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Previous Year Question Paper

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Paper name:
Business Law B.Com. (P)

Year:
2020, 2021, 2022, 2023
 2022 (MARCH)
Name of the Paper : Business Laws
Name of the Course : B.Com

Duration: 3 hours Maximum Marks: 75

Attempt any 4 Questions. All questions carry equal marks.

Q. 1. "Apart from minority and unsoundness of mind, the

capacity to contract of a person may be affected by virtue
of any special law to which he is subject." Comment on the
statement.
Ans. Competence/capacity to contract. At least two parties are
essential for every valid contract and each of these parties must
have the legal capacity of entering into the contract. Section 11
of the Contract Act provides that "Every person is competent to
contract, who is of the age of majority, according to the law to
which he is subject, and who is of sound mind and is not
disqualified from contracting by any law to which he is subject".
subject". Thus, in law, following persons are not considered to be
competent to enter into a contract:
A minor,
A person otherwise disqualified for entering into contract,
A person of unsound mind.

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Apart from minority and unsoundness of mind, there are other
persons also who are otherwise disqualified for entering into a
contract. Section 11 of the Contract Act gives another category of
persons who may not be competent to contract. These are the
persons who may be declared disqualified to contract by some
law to which they are subject to:
(a) Convicts. A convict is a person under imprisonment by Court
on being found guilty under the Indian Penal Code (IC). Such a
person does not have certain civil rights.
(b) Foreign Diplomats. An Indian entering into a contract with
foreign diplomats will not be able to enforce it against them
without the permission of Government of India because of
privileges extended to them and their families under the Vienna
Convention on Diplomatic Relations, 1961.
(c) Alien enemy. An agreement made by an Indian with an alien
enemy without Government's approval will not be enforceable by
both the parties.
(d) Insolvent persons. An insolvent is a person who has been
declared so by a Court of law because of his inability to meet his
liabilities out of his existing assets. An Insolvent cannot make
any contract which will make his property liable in some manner
to the disadvantage of the creditors.

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perpetual succession. From the date of registration/ incorporation
given in the certificate, the LLP shall be capable forth-with of
exercising the following powers:
(i) Suing and being sued;
(ii) Acquiring, owning, holding and developing or disposing of
property;
(iii) Having a common seal, if it decides to have one; and
(iv) Doing and suffering such other acts and things as bodies
corporate may lawfully do and suffer.

Change of registered office from one state to another.

The LLP may change its registered office from one place to
another. The following procedures (as laid down in Rule 17 of
the LLP Rules, 2009) are to be followed for effecting the change:
(i) The procedure laid down in the LLP Agreement should be
followed.
Where the LLP Agreement does not provide for such procedure,
consent of all partners shall be required. However, in case of
change of registered office from one state to another state,
consent of secured creditors shall also be required.
(ii) In case of change of registered office from one state to
another state, the LLP shall publish a Public Notice, at least 21
days before filing any Notice of change in Form 15 with the
Registrar in a daily newspaper published in English and a local
language.
(iii) In case of change in place of registered office from one place

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(ii) Revocation by the principal. It is Section 203 of the
Contract Act which provides that 'principal' to the agency can
revoke the authority of the agent at any time before the agent
has exercised his authority, unless the agency is 'irrevocable'.
This revocation can be either expressed or implied.
However, in case of a continuous agency, the principal can only
revoke it for the future and that too only after giving reasonable
notice to the agent. Similar is the case where agency is for a
fixed period of time where also the revocation should not be
without sufficient cause.
(iii) Renunciation by agent. An agency may also be terminated
by an expressed renunciation by the agent. But again a
reasonable notice is needed, otherwise the principal is entitled to
damages.
2. By operation of law. An agency automatically gets
terminated in the following cases:
(i) Completion of business of agency. Whereupon the agency
automatically comes to an end.
(ii) Expiry of time. If agency is for a fixed term or period, then
it comes to an end at the expiry of the fixed period of time.
(iii) Death of the principal or agent. An agency comes to an
end on the death of either party to the contract of agency.
(iv) Either party to the contract of agency becoming of unsound
mind also results in termination of agency.
(v) Either party to the contract of agency being adjudged
insolvent.

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 2021 (MARCH)
Name of the Paper : Business Laws
Name of the Course : B.Com

Duration: 3 hours Maximum Marks: 100

Attempt any two questions in all. All questions carry equal marks.

Q. 1. (a) "Doctrine of Caveat Emptor does not apply in all

contracts of Sale of Goods." Explain the doctrine and give
the situations where this Doctrine is not applicable.
(b) Explain the procedure and effects of conversion of a
partnership into LLP as per LLP Act, 2008.
(c) "A partner shall never be liable to an unlimited extent
for the debts of the LLP." Critically examine the statement.
(d) "The court can wind up an LLP on just and equitable
grounds." Comment.

Ans. Caveat emptor. 'Caveat emptor means 'let the buyer

beware'. The doctrine of 'Caveat emptor means that in every
contract of sale of goods, buyer stands warned that it is his
responsibility to identify the goods and find faults in them and
determine which faults would be acceptable to him or otherwise.
Except in the case of 'fraud' the seller will not be liable to the
buyer for any defect in the goods. It is his duty to select and
finalise the goods that he requires. It is not the duty of seller to

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 of Account and Solvency or the Annual Returns for any five
consecutive financial years.
Tribunal is of the opinion that it is just and equitable for a
LLP to be wound up.
Besides these circumstances LLP's name can be ordered to be
removed from the Register. This may be done by the Registrar in
case the LLP is found to be not carrying on any business or
operation-
(a) for a period of two or more years and the Registrar has
reasons to believe that the name of the LLP be removed from the
Register.
(b) for a period of one year or more the ILLP is not carrying on
any business or operations and an application in a prescribed
form is made to the Registrar with the consent of all the
partners asking or seeking that the name of the LLP be removed
from the Register.
However, in either case, the Registrar has to send a notice to the
LLP and all the partners. In this notice he has to make clear his
intention to remove the name of the LLP from the Register. The
LLP and its partners have to or can send their representations
along with copies of the relevant documents, if any, within a
period of one month from the date of notice.
But no such notice by the Registrar is needed in case of above
where an application in the prescribed form is made to the
Registrar with the consent of all the partners of the LLP for
removing its name from the Register.

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