MERCANTILE LAWS MODULE PAPER-1

1. X BOUGHT SHARES IN A COMPANY ON TH EFAITH OF A PROSPECTUS THAT OCNTAINED AN UNTRUESTATEMENT AS TO THE DIRECTORSHIP OF J. X HAD NEVER HEARD OF J AND HENCE SUCH STATEMENT WAS IMMATERIAL FROM HIS VIEW POINT. X CLAIMED DAMAGES FOR FRAUD.HIS CLAIM WILL BE DISMISSED ON THE GROUND THAT THERE WAS NO FRAUD AT ALL. FRAUD IN COMPANY PROSPECTUS IIS NOT COVERED BY INDIAN CONTRACT ACT. THE UNTRUE STATEMENT HAD NOT INDUCE HIM TO BUY THE SHARES ALL OF THE ABOVE 2. K PROMISE TO PROCURE THE MARRIAGE OF L WITH M, FOR A CONSIDERATION OF Rs, 50,000. IN THIS CASE-

IF THE MARRIAGE IS PERFORMED BUT THE MONEY IS NOT PAID, IT CANNOT BE RECOVERED.. IF THE MONEY HAS BEEN PAID AND THE MARRIAGE IS NOT PERFORMED, IT CANNOT BE GOT BACK. BOTH (a) AND (b) NEITHER (a) OR (b). 3. WHAT IS THE APPROPRIATE PLACE OF DELIVER IN RESPECT OF GOODS SOLD? AT THE PLACE AT WHICH THEY ARE ATE THE TIME OF SALE. AT THE PLACE AT WHICH THEY ARE AT THE TIME OF THE AGREEMENT TO SELL. AT THE PLACE AT WHICH THEY ARE MANUFACTURED OR PRODUCED. AT THE PLACE AT DETERMINED BY THE CARRIER.

4. THE TERM ACT OF A FIRM, MEANS AN ACT OR OMISSION BY ------------WHICH GIVES RISE TO A RIGHT ENFORCEABLE BY OR AGAINST THE FIRM..

ALL THE PARTNERS ANY PARTNER AGENT OF THE FIRM ANY OF THE ABOVE. 5. IN WHICH OF THE FOLLOWING SITUATIONS, A STRANGER TO CONTRACT CAN FILE A VALID SUIT? BENEFICIARY OF A TRUST OR OTHER INTEREST IN SPECIFIC IMMOVABLE PROPERTY.. MARRIAGE SETTLEMENT, PARTITION AND OTHER FAMILY ARRANGEMENTS, IN WRITTEN FORM. ACKNOWLEDGEMENT OF LIABILITY, OR BY PAST PERFORMANCE THERE OF. ALL OF THE ABOVE 6. WHERE A PARTNER HAS ADVANCED ANY LOAN TO THE FIRM AND THE AGREEMENT PROVIDES FOR INTEREST, BUT DOES NOT SPECIFY ANY RATE, THE RATE SHALL BE--6%. 8% 10% 12% 7. UNPAID SELLER CAN EXERCISE HIS RIGHT OF WITHHOLDING DELIVERY OF GOODSEVEN WHEN PROPERTY IN GOODS HAS PASSED TO THE BUYER.. ONLY WHEN PROPERTY IN GOODS HAS NOT PASSED TO THE BUYER.. EITHER (a) OR (b). NEITHER (a) NOR (b).

8. A AGREES TO DELIVER 100 BAGS OF SUGAR TO B AT A CERTAIN PRICE ON 1ST SEPTEMBER , IF A REFUSES OR FAILS TO DELIVER THE GOODS ON 1ST SEPTEMBER, THERE IS AN ACTUAL BREACH ON THE DUE DATE OF PERFOMANCE.. ANTICIPATORY BREACH ON THE DUE DATE OF PERFORMANCE. ACTUAL BREACH DURING THE COURSE OF PERFORMANCE ANTICIPATORY BREACH DURING THE COURSE OF PERFORMACE.

9. DISSOULTION MAY ARISE WHERE IT APPEARS THAT THE STATE OF FEELINGS AND CONDUCT OF THE TWO PARTNERS HAVE BEEN SUCH THAT BUSINESS CANNOT BE CONTINUED WITH ADVANTAGE TO EITHER PARTY. THIS WILL BE A CASE OF----DISSOLUTION OF PARTNERSHIP.. DISSOLUTION OF FIRM. DISSOLUTION OF FIRM NAME. RECONSTITUTION OF FIRM.. 10. M OFFERED TO SELL HIS LAND TO N FOR Rs. 70 LAKHS. N REPLIED PURPORTING TO ACCEPT AND ENCLOSED Rs. 20 LAKHS, PROMISING TO PAY THE BALANCE OF Rs. 50 LAKHS BY MONTHLY INSTALMENTS OF Rs. 10 LAKHS EACH. IN THIS CASETHERE IS NO VALID ACCEPTANCE.. THERE IS A VALID ACCEPTANCE.. THE CONTRACT IS VOIDABLE AT M`s OPTION. THE CONTRACT IS VOIDABLE AT N`s OPTION. 11. IN THE CASE OF SALE BY AUCTION THE SALE IS COMPLETE WHEN AUCTIONEER ANNOUNCES COMPLETION BY THE FALL OF HAMMER OR IN ANY OTHER CUSTOMARY MANNER, AND UNTIL SUCH ANNOUNCEMENT IS MADE, THE BIDDER MAY RETRACT HIS BID. TRUE PARTLY TRUE FALSE NONE OF THE ABOVE

12. REGISTRATION OF FIRM DOES NOT CREATE PARTNERSHIP, BUT IS ONLY THE EVIDENCE OF EXISTENCE OF PARTNERSHIP. TRUE PARTLY TRUE. FALSE. NONE OF THE ABOVE 13. ALL ILLEGAL AGREEMENTS ARE VOID, BUT ALL VOID AGREEMENTS ARE NOT ILLEGAL. TRUE PARTLY TRUE. FALSE. NONE OF THE ABOVE 14. THE DIFFERENCE BETWEEN AN ADVERTISEMENT FOR SALE AND A PROPOSAL IS NO DIFFERENCE AT ALL A PROPOSAL BECOMES A PROMISE AS SOON AS THE PARTY TO WHOM IT IS MADE ACCEPTS IT BUT AN ADVERTISEMENT IS ONLY AN INVITATION TO OFFER. EVERY CASE WILL HAVE TO BE VIEWED ACCORDING TO THE CIRCUMSTANCES. PROPOSAL CANNOT BE ADVERTISED, WHILE ADVERTISEMENT CANNOT BE PROPOSED. 15. IF A CONTRACT IS BASED ON PERSONAL SKILL OR CONFIDENCE OF PARTICES, THE DEATH OF A PARTY IN SUCH A CASEPUTS AN END TO THE CONTRACT. DOES NOT PUT AN END TO THE CONTRACT. THE REPRESENTATIVES OF THE DECEASED CAN BE MADE LIABLE TO PERFORM SUCH A CONTRACT. GIVES A RIGHT TO THE AGGRIEVED PARTY TO SUE.

16. F OFFERS TO SELL HIS HOUSE TO G FOR Rs. 20 LAKS. G REPLIES THAT HE WOULD BUY THE HOUSE PROVIDED HIS SOLICITOR APPROVES OF F`s TITLE TO THE HOUSE. THE OFFER DID NOT CONTAIN ANY MENTION AS TO TITLE. THE ACCEPTANCE IS QUALIFIED, HENCE INVALID. CONDITIONAL, HENCE INVALID. VALID BOTH (a) AND (b).

17. WHERE THE BUYER WRONGFULLY NEGLECTS OR REFUSES TO ACCEPT AND PAY AND PAY FOR GOODS, THE SELLER ,MAY SUE HIM FOR--PAYMENT OF PRICES OF GOODS. DAMAGES FOR NON-ACCEPTANCE OF GOODS. PAYMENT OF OTHER CHARGES LIKE INSURANCE FORWARDING ETC. ALL OF THE ABOVE 18. WHERE DISSOLUTION OF FIRM IS SOUGHT FOR ON THE GROUND THAT A PARTNER WILLFULLY AND PERSISTENTLY COMMITS BREACH OF AGREEMENTS RELATING TO MANAGEMENT OF THE FIRMs AFFAIRS OR THE CONDUCT OF ITS BUSINESS, THE SUIT SHALL BE BROUGHT BY--THE PARTNER WHO IS GUILTY OF MISCONDUCT. MAJORITY OF THE PARTNERS. ANY OTHER PARTNER. ALL THE OTHER PARTNERS. 19. ONLY THOSE PERSONS, WHO ARE PARTIES TO A CONTRACT CAN SUE AND BE SUED UPON THE CONTRACT. THIS RULE IS KNOWN AS DOCTRINE OF--PROMISSORY ESTOPPEL. RIGHT OF PRIVILEGE SUIT. PRIVITY OF CONTRACT. RIGHTS IN REM. 20. WHICH OF THE FOLLOWING RELATIONSHIPS DO NOT RAISE A PRESUMPTION OF UNDUE INFLUENCE?

GUARDIAN & WARD. DOCTOR & PATIENT. HUSBAND & WIFE. FIANCE AND FIANCEE

21. THE OUTGOING PARTNER CAN CARRY ON A COMPETING BUSINESS AND ALSO ADVERTISE SUCH BUSINESS. FOR THIS PURPOSE, IN THE ABSENCE OF CONTRACT TO THE CONTRARY---

HE CAN USE THE FIRM`s NAME. HE CANNOT USE THE FIRM`s NAME. HE CAN USE FIRM`s LETTER HEAD. HE CAN HOLD OUT THAT HE IS STILL PARTNER IN THE FIRM. 22. MERE EXPRESSION OF OPINION CONSTITUTES MISREPRESENTATION. IT NEED NOT RELATE TO A MATERIAL FACT.

TRUE. PARTLY TRUE. FALSE. NONE OF THE ABOVE. 23. B IS A LICENSED MANUFACTURER OF PERMITTED CHEMICALS. A PROMISES TO B TO SUPERVISE B`s BUSINESS AND COMBINE IT WITH THE PRODUCTION OF SOME CONTRABAND ITEMS TOGETHER WITH THE PERMITTED ITEMS. B PROMISES TO PAY A, A SALARY OF Rs. 10,000 PM. THE AGREEMENT IS ---

VOID AS A WHOLE.. VALID AS A WHOLE.. VALID TO THE EXTENT OF PERMITTED CHEMICALS AND VOID FOR THE BALANCE CONTRABAND ITEMS.. VOID TO THE EXTENT OF PERMITTED CHEMICALS AND VALID FOR THE BALANCE CONTRABAND ITEMS. 24. UPON DISSOLUTION, THE FIRM`s ASSETS SHALL BE FIRST APPLIED IN---

PAYMENT OF DEBTS & LIABILITIES OF THE FIRM.. PAYMENT OF PARTNER`S LOAN. PAYMENT OF PARTNER`S CAPITAL. DISTRIBUTION TO PARTNERS IN THEIR PROFIT SHARING RATIO.

25. A ENTERD INTO A CONTRACT WITH B FOR SUPPLY OF CERTAIN THINGS MANUFACTURED BY C. C DID NOT MANUFACTURE THOSE GOODS. IN THIS CASE---

A IS NOT DISCHARGED. A IS DISCHARGED. CONTRACT BECOMES VOID. CONTRACT BECOME VOIDABLE. 26. A, A SINGER ENTERS INTO A CONTRACT WITH B, THE MANAGER OF A THEATRE TO SING AT HIS THEATRE FOR TWO NIGHTS IN EVERY WEEK DURING THE NEXT TWO MONTHS AND B ENGAGES TO PAY HER Rs. 1,00,000 FOR EACH NIGHT`S PERFORMANCE. ON THE SIXTH NIGHT, A WILLFULLY ABSENTS HIMSELF FROM THE THEATRE..

B IS AT LIBERTY TO PUT AN END TO THE CONTRACT. B CANNOT PUT AN END TO THE OCNTRACT. THE CONTRACT IS LEFT AT THE LIBERTY OF A. THE CONTRACT IS UNLAWFUL. 27. B HOLDS LAND ON A LEASE GRANTED BY A, THE LANDLORD. LAND REVENUE PAYABLE BY A IS IN ARREARS, HENCE THE GOVENRMENT ADVERTISES A`s LAND FOR SALE. UNDER THE REVENUE LAW, CONSEQUENCE OF SUCH SALE WILL BE ANNULEMENT OF B`s IN ORDER TO PREVENT SALE AND CONSEQUENT, THE SUM DUE BY A. IN THIS CASE

A IS BOUND TO MAKE GOOD TO B THE AMOUNT SO PAID. A HAS NO OBLIGATIONS TO B. B CAN CLAIM THE AMOUNT BACK FROM THE GOVERNMENT. B HAS TO BEAR THE EXPENDITURE INCURRED BY HIM. 28. WHERE NO PRICE IS FIXED BY EXPRESS AGREEMENT OR BY IMPLICATION, THE BUYER SHALL PAY THE SELLER

NET REALISABLE. VALUE REASONABLE PRICE. RESALE PRICE. ADHOC PRICE.

29. WHERE AS PER CONTRACT, THE PROMISE IS TO BE PERFORMED ON A CERTAIN DAY; AND THE PROMISOR HAS NOT UNDERTAKEN TO PERFORM THE PROMISE WITHOUT APPLICATION BY PROMISEE

PROMISOR HAS TO PERFORM WITHOUT ANY APPLICATION BY THE PROMISEE.. PROMISOR HAS TO REQUEST PRMOISEE TO APPLY FOR PERFORMANCE.. PROMISEE HAS TO REQUEST / APPLY TO THE PROMISOR FOR PERFORMANCE.. STRANGER HAS TO REQUEST / APPLY TO THE PROMISOR FOR PERFORMANCE. 30. WHICH OF THE FOLLOWING IS NOT AN USUAL ACTIVITY FOR A TRADING CONCERN, FOR IMPLIED AUTHORITY PURPOSE?

BUYING AND SELLING OF GOODS. DRAWING AND ACCEPTING BILLS OF EXCHANGE. WITHDRAWING SUITS FILED ON BEHALF OF THE CONCERN. TAKING LOANS. 31. WHERE THE DEBTOR DOES NOT EXPRESSLY INTIMATE OR WHERE THE CIRCUMSTANCES ATTENDING ON A PAYMENT DO NOT INDICATE ANY INTENTION, THE CREDITOR

MAY APPLY IT AT HIS DISCRETION TO ANY LAWFUL DEBT DUE. MUST APPLY IT TO THE LAST DEBT. MUST APPLY IT TO THE FIRST DEBT. MUST APPLY IT TO A TIME BBARRED DEBT. 32. IN CASE OF BREACH OF CONTRACT, THE INDIAN LAW AWARDS DAMAGES TO MAKE GOOD FOR THE PROFIT WHICH MAY HAVE BEEN EARNED BUT FOR THE BREACH. WHICH AROSE NATURALLY OR WHICH PARTIES KNEW TO BE LIKELY WHEN THEY ENTERED INTO THE CONTRACT. TO PENALIZE THE DEFAULTER. THE COMPENSATE FOR MENTAL ANXIETY AND PHYSICAL LOSS CAUSED BY THE BREACH.

33. P CONTRACTS TO DELIVER 50 UNITS OF A PETROL ENGINE TO Q ON A STIPULATED; FAILING WHICH HE SHALL PAY Rs. 5 LAKHS. NEITHER THE PRICE OF ENGINE NOR LOSS ON FAILURE OF DELIVERY WOULD AMOUNT TO Rs. 5LAKH. IN SUCH CASE, THE AMOUNT OF Rs. 5 LAKHS IS A----

EXEMPLARY DAMAGES. PENALTY. LIQUIDATED DAMAGES. SPECIAL DAMAGES. 34. THE TERM CONTINGENT GOODS REFERS TO--

GOODS, THE ACQUISITION OF WHICH BY THE SELLER DEPENDS UPON A CONTINGENCY. GOODS WHICH ARE NOT CAPABLE OF IDENTIFICATION GOODS WHICH MAY OR MAY NOT BE SOLD. GOODS WHICH MAY OR MAY NOT BE BOUGHT BY BUYER. 35. A LETTER OF ACCEPTANCE SUFFICIENTLY STAMPED AND DULY ADDRESSED IS PUT INTO COURSE OF TRANSMISSION. THERE IS

A CONTRACT VOIDABLE AT THE OPTION OF ACCEPTOR. A CONTRACT VOIDABLE AT THE OPTION OF THE OFFEROR. NO CONTACRT AT ALL. A VALID CONTRACT. 36. THERE WAS A CONTRACT TO SUPPLY WASTE COAL AND ASH FOR THE NEXT SIX MONTHS, AS AND WHEN THE WASTE IS GENERATED BY THE SELLER`S FACTORY. THE BUYER PAID THE LUMPSUM PRICE FOR THE NEXT SIX MONTHS IN ADVANCE. WHEN DOES THE PROPERTY IN THE GOODS PASS TO THE BUYER?

AFTER THE LAPSE OF SIX MONTHS PERIOD. AT THE TIME OF ENTERING INTO THE CPNTRACT. ST THE TIME OF PAYING ADVANCE MONEY. AS AND WHEN THE FACTORY DISCHARGES THE WASTE.

37. WHICH OF THE FOLLOWING AGREEMENTS ARE VOID?

AGREEMENTS TO DO IMPOSSIBLE ACTS. AGREEMENTS TO DO RECIPROCAL PROMISES, ONE SET OF WHICH IS LEGAL, AND THE OTHER PART IS ILLEGAL. BOTH (a) OR (b). NEITHER (a) NOR (b). 38. DELIVERY WITHIN THE MEANING OF THE SALE OF GOODS ACT, CAN BE---

SYMBOLIC. ACTUAL. CONSTRUCTIVE. EITHER (a) OR (b) OR (c). 39. AS PER SECTION 2(e) OF THE INDIAN CONTRACT ACT, EVERY PROMISE AND EVERY SET OF PROMISE FORMING THE CONSIDERATION FOR EACH OTHER IS A / AN

CONTRACT. AGREEMENT. OFFER. ACCEPTANCE. 40. ALL VOID AGREEMENTS NEED NOT BE ILLEGAL. BUT ALL ILLEGAL AGREEMENTS ARE VOID.

TRUE. PARTLY TRUE. FALSE. NONE OF THE ABOVE.