Mercantile Law CPT MCQ:
Question: In which form of the contract, the property in the goods passes to the buyer immediately:
(a) agreement to sell
(b) hire purchase
(c) sale
(d) installment to sell
Question: After retirement from firm, which of the following partners is not liable by holding out, even if the public notice of retirement is not given?
(a) Active partner
(b) Sleeping partner
(c) Representative of deceased partner
(d) Both (b) and (c)
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Question: Where the goods are delivered to a carrier or wharfinger for the purpose of transmission to the buyer, the delivery is
(a) Invalid & effective
(b) Valid & effective
(c) Conditional
(d) None
Question: Rajinder makes the following statement while negotiating the sale of his car, “This is the sharpest car on the market.” His statement may support a claim for:
(a) misrepresentation
(b) fraud
(c) fraud and misrepresentation
(d) none of the above
Question: A partnership at will is one:
(a) which does not have any deed
(b) which does not have any partner
(c) which does not provide for how long the business will continue
(d) which cannot be dissolved.
Question: _____ is included in the implied authority of a partner.
(a) To submit to arbitration a dispute relating to the firm’s business.
(b) To pledge a security goods of the firm for obtaining loan for the firm
(c) To enter into another partnership on behalf of the firm
(d) To open a bank account on behalf of the firm in the partner own name
Question: A firm is the name of:
(a) The Partners
(b) The minors in the firm.
(c) The business under which the firm carries on business
(d) The collective name under which it caries on business.
Question: Which of the following is not the right of a partner i.e., which he cannot claim as a matter of right?
(a) Right to take part in business
(b) Right to have access to account books
(c) Right to share profits
(d) Right to receive remuneration.
Question: Every partner has the right to:
(a) Take part in the business of the firm
(b) To share exclusive profits
(c) To use the property of the firm for personal purposes
(d) Pay taxes
Question: To constitute a partnership, the agreement must be in:
(a) In writing
(b) In Oral
(c) Either in written or in Oral
(d) Neither in writing Nor in Oral
Question: Ramesh and Suresh entered into a contract whereby Ramesh agreed to sell Suresh 1,00000 worth of illegal drugs. This is an example of a:
(a) quasi contract
(b) void contract
(c) voidable contract
(d) secondary party beneficiary contract
Question: Which company shares can be freely transferable?
(a) Private Company
(b) Public Company
Question: Cross Offers means
(a) Exchanging identical offers by two parties in ignorance.
(b) Offer made to the public in general.
(c) Offer allowed to remain open for acceptance over a period of time.
(d) Offer made to a definite person.
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Question: Which of the following is false? An offer to be valid must:
(a) Intend to create legal relations
(b) Have certain & unambiguous terms
(c) Contain a term the non-compliance of which would amount to acceptance
(d) Be communicated to the person to whom it is made.
Question: An agreement is void if it is opposed to public policy. Which of the following is not covered by heads of public policy?
(a) Trading with an enemy
(b) Trafficking in public offices
(c) Marriage brokerage contracts
(d) Contracts to do impossible acts
Question: A minor’s liability for ‘necessaries’ supplied to him;
(a) Arises after he attains majority age
(b) Is against only minor’s property
(c) Does not arise at all
(d) Arises if minor gives a promise for it.
Question: Which of the following persons can perform the contract?
(a) Promisor alone
(b) Legal representatives of promisor
(c) Agent of the promisor
(d) All of these
Question: Which of the following offers constitute a valid offer?
(a) An auctioneer displays a TV. set before a gathering in an auction sale.
(b) Ram who is in possession of three cars purchased in different years says ‘I will sell you a car’.
(c) A says to B, “Will you purchase my motor cycle for Rs. 20,000?
(d) All of the above.
Question: Impossibility arising subsequent to entering in to a contract is called____
(a) Supervening impossibility
(b) Irregular impossibility
(c) Perpetual impossibility
(d) None
Question: Which of the following statement is true?
(a) Consideration must result in a benefit to both parties
(b) Past consideration is no consideration in India.
(c) Consideration must be adequate.
(d) Consideration must be something, which a promisor is not already bound to do.
Question: Which of the following is not an exception to the rule – No Consideration, No Contract?
(a) Compensation for involuntary services.
(b) Love & Affection.
(c) Contract of Agency
(d) Gift.
Question: Impossibility arising subsequently to formation of a contract is
(a) Pre-contractual contract
(b) Supervening impossibility
(c) Initial Impossibility
(d) None of these
Question: Generally, which of the following damages are not recoverable?
(a) Ordinary damages
(b) Special damages
(c) Remote damages
(d) Nominal damages
Question: Which of the following is not an implied condition in a contract of sale?
(a) Condition as to title
(b) Condition as to description
(c) Condition as to free from encumbrance
(d) Condition as to sample
Question: The doctrine of indoor management is an ______to the doctrine of constructive notice
(a) Exception
(b) Extension
(c) Alternative
(d) None of the above
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Question: Age limit of Directors in case of private company is ___
(a) 65
(b) 70
(c) 75
(d) No limit
Question: Which of the following is not a form of delivery?
(a) Constructive delivery
(b) Structured delivery
(c) Actual delivery
(d) Symbolic delivery
Question: Which one or more of the following resolution need not be filed with the registrar
(a) Special resolution
(b) A resolution of Board relating to appointment of a managing director
(c) A resolution approving the appointment of a sole selling agent
(d) An ordinary resolution
Question: Doctrine of Caveat Emptor means
(a) let the seller beware
(b) let the buyer beware
(c) let the creditor beware
(d) none of the above
Question: Mercantile Agent is having an authority to
(a) sell or consign goods
(b) raise money on the security of goods
(c) sell or buy goods
(d) any of the above
Question: _____ is one sided contract in which only one party has to perform his part of promise
(a) Unilateral contract
(b) Illegal
(c) Bilateral
(d) enforceable
Question: A mistake as to a law not in force in India has the same effect as:
(a) mistake of fact
(b) mistake of Indian law
(c) fraud
(d) misrepresentation
Question: A, B and C jointly promised to pay Rs. 60,000 to D. Before performance of the contract, C dies. Here, the contract
(a) becomes void on C’s death.
(b) should be performed by A and B along with C’s legal representatives.
(c) should be performed by A and B alone
(d) should be renewed between A, B and D.
Question: In the absence of agreement to the contrary all partners are:
(a) Not entitled to share profits
(b) Entitled to share in capital ratio.
(c) Entitled to share in proportion to their ages
(d) Entitled to share profits equally.
Question: Which of the following meeting can be held more than once in a calendar year?
(a) E.G.M.
(b) S.G.M.
(c) A.G.M.
(d) None of the above
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Question: 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
Question: Where in a partnership firm the partners are entitled to interest on their capital balance
such interest is payable.
(a) Only out of partners capital
(b) Only out of cash brought in by a new partners towards goodwill
(c) Only out of profits of the firm
(d) None of the above
Question: The term “goods” under Sale of Goods Act, 1930 does not include
(a) goodwill
(b) actionable claims
(c) stocks and shares
(d) harvested crops
Question: In contract of sale, the goods destroyed after delivery thus risk bears by
(a) The buyer
(b) The seller
(c) Partly by the seller or buyer
(d) Neither buyer Nor seller
Question: Suppose the time fixed for performance of the contract has expired but the time is not essential. What is the remedy of the promisee in the circumstances?
(a) Can rescind the contract
(b) To claim compensation
(c) No remedy available
(d) Can’t be determined
Question: The most important element in partnership is:
(a) Business
(b) Sharing of Profits
(c) Agreement
(d) Business to be carried on by all or any of them acting for all.
Question: Active partner is one who:
(a) Takes part in the business of the firm
(b) Actively participates in co-curricular activities
(c) Actively shares the profits
(d) Makes a show of authority
Question: Om Jewelers wrote a letter to James, “We have received an exceptionally fine Vintage Car which we will sell to you at a very favorable price.”
(a) The letter is an offer to sell
(b) A valid offer cannot be made by letter
(c) The letter contains a valid offer which will terminate within a reasonable time
(d) The letter lacks one of the essential elements of an offer.
Question: An offer may lapse by:
(a) Revocation
(b) Counter Offer
(c) Rejection of Offer by Offeree.
(d) All of these.
Question: Which of the following is a requirement for misrepresentation to exist?
(a) Misrepresentation should relate to a material fact.
(b) The person making a misrepresentation should not believe it to be true.
(c) It must be made with an intention to deceive the other party.
(d) All of the above.
Question: Mere silence as to fraud likely to affect the willingness of a party to enter into a contract
is not fraud unless.
(a) The circumstances of the case imposed the duty of the person to speak
(b) The circumstances do not show that silence is equivalent to speech
(c) The circumstances such that silence is not fraudulent
(d) Obligations are not imposed by the law
Question: Which of the following statement is true?
(a) An agreement is an unaccepted proposal.
(b) An agreement enforceable by law is a contract.
(c) An agreement can only consist of an offer.
(d) An agreement can only consist of an acceptance.
Question: Consideration must move at the desire of
(a) Promisor
(b) Promisee
(c) Any other person
(d) Any of these
Question: Who of the following can be a party to enter into contract?
(a) A convict undergoing sentence
(b) A joint stock company
(c) A minor
(d) All of the above
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Question: Valid Contract:
(a) In case of this collateral agreements are void
(b) Not enforceable in a court of law
(c) An agreement enforceable by law at the option of one or more of the parties thereon but not at the option of the other or others
(d) Enforceable at the option of both the parties
Question: In case of illegal agreements, the collateral agreements are ___ .
(a) Valid
(b) Void
(c) Voidable
(d) None of these.
Question: Which of the following is not disability of an unregistered firm?
(a) It cannot file a suit against third parties
(b) Its partners cannot file a suit against a firm.
(c) It cannot claim a set-off exceeding Rs. 100
(d) It cannot be sued by a third party.
Question: Which of the following statements is true?
(a) Even if a proposal is not accepted properly it becomes a valid contract.
(b) The agreements which are against the public policy can be enforced if the parties are willing to contract.
(c) A contract can consist of an offer or an acceptance only.
(d) Two are more persons are said to consent when they agree upon the same thing in the same sense.
Question: Goods must be the same as wanted by the seller. This is
(a) Condition as to description
(b) Condition as to sample
(c) Condition as to wholesomeness
(d) Condition as to title
Question: Which of the following is false? An acceptance:
(a) Must be communicated
(b) Must be absolute and unconditional.
(c) Must be accepted by a person having authority to accept.
(d) May be presumed from silence of offeree.
Question: Return of partly paid shares by the shareholders to the company is _______
(a) Surrender
(b) Forfeiture
(c) Lien
(d) None of the above
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Question: Binoy purchased a can of Juice from The Mini Mall. After he finished drinking the Juice, Binoy noticed that the can contained dead insects stuck on the inside bottom of the can. In a strict product liability tort action against The Mini Mall, Binoy must prove, among other things, that:
(a) The The Mini Mall is a merchant selling Juice
(b) The The Mini Mall knew or should have known of the defective condition.
(c) The The Mini Mall had prior notice of other similar problems with Juice products.
(d) The The Mini Mall actually placed the dead insects into the can.
Question: Which of the following statement is false? Consideration:
(a) Must move at the desire of the promisor
(b) May move from any person.
(c) Must be illusory
(d) Must be of some value.
Question: Which of the following company can held the AGM on public holiday ______
(a) Public company
(b) Private company
(c) Govt. company
(d) Association not for profits
Question: In which of the following cases, the unpaid seller loses his right of lien?
(a) Delivery of goods to buyer
(b) Delivery of goods to carrier
(c) Tender of price by buyer
(d) All of these
Question: Which of the following is a not document of title to goods?
(a) Bill of Lading
(b) Railway Receipt
(c) Dock Warrant
(d) Performa invoice
Question: A void agreement is one which is
(a) Valid but not enforceable
(b) Enforceable at the option of both the parties.
(c) Enforceable at the option of one party
(d) Not enforceable in a court of law.
Question: Which of the following statement is true?
(a) A contract with a minor is voidable at the option of the minor.
(b) An agreement with a minor can be ratified after he attains majority.
(c) A person who is usually of an unsound mind cannot enter into contract even when he is of a sound mind.
(d) A person who is usually of a sound mind cannot enter into contract when he is of unsound mind.
Question: The law of contract in India is contained in
(a) Indian Contract Act, 1862
(b) Indian Contract Act, 1962
(c) Indian Contract Act, 1872
(d) Indian Contract Act, 1972
Question: The body of law which establishes rights between persons and provides for redress for violation of those rights is known as:
(a) Criminal Law
(b) Civil Law
(c) The Uniform Commercial Code
(d) Stare decisis
Question: Which of the following statement is true?
(a) A threat to commit suicide does not amount to coercion.
(b) Undue influence involves use of physical pressure.
(c) Ignorance of law is no excuse
(d) Silence always amounts to fraud.
Question: In case of sale of standing trees, the property passes to the buyer when trees are
(a) Felled and ascertained
(b) Not felled but earmarked
(c) Counted and ascertained
(d) Both (b) and (c)
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Question: Partnership
(a) Arises by operation of law
(b) Comes into existence only after registration
(c) Can arise by agreement or otherwise
(d) Arise by way of an agreement only
Question: Which one of the following is not true?
(a) Document showing title is different from document of title.
(b) Bill of lading is a document of title to goods.
(c) Specific goods can be identified and agreed upon at the time of the contract of Sale.
(d) None of the above.
Question: Quorum should be present at the
(a) Commencement of meeting
(b) Middle of the meeting
(c) End of the meeting
(d) Any time during meeting
Question: The amount unclaimed on redemption is transferred to ________fund.
(a) Investor education & protection
(b) Children welfare
(c) Workmen compensation fund
(d) None of the above
Question: A proposal when accepted becomes a
(a) Promise
(b) Contract
(c) Offer
(d) Acceptance.
Question: Sia threw a knife at Ellie, intending to injure her severely. However, Sia missed Ellie. Ellie saw the knife just as it whizzed by her head, missing it by about one inch. As a result, Ellie was very scared. Ellie sued Sia for assault and battery. Which of the following is most correct?
(a) Sia will be liable for battery, but not assault.
(b) Sia will be liable for assault, but not battery.
(c) Sia will be liable for assault and for battery.
(d) Sia will not be liable for either assault or battery because this is only a criminal matter.
Question: What is legal terminology for the doing or not doing of something which the promisor desires to be done or not done?
(a) Desires
(b) Wishes
(c) Consideration
(d) Promise
Question: Goods dependant upon certain events which may or may not happen.
(a) Unascertained goods
(b) Future goods
(c) Contingent Goods
(d) Existing Goods
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Question: The Sale of Goods Act, 1930 deals with
(a) sale
(b) mortgage
(c) pledge
(d) all of the above.
Question: Which one of the following is/are document of title to goods?
(a) railway receipt
(b) wharfinger’s certificate.
(c) warehouse keeper’s certificate
(d) all of the above
Question: On the valid performance of the contractual obligations by the parties, the contract
(a) is discharged
(b) becomes enforceable
(c) becomes void
(d) none of these
Question: Which one of the following is not an implied warranty?
(a) Warranty as to undisturbed possession
(b) Warranty as to existence of encumbrance
(c) Disclosure of dangerous nature of goods
(d) Warranty as to quality or fitness by usage of trade
Question: The term ‘goods’ for the purpose of Sale of Goods Act, includes
(a) Money
(b) Actionable claims
(c) Growing crops, grass
(d) None of these
Question: An unpaid seller can exercise the right of resale
(a) if the goods are of durable nature
(b) if the goods are of perishable
(c) with the consent of buyer
(d) without the consent of buyer
Question: A contract is discharged by rescission which means the
(a) change in one or more terms of the contract
(b) acceptance of lesser performance.
(c) abandonment of rights by a party
(d) cancellation of the existing contract.
Question: Unsecured debentures does not require any registration because it is not secured by ____
(a) Fixed
(b) Floating charge
(c) Both (a) & (b)
(d) None of the above
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Question: X and Y agree to work together as carpenters but X shall receive all profit and shall pay wages to Y. The relation between X and Y is that
(a) Partners
(b) Carpenters
(c) Labourers
(d) Master-Servant
Question: Implied contract, even if not in writing or express words, is perfectly ________if other conditions are satisfied
(a) Void
(b) Valid
(c) Voidable
(d) Illegal
Question: Which of the following sales is valid?
(a) Sale by mercantile agent.
(b) Sale by one of the Joint owners.
(c) Sale by a person who has possession of goods under a voidable contract but still rescinded.
(d) both (a) & (b).
Question: In case of misrepresentation the party who has suffered, can avoid the contract even if he had the means of discovering the truth with ordinary diligence.
(a) true
(b) partly true
(c) totally false
(d) None of the above
Question: Which of the following is an essential feature of partnership?
(a) Registration
(b) Test of Mutual Agency
(c) Separate Legal Entity
(d) All of the above
A contract cannot be performed by
(a) Parties to the contract
(b) Agents to the parties
(c) Stranger
(d) Promisor
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Question: Which of the following statements is correct concerning the “reasonable person” standard in tort law?
(a) The reasonable person standard varies from person to person.
(b) The reasonable person standard focuses on the defendant’s subjective mental state rather than on the defendant’s behavior.
(c) A person with a physical disability must act as would a reasonable person with the same disability.
(d) A person with a mental disability must act as would a person with the same mental disability.
