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mercantile law Flashcards

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1
Q

WHAT IS CONTRACT?

A

Section 2(h) of the Act defines the term contract “as an agreement enforceable by law”.
Section 2(e) defines agreement as “every promise and every set of promises, forming the consideration
for each other”.Again Section 2(b) defines promise in these words:
“When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be
accepted. Proposal when accepted, becomes a promise”.

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2
Q

ESSENTIAL ELEMENTS OF A VALID CONTRACT

A
  1. Proper offer and proper acceptance with intention to create legal relationship.
  2. Lawful consideration.
  3. Capacity.
  4. Free consent.
  5. Lawful agreement.
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3
Q

Section 11 of the Indian Contract

Act specifies that every person is competent to contract provided,

A

(a) he is of the age of majority according to the law to which he is subject and
(b) he is of sound mind and
(c) he is not disqualified from contracting by any law to which he is subject

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4
Q

TYPES OF CONTRACT

A
  1. Void Contract
  2. Voidable Contract
  3. Illegal contract
  4. Unenforceable contract
  5. Express Contracts
  6. Implied Contract
  7. Tacit Contract
  8. Executed Contract
  9. Executory Contract
  10. Unilateral Contract
  11. Bilateral Contract
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5
Q

Void Contract

A

It is a contract without any legal effect and cannot be enforced in a Court
of Law. Section 2(j) defines a void contract as “a contract which ceases to be enforceable by
law becomes void when it ceases to be enforceable”.

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6
Q

Void Contract

A

Where both parties to an agreement are under a mistake of fact, (Section 20),
when the consideration or object of an agreement is unlawful, (Section 23), an agreement
made without consideration, (Section 25), agreement in restraint of marriage (Section 26),
trade (Section 27), legal proceedings (Section 28), agreement by way of wager (Section 30)
are instances of void contract.

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7
Q

Voidable Contract

A

As per Section 2(i), “an agreement which is enforceable by law at the option
of one or more the parties but not at the option of the other or others is a voidable contract.”

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8
Q

Voidable Contract

A

A contract brought about as a result of Coercion, Undue influence, Fraud or
misrepresentation would be voidable at the option of the person whose consent was caused
by any one of these factors.

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9
Q

Illegal contract

A

It is a contract which the law forbids to be made. The court will not
enforce such a contract and also connected contracts. All illegal agreements are void but all
void agreements or contracts are not necessarily illegal.

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10
Q

Unenforceable contract

A

Where a contract is good in substance but because of some technical
defect i.e., absence in writing, barred by limitation etc. one or both the parties cannot sue
upon it, it is described as an unenforceable contract.

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11
Q

Express Contracts

A

A contract which is made by words either spoken or written is said to
be an express contract. According to Section 9 insofar as the proposal or acceptance of
any promise is made in words, the promise is said to be express.

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12
Q

Implied Contract

A

By implied contract means implied by law (i.e.) the law implies a contract
though parties never intended. According to Section 9 insofar as such proposal or acceptance
is made otherwise than in words, the promise is said to be implied. For example, A delivers
by mistake goods at B’s warehouse instead of at C’s place. Here there is an obligation on
the part of B to return the goods to A, though they never intended to enter into a contract.

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13
Q

Tacit Contract

A

A contract is said to be tacit when it has to be inferred from the conduct of
the parties. Examples obtaining cash through automatic teller machine, sale by fall of
hammer at an auction sale.

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14
Q

Executed Contract

A

If the consideration for the promise in a contract (i.e., any act or
forbearance) is given or executed, such type of contract is called contract with executed
consideration.

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15
Q

Executory Contract

A

It is so called because the reciprocal promises or obligation which
serves as consideration is to be performed in future

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16
Q

Unilateral Contract

A

A unilateral contract is a one-sided contract in which only one party
has to perform his promise or obligation to do or forbear.

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17
Q

Bilateral Contract

A

Where the obligation or promise in a contract is outstanding on the part
of both the parties, it is known as bilateral contract

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18
Q

Formal Contracts

A

Formal Contracts include (a) Contract of record and (b) Contract under Seal.

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19
Q

Contract of Record

A

A contract of record is either a judgement of a court or a recognisance.
A judgement is an obligation imposed by a Court upon one or more persons in favour of
another or others. As a matter of fact it is not a contract in the real sense, since it is not
based upon any agreement between the two parties. A recognisance is a written
acknowledgement of a debt due to the State. It is usually met with the connection with
criminal proceedings.
Contracts of record derive their binding force from the authority of the Court.

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20
Q

Contract under Seal

A

A contract under seal is one which derives its binding force from its
form alone. It is written and is signed, sealed and delivered by the parties. It is also called a
deed or a speciality contract.

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21
Q

PROPOSAL/OFFER

A

it is defined under Section 2(a) of
the Indian Contract Act, 1872 as when one person signifies to another his willingness to do or to
abstain from doing anything with a view to obtaining the assent of that other to such act or
abstinence, he is said to make a proposal.

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22
Q

Classification of Offer

A

(a) General Offer
(b) Special Offer
(c) Cross Offers
(d) Counter Offer
(e) Standing, Open or Continuing offer

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23
Q

Rules as to offer :

A

(a) The offer must be capable of creating legal relation
(b) The offer must be certain, definite and not vague
(c) The offer may be expressed or implied.
(d) The offer must be distinguished from an invitation to offer.
(e) An offer may be specific or general.
(f) The offer must be communicated
(g) The offer must be made with a view to obtaining the consent of the offeree.
(h) An offer may be conditional.
(i) The offer should not contain a term the non compliance of which would amount to
acceptance. Thus a man cannot say that if acceptance is not communicated by a certain
time the offer would be considered as accepted.

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24
Q

ACCEPTANCE

A

A proposal or offer is said to have been accepted when the person to whom the proposal
is made signifies his assent to the proposal to do or not to do something [Section 2 (b)].

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25
Q

The rules regarding acceptance are :

A
  1. Acceptance must be absolute and unqualified
  2. Communicated to Offeror:
  3. Acceptance must be in the mode prescribed:
  4. Time:
  5. Mere silence is not acceptance
  6. Acceptance by conduct
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26
Q

Communication of offer

A

The communication of an offer is complete when it comes to the
knowledge of the person to whom it is made (Sect. 4). An offer may be communicated either by
words spoken or written or it may be inferred from the conduct of the parties.

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27
Q

Communication of acceptance

A

Communication of an acceptance is complete :
(i) as against the proposer, when it is put in course of transmission to him so as to be out of the
power of the acceptor to withdraw the same;
(ii) as against the acceptor, when it comes to the knowledge of the proposer.

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28
Q

Under Section 4, the communication of a revocation is complete

A

(i) as against the person who makes it, when it is put into a course of transmission to the
person to whom it is made so as to be out of the power of the person who makes it;
(ii) as against the person to whom it is made, when it comes to his knowledge.

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29
Q

WHAT IS CONSIDERATION ?

A 
Section 2(d) defines consideration as follows : “When at the desire of the promisor,
the promisee or any other person has done or abstained from doing, or does or abstains from doing or
promises to do or abstain from doing something, such an act or abstinence or promise is called
consideration for the promise”.
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30
Q

CONSIDERATION

A

(1) That is to say, consideration is the doing or not doing of something which the promisor
desires to be done or not done.
(2) Consideration must be at the desire of the promisor.
(3) Consideration may move from promisee or any other person.
(4) Consideration may be past, present or future.
(5) Consideration need not be adequate, but should be real.

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31
Q

LEGAL REQUIREMENTS REGARDING CONSIDERATION

A

(i) Consideration must move at the desire of the promisor
(ii) Consideration from promisee or any other person
(iii) Executed and executory consideration
(iv) Past Consideration
(v) Adequacy of consideration
(vi) Performance of what one is legally bound to perform
(vii) Consideration must not be unlawful, immoral, or opposed to public policy.

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32
Q

VALIDITY OF AN AGREEMENT WITHOUT CONSIDERATION

A
  1. Natural Love and Affection
  2. Compensation for past voluntary services
  3. Promise to pay time barred debt
  4. Agency
  5. Completed gift
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33
Q

in order that a promise to pay for the past voluntary services is binding,
the following essential factors must exist :

A

(i) The services should have been rendered voluntarily.
(ii) The services must have been rendered for the promisor.
(iii) The promisor must be in existence at the time when services were rendered.
(iv) The promisor must have intended to compensate the promisee.

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34
Q

CAPACITY TO CONTRACT

A

Every person who (a) has attained the age of majority, (b) is of
sound mind and (c) is not otherwise disqualified from contracting, is competent to contract.
(Section 11)

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35
Q

(a) Age of majority

A

In India, the age of majority is regulated by the Indian Majority Act (Act
IX of 1875). Every person domiciled in India attains majority on the completion of 18
years of age.

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36
Q

(b) Sound mind

A

A person is said to be of sound mind for the purposes of making a contract
if, at the time when he makes it, he is capable of understanding it and of forming a rational
judgement as to its effect upon his interests.

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37
Q

Sound mind

A

A person who is usually of unsound mind, but occasionally of sound mind, may make a contract
when he is of sound mind.
A person who is usually of sound mind, but occasionally of unsound mind, may not make a
contract when he is of unsound mind.

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38
Q

Position of Minor’s agreement

A
  1. An agreement entered into by a minor is altogether void
  2. Minor can be a beneficiary
  3. Minor can always plead minority
  4. Ratification on attaining majority is not allowed
  5. Contract by guardian - how far enforceable
  6. Liability for necessaries
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39
Q

FREE CONSENT

A

According to Section 13, “two or more persons are said to have consented when they agree upon the
same thing in the same sense(Consensus-ad-idem).

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40
Q

ELEMENTS VITIATING FREE CONSENT

A

(a) Coercion : Section (15)
(b) Undue influence (Section 16)
(c) Fraud (Section 17)
(d) Misrepresentation (Section 18)
(e) Mistake as per Section 20

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41
Q

Coercion

A

“Coercion” is the committing, or threatening to commit, any act
forbidden by the Indian Penal Code (45 of 1860), or the unlawful detaining, or threatening to
detain any property, to the prejudice of any person whatever, with the intention of causing any
person to enter into an agreement.

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42
Q

Undue influence

A

A contract is said to be induced by “undue influence” where
the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage of the other. A
person is deemed to be in a position to dominate the will of the other, when he holds authority real
or apparent over the other, or when he stands in a fiduciary relation to the other.

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43
Q

Fraud

A

As per the Act “Fraud” means and includes any of the following acts
committed by a party to a contract, or with his connivance or by his agent with intent to deceive
another party thereto or his agent, or to induce him to enter into the contract

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44
Q

Mere silence amounting to fraud?

A

Mere silence as to facts likely to affect the willingness of a
person to enter into a contract is no fraud; but where it is the duty of a person to speak, or
his silence is equivalent to speech, silence amounts to fraud.

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45
Q

Misrepresentation

A

Where a person asserts something which is not true,
though he believes it to be true, his assertion amounts to misrepresentation. Misrepresentation may be either innocent or without reasonable ground. Misrepresentation is misstatement of facts by one, which misleads the other who, consequently, can avoid the
contract.

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46
Q

Misrepresentation as to law

A

Misrepresentation as to fact renders a contract, voidable
misrepresentation as to law does not, ordinary, make the contract voidable. But a deliberate
misrepresentation in matter of law is certainly a cause for avoiding a contract.

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47
Q

Mistake

A

When both the parties to an agreement are under a mistake to
a matter of act essential to the agreement the agreement is altogether void. The Court will enforce a voidable contract if not avoided, but will not recognise an agreement that is
void.

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48
Q

UNLAWFUL OBJECT

A

The limits to contractual freedom are set out in Section 23 of the Act. An agreement, the
object or consideration of which is unlawful is void. “Consideration or object is unlawful if it is
forbidden by law; or it would; if permitted defeat the provisions of any or law or is fraudulent;
or involves injury to the person or property of another, or is immoral; or opposed to public
policy.”

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49
Q

The seven circumstances which would make consideration as well as an object unlawful are
discussed below

A

(i) Forbidden by law
(ii) Defeat of the provision of law
(iii) Defeat of any rule for the time being in force in India
(iv) Fraudulent
(v) Injury to the person or property of another
(vi) Immoral
(vii) Agreement opposed to public policy

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50
Q

Agreement opposed to public policy

A

(a) Trading with enemy
(b) Stifling prosecution
(c) Champerty and maintenance
(d) Interference with the course of justice
(e) Marriage brokerage contracts
(f) Interest against obligation
(g) Sale of public offices
(h) Agreement for the creation of monopolies
(i) Agreement in restraint of marriage (Section 26)
(j) Agreement in restraint of trade (Section 27)
(k) Agreement in restraint of legal proceedings (Section 28)

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51
Q

AGREEMENTS EXPRESSLY DECLARED VOID

A

(a) Consideration Unlawful in Part
(b) Agreement - the meaning of which is uncertain (Section 29)
(c) Wagering agreement

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52
Q

gambling

A

gambling is prohibited by law, whereas speculation is generally not. Under Section 30 of
the Act, a wagering contract is void, the reason being that such a contract is opposed to public
policy.

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53
Q

BY WHOM CONTRACT MAY BE PERFORMED ?

A
  1. Promisor himself
  2. Agent
  3. Representatives
  4. Third persons
  5. Joint promisors
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54
Q

PERFORMANCE OF RECIPROCAL PROMISES

A

(i) General observations
(ii) Simultaneous performance of reciprocal promises
(iii) Performance of reciprocal promises where the order of performance is expressly fixed
(iv) Performance of reciprocal promises when the order of performance is fixed by implication
(v) Effect of one party preventing another from performing promise

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55
Q

IMPOSSIBILITY OF PERFORMANCE

A

(1) Impossibility existing at the time of contract

(2) Supervening impossibility:

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56
Q

(1) Impossibility existing at the time of contract

A

(i) If known to the parties
(ii) If unknown to the parties
(iii) If known to the promisor only

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57
Q

APPROPRIATION OF PAYMENTS

A

(i) Application of Payment where debt to be discharged is indicated
(ii) Application of payment where neither party appropriates

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58
Q

CONTRACTS WHICH NEED NOT BE PERFORMED

A

(a) Effect of novation
(b) Effect of rescission
(c) Effect of alteration of contract
(d) Promisee may waive or remit performance of promise

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59
Q

DISCHARGE OF A CONTRACT

A

(i) Discharge by performance
(ii) Discharge by mutual agreement
(iii) Discharge by impossibility of performance
(iv) Discharge by lapse of time
(v) Discharge by operation of law
(vi) Discharge by breach of contract

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60
Q

LIABILITY FOR DAMAGES

A

(a) Liability for special damages
(b) Liability to pay vindictive or exemplary damages
(c) Liability to pay nominal damages
(d) Damages for deterioration caused by delay

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61
Q

Besides claiming damages as a remedy for the breach of contract, the following remedies are
also available

A

(i) Rescission of contract
(ii) Suit upon Quantum Meruit
(iii) Suit for specific performance
(iv) Suit for injunction

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62
Q

WHAT IS A CONTINGENT CONTRACT ?

A

According to Section 31 of the Act, contingent contract is a contract to do or not to do something,
if some event collateral to such contract, does or does not happen.

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63
Q

RULES RELATING TO ENFORCEMENT

A

1.Enforcement of contracts contingent on an event ‘happening
2.Enforcement of contracts contingent on an event ‘not-happening’
3.When shall an event on which contract is contingent be deemed impossible, if it is the
future conduct of a living person
4.Agreement contingent on impossible event (Section 36)

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64
Q

TYPES OF QUASI-CONTRACTS

A

(a) Claim for necessaries supplied to persons incapable of contracting (Section 68)
(b) Right to recover money paid for another person
(c) Obligation of a person enjoying benefits of non-gratuitous act (Section 70)
(d) Responsibility of a finder of goods
(e) Liability for money paid or thing delivered by mistake or under coercion

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65
Q

The law of contract in India is contained in

A

Indian Contract Act, 1872

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66
Q

An agreement enforceable by law is a

A

Contract.

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67
Q

A void agreement is one which is

A

Not enforceable in a court of law.

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68
Q

An agreement which is enforceable by law at the option of one or more of the parties
thereon but not at the option of the other or others is a

A

Voidable Contract

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69
Q

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

A

Contain a term the non-compliance of which would amount to acceptance

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70
Q

When the consent of a party is not free, the contract is

A

Voidable.

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71
Q

Which of the following is false? An acceptance:

A

May be presumed from silence of offeree.

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72
Q

In case of illegal agreements, the collateral agreements are

A

Void.

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73
Q

An offer may lapse by:

A

(a) Revocation. (b) Counter Offer. (c) Rejection of Offer by Offeree.

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74
Q

A proposal when accepted becomes a

A

Promise.

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75
Q

Which of the following statement is true?

A

Consideration must be something, which a promisor is not already bound to do.

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76
Q

Which of the following statement is false? Consideration:

A

Must be illusory.

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77
Q

Which of the following statement is false?

A

A verbal promise to pay a time barred debt is valid

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78
Q

Consideration must move at the desire of

A

Promisor

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79
Q

Which of the following statement is true

A

There can be a stranger to a consideration

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80
Q

Consideration may be

A

Past (b) Present (c)Future

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81
Q

Consideration in simple term means:

A

Something in return.

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82
Q

Which of the following is not an exception to the rule – No consideration, No contract

A

Compensation for involuntary services.

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83
Q

Ordinarily, a minor’s agreement is

A

Void ab initio

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84
Q

A minor’s liability for ‘necessaries’ supplied to him

A

Is against only minor’s property.

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85
Q

Which of the following statements is not true about minor’s position in a firm?

A

He can become a partner in an existing firm

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86
Q

Which of the following statement is true?

A

A person who is usually of a sound mind cannot enter into contract when he is of
unsound mind.

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87
Q

Consent is not said to be free when it is caused by

A

Coercion. (b) Undue Influence. (c)Fraud.

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88
Q

When the consent of a party is obtained by fraud, the contract is;

A

Voidable.

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89
Q

The threat to commit suicide amounts to

A

Coercion

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90
Q

Moral pressure is involved in the case of

A

Undue Influence

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91
Q

A wrong representation when made without any intention to deceive the other party
amounts to

A

Misrepresentation

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92
Q

Which of the following statement is true?

A

Ignorance of law is no excuse.

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93
Q

In case of illegal agreements, the collateral agreements are:

A

Void

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94
Q

An agreement the object or consideration of which is unlawful, is

A

Void.

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95
Q

An agreement is void if it is opposed to public policy. Which of the following is not
covered by heads of public policy?

A

Contracts to do impossible acts.

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96
Q

On the valid performance of the contractual obligations by the parties, the contract

A

is discharged

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97
Q

Which of the following persons can perform the contract?

A

Promisor alone. (b) Legal representatives of promisor.

(c) Agent of the promisor.

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98
Q

A, B and C jointly promised to pay Rs. 60,000 to D. Before performance of the contract,
C dies. Here, the contract

A

should be performed by A and B along with C’s legal representatives.

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99
Q

A contract is discharged by novation which means the

A

substitution of existing contract for a new one

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100
Q

A contract is discharged by rescisson which means the

A

cancellation of the existing contract.

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101
Q

When prior to the due date of performance, the promisor absolutely refuses to perform
the contract, it is known as

A

anticipatory breach of contract.

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102
Q

In case of anticipatory breach, the aggrieved party may treat the contract

A

as discharged and bring an immediate action for damages.

(b) as operative and wait till the time for performance arrives.

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103
Q

In case of breach of contract, which of the following remedy is available to the aggrieved
party?

A

Suit for rescission. (b) Suit for damages.

(c) Suit for specific performance.

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104
Q

Sometimes, a party is entitled to claim compensation in proportion to the work done by
him. It is possible by a suit for

A

quantum meruit

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105
Q

Generally, the following damages are not recoverable?

A

Remote damages.

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106
Q

A contract dependent on the happening or non-happening of future uncertain event, is
a

A

Contingent contract

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107
Q

A contingent contract is

A

Valid

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108
Q

A contingent contract dependent on the happening of future uncertain event can be
enforced when the event

A

happens

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109
Q

A agrees to pay Rs. One lakh to B if he brings on earth a star from sky. This is a contingent
contract and

A

Void.

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110
Q

Which of the following statements is true

A

an agreement enforceable by law is a contract

(b) an agreement is an accepted proposal

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111
Q

A voidable contract is one which

A

can be enforced at the option of aggrieved party

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112
Q

A voidable contract is one which

A

Both the acceptor and offeree becomes bound by the contract.

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113
Q

As a general rule, an agreement made without consideration is

A

void

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114
Q

A agrees to sell his car worth Rs. 100,000 to B for Rs. 20,000 only, and A’s consent was
obtained by coercion. Here, the agreement is

A

voidable

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115
Q

An agreement made with free consent to which the consideration is lawful but
inadequate, is

A

valid

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116
Q

Which of the following persons are not competent to contract

A

minors (b) persons of unsound mind

(c) persons disqualified by law

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117
Q

For the purposes of entering into a contract, a minor is a person who has not completed
the age of

A

18 years

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118
Q

A contract with the minor, which is beneficial for him, is

A

valid

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119
Q

Which of the following persons do not fall under the category of persons of unsound
mind?

A

alien.

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120
Q

Which of the following elements does not affect the free consent of the parties

A

incompetency

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121
Q

When the consent of a party is obtained by coercion undue influence, fraud or
misrepresentation, the contract is

A

voidable

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122
Q

A threatens to kill B if he does not agree to sell his scooter to him for Rs. 1000 only. Here
B’s consent is obtained by

A

coercion

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123
Q

When the consent to an agreement is obtained by coercion, the agreement is voidable at
the option of

A

a party whose consent was so obtained

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124
Q

Where one party is in a position to dominate the will of another and uses his superior
position to obtain the consent of a weaker party, the consent is said to be obtained by

A

undue influence

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125
Q

Which of the following acts does not fall under the categories of fraud?

A

Innocent false statement

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126
Q

Where the consent of a party is obtained by misrepresentation, the contract is

A

voidable

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127
Q

Which of the following statements is false?

A

A party who affirms the contract, can also change his option afterwards if he so
decides.

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128
Q

Where the consent of both the parties is given by mistake, the contract is

A

void

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129
Q

As per section 20, the contract is void on account of bilateral mistake of fact. But as per
Section 22, if there is mistake of only one party, then the contract is

A

valid

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130
Q

A contract made by mistake about the India Law, is

A

valid

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131
Q

A contract made by mistake about some foreign law, is

A

void

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132
Q

A mistake as to a law not in force in India has the same effect as

A

mistake of fact

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133
Q

The consideration or object of an agreement is considered unlawful, if it is

A

forbidden by law (b) fraudulent

(c) immoral

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134
Q

A agrees to pay Rs. 5 lakhs to B if he (B) procures an employment for A in Income Tax
Department. This agreement is

A

void

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135
Q

A agrees to pay Rs. 50,000 to B if he kills C. The agreement is

A

void

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136
Q

An agreement in restraint of marriage, i.e., which prevents a person from marrying, is

A

void

137
Q

An agreement in restraint of marriage is valid in case of following persons

A

Minors

138
Q

An agreement, which prevents a person from carrying a lawful business, is

A

Void

139
Q

An agreement in restraint of legal proceedings is void. It does not cover an agreement
which

A

Provides for a reference to arbitration instead of court of law

140
Q

A agrees to sell his car to B at a price which B may be able to pay. This agreement is

A

void

141
Q

An agreement to pay money or money’s worth on the happening or non-happening of a
specified uncertain event, is a

A

wagering agreement

142
Q

An agreement to do an illegal act e.g., to share the earnings of a smuggling business, is

A

Void

143
Q

Where an agreement consists of two parts once legal and the other illegal, and the legal
part is separable from the illegal one, such legal part is

A

valid

144
Q

A contingent contract dependent on the non-happening of a future uncertain event
becomes void when such event

A

happens (b) does not become impossible

145
Q

A agrees to pay Rs. 1,000 to B if a certain ship returns within a year. However, the ship
sinks within the year. In this case, the contract becomes

A

void

146
Q

A contingent contract dependent on the non-happening of specified uncertain event
within fixed time can be enforced if the event

A

does not happen within fixed time

(b) becomes impossible before the expiry of fixed time

147
Q

The basis of ‘quasi contractual relations’ is the

A

prevention of unjust enrichment at the expense of others

148
Q

Sometimes, a person finds certain goods belonging to some other persons. In such a case,
the finder

A

is under a duty to trace the true owner and return the goods

(c) can sell the perishable goods if true owner cannot be found

149
Q

A, B and C jointly promised to pay Rs. 60,000 to D. A was compelled by D to pay the
entire amount of Rs. 60,000. Here

A

A is entitled to recover Rs. 20,000 each from B and C

150
Q

In commercial transactions, time is considered to be of the essence of the contract, and if
the party fails to perform the contract within specified time, the contract becomes:

A

voidable at the option of the other party

151
Q

Where the performance of a promise by one party depends on the prior performance of
promise by the other party, such reciprocal promises fall under the category of

A

Conditional and dependent

152
Q

When after the formation of a valid contract, an event happens which makes the
performance of contract impossible, then the contract becomes:

A

void

153
Q

A party entitled to rescind the contract, loses the remedy where

A

he has ratified the contract

(b) third party has acquired right in good faith
(c) contract is not separable and rescission is sought of a part only

154
Q

The special damages, i.e., the damages which arise due to so e special or unusual
circumstances -

A

Cannot be claimed as a matter of right

155
Q

Which of the following statements is correct?

A

Ordinary damages are recoverable.
(b) Special damage are recoverable only if the parties knew about them.
Remote or indirect damages are not recoverable.

156
Q

When offer is made to a definite person, it is known as

A

Special Offer

157
Q

Standing Offer means

A

Offer allowed to remain open for acceptance over a period of time

158
Q

When the offeree offers to qualified acceptance of the offer subject to modifications and
variations he is said to have made a

A

Counter Offer.

159
Q

What is legal terminology for the doing or not doing of something which the promisor
desires to be done or not done?

A

Consideration

160
Q

Can a person who is usually of unsound, but occasionally of sound mind, make a contract?

A

Yes, but only when he is of sound mind.

161
Q

A and B both believe that a particular kind of rice is being sold in the market at Rs. 3,000
per quintal and A sells rice of that kind to B at Rs.3,000 per quintal. But, in fact, the
market price was Rs. 4,000. The contract is

A

Valid.

162
Q

A sells the goodwill of his business to B and agrees with him to refrain from carrying on
a similar business within specified local limits. This contract is

A

Valid.

163
Q

R, an optical surgeon, employs S as the assistant for a term of three years and S agrees
not to practice as a surgeon during this period. This contract is

A

Valid.

164
Q

Agreement-the meaning of which is uncertain is

A

Valid.

165
Q

A agrees to pay Rs. 500 to B if it rains, and B promises to pay a like amount to A if it does
not rain, this agreement is called

A

Wagering Agreement.

166
Q

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

To claim compensation

167
Q

A ___________ agreement is one, which is enforceable at the option of one party.

A

Voidable

168
Q

Agreement-the meaning of which is uncertain is ________

A

Void.

169
Q

In case of illegal agreements, the collateral agreements are ________.

A

Void

170
Q

________ consideration is no consideration in England.

A

Past.

171
Q

Consideration must move at the desire of the___________.

A

Promisor.

172
Q

There can be a stranger to a _____________

A

Consideration

173
Q

A minor is liable for the _______________supplied to him

A

Necessaries.

174
Q

When the consent of a party is obtained by fraud, the contract is

A

Voidable

175
Q

An agreement the object or consideration of which is unlawful, is

A

Void

176
Q

R, an optical surgeon, employs S as the assistant for a term of three years and S agrees
not to practice as a surgeon during this period. This contract is

A

vaild

177
Q

Implied contract, even if not in writing or express words, is perfectly ________if other
conditions are satisfied.

A

Valid

178
Q

Threat to commit suicide amounts to

A

Coercion

2. Offence under the Indian Penal Code

179
Q

Which of the following are covered under the heads Agreements Opposed to
Public Policy?

A

Trading with enemy

(2) Trafficking in Public Offices
(3) Marriage Brokerage Contracts

180
Q

The consideration of an agreement is considered unlawful, if it is

A

forbidden by law

(2) fraudulent
(3) immoral

181
Q

Contract caused by which of the following is voidable:

A

Fraud

(2) Mis-representation
(3) Coercion

182
Q

Who among the following is not disqualified by law to enter in to contract?

A

A major person.

Diplomatic staff of foreign states

183
Q

Which of the following is true with respect to minor entering a contract?

A

An agreement with or by a minor is void ab initio.

2. A minor can be a beneficiary of a contract.

184
Q

Which of the following is/are not competent to enter into a contract?

A

A minor.

3. A person who is not capable of understanding the contract at the time of its making.

185
Q

Which of the following statements is true?

A

For breach of contract a party can claim compensation for loss or damage.
4. Two are more persons are said to consent when they agree upon the same thing in
the same sense.

186
Q

Which of the following is/are false?

A

A promise to do something which one is already bound to do by law, will be treated
as good consideration.
4. Consideration must be adequate.

187
Q

Which of the following is/are the essential elements of a valid offer?

A

Offeror must have an intention to be bound by his offer

Must be definite.

188
Q

Which of the following agreements is/are void?

A

Agreement in restraint of legal proceedings.

2. Agreement to stifle prosecution.

189
Q

Which of the following offers do not constitute a valid offer?

A

An auctioneer displays a T.V. set before a gathering in an auction sale.
2. Ram who is in possession of three cars purchased in different years says ‘I will sell
you a car’.

190
Q

Which of the following agreements are void?

A

Agreements made under the bilateral mistake of fact.

3. Agreements the consideration of which is unlawful.

191
Q

Which of the following is a requirement for misrepresentation to exist?

A

Misrepresentation should relate to a material fact.

2. The person making a misrepresentation should believe it to be true..

192
Q

A contracts with B to buy a necklace, believing it is made of pearls whereas in fact it is
made of imitation pearls of no value. B knows that A is mistaken and takes no steps to
correct the error. Now A wants to cancel the contract on the basis of fraud. Which of the
following statement is correct?

A

A cannot cancel the contract

193
Q

Mr. J invited all his close friends for a dinner on the occasion of the successful completion
of his research. He wanted to take good care of his friends and accordingly be arranged
a very lavish dinner in a star hotel. On the day, to his shock and surprise the friends could
not turn up to the dinner, consequently all the dishes and money were wasted. He was
terribly disappointed. In the above situation which of the following remedies is/are
available to Mr. J for the loss caused to him?

A

Mr. J cannot have any remedy.

194
Q

G paid Rs. 1,00,000 to H to influence the head of the Government Organisation in order
to provide him some employment. On his failure to provide the job, G sued H for recovery
of the amount. Which of the following is correct?

A

The contract is void as it is opposed to public policy and G cannot recover.

195
Q

M a popular singer, enters into a contract with the manager of a theatre, to sing at the
theatre two evenings a week for the next two months and the manager of the theatre
agrees to pay him at the rate of Rs. 1000 for each performance. From the sixth evening
onwards, M absents himself from the theatre. In this context, which of the following
remedies is/are available to the manager of the theatre against M?

A

He is at liberty to put an end to the contract
He is entitled to compensation for the damages sustained by him through M on his
failure to sing from the sixth evening onwards.

196
Q

Ram, Rohit and Kiran jointly borrowed Rs. 2,00,000 from Rahim by executing a promissory
note. Rohit and Kiran are not traceable. Rahim wants to recover the entire amount from
Ram. Ram objected this move by saying he is liable to pay 1/3 of the debt only. Which of
the following statement(s) is correct?

A

Rahim can recover the entire amount from Ram.

197
Q

At the time of marriage between A and B, A’s father promised to B’s parents that he will
pay five thousand rupees per month to B after her marriage with his son. On his failure
to pay the amount B wants to sue A’s father for the amount promised by him at the time
of her marriage with A. Which of the following statement(s) is correct?

A

B can sue A’s father for breach of contract.

198
Q

V purchased a used computer from P thinking it as a computer imported from USA, P
failed to disclose the fact to V. On knowing the fact V wants to repudiate the contract.
Which of the following statement(s) is correct

A

V cannot repudiate the contract.

199
Q

An auctioneer in Mumbai advertised in a newspaper that a sale of office furniture would
be held on December 23, 2003. a broker came from Hyderabad to attend the auction, but
all the furniture was withdrawn. The broker from Hyderabad sued the auctioneer for
loss of his time and expenses. Which of the following statement(s) is correct?

A

The broker will not get damages from the auctioneer for loss of his time and expenses.

200
Q

Ankit, aged 17 years, falsely representing himself to be of 22 years, enters into an agreement
to sell his property to Praveen and receives from Praveen a sum of Rs. 10,00,000 in advance.
Out of this sum, Ankit buys an imported car worth Rs. 5,50,000 and spends the rest on a
pleasure trip to France. After Ankit attained majority, Praveen sues him for the conveyance
of the property or, in the alternative, for the refund of Rs. 10,00,000 and damages. The
agreement between Ankit and Praveen is:

A

Void ab initioas it is a contract with a minor

201
Q

Void Contract

A

Not enforceable in a court of law.

202
Q

Voidable Contract

A

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.

203
Q

Illegal Contract

A

In case of this collateral agreements are void.

204
Q

Valid Contract

A

Enforceable at the option of both the parties

205
Q

Executed Contract

A

Consideration for the promise in a contract is already given.

206
Q

Executory Contract

A

Reciprocal promises are to be performed in future.

207
Q

Unilateral Contract

A

Contract in which only one party has to perform his

promise.

208
Q

Bilateral Contract

A

Promise in a contract is outstanding on part of both the

parties

209
Q

General Offer

A

Offer made to the public in general

210
Q

Special Offer

A

Offer made to a definite person.

211
Q

Cross Offers

A

Exchanging identical offers by two parties in ignorance.

212
Q

Continuing Offer

A

Offer allowed to remain open for acceptance over a period

of time.

213
Q

Coercion

A

Involves Physical force.

214
Q

Undue Influence

A

Involves Moral Pressure.

215
Q

Fraud

A

Person making false representation does not believe it to be

true.

216
Q

Misrepresentation

A

The person making false representation believes it to be true

217
Q

Section 2 of the Sale of Goods Act, 1930, defines the terms which have been frequently used in
the Act, which are as follows –

A

(a) Buyer and Seller:
(b) Goods and other related terms
(c) Delivery - its forms and derivatives
(d) “Document of title to goods”
(e) Mercantile Agent [Sub-section (9)]
(f) Property [Sub-section (11)]:
(g) Insolvent:-

218
Q

Goods

A

“Goods” means every kind of movable property other than actionable claims and
money; and includes stock and shares, growing crops, grass, and things attached to
or forming part of the land, which are agreed to be severed before sale or under the
contract of sale; [Sub Section (7)]. This is a wider definition than contained in the
English law, which does not consider ‘stock’ and ‘shares’ as goods, though it includes
a ship. ‘Actionable claims’ are claims, which can be enforced only by an action or
suit, e.g., debt. A debt is not a movable property or goods.

219
Q

CONTRACT OF SALE

A

Section 4 (1) of the Sale of Goods Act, 1930 defines the term ‘Contract of
Sale’ as– acontract of sale of goods is a contract whereby the seller transfers or agrees to
transfer the property in goods to the buyer for a price.

220
Q

ESSENTIALS OF CONTRACT OF SALE

A

(i) There must be at least two parties.
(ii) The subject matter of the contract must necessarily be goods.
(iii) A price in money (not in kind) should be paid or promised.
(iv) A transfer of property in goods from seller to the buyer must take place.
(v) A contract of sale must be absolute or conditional [Section 4(2)].
(vi) All other essential elements of a valid contract must be present in the contract of sale.

221
Q

SALE

A

The term
Sale is defined in the Section 4(3) of the Sale of Goods Act, 1930 as – “where under a contract
of sale the property in the goods is transferred from the seller to the buyer, the contract is called
a sale.”

222
Q

AGREEMENT TO SELL

A

Sale of Goods Act, 1930, which is as follows – where under a
contract of sale the transfer of the property in the goods is to take place at a future time or
subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.

223
Q

Bailment

A

A ‘bailment’ is the delivery of goods for some specific purpose under a
contract on the condition that the same goods are to be returned to the bailor or are to be
disposed of according to the directions of the bailor.

224
Q

A contract of sale may be made in any of the following modes

A

(i) There may be immediate delivery of the goods; or
(ii) There may be immediate payment of price, but it may be agreed that the delivery is to be
made at some future date; or
(iii) There may be immediate delivery of the goods and an immediate payment of price; or
(iv) It may be agreed that the delivery or payment or both are to be made in installments; or
(v) It may be agreed that the delivery or payment or both are to be made at some future date.

225
Q

EXPRESS AND IMPLIED CONDITIONS AND WARRANTIES

A

Condition as to title [Section 14(a)]
Sale by description [Section 15].
Sale by sample [Section 17]
Sale by sample as well as by description [Section 15].
Condition as to quality or fitness [Section 16]
Conditions as to wholesomeness

226
Q

IMPLIED WARRANTIES

A

Warranty as to undisturbed possession
Warranty as to non-existence of encumbrances
Disclosure of dangerous nature of goods
Warranty as to quality or fitness by usage of trade [Section 16(4)]:

227
Q

Appropriation of goods

A

Appropriation of goods involves selection of goods with the intention of
using them in performance of the contract and with the mutual consent of the seller and the
buyer.

228
Q

The essentials are:

A

(a) The goods should conform to the description and quality stated in the contract.
(b) The goods must be in a deliverable state.
(c) The goods must be unconditionally (as distinguished from an intention to appropriate)
appropriated to the contract either by delivery to the buyer or his agent or the carrier.
(d) The appropriation must be made by:
(i) the seller with the assent of the buyer; or
(ii) the buyer with the assent of the seller.
(e) The assents may be express or implied.
(f) The assent may be given either before or after appropriation.

229
Q

Goods sent on approval or “on sale or return

A

When the goods are delivered to the buyer on
approval or on sale or return or other similar terms the property passes to the buyer, (i) when
he signifies his approval or acceptance to the seller, (ii) when he does any other act adopting
the transaction, and (iii) if he does not signify his approval or acceptance to the seller but
retains goods beyond a reasonable time (Section 24).

230
Q

In the following cases, a non-owner can convey better title to the bona fide purchaser
of goods for value.

A

(1) Sale by a Mercantile Agent
(2) Sale by one of the joint owners
(3) Sale by a person in possession under a voidable contract
(4) Sale by one who has already sold the goods but continues in possession thereof
(5) Sale by buyer obtaining possession before the property in the goods has vested in him
(6) Effect of Estoppel
(7) Sale by an unpaid seller

231
Q

RULES REGARDING DELIVERY OF GOODS

SECTIONS 33 - 39

A

(i) Effect of part delivery:
(ii) Buyer to apply for delivery:
(iii) Place of delivery
(iv) Time of delivery
(v) Goods in possession of a third party
(vi) Time for tender of delivery:
(vii) Expenses for delivery
(viii) Delivery of wrong quantity:
(ix) Instalment deliveries
(x) Delivery of carrier:
(xi) Deterioration during transit:
(xi) Deterioration during transit:

232
Q

ACCEPTANCE OF DELIVERY OF GOODS

A

(a) intimates to the seller that he had accepted the goods; or
(b) does any act to the goods, which is inconsistent with the ownership of the seller; or
(c) retains the goods after the lapse of a reasonable time, without intimating to the seller that
he has rejected them (Section 42).

233
Q

UNPAID SELLER

A

(a) the whole of the price has not been paid or tendered and the seller had an immediate right
of action for the price.
(b) A bill of exchange or other negotiable instrument was given as payment, but the same has
been dishonoured, unless this payment was an absolute, and not a conditional payment.

234
Q

RIGHTS OF AN UNPAID SELLER

A

(a) A rights of an unpaid seller against the goods

(b) Rights of unpaid seller against the buyer:

235
Q

(a) A rights of an unpaid seller against the goods

A

(1) Rights of lien (Section 47)
(2) Right of stoppage in transit
(3) Right of re-sale:

236
Q

(b) Rights of unpaid seller against the buyer

A
  1. Suit for price (Section 55)
  2. Suit for damages for non-acceptance (Section 56)
  3. Repudiation of contract before due date (Section 60)
  4. Suit for interest [Section 61(2)(d)]
237
Q

RIGHTS OF PARTIES IN CASE OF BREACH OF CONTRACT

A

(a) Buyer’s right against the seller in case of breach of contract (Sections 57-59)
(b) Seller’s right against the buyer in case of breach of contract (Sections 55 and 56)

238
Q

(a) Buyer’s right against the seller in case of breach of contract (Sections 57-59)

A

(1) Suit for non-delivery:
(2) Suit for specific performance [Section 58]
(3) Suit for damages for Breach of warranty [Section 59]
(4) Suit for recovery of price

239
Q

(b) Seller’s right against the buyer in case of breach of contract (Sections 55 and 56)

A

(i) Suit for the price

(ii) Damages for non-acceptance

240
Q

A contract for the sale of goods where property would pass to the buyer on payment of
total price would be

A

agreement to sell

241
Q

The term “goods” under Sale of Goods Act, 1930 does not include

A

actionable claims

242
Q

A contract for the sale of “future goods” is

A

agreement to sell.

243
Q

A stipulation in a contract of sale of goods whose violation by seller gives a right of
rescission to buyer, is called

A

condition.

244
Q

The unpaid seller has right of stoppage of goods in transit only where the buyer

A

becomes insolvent.

245
Q

The sale of Goods Act, 1930 deals with the

A

movable goods only

246
Q

Under Sale of Goods Act, 1930 the terms “Goods” means every kind of movable property
and it includes

A

stock and share (b) growing crops, grass

247
Q

A stipulation which is collateral to the main purpose of the contract, and if proves false,
gives the buyer only a right to claim damages, is known as

A

warranty

248
Q

Which of the following is not an implied condition in a contract of sale?

A

condition as to free from encumbrance

249
Q

The Sale of Goods Act, 1930 deals with

A

sale

250
Q

Which one of the following is true?

A

the provisions of Sale of Goods were originally with the Indian Contract Act, 1872.

251
Q

The conditions and warranties may be in the form of

A

express. (b) implied.

252
Q

Goods which are in existence at the time of the Contract of Sale is known as

A

existing Goods

253
Q

Which of the following is not a form of delivery?

A

structured delivery.

254
Q

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

A

railway receipt. (b) wharfinger’s certificate.

(c) warehouse keeper’s certificate.

255
Q

Mercantile Agent is having an authority to

A

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

256
Q

Contract of Sale is

A

executory Contract. (b) executed Contract

257
Q

In which form of the contract, the property in the goods passes to the buyer immediately?

A

sale

258
Q

Which one of the following is not an implied warranty

A

warranty as to existence of encumbrance.

259
Q

Doctrine of Caveat Emptor means

A

let the buyer beware

260
Q

Under the doctrine of Caveat Emptor the seller is

A

not responsible for the bad selection of goods by the buyer

261
Q

The doctrine of Caveat Emptor does not apply, when

A

the goods are bought by sample.

(b) the goods are bought by sample as well as description.
(c) the goods are purchased under its brand name.

262
Q

Where there is an unconditional contract for the sale of specific goods in a deliverable
state-

A

property in the goods passes to the buyer when the contract is made.

263
Q

Selection of goods with the intention of using them in performance of the contract and
with the mutual consent of the seller and the buyer is known as

A

appropriation

264
Q

Acceptance of delivery of goods is deemed to take place when the buyer

A

intimates to the seller that he had accepted the goods.
(b) does any act to the goods, which is inconsistent with the ownership of the seller.
(c) retains the goods after the lapse of a reasonable time, without intimating to the seller
that he was rejected them.

265
Q

An unpaid seller is having rights against

A

both goods and buyer.

266
Q

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.

267
Q

When the unpaid seller has parted with the goods to a carrier and the buyer has become
insolvent he can exercise

A

right of stoppage in transit.

268
Q

The essence of a right of lien is to

A

retain the possession

269
Q

Which of the following right can be exercised by an unpaid seller against the buyer, who
is not insolvent

A

right of lien

270
Q

Which of the following is a buyer right against the seller in case of breach of contract?

A

suit for non-delivery. (b) suit for specific performance.

(c) suit for damages for breach of warranty.

271
Q

An auction sale is complete on the

A

fall of hammer

272
Q

If a seller handed over the keys of a warehouse containing the goods to the buyer results
in

A

symbolic delivery

273
Q

If A agrees to deliver 100 kg of sugar to B in exchange of 15 mts of cloth, then it is

A

Barter.

274
Q

In a hire-purchase agreement, the hirer

A

has an option to buy the goods.

275
Q

A agrees to deliver his old car valued at Rs. 80,000 to B, a car dealer, in exchange for a new
car, and agrees to pay the difference in cash it is

A

Contract of sale.

276
Q

If the buyer rejects the whole quantity of goods due to short delivery or excess delivery,
the contract is treated as

A

subsisting

277
Q

Seller has right of resale where

A

goods are perishable. (b) seller has reserved such right.

(c) seller gives notice.

278
Q

Legally, a contract of sale includes

A

sale. (b)agreement to sell.

279
Q

In case of goods sold by sample, the goods should correspond with the sample other wise

A

buyer can reject the goods

280
Q

A contact for the sale of goods which provide that the property would pass to the buyer
on full payment of price and execution of sale deed, is known as

A

agreement to Sell

281
Q

M, a shopkeeper, sold a Television set to N, who purchased it in good faith. The set had
some manufacturing defect and it did not work after a few days in spite of repairs. In this
case, the television was not merchantable as it was not fit for ordinary purpose

A

the buyer has the right to reject the television and to have refund of the price

282
Q

The Sale of Goods Act, 1930 came into force on

A

1st July, 1930

283
Q

The person who buys or agrees to buy goods is known as

A

buyer

284
Q

Voluntary transfer of possession by one person to another is popularly known as

A

delivery.

285
Q

Under which circumstances, the right of stoppage can be exercised by the unpaid seller

A

when the goods are of perishable nature
when he gives notice to the buyer of his intention to re-sale and the buyer does not
within a reasonable time pay the price.

286
Q

Where the seller wrongfully neglects to deliver the goods to the buyer, then the buyer

A

may sue the seller for damages for non-delivery

287
Q

Where the buyer is deprived to goods by their true owner, then the buyer

A

may recover the price for breach of the condition as to title

288
Q

Where the buyer wrongfully neglects or refuses to accept and pay for the goods, then

A

the seller may sue buyer for damages for non-acceptance

289
Q

In an auction sale, the property shall be sold to the

A

Highest bidder

290
Q

In an auction sale, if the seller makes use of pretended bidding to raise the price, then the
sale is

A

voidable

291
Q

If X commissioned Y, an artist, to paint a portrait of A for 200 dollars & Y uses his own
canvas & paint then it is

A

Contract of work & materials

292
Q

The implied condition that goods shall be fit to buyer’s specific purpose, is applicable
only where the buyer tells his purpose to the seller and relies upon seller’s skill and
judgement as

A

It is the requirement of law

293
Q

In case, a condition is changed to the status of a warranty, then the buyer

A

loses the right to reject goods (b) retains right to claim damages only

294
Q

The property in the goods means the

A

ownership of goods

295
Q

The goods are at the risk of a party who has the

A

Ownership of goods

296
Q

In case of unconditional contract of sale, the property passes to the buyer at the time of
making the contract. For this rule to apply, the goods must be

A

specific (b) in a deliverable state

297
Q

In case of sale of standing trees, the property passes to the buyer when trees are

A

felled and ascertained

298
Q

In case of sale of unascertained goods, the ownership is transferred to the buyer when
the goods are

A

ascertained (b) appropriated to the contract

299
Q

In case of sale on approval, the ownership is transferred to the buyer when he

A

accepts the goods (b) adopts the transaction

(c) fails to return goods

300
Q

Which of the following modes of delivery of goods is considered effective for a valid
contract of sale?

A 
Actual delivery (b) symbolic delivery
(c) Constructive delivery
301
Q

Where the goods are delivered to a carrier or wharfinger for the purpose of transmission
to the buyer, the delivery is

A

valid and effective

302
Q

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

303
Q

The bidder at an auction sale can withdraw his bid

A

before fall of hammer

304
Q

Where in an auction sale, the seller appoints more than one bidder, the sale is

A

voidable

305
Q

Where in an auction sale notified with reserve price, the auctioneer mistakenly knocks
down the goods for less than the reserve price, then the auctioneer is

A

not bound by auction

306
Q

A contract for the sale of “future goods” is

A

agreement to sell

307
Q

Under the Sale of Goods Act, 1930, which of the following is/are the implied
warranty (ies) ?

A

Warranty of quiet possession 2. Warranty of freedom from encumbrances

308
Q

Which of the following is/are necessary constituent(s) of a contract of sale?

A

Movable goods for a price

3. Transfer of general property

309
Q

The term ‘goods’ for the purpose of Sale of Goods Act, does not include

A

Money

2. Actionable claims

310
Q

A buyer may make some payment in advance to the seller as a guarantee for performance
of contract. This money is known as

A

Earnest money

2. Security deposit

311
Q

Which of the following is a document of title to goods

A

Bill of Lading

  1. Railway Receipt
  2. Dock Warrant
312
Q

A seller is unpaid when

A

Whole of the price have not been tendered

  1. A negotiable instrument given has been dishonoured
  2. A bill of exchange given was dishonoured
  3. A part of the price has only been paid
313
Q

Which of the following is the Right of Unpaid Seller

A

Right to re-sale

  1. Right to stop the goods in transit
  2. Right of lien
314
Q

A sold a tin of disinfectant powder to K without warning knowing fully that if the tin was
not opened with care, it will likely to cause injury. K was injured while opening the tin.
Which of the following statement(s) is/are correct?

A

A is liable for the damages.

315
Q

A purchased a refrigerator on hire purchase from B and pledged with C. D purchased
the refrigerator from C in good faith, on knowing the facts B wants to recover the refrigerator
from D. Which of the following statement(s) is/are correct?

A

B can recover the refrigerator from D.

316
Q 
A timber merchant agreed to supply best teak at a certain agreed price to a builder. Later
the merchant supplied timber which was identified as ordinary class of timber and
demanded the payment from the builder. Which of the following statements is/are true?
A

Builder can reject the goods and can claim damages.

317
Q

‘A’ acquired certain goods from ‘C’ by falsely representing that he was acting on behalf
of ‘B’ and was authorized to collect the goods. ‘A’ later sold the goods to ‘D’. Is the sale
valid?

A

The sale is not valid because it a sale by non-owner and therefore, ‘D’, the buyer, will
not acquire any good title of the goods.

318
Q

In a concluded sale, if the goods are destroyed, the loss is to be borne by

A

The buyer

319
Q

R, a grain merchant, displays wheat of different varieties. A after satisfying himself of the
quality buys the wheat in the belief that the wheat is of earlier harvest. In fact the wheat is
of recent harvest. A wants to return the wheat and refuses to pay the price. Which of the
following is/are true?

A

A cannot return the wheat.

320
Q

Goods were there at the time of sale

A

Existing Goods

321
Q

Goods were not specifically identified

A

Unascertained goods

322
Q

Good not in existence at the time of contract of sale

A

Future goods

323
Q

Goods depend upon certain events which may or may not happen

A

Contingent Goods

324
Q

Goods sold on the fall of hammer

A

Auction Sale

325
Q

Right to withhold

A

Right of Lien

326
Q

Delivery of goods

A

Constructive Delivery

327
Q

Deliver to a caretaker

A

Wharf finger

328
Q

Sale

A

Ownership is transferred immediately

329
Q

Agreement to sell

A

Ownership is transferred at some future

date

330
Q

Condition

A

A stipulation which is essential

331
Q

Warranty

A

Stipulation which is collateral

332
Q

Right to Sell

A

Condition as to title

333
Q

Goods must be properly packed

A

Condition as to wholesomeness

334
Q

Goods must be the same as wanted by the seller

A

Condition as to description

335
Q

Buyer having right / opportunity to compare

A

Condition as to sample

336
Q

WHAT IS PARTNERSHIP?

A

Partnership is the relation between persons who have agreed to share the profits of a business
carried on by all or any one of them acting for all (Section 4)

337
Q

partnership consists of three essential elements

A

(i) It must be a result of an agreement between two or more persons.
(ii) The agreement must be to share the profits of the business.
(iii) The business must be carried on by all or any of them acting for all.

338
Q

ESSENTIAL ELEMENTS OF PARTNERSHIP

A

Agreement
Sharing profit of business
Business carried on by all or any of them acting for all

cpt (1 decks)

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