BUSINESS REGULATORY FRAMEWORK

CHAPTER 8 : Arbitration and Concilation

Correct
Sr. No Multiple Choice Questions A B C D
Answer
to comprehensively cover
international and commercial
1 arbitration and also conciliation A
Which among the following options is the main purpose of the as also domestic arbitration and to cover only domestic to cover only international
Arbitration and Conciliation Act, 1996 conciliation arbitration and conciliation arbitration None of above

the power and

2 C
The power of court to refer parties for arbitration would and must the power and jurisdiction to the power and jurisdiction the power and jurisdiction jurisdiction to call for
necessarily include, imply and inhere in it advise the parties to review the award to appoint the arbitrator another arbitrator.
An arbitral award made under Part l of the Arbitration and Conciliation
3 A
Act, 1996 shall be considered as a domestic award foreign award general award international award.

on the date on which a request on the date when the on the date when the
4 for a dispute to be referred to respondent gives consent to on the date when the statement of claim and A
arbitration is received by the the appointment of the arbitrator issues notice of written submission of
Arbitral proceedings commence respondent arbitrator ' the parties defence is made.

acts in accordance with

5 An arbitrator: privately chosen procedure D
is chosen and paid by the so far as that is not both (a) and (b) are
disputant repugnant to public policy only (a) is correct correct.
must be connected with the
6 An arbitral award: subject-matter of the dispute must be founded on D
arbitrated principle of trust both (a) and (b) are correct only (a) is correct
has to be in writing and
7 An arbitral award has to be in writing but need not signed by the members of B
be signed the arbitral tribunal may be oral either (a) or (b) or (c).
for reappointment the
8 A
Inability of lawyer to attend arbitral sitting due to illness is ground for setting aside the award for adjournment for sending the case to court arbitrator.
an exchange of letters, an exchange of statements of
telex, telegrams or other claim and defence in which
means of the existence of the
9 A written arbitration agreement is authentic if it is contained in: D
telecommunication which agreement is alleged by one
provide a record of the party and not denied by the All the options are
a document signed by the parties agreement other correct.
10 The term ‘fairness’ embodies: the concept of justice the concept of equality the concept of unbiasness none of the above. B
the conciliator shall
After the settlement agreement is reached between the parties to authenticate the settlement
11 B
conciliation: the conciliator makes an award agreement and furnish a the conciliator shall refer
stating the reasons thereof copy thereof the matter to the tribunal none of the above

12 The conciliation proceedings shall be terminated:
by signing of the settlement
agreement by the parties, on the conciliation proceedings on
date of agreement
13 In Conciliation:
the parties come to settlement
after the award of the conciliator conciliator
14 Conciliation proceedings shall commence: when both the parties comes to a conciliation is made to the when both the parties agree
written agreement
the party against whom the
award is invoked was not given
15 The enforcement of a foreign award may be refused if:
proper notice of the
appointment of the arbitrator
16
After the arbitral award is made, each party shall be delivered the original award
@ 6% per annum from the date
17
of the award till the date of
A sum directed to be paid by an arbitral award shall carry interest payment
An arbitral award shall be enforced in the same manner as if it were a
18
decree of local authority
the time for making an
application for setting aside the
19 arbitral award has expired and
no such application has been
An arbitral award becomes enforceable when made
a body corporate which is
20
To invoke international commercial arbitration it is necessary that at incorporated in any country
least one of the parties is: other than India
21 Private arbitration is also described as: integral arbitration
when the parties involved in
commercial transaction choose
22
to incorporate arbitration clause
as a part of agreement to refer
Ad-hoc arbitration can be sought: their future disputes
imposed on the parties by
23
Statutory arbitration is: operation of law '
by written declaration of
by written declaration of the parties addressed to the
the parties and the conciliator to the effect that D
conciliator to terminate the conciliation proceedings are
terminated, on the date of
the date of declaration declaration all of the above.
the parties come to any
the parties come to a settlement only after the
settlement without making agreement ' of settlement or B
of any award by the conciliation is signed in
front of the conciliator all of the above.
when written invitation to
B
other party for conciliation mutually none of the above
enforcement of the award‘
D
would be contrary to the
public policy of India none of the above both (a) and (b).
an unsigned copy of
B
a signed copy of the award a photocopy of the award the award
@ 24 % per annum
@ 12% per annum from the @ 18% per annum from the from the date of the
C
date of the award till the date of the award till the award till the date of
date of payment date of payment payment.
C
the court the tribunal both (b) and (c)
an application for setting C
aside the arbitral award has
been refused either (a) or (b) neither (a) nor (b).
an individual who is a
national of, or habitually
D
Government of a foreign resident in any country
country other than India. all of the above.
consensual arbitration domestic arbitration none of the above B
when a dispute that arose
between the parties to a when the parties agree to
B
business transaction could submit to arbitration ‘all or
not be settled through any’ differences which have
mediation or conciliation arisen or may arise only (b) and (c).
where consent of the parties
D
a compulsory arbitration is not necessary all of the above.
 The definition of ‘Arbitral Tribunal’ under the Arbitration and sole arbitrator or a panel of
24 A
Conciliation Act, 1996 means arbitrators sole arbitrator only panel of arbitrators only ‘ presiding officer.

of its own, irrespective

with the consent of the without the consent of the
25 The arbitral tribunal may arrange for administrative assistance with the consent" of the parties of the consent of the A
claimant parties
parties.

on becoming aware of the

on becoming aware of the reasons of challenge after
26 C
A written statement of the reasons for the challenge to the arbitral constitution of the arbitral the appointment of the
tribunal has to be sen tribunal arbitrator either (a) or (b) neither (a) nor (b).
60 days of becoming
30 days of becoming aware 7 days of becoming aware of aware of the
27 A
A written statement of the reasons for the challenge to the arbitral 15 days of becoming aware of of the constitution or the the constitution or the constitution or the
tribunal has to be sent within the constitution or the reasons reasons reasons reasons
can be raised at any
must be raised before or at the may be raised after the can be raised at any time time before the
28 A
time of submission of statement submission of the statement before the conclusion of making of arbitral
A plea questioning the jurisdiction of the arbitral tribunal of defence of defence arbitral proceedings award.
29 During the arbitral proceedings the arbitral tribunal can make interim award provide appropriate both (a) and (b) either (a) or (b). C
30 The members of Statutory Arbitral Tribunals are appointed by: parties themselves State Centre none of the above B
(a) At the discretion of either (b) With the leave of the
31
Authority of an appointed arbitrator or umpire can be revoked: party Court (c) Irrevocable (d) None of these C
 BUSINESS REGULATORY FRAMEWORK
CHAPTER 7 : The Negotiable Instrument Act
Correct
Sr. No Multiple Choice Questions A B C D
Answer
may be conditional or
1 The undertaking contained in a promissory note, to pay a certain sum of unconditional depending C
money is conditional unconditional upon the circumstances none of the above.
A transferee cannot
get better title than a
The collecting banker should transferor and he also
2 D
confirm about the genuineness The not negotiable cheque Collection of not negotiable cannot transfer a
of holder before collection of his cannot be further cheque will not get better title than he
Not negotiable crossing means: cheque negotiated. protection under NI Act possesses.
A bill is payable to or to order of a non-trading firm. Endorsement can Authorised partner through
3 A
be made by: Any partner of the firm All the partners power of attorney Any two partners
A plain sheet appended to a
negotiable instrument for the Enclosures to the
4 A
purpose of making endorsement Conditional endorsement of A plain sheet appended to a balance sheet of the
The term `allonge’ refers to: thereon a negotiable instrument will bank
demand is in order,
A customer of Delhi branch of the bank having Multi-city cheque book demand is in order. to demand money all bank but Lucknow branch
5 under the centralized business solution (CBS) demands payment of a Lucknow branch should branches are considered one cannot get valid B
cheque at Lucknow branch of the bank and there is connectivity pay. Bank would get proper unit whether the cheque is discharge as contract
between these two branches: it is not a proper demand discharge. normal or multi-city is with Delhi branch
A cheque is presented for payment through clearing house but due to
6 certain reasons, it is returned unpaid. The returning memo is enclosed to RBI clearing House D
comply with: Negotiable Instruments Act RBI Act Banking Regulations Act rules
__________ means something transferable from one person into another
7 B
person for a consideration Instrument Negotiable Negotiable Instrument all of the above
____ means a written document by which some legal rights are created
8 A
in favour of some person Instrument Negotiable Negotiable Instrument all of the above
Negotiable Instrument means a promiosory note, bill of exchange, or neither bearer or
9 C
cheque payable at _____ bearer order Either bearer or payable order
A negotiable instrument is freely transfer , by delivery it a / an ___
10 B
instrument order bearer both A and B none of the above.
A negotiable instrument is freely transfer , by endorsement it a / an ___
11 A
instrument order bearer both A and B none of the above.
on whose name it is
12 B
The transferee is the one who transfer the the instrument transfered who enchases about it none of the above.
13 The instrument must be taken in good faith and with a Interest consideration legal relation business motive B
14 when an instrument has been lost it is presumed that it was expired duly stamped stolen misplaced B
 __ is An instumen tin writing containing an unconditional undertaking
15 Promisory note Cheque bill of exchange none of the above. A
signed by maker to pay a certain sum of amount only to , or to the order
of a certain person or to the bearer of the instrument
16 The number of parties to the bill of exchange is 2 4 6 3 D
17 The number of parties to the Promisory note is 2 4 6 3 A
18 Sec 4 of the negotiable instrument deals with Promisory note Bill of Exchange cheque none of the above. A
19 Sec 5 of the negotiable instrument deals with Promisory note Bill of Exchange cheque none of the above. B
20 Sec 6 of the negotiable instrument deals with Promisory note Bill of Exchange cheque none of the above. C
21 _____ cannot be a bearer instrument Promisory note Bill of Exchange cheque none of the above. A
22 Acceptance is ____ in bill of exchange Compulsory optional not compulsory adequate A
The provision for making the payment of amount mentioned in words in
23 18 19 20 21 A
a cheque is described u/s...of NI Act
A bearer cheque is issued by one Mr. Ashok in favour of Aman, but he
forgets to hand over the cheque to Aman. Aman however, picks up the No, endorsement and Yes, the cheque is
24 No, endorsement is also needed No, delivery is also needed B
cheque in his absence from his table. Whether the negotiation has taken delivery both required drawn in his favour
place?
25 Drawer to both debtor to one and creditor to another in case of ___ Promisory note Bill of Exchange cheque none of the above. B
26 Liability of maker is __________ in Case of bill of exchange Primary unlimited unconditional secondary D
27 ______ is an order to pay the third party Promisory note Bill of Exchange cheque none of the above. A
28 A promisory note bill of exchange can be made payable on demand on a specific date after a specific date all of the above D
To calculate the maturity date of negotiable instrument the drawing date
29 B
to be _____ for counting included excluded considered none of the above.

30 7 5 3 4 C
If the instrument is not 'on demand ' ______ days of grace is granted
When a negotiable instrument may be construed either as a promissory
31
note or bill of exchange, law recognizes it as: Promissory note Bill of Exchange Ambiguous Instrument None of these C

32 When a bill of exchange has been dishonoured, the holder can cause D
such dishonour to be certified by a notary public, such certificate is a Claiming Presentment Protest None of these(Noting)
If a cheque is transferred to any person to constitute him as a holder, the
33 B
instrument is said to be: Delivered Negotiated Presented None of these
the cheque will be returned
the amount stated in words shall the amount stated in figures to the bearer by the banker
34 A
In a cheque issued by A to B, amount is stated differently in figures and be the amount ordered to be shall be the amount ordered for correction by the
in words: paid to be paid drawer None of these
35
 BUSINESS REGULATORY FRAMEWORK
CHAPTER 6 : The Intellectual Property Rights Act
Correct
Sr. No Multiple Choice Questions A B C D
Answer
Intellectual Property Rights (IPR) protect the use of information and
1 D
ideas that are of Ethical value Moral value Social value Commercial value
The following can not be exploited by assigning or by licensing the
2 C
rights to others. Patents Designs Trademark All of the above
c. exclusive privilege of
3 a. knowledge disclosed to the b. monopoly granted for making, selling and using B
In ‘quid-pro-quo’, quo stands for public the term of the patent the invention d. None of the above

is capable of distinguishing may includes shapes of

4 Trade mark D
the goods or services of one goods or combination of
is represented graphically person from those of others colours All of the above
b. 25 years after the death c. 40 years after the death of d. 60 years after the
5 D
In India, the literary work is protected until a. Lifetime of author of author author death of author
b. composition of lines or c. mode or principle of
6 C
Design does not include a. features of shape colours construction d. None of the above
If Francesca invents a new process for recording music, she will likely
7 A
apply for a: Patent Trademark Copyright Industrial design
The rights of an author or artist with respect to his or her creation are
8 A
governed by the law of: Patent Trademark Copyright Industrial design
9 A street vendor on Bloor Street is selling fake "TAGG" watches. Under Copyright Trademark Patent Industrial design B
10 Which is false? Intellectual property rights may be protected by: Maintain Secrecy Registration use of Confidentiality Assignment D
Reeti has designed a uniquely shaped walker for senior citizens, which
can be collapsed and, with the aid of two levers, used as a chair. Reeti's
11 design is in commercial production under the name of Supportive D
Stroller. Which types of intellectual property would most likely apply to Copyright; trademark; Trademark; industrial Patent; trademark;
Reeti's creation? Patent; copyright; trademark industrial design design; trade secret industrial design

12 C
Which is not a remedy for infringement of intellectual property rights? An accounting for profits An injunction Specific performance Damages
The utterance of a
false statement about
another's goods or
13 Passing off is The public utterance of a services that is
Incitement to break the false statement of fact or harmful to the
contractual obligations of Presenting another's goods opinion that harms reputation of those
another and services as one's own another's reputation goods or services
b. composition of lines or c. mode or principle of
14 C
Design does not include a. features of shape colours construction d. None of the above
Which of the following is (are) included in Geographical indications of
15 D
Goods a. Handicraft b. Foodstuff c. Manufactured d. All of the above
 D. Geneva,
16 D
Headquarter of World Intellectual Property Organization is located in A. Rome, Italy B. Bern, Switzerland C. Berlin, Germany Switzerland
First World Intellectual Property Organization on Changing Face of
17 2005 2007 2011 2009 C
Innovation was published in
International organization, providing a stable environment for
18 A
marketing of intellectual property products, is known as A. WIPO B. UPU C. IBRD D. UNDP
Intellectual property rights and _______________ are two of the most trademark
19 A
important developing areas of law. Cyber law copyright infringement patent law infringement
What action would a person bring against someone who steals a trade Violation of
20 C
secret? Economic Espionage Act Infringement action Misappropriation trademark law
21 To be patented, an invention must be non-obvious useful noble all of the above D
The inventor’s partners or
22 C
Who can challenge the issue of a patent? Business competitors employees Anyone Federal government
Order requiring the
23 Which of the following can a successful plaintiff in a patent Royalties for the next ten Injunction preventing destruction of the B
infringement suit not recover? Money damages years future infringements infringing article
A patent may not be granted if the public used the invention for more
24 than one year prior to the filing of the patent application pursuant to the World Trade organization American Inventors A
_______________. fair-use doctrine public-use doctrine treaty Protection Act

The right to prevent others A mark used to

25 D
The ornamentation or shape of a from copying or modifying A monopoly to make, use, distinguish the source
A trademark is functional object, such as a chair certain works or sell an invention of goods or services
To qualify for federal
Trademark registrations can be Trademark law is intended protection, a mark must be
26 A
renewed for an unlimited to protect the owner’s distinctive and have a Surnames alone can be
Which of the following statements is true? number of ten-year periods original work. "secondary meaning." trademarked.
an order requiring the
27 In a successful copyright infringement case, the plaintiff can recover profits made by the copyright destruction of the an injunction prevent future D
_______________. infringer infringing works infringements all of the above
Intentional reproduction in Reproduction by a
28 Which of the following examples would not fall into the scope of the a broadcast of a reported teacher to illustrate a C
fair-use doctrine? Brief quotation in a news report Use in a parody event lesson
The Green Family Fun
29 C
Which of the following would not qualify as a mark? Toys "R" Us Reebok North Experience
Defendant infringed plaintiff’s The use of the mark is likely
mark. to cause confusion or
30 What must a plaintiff prove in a successful trademark infringement case? deception of the public as to D
Defendant used the mark in the origin of the services or
an unauthorized manner. goods. All of the above.
In the 1980s, which organization began using the Internet? U.S. Patent and Trademark U.S. Copyright Office
31 A
National Science Foundation U.S. Department of Defense Office
Commercial use domain names will normally use the following suffix in
32 C
their website address. .net .gov .com .org
 If Donald Trump wanted to start a website called donaldtrump.com and
found out someone had purchased the domain name and was refusing to The Digital Millennium The Anti-Cybersquatting
33 both A and B none of the above B
settle it unless Mr. Trump paid an enormous sum of money, Mr. Trump Copyright Act Consumer Protection Act
could use the following law as a remedy:

he owner/creator is a
The work does not have to British citizen / the
34 B
Which of the following is NOT a necessary criteria for protection of the The work is of a type that is be produced in a tangible The work satisfies the work was first
copyright holder? protected under the CDPA 1988. form - e.g. thoughts qualify requirement of originality published in the UK.
The duration of protection of copyright in relation to literary and The life of the creator
35 D
dramatic works is? 50 years The life of the creator 70 years plus 70 years
The remedies available for infringement of copyright does NOT include
36 C
which of the following: Injunction Account of profits Rectification Damages
Protection under the Registered Design Act 1949 exists for a maximum
37 A
period of 25 years 3 years 10 years 5 years
The 'apple' logo of the Apple Corporation is an example of which of the
38 D
following? Copyright Patent Design righ A trade mark
An invention that would
not have been obvious to
39 C
Which of the following will allow for a patent to be successfully The presentation of someone with skill and A new form of doing
applied? A new dramatic art. information. experience in the area. business

In relation to patents, where an employee creates an invention during The board of directors of the It depends on the
40 B
the normal course of employment and it relates to his/her duties at company the employee specific nature of the
work, the intellectual property belongs to which of the following? The employee. The employer. works for employment contract.
 BUSINESS REGULATORY FRAMEWORK
CHAPTER 5 : The Consumer Protection Act
Correct
Sr. No Multiple Choice Questions A B C D
Answer
any consumer association
1 As per section 2(1)(b) of Consumer Protection Act 1986, "complainant" registered under the the Central Government or D
means a consumer Companies Act, 1956 any State Government, All the above
As per section 2(1)(c) of Consumer Protection Act 1986, "complaint"
means any allegation in writing made by a complain­ant that a trader or
service provider has charged for (a) fixed by or under any law for the
time being in force
2 D
(b) displayed on the goods or any package containing such goods
(c) displayed on the price list exhibited by him
(d) agreed between the partiesthe goods or service a price in excess of
the price (a), (b) & (c) (b) (a), (c) & (d) (c) (a), (b) & (d) (d) (a), (b), (c) & (d)
consumer association
3 In case of death of a consumer who can prefer compliant under Section registered under the No one can prefer A
2(1)(b) of Consumer Protection Act 1986 his legal heir or representative State Government Companies Act, 1956 complaint
As per Section 2(1)(a) of Consumer Protection Act 1986,
'appropriate laboratory' means a laboratory or organisation (i) recognised
by the Central Government
4 (ii) recognised by a State Government D
(iii) financed or aided by the Central Government or a State Government
for carrying out analysis or test of any goods with a view to determining
whether such goods suffer from any defect (a) (i) & (ii) (b) (ii) & (iii) (c) (i) & (iii) (d) (i), (ii) & (iii)
5 The following is not a consumer a. The insurance company b. A licensee to run a phone c. A lottery ticket holder d. All the above D
The central consumer protection council shall consist of the following
6 D
members a. The minister in charge of consumer
b. Such
affairs
member
in theofcentral
other govt,
official
c. who
The
or Chief
non
shallofficial
be
justiceits
members
ofchairman
high court
representing
d. Both A&Bsuch interest as may be prescribed
The central council shall meet as and when necessary but at least ___
7 A
meeting of the council shall be held every year a. One b. Two c. Three d. Four
8 Members of state consumer protection council should not exceed a. Two b. Five c. Ten d. Three C
9 The chairman of the district consumer protection council is a. District magistrate b. Collector of the District c. MP of the district d. None of these B
Which one of the following know as Consumer disputes redressal
10 D
agency? a. District forum b. State commission c. National commission d. All the above
11 President of district forum is a. Collector of the district b. A person who are qualifiedc.asAadvocate
person who are qualified d. to None
be a district
of thesejudge C
12 The disqualification of the member is a. Has been convicted and sentencedb. Istoanimprisonment
underchargedfor insolvent
an offence
c. Is of which
unsound , inmind
the opiniond.ofAll
thethe
state
above
govt involves moralDturpitude
Every appointment of district forum shall be made by the state govt on
13 the recommendation of a selection committee consisting of the D
following a. President of the state commission
b. shall
Secretary,
be a chairman
law dept of the state
c. Secretary,
shall be incharge
a memberof dept d. dealing
All thewith
above
consumer affair shall be a another member
Who will working as president in case absence of the president of state
14 a. Governor b. Chief minister c. A sitting judge of High court d. Chief justice of highcourt C
commission
15 Jurisdiction of district for is rupees a. Exceed twenty lac b. exceed 50 lac c. Up to twenty lac d. twenty to fifty lac D
16 The complaint shall ordinarily be decided within a. Twenty one days from the date b.onThirty
whichdays
the complaint
from the date
was on
c.
received
Forty
whichfive
thedays
complaint
from the
wasdate
received
d. on
Nowhich
time limit
the complaint was received
A
 Where the complaint alleges a defect in the goods which cannot be
determined without proper analysis or test of the goods, the sample of
17 a. 30 b. 40 c. 45 d. 60 C
goods forwarded to appropriate laboratory for laboratory test. Such
types of case finding report within ______days
Every complaint shall be heard as expeditiously as possible and
endeavour shall be made to decide the complaint within a period of
18 ____from the date of receipt of notice by opposite party where the a. 3 Months, 5 months b. 45 days, 90 days c. 30 days, 90 days d. None of these A
complaint does not require analysis or testing of commodities and
within____, if it requires analysis or testing of commodities.
Provided that the minimum amount of sum so payable shall not be less
19 than ____ of the value of such defective goods sold or services provided, C
as the case may be to such consumers a. Rs 25000/­ b. 10% c. 5% d. None of these
Any person aggrieved by an order made by the District forum may
20 D
prefer an appeal such order to the State commission within a. 60 days b. 90 days c. 1 month d. Thirty days
Any person prefer an appeal to state commission shall be deposited
21 C
amount in prescribed manner a. Fifty percent of that amount b. Twenty five thousand rupees c. Whichever is less of the above
d. None
A&Bof these
22 Appropriate laboratory means a laboratory or organization a. Recognized by Central Government b. Recognized by state government
c. Both the above d. None of the above
23 What is the minimum age to be appointed as the member of consumer dispute 35 redressal forum/commission 40 25 20 A
24 For appointing as member of the consumer dispute redressal forum/ commission,
15 yearsat least .................. years experience
5 Years in dealing with problems
10 Years
relating to economics, law,
7 years
commerce, accountancy, industry,
C public affairs or adm
Minister in charge of
Secretary in charge of the the Department
25 Department dealing dealing A
Who is the Chairman of the selection committee constituted for President of the State Chief Justice of the High with consumer affairs in the with consumer affairs
appointing chairman and members of the District Forum (CDRF)? Commission Court State in the State
(d) Secretary in
Minister in charge of the (c) A sitting Judge of that charge of the
26 In the absence of the President of the State Commission, who will act as Department dealing High Court nominated by Department dealing C
Chairman of the Selection Committee constituted for appointing with consumer affairs in the (b) The Chief Justice of the the Chief Justice of the High with consumer affairs
chairman and members of the District Forum (CDRF)? State High Court Court in the State

27 The salary or honorarium and other allowances payable to the members (b) The National (d) The State C
of the District Forum shall be be prescribed by .................... (a) The Governor of the State Commission (c) The Central Government Government
(d) Six years or up to
(a) Five years or up to the age of (b) Six years or up to the (c) Five years or up to the the age of sixty seven
28 A
Every member of the District Forum shall hold office for a term of sixty five years, whichever is age of sixty five years, age of sixty years, years, whichever is
............. earlier whichever is earlier whichever is earlier earlier
The District Forum shall have jurisdiction to entertain complaints where
29 the value of the goods or services and the compensation claimed does not B
exceed ..................... rupees (a) 50 lakhs (b) 20 lakhs (c) 10 lakhs (d) 5 lakhs
Each District Forum shall consist of ............. number of members
30 B
(excluding president), one of whom shall be a woman (a) 4 (b) 2 (c) 3 (d) 5
 BUSINESS REGULATORY FRAMEWORK
CHAPTER 4 : E - Transaction
Correct
Sr. No Multiple Choice Questions A B C D
Answer

1 Which section of IT Act deals with the appointment Section 17 Section 15 Section 10 Section 5 A
of Controller of certifying authorities
What is the maximum penalty for damage to
Computer, Computer systems, unauthorized access,
2 Rs. 50 lakh Rs.1 crore Rs. 5 crore Rs,75 lakh B
download of data, infecting with virus, denial of
access etc as per Section 43
What is the penalty for publishing images of a
5 years imprisonment or 5 3 years imprisonment or 2
3 person's private parts without consent, as per IT Act Life imprisonment None of the above C
lakh rupees penalty or both lakh rupees penalty or both
2000?
Which section of IT Act deals with the legal
4 Section 4 Section 2 Section 5 Section 6 A
recognition of electronic records?

5 Which section of IT Act deals with the appointment Section 5 Section 10 Section 15 Section 17 D
of Controller of certifying authorities?
Three year
Three year imprisonment Three year imprisonment or
imprisonment or 2
6 What is the punishment for hacking of computers Life Imprisonment or 10 lakh rupees penalty or 5 lakh rupees penalty or C
lakh rupees penalty or
both both
both

7 The section deals with the use of electronic records Section 6 Section 5 Section 4 Section 3 A
and digital signature in Government and its agencies
The things carried out by means of electronic data
8 interchange and other means of communication is E - communication e - governance e - records e- commerce D
commonly referred as
The authentication to be effected by the use of
9 assymetric crypto system And has function is known Public Key Private Key Digital Signature e- commerce C
as
10 Digitial Signatures created and verified using Programme graphical coding HTML cryptography D
11 Private key is used to Digitally sign Verify the sign verify the documents make payment A
12 Public key is used to Digitally sign Verify the sign verify the documents make payment B

The central government may appoint a ___ of

13 commissioner controller executive president B
certifying authority who shall excercise supervision
over the activities of certifying authorities
_____ means a person who has been granted a license
14 Controller Certifying authority certificate issuer licencing authority B
to issue a Digital signature certificate
Filling any form in the
15 issue of grant making payment All of the above D
E - records and digital signatures are used to government
 Controller of Certifying Authorities (CCA) work Ministry of Communication
16 C
under ? Prime Minister office Reserve Bank of India & IT autonomous body
Which is the Act which provides legal framework for
17 IT (amendment) Act 2008 Indian Penal Code IT Act 2000 None of the above C
e-Governance in India
What is the time limit for filing appeal against the
18 30 days 90 days 60 days 45 days C
order of Cyber appellate tribunal?
Which is the appeal court on the orders issued by
19 A. Munsiff Court A. District Court A. High Court A. Supreme Court C
Cyber appellate tribunal?
What is the term of the office of the presiding
20 3 years 4 years 6 years 5 years D
officer of Cyber appellate tribunal?

21 C
Verification of electronic records is possible through Public Key Private Key Digital Signature e- commerce
As per IT act those who fail to furnish documents
22 D
will be penalised upto 5000 per day 50000 25000 150000

The certifying authosrity empowers to issue a Digital

23 A
signature certificate shall have to procure a license
from the _____ to issue digital certificate controller of certifying authority central governement state government Commissioner
____ is a person in whose name the Digital
24 B
certioficate is issued certified authority subscriber holder controller
The ____ has the power to suspent or revoke Digital
25 B
signature Certificate commissioner Certifying authority subscriber controller
 BUSINESS REGULATORY FRAMEWORK
CHAPTER 3 : Sale of Good Act
Correct
Sr. No Multiple Choice Questions A B C D
Answer
As per-section 2(1), a person who buys or agrees to
1 Buyer Seller Both A and B None of the above A
buy goods is called
2 The voluntary transfer of possession from one person toTransfer
another is called change of posession dilivery None of the above C
3 Goods other than actionable claim
As per section 2, sub section 7 every kind of moveable property Both (a)money
and and (b)is called Future goods None of above A
Future goods means goods to be manufactured or
4 B
produced or acquired by the seller In future prescribed time After making of contract Before making of contract None of above
Who has ceased to pay his debts
As per section 2 sub-section 8, of the Sales of Goods Or can not pay his debts as
5 in the ordinary course of Both (a) and (b) None of above C
Act, insolvent means a person they become due
business

The agent having in customary course of business as

such agent authority either to sell goods or to consign
6 Agent Mercantile agent Partner None of above B
goods for the purpose of sale or to buy goods or to
raise money on the security of goods is called

The goods identified and agreed upon at the time a

7 Ordinary goods Specified goods Scheduled goods None of above B
contract of sale is made are called

According section 5(2) Subject to provision of any law Partly in writing or partly
8 Made in writing By words of month All of above ways D
for the time being in force a contract of sale may be in words of month

A stipulation in contract of sale with reference to

9 A condition A warranty Both (a) and (b) None of above C
goods which are the subject there of may be
Section 31 of the Sale of Goods Act deals with duties
10 B
of seller To show goods To deliver goods To change goods None of above
Section_____ to______, of the Sale of Goods Act deals
11 31 to 44 25 to 40 Both (a) and (b) None of above A
with performance of the contract
Where an unpaid seller has made part delivery of the
12 Return on the remainder Of lien on the remainder Sale to any other person None of above B
goods he may exercise his right________
Suit for damages for non- Suit for damages for non-
13 Suit for price None of above B
Section 57, of the Sale of Goods Act, deals with delivery acceptance
Section 58, of The Sale of Goods Act provide right of
14 suit for Specific Performance of Contract on the part Seller Buyer Both (a) and (b) None of above A
of
 Where a third party is prevented from making the
valuation of goods, as price to be paid by the buyer to
15 the seller, by a party to the agreement, under section sue for specific performance sue for damages both (a) and (b) either (a) or (b). A
10 of the Sale of Goods Act, 1930, the other party has
a right to

Where the price of the goods under a contract of sale

is to be fixed by the valuation of a third party who liable to pay the reasonable price liable to pay the minimum not liable to pay any price liable to pay the
16 fails to fix the valuation, but goods are supplied to the of the goods A
price of the goods until fixed by the valuer maximum retail price.
buyer, under section 10 of the Sale of Goods Act,
1930 the buyer is
Where the price of the goods under a contract of sale
has to be determined by the valuation of a third
17 party, and the valuer fails or refuses to make the become void be voidable remain valid become impossible. B
valuation, the contract under section 10 of the Sale of
Goods Act, 1930, shall
can be delegated by the can be delegated by
cannot be delegated by the
18 The duty of fixing value for the goods, under section can be delegated by the valuer valuer with the consent of the valuer with the B
valuer
10 of the Sale of Goods Act, 1930 the buyer leave of the court.
the average of the
The prima facie evidence of a reasonable price within the one which the court highest and the lowest
19 the current price the market price B
the meaning of section 9 of the Sale of Goods Act, fixes price in a period of
1930 is one year.
avoid the contract so far as
If a contract for sale of goods is for sale of two or it relates to the goods
20 avoid the whole contract not avoid the contract at all either (b) or (c). D
more things under an entire contract, the perishing of perished and not the whole
some of them would contract
A contract of sale of goods, on goods having been at any time irrespective of
damaged/perished subsequent to the formation of the before the property in goods has after the property in goods whether the property in
21 only (b) not (a) or (c). A
contract under section 8 of the Sale of Goods Act, passed to the buyer has passed to the buyer goods has passed to the
1930, can be avoided buyer or not
partly on the buyer and the seller if the price is
22 the buyer the seller A
In a sale , if the goods are destroyed , the loss falls on partly on the seller not bee paid
Sale of goods act deals only with the goods which are
23 Immovable Movable Specific All of the above B
______ in nature
________ is stipulation which is collateral to the
24 Condition Warranty Guarantee collateral contract B
purpose of the contract
___________ is the concept of LET the Buyer
25 Information Center unfair trade practice Caveat Emptor Buyer kingdom C
Beaware
The Subject matter of the contract under the sale of
26 Money Goods Immovable goods All of the above B
goods act must be
 In Agreement to sell the transfer of property in goods
27 At the end of the contract Immediately In future Date Both b and C C
from seller to the buyer takes place

28 Specific generic future None of the above A

Ascertain goods is otherwise called as ______ goods
______ cannot be the subject matter of the sale of
29 Gas Electricity Money All of the above C
goods
In case of sale the seller can sue the buyer for the ___
30 Damages Price interest Fraud B
in case of breach
Which of the below is not included in goods as per
31 Forming part of the land Stocks Actionable Claims Crop C
Sale of goods ACT 1930

when the buyer does not

in case of implied condition and intimate the purpose to the When goods are sold by when goods are sold
32 The Doctrine of Caveat emptor aqpplies A
warranties seller and depends upon his sample by discription
own skill and judgement

If a Sale is by sample as well as by description,the

either sample or
33 implied condition is that the foods shall correspond Sample description both sample and description C
description
with

34 repudiate the contract claim damages only return the goods refuse to pay the price B
In case of breach of a warrantu, the buyer can
collateral to the main
essential to the main purpose of not essential to the main
35 A condition is stipulation which is purpose of the contract of None of the above A
the contract of sale purpose of contract of sale
sale
In a sale , there is an implied condition on the part of b) is in possession of the d) will acquire the
36 A
the seller that he – a) has a right to sell the goods goods c) will have the right to sell good
(b) Existing and Future (c) Existing, Future and
37 A
The goods which form the subject of a Sale can be: (a) Existing Goods Goods Contingent Goods (d) None of these
If the seller make use of Pretended bidding to raise
38 A
the price the sale is: (a) Voidable (b) Void (c) Illegal (d) None of these
There is an implied
The seller guarantees the quality The buyer himself takes the condition that the buyer
39 B
The maxim of Caveat Emptor in a contract of sale or fitness for any particular risk as to the quality and can repudiate the contract
means: purpose supplied condition of the goods at his option None of these
A agrees to sell to B “”a hundred tons of oil” –the
40 B
agreement is: Valid b) Void (c) Voidable (d) Partially valid

41 A contract of sale of goods is a contract whereby the in goods to the buyer for a none of the options C
seller transfers or agrees to transfer the property: for a price in goods price provided
every kind of movable
property other than property, other than
42 D
According to Section 2(7) of Sale of Goods, ‘goods’ actionable claims and actionable claims and
means: every kind of movable property money every kind of property money
43 where trees are sold to be cut and then taken away by that will be a contract for sale of that will be a contract for that will be a contract of that will be a contract B
the buyer; immovable property. sale of movable property. existing goods of future goods
may be implied from the all options are
44 D
A contract of sale may be made in writing by word of mouth, conduct of the parties. correct

45 where the transfer of the property in the goods is to B

take place at a future time, the contract is called sale an agreement to sell. provisional sale conditional sale
In a contract of sale of goods, Breach of a condition repudiate the contract and none of the options
46 C
gives the aggrieved party right to: repudiate the contract claim damages also claim damages provided

The goods shall be free

from any defects rendering
47 The buyer shall have a them un-merchantable, D
reasonable opportunity of which would not be
The implied conditions, in a sale by sample The bulk shall correspond with comparing the bulk with apparent on reasonable all points given as
include: the sample in quality the sample examination of the sample option A, B and C
In a contract for sale of goods, Buyer may have an
48 action, in respect of physical injuries caused by defect aginast the dealer as also the none of the options is A
in the goods; against the manufacturer against the dealer manufacturer correct

A contract is deemed to have become impossible of

all given options are
49 performance under the circumstances that the subject inherent impossibility supervening impossibility Expected impossibility B
correct
matter of a contract is destroyed for no fault of the
promisor. Such circumstances are called:

A contract is discharged by death of the promisor, by

insolvency of the promisor, by entering into a new all given options are
50 Operation of law by breach supervening impossibility A
contract where inferior rights under the previous correct
agreement are merged in the new one; such discharge
of a contract is called: discharge by
 BUSINESS REGULATORY FRAMEWORK
CHAPTER 1 : Law of Contract Act
Correct
Sr. No Multiple Choice Questions A B C D
Answer
Acceptance of proposal should be unconditional and
1 Complete Legal Illegal Uncompleted A
____
2 Contract without consideration is_____ and void Void able Illegal Legal Improper C
3 Each ___ is not contract Agreement Acceptance Insurance Promise A
The contract is that where implementation of
4 Law Parties Proposal Advocates A
agreement can be done by ____
Minor cannot be done as promissory but he can be
5 Promises Implement or of promise Adult Acceptance D
done as ………..

All damages which he may be All sums which he may

All costs which he may be
compelled to pay in any suit in have paid under the terms
6 The promisee in a contract of indemnity, acting compelled to pay in any All of the above D
respect to any matter to which any compromise of any
within the scope of his authority, is entitled to such suit
he promise to indemnity applies such suit
recover from the promiso :
Which one of the following is correct sequence in the Offer, no acceptance, Acceptance, no Contract, offer,
7 Contract, breach, damages A
claim for damage for breach of contract ? damages consideration, damages damages

8 Damages awarded with a view to punish the party Liquidated damages Punitive damages Special damages General damages B
who commits the breach of contract are known as :
Every promise and every set of promises, forming the
9 agreement contract offer Acceptance B
consideration for each other, is an
is invalid for want of has no consensus ad
10 cannot be enforceable by law. is valid in law. A
Agreement to murder a person consideration. idem.
A promise to give 5000 per month pocket money to B can accept a lower B has to give 5000 to
11 B can sue his father. B has no remedy against A. B
his son B. If A does not give the pocket money pocket money also. his father.
mutual lawful rights
rights and obligations of the obligations of the parties to mutual understanding
12 and obligations of the D
parties to it. it. between the parties to it.
A contract creates parties to it.

to be proved to the satisfaction required to the extent of

13 In agreements of a purely domestic nature, the presumed to exist. not relevant at all. A
of the court. consideration.
intention of the parties to create legal relationship is
A and B enter into a contract to marry each other.
14 Before the time fixed for the marriage, A goes mad. void. illegal. valid. voidable. A
The contract becomes
A makes a contract with B to beat his business unenforceable
15 valid contract. illegal agreement. voidable contract. B
competitor. This is an example of contract.
16 ……………… is made by words written. Express contract implied contract Tacit contract Unlawful contract A
 Where a contract has to be inferred from the conduct
17 express contract. implied contract. tacit contract. unlawful contract B
of parties, it is called
Drawing cash from ATM, sale by fall of hammer at an
18 express contract. implied contract. tacit contract. unlawful contract B
auction sale, etc., are example of

19 . …………….. is a one-sided contract in which only Void contract Illegal agreement Unilateral contract Bilateral contract C
one party has to perform his promise or obligation.
Where the obligation in a contract is outstanding on
20 void contract. illegal agreement. . unilateral contract. bilateral contract D
the part of both parties, it is called

Where a particular type of contract is required by law

unenforceable
21 to be in writing and registered, it must comply with void contract. illegal agreement. valid contract. D
contract.
the necessary formalities as to writing, registration
and attestation. Otherwise, such a contract is
All illegal agreements are void; but all void
22 True Partly true False None of the above A
agreements are not illegal.
An offer and its acceptance is the basic requirement should be made to the other should be made to another
may also be made to
23 of an agreement and as per this requirement an offer who is related to him.another who may or may not be should be made to C
himself.
by one party before the Registrar related to him.
According to enforceability, the contracts may be
24 valid contracts. void contracts. voidable contracts. all of the above D
classified as
that the parties do not
that parties do not intend
that parties do not intend to that parties intend to intend to create legal
25 to make legal and social D
create social relations. perform them. relations between
relations.
In social agreements usual presumption is them.
A promised to marry B. Later on B died. This contract is void from very
26 becomes void. is valid. is illegal now. A
of marriage beginning.
An implied contract is one which comes into non-availability of a paper inability of the parties to directions given by a
27 conduct of the parties. A
existence on account of for writing. write or speak. court
A contract in which, under the terms of a contract,
28 nothing remains to be done by either party is known executed contract. executory contract. unilateral contract. none of the above. A
as
A contract in which, under the terms of a contract,
29 one or both the parties have still to perform their executed contract. . executory contract. unilateral contract. none of the above B
obligations in future is known as
partly executed or partly
30 executed contracts. executory contracts. all of the above. D
Contracts classified on the basis of performance are executory contracts.

31 words either spoken or written. documents. both words and documents. all of the above. D
Express contract means a contract made by
He is liable to return the
32 He can be sued for fraud He cannot be sued for fraud None of the above B
A minor by representing his age borrows some money money
33 want of consideration unsoundness of mind illegality of object uncertainity of object B
Flaw in capacity to contract may arise from
When a person positively asserts that a fact is true
34 when his information does not warrant it to be so, misrepresentation fraud undue influence Coercion A
through he believes it to be true, there is
It there is fradulent misrepresentation as to the
35 Void voidable valid contract. illegal B
character of a document the contract is
An unlawful detention of any property to obtain his
36 misrepresentation fraud undue influence Coercion D
consent to a contrat amounts to
A is not entitled to be
A is entitled to be reimbursed
37 A supplies the wife and children of B, a lunatic with reimbursed from B's Both A and B None of these A
from B's property
necessaries suitable to their condition in life : property
A, a tradesman, leaves goods at B's house by mistake.
38 Bound to pay A for them Not Bound to pay for them Both A and B None of these A
B treats the goods at his own. B is

39 A sell and delivers goods to B. A afterwards, without The agreement is Void The contract is Void The contract is Voidable The agreement if valid A
consideration agrees to pay for them in default of B
A enters into a Contract with B to sell him 100 bales
Either B or C, or both for
40 of cotton and afterwards discovers that B was acting B for the piece of cotton C for the piece of cotton None of these A
the piece of cotton
as agent for C. A may sue :
A is not entitled to be
A is entitled to be reimbursed
41 A supplies the wife and children of B, a lunatic with reimbursed from B's Both A and B None of these A
from B's property
necessaries suitable to their condition in life : property

A agrees to buy from a certain horse. It turns out that

42 Void Voidable Valid None of these A
the horse was dead at the time of bargain. Though
neither party way aware of the fact. The agreement is
A, by Misrepresentation, leads B erroneously to
believe that five hundred mauds of indigo are made
annually at A's factory. B examines the accounts of Voidable on account of A's Not Voidable on account of
43 Valid Void B
the factory. Which show that only four hundred misrepresentation A's misrepresentation
mauds of indigo have been made. After this B buys
the factory, the contract is.

A is entitled to succeed to an estate at the death of B.

44 B dies C having received intelligence of B's death, Voidable at the option of A Voidable at the option of B Not Voidable None of the above A
prevents the intelligence reaching A and thus induces
A to sell him his interest in the estate, the sale is.
A and B being traders, enter upon a contract. A has
private information of a change in prices which
45 Bound to inform B Not Bound to inform B Both A and B None of the above B
would affect B's willingness to proceed with the
contract. A is .
 A intending to deceive B, falsely represents that five
hundred mauds of indigo are made annual at A's Voidable at option of
46 Legal Voidable at option of B Void B
factory and thereby inducess B to buy the factory. A
The contract is.
A agrees to sell a specific cargo of goods supposed to
be on its way from England to Bombay it turns out
that before the day of the bargain the ship conveying
47 Void Voidable Legal None of the above A
the cargo had been cast away and the goods lost
neither party has aware of these facts, the agreement
is.
Cannot be enforced by A's Cannot be enforced by B
Cannot be enforced either by A's
48 A promises to paint a picture for B by a certain day at representatives but can be but can be by A's None of these D
representatives or by B
a certain price. A dies before the day. The contract : by B representatives
A, B and C jointly promise to pay D the sum of Rs.
3,000. C is compelled to pay the whole. A is insolvent To receive Rs. 500 from A's To receive Rs. 500 from A's To receive Rs. 1,000
49 To receive Rs. 1,500 from B A
but his assets are sufficient to pay one half of his estate and Rs. 1,250 from B estate and Rs. 1,000 from B from B
debts. C is entitled
A promise to deliver goods at B's warehouse on first
January, on that day A brings the goods to B's A has performed his
50 A has not preformed his promise Both A and B None of these A
warehouse, but after the hour closing it, and they are promise
not received
Advertisement of an auction is not ……….. but it
51 Acceptance Consideration Proposal Agreement C
only invitation for the proposal
such agreement is like specific incident occurred in
specific manner at that time one party give a promise
has to pays some amount or a special object that he
agreement which is agreement in restraint of
52 and such incident occurs in opposite manner at that wagering agreement legal agreement B
un certain trade
time opposite party has to promise to pay some
amount or any object to the first party such
agreement is called ………..
lt is not a consideration which is not happened with
53 Promise Third person Major Promisor D
the wishes of ………..
If all ……….. are made with the consent of the
54 Matters Definitions Consideration Gifts C
parties than it becomes a contract

When the contract possess two part one legal and

55 second illegal, and it is possible to separate legal parts Quasi Legally Illegal contract Ambiguous B
at that time the court can implement the part of

56 B
A breach of contract can be of _____________ breach Actual Anticipatory Both A and B None of the above
57 A minor can be an Agent partner Surety None of the above A
58 A Consideration can simply be explained as Profit Benefit Income Acceptance B
 The legal relationship between the middleman and
59 C
the business person is governed by law of business law of surety law of agency None of the above

60 A
The person who is represented by agent is called the Principal principle Middle man None of the above
The ____ does not usually get any rights or
61 B
responsibilities under the contract Principal Agent Surety None of the above
_____ of the agent is to act on behalf ofprincipal is
62 C
must Consideration Rule Intention None of the above
An agreement between partners imposing reasonable
restriction on a partner for not carrying on any
63 A
business within a specified time or local limits on
ceasing to be a partner is: (a) Void (b) Valid (c) Illegal (d) None of these
Mr. Aslam applied to a bank for a loan at a time when
there is stringency in the money market, the banker
64 B
declines to make the loan except at an unusually high (b) Transaction in the
rate of interest, this is called: (a) Undue influence ordinary course of business (c) Free consent (d) None of these

65 When consent to an agreement is caused by coercion, C

fraud, or misrepresentation, the agreement is: (a) Valid (b) Void (c) Voidable (d) None of these
An agreement in restraint of the marriage of any (d) None of
66 D
person other than a minor is called : (a) Valid (b) Invalid (c) Illogical these(Void)

An agreement entered into before marriage between a

67 A
Muslim wife and husband that the wife shall be at Voidable at the option of
liberty to live with her parents after marriage is: Valid Void husband (d) None of these
A promises to obtain for B an employment in the
68 Public Service and promises to pay rupees 1000 to A. Voidable at the option of B
The agreement is: Valid Void husband (d) None of these
Ceased to be a valid
69 D
A void contract is: An illegal agreement Partly valid agreement agreement None of these

70 An agreement to pay one hundred rupees to a holy A

man for prayers for the success of a suit in a court is: (a) Valid (b) Void (c) Voidable (d) None of these
A, for natural love and affection, promises to give his
71 son B, Rs.100,000, and puts his promise to B into A
writing and registers it. Will the contract be: (a) Valid (b) Void (c) Voidable (d) None of these
A contract B to sell his horse for Rs.500 by 10th
72 January 2010. The horse so contracted dies on 8th B can sue for A B
January 2010. The contract is: (a) Valid (b) Void compensation A is liable for damages
Voidable at the option of a
73 When consent to an agreement is caused by coercion, party whose consent was so C
fraud or misrepresentation, the agreement is: Valid (b) void caused Partially void
 He cannot have access to
74 A
He may be admitted to the and inspect and copy any of
A minor in a firm enjoys the following rights: benefits of partnership the accounts of the firm None of these
to each according to his to each according to his none of the options is
75 A
the phrase “quantum meruit” means: as much as earned need condition correct
 BUSINESS REGULATORY FRAMEWORK
CHAPTER 2 : Partnership Act
Correct
Sr. No Multiple Choice Questions A B C D
Answer
formulation and regulation of
formulation and regulation of Joint Ventures with formulation and regulation of formation and regulation of Limited
General Partnership Firms and unlimited liability formed Chit Funds Organisations with Liability Partnership with limited D
The Limited Liability Partnership Act, 2008 (6 of Limited Liability formed under under Indian Contract Act, unlimited liability formed under liability formed under the Limited
1 2009) is an Act to make provisions for the Indian Partnership Act, 1932 1872 the Chit Funds Act, 1982 Liability Partnership Act, 2008.
An ordinary partnership business can have: Not more than 20
B
2 Not more than 50 partners. partners. (T) Any number of partners. Any number than 2 partners.
3 Every partner is ……….. of the other partners. an agent servant owner principa A

Which of the following is not an essential requisite business to be carried by all or any D
4 for creating a partnership as per section 4 an agreement to carry on a business sharing of profits sharing of losses of them acting for all.
Which of the following is an exception to the where there is a provision for
partnership at will, as provided under section 7 of the where there is a provision for the determination of the A
5 Indian Partnership Act, 1932 duration of the partnership partnership both (a) and (b) only (a) and not (b).

The non - registration of firm does not affect the to file a suit for the recovery of more to file a suit for the recovery to file a suit against a partner for to claim a set off not exceeding Rs B
6 right of the firm than 100 of less than Rs. 100 recovery of money due by him 100
Registration of a firm under the Indian Parnership
compulsory not optional not necessary inevitable C
7 Act, 1932
not liable for the debts of the
A nominal partner is liable for the debts of the firm liable for the nominal sum one whose liability is primary A
8 firm
Public notice is not given on the death of a partner
The estate of the deceased partner is The estate of the deceased his legal representatives are
but the firm continues the business. For the act of the None of these B
liable partner is not liable personally liable.
9 firm done after his death
The Change in the nature of the business of a firm
D
10 can be made if the majority of the partners agree the seniot partners agree the financing partners agree all the partners agree
If the assests of the firm are insufficient to discharge
the debts and liabilities of the firm the partners shall in the profit sharing ratio in the capital ratio equally as determined by the court. A
11 bear the deficiency
complete breakdown of the relation
Dissolution of the partners means of partnership between all the only a change in the relation stopping the business of the firm B
12 partners of the partners for some time stopping the business permanetly.

Which one of the following statements about limited An LLP has a legal personality The liability of each partner Members of an LLP are taxed as A limited company can convert to
D
liability partnerships (LLPs) is incorrect? separate from that of its members. in an LLP is limited partners an LLP.
13
The right to be indemnified by the
The Partnership Act 1890 section 24 sets out rights of The right to share equally in the
Right to take part in the firm for any liabilities incurred or
partners (in default of their own agreement). Which The right to a salary. capital and profits of the B
management of the business payments made in the course of the
one of the following is not included in section 24? business
14 firm's business.
Sparkle Ltd is a private limited company limited by
one provided it is a different person One which can be the same person
shares. It has one director. How many shareholders Five Two D
than director as the director
15 does the law require it to maintain?
 An organisation running a business has the following
attributes: the assets belong to the organisation, it can
create a floating charge over its assets, change in A limited liability
A private limited company a general partners A public limited company B
membership does not alter its existence, and members partnership
cannot transfer their interests to others. What type of
organisation is it?
16
Every Limited Liability Partnership as per the
Limited Liability Partnership Act, 2008 shall have at at least one among them shall be both of them shall belong to both of them should be non- both of them should belong to a
A
least two Designated Partners (DPs) who are resident in India one family residing in India resident Indians (NRIs) single country outside India.
17 individuals and
Where a partner is authorised to recover dues of the
partnership & spend the same for the business of the accountable civilly to the
guilty of criminal breach of trust both (a) and (b) either (a) or (b). C
partnership and if he does not deposit the money so other
18 collected in the bank the partner is
When the property is purchased out of the is a question of fact to be
is a question of law to be decided on
partnership funds but in the name of an individual becomes an estate of the partner becomes a joint estate determined with reference to A
legal principles.
19 partner, it the intention of the partners

belong to the partnership if belong to the partnership if the

belong to the partnership if the
All the benefits and liabilities arising out of a contract the contract has been contract has been performed
contract has been performed before none of the above. A
made on behalf of a partnership do not performed before the after the dissolution of the firm
the dissolution of the firm
20 retirement of the firm or retirement of a partner
Sr.
No Question Option 1 (a) Option 2 (b) Option 3 (c) Option 4(d)
1 Acceptance of proposal should be unconditional and ____ Complete Legal Illegal Uncompleted
2 Contract without consideration is_____ and void Void able Illegal Legal Improper
3 Each ___ is not contract Agreement Acceptance Insurance Promise
The contract is that where implementation of agreement can be done
4 Law Parties Proposal Advocates
by ____
5 Promises Implement or of promise Adult Acceptance
Minor cannot be done as promissory but he can be done as ………..
All damages which he may
be compelled to pay in any All costs which he may be All sums which he may have
6 suit in respect to any matter compelled to pay in any paid under the terms any All of the above
The promisee in a contract of indemnity, acting within the scope of to which he promise to such suit compromise of any such suit
his authority, is entitled to recover from the promiso : indemnity applies
Which one of the following is correct sequence in the claim for Offer, no acceptance, Acceptance, no
7 Contract, breach, damages Contract, offer, damages
damage for breach of contract ? damages consideration, damages
Damages awarded with a view to punish the party who commits the
8 Liquidated damages Punitive damages Special damages General damages
breach of contract are known as :
Every promise and every set of promises, forming the consideration
9 agreement contract offer Acceptance
for each other, is an
cannot be enforceable by is invalid for want of
10 is valid in law. has no consensus ad idem.
Agreement to murder a person law. consideration.
A promise to give 5000 per month pocket money to his son B. If A B has no remedy against B can accept a lower pocket
11 B can sue his father. B has to give 5000 to his father.
does not give the pocket money A. money also.
rights and obligations of the obligations of the parties to mutual understanding mutual lawful rights and
12
A contract creates parties to it. it. between the parties to it. obligations of the parties to it.
In agreements of a purely domestic nature, the intention of the parties to be proved to the required to the extent of
13 presumed to exist. not relevant at all.
to create legal relationship is satisfaction of the court. consideration.
A and B enter into a contract to marry each other. Before the time
14 void. illegal. valid. voidable.
fixed for the marriage, A goes mad. The contract becomes
A makes a contract with B to beat his business competitor. This is an
15 valid contract. illegal agreement. voidable contract. unenforceable contract.
example of
16 ……………… is made by words written. Express contract implied contract Tacit contract Unlawful contract
Where a contract has to be inferred from the conduct of parties, it is
17 express contract. implied contract. tacit contract. unlawful contract
called
Drawing cash from ATM, sale by fall of hammer at an auction sale,
18 express contract. implied contract. tacit contract. unlawful contract
etc., are example of
. …………….. is a one-sided contract in which only one party has to
19 Void contract Illegal agreement Unilateral contract Bilateral contract
perform his promise or obligation.
Where the obligation in a contract is outstanding on the part of both
20 void contract. illegal agreement. . unilateral contract. bilateral contract
parties, it is called

Where a particular type of contract is required by law to be in writing

21 void contract. illegal agreement. valid contract. unenforceable contract.
and registered, it must comply with the necessary formalities as to
writing, registration and attestation. Otherwise, such a contract is
 All illegal agreements are void; but all void agreements are not
22 True Partly true False None of the above
illegal.
should be made to the other should be made to another
may also be made to
23 who is related to him.another who may or may not be should be made to
An offer and its acceptance is the basic requirement of an agreement himself.
before the Registrar related to him.
and as per this requirement an offer by one party
24 According to enforceability, the contracts may be classified as valid contracts. void contracts. voidable contracts. all of the above
that parties do not intend to that the parties do not intend to
that parties do not intend to that parties intend to
25 make legal and social create legal relations between
create social relations. perform them.
In social agreements usual presumption is relations. them.
is void from very
26 becomes void. is valid. is illegal now.
A promised to marry B. Later on B died. This contract of marriage beginning.
non-availability of a paper inability of the parties to
27 conduct of the parties. directions given by a court
An implied contract is one which comes into existence on account of for writing. write or speak.
A contract in which, under the terms of a contract, nothing remains to
28 executed contract. executory contract. unilateral contract. none of the above.
be done by either party is known as
A contract in which, under the terms of a contract, one or both the
29 executed contract. . executory contract. unilateral contract. none of the above
parties have still to perform their obligations in future is known as
partly executed or partly
30 executed contracts. executory contracts. all of the above.
Contracts classified on the basis of performance are executory contracts.
words either spoken or
31 documents. both words and documents. all of the above.
Express contract means a contract made by written.
He cannot be sued for He is liable to return the
32 He can be sued for fraud None of the above
A minor by representing his age borrows some money fraud money
33 Flaw in capacity to contract may arise from want of consideration unsoundness of mind illegality of object uncertainity of object
When a person positively asserts that a fact is true when his
34 information does not warrant it to be so, through he believes it to be misrepresentation fraud undue influence Coercion
true, there is
It there is fradulent misrepresentation as to the character of a
35 Void voidable valid contract. illegal
document the contract is
An unlawful detention of any property to obtain his consent to a
36 misrepresentation fraud undue influence Coercion
contrat amounts to
A is entitled to be A is not entitled to be
37 A supplies the wife and children of B, a lunatic with necessaries reimbursed from B's reimbursed from B's Both A and B None of these
suitable to their condition in life : property property
A, a tradesman, leaves goods at B's house by mistake. B treats the
38 Bound to pay A for them Not Bound to pay for them Both A and B None of these
goods at his own. B is
A sell and delivers goods to B. A afterwards, without consideration
39 The agreement is Void The contract is Void The contract is Voidable The agreement if valid
agrees to pay for them in default of B
A enters into a Contract with B to sell him 100 bales of cotton and Either B or C, or both for the
40 B for the piece of cotton C for the piece of cotton None of these
afterwards discovers that B was acting as agent for C. A may sue : piece of cotton
A is entitled to be A is not entitled to be
41 A supplies the wife and children of B, a lunatic with necessaries reimbursed from B's reimbursed from B's Both A and B None of these
suitable to their condition in life : property property
 A agrees to buy from a certain horse. It turns out that the horse was
42 dead at the time of bargain. Though neither party way aware of the Void Voidable Valid None of these
fact. The agreement is
A, by Misrepresentation, leads B erroneously to believe that five
hundred mauds of indigo are made annually at A's factory. B
Voidable on account of A's Not Voidable on account
43 examines the accounts of the factory. Which show that only four Valid Void
misrepresentation of A's misrepresentation
hundred mauds of indigo have been made. After this B buys the
factory, the contract is.

A is entitled to succeed to an estate at the death of B. B dies C having

44 Voidable at the option of A Voidable at the option of B Not Voidable None of the above
received intelligence of B's death, prevents the intelligence reaching
A and thus induces A to sell him his interest in the estate, the sale is.
A and B being traders, enter upon a contract. A has private
45 information of a change in prices which would affect B's willingness Bound to inform B Not Bound to inform B Both A and B None of the above
to proceed with the contract. A is .
A intending to deceive B, falsely represents that five hundred mauds
46 of indigo are made annual at A's factory and thereby inducess B to Legal Voidable at option of B Void Voidable at option of A
buy the factory. The contract is.
A agrees to sell a specific cargo of goods supposed to be on its way
from England to Bombay it turns out that before the day of the
47 Void Voidable Legal None of the above
bargain the ship conveying the cargo had been cast away and the
goods lost neither party has aware of these facts, the agreement is.
Cannot be enforced by A's
Cannot be enforced either by Cannot be enforced by B but
48 A promises to paint a picture for B by a certain day at a certain price. representatives but can be None of these
A's representatives or by B can be by A's representatives
A dies before the day. The contract : by B
A, B and C jointly promise to pay D the sum of Rs. 3,000. C is To receive Rs. 500 from
To receive Rs. 1,500 from To receive Rs. 500 from A's
49 compelled to pay the whole. A is insolvent but his assets are A's estate and Rs. 1,250 To receive Rs. 1,000 from B
B estate and Rs. 1,000 from B
sufficient to pay one half of his debts. C is entitled from B
A promise to deliver goods at B's warehouse on first January, on that
A has not preformed his A has performed his
50 day A brings the goods to B's warehouse, but after the hour closing it, Both A and B None of these
promise promise
and they are not received
Advertisement of an auction is not ……….. but it only invitation for
51 Acceptance Consideration Proposal Agreement
the proposal
such agreement is like specific incident occurred in specific manner
at that time one party give a promise has to pays some amount or a
agreement which is agreement in restraint of
52 special object that he and such incident occurs in opposite manner at wagering agreement legal agreement
un certain trade
that time opposite party has to promise to pay some amount or any
object to the first party such agreement is called ………..
lt is not a consideration which is not happened with the wishes of
53 Promise Third person Major Promisor
………..
If all ……….. are made with the consent of the parties than it
54 Matters Definitions Consideration Gifts
becomes a contract
When the contract possess two part one legal and second illegal, and
55 it is possible to separate legal parts at that time the court can Quasi Legally Illegal contract Ambiguous
implement the part of
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 INSTITUTE OF MANAGEMENT & RESSEARCH , CHINCHWAD

103: LEGAL ASPECTS OF BUSINESS

MULTIPLE CHIOCE QUESTIONS

S.NO QUESTIONS A B C D ANSWERS

CHAPTER -1: The Contract Act, 1881

Not the whole of The whole law of

agreements nor is it the agreements enforced by The whole law of
1 Law of contract is : whole law of obligations the law obligations None of the above. B
only rights and no
2 A contract creates: Rights in personam Rights in rem obligations only obligations and no rights. B
When it is carried out by
enforceable if certain Fraud,Coercion & enforceable by both
3 An agreement is a voidable contract when it is : conditions are fulfilled Mispresentation parties not enforceable at all. B
Offer+ Acceptance
An agreement is :
4 Offer Acceptance Offer+ Acceptance + enforceability C
Offer+ Acceptance
5 A contract is: Offer Acceptance Offer+ Acceptance + enforceability D
6 The Indian Contract Act came into force on : 1882 1932 1947 1948 A
7 When the consent of a party is not free, the contract is Void Valid Voidable All the above C
8 An agreement with minor is : Void Valid Voidable All the above A
9 Mr. X travelling by bus, it is an example of : Express contract Implied contract Void contract Valid contract B
All contracts are All agreements are not All agreements are
None of above
10 Which one is not correct ? agreements contracts contracts C
11 Consent is not said to be free, when it is caused by : Coercion Fraud Undue Influence All of these D
A contract , where both the parties have fulfilled their respective obligations
Executory contact All of theses
12 is called Executed contract Unilateral contact A
A contract , where both the parties have fulfilled their respective obligations
All the above
13 is called Void Valid Voidable B

14 A promised to marry B. Later on B died. This contract of marriage becomes void. is void from very beginning. is valid is illegal now. A
non-availability of a paper inability of the parties to
15 An implied contract is one which comes into existence on account of Conduct of the parties. for writing. write or speak. directions given by a court. A
A contract in which, under the terms of a contract, nothing remains to be
16 done by either party is known as Executed contract. Executory contract. unilateral contract. none of the above. A
A contract in which, under the terms of a contract, one or both the parties
17 have still to perform their obligations in future is known as Executed contract. Executory contract. unilateral contract. none of the above. B

partly executed or partly

18 Contracts classified on the basis of performance are Executed contract. Executory contract. executory contracts. all of the above. D
words either spoken or both words and
19 Express contract means a contract made by written. documents. documents. all of the above. D
that parties do not intend that the parties do not intend
that parties do not intend that parties intend to to make legal and social to create legal relations
20 In social agreements usual presumption is to create social relations. perform them. relations. between them. D
Who said “Contract is an agreement creating and defining obligations
21 between parties?” Peter Drucker Salmond Austin Henry Feyol B
22 Agreement is defined in Section……… of the Indian Contract Act, 1872. 2(c) 2(e) 2(g) 2(i) B
Every promise and every set of promise forming the consideration for each
23 other is a/an Contract Agreement Offer Acceptance B

Any of the above if not

Where there is no express provision in Contract Act, the following prevails The provisions of any law The provisions of personal inconsistent with the
24 and applied for deciding the cases of the land The usage of the trade law provisions of the Contract Act D

25 Who said, “Every Agreement and Promise enforceable at law is a contract? Austin Benjamin Pollock Balfour C
A promises to deliver his watch to B and, in return, B promises to pay a sum
26 of Rs 2,000. This is a/an Agreement Proposal Acceptance Offer A

Are made by competent Have lawful consideration

27 Valid Contracts is --- Are made by free consent party and lawful object All of the above D
A invites B for his son’s wedding. B accepts the invitation. In this case, there is There is no intention to There is no written There is no formal acceptance
28 an agreement but no contract, since There is no consideration create legal relationship document of the offer B

Rights and obligations of Obligations of the parties Mutual understanding Mutual lawful rights and
29 A contract creates -- the parties to it to it between the parties to it obligations of the parties to it. D

Which is valid as long as it

is not avoided by the
30 Voidable contract is one --- Which is lawful Which is invalid party entitled to do so Which is unlawful C
When the contract is perfectly valid but cannot be enforced because of
31 certain technical defects. This is called Unilateral Contract Bilateral Contract Unenforceable Contract Void Contract C

32 ………….. is without any legal effect and cannot be enforced in a Court of Law. Valid Contract Void Contract Voidable Contract Unenforceable Contract B
A agrees to sell his DVD player to B promising to deliver it on the date of
payment. B promises to pay the amounts within one month. This is an
33 example of Void Contract Illegal agreement Unilateral Contract Bilateral Contract D
Non-availability of a paper Inability of the parties to
34 An implied contract is the one which comes into existence on account of Conduct of the parties for writing write or speak Directions given by a court A
A, a tradesman, left certain goods at B’s house by mistake. B treated and Not liable to pay for the Liable to be prosecuted Liable to pay for the
35 used the goods as his own. In this case, B is goods under law goods Bound to inform police C
Abstaining from doing an
36 A proposal may consist of a promise for Doing an act act Either (a) or (b) Returning the consideration C

37 Offer can be accepted by Offeror Offeree Promisor Either (a) or (b) B

The parties are legally
The parties are financially The parties are physically competent to enter into
38 Capacity to contract means sound to make contract able to enter into contract contracts All of the above C
One minor and a major One minor and a person of One major person and an
39 These two persons can enter into a valid contract person sound mind Husband and Wife insolvent person C
A promise in the
agreement and he has
performed his part of
Minor’s agreement is void but the minor can enforce the agreement against A third party in the promise under the
40 the other major party if minor is agreement Promisor in the agreement agreement Relative of M.P C

Mohiri Bibee Vs Salma begam Vs Jan

41 A minor’s agreement is void. This was held in the case of Dharmadas Ghosh Mohamed Khan Balfour vs balfour Chinnaiya vs Ramaya A
 A ia a minor, b approaches A for a loan on the basis of a mortgage of the The mortgage is not The mortgage is The mortgage is
house owned by B Hence, A advances the money and b executed a mortagage enforceable by A, because enforceable but only when enforceable by A even
42 in favour of A, a minor. In these circumstances he is a minor a attains majority though he is a Minor There is no mortgage at all C
The original cheque is The original cheque is valid
A, a Minor draws cheque in favour of B. on attaining majority, A makes out a invalid but the fresh but the fresh cheque is Both the original and Both the original and Fresh
43 fresh cheque in lieu of the old one. In this case cheque is valid invalid fresh cheque are valid cheque are invalid D
He is capable of forming a
rational judgment about
He is able to understand contract and about his
44 A person is said to be of Sound Mind, if at the time of contracting the terms of Contract interests Either (a) or (b) Either (a) and (b) D
Which of the following persons are not competent to Contract being the
45 persons disqualified by law? Alien enemies Insolvents Convicts All of the above D
“Consideration” means a reasonable equivalent or other valuable benefit By the Promisor to the By the Promisee to the By the promisor to the By the promise to the
46 passed on beneficiary Promisor promisee beneficiary C
A husband, by a registered agreement promised to pay wife Rs 5,000 p.m.
there was no consideration moving from the wife to the husband. This
47 contract is Void Illegal Valid Unenforceable A

When one party uses its

dominant position to get
When one party is a unfair advantage over the When parties to contract When parties to a contract are
48 A contract is said to be caused by undue influence dominant party other in a contract are close friends near relatives B
A threatens to kill B, if B does not agree to sell his property to A. B’s Consent
49 is obtained by Fraud Undue Influence Coercion Misrepresentation C

50 A contract is said to be made without consent when the contract is caused by Coercion Undue influence Fraud Bilateral Mistake of fact D

CHAPTER -2: The Sale of Goods Act, 1930

Where the goods are handed over by the seller to the buyer , the delivery is said to
All the above
51 be Symbolic Actual Constructive B
Who has the right of stopping the goods in transit after he has parted with their
All the above
52 possession to a carrier in case of insolvency of the buyer. Seller Buyer Unpaid seller C
Transfer of physical
All of the above
53 Passing of property implies : Transfer of documents possession of goods Transfer of ownership C
Which type of goods are produced or acquired by the seller after the making of the
Future goods All the above
54 contract of sale. Ascertained goods Unascertained goods B
55 The term “ Goods” under Sale of Goods Act, does not include stocks & shares Harvested crops Grass Money D
56 In the right of Lien, the possession is retained by : Seller Buyer Unpaid seller None of above C
57 The meaning of the Caveat Emptor is : Let the seller beware Let the buyer beware Consumer is a king Consumer is god B
58 Goods identified at the time of contact of sale are known as : Ascertained goods Specific goods Unascertained goods Actual goods A
The goods which are not separately identified at the time of the making of the
59 contract is known as : Ascertained goods Specific goods Unascertained goods Future goods C
60 Contract of Sale Act is governed by the provision of sale of Goods Act 1882 1930 1947 1948 B
61 The Sale of Goods Act, 1930 came into force on: 15th March, 1930 1st March, 1930 30th July, 1930 30th June, 1930 B
transfer of possession of transfer of property in goods
payment of price
62 The main object of a contract of sale is: goods from seller to buyer delivery of goods B
Both movable & immovable
The Sale of Goods Act, 1930 deals with : All immovable properties All the above
63 All movable properties properties B
Agreement Of Sale Barter
64 If “ A” agrees to deliver 100 kg of sugar to “B” in exchange of 50 lit. of oil , then it is Contract oF Sale Sale of Approval D
 partly on the buyer and
In a Sale , if the goods are destroyed , the loss falls on : the seller All the above
65 the buyer seller A
the goods are purchased
The doctrine of Caveat Emptor does not apply, when : the goods are bought by the goods are bought by All the above
under its brand name
66 sample sample as well as description D
67 In case of agreement to sale , the ownership in the goods remains with : The buyer The Seller Both the buyer & seller None of the above B
is a document of title of is an acknowledgement for
A mate’s receipt : None of the above
68 goods the receipt of goods both the above B
the goods have been the goods have not been there is a specific
In agreement of sale, the seller can sue for price if : All the above
69 delivered to the buyer delivered to the buyer agreement C
70 Which of the following is not a form of delivery? Actual delivery Symbolic delivery Constructive delivery Structural delivery D
The unpaid seller has right of stoppage of goods in transit only where the buyer: refuses to pay price All the above
71 becomes insolvent acts fraudulently D

To consolidate and amend To consolidate, amend and

To define the laws relating to the laws relating to the sale define the laws relating to To define and amend the laws
72 What is the purpose behind the enactment of Sale of Goods Act, 1930? the sale of goods of goods the sale of goods relating to the sale of goods D
Person who buys goods and Person who agrees to buy Person who buys or agrees Person who buys or agrees to buy
73 Section 2(1) of Sale of Goods Act defines ‘buyer’ as: services goods to buy goods goods and services C
Before the enactment of Sale of Goods Act, the provisions regarding Sale of Goods Transfer of Property Act,
74 were contained in: Indian Contract Act, 1872 Indian Registration Act, 1908 1882 Indian Partnership Act, 1932 A
Which of the following cannot be said to be included in the term “goods” defined
75 under section 2(7) of the Sale of Goods Act, 1930: Stock Shares Growing crops Actionable claims D

A contract whereby seller A contract where transfer of the

A contract whereby seller transfers or agrees to A contract where transfer of property in goods is to take place
Which of the following most appropriately describes the term “sale” as per Sale of transfers the property in transfer the property in the property in goods is to subject to some condition
76 Goods Act, 1930: goods goods to the buyer for a price take place at a future time thereafter to be fulfilled B
When the time elapses or
the conditions subject to
When the seller agrees to which the property in the
When does an agreement to sell become a sale as per the provisions of Sale Of When the seller transfers the transfer the property in goods is to be transferred Agreement to sell is deemed to
77 Goods Act, 1930: property in goods goods are fulfilled be sale C
Existing goods which are Existing goods, owned or
What can be the subject matter of the contract of sale as per section 6 of Sale of Only existing goods owned or neither owned nor possessed by the owner or future
78 Goods Act: possessed by the owner Only Future goods possessed by the owner goods D
Where in a contract of sale the seller purports to effect the present sale of the An agreement to sell the A Contact of sale or
79 future goods, the contract operates as: A Contract of sale goods agreement to sell It is not a valid contract B

In a contract for sale of specific goods, the goods, without the knowledge of seller A voidable contract at the A voidable contract at the A voidable contract subject
80 perished at the time when the contract was made, the contract is: instance of seller instance of buyer to approval of the civil court A void contract D
Can the agreement be avoided when there is an agreement to sell specific goods It can be avoided only if there is a
but subsequently the goods perish or become so damaged without any fault of the It can be avoided by the It can’t be avoided by the It can be avoided only with contract in this regard between
81 seller or buyer: parties parties the approval of Court the parties A
in writing or by word of partly in writing of partly by by the implied conduct of
82 A contract of sale may be made: mouth word of mouth parties All of the above D
The buyer has the right to have
and enjoy the quiet possession of
The buyer has the right to goods and that the goods shall be
Seller has a right to sell the have and enjoy the quiet The goods shall be free from free from any charge or
83 In the Contract of Sale, there is an implied warranty that: goods possession of goods only. any charge or encumbrance encumbrance D
 The bulk of goods shall The bulk of goods shall
correspond with sample correspondent with the
while it is not necessary that description and it is not Variation of the bulk of goods
The bulk of goods shall the bulk of goods shall necessary that the bulk of with the sample and description
correspond with the sample correspond with the goods correspond with the of goods is only to be treated as a
84 In a Contract for Sale of goods by sample and description, it is necessary that: as well as description description sample breach of warranty A
When the parties to the
When does the property in the goods pass to the buyer in case of contract for the When the contract for sale is contract intend it to be When the price is paid for When the delivery of goods has
85 sale of specific or ascertained goods: made transferred the goods been made B

Buyer is not bound to return

any type of rejected goods,
having right to do so, if he Buyer is bound to return Buyer is bound to return only
Choose the most appropriate option out of the following in respect to return of intimates to the seller that he Buyer is bound to return all only those rejected goods those rejected goods which are
86 rejected goods by the buyer: refuses to accept the same types of rejected goods which are perishable sold by description. A
Right of lien on goods for the Right of stopping the goods in Right of withholding delivery
Which of the following is not the right of an unpaid seller under Sale of Goods Act, price while the goods are in transit, in case of insolvency Right of resale as limited by where the property in the goods
87 1930: possession of seller. of buyer the Act has passed to the buyer D

Where goods have been sold
In which of the following cases the unpaid seller cannot exercise the right of lien on without any stipulation
88 goods in his possession: regarding credit
When seller delivers the
goods to a carrier or other
bailee for the purpose of
transmission to the buyer
without reserving the right of
89 In which of the following cases an unpaid seller does not lose his right of lien: disposal
Where the goods have been Where the goods have been sold
sold on credit but the term of Where the buyer becomes on credit but the term of credit
the credit has expired insolvent has not expired D
When buyer or his agent When the unpaid seller has
lawfully obtains possession obtained the decree for the When the unpaid seller himself
of the goods price of the goods waives off his right of lien C

When the buyer of goods has

been has been sentenced to When the buyer of goods has
When the buyer of goods has imprisonment for a term of When the buyer of goods been sentenced to imprisonment
In which of the following cases an unpaid seller who has parted with the possession been declared as a person of more than six months under has been declared as an for a term of more than two
90 of the goods has the right of stopping such goods in transit: unsound mind any law insolvent years under any law C
Where there is a contract for the sale of specific or ascertained goods the property Parties intend the property in
91 in them is transferred to the buyer at the time when the: goods to pass Contract is entered into Price is paid Delivery of goods has been made D
Conditional only with the consent
92 A contract of sale can be: Absolute only Conditional only Absolute or conditional of the buyer C
Where the transfer of the property in the goods is to take place at a future time or
93 subject to some condition, then such contract is called: An agreement to sell A contract to Sale Future Contract Conditional contract A

An Offer and delivery of An Offer to buy or sell goods, An Offer, delivery, An Offer, price, delivery and
94 What are the requisites of contract of sale: goods for a price and its acceptance possession and acceptance acceptance C

who only agrees to sell the who transfers the possession of

95 According to Sale of Goods Act, 1930, ‘seller’ means a person: goods who only sells the goods who sells or agrees to sell the goods to the other party C
96 ____________ is termed as consideration in a contract of sale: Exchange money Barter money Price Reward C

Where under a contract of sale, the property in the goods has passed to the buyer Sue the buyer for damages of Sue the buyer for Sue the buyer for the price of
97 and the buyer wrongfully neglects or refuses to pay for the goods, the seller may: Ask for indemnification non-acceptance compensation goods D
98 The position of the finder of lost goods is that of: Bailee Bailor Creditor True owner A
Where the seller wrongfully neglects or refuses to deliver the goods to the buyer,
99 the buyer may sue for: Damages for non-delivery Damages for non-acceptance Specific performance Compensation A
 When the price is not determined in the contract or agreed between the parties,
100 the buyer shall pay the seller: a fair price a reasonable price market price average price B

CHAPTER -3: The Negotiable Instrument Act,

Which of the following section in Negotiable Instruments Act deals with the Bill of
101 Exchange? Section 5 Section 6 Section 4 Section 8 A
Which of the followings are not the Negotiable Instruments as defined by the
102 Statute… Banker’s Note Promissory Note Bill of Exchange Cheques A
Dishonor of Negotiable Instrument by Non Payment is covered under section in
103 Negotiable Instrument Act 1882… Section 90 Section 91 Section 92 Section 93 C

The Negotiable Instruments (Amendment) Bill, 2017 inserted a provision allowing a

court trying an offence related to cheque bouncing, to direct the drawer (person who
writes the cheque) to pay interim compensation to the complainant. The interim
104 compensation will not exceed ___% of the cheque amount ? 15% 25% 30% 20% D

If the holder of a bill of exchange allows the drawee more than ___ hours, exclusive of
public holidays, to consider whether he will accept the same, all previous parties not
105 consenting to such allowance are thereby discharge from liability to such holder. 12 24 36 48 D
106 Section 6 of Negotiable Instruments Act defines ___ Cheque Bill of Exchange Promissory Notes Dishonour by non-payment A

107 If a Minor draw, indorse, deliver and negotiate Negotiable Instruments, it binds __ All the parties except minor All the parties including minor Minor Only Minor and Only Drawer C
by mere delivery or by negotiation of a negotiable
"Negitiable’ means transferable. In the case of a negotiable instrument Negotiation endorsement and only by endorsement and all negotiable instruments instrument cannot take place by
108 can take place from one person to another: delivery. delivery. cannot be negotiated mere delivery A
expressed to be so payable or on
on which the only on which the last which the only or last
endorsement is an endorsement is an endorsement is an endorsement
109 A promissory note, bill of exchange or cheque is payable to bearer which is: expressed to be so payable endorsement in blank. endorsement in blank. in blank A
some of these are negotiable
Money orders; Postal orders; Fixed Deposit receipts; share certificates; Letters of instruments while others are
110 Credit are examples of: Negotiable Instruments Non-negotiable instruments not none of given options is correct B
bills of lading; dock warrants; railway receipts and wharfinger certificates are quasi- negotiable
111 examples of: negotiable Instruments non-negotiable instruments instruments none of the options C
race period only if the
maturity fals due on a bank
112 A Bill of Exchange, not payable on demand, is entitled to get: 3 days grace period. 7 days of grace period holiday none of the options A
An accommodation bill
An accommodation bill is not supported by consideration or a trading transaction. It is creates no obligation of The accommodation party is
drawn with the object of providing financial help either to drawer or to both drawer payment between the parties liable on the bill to any both option A and B are none of the given options is
113 and the drawee. Which of the options is true in case of an accommodation bill? to the transaction. subsequent ‘holder for value’. correct correct C

No person in India, other than

RBI or the Central
Government can make or
issue a promissory note
“payable to bearer”. No
person in India other than RBI
or the Central Government A cheque ‘payable to bearer
can draw or accept a bill of on demand’ can be drawn on
Section 31 of Reserve Bank of India, Act overrides the Negotiable Instruments Act. exchange ‘payable to bearer a person’s account with the both the options A and B are
114 which of the options mentions the provisions of the Section 31 0f RBI Act? on demand’. banker. correct none of the given options is correct A
 It is still transferable, but the
transferee cannot get title cheque will be credited only banker is required to keep a
which of the options is correct in respect of a negotiable instrument bearing "NOT mean that the cheque is not better than what transferor after verification from the separate record of such
115 NEGOTIABLE" crossing? transferable had. drawer instruments A
drawer and all earlier
116 In case of dishonor of a negotiable instrument, notice is required to be given to: drawer only all earlier endorsees. endorsees. all options are correct C
Where a person receives a negotiable instrument without consideration, he may
117 be: called ‘holder in due course’. a holder beneficiary assignee B

two years imprisonment or no imprisonment but fine up three years imprisonment or two years imprisonment or fine up
fine up to twice the amount of to twice the amount of fine up to twice the amount to five times the amount of
118 If a cheque is dishonored for insufficiency of funds, the penalty can be up to: cheque or both. cheque of cheque or both. cheque or both. A
119 In India Negotiable Instruments Act came into force in the year ____. 1861 1881 1871 1981 B
120 Bearer cheques are also known as ______ cheques Crossed General Special Open D
121 The liability on the instrument may be discharged by cancellation release payment any one of the above methods D
On addition of the name of
122 A cheque shall be deemed to be crossed specially- the banker drawing two lines parallel any of (A) or (B) none of (A) or (B) A
123 Who can endorse the negotiable instrument? Maker of the Instrument older of the instrument Drawee Both of A and B D
Promissory note & Bill of
124 Which of the following is not a negotiable instrument Bill of exchange and cheque Postal Order & Currency note Promissory note and cheque exchange B
125 Features of Negotiable instruments are - Written and signed Recovery Freely transferable All of the above D
126 An instrument is ___ by _____ as per N.I Act, 1881 Discharged/Cancellation Closed/ release Closed/ Payment None A
127 Cheque can be of ___ types and crossing of cheques can be of ____ types. three, two two, two two, three three, three B
128 The ___ of Promissory Note has been given in section ____. scope, 2 definitions, 4 role, 3 function, 5 B
who for consideration became
the possession of promissory to whom order the money is
129 Holder in due course means any person- Drawing the instrument note directed to paid none of the Above B
130 Who may negotiate? drawer payee All of the joint makers Any of (A) to (C) D
131 A negotiable instrument is dishonoured on Payment on acceptance endorsement Both of A and B D
132 When does a bank dishonour its customer’s cheque — Bearer cheque Crossing of cheque Signature disagrees Not negotiable marked C
133 A Bill of exchange contains — Conditional undertaking Unconditional undertaking Unconditional order Conditional order C
134 The money payable on any Negotiable instrument — Must be certain Must not be certain usually uncertain Conditional A

135 The Negotiable Instruments Act, 1881 define and amend the law relating to…………… Promissory notes Bills of exchange Cheques All of above D
A “negotiable instrument” means a promissory note, bill of exchange or cheque
136 payable either…………… To order To bearer (a) or (b) (a) and (b) C

Which of the following can be considered as characteristics of Negotiable The holder of the instrument They are not freely They are transferable subject
137 Instruments? is presumed to be the owner. transferable. to restriction (b) or (c) A
138 A negotiable instrument is freely transferable. No Yes Partly yes None of above B
The only or last
endorsement on the
It is expressed to be payable It is expressed to be so instrument an endorsement
139 A promissory note, bill of exchange or cheque is payable to bearer when………. to a particular person. payable in blank (b) or (c) A

A promissory note, bill of exchange or cheque drawn or made in India, and made
140 payable, or drawn upon any person, resident in India shall be deemed to be…………. Foreign Instruments An inland instrument Demand Instruments Bearer Instruments B
After acceptance, or after
noting for nonacceptance or
After noting for non- after protest for
141 In the case of bill of exchange, the expression “after sight” means…………. After acceptance acceptance nonacceptance None of above A
A promissory note is an instrument in writing containing an unconditional
undertaking, signed by……………to pay a certain sum of money to, or to the order of, a
142 certain person, or only to bearer of the instrument The payee The holder The endorser The maker D
 The person who makes or executes the note promising to pay the amount stated
143 there in is called as …………… The payee The holder The endorser The maker D
It must contain an express
promise or clear undertaking
144 Which of the following is/ are essential (s) of promissory note? It must be in writing. to pay. The payee must be certain. All of above B
The maker must sign the
promissory not in token of an
undertaking to pay to the The maker must be a certain
145 Which of the following is/ are essential (s) of promissory note? payee or his order person The payee must be certain. All of above B
146 The promissory not should be signed by:………… Drawer Drawee Payee Promise A
147 A bill of exchange must contain an unconditional order to pay……….only Money Goods Property Assets A
It is always payable on It does not require
148 Essential of a cheque:………… It is always drawn on a banker. demand. acceptance. All of above B

When a customer
countermands payment i.e.,
where or when a customer,
after issuing a cheque issues
instructions not to honour it,
149 In which of the following case banker MUST refuse to honour the cheque? the banker must not pay it.
When the banker receives
150 In which of the following case banker MUST refuse to honour the cheque? notice of customer’s insanity. prohibits payment.
When the banker receives
notice of customer’s death.
When an order of the Court,
When customer has been
adjudged an insolvent. All of above D
When the customer has
given notice of assignment
of the credit balance of his
account. All of above v D

CHAPTER -4: The Companies Act ( Amended ), 2015

151 The term company is defined under which sec of the Act? Section 2 (4) Section 4 (2) Section 3 (1) Section 1 (3) C
152 Property of the company belongs to Company Share holders Members Promoters A
153 Which company shares can be freely transferable Private Company Public Company Both (a) & (b) None of the above B
154 Minimum number of members in case of public company 3 5 7 10 C
155 Minimum number of members in case of private company is 2 5 7 10 A
156 Maximum no. of members in case of private company is 50 100 150 200 D
157 Maximum no .of members in case of public company is Unlimted 100 150 200 A

158 How many months did the company can continue its business u/s 45 _______ 3 5 6 12 C
159 Minimum subscription should be received with in ______days 50 100 120 150 C
If minimum subscription is not received application money should be refunded with
160 in ______days 10 20 30 60 A
161 Liability of a member in case of a private company is Limited Unlimited Both (a) or (b) None of the above C
162 Maximum no. of persons in case of partnership banking business ______ 5 7 10 12 C
163 Minimum paid up share capital in case of a ( Amended) private company is 1 Lakh 3 Lakh 5 Lakh Nil D
164 Minimum paid up share capital in case of a ( Amended) public company is 1 Lakh 3 Lakh 5 Lakh Nil D
165 Minimum number of Directors in case of a public company is _________ 1 2 3 10 C
166 Minimum number of Directors in case of private company is ______ 1 2 3 10 B
167 Age limit of Directors in case of public company is ______ 60 65 70 75 B
168 Age limit of Directors in case of private company is _________ 60 65 70 No limit D
Place at books of accounts
169 The company’s nationality is decided by its Shareholders Registered office are kept None of the above B
170 The liability of members if company is limited by guarantee. Unpaid value of shares Guarantee amount Unlimited liability None of the above B
 A company incorporated
outside India having
If the company is established shareholders who are all A company incorporated in
In which of the following conditions, a company will be reckoned a outside India and has a place- Indian citizens and having its India but having all foreign
171 foreign company? of business in India. business outside India. shareholders. Both (a) and (b). A
t files Memorandum of It gets incorporation It gets certificate for
association and Articles of certificate with the Registrar commencement of
172 A company is said to have been registered when? Association. of Companies. business. It actually starts its business. B

173 An Audit Committee may include. Auditors. Company Secretary. Non- executive Directors. All. D
A person cannot be a director of more than …………… as per the Companies
174 (Amendment) Act, 2000. 5 companies. 10 companies. 15 companies. 20 companies. C
The remuneration payable to a whole time director of the company should not
175 exceed. 5% of the net profits. 6 % of the net profits. 7 % of the net profits. 10% of the net profits. A
176 he first directors of a public company are appointed by the. Public. Shareholders. Promoters. Government. C
According to section 255 of the companies Act, the Directors must be appointed by Company in General
177 the. Central Government. Company Law Tribunal. Meeting. Board of Directors. C
178 Voting in a company Meeting can be through. Ballot. Raising hands. Raising voice. All of these. D
179 East India Company is an example of. Statutory Company. Registered company. Chartered company. None of these. C

180 The procedure to write facts about a resolution and its decision is called…………… Explanatory statement statutory report minutes of narration none C
181 The first directors are usually named in the ……… articles memorandum prospectus none A
The company shall send a duplicate copy of the contents of Register of directors to
182 the registrar within …….of the appointment of the directors. 30 days three months 60 days six months A
……….meeting is the first meeting of the members of the public company after its
183 incorporation board annual general departmental statutory D
When a public company has issued prospectus without receiving the minimum
184 subscription it is called…………… splitting of allotment return of allotment renunciation of allotment irregular allotment D
The return of allotment must be filed with the registrar of companies within…………..
185 of allotment 30 days three months 60 days six months A
Where a director acts dishonestly to the interest of the company, he will be held
186 liable for. Ultra vires acts. Negligence. Breach of fiduciary duty. Mala fide acts. C
Except with the approval of the central Government, remuneration of a whole time
director or a managing director shall not exceed …………… of the net profits for one
187 such director. 3%. 5%. 10%. 11%. C
Share holders in Annual
188 The Statutory Auditors of the company are appointed by. General Meeting. Board of Directors. Company Law Board. Central Government. A
are men from outside the occupy management
189 Executive Directors are those directors who. Board. position. are independent directors. elect the board committee. B
The company agrees that the remuneration of non- executive directors shall be
190 decided by. Board of Directors. Company. Share holders. Central Government. A
A special resolution and with
An approval of the central approval of the Central
191 Name of a company can be changed by. An ordinary resolution. A special resolution. government. government. D
Change of registered office of a company from one place to another in the same city Special resolution with Central
192 requires. Board resolution. Special resolution. Ordinary resolution. government approval. A
An ordinary resolution in
A resolution of Board of Annual General Meeting by Obtaining permission of the
193 Article of Association can be altered by. Directors. the shareholders. A special Resolution. Company Law Tribunal. C

194 The charter of a company is its. prospectus. Memorandum of Association. Certificate of incorporation. Articles of Association. B
Contributories or
195 A voluntary winding up means winding up by. Members or Creditors. Members or Contributors. Creditors. Share holders or Tribunal. A
 One month of obtaining the 3 months of obtaining the 6 months of obtaining the
certificate to commence certificate to commence 6 months of obtaining the certificate to commence
196 Statutory meeting of the company must be held within. business. business. certificate of incorporation. business. D

12 months from the date of 12 months from the date of 18 months from the date of 18 months from the date of
197 The first annual general meeting of the company must be held within. incorporation. commencement of business. its incorporation. commencement of business. C
198 ………….carries out the winding up proceedings. liquidator solicitor contributory tribunal A
199 A meeting of the Board of Directors must be held at least once in. Each month. Every two months. Every three months. Every four months. C
For general meeting of any kind (statutory, Annual or Extraordinary) at least
200 ………….. Notice must be given to members. 21 days. 22 days. 23 days. 25 days. A

CHAPTER -5: The Intellectual proporty rights

Intellectual Property Rights (IPR) protect the use of information and ideas that are
201 of Ethical value Moral value Social value Commercial value D
202 The term ‘Intellectual Property Rights’ covers Copyrights Know-how Trade dress All of the above D

203 The following can not be exploited by assigning or by licensing the rights to others. Patents
204 The following can be patented Machine
knowledge disclosed to the
205 In ‘quid-pro-quo’, quo stands for public
Designs Trademark All of the above C
Process Composition of matter All of the above D
exclusive privilege of
monopoly granted for the making, selling and using
term of the patent the invention None of the above B

is capable of distinguishing may includes shapes of

the goods or services of one goods or combination of
206 Trade mark covers ….. is represented graphically person from those of others colours All of the above D
207 Symbol of Maharaja of Air India is Copyright Patent Trademark All of the above C
25 years after the death of 40 years after the death of
208 In India, the literary work is protected until Lifetime of author author author 60 years after the death of author D
composition of lines or mode or principle of
209 Design does not include features of shape colours construction None of the above C
210 What protects the intellectual property created by artists? copyright geographical indications patents registered designs A
211 What protects the intellectual property created by designers? copyright geographical indications patents registered designs D
212 What protects the intellectual property created by inventors? copyright geographical indications patents registered designs C
the look, shape and feel of a
What does a trademark protect?
213 an invention a work of art logos, names and brands product C
10 years after the death of
In most countries, how long does copyright last for? 10 years after the creation of 50 years after the creation of the person who created 50 years after the death of the
214 the work the work that work person who created that work D
215 How long do patents usually last for? 10 years 20 years 40 years 60 years B
If you write an original story, what type of intellectual property gives you the right
216 to decide who can make and sell copies of your work? copyright geographical indications patents Registered designs A
Imagine a footballer sets up his own company to sell his own range of clothes. What
type of intellectual property can he use to show that the clothes are made by his All of the above
217 company? Copyright Patent Trademark C
If a company develops a new technology that improves its main product, what type
All of the above
of intellectual property can they use to stop others from copying their invention?
218 Copyright Patent Trademark B
Which of the following is not a category of copyright work in the CDPA?
2+G2+A240:F245 Literary works Furniture Sculpture Musical works B

What is the most important distinction between literary, dramatic, musical and Authorial works must be original
artistic works ("authorial works) on one hand, and sound recordings, films, Authorial works have to be he non-authorial works Only authorial works works to be protected; the other works
220 broadcasts and published editions on the other? recorded in a material form works reward investmen have authors do not have to be original D
221 Which of the following is not an example of a literary work? A character from a novel A shopping list A textbook computer programme A
Only works falling within
rtistic quality is irrelevant the definition of artistic he question of whether
All forms of art are protected where copyright protection is works in s. 4 CDPA are something is art or not is judged
222 Which of the following statements is correct regarding artistic works? as artistic works concerned protected objectively C

Originality requires the input of

Originality requires the some skill and labour on the part
input of skill and labour on of the author, which must relate
the part of the author, the to the literary, dramatic, musical
Which of the following statements best represents the traditional UK test for Originality means "not Originality requires creative type of skill and labour or artistic nature (as the case may
223 originality? copied" and nothing more effort involved is irrelevant be) of the work D

as been re-considered by the

courts in the light of the Human
Rights Act so as to include
as created as a result of the s a statutory defence Derives from equitable recognition of the right to
224 The "public interest defence": Human Rights Act 1998 contained in s. 171(3) CDPA considerations freedom of expression D
World Investment policy World intellectual property Wildlife Investigation and World institute for Prevention of
225 The term “WIPO” stands for:- organization organization Policing organization organized crime B
Industrial Design of
226 Which of the following is an „intellectual property‟ as per IPR Laws in India. Original literary work; Maruti800 car; Trademark of Tata company All the above D
227 A company wishes to ensure that no one else can use their logo. Copy rights Trade mark Patent Industrial designs B
A singer wishes to assign the rights to reproduce a video she has made of her
228 concert. Copy rights Trade mark Patent Industrial designs A
229 A new way to process milk so that there is no fat in any cheese made from it. Copy rights Trade mark Patent Industrial designs C
A company has decided to invest in outer shape design of bottle in which they
would fill the perfume produced by them, and which is distinctive, and they wish to
230 ensure that they have sole use. Copy rights Trade mark Patent Industrial designs D
A company decides to use a logo that has the same shape as its competitor but with
231 a different color Copy rights Trade mark Patent Industrial designs D
232 Which of the following is not an intellectual property law? Copyright Act, 1957 Trademark Act, 1999 Patent Act, 1970 Customs Act, 1962 D
Song lyrics and musical
233 Consumer Protection Act is applicable to compositions Sculptures and paintings Dramatic and literary works All of the above D
Trademarks are "shorthand" for
A trademark is represented by several key characteristics. Which of the following is A trademark identifies a Slogans are not covered Trademarks are never an retailers to use in determining
234 one of them? product's origin under trademark law indicator of quality pricing strategy A
To qualify for federal
Trademark registrations can Trademark law is intended to protection, a mark must be
be renewed for an unlimited protect the owner‟s original distinctive and have a Surnames alone can be
235 Which of the following statements is true? number of tenyear periods work "secondary meaning." trademarked A
Words, symbols or devices
that differentiate goods or Names of specific people Inventions that feature some sort
236 Trademark law protects…… services from one another Only brand names and places of utility function A
A trademark should be A trademark should not
A trademark should be capabale of distinguishing cause confusion with A trademark should not be
237 Which of the following principles is applicable to trademarks? distinctive goods or services previous trademarks deceptive B
Public performance and
Reproduction of the work in translate into other Broadcasting by radio or
238 The rights provided by copyrights are various forms languages cable All of the above
 Patenting one‟s invention make
useful data relating to the
It makes others aware of invention available to other
It gives protection to a It gives legal recognition to the fact as to whom does inventions for further research
239 Why an invention should be patented? patentable invention. the invention. the invention belong and development B
Assign the property to
240 The rights of a patentee are Sell or distribute License others All of the above D

241 Rights of consumer are protected under _________ Consumer protection 1986 Consumer protection 1990 Consumer protection 1982 Consumer protection 1991 A
The consumer has the right to get compensation against unfair trade practices
242 under right to Right to choose Right to seek redressal Right to safety Right to safety B
Self-regulation by the
243 Which of the following are the ways and means of consumer protection? business Business associations Government All of the above D
244 _____ is the standardized mark on jewellery ISI FPO Hallmark CERC C
Consumer forum at district
245 ______ are made to hear complaints of the value less than 5 lakhs. level State commission National commission None of the above A
The bureau of Indian
246 Which of the following is not an organization working for consumer protection? Consumer VOICE Consumer forum standard Consumer utility & trust society B

247 Consumer Protection Act is applicable to immovable goods movable goods specific goods and services all goods and services D
“Consumer has the right to present before the appropriate forum or authorities all
those matters which effect his interests “ this right of consumer is termed as right
248 to be informed heard safety educated B

249 The maximum age limit of a person who can be a member in state commission is 60 65 70 75 B
To be a member in any redress forum the person should have minimum ________
250 years of experience 5 10 15 20 B
 MCQ Chapter I
1) Law of contract is—
a) not the whole of agreements nor is it the whole law of obligations
b) the whole law of agreements
c) the whole law of obligations
d) none of the above.

2)An agreement is a voidable contract when it is –

a) enforceable if certain conditions are fulfilled.
B)enforceable bylaw at the option of the aggrieved party .
c)enforceable by both parties
d)not enforceable at all.

3)An agreement not enforceable by law is said to be

a)void ,
b)voidable,
c)valid,
d)unenforceable,
e) illegal.

4)A contract is
a) a legal obligation
b) an agreement plus a legal obligation
c) consensus ad idem,
d) agreement plus a legal object.

5)A specific offer can be accepted by

a)any person
b)any friend of offerer
c) the person to whom it is made
d)any friend of offeree.

6)A letter of acceptance sufficiently stamped and duly addressed is put into course of
transmission. There is
a) a contract voidable at the option of acceptor
b)a contract voidable at the option of offerer,
c)no contract at all,
d)a valid

7)Acceptance may be revoked by the acceptor

a) any time
b)before the letter of acceptance reaches the offerer
c)after the letter of acceptance reaches the offeree
d)before the death of the acceptor.
8)An offer is made to Mani in crowd It –
a) can be accepted by him alone,
b)may be accepted by any person who hears it.
C)may be accepted by his brother
d)may be accepted by his friends.

9)A makes an offer to B on 10th by a letter which reaches B on 12th B posts letter of acceptance
on 14th which reaches A on 16th . The communication of acceptance is complete as against A on
–
a) 12th
b) 14th
c)16th

10)Considerationa)
must be adequate to the promise made,
b)need not be adequate to the promise made
c)must be of reasonable value
d) must be of more value than the value of promise made.

11)A promise to compensate ,wholly or in part , a person who has already voluntarily done
something for the promisor is
a)enforceable
b)not enforceable because it is without consideration,
c) void
d) voidable.

12)Consideration in a contract –
a) may be past ,present or future,
b)may be present or future only .
c)must be present only.
D)must be future only.

13)An agreement made without consideration is

a)valid,
b)illegal ,
c)voidable
d)void

14) An agreement with or by minor is –

a)void
b)voidable at the option of the minor
c) voidable at the option of the other party
d) valid.
15)A minor enters into a contract for the purchase of certain necessaries , in such case –
a) he is not personally liable to pay
b)he is liable to pay
c)his estate is liable to pay
d) his guardian is liable to pay.

16)The contractual capacity of a company is regulated by –

a)its memorandum of association and the provisions of the companies act, 1956
b)the terms of contract entered into with a third party
c)its articles of association
d) its prospectus.

17)Flaw in a capacity to contract may arise from –

a) want of consideration
b)unsoundness of mind
c)illegality of object
d) uncertainty of object.

18) Where consent is caused by fraud or misrepresentation , the contract is –

a) voidable at the option of the aggrieved party
b) void
c) unenforceable
d) not affected in any manner .

19)Where both the parties to an agreement are under a mistake as a matter of fact essential to the
agreement ,the agreement Is –
a) void
b) voidable
c)illegal
d) not affected at all.

20)Consent given to a contract under some misrepresentation by the other party makes the
contract –
a) void
b) invalid
c) unenforceable
d) voidable

21)When a person positively asserts that a fact is true when his information does not warrant it to
be so, though he believes it to be true , there is –
a) misrepresentation
b) fraud
c) undue influence
d) coercion.
.
22)When consent to an agreement is obtained by undue influence, the agreement is a –
a)contract voidable at the option of the party whose consent was so obtained
b) void contract.
C) valid contract
d)void agreement.

23)A promise made without the intention of performing it amounts to –

a)innocent misrepresentation
b) fraud
c)negligent Misrepresentation
d) wrongful misrepresentation

24) The unlawful detention of any property of a person to obtain his consent to a contract
amounts to –
a) misrepresentation
b) fraud
c) undue influence
d) coercion.

25)An agreement made with an alien enemy is

a)unlawful on the ground of public policy
b)unlawful because it becomes difficult to be performed
c) valid,
d)voidable.

26) An agreement to do an impossible act is,

a) void
b) voidable
c) illegal
d) enforceable under certain circumstances.

27)A wagering agreement is .

a) forbidden by law,
b) immoral,
c) opposed to public policy
d) none of the above.

28) If a contract contains an undertaking to perform an impossibility , the contract is –

a) void ab initio
b)void
c)voidable at the option of the plaintiff
d) illegal
29)If a new contract is substituted in place of an existing contract , it is called –
a)alteration
b)rescission
c) novation
d)waiver ,
e)remission

30) In case of a wrongful dishonour of a cheque by a banker having funds to the credit of the
customer ,the court may award----
a) ordinary damages ,
b) nominal damages
c)exemplary damages
d) contemptuous damages.

31) A quasi contract –

a) is a contract
b) as an agreement
c)creates only legal obligation
d)is none of these

32)Quantum meruit means –

a)a non gratuitous promise
b)an implied promise
c)as mush as earned
d)as much as is paid.

33) A contract of indemnity is a –

a) a contingent contract
b) wagering contract
c)quasi contract
d) void contract

34)Where there are co-sureties ,a release by the creditor of one of them –

a) discharges the other co-sureties
b) does not discharge the other co-sureties
c)makes all the co-sureties immediately liable
d) makes the contract of guarantee void.

35) The right of subrogation in a contract of guarantee is available to the

a) creditor
b) principal debtor
c) surety
d)indemnified
 MCQ Chapter II

1. In a sale, the property in goods –

a) is transferred to the buyer ,
b) is yet to be transferred to the buyer
c) may be transferred at a future time
d) is transferred when goods are delivered to the buyer
e)is transferred when the buyer pays the price

2. In a sale ,if the goods are destroyed , the loss falls on –

a) the buyer
b) the seller
c) partly on buyer and partly on seller
d)the seller if price has not been paid by the buyer.

3. The term property as used in the sale of goods act means

a) possession
b ) ownership
c) ownership and possession both
d) the subject matter of contract of sale.

4. If a price is not determined by the parties in a contract of sale , the buyer is bound to pay
a)the price demanded by the seller ,
b) a reasonable price
c) the price which the buyer thinks is reasonable
d) the price to be determined by a third independent person.

5. A condition is a stipulation which is a –

a) essential to the main purpose of contract of sale
b) not essential to the main purpose of contract of sale ,
c) collateral to the main purpose of contract of sale d) none of the above.

6. In case of breach of a warranty , the buyer can –

a) repudiate the contract
b) claim damages only
c) return the goods
d) refuse to pay the price
e) refuse to take delivery of the goods .

7. Which of the following is not a remedy available to buyers?

a. Right to damages
b. Right to reject the goods
c. Right to specific performance
d. Right to demand replacement goods
 MCQ Chapter III

1. In the case of partnership firm. Audit is

a) Compulsory
b) Optional
c) None of the above.

2. Property of the company belongs to

a) Company
b) Share holders
c) Members
d) Promoters

3. Minimum paid up share capita l in case of a private company is _______

a) 1 Lakh
b) 2 Lakhs
c) 3 Lakhs
d) 4 Lakhs

4. Age limit of Directors in case of private company is ________

a) 65
b) 70
c) 75
d) No limit

5. The liability of members if company is limited by guarantee.

a) Unpaid value of shares
b) Guarantee amount
c) Unlimited liability
d) None of the above

6. The liability of members if company is limited by shares

a) Unpaid value of shares
b) Guarantee amount
c) Unlimited liability
d) None of the above

7. A company is named as govt. company if it is holds ______ % of paid up share capital

a) more than 30
b) more than 40
c) more than 50
d) None

8. Central Government permission is required in case of _______ conversion __________

a) Private to public
b) Public to private
c) Both (a) or (b)
d) None of the above
9. In case of Non –Profit making Companies notice of general meeting should be given with
in ______days
a) 14
b) 15
c) 21
d) 22

10. If the guarantee Co. having no share capital the liability of shareholders will be
a) To the extent of guarantee
b) Unpaid value of shares
c) Unlimited
d) None of the above

11. Maximum members in case of private company

a) 50
b) 100
c) 75
d) None of these

12. Maximum paid up capital in case of public company.

a) 50 Lakhs
b) 100 Lakhs
c) 125 Lakhs
d) None of these

13. Any change in the address of the registered office must be communicated to the registrar
with in:
a) 15 days
b) 30 days
c) 1 Month
d) 12 months

14. In case of forgeries acts done in the name of the company are
a) Valid
b) Void
c) Void ab initio
d) None of the above

15. Signature of memorandum and articles should be done by ___________ number of

persons in case of public company
a) 7
b) 5
c) 4
d) None of these
16. Address of the registered office is situated in
a) MOA
b) AOA
c) Prospectus
d) None of these

17. The date of the opening of the subscription list means the beginning of the ________from
the day of the issue of prospectus.
a) 5 th
b) 3 rd
c) 10 th
d) 20 th

18. When the shares are transferred to X from Y. Y will be a __________ of the company
a) Member
b) Shareholder
c) Partner
d) None of these

19. A company can become a members of another company if it is so authorized by

_________
a) MOA
b) AOA
c) Both (a) & (b)
d) None of the above

20. A company can create ‘reserve capital’ by passing __________

a) an ordinary resolution
b) a special resolution
c) a board resolution
d) None of the above

21. Paying back of capital is called

a) Redemption
b) Conversion
c) Participation
d) None

22. For reducing its share capital it should give notice to whom?
a) Debtors
b) Creditors
c) Both a) & b)
d) None of the above

23. With in 30 days of completion of buy back company shall file the details with whom
_________
a) Registrar
b) SEBI
c) Both a) & b)
d) None of the above
24. Forfeiture can be made only if it is authorized by ________
a) AOA
b) MOA
c) ROC
d) C.G

25. _________ is voluntary passage of the rights and duties of member from a share holder.
a) Transfer
b) Transmission
c) Both (a) & (b)
d) None of the above

26. What is the time limit for conducting statutory meeting?

a) 1 to 5 months
b) 1 to 6 months
c) 1 to 9 months
d) None of these

27. In which one of the following cases an ordinary resolution may be passed _________
a) Commencement of a new business
b) alteration of articles
c) Compulsory winding up of the company
d) none of the above

28. In which one or more of the following company a member does not have a right to
appoint
proxy:
a) Public company having share capital
b) Public company not having share capital
c) Private company not having a share capital
d) None of the above

29. Directors are __________ of the company

a) Employees
b) Employers
c) Both a) & b)
d) None of the above

30. ________ is the official recording of the proceedings of a meeting

a) Quorum
b) Minutes
c) Both a) & b)
d) None of the above
 MCQ Chapter IV

1. In a promissory note, the amount of money payable

(a) must be certain
(b) may be certain or uncertain
(c) is usually uncertain
(d) none of the above.

2. The 1. The Negotiable Instruments Act, 1881 applies to

(a) the whole of India
(b) the whole of India except the State of Jammu and Kashmir
(c) those states as notified by the Union Government from time to time in the Official Gazette
(d) the whole of India except the State of Jammu and Kashmir and the North- Eastern States.
Negotiable Instruments Act, 1881 came into force on
(a) 9th December, 1881
(b) 19th December, 1881
(c) 1st March, 1882
(d) none of the above.

3. The undertaking contained in a promissory note, to pay a certain sum of money is

(a) conditional
(b) unconditional
(c) may be conditional or unconditional depending upon the circumstances
(d) none of the above.

4. A bill of exchange contains a/an

(a) unconditional undertaking
(b) unconditional order
(c) conditional undertaking
(d) conditional order.

5. Cheque is a
(a) promissory note
(b) bill of exchange
(c) both (a) and (b) above
(d) None of the above.

6. The term "a cheque in the electronic form" is defined in the Negotiable Instruments Act,
1881 - under
(a) section 6(a)
(b) section 6(l)(a)
(c) explanation 1(a) of section 6
(d) section 6A.
7. The term 'Negotiable instrument' is defined in the Negotiable Instruments Act, 1881,
under section
(a) 12
(b) 13
(c) 13A
(d) 2(d).

8. The term 'negotiation' in section 14 of the Negotiable Instruments Act, 1881 refers to
(a) the transfer of a bill of exchange, promissory note or cheque to any person, so as to constitute
the person the holder thereof
(b) the payment by a bank on a negotiable instrument after due verification of the instrument
(c) the bargaining between the parties to a negotiable instrument
(d) all of the above.

9. If an instrument may be construed either as a promissory note or bill of exchange, it is

(a) a valid instrument
(b) an ambiguous instrument
(c) a returnable instrument
(d) none of the above.

10.If in an instrument the amount undertaken or ordered to be paid is stated differently in

figures and in words
(a)the instrument is void due to uncertainty
(b)the amount stated in figure shall be the amount undertaken or ordered to be paid
(c) the amount stated in words shall be the amount undertaken or ordered to be paid
(d) none of the above.

11. Under section 16 of the Negotiable Instrument Act, 'indorsement in blank' of an

instrument means
(a) where the indorser does not write anything on the instrument
(b) where the indorser signs his name only on the instrument
(c) where the indorser writes the name of the person who is directed to pay
(d) none of the above.

12. 'At sight' under section 21 of the Negotiable Instrument Act, 1881, means
(a) on presentation
(b) on demand
(c) on coming into vision
(d) none of the above.

13. A promissory note or bill of exchange which is not expressed to be payable on demand,
at sight or on presentment is at maturity
(a) on the 30th day after the day on which it is expressed to be payable
(b) on the 3rd day after the day on which it is expressed to be payable
(c) on the 5th day after the day on which it is expressed to be payable
(d) on the 4th day after the day on which it is expressed to be payable.

14. If a minor draws, indorses, deliver or negotiates an instrument, such instrument binds
(a) all parties to the instrument including the minor
(b) only the minor and not other parties to the instrument
(c) all parties to the instrument except the minor
(d) none of the above.

15. In a promissory note, the amount of money payable

(a) must be certain
(b) may be certain or uncertain
(c) is usually uncertain
(d) none of the above.

16. An authority to draw bills of exchange

(a) itself import an authority to indorse
(b) does not itself import an authority to indorse
(c) sometime import an authority to indorse
(d) none of the above.

17. The term 'legal representative' in section 29 of the Negotiable Instruments Act, 1881
(a) does not include executors or administrator (Rama v. Pravin, AIR 1926 Mad 389)
(b) includes executors or administrator (K. Subbanna v. K. Subbarayudu, AIR 1926 Mad 390)
(c) includes executors but does not include administrators (P. Nayar v. T. Ramanna, AIR 1929
Mad 389)
(d) includes only administrators but does not include executors (P.K. Pati v. Damodar Sahu, AIR
1953 Ori 179).

18. Can a drawer escape from his liability?

(a) no, a drawer can never escape from his liability
(b) yes, a drawer can limit or exclude his liability by inserting in the bill an express stipulation to
that effect
(c) in certain cases although he can escape from his liability but always he cannot so escape
(d) none of the above.

19. In which of the following case the elementary law is laid down that where there is no
acceptance, no cause of action can have arisen to the payee against the drawee
(a) Khandas Narandas v. Dahiabhai, ILR 3 Bom 182 (183)
(b) Venkayya Pantulu v. Sun/a Prakasamma, AIR 1940 Mad 879
(c) Karak Rubber Co. Ltd. v. Burden, (1972) 1 All ER 1210
(d) K.A. Lona v. D.H. Ibrahim, AIR 1981 Ker 816 (DB).

20. A bill is drawn payable to 'A' or order. 'A' indorses it to 'B', the indorsement not
containing the words '"or order" or any equivalent words. Can 'B' negotiate the
instrument?
(a) yes
(b) no
(c) not always
(d) none of the above.

21. Where an indorser of an instrument excludes his liability and afterwards becomes the
holder of the instrument, who are liable to him?
(a) no one is liable to him
(b) all intermediate indorsers are liable to him
(c) only the immediate prior indorser is liable to him
(d) none of the above.

22. Can the legal representative of a deceased person negotiate a promissory note, bill of
exchange or cheque payable to order by delivery only which was indorsed by the deceased
but not delivered by him?
(a) yes, the legal representative can negotiate the instrument by delivery only
(b) no, the legal representative can not negotiable an instrument by delivery only. He must re-
indorse and deliver the instrument for negotiating it
(c) an instrument indorsed by a deceased person has no legal validity and is void
(d) none of the above.

23. Can the holder of a negotiable instrument indorsed in blank convert the indorsement
into an indorsement in full?
(a) no, such a conversion is not possible under the Negotiable Instruments Act, 1881 (Section 49)
(b) yes, the holder can, without signing his own name, and by writing above the indorser's
signature a direction to pay to any other person as indorsee, convert the indorsement in blank
into an indorsement in full (Section 49)
(c) yes, the holder can by signing his own name and by writing above the indorser's signature a
direction to pay to any other person as indorsee, convert the indorsement in blank to an
indorsement in full (Section 49)
(d) none of the above.

24.The indorsement of a negotiable instrument followed by delivery

(a) transfers to the indorsee the property in the bill, provided the indorsement must be an
indorsement in full
(b) does not transfer the property in the bill to anyone
(c) transfers to the indorsee the property in the bill
(d) transfers to the holder the property in bill.

25. When presentment for payment is to be made under section 65 of the Act?
(a) Presentment for payment can be made at any reasonable time.
(b) Presentment for payment must be made during the usual hours of business and, if at a
banker's, within banking hours.
(c) There is no such stipulation on the time for presentment.
(d) none of the above.

26. In determining reasonable time for the purpose of payment of a negotiable instrument
(a) public holidays are included
(b) public holidays are excluded
(c) only the holidays observed by the banks are excluded
(d) none of the above.

27. The question of the reasonableness of the time for presenting a bill of exchange for
payment is a
(a) question of law
(b) question of fact
(c) mixed question of law and fact
(d) none of the above.

28. Under section 76(b) of the Negotiable Instruments Act, 1881, the engagement to pay
must have been entered into
(a) at maturity (Mehar v. Hari Gaur, AIR 1935 Lah 666)
(b) after maturity (Sivaram v. Jayaram, AIR 1960 Mad 297 (DB)
(c) prior to maturity (Thakur Din v. Oudh Commercial Bank Ltd., AIR 1999 Oudh 16)
(d) none of the above.

29. A note under section 99 of the Negotiable Instruments Act should contain among other
things
(a) place of the notary
(b) charges of notary
(c) both (a) and (b)
(d) none of the above.

30. A notice of protest under section 102 of the Negotiable Instruments Act, 1881
(a) may be given by the notary public who makes the protest
(b) must always be given by the notary public who makes the protest
(c) must be given by the holder
(d) none of the above.

31. Under section 118 of the Negotiable Instruments Act, 1881, it is presumed, until the
contrary is proved, that every transfer of a negotiable instrument was made
(a) after its maturity
(b) before its maturity
(c) at its maturity
(d) none of the above.

32. To whom of the following, payment of the amount due on a promissory note, bill of
exchange or cheque must be made in order to discharge the maker or acceptor
(a) holder of the instrument
(b) indorser of the instrument
(c) indorsee of the instrument
(d) none of the above.

33. The provisions of section 87 of the Negotiable Instruments Act, 1881, are subject to the
provisions of
(a) sections 20,48, 68 and 125 of the Act
(b) sections 20, 49, 68 and 122 of the Act
(c) sections 20, 49, 86 and 125 of the Act
(d) sections 20, 49, 66 and 125 of the Act.

34. Under section 118 of the Negotiable Instruments Act, the onus of proving absence of
consideration in the execution of a negotiable instrument is on the
(a) indorser (Zohra Jan v. Rajan Bibi, 28 IC 402)
(b) executant (Zohra Jan v. Rajan Bibi, 28 IC 402)
(c) drawee (R.S. Rajeswara Sethupathi v. Chidambaram Chettiar, AIR 1938 PC 123)
(d) none of the above.

35. Which of the following is not a justified round of dishonouring of cheque by anker?
(a) the cheque is post-dated and presented before the ostensible date
(b) the banker had sufficient funds, but the funds are not properly applicable towards the
payment of the cheque
(c) if the cheque is altered in parts
(d) if the cheque is duly presented.

36. When the acceptor of an instrument is also a drawer, notice of dishonour is

(a) necessary (section 98A)
(b) not necessary [section 98(e)]
(c) not always necessary but under certain circumstances mentioned in section 98A of the Act, it
is a must
(d) none of the above.
37. Under section 97, of the Negotiable Instruments Act when the party to whom notice of
dishonour is dispatched is dead, but the party despatching the notice is ignorant of his
death, the notice is
(a) sufficient
(b) not sufficient
(c) null and void and has no effect
(d) none of the above.

38. If the words "not negotiable" are used with special crossing in a cheque, the cheque is
(a) not transferable
(b) transferable
(c) negotiable under certain circumstances
(d) none of the above.

39. Crossing of a cheque effects the

(a) negotiability of the cheque
(b) mode of payment on the cheque
(c) both (a) and (b)
(d) none of the above.

40. What is the presumption under section 137 of the Negotiable Instruments Act, 1881?
(a) a negotiable instrument drawn in a foreign country is genuine
(b) the law of any foreign country regarding promissory notes, bills of exchange and cheques is
same as that of India
(c) both (a) and (b)
(d) none of the above.

41. Who among the following cannot cross a cheque?

(a) drawer
(b) holder
(c) banker
(d) foreigner.

42. As per section 147 of the Negotiable Instruments Act, 1881, every offence punishable
under the Act are
(a) compoundable
(b) non-compoundable
(c) cognizable
(d) both (b) and (c) above.

43. Under the provisions of section 143 of the Negotiable Instruments Act, 1881, all offences
under the Act are to be tried by
(a) any Judicial Magistrate
(b) Judicial Magistrate of the First Class or by a Metropolitan Magistrate
(c) only a District Judge
(d) none of the above.
44. For what term of imprisonment an offender under section 138 of the Negotiable
Instruments Act can be punished?
(a) for a term which may extend to two years
(b) for a term which may extend to one year
(c) for a term not exceeding three years
(d) none of the above.

45. Dishonour by non-acceptance takes place

(a) when the bill is properly presented for acceptance, except where presentment is excused, but
the drawee makes the default in accepting it
(b) when the Dill is properly presented for acceptance, except where presentment is excused, but
the drawee makes the default in paying it
(c) when the bill is properly presented for payment, except where presentment is excused, but the
drawee fails to accept it
(d) none of the above.

46. The presumption as to the date of a negotiable instrument under section 118 is that,
every negotiable instrument bearing a date was made or drawn
(a) prior to that date
(b) on such date
(c) may be on or prior to that date
(d) none of the above.

47. In the absence of a contract to the contrary, the liability of the maker or drawer of a
foreign negotiable instrument is regulated in all essential matters
(a) by the law of the place where the instrument is made payable (section 134)
(b) by the law of the place where the instrument is indorsed (section 134)
(c) by the law of the place where the instrument is made (section 134)
(d) none of the above.

48. Chapter XVII was inserted into the Negotiable Instruments Act, 1881, by amendment
of the Act in the year
(a) 1888
(b) 1988
(c) 1998
(d) none of the above.

49. Chapter XVII contain sections

(a) 138 to 142
(b) 136 to 142
(c) 112 to 124
(d) none of the above.

50. With effect from which date, the term of imprisonment under section 138 was increased
to two years from one year?
(a) from 6-2-2002
(b) from 6-2-2003
(c) from 1-4-1989
(d) none of the above.
51.Section 138 of the Negotiable Instruments
Act, 1881,................ mens rea
(a) partially excludes
(b) includes
(c) sometime includes
(d) none of the above.

52.When a cheque has become invalid because of the expiry of the stipulated period, can it
be re-validated by the drawer by alteration of dates?
(a) yes, the drawer can re-validate the cheque by alteration of dates
(b) no, the drawer cannot re-validate it by so alteration of dates
(c) although the drawer cannot revalidate the cheque, but the drawee can at his discretion
revaliate it
(d) none of the above.

53. For the purpose of attracting the provisions of section 138 of the Negotiable
InstrumentsAct, 1881, a cheque has to be presented to the bank
(a) within a period of six months
(b) within a period of six months from the date on which it is drawn or within the period of its
validity, whichever is earlier
(c) within a period of 15 days from the date on which it is drawn
(d) none of the above.

54.Cognizance of an offence under section 138 can be taken by a court only on a/an
(a) police report (section 142)
(b) complaint (section 142)
(c) application to the District Judge (section
(d) none of the above.

55. Who should make a complaint to a court for the purpose of taking cognizance of an
offence under section 138?
(a) the payer or as the case may be, the holder in due course of the cheque
(b) any person who is effected can make a complaint
(c) the payee with the written permission of the drawee
(d) none of the above.

56. A complaint against an offence under section 138 of the Negotiable Instrument Act,
1881
(a) must be in writing (section 142) -
(b) may be oral or in writing (section 142)
(c) must be in writing containing a declaration by the drawee that he consents to such filing of
the complaint (section 142)
(d) none of the above.

57. In the trial of an offence under section 138 of the Negotiable Instruments Act, the
provisions of sections 262 to 265 of the Code of Criminal Procedure
(a) shall apply (section 143)
(b) shall not apply (section 143)
(c) sometimes shall apply (section 143)
(d) none of the above.
58. Under section 143 of the Negotiable Instruments Act, an endeavour shall be made to
conclude the trial within.......................... months from the date of filing of the complaint.
(a) 9
(b) 3
(c) 6
(d) 12.

59. Can a 'notice in writing' envisaged in section 138(b) of the Negotiable Instruments Act,
1881, be sent by telegraph?
(a) no (V. Raju v. P. Subbarama Naidu, AIR 1931 Mad 301)
(b) yes [M.V. Muthuramlingam v. D. Narayanswamy, (1995) 3 Comp Cas 77 Mad]
(c) yes [A.B. Steels v. Krishna Finance, (1996) 86 Comp Cas 295 (Mad)]
(d) none of the above.

60. The provision of section 147 of the Negotiable Instruments Act, 1881, that every offence
punishable under this Act shall be compoundable was inserted by the
(a) amending Act of 1988
(b) amending Act of 1980
(c) amending Act of 2002
(d) none of the above.

61. The liability under section 138 of the Negotiable Instruments Act, 1881, is
(a) strict liability
(b) vicarious liability
(c) both (a) and (b)
(d) none of the above.

62. A Magistrate issuing a summons to an accused or a witness can send it

(a) by speed post
(b) by courier services
(c) by a courier services as are approved by a court of session
(d) both (a) and (c).

63. Under the Limitation Act, 1963 the period of limitation for filing a suit by the payee
against the drawer of a bill of exchange which has been dishonoured by non- acceptance is
(a) 3 years from the date of the refusal to accept
(b) 2 years from the date of the refusal to accept
(c) 3 years from the date of the signing by the drawer
(d) 3 years from the date of presentment.

64. A post-dated cheque remaines only a bill of exchange till the date on its face and only
from that date it becomes a cheque being payable on demand. The statement is-
(a) false [Anil Kumar Sawhney v. Gidshan Rai, (1993) 4 SCC 424]
(b) true [Anil Kumar Sawhneu v. Gidshan Rai, (1993) 4 SCC 424]
(c) true [Jogy David v. K.K. Babu, (1998) 94 CompCas 711 (Ker)]
(d) true [Punna Devi v. John Inpex Pvt. Ltd., (1996) 2 Bank CLR 482],
65. As per the provisions of section 93, when a cheque is dishoroured by non-acceptance or
non-payment the holder
(a) may or may not give notice to the parties whom the holder seeks to make liable thereon
(b) must give notice to the parties whom the holder seeks to make liable
(c) must give notice to the parties whom the holder seeks to make liable, but after noting
(d) must not give any notice to anyone.

66. In which of the following case the Supreme Court held that "the persons who are
sought to be made vicariously liable for a criminal offence under section 141 should be, at
the time the offfence was committed, was in charge of, and was responsible to the company
for the conduct of the business of the company. Every person connected with the company
shall not fall within the ambit of the provision"?
(a) National Small Industries Corporation Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330
(b) State of Bihar v. Kalyanpur Cement Ltd., (2010) 3 SCC 274
(b) both (a) and (b)
(d) none of the above.

67. The provisions regarding summary procedure relating to suits upon bills of exchange,
huttdies and promissory notes are laid down in
(a) Order 37 of CPC
(b) Order 38 of CPC
(c) Order 39 of CPC
(d) none of the above.

68. A protest must contain

(a) the name of the person for whom the instrument has been protested
(b) the name of the person against whom the instrument has been protested
(c) the instrument itself or its literal transcript
(d) all of the above.

69. A protest is made by

(a) the drawer
(b) the indorser
(c) a notary
(d) none of the above.

70. Where a cheque is crossed generally the banker on whom it is drawn

(a) shall not pay it otherwise than to a banker
(b) shall not pay it otherwise than to the holder
(c) shall not pay it to a banker
(d) none of the above.
 MCQ Chapter V

1. . …………… means right to be assured, wherever possible, access to a variety of goods and
services at competitive prices.
a. Right to be heard
b. Right to choose
c. Right to be informed
d. Right to safety

2. If the value of goods or services and the compensation, if any, claimed exceeds Rs one
crore, then where should a consumer file the complaint?
a. State Commission
b. National Commission
c. District Forum
d. Supreme Court

3. All of the following are the power and functions of commission EXCEPT
a. Power to award compensation
b. Power to review its own orders
c. Inquiring into certain agreements
d. Power to reject the orders

4. CCI stands for

a. Consumer Commission of India
b. Competition Commission of India
c. Competition Collaboration of India
d. Computer Competition of India

5. IPC stands for

a. International Personal Computer
b. Indian Personal Computer
c. International Penal Code
d. Indian Penal Code

6. The Consumer protection act 1986 enacted in

a. 15-Jun-05
b. 24-Oct-86
c. 24-Dec-86
d. 1 Jan 1986

7. Appropriate laboratory means a laboratory or organization

a. Recognized by Central Government
b. Recognized by state government
c. Both the above
d. None of the above
8. Complainant means

a. Consumer
b. Any voluntary consumer association registered under the companies act 1956
c. The central govt or any state govt
d. All the above

9. Complaint means allegation in writing made by a complainant that

a. An unfair trade practice or restrictive trade practice has been adapted by any traders or
service provider
b. The goods bought by him or agreed to be bought by him suffer from one or more defect
c. A traders or the service provider as the case may be has charged for the goods or for the
services mentioned in the complaint a price in excess of the price
d. All the above

10. The following is not a consumer

a. The insurance company

b. A licensee to run a phone
c. A lottery ticket holder
d. All the above

11. The central consumer protection council shall consist of the following members

a. The minister in charge of consumer affairs in the central govt, who shall be its chairman
b. Such member of other official or non official members representing such interest as may be
prescribed
c. The Chief justice of high court
d. Both A&B

12. The central council shall meet as and when necessary but at least ___ meeting of the
council shall be held every year

a. One
b. Two
c. Three
d. Four

13. Members of state consumer protection council should not exceed

a. Two
b. Five
c. Ten
d. Three
14. Chairman of the district consumer protection council is

a. District magistrate
b. Collector of the District
c. MP of the district
d. None of these

15. Which one of the following know as Consumer disputes redressal agency?

a. District forum
b. State commission
c. National commission
d. All the above

16. President of district forum is

a. Collector of the district

b. A person who are qualified as advocate
c. A person who are qualified to be a district judge
d. None of these

17. Mark the correct option relating to district forum

a. It should have two member , one of whom shall be a woman

b. Members age shall not be less than 35 years old
c. Possess a bachelors of degree from recognized university
d. Ten year knowledge and experience in dealing with problems relating to economics, law,
commerce, accountancy, industry& public affairs
e. All the above

18. The disqualification of the member is

a. Has been convicted and sentenced to imprisonment for an offence which , in the opinion of
the state govt involves moral turpitude
b. Is an undercharged insolvent
c. Is of unsound mind
d. All the above

19. Every appointment of district forum shall be made by the state govt on the
recommendation of a selection committee consisting of the following

a. President of the state commission shall be a chairman

b. Secretary, law dept of the state shall be a member
c. Secretary, incharge of dept dealing with consumer affair shall be a another member
d. All the above
20. Who will working as president in case absence of the president of state commission

a. Governor
b. Chief minister
c. A sitting judge of High court
d. Chief justice of highcourt

21. Mark the correct option

a. Every member of district forum shall hold office a term of 5 years or up to age 65 years
b. The member of district forum shall eligible for reappointment for another term
c. Members of district forum may resign his office in writing addressed to state government
d. All the above

22. Any person aggrieved by an order made by the District forum may prefer an appeal such
order to the State commission within

a. 60 days
b. 90 days
c. 1 month
d. Thirty days

23. Any person prefer an appeal to state commission shall be deposited amount in prescribed
manner

a. Fifty percent of that amount

b. Twenty five thousand rupees
c. Whichever is less of the above A&B
d. None of these

24. Information Technology (IT) Act 2000 came into force on ...... ?
A. 17 October 2000
B. 9 June 2000
C. 1 June 2000
D. 1 October 2000

25. What is/are component of IT Act 2000 ?

A. Legal Recognition to Digital Signatures
B. Regulation of Certification Authorities.
C. Digital Certificates
D. All the above

26. Information Technology (Amendment) Act, 2008 has come into force in ?
A. January 2008
B. October 2009
C. October 2008
D. January 2009
27. Controller of Certifying Authorities (CCA) work under ?
A. Prime Minister office
B. Reserve Bank of India
C. Ministry of Communication & IT
D. autonomous body

28. Which of the following is an example of Intellectual property ?

A. Patent
B. Trade Marks
C. Copyright
D. All of above
Ans: D

29. Intellectual Property Rights (IPR) protect the use of information and ideas that are of

a. Ethical value
b. Moral value
c. Social value
d. Commercial value

30. The term ‘Intellectual Property Rights’ covers

a. Copyrights
b. Know-how
c. Trade dress
d. All of the above

31. The following can not be exploited by assigning or by licensing the rights to others.

a. Patents
b. Designs
c. Trademark
d. All of the above

32. The following can be patented

a. Machine
b. Process
c. Composition of matter
d. All of the above

33. Trade mark

a. is represented graphically
b. is capable of distinguishing the goods or services of one person from those of others
c. may includes shapes of goods or combination of colours
d. All of the above

34. Symbol of Maharaja of Air India is

 a. Copyright
b. Patent
c. Trademark
d. All of the above

35. In India, the literary work is protected until

a. Lifetime of author
b. 25 years after the death of author
c. 40 years after the death of author
d. 60 years after the death of author

36. Design does not include

a. features of shape
b. composition of lines or colours
c. mode or principle of construction
d. None of the above

37. The agreement that is enforceable by law is known as

a. Valid agreement
b. Void agreement
c. Illegal agreement
d. Unenforceable agreement

38. Which of the following is (are) included in Geographical indications of Goods

a. Handicraft
b. Foodstuff
c. Manufactured
d. All of the above
QUESTION BANK

BBA

SEMESTER III

1
 FOR PRIVATE CIRCULATION

The Questions contained in this booklet have been

prepared by the faculty of the Institute from the sources
believed to be reliable. Neither the Institute nor the faculty
gives any guarantee with respect to completeness or
accuracy of the contents contained in the booklet and shall
in no event be liable for any errors, omissions or damages
arising out of use of the matter contained in the booklet.
The Institute and the faculty specifically disclaim any
implied warranty as to merchantability or fitness of the
information for any particular purpose.

2
QUESTION BANK

BUSINESS LAWS

BBA 201

3
 QUESTION BANK
BUSINESS LAWS - BBA 201
BBA III

UNIT - I

I MULTIPLE CHOICE QUESTIONS:

1. A contract is made where:
A. X agrees with Y to discover a treasure by magic.
B. X bids at a public auction
C. A takes a sea
D. A sit in a public Omni bus.
ANSWER: D

2. A Void Contract
A. Is void from the very beginning?
B. Enforceable at the option of both the parties.
C. Enforceable at the option of one party
D. Not enforceable in the court of law
ANSWER: D

3. In case of void agreements, collateral transactions are

A. Also void
B. Unenforceable
C. Not affected
D. Illegal
ANSWER: A

4. Undue influence can be exercised only between the parties who are:
A. Related to each other
B. Not related to each other
C. Friendly to each other
ANSWER: A

5. Which of the following persons can perform the contract?

A. Promisor alone
B. Legal representative of promisor
C. Agent of the promisor
D. All of them
ANSWER: D

6. Which of the following is not a legal requirement of a valid consideration?

A. It must move at the desire of the promisor
B. It must be lawful
C. It must be real and not illusory
D. It must be adequate
ANSWER: A

4
7. Which of the following persons are not competent to contract?
A. Minor
B. Person disqualified by law
C. Person of unsound mind
D. All of the above
ANSWER: D

8. Consent is free under section 14 if not caused by

A. Coercion & undue influence
B. Fraud and misrepresentation
C. Mistake subject to the provisions of sections 20, 21 and 22
D. All the above
ANSWER: D

9. Which is correct?
A. Proposal + acceptance = promise
B. Promise + consideration = agreement
C. Agreement + enforceability = contract
D. All the above.
ANSWER: D

10. The Bailment of goods as security for payment of a debt or performance of a promise is
called:
A. Pledge
B. Bailment
C. Contingent contract
D. Agreement
ANSWER: A

11. The delivery of goods by one person to another for some purpose, upon a contract and
that they shall, when the purpose is accomplished, be returned or otherwise disposed of
by accounting to the directions of the person delivering them, then it is called:
A. Contingent contract
B. Bailment
C. Pledge
D. Contract of indemnity
ANSWER: B

12. In contract of guarantee, the person to whom guarantee is given is known as:
A. Creditor
B. Surety
C. Principal debtor
D. Debtor
ANSWER: A

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13. In contract of guarantee, the person in respect of whose default the guarantee is given, is
known as:
A. Creditor
B. Surety
C. Principal debtor
D. Debtor
ANSWER: C

14. Promises which form the consideration or part thereof, for each other under section 2(F)
are called
A. Acceptances for different proposals
B. Agreements
C. Reciprocal promises
D. Consideration
ANSWER: C

15. Express contract means a contract made by

A. words either spoken or written.
B. documents.
C. both words and documents.
D. all of the above.
ANSWER: D

16. Consideration should be something in return of promise which:

A. both the law and parties regard, as having some value
B. only law regards as having some value
C. only the parties regard some value
D. only adequate value necessary
ANSWER: A

17. Consent is free under section 14 if not caused by–

A. coercion & undue influence
B. fraud and misrepresentation
C. mistake subject to the provisions of sections 20, 21 and 22
D. all of the above
ANSWER: D

18. Which of the following person do not fall under the category of persons of unsound
mind?
A. Drunkards
B. Lunatics
C. Idiots
D. Blind person.
ANSWER: D

19. What does Section 17 of the Indian Contract Act, define?

A. Coercion

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 B. Undue influence
C. Fraud
D. Mistake
ANSWER: C

20. In Indian Contract Act, the term consensus ad idem means

A. Parties under a mistake
B. Parties under the free consent
C. Parties agreeing upon the same thing in same sense
D. None of these
ANSWER: C

21. A contract to perform a promise or discharge the liability of a third party is called—
A. Contract of indemnity
B. Contract of agency
C. Contract of guarantee
D. Contract of warranty
ANSWER: C

22. Sonia contracts with Anshul to buy a necklace, believing it is made of pearls whereas in
fact it is made of imitation pearls of no value. Anshul knows that Sonia is mistaken and
takes no steps to correct the error. Now Sonia wants to cancel the contract on the basis
of fraud. Which of the following statement is correct?
A. Sonia can cancel the contract alleging fraud
B. Sonia cannot cancel the contract
C. Sonia can cancel the contract alleging undue influence
D. Sonia can claim damages
ANSWER: B

23. Which of the following is false with respect to minor entering a contract?
A. An agreement with or by a minor is void ab initio
B. A minor can be a beneficiary of a contract
C. The contracts involving a minor as a beneficiary may be enforced at the option of
the third party
D. A minor cannot ratify a contract on attaining majority
ANSWER: C

24. Deepak, Ashwani and Tarun jointly promised to pay ` 90,000 to Pradeep. Deepak was
compelled by Pradeep to pay the entire amount of ` 90,000. Here:
A. Deepak can file a suit against Pradeep for recovery of amount exceeding his share.
B. Deepak is entitled to recover ` 30,000 each from Ashwani and Tarun
C. On payment by Deepak, the contract is discharged and Ashwani and Tarun are
also not liable to Deepak.
D. Pradeep is not justified here and is liable to refund the entire amount to Deepak.
ANSWER: B

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25. Anuj agrees to pay ` 10,000 to Manoj if a certain ship returns within a year. However,
the ship sinks within the year. In this case, the contract becomes:
A. Valid
B. Void
C. Voidable
D. Illegal
ANSWER: B

26. A invites B for coffee in Coffee day Restaurant and B accepts the invitation. On the
appointed date, B goes there but A does not come. In this case
A. B has no remedy against A.
B. B has to wait for another invitation from A.
C. B can sue A for not honouring his words.
D. A has to invite B again, to keep the promise.
ANSWER: A

27. When, at the desire of the promisor, the promisee or any other person has done or
abstained from doing or, does or abstain from doing or promises to do or to abstain from
doing something, such act or abstinence or promise under section 2(d) is called
A. Reciprocal promise
B. Consideration for the promise
C. Counter offer
D. Acceptance.
ANSWER: B

28. Where a contract has to be inferred from the conduct of parties, it is called
A. Express contract.
B. Implied contract.
C. Tacit contract.
D. Unlawful contract
ANSWER: B

29. According to enforceability, the contracts may be classified as

A. Valid contracts.
B. Void contracts.
C. Voidable contracts.
D. All of the above.
ANSWER: D

30. Voidable contract is one

A. Which is lawful.
B. Which is invalid.
C. Which is valid as long as it is not avoided by the party entitled to do so.
D. Which is unlawful.
ANSWER: C

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32. A minor was facing a criminal prosecution for smuggling drugs. He borrowed Rs. 5000
to hire an advocate to defend him in the court of law. What is the remedy available to
the creditor if the minor does not return the money on his own?
A. The creditor cannot recover the amount from the minor since a contract with a
minor is void ab initio
B. The amount of loan can be recovered from minor’s property since it is a loan for
necessaries
C. The creditor can recover his amount of loan from the minor on his (minor’s)
attaining the age of majority
D. The creditor can recover his amount from the parent or guardian of the minor
ANSWER: A

33. Undue influence can be presumed between

A. Guardian and Ward
B. Mother and Daughter
C. Doctor and Patient
D. All of the above
ANSWER: D

34. Wagering Agreement is a _____________ agreement

A. Valid
B. Voidable
C. Void
D. Illegal
ANSWER: C

35. Identical offers made by two parties to each other, in ignorance of each other’s offer are
known as
A. Counter Offer
B. Cross-Offers
C. Standing Offer
D. None of the above
ANSWER: B

II SHORT ANSWER TYPE QUESTIONS:

1. Define Agreement.
2. Define Contract.
3. When is the contract said to be performed?
4. State the essentials of a valid contract.
5. What do you understand by Consideration? Is it necessary in all the cases?
6. Difference between contract of Indemnity and Guarantee
7. ‘Every person is competent to contract” Comment
8. “A minor can be appointed as an agent”. Do you agree?
9. Distinguish between Void and Voidable Contracts.
10. Define Bailment. What are the requisites for the contract of bailment?
11. What do you mean by ‘Proposal’ or ‘Offer’?

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12. What do you understand by capacity to Contract?
13. Who are competent and not competent to contract under Indian Contract Act, 1872?
14. “An agreement requires a meeting of minds” Comment.
15. What do you understand by ‘Coercion’?
16. What do you mean by ‘Undue Influence’? How it differs from Coercion?
17. What is Fraud? Discuss its effect on Contract.
18. What do you mean by ‘Misrepresentation’? Distinguish between Fraud and
Misrepresentation.
19. What is ‘Mistake’?
20. “Contract without consideration is void”. What are the exceptions of this rule?
21. State the various rights and duties of Indemnified and Indemnifier.
22. Who is Bailee? State his rights and obligations
23. What is meant by the ‘Lien’?
24. Define ‘pledge’. Discuss the essential elements of a pledge.
25. What is the difference between the Contract of Bailment and Pledge.
26. ‘Material alteration renders the instrument void’. Elaborate
27. Write short notes on the following (a) Quantum meruit and (b) Specific Performance
28. Distinguish between agency by estoppel and agency by holding out.
29. What are the essential features of contingent contracts?

III LONG ANSWER TYPE QUESTIONS:

1. Define contract and essentials of a valid contract.

2. “All contracts are agreements but all agreements are not contracts”. Explain with suitable
examples.
3. “An agreement enforceable by law is a Contract”. Comment. Discuss the essentials of a
valid contract in brief.
4. What do you mean by ‘Proposal’ or ‘Offer’? Explain its various characteristics.
5. By giving definition of an acceptance explain the various general rules regarding
acceptance of an offer.
6. What do you mean by the communication of acceptance? By describing the modes of
revocation of it, explain is there any time limit of its revocation.
7. What are the factors concerning consent not a free one? Discuss their effect on validity of
Contract.
8. What is ‘Mistake’? What are the kinds of it? Discuss the mistake of Law and its effect on
Contract.
9. What do you mean by contract of indemnity? Discuss the right of indemnity holder.
Discuss the difference of indemnity & Guarantee.
10. What is bailment? Discuss the right and duties of bailor & bailee.
11. What is pledge? Whether a person who is not the real owner of movable Property can
pledge the goods?
12. Define continuing guarantee. When surety may discharge from his liability and when
surety cannot discharge from his liability
13. What do you understand by 'Capacity to Parties’ to contract? Discuss the law regarding
Minor’s agreements.
14. Define “Consideration”. What are the legal rules of consideration?

10
15. “Insufficiency of consideration is immaterial but an agreement without consideration is
void.” Elaborate this statement.
16. Explain clearly the meaning of “Bailment” as provided in the Indian Contract Act. When
does a contract of bailment terminate? Explain.
17. “Goods can be pledged by the owner only” discuss. State the circumstances in which the
goods can be pledged by non-owners.
18. “A contract is a contract from the time it is made and not from the time performance is
due”. Comment.
19. “An agreement enforceable at law is a contract.” Explain.
20. State with suitable examples the circumstances under which a minor is bound by his
contracts for necessaries as per Indian Contract Act.
21. When is consent said to be given under coercion? What is the liability of a person to
whom money has been paid or goods have been delivered under coercion? Hoe coercion
differs from undue influence?
22. Explain each of the following statements:
(i) “Amount paid under mistake of law cannot be recovered back.”
(ii) Mere silence as to facts is not fraud.
23. When is a contract said to be induced by undue influence? Discuss the effect of undue
influence on the formation of a contract.
24. Explain the doctrine of “Public Policy”. Discuss the agreements contrary to public policy.
25. Examine the legal position of:
(i) Minor Promisor
(ii) Minor Promisee
(iii) Minor Agent
26. "An agreement enforcement by law is a contract." Discuss and bring out the essentials
features of a valid contract. (June 2014)
27. Define fraud and point out its effects on the validity of a contract. How does it affect free
consent? Give suitable examples to illustrate your answers. (June 2014)
28. When a contract is said to have been breached? Explain various remedies available to
both the aggrieved party and the party which has breached the contract. (June 2017)
29. Explain “Free Consent”. Give at least five instances covering each type of situations
where consent is not free. (June 2017)
30. Promise made by husband to his wife will not create any legally binding obligations.
Explain using relevant case law. (June 2018)
31. The Indian Contract Act, 1872 contains explicit provisions under which certain
agreement are expressly declared as void agreements. Briefly discuss such void
agreements. (June 2018)

UNIT - II

I MULTIPLE CHOICE QUESTIONS:

1 Section 2, sub-section______, of the Sale of Goods Act, 1930 defines "Goods"
A. 5
B. 7
C. 6
D. None of above

11
 ANSWER: C

2. As per section 2, sub section 7 every kind of moveable property other than actionable
Claim and money is called
A. Goods
B. Future goods
C. Both (a) and (b)
D. None of above
ANSWER: A

3. Future goods mean goods to be manufactured or produced or acquired by the seller

A. In future prescribed time
B. After making of contract
C. Before making of contract
D. None of above
ANSWER: B

4. As per section 2(8), of the Sales of Goods Act, insolvent means a person
A. Who has ceased to pay his debts in the ordinary course of business
B. Or cannot pay his debts as they become due
C. Both (a) and (b)
D. None of above
ANSWER: C

5. As per section 2(12), of the Sale of Goods Act, quality of goods includes
A. State of goods
B. Conditions of goods
C. Both (a) and (b)
D. None of above
ANSWER: C

6. The goods identified and agreed upon at the time a contract of sale is made are called
A. Ordinary goods
B. Specified goods
C. Scheduled goods
D. None of above
ANSWER: B

7. Section 4, of the Sale of Goods Act 1930, deals with

A. Sale
B. Agreement to sell
C. Both (a) and (b)
D. None of above
ANSWER: C

12
8. A sold a stolen car to B which was subsequently recovered by the police form B's
possession and he (B) was forced to return the same to the true owner. Here, there is breach
of implied condition as to
A. Merchantability
B. Fitness for buyer's purpose
C. Title
D. None of these
ANSWER: C

9. A stipulation which is essential to the main purpose of the contract and if proved false,
gives the buyer a right to terminate the contract, is legally known as
A. Condition
B. Warranty
C. Guarantee
D. None of these
ANSWER: A

10. When a person sells the goods by infringing the copying or trademark of the others, there is
breach of an implied.
A. Condition as to title
B. Condition as to description
C. Conditions as to merchantability
D. None of these
ANSWER: A

11. The term condition is defined in which of the following Section of the Sale of Goods Act.
1930?
A. Section 12 (1)
B. Section 12 (2)
C. Section 12 (3)
D. Section 12 (4)
ANSWER: B

12. According to implied ' warranty as to quiet possession' it is presumed that the buyer shall
have the
A. Peaceful possession of the goods.
B. Right to use the goods as an owner.
C. Both
D. None of these
ANSWER: C

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13. In case of breach of condition, the buyer
A. Has no remedy
B. Can reject the goods.
C. Cannot reject the goods.
D. Can get the seller arrested
ANSWER: B

14. Where the goods are sold by description, there is an implied condition that the goods shall
A. Be fit for buyer's purpose
B. Free from any defects
C. Correspond with the description
D. Free form any encumbrance
ANSWER: C

15. The seller is required to supply the goods which shall be fit for buyer's purpose where the
A. Seller is the sole distributor of goods sold.
B. Seller knows the particular purpose of buyer.
C. Buyer makes his purpose clear and relies upon seller's skill and judgement.
D. Buyer is uneducated and the person of rural background.
ANSWER: B

16. Which of the following types of conditions and warranties are covered by the Sale of
Goods Act, 1930?
A. Express
B. Implied
C. Both (a) and (b)
D. Only (b)
ANSWER: C

17. As per the doctrine of caveat emptor incorporated in Section 16, there is no implied
conditions or warranty in a contract of sale as to the
A. Merchantability.
B. Wholesomeness.
C. Quality or fitness for buyer's purpose.
D. None of these.
ANSWER: C

18. A warranty is a stipulation which is

A. Essential to the main purpose of contract of sale.
B. Essential for buyer's specific purpose.
C. Collateral to the main purpose of contract of sale.
D. None of these
ANSWER: C

14
19. Where the transfer of the property in the goods is to take place at a future time or subject to
some condition, then such contract is called:
A. An agreement to sell
B. A contract to Sale
C. Future Contract
D. Conditional contract
ANSWER: A

20. Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer
may sue for:
A. Damages for non-delivery
B. Damages for non-acceptance
C. Specific performance
D. Compensation
ANSWER: A

21. _____________ is termed as consideration in a contract of sale:

A. Exchange money
B. Barter money
C. Price
D. Reward
ANSWER: C

22. The unpaid seller has right of stoppage of goods in transit only where the buyer
A. Become insolvent
B. Refuses to pay price
C. Acts fraudulently
D. All of these
ANSWER: A

23. An unpaid seller is having rights against

A. Goods only
B. The buyer only
C. Both goods and buyer
D. None of the above
ANSWER: C

24. Under which of the circumstances unpaid seller loses his right of lien
A. By estoppel
B. Where seller waived the right of lien
C. Where the buyer or his agent lawfully obtains possession of the goods
D. Any of the above
ANSWER: D

15
25. Seller has right of resale where
A. Goods are perishable
B. Seller has reserved such right.
C. Seller gives notice
D. All of these.
ANSWER: D

26. The voluntary transfer of possession from one person to another is called
A. Transfer
B. Change of possession
C. Delivery
D. None of above
ANSWER: C

27. The agent having in customary course of business as such agent authority either to sell
goods or to consign goods for the purpose of sale or to buy goods or to raise money on the
security of goods is called
A. Agent
B. Mercantile agent
C. Partner
D. None of above
ANSWER: B

28. According section 5(2) subject to provision of any law for the time being in force a
contract of sale may be
A. Made in writing
B. By words of mouth
C. Partly in writing or partly in words of mouth
D. All above ways
ANSWER: A

29. 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
ANSWER: C

30. Where an unpaid seller has made part delivery of the goods he may exercise his Right of
_______
A. Return of remaining goods
B. Lien on the remaining goods
C. Sale to any other person
D. None of above
ANSWER: B

16
31. Delivery of key of the warehouse by the seller to the buyer will amount to:
A. Symbolic Delivery
B. Actual Delivery
C. Constructive Delivery
D. No delivery
ANSWER: A

32. The Right of Lien is exercised:

A. To retain the possession of goods
B. To regain the possession of goods
C. To resell the goods
D. To transfer the goods
ANSWER: A

33. In case of an agreement to sell, action against a third party for damaging the goods can be
taken by:
A. The seller
B. The buyer
C. Both
D. None
ANSWER: A

34. In case of ‘sale or return’ the buyer is deemed to have accepted the goods when:
A. He does not intimate to the seller that he has rejected them
B. He retains without intimating the seller that he has rejected them
C. He rejects the goods but does not intimate the seller
D. He pledges the goods
ANSWER: A

35. Caveat Emptor means

A. Let the buyer beware
B. Let the seller beware
C. Let the government beware
D. None of the above
ANSWER: A

II SHORT ANSWER TYPE QUESTIONS:

1. Define a contract of sale of goods.

2. Discuss the essential characteristics of a contract of sale of goods.
3. Define Contingent goods?
4. Distinguish between Sale Agreement and Hire Purchase Agreement.
5. What is meant by specific goods?
6. Define a Condition.

17
7. What is a Warranty?
8. When can ‘condition’ be treated as ‘warranty’? Comment.
9. What is meant by Condition as to Merchantable Quality?
10. What are the conditions to be satisfied in the condition of Fitness?
11. Explain the meaning of sale by sample, as well as, by description.
12. What is condition as to wholesomeness?
13. Which implied warranty results in presuming that when the goods are sold they are
delivered free of any problems?
14. “A breach of condition cannot be treated as a breach of warranty.” Comment.
15. “Custody or control of goods” implies “Property in Goods”. Comment.
16. When a property passes to the buyer under “goods on approval” or “on sale or return”?
17. Write a note on Instalment Deliveries.
18. What is Ex-Ship Contract.
19. Who is an unpaid seller?
20. Distinguish between unpaid seller’s right of lien and right of stoppage in transit. When can
he resell the goods?
21. What are the rights of an unpaid seller against the goods?
22. Distinguish between particular lien and general lien.
23. Discuss two remedies available to a buyer against the seller for a breach of a contract of
sale.
24. What are the rules as to delivery of goods by instalments under Sale of Goods Act?
25. “Risk prima facie passes with ownership.” Comment.
26. Who is an unpaid seller? What are his rights? (June 2014)
a. Contract of Sale
b. Unpaid Seller
27. Briefly explain the rules related to transfer of property under the Sale of Goods Act, 1930
(June 2016)
28. In certain cases, non-owners can pass a better title than they themselves have. Elucidate
(June 2016)
29. Write short notes on Particular Lien & General Lien.
30. Write short notes on Rights of an unpaid seller.
31. Define “Goods” under Sales of Goods Act, 1930.

III LONG ANSWER TYPE QUESTIONS:

1. State briefly the essential element of a contract of sale under the Sale of Goods Act, 1930.
Examine whether there should be an agreement between parties in order to constitute a sale
under the said Act.
2. Distinguish “sale” from an “agreement to sell” under the Sale of Goods Act, 1930.
3. Explain the term “goods” as defined in the Sale of Goods Act,1930.
4. Define the term ‘warranty’. What are the kinds of implied warranties under the provisions
of the Sale of Goods Act, 1930?
5. What do you understand by an implied condition? Sate the Conditions implied in a contract
of sale of goods.
6. Distinguish between Condition as to fitness of goods for buyer’s purpose and condition as
to wholesomeness.

18
7. Explain the doctrine of ‘caveat emptor’ with its exceptions.
8. “In a contract for the sale of goods, there is no implied condition or warranty as to the
quality of the goods or their fitness for any purpose.” Comment.
9. “The seller of goods is not bound to disclose defects in the goods that he intends to sell.”
Comment.
10. “In a contract of sale of goods, the buyer has always to bear the risk.” Comment.
11. In a contract of sale of goods “no one can transfer a better title than what he himself has”-
Explain.
12. Explain the rules regarding transfer of ownership from seller to the buyer.
13. Discuss briefly the cases in which a seller can give a better title to the goods than he
himself has.
14. Explain the term “Delivery” as used in a contract of sale and state the rules regarding valid
delivery of goods.
15. Explain the different modes of effective delivery of goods.
16. When can a seller of goods be deemed to be an unpaid seller? What are his rights against
the (a) goods; and (b) the buyer personally?
17. Explain the nature of right of lien. When can the unpaid seller exercise the right of lien?
Under what circumstances is the lien terminated?
18. Discuss the rules regarding the duration of transit. When does it comes to end?
19. What are the conditions required to be fulfilled for the exercise of the right of stoppage in
transit?
20. Can an unpaid seller exercise his right of lien or stoppage in transit on the goods
transferred by way of sale or other disposition by the buyer?
21. ‘The right of stoppage in transit is an extension of an unpaid seller’s right to lien.’
Comment.
22. What are the remedies available to the buyer in case of breach of a contract of sale by the
seller?
23. Under what circumstances can an unpaid seller exercise the right of resale?
24. Define sale and agreement to sale, discuss its essentials. What is the effect, when goods
perished before contract of sale & after agreement to sale?
25. Explain clearly the essential elements which must co-exist for constituting a valid sale of
goods. In what respect does a “sale” differ from an “agreement to sell”?
26. Distinguish between following:- (June 2014)
(i) Sale and Agreement to Sell.
(ii) Conditions and Warranties.
27. “Delivery of goods does not amount to acceptance of goods." Comment.(June 2014)
28. Discuss the rule of Caveat Emptor. What are the exceptions to this rule available under
Sale of Goods Act, 1930? Explain (June 2016)
29. Distinguish between “Sale” and “Agreement to Sell”. Explain the rights of unpaid seller
against the goods. (June 2016)
30. Conditions and Warranties are considered as exceptions to the general rule of “caveat
emptor”. Discuss. (June 2018)
31. Explain the circumstances under which sale by non-owners is regarded as legitimate sale
and the buyer acquires better title than that of the seller over the goods. (June 2018)

19
UNIT - III

I MULTIPLE CHOICE QUESTIONS:

1. The term company is defined under which sec of the Act?
A. Sec 3(1)
B. Sec 4(2)
C. Sec 2(4)
D. Sec 1(3)
ANSWER: A

2. Property of the company belongs to:

A. Company
B. Shareholders
C. Members
D. Promoters
ANSWER: B

3. Which company shares can be freely transferable

A. Private company
B. Public company
C. Both a & b
D. None of the above
ANSWER: B

4. Maximum number of members in case of public company is:

A. 50
B. 100
C. 150
D. 200
ANSWER: D

5. XYZ company conducted an AGM on 1st September 2007. On that day due to fire accident
in the hall. All shareholders died. Will the company be in existence?
A. Yes
B. No
ANSWER: A

6 The liability of members if company is limited by guarantee.

A. Unpaid value of shares
B. Guarantee amount
C. Unlimited liability
D. None of the above
ANSWER: A

7 The liability of members if company is limited by shares

A. Unpaid value of shares

20
 B. Guarantee amount
C. Unlimited liability
D. None of the above
ANSWER: B

8 The companies which are formed under special charter granted by the king or queen of
England are called
A. Statutory companies
B. Registered companies
C. Chartered companies
D. None of these
ANSWER: C

9 The companies which are formed under special Act. Those companies are called as
A. Chartered companies
B. Statutory companies
C. Registered companies
D. None of these
ANSWER: A

10 The companies which are formed under Companies Act.2013. They will be called as
A. Chartered companies
B. Statutory companies
C. Registered companies
D. None of these
ANSWER: C

11 XYZ Co, is having 15% share capital held by X Company and 50% held by Central
Government and 10% held by State Government and 25% held by other people then that
company will be
A. Government Company
B. Private Company
C. Public Company
D. None of these
ANSWER: C

12 XYZ Company is a Government Company and X Co. is a subsidiary of XYZ Co. Then X
Co. will be
A. Public Company
B. Private Company
C. Government Company
D. None of these
ANSWER: A

21
13 In the process of conversion of a private company into a public company which
prospectus must be issued
A. Deemed prospectus
B. Shelf prospectus
C. Statement in lieu of prospectus
D. None of the above
ANSWER: A

14 Company should file a prospectus in case of conversion of private company into a public
company with in __________ from the date of resolution
A. 30 days
B. 45 days
C. 60 days
D. none of these
ANSWER: D

15 ______ is the conclusive evidence in case of company that statutory requirements have
complied with
A. Certificate of Incorporation
B. Certificate of commencement of Business
C. Both
D. None of the above
ANSWER: B

16 The doctrine of _________ does not apply to acts void ab initio.

A. Ultra virus
B. Intra virus
C. Constructive notice
D. Indoor management
ANSWER: C

17 A company can change its name at its own discretion by passing _________
A. Ordinary resolution
B. Special resolution
C. Boards resolution
D. None of the above
ANSWER: C

18 Any change in the address of the registered office must be communicated to the registrar
with in:
A. 15 days
B. 30 days
C. 1 Month
D. 12 months
ANSWER: A

22
19 In the MOA there are 6 classes. We can alter all clauses expect one clause. What is that
clause?
A. Objects clause
B. Name clause
C. Association clause
D. None of these
ANSWER: C

20 Ultra vires means

A. Beyond the power
B. Within the power
C. Both
D. None of the above
ANSWER: B

21 Contracts made after incorporation but before the grant of Certificate of commencement of
Business _________
A. Provisional contracts
B. Pre incorporation contracts
C. Preliminary contracts
D. Both (b) & (c)
ANSWER: A

22 Pre incorporation contract is also known as _________

A. Provisional
B. Preliminary
C. Illegal
D. Legal
ANSWER: A

23 _______are the prospectus issued instead of full prospectus

A. Abridged
B. Statement in lieu
C. Shelf
D. Red herring
ANSWER: B

24 Which one of the following has a right to claim compensation for any loss due to mis-
statement in prospectus
A. Purchasing shares in Primary Market
B. Secondary Market
C. Subscribers to memo.
D. All the above
ANSWER: A

23
25 _________ prospectus was issued in case securities were issued in stages
A. Deemed
B. Shelf
C. Red herring
D. None of the above
ANSWER: A

26. Alteration of objects clause of MOA of a company requires

A. Special resolution
B. Approval of CLB
C. Ordinary resolution
D. Approval of ROC
ANSWER: A

27 AOA is a
A. Public document
B. Managerial document
C. Private document
D. Internal document
ANSWER: D

28 Memorandum of association contains:

A. The exact address of the registered office
B. The name of the state in which the company will have its registered office
C. The name of the country in which the company will have its registered office
ANSWER: B

29 Memorandum of association governs the relationship of the company:

A. With the outside world
B. With the shareholders
C. With other companies
D. of the above
ANSWER: A

30 The association clause of a public company must be signed by:

A. 10 persons
B. 12 persons
C. 7 persons
D. 5 persons
ANSWER: C

24
31 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.
ANSWER: D

32 Minutes should be recorded within _________ days from the date of conclusion of every
meeting
A. 10
B. 20
C. 30
D. 40
ANSWER: C

33 Directors are __________ of the company

A. Employees
B. Employers
C. Both a) & b)
D. None of the above
ANSWER: A

34 Total managerial remuneration cannot exceed ____% of net profit

A. 11
B. 12
C. 13
D. 14
ANSWER: A

35. When a private company is converted into public company. In which form it should be
A. Schedule III
B. Schedule IV
C. Schedule VI
D. None of these
ANSWER: C

II SHORT ANSWER TYPE QUESTIONS:

1. Define a joint stock company.

2. Define Private company.
3. What is an ‘Article of association’?
4. Discuss briefly various stages involved in formation of a company.
5. Who is a promoter? What are his functions?
6. “A certificate of incorporation is conclusive evidence that all the requirements of the
companies act regarding registration of a company have been complied with”. Explain.
7. Write short note on “Reduction of Share Capital”.

25
8. What is the difference between MOA and AOA of a company?
9. Define prospectus and state its contents.
10. Prospectus is the face of the company. Do you agree?
11. Explain the legal requirements as to issue of a prospectus.
12. What is Red Herring Prospectus?
13. Write a note on the concept of book building.
14. Explain the rules related to the remuneration of directors in a company.
15. What are the requisites of a Valid Meeting?
16. Write a short note on “allotment of shares in fictitious names”?
17. What is irregular allotment?
18. What is “Return of Allotment”?
19. What is meant by “Minimum Subscription”?
20. Write a note on statutory meeting.
21. What are the requisites of a Valid Meeting?
22. Under what circumstances do special resolutions become necessary?
23. Briefly explain the statutory duties of Directors of a company.
24. State the different types of Directors.
25. Who can apply to the Company Law Board for relief in case of oppression or
mismanagement?
26. Explain the object clause of Memorandum of Association.
27. Write a note on “Association not for Profit”.
28. What is a Government Company? Explain its special features.
29. How are the auditors of a company appointed?
30. Write short note on ‘statutory meeting’.

III LONG ANSWER TYPE QUESTIONS:

1. What is joint stock company? Distinguish between a public limited company and a
private limited company.
2. Board of directors of private company decided to convert it into a public company. State
the steps to be taken for such conversion in order to comply with the requirements under
the Companies Act.
3. Enumerate the privileges available to a private company.
4. “A certificate of incorporation is a conclusive evidence that all the requirements of the
Companies Act regarding registration of a company have been complied with”. Explain.
5. “The Memorandum of Associations is the charter of a company and defines the
limitations on the powers of the company.”
6. Discuss the meaning, importance, and contents of Memorandum of Association.
7. Explain the law relating to alteration of objects clause in Memorandum of Association.
8. Explain the formalities involved in obtaining the Certificate of Incorporation. What are
the consequences of such a certificate?
9. “Is it compulsory for every company to register Articles of Association?” Comment &
discuss the restrictions on the alteration of Articles of Association.
10. Explain in detail the process of company’s formation.

26
11. Define a Prospectus. State its contents. Explain the consequences of omissions and mis-
statements in a company’s prospectus. Define a Prospectus. State its contents. Explain the
consequences of omissions and mis-statements in a company’s prospectus.
12. Explain the meaning of “Shelf Prospectus”. State the law relating to Shelf Prospectus
contained in Companies Act.
13. When is a public company entitled to proceed to allot its shares? What is an irregular
allotment? What are the consequences of an irregular allotment?
14. Explain the provisions and main contents of “Return of Allotment” under the Companies
Act.
15. What is meant by “Minimum Subscription”? State the provisions of the Companies Act,
regarding the refund and deposit of minimum subscription.
16. What is share? What different classes of shares a Joint Stock Company may issue?
17. Explain the statutory provisions regarding the holding of an Annual General Meeting.
What business is transacted at such a meeting?
18. “One person alone cannot hold a meeting” Explain.
19. Explain in detail the Types of meetings conducted by the companies. How are the MOM
recorded?
20. How are the directors of a public company appointed? How are they removed. When is
the office of a director of a public company deemed to be vacated? Discuss the
qualifications of the directors.
21. Distinguish between:
(a) Managing Director and Whole-time director
(b) Manager and Managing Director
22. Explain the provisions of the Companies Act, regarding appointment of directors by the
Board of Directors.
23. What are the modes in which a director of a company can be appointed.
24. Discuss the powers of the Company Law Tribunal to prevent oppression and
mismanagement of a company.
25. “Majority will have its way but the minority must be allowed to have its say.” Discuss the
above proposition with reference to prevention of oppression and mismanagement in a
company.
26. Write short notes on the following:
(a) Remuneration of Promoters,
(b) Provisional Contracts,
(c) Pre-incorporation Contracts
(d) Certificate of Incorporation
27. Discuss the provisions related to the appointment of Directors of a company and their
role vis-à-vis the company and shareholders. (June 2018)
28. Explain the contents of Memorandum of Association (MOA) and its significance under
the “doctrine of ultravires” (June 2018)
29. Write notes on: (June 2018)
(a) Prospectus
(b) Share Capital
(c) Statutory Meeting
(d) Preference Shares

27
30. Briefly discuss the provisions related to formation of one-person company under
Companies Act, 2013.

UNIT - IV

I MULTIPLE CHOICE QUESTIONS:

1. The Negotiable Instruments Act, 1881 applies to
A. The whole of India
B. The whole of India except the State of Jammu and Kashmir
C. Those states as notified by the Union Government from time to time in the Official
Gazette
D. The whole of India except the State of Jammu and Kashmir and the North- Eastern
States.
ANSWER: B

2.. The Negotiable Instruments Act, 1881 came into force on

A. 9th December 1881
B. 19th December 1881
C. 1st March 1882
D. none of the above.
ANSWER: A

3. The undertaking contained in a promissory note, to pay a certain sum of money is

A. Conditional
B. Unconditional
C. May be conditional or unconditional depending upon the circumstances
D. None of the above.
ANSWER: B

4. A bill of exchange contains a/an

A. Unconditional undertaking
B. Unconditional order
C. Conditional undertaking
D. Conditional order.
ANSWER: A

5. Cheque is a
A. Promissory note
B. Bill of exchange
C. Both (a) and (b) above
D. None of the above.
ANSWER: D

6. The term 'negotiation' in section 14 of the Negotiable Instruments Act, 1881 refers to
A. The transfer of a bill of exchange, promissory note or cheque to any person, so as to
constitute the person the holder thereof

28
 B. The payment by a bank on a negotiable instrument after due verification of the
instrument
C. The bargaining between the parties to a negotiable instrument
D. All of the above.
ANSWER: A

7. If an instrument may be construed either as a promissory note or bill of exchange, it is

A. A valid instrument
B. An ambiguous instrument
C. A returnable instrument
D. None of the above.
ANSWER: A

8. If in an instrument the amount undertaken or ordered to be paid is stated differently in

figures and in words
A. The instrument is void due to uncertainty
B. The amount stated in figure shall be the amount undertaken or ordered to be paid
C. The amount stated in words shall be the amount undertaken or ordered to be paid
D. None of the above.
ANSWER: A

9. Under section 16 of the Negotiable Instrument Act, 'indorsement in blank' of an

instrument means
A. Where the indorser does not write anything on the instrument
B. Where the indorser signs his name only on the instrument
C. Where the indorser writes the name of the person who is directed to pay
D. None of the above.
ANSWER: A

10. 'At sight' under section 21 of the Negotiable Instrument Act, 1881, means
A. On presentation
B. On demand
C. On coming into vision
D. None of the above.
ANSWER: A

11. A promissory note or bill of exchange which is not expressed to be payable on demand, at
sight or on presentment is at maturity
A. On the 30th day after the day on which it is expressed to be payable
B. On the 3rd day after the day on which it is expressed to be payable
C. On the 5th day after the day on which it is expressed to be payable
D. On the 4th day after the day on which it is expressed to be payable.
ANSWER: D

29
12. In a promissory note, the amount of money payable
A. Must be certain
B. May be certain or uncertain
C. Is usually uncertain
D. None of the above.
ANSWER: A

13. A bill is drawn payable to 'A' or order. 'A' indorses it to 'B', the indorsement not
containing the words '"or order" or any equivalent words. Can 'B' negotiate the
instrument?
A. Yes
B. No
C. Not always
D. None of the above.
ANSWER: A

14. Can the holder of a negotiable instrument indorsed in blank convert the indorsement into
an indorsement in full?
A. No, such a conversion is not possible under the Negotiable Instruments Act, 1881
(Section 49)
B. Yes, the holder can, without signing his own name, and by writing above the
indorser's signature a direction to pay to any other person as indorsee, convert the
indorsement in blank into an indorsement in full (Section 49)
C. Yes, the holder can by signing his own name and by writing above the indorser's
signature a direction to pay to any other person as indorsee, convert the
indorsement in blank to an indorsement in full (Section 49)
D. None of the above.
ANSWER: C

15. In determining reasonable time for the purpose of payment of a negotiable instrument
A. Public holidays are included
B. Public holidays are excluded
C. Only the holidays observed by the banks are excluded
D. None of the above.
ANSWER: B

16. To whom of the following, payment of the amount due on a promissory note, bill of
exchange or cheque must be made in order to discharge the maker or acceptor
A. Holder of the instrument
B. Indorser of the instrument
C. Indorsee of the instrument
D. None of the above.
ANSWER: A

30
17. When a cheque bears across its face an addition of the name of a banker, either with or
without the words not negotiable, the cheque is considered to have been crossed
A. Specially
B. Generally
C. Normally
D. Either a or b or c
ANSWER: A

18. When an endorser willing to transfer to an endorsee only a part of the amount of the
instrument, then it is which type of endorsement?
A. Restrictive endorsement
B. Conditional endorsement
C. Special endorsement
D. Partial endorsement
ANSWER: D

19. If a cheque is refused by the State Bank of India (SBI) due to inadequacy of funds for the
cheque to clear, then it is said to be
A. Bounced cheque
B. Cancelled cheque
C. Either a or b
D. Both a and b
ANSWER: A

20. If the words "not negotiable" are used with special crossing in a cheque, the cheque is
A. Not transferable
B. Transferable
C. Negotiable under certain circumstances
D. None of the above
ANSWER: B

21. Crossing of a cheque effect the

A. Negotiability of the cheque
B. Mode of payment on the cheque
C. Both (a) and (b)
D. None of the above
ANSWER: C

22. Who among the following cannot cross a cheque?

A. Drawer
B. Holder
C. Banker
D. Foreigner.
ANSWER: B

31
23. For the purpose of attracting the provisions of section 138 of the Negotiable Instruments
Act, 1881, a cheque has to be presented to the bank
A. Within a period of six months
B. Within a period of six months from the date on which it is drawn or within the
period of its validity, whichever is earlier
C. Within a period of 15 days from the date on which it is drawn
D. None of the above.
ANSWER: B

24. A protest is made by

A. The drawer
B. The indorser
C. A notary
D. None of the above.
ANSWER: C

25. Crossing of a cheque effect the

A. Negotiability of the cheque
B. Mode of payment on the cheque
C. Both (a) and (b)
D. None of the above.
ANSWER: B

26. The indorser is excluded from his liability for dishonour of instrument towards his
subsequent holder in case of
A. Sans Recourse Endorsement
B. Facultative Endorsement
C. Sans Frais Endorsement
D. None of the above.
ANSWER: B

27. Acceptor for honour can be a party to

A. A cheque
B. A bill of exchange
C. A promissory note
D. A hundi
ANSWER: B

28. Both noting and protest are compulsory in case of

A. Foreign Bills
B. Inland Bills
C. Foreign as well as Inland Bills
D. None of them
ANSWER: C

32
29. Notice of dishonour must be given
A. To the drawer and drawee only
B. To the drawer, acceptor and endorser(s) only
C. To all the parties liable on the instrument or to their duly authorized agent
D. To all the parties who are secondarily liable on the instrument or to their duly
authorized agent
ANSWER: D

30. Presentation is required for

A. Acceptance
B. Sight
C. Payment
D. Any of the above three purposes
ANSWER: D

31. A minor cannot be a______________ of the instrument

A. Drawer
B. Drawee
C. Payee
D. Acceptor
ANSWER: C

32. Presentment of an acceptance is required in case of

A. Every Bill of exchange
B. Every Bill of exchange payable after sight
C. Every promissory note
D. Every cheque
ANSWER: C

33. In case of insolvency of a drawee, a bill should be presented for acceptance to the
A. Official receiver
B. Acceptor for honour
C. Drawee incase of need
ANSWER: A

34. A drawee is need to be given a deliberation of

A. 24 hrs
B. 48 hrs
C. 72hrs
D. 10 days
ANSWER: B

II SHORT ANSWER TYPE QUESTIONS:

1. Enumerate the essential characteristics of negotiable instruments.

2. Define holder, enumerate the privileges of a holder in due course.

33
 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance III (3423 ) CLASS: TYB.Com (2013 PATTERN)

Unit 2: Negotiable Instrument Act 1881

1) It is a ----------------- obligation of a banker to honour the cheques of the customer drawn against
current
a) Mutual
b) Statutory
c) Unstatutory
d) All of the above

2) Which bank have given the instructions to the commercial banks regarding the immediate credit of
outstation cheques?
a) Reserve Bank of India
b) Central Bank
c) World Bank
d) All of the above

3) In India, the law regulating the Negotiable instruments are

a) Banking Regulation Act 1949
b) Reserve Bank of India Act 1934
c) Negotiable Instruments Act 1881
d) Companies Act 1956

4) In Negotiable Instruments Act 1881, which section defines promissory note?

a) Section 1
b) Section 2
c) Section 3
d) Section 4

5) A cheque dated subsequent to the date of its issue is

a) Post dated cheque
b) Blank cheque
c) Crossed cheque
d) Account payee cheque

6) A drawer in the bill of exchange can also be a

a) Paymaster
b) Payee
c) Banker
d) Creditor

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance III (3423 ) CLASS: TYB.Com (2013 PATTERN)

7) The rate at which RBI discounts approved bill of exchange is

a) Bank rate
b) Interest rate
c) Exchange rate
d) Discount rate

8) Who is primarily liable on a promissory note?

a) Holder
b) Maker
c) Drawee
d) Endorser

9) How many parties are mainly involved in Promissory Note?

a) One
b) Five
c) Two
d) Three

10) In a bill of exchange, drawee is the person

a) who draws the bill
b) on whom the bill is drawn
c) to whom the payment of the bill is to be made
d) to whom the payment of the bill is not to be made

11) ------------ is a dead cheque

a) Post dated cheque
b) Stale cheque
c) Ante dated cheque
d) Pre dated cheque

12) Name the person to whom the amount of the cheque is payable?
a) Drawer
b) Payee
c) Drawee
d) Acceptor

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance III (3423 ) CLASS: TYB.Com (2013 PATTERN)

13) Discounting of bills of exchange is

a) Clean advance
b) Secured advance
c) Neither clean advance nor secured advance
d) Unsecured advance

14) Expand NEFT

a) National Electronic Fund Transfer
b) Neutral Electronic Fund Transfer
c) Nominal Electronic Fund Transfer
d) Natural Electronic Fund Transfer

15) A negotiable instrument drawn or make in India is called_______ instrument.

a) Inland
b) Foreign
c) Time
d) Clean

16) The following one is a negotiable instrument, negotiable by usage or custom

a) Bill of Exchange
b) Accommodation Bill
c) Promissory Note
d) Share warrant

17) The most important feature of a negotiable instrument is

a) Free transfer
b) Transfer free from defects
c) Right to sue
d) Both A & B

18) The following one is absolutely essential for a special crossing.

a) Two parallel transverse lines
b) Words "And company?
c) Words "Not negotiable"
d) Name of a banker

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance III (3423 ) CLASS: TYB.Com (2013 PATTERN)

19) Cheque is payable on

a) Demand
b) Usage
c) Fixed future date
d) After sight

20) The reasonable period allowed in India for the presentation of a cheque is
a) 1 year
b) 3 months
c) 9 months
d) depending upon custom

21) Section 6 of the Negotiable Instruments Act defines ___.

a) Cheque
b) Bill of Exchange
c) Promissory Notes
d) Dishonour by non-payment
e) Dishonour by non-acceptance

22) If a Minor draw, indorse, deliver and negotiate Negotiable Instruments, it binds __
a) All the parties except minor
b) All the parties including minor
c) Minor Only
d) Minor and Only Drawer
e) Minor and the Drawee

23) Dishonour of Negotiable Instrument by Non Payment is covered under section in Negotiable
Instrument Act 1882…
a) Section 90
b) Section 91
c) Section 92
d) Section 93
e) Section 94

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance III (3423 ) CLASS: TYB.Com (2013 PATTERN)

24) Which of the following section in the Negotiable Instruments Act deals with the Bill of Exchange?
a) Section 5
b) Section 6
c) Section 4
d) Section 13

25) Which of the followings are not the Negotiable Instruments as defined by the Statute…
a) Banker’s Note
b) Promissory Note
c) Bill of Exchange
d) Cheques
e) All of the Instruments are Negotiable Instruments

26) Which of the following is/are true about the Negotiable Instruments Act, the Promissory Note is …
A) Definition of Promissory Note is given in section 8 of the Negotiable Instrument Act
B) Containing an unconditional undertaking
C) To pay a certain sum of money only to a specific person or the bearer
D) The seller is bound to accept the promissory note
E) A document was written and signed by the payer/maker

a) (A), (B) and (C)

b) (B), (C) and (E)
c) (B), (C), and (D)
d) (A), (C) and (D)
e) All of the above

27) The Negotiable Instruments (Amendment) Bill, 2017 inserted a provision allowing a court trying an
offence related to cheque bouncing, to direct the drawer (person who writes the cheque) to pay
interim compensation to the complainant. The interim compensation will not exceed ___% of the
cheque amount?
a) 15%
b) 25%
c) 30%
d) 33%
e) 20%

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance III (3423 ) CLASS: TYB.Com (2013 PATTERN)

28) Which of the following is/are true about bill of exchange?

A) A bill of exchange requires in its inception two parties.
B) A bill of exchange or “draft” is a written order by the drawer to the drawee to pay money to the
payee.
C) Bills of exchange are used primarily in international trade, and are written orders by one person to
his bank to pay the bearer a specific sum on a specific date.
D) Definition of ‘Bill of Exchange’ is mentioned in Section 6 of the Negotiable Instrument Act.

a) (A) and (D)

b) (A), (B) and (D)
c) (B) and (C)
d) (C) and (D)
e) All of the Above

29) If the holder of a bill of exchange allows the drawee more than ___ hours, exclusive of public holidays,
to consider whether he will accept the same, all previous parties not consenting to such allowance are
thereby discharged from liability to such holder.
a) 24
b) 12
c) 36
d) 48
e) 60

30) Which of the following is/are false about Dishonour of Cheque?

A) Section 138 defines Dishonour of cheque for insufficiency, etc., of funds in the account.
B) Such cheque has been presented to the bank within a period of twelve months from the date on
which it is drawn or within the period of its validity, whichever is earlier
C) Imprisonment for such offence may be extended for period of five year
D) Section 138 apply unless – the drawer of such cheque fails to make the payment of the said
amount of money to the payee or, as the case may be, to the holder in due course of the cheque,
within fifteen days of the receipt of the said notice.

a) (A) and (D)

b) (B) and (C)
c) (B),(C) and (D)

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance III (3423 ) CLASS: TYB.Com (2013 PATTERN)

d) Only (D)
e) Only (C)

Answer Key:
1-b 2-a 3- c 4-d 5-a 6-b 7-d 8-b 9-c 10 - b
11 - b 12 - c 13 - c 14 - a 15 - a 16 - d 17 - d 18 - d 19 - a 20 - b
21 - a 22 - a 23 - c 24 - a 25 - a 26 - b 27 - e 28 - c 29 - d 30 - b

PROF. KAVITA PAREEK www.dacc.edu.in

SUBJECT 1 BUS LAW
Ques
tion
Question Answer1 Answer2 Answer3
Controller of Answer4 Answer5
CorrectOption
Difficulty
Marks
LevelImage
Audio
Video
File
Topic
FilePath
FileType
PathPath
The authority above Deputy Assistant certifying
controller is _____________ Deputy controller controller authority Vice chairman Answer3 2 1 Unit 6 MCQ
____________ uses decryption
while authenticating
____________ is a person who Public key Digital form private key target Answer3 2 1 Unit 6 MCQ
sends, generates message in E
contracts
The ____________ is below the Intermediary Addressee sender originator Answer4 1 1 Unit 6 MCQ
controller of certifying authority Assistant
under the IT Act Deputy controller controller Controller Vice chairman Answer1 3 1 Unit 6 MCQ
In Asymmetric Crypto System
__________
In Asymmetric is to verifySystem
Crypto DSC Private Key Public Key Lost key Add-on key Answer2 1 1 Unit 6 MCQ
Public key is used to ________
DSC
In Asymmetric Crypto System authenticating entry affixing verify Answer4 2 1 Unit 6 MCQ
Private key is used to ________
DSC verify entry affixing creating Answer4 2 1 Unit 6 MCQ
The Information technology act
does not apply to _________ plain contracts a trust payable receivable Answer2 2 1 Unit 6 MCQ
The Information technology act
does not apply to _________ plain contracts property contract payable receivable Answer2 2 1 Unit 6 MCQ
________ is allowed under the
Information Technology property contract a trust plain contracts Power of attorney Answer3 1 1 Unit 6 MCQ
________ is allowed under the
Information Technology property contract a trust payment contract Power of attorney Answer3 3 1 Unit 6 MCQ
________ is allowed under the
Information Technology property contract a trust plain contracts Power of attorney Answer3 3 1 Unit 6 MCQ
No ____ protection is extended
Statutory
to ____
In cheques which arethe
instrument, forged. criminal civil constitutional Answer1 3 1 Unit 5 MCQ
negotiable instrument is payable
Bearer
to order. Foreign fictitious order Answer4 2 1 Unit 5 MCQ
A Promissory note, bill of
exchange drawn or made in India
Escrow
and made
Any payable
instrument, notupon any
so drawn, Inland Foreign Bearer Answer2 1 1 Unit 5 MCQ
made or payable in India shall be
Inland
deemed
If to be _____
the payment Instrument
by acceptor of Bill Bearer Foreign Order Answer3 1 1 Unit 5 MCQ
of Exchange is dependent upon
incomplete
theacceptance
An happening of an event,
which the
undertakes incorrect inappropriate conditional Answer4 1 1 Unit 5 MCQ
to pay only part of the amount of
unfinished
Bill of ExchangeofisBill
An acceptance a _______
of Exchange Partial unlimited fair Answer2 1 1 Unit 5 MCQ
which undertakes to pay only at Qualified as to Qualified as to Qualified as to
a specified
An acceptance place ofand notExchange
Bill of place time name Not qualified Answer1 1 1 Unit 5 MCQ
is if it make the money payable Qualified as to Qualified as to
under
A drawee a billofatbill
a time other than
of exchange who time Not qualified time Invalid Answer3 1 1 Unit 5 MCQ
accepts the bill drawn on him /
follower
her is called
There are three_____ parties to a bill of believer member Acceptor Answer4 1 1 Unit 5 MCQ
exchange known as Drawer,
Complainant
Drawee and _______ Respondent Plaintiff Payee Answer4 1 1 Unit 5 MCQ
A bill of exchange is sometimes
draft
referred to as a ______ document abstract rough blueprint Answer1 1 1 Unit 5 MCQ
Bill of Exchange, when issued by
rough draft
a bank, it is called as _________ bank draft version outline Answer2 1 1 Unit 5 MCQ

Where an unpaid seller has made

Return on the Of lien on the Sale to any other
part delivery of the goods he may Goods sold 2
remainder remainder person
exercise his right________
Answer3 1 Unit 4 MCQ

Ascertained goods is otherwise

Specific Generic Future Past 2
called as _______________ goods
Answer1 1 Unit 4 MCQ

In case of agreement to sell the

seller can sue the buyer for Damages Price Interest Fraud 1
_________ in case of breach
Answer3 1 Unit 4 MCQ
In a contract for sale of specific
A voidable
goods, the goods, without the A voidable A voidable
contract subject
knowledge of seller perished at contract at the contract at the A void contract 3
to approval of
the time when the contract was instance of seller instance of buyer
the civil court
made, the contract is: Answer4 1 Unit 4 MCQ
A is a stipulation essential to
main purpose of the contract and
the breach of which gives rise to Condition Warranty Disclaimer Goods 3
a right to treat the contract as
repudiated: Answer1 1 Unit 4 MCQ
Right of lien on Right of stopping Right of
the following is not the right of goods for the the goods in withholding
Right of resale as
an unpaid seller under Sale of price while the transit, in case of delivery where the 2
limited by the Act
Goods Act, 1930: goods are in insolvency of property in the
possession of buyer goods has passed Answer4 1 Unit 4 MCQ
__________________________
is the concept of “LET THE BUYER Information Unfair Trade
BEWARE”. Center Practics Caveat Emptor Buyer Kingdom Answer3 1 1 Unit 4 MCQ
It is a standard rule that risk
follows_____. Seller Buyer Property Possession Answer3 1 1 Unit 4 MCQ
The sale of Goods Act enforces in
the year 1935 1930 1945 1955 Answer2 1 1 Unit 4 MCQ
The subject matter of the
contract under Sale of goods Act Money Immovable
must be Goods Goods Immovable Money Answer2 1 1 Unit 4 MCQ

Sale under Sale of goods Act is

a/an _______________ contract
Executory Executable Executed Execut Answer3 2 1 Unit 4 MCQ
There are basically _____ modes 6
5 3 2 1 2
of discharge of a contract Answer1 Unit 3 MCQ
Discharge by ______ is Novation Remission Termination Consideration ,
2 2
substituting an old contract with purpose Answer1 Unit 3 MCQ
a new contract
Impossibility may be ______ or Contract, offer Services and Consideration ,
Pre,post 3 2
_____ contractual in nature agencies purpose Answer2 Unit 3 MCQ
Breach of contract may be Actual, Actual , past
Futue,general Specific,general 1 2
classified as ____ breach or ____ anticipatory contract Answer1 Unit 3 MCQ
breach of contract
Although contingent contract is
based on an uncertain event, the Policy Rules Act Consideration 2 2
event can be an of the party
Answer3 Unit 3 MCQ

Trade combinations are vaild 2 2

void voidable VAT contract Answer1 Unit 3 MCQ

Ignorance of _______ is no excuse Law court judgment excuse Answer1 1 2

offer must be offer must be offer must give rise Unit 3 MCQ
Case Law Lalman Vs Gauridutt communicated kept oen till it is offer must be to legal
(1913) is related to to the offeree
exchanging accepted
offeer made to definite
offer allowed to consequences Answer1 2 1 Unit 3 MCQ
identical offers the public in remain open for offer made to a
Cross offer means by two parties in general acceptance over definite person Answer1 2 1 Unit 3 MCQ
Which of the following is not voidable
classified under enforceability? valid contracts void contracts contracts quasi contract Answer4 1 1 Unit 3 MCQ
The Contract Act 1872 consists
238 266 248 252
________sections.
An agreement enforceable by law Answer1 1 1 Unit 3 MCQ
at the option of one of the a voidable
a void contract
parties
SLP thereto
is given butArticle
under not at136
the of contract a valid contract invalid contract Answer2 1 1 Unit 3 MCQ
Constitution Of India, what is its Supreme Leave Special Leave Special Leave Silent Leave
full form? Permission Petition Permission Petition Answer2 1 1 Unit 2 MCQ
Loksabha and Independent
Bi Cameral Legislature means Rajya sabha only Rajya sabha only Lok sabha Judiciary Answer1 2 1 Unit 2 MCQ
State Central
Statutes are enacted by________ Government Government Supeme Court Parliament Answer4 2 1 Unit 1 MCQ

SUBJECT 2 PPBI