KMB207 Legal aspects of Business mcq Set 1

11th September 2020 1 By indiafreenotes
  1. An agreement becomes a contract when
  • These is some consideration for it
  • Parties are competent to contract
  • Their consent is free and their object is lawful
  • All of the above


2. An agreement enforceable at law is a

  • enforceable acceptance
  • accepted offer
  • approved promise
  • contract under section 2(h)


3. Offer as defined under section 2(a) is

  • communication from one person to another
  • suggestion by one person to another
  • willingness to do or abstain from doing an act in order to obtain the assent of other thereto
  • none of the above.


4. Every promise and every set of promises, forming the consideration for each other, is an

  • agreement as per section 2(e)

  • contract
  • offer
  • acceptance


5. Which among the following is an offer

  • Fixation of reserve price in an invitation for submission of tenders
  • A Development Authority’s announcement for making an allotment of plots on first come first served basis on payment of full consideration
  • A banker’s catalogue of charges
  • A railway time table


6. Which is correct

  • proposal + acceptance = promise
  • promise + consideration = agreement
  • agreement + enforceability = contract
  • All the above


7. Proposal may be

  • Implied or express
  • Specific
  • Generic
  • Any of the above


8. An offer made without any words spoken or written is

  • Counter offer
  • Implied offer

  • Cross offer
  • Special offer


9. Goods displayed in a shop with a price tag is an

  • offer
  • invitation to offer
  • counter offer
  • none of the above.


10. Find out the incorrect statement

  • Every contract is an agreement, but every agreement is not a contract
  • The test of contractual intention is objective, not subjective
  • Acceptance is complete only when communicated to the offeror
  • The party inviting tenders is bound to accept the lowest tender


11. The communication of acceptance is complete as against the offeror

  • None of these
  • When acceptance is reached to offeror
  • When it is put into transmission and leaves his power to reject / when it comes to the knowledge of proposer.

  • When acceptance comes to the knowledge of the offeror


12. Under what provision of the constitution of India the state acts in its executive power in entering in contracts with individual parties

  • Article 299
  • Article 298

  • Article 297
  • none of the above


13. All Government contracts made in exercise of the executive power of the union shall be expressed to be made by the president under

  • Article 297 of the constitution of India
  • Article 280 of the constitution of India
  • Article 299 of the constitution of India
  • none of the above


14. Which among the following is enforceable

  • If A saves B from drowning and B later promises A a reward
  • A finds B’s purse and gives it to him. B promises to give A Rs.50
  • A supports B’s infant son. B promises to pay A’s expenses in so doing
  • All of the above


15. Find out the void agreement among the following

  • A for natural love and affection, promises to give his son, B. Rs.10,00,000. A puts his promise to pay B in writing and register it.
  • A owes B Rs.1,00,000, but the debt is barred by the Limitation Act. A signs a written promise to pay B Rs.50,000 on account of debt.
  • A promises, for no consideration, to give to B Rs.1,000
  • none of the above


16. A lunatic person means

  • Alien enemy
  • Person disqualified by law
  • Person of unsound mind
  • Insolvent person


17. A contract with or by a minor is a

  • valid contract
  • void contract
  • voidable contract
  • voidable at the option of either party


18. Find out the unenforceable contract among the following

  • A housing society agreed to sell land before it became a legal person by registration

  • A supplies B, a lunatic, with necessaries suitable to his life and wants to be reimbursed from B’s property
  • money advanced to save a minor’s estate from execution
  • none of the above


19. Consent is set to be free when it is not caused by

  • Coercion
  • undue influence
  • fraud or misrepresentation
  • All of the above


20. _______ does not affect the free consent of the parties.

  • Undue-influence
  • Incompetency of parties
  • Coercion
  • Fraud


21. Misrepresentation under section 18 means

  • a positive assertion, in a manner not warranted by the information of the person making it, not true but he believes it to be true
  • any breach of duty, which gains an advantage to the person committing it, by misleading another to his prejudice
  • causing a party to make an agreement to make a mistake as to the subject matter of contract
  • All the above


22. Under section 2(c) promisor is the

  • person who makes the proposal

  • person who accepts the proposal
  • person who makes the promise
  • person to whom the proposal is made


23. An agreement enforceable by law at the instance of one party & not of other party under section 2(i) is called

  • Void contract
  • Voidable contract

  • Neither (a) or (b)
  • None of the above


24. Which of the following is valid?

  • Compensation for past voluntary services
  • A promise to pay time barred debt
  • Agreement made out of natural love and affection
  • All of the above


25. If the agreement consists of legal and illegal parts, and legal part is separable from illegal part, then legal part is

  • None
  • Voidable
  • Void
  • Valid


26. Amount withdrawn from ATM is

  • None of the above
  • Tacit contract

  • Express contract
  • Quasi contract


27. Which contract depends upon happening or non-happening of future uncertain event?

  • Voidable contract
  • Void agreement
  • Wagering agreement
  • Contingent contract


28. Which among the following is incorrect

  • The legal implication of the bank guarantee and letter of credit are the same
  • Bank guarantee can also take the shape of performance bond
  • certification of breach is not enough in terms of bank guarantee
  • none of the above


29. __________ Contract is made without any intention of parties.

Executory contract

Quasi contract

Implied contract

Express contract


30. A promises to pay B, a sum of Rs. 10000/- if it rains and in return B promises to pay Rs. 10000/- to A, if it does not rain. It is a/an __________

  • Valid agreement
  • Contingent contract
  • Wagering agreement
  • Uncertain agreement


31. PWD refused to release the payment to a contractor unless he gave up his claim for extra rate, amounted to

  • fraud
  • undue influence
  • coercion
  • None of the above


32. The term quid pro quo is applied in relation to

  • Legality of object
  • Capacity of parties
  • Free consent
  • Consideration


33. In a mediclaim insurance policy, the insured was forced and pressurized for consent to exclusion of cover for cardiac ailments. The consent being

  • not lawful, it had binding effect
  • not unlawful, it had no binding effect
  • Not lawful, it had no binding effect
  • none of the above


34. A and B, being traders, enter upon a contract. A has private information of a change in prices which would affect B’s willingness to proceed with the contract:

  • A is bound to inform B
  • A is not bound to inform B

  • Neither (a) nor (b)
  • none of the above


35. When a person at whose option a contract is voidable rescinds it, the consequence would be:

  • The party seeking recession need not perform and promise
  • the party seeking recession must restore the benefits that he has obtained under the contract
  • Neither (a) nor (b)
  • Both (a) and (b)


36. Where one of the parties is under a mistake as to matter of fact the contract is:

  • valid
  • void
  • voidable
  • illegal


37. A contract may be discharged

  • by performance
  • By impossibility of performance
  • By Breach
  • All of the above


38. A contract is made for the import of goods and the import is thereafter forbidden by a Government order. It is

  • an agreement to do an act impossible in itself
  • an agreement which is impossible by subsequent event
  • contract of novation
  • none of the above


39. The effect of frustration of a contract is

  • none of the above
  • Performance or dissolution depends on the intention of the parties
  • The dissolution of the contract occurs automatically
  • the parties may perform the contract


40. A breach of contract occurs when a party to a contract

  • renounces his liability under it
  • makes it impossible that he should perform his obligation under it
  • totally or partially fails to perform the obligations
  • (a) or (b) or (c)


41. An agreement to remain unmarried is

  • Unenforceable
  • Void
  • Voidable
  • Valid


42. Which among the following is not a bailment

  • Hiring of a bank’s locker and storing things in it
  • Delivery of a railway receipt for the delivery of goods
  • A car involved in an accident delivered under the policy of the insurer to the nearest garage for repair
  • none of the above


43. Which among the following is incorrect

  • Any kind of personal property which is movable and saleable can be the subject matter of pledge
  • Delivery of possession actual or constructive is necessary for a pledge
  • Any kind of personal property either movable or immovable can be the subject matter of pledge
  • none of the above


44. When the aggrieved party does not face any loss _______ damages can be claimed.

  • Vindictive
  • Nominal
  • Special
  • General