 10. ------- 1.


Group II------Business law
Paper V - MCQs on Law of Insurance 2020 Online Exam.

1. The IRD Act has established the Insurance Regulatory and Development Authority
(―IRDA‖ or ―Authority‖) as a statutory regulator to regulate and promote the
insurance industry in India and to protect the interests of holders of ---------------
1. Foreign Direct Investments
2. Insurance policies.
3. Fixed Deposits
4. Mutual Funds

2. For the purposes of calculating the investments, the amount of deposits made with the
RBI by the insurer in respect of his life insurance business shall be deemed to be -----
----- invested in Government securities.
1. Returns
2. Capital
3. Assets
4. Stock

3. Insurance companies and insurance agents, in India, are subject to tax for the ----------
----------------------------- received by them respectively, under the Indian Income Tax
Act, 1963 (―Income Tax Act‖).
1. Premiums and the commissions
2. Annuity
3. Gratuity.
4. Pension

4. Insurance helps to

1. Prevent adverse situations from occurring


2. Reduce the financial consequences of adverse situations
3. Negate all consequences of adverse situations
4. Make assets continuously productive.
5. Which of the following terms matches closest with ‗Family Floater‘?
5. Health insurance
6. Property insurance
7. Accidental injury
8. Consequential loss

6. In cases where a Life Insurance Agent collects the premium from the policyholder
and remits it to the insurer‘s office, he is acting as an agent of
5. IRDA
6. The Insurance Company
7. The Policyholder
8. The broker

7. A policy where the policyholder makes a one-time payment of premium, is known as

5. Money-back policy
6. Single premium policy
7. Salary Savings Scheme policy
8. Half-yearly policy.

8. As per structured formula under the Motor Vehicle Act, victims of fatal injuries are
paid compensation on the basis of:
5. Age and sex
6. Age and number of dependents
7. Income and size of family
8. Age and income

9. The minimum paid up capital required for a General Insurance Company is Rs.
5. 25 crores
6. 50 crores
7. 75 crores
8. 100 crores

10...............principle in insurance means maximum truth.


1. subrogation
2. causa Proxima
3. insurable interest
4. uberrima fides

Answer key
1.------2 2------- 3

3. ------- 1 4. --------2

5. ------- 1 6. ------- 2

7. ------- 2 8. ------ 4
9. ----------- 4 10. --------- 4
Group II------Business law
Paper VI- MCQs on Banking Law 2020 Online Exam.

5. The Reserve Bank of India was established in the year

1. 1949

2. 1954

3. 1935

4. 1934.

6. Co-operative Credit banks function in India at

1. Central
2. State
3. Primary at village level
4. All of the above.

7. Six banks having demand and time liabilities exceeding-----crores were nationalized
in 1980

1. 200
2. 500
3. 700
4. 150

8. Commercial Banks do not perform

1. Availability of Credit

2. Promotion of trade
3. Banker to the Government
4. Regional development.
5. Central bank does not

1. Custodian of cash reserves


2. Deal with customers directly
3. Monopoly of note issue
4. Maintains international currency.

6. Business which the RBI may transact is provided in Section

1. 12.
2. 17
3. 7.
4. 35

7. Instruments of Credit Control

1. Bank rate
2. Open market operations
3. Variable Cash Reserve Ratio
4. All of the above.

8. Unit banking, Branch banking, Group banking and Mixed banking are

1. Structure of Commercial Banks


2. Types of Banks
3. None of the above
4. All of the above.

9. Similarity between Central Bank and Commercial Bank is

1. Branch expansion
2. Deal in money
3. Controller of credit
4. None of the above.

10. The RBI has

4. Issue Department

5. Agricultural Department

6. Department of reserves and statistics


4. All of the above.

Answer key
1. -------3. 2. ------ 4

3. --------1. 4. ---------3.

5. ---------- 2. 6. --------- 2.

7. --------- 4. 8. --------- 1.

9. -------- 2. 10. ----------- 4.

*******************************************

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