CMS Professional Academy CA-CPT/IPCC/FINAL/CMA

CMA FOUNDATION – LAW EXAM PAPER

Time: 60 Mins 50 Marks
1. An agreement by way of wager under Section 30 is:
(a) void (b) voidable (c) valid (d) unenforceable
2. The void agreement is one which is:
(a) Valid but not enforceable
(b) Enforceable at the option of both the parties
(c) Enforceable at the option of one party
(d) Not enforceable in a Court of law.
3. On the valid performance of the contractual obligations by the parties, the contract:
(a) is discharged (b) becomes enforceable
(c) becomes void (d) none of these.
4. Consideration must be:
(a) Adequate (b) Superficial (c) Unlawful (d) Something
5. Agreement the meaning of which is uncertain is
(a) Void (b) Valid (c) Voidable (d) IIIegal
6. The Indian Contract Act, 1872:
(a) Contains the basic principles of contract
(b) Is not a complete code on contract
(c) Does not cover all type of contracts
(d) All of the above
7. The period is limitation for simple contract in India is _______
(a) 2 years (b) 3 years (c) 6 years (d) 8 years
8. A contract which ceases to be enforceable by law becomes
(a) Voidable contract. (b) Void agreement. (c) Void contract. (d) Valid contract.
9. Which one of the following statements is correct?
(a) Void agreements are always illegal.
(b) Illegal agreements are voidable.
(c) Illegal agreement can be ratified by the parties.
(d) Illegal agreements are always void.
10. The doctrine of "CAVEAT EMPTOR" is not applicable:
(a) when the goods are of mass consumption
(b) In case of perishable goods
(c) When the seller is a well – established and known person
(d) When the buyer has relied upon the skill & judgment of the seller
11. The implied warranties as per the sale of goods act, 1930 includes________
(a) Enjoyment of undistributed possession
(b) Disclosure of dangerous nature of goods
(c) Quality or fitness by usage of trade
(d) All of the above
12. An auction sale is complete on the:
(a) Delivery of goods (b) Payment of price (c) Fall of hammer (d) None of above.
13. A contract for sale of goods which provide that property would pass to buyer on full payment of price and
execution of sale deeds is known as:
(a) Sale (b) Agreement to sell (c) Hire-purchase agreement (d) Sale of approval.
14. Good the acquisition of which is contingent upon some events happening or non-happening will be treated:
(a) Future goods (b) Unascertained goods (c) Contingent goods (d) forward commodities
15. CIF Contract is also known as:
(a) Contingent contract (b) Contract for sale of document

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(c) Conditional contract of sales (d) quasi contract
16. “Mercantile agent” means the person:
(a) Who sell goods, or consigns for the purpose of sell, or buy goods or raise money on security of goods
(b) Who only sell or purchase
(c) Who only stores goods
(d) Who raise money on security of goods
17. Anil sold and delivered 230 kg of bajra to Sunil. Sunil instead of expressing his acceptance of the sugar in
writing or by words send the same to floor mill. The acceptance of goods:
(a) Has not taken place (b) By implied adoption has taken place
(c) By default (d) By estoppels
18. X purchased knifes. The Knifes were found to be blunt not suitable for cutting. This is a breach of:
(a) Condition as to wholesomeness
(b) Condition as to fit for a particular purpose
(c) Condition as to merchantability
(d) Free from encumbrance
19. Doctrine of caveat emptor does not apply when:
(a) Goods are purchased by sample
(b) Goods are purchased by description
(c) Goods are purchased by sample as well as description
(d) all of the above
20. M sold goods to B. The payment was to be done after one month. B did not made payment. The right of lien
can be exercised by M When goods are _________
(a) Handed over to transporters (b) Not handed over to anyone
(c) Handed over to B (d) Handed over to any one
21. A stipulation in a contract of sale which is collateral to the main purpose of contract is called as:
(a) Guarantee (b) Warranty (c) Condition (d) Term
22. Sellers means a persons ______
(a) Who sells or agree to sell goods (b) Who bear authority to sell
(c) Who only agrees to sell goods (d) Who is desirous of selling
23. Breach of warranty gives a right to:
(a) Reject goods (b) Treat the contract as repudiated
(c) Claim new goods (d) Claim damages
24. A had ten horses. He agreed to sell one horse to B. This is a contract for the sale of:
(a) Specific goods (b) Ascertained goods
(c) Unascertained goods (d) Contingent goods.
25. A document issued by warehouse keeper or a war fingers stating that the goods specified in the document are
in his warehouse or in his where is called:
(a) Dock Warrant
(b) Bill of lading
(c) A warehouse keeper's or war fingers certificates
(d) Delivery order.
26. As per section 5 (1) of the sale of goods act, 1930, which of the following is a recognized made of a contract of
sale? The price and delivery of the goods may be:
(a) Postponed (b) Agreed to be made in installments
(c) Agreed to be made immediately (d) All of these
27. A finder can sell the goods if:
(a) The goods are ascertained (b) The goods are un-ascertained
(c) The goods are valuable (d) The goods are perishable
28. An agreement to sell is:
(a) An executory contract (b) An executed contract

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(c) Neither ‘a’ or ‘b’ (d) Sometime ‘a’ or ‘b’
29. The general rule of sale of goods act is, risk prima facie passes with:
(a) Ownership (b) Possession (c) Delivery (d) Custody
30. An essential element of a contract of sale is:
(a) Transfer of ownership in goods (b) Delivery of goods
(c) Both ‘b’ and ‘c’ (d) Either ‘a’ or ‘b’
31. Section 19 of the Sale of Goods Act, deals with passing of property of ________ goods.
(a) Unascertained goods (b) Future goods
(c) Ascertained or specific goods (d) Contingent goods
32. Right of stoppage in transit can be exercised by the unpaid seller, where he
(a) Has lost his right of lien (b) Still enjoys his right of lien
(c) Either (a) or (b) (d) Neither (a) nor (b)
33. Which of the following is not correct regarding appropriation of goods for unascertained goods?
(a) The assent must be given either before or after appropriation
(b) Buyer or seller can make appropriation.
34. When the breach of condition is treated as breach of warranty, buyer has right to:
(a) Claim damages (b) Repudiate the contract
(c) Reject the goods (d) none of the above
35. Implied condition as to quality or fitness becomes applicable if -
(a) Buyer discloses to the Seller, the exact purpose for which goods are required.
(b) Buyer suffers from an abnormality and does not communicate this fact to the Seller.
(c) Seller's business is to sell specific goods under a patent or trade name.
(d) Buyer reserves the right to examine the goods and check its quality.
36. M purchased a hot water bottle from a Chemist. The bottle burst and injured his wife. The Chemist is liable on
account of -
(a) Breach of express condition as to quality (b) Breach of implied condition as to quality
(c) Personal injury caused to the Buyer's wife (d) Hot water bottle sales are illegal.
37. In case of ________ in addition to the implied condition as to the merchantability there is another implied
condition that the goods shall be wholesome
(a) Silver (b) Equity share (c) Machineries (d) Eatables
38. The Doctrine of Caveat Emptor applies to the Sale where –
(a) The buyer expressly informed the seller the particular purpose for which the goods are being bought.
(b) Sale under a Patent or Trade Name.
(c) When the good is of merchantable quality and the buyer has examined the good.
(d) None of the above.
39. In case of sale of specific goods in a deliverable state, the property in goods passes to the buyer when____
(a) Contract in entered (b) Payment is made by the buyer
(C) Goods are delivered and payment is made (d) Goods are delivered to buyer
40. In cases of goods sent on approval basis, the goods are at the........ if they perish in an inevitable accident.
(a) Buyer's Risk (b) Seller's Risk
(c) Combined Risk of Buyer and Seller (d) Carrier's Risk
41. A obtains a necklace from B, a jeweller, by playing fraud upon him. This contract is voidable at the option of B.
But before B could terminate the contract, A sells the necklace to C who buys it in good faith and without notice
of A's defective title.
(a) A gets a good title to goods. (b) B gets a good title to goods.
(c) C gets a good title to goods. (d) There is no sale at all.
42. A sells to B 100 bags of wheat lying in C's warehouse. A makes a delivery order to C to transfer the wheat to B.
C transfers and holds the 100 bags on behalf of B and by making necessary entries in his books. This is a case of -
(a) Actual Delivery (b) Constructive Delivery
(c) Symbolical Delivery (d) Forward Delivery

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43. Where Goods are bulky / heavy and it is not possible to physically hand over them to the Buyer, some symbol
which carries with it the real possession or control over the Goods is handed over to the Buyer. This is a case of -
(a) Actual Delivery (b) Constructive Delivery
(c) Symbolical Delivery (d) Forward Delivery
44. A Finder of goods has the power to sell the goods to give good title to the Buyer, if the owner of goods cannot
be found with
(a) Ordinary diligence (b) reasonable diligence
(c) Due diligence (d) lack of diligence
45. A agreed to sell 100 quintals of rice to B, B does not like that quality and refuse them-
(a) B can do so and he is not liable for any loss
(b) B can do so, but he is liable to pay for care and custody of goods
(c) B has no right to do so but he is liable to pay damages
(d) None of the above
46. Goods are deemed to be in transit from the time they are delivered to the Carrier or other bailee for
transmission to the Buyer, until-
(a) Buyer becomes solvent
(b) Buyer or his agent takes delivery of the goods
(c) Seller becomes solvent
(d) Seller or his agent takes delivery of the goods
47. When goods are in possession of third person, delivery is complete:
(a) When such third party acknowledges to the buyer that he holds the goods on his behalf
(b) Even though such third party does not acknowledge
(c) When the physical possession of the goods is given
(d) None of the above
48. If the seller delivers to the buyer a quantity larger than he contracted to sell, the buyer may
(a) Reject the whole
(b) Accept the whole
(c) Accept the quantity he ordered and reject the rest
(d) Either 'a', 'b' or 'c'
49. In case of carriage of goods by sea, where the seller has to put the goods on board a ship at his own expenses,
the contract is known as
(a) F.O.B. Contract (b) C.I.F. Contract
(c) Ex-ship Contract (d) FAS Contract
50. The general principle regarding transfer of title in case of sale of goods is that-
(a) The seller cannot transfer to the buyer a better title than he himself has
(b) The seller can transfer to the buyer a better title than he himself has
(c) The buyer can transfer to the seller a better title than he himself has
(d) The seller's representative can transfer to the buyer no title

CMA F – LAW Exam Paper (17-05-24) SHORT TERM- Contact: 9573997799