Business Law MCQs with Answers (Multiple Choice Questions)

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45

Subject – Business Law (503) Class : TY BBA (2013 Pattern)

PROF . SWATI BHALERAO www.dacc.edu.in

Unit 1. - Indian Contract Act 1872

1. Which of the following is not a necessary feature to convert a proposal into a promise:

A. The acceptance must be absolute

B. The acceptance must be within the prescribed time limit

C. The acceptance must be conditional

D. The acceptance must be expressed in some usual and reasonable manner

2. In an executed contract, the obligation of ________:

A. both the parties have been fulfilled

B. both the parties are outstanding

C. obligation of one party is outstanding

D. none of these

3. A contract with or by a minor is a:

A. valid contract

B. void contract

C. voidable contract

D. voidable at the option of either party

4. The term consideration is defined in __ section of the Indian Contract Act, 1872.

A. 2(a)

B. 2(d)

C. 3(a)

D. 2(h)

5. An agreement & contract are one and same thing:

A. True

B. False

C. Depends on the situation

D. None of these

Page 1

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45

Subject – Business Law (503) Class : TY BBA (2013 Pattern)

PROF . SWATI BHALERAO www.dacc.edu.in

6. Two persons have the capacity to contract:

A. If both are not of unsound mind

B. If none is disqualified from contracting by any law to which he is subject

C. If both have attained the age of maturity

D. All of the above

7. A contract can be performed by:

A. promisor himself

B. agent of the promisor

C. legal representative of the promisor

D. either of these three

8. In a contract not specifying the time for performance, the promisor can perform the contract:

A. immediately

B. within the shortest time

C. within a reasonable time

D. within next 21days

9. When the consent of a party is not free, the contract is:

A. void

B. voidable

C. valid

D. illegal.

10. In Case of Illegal agreements, the collateral agreements are:

A. valid

B. void

C. voidable

D. any of these.

11. A agrees to sell his car worth ` 1,00,000 to B for ` 20,000 only and A’s consent was obtained by

coercion. Here, the agreement is:

A. void

B. valid

C. voidable

D. unlawful.

Page 2

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45

Subject – Business Law (503) Class : TY BBA (2013 Pattern)

PROF . SWATI BHALERAO www.dacc.edu.in

12. Contract caused by which of following is voidable?

1. Fraud

2. Mis-representation

3. Coercion

4. Bilateral Mistake

A. 1, 2, 3

B. 2, 3, 4

C. 1, 2, 4

D. 1, 2, 3, 4

13. An insurance contract is

A. Contingent contract

B. Wagering agreement

C. Unenforceable contract

D. Void contract

14. Agreement is defined in section of the Indian Contract Act, 1872.

A. 2(c)

B. 2(e)

C. 2(g)

D. 2(i)

15. Every Contract is an agreement but every agreement is not a contract. This statement is -

A. Wrong

B. Correct

C. Correct Subject to certain exceptions

D. Partially correct.

16. Contract is defined as an agreement enforceable by Law, vide section — of the Indian Contract

Act.

A. 2(e)

B. 2(f)

C. 2(h)

D. 2(i)

Page 3

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45

Subject – Business Law (503) Class : TY BBA (2013 Pattern)

PROF . SWATI BHALERAO www.dacc.edu.in

17. Goods displayed in a Shop window with a price label will amount to:

A. Offer

B. Acceptance of offer

C. Invitation to offer

D. Counter offer

18. The Indian Contract Act came into force on:

A. 15th September, 1872

B. 1st September, 1872

C. 1st October, 1872

D. 15th October, 1872.

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

A. Intentional false statement of facts

B. Active concealment of facts

C. False statement in good faith

D. Promise made without intention to perform.

20. The two types of breach are —

A. Actual breach and Deemed breach

B. Actual breach and Conditional breach

C. Actual breach and Anticipatory breach

D. Actual breach and Remedial breach

21. The contracts of indemnity, guarantee, bailment, pledge and agency is covered by section —

A. Section 1-75

B. Section 76-100

C. Section 124-128

D. Section 124-238

22. A wrong statement made is called —

A. Misrepresentation

B. Fraud

C. Undue Influence

D. Mistake

Page 4

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45

Subject – Business Law (503) Class : TY BBA (2013 Pattern)

PROF . SWATI BHALERAO www.dacc.edu.in

23. A menu card handed by a waiter in a hotel is an offer —

i. True

ii. Partly True

iii. False

iv. Can’t Say

24. According to performance, contract are:—

A. Unilateral

B. Bilateral

C. Multilateral

D. Both (a) and (b)

25. Quid Pro Quo means —

A. Meeting of Minds

B. Something in return

C. To do something

D. Promise

26. Offer can be revoked —

A. Before its acceptance

B. By withdrawal of acceptance

C. Both (a) & (b)

D. None of these

27. In case of innocent misrepresentation—

A. Contract become voidable and damages are payable

B. Contract become voidable and damages are not payable

C. Contract become valid and damages are payable

D. Contract remains valid and damages are not payable.

28. . In case of willful misrepresentation or fraud—

A. Contract becomes voidable & damages are payable

B. Contract become voidable & damages are not payable

C. Contract become void & damages are payable

D. Contract become void & damages are not payable.

Page 5

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45

Subject – Business Law (503) Class : TY BBA (2013 Pattern)

PROF . SWATI BHALERAO www.dacc.edu.in

29. A contract creates

A. Rights and obligations of the parties to it

B. Obligations of the parties to it

C. Mutual understanding between the parties to it

D. Mutual lawful rights and obligations of the parties to it.

30. Which of the following is not a necessary feature for free consent:

A. A When the consent is not caused by coercion

B. B When the consent is not caused by undue influence

C. C When the consent is not caused by mistake

D. D When the consent is not caused by misunderstanding

Answer Key

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

C

A

B

D

C

B

C

A

B

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

C

B

C

D

A

C

D

B

A

B

A

D

Page 6

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45

Subject – Business Law (503) Class : TY BBA (2013 Pattern)

PROF . SWATI BHALERAO www.dacc.edu.in

Unit 2. Sale of Goods.(Sale of Goods Act,1930)

31. What is the purpose behind the enactment of Sale of Goods Act, 1930?

a) To define the laws relating to the sale of goods

b) To consolidate and amend the laws relating to the sale of goods

c) To consolidate, amend and define the laws relating to the sale of goods

d) To define and amend the laws relating to the sale of goods

32. Section 2(1) of Sale of Goods Act defines ‘buyer’ as:

a) Person who buys goods and services

b) Person who agrees to buy goods

c) Person who buys or agrees to buy goods

d) Person who buys or agrees to buy goods and services

33. Before the enactment of Sale of Goods Act, the provisions regarding Sale of Goods were

contained in:

a) Indian Contract Act, 1872

b) Indian Registration Act, 1908

c) Transfer of Property Act, 1882

d) Indian Partnership Act, 1932

34. Which of the following cannot be said to be included in the term “goods” defined under

section 2(7) of the Sale of Goods Act, 1930:

a) Stock

b) Shares

c) Growing crops

d) Actionable claims

35. When does an agreement to sell become a sale as per the provisions of Sale Of Goods Act,

1930:

a) When the seller transfers the property in goods

b) When the seller agrees to transfer the property in goods

Page 7

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45

Subject – Business Law (503) Class : TY BBA (2013 Pattern)

PROF . SWATI BHALERAO www.dacc.edu.in

c) When the time elapses or the conditions subject to which the property in the goods is to be

transferred are fulfilled

d) Agreement to sell is deemed to be sale

36. What can be the subject matter of the contract of sale as per section 6 of Sale of Goods Act:

a) Only existing goods owned or possessed by the owner

b) Only Future goods

c) Existing goods which are neither owned nor possessed by the owner

d) Existing goods, owned or possessed by the owner or future goods

37. In a contract for sale of specific goods, the goods, without the knowledge of seller perished at

the time when the contract was made, the contract is:

a) A voidable contract at the instance of seller

b) A voidable contract at the instance of buyer

c) A voidable contract subject to approval of the civil court

d) A void contract

38. A contract of sale may be made:

a) A in writing or by word of mouth

b) partly in writing of partly by word of mouth

c) by the implied conduct of parties

d) All of the above

39. As per section 2, sub section 7 every kind of moveable property other than actionable claim

and money is called

a) Goods

b) Future goods

c) Both (a) and (b)

d) None of above

40. In the Contract of Sale, there is an implied warranty that:

a) Seller has a right to sell the goods

b) The buyer has the right to have and enjoy the quiet possession of goods only.

c) The goods shall be free from any charge or encumbrance

d) The buyer has the right to have and enjoy the quiet possession of goods and that the goods shall

be free from any charge or encumbrance

Page 8

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45

Subject – Business Law (503) Class : TY BBA (2013 Pattern)

PROF . SWATI BHALERAO www.dacc.edu.in

41. Choose the most appropriate answer. Unless otherwise agreed, the goods remain at seller’s

risk until:

a) The goods have been delivered to the buyer

b) The goods have been utilised by the buyer

c) The price to the goods has been received by seller

d) The property therein has been transferred to the buyer

42. A contract of sale can be:

a) Absolute only

b) Conditional only

c) Absolute or conditional

d) Conditional only with the consent of the buyer

43. Where the transfer of the property in the goods is to take place at a future time or subject to

some condition, then such contract is called:

a) An agreement to sell

b) A contract to Sale

c) Future Contract

d) Conditional contract

44. What are the requisites of contract of sale:

a) An Offer and delivery of goods

b) An Offer to buy or sell goods, for a price and its acceptance

c) An Offer, delivery, possession and acceptance

d) An Offer, price, delivery and acceptance

45. According to Sale of Goods Act, 1930, ‘seller’ means a person:

a) who only agrees to sell the goods

b) who only sells the goods

c) who sells or agrees to sell

d) who transfers the possession of the goods to the other part

46. X purchases a car from Y. After 6 months, Z, the true owner of the car, demanded it from X. X

had to return it to its true owner. X was entitled to recover the full price even though several

months have passed. This is an example of:

a) Condition as to description

b) Condition as to sample

c) Condition as to title

Page 9

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45

Subject – Business Law (503) Class : TY BBA (2013 Pattern)

PROF . SWATI BHALERAO www.dacc.edu.in

d) Condition as to fitness

47. Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer

may sue for:

a) Damages for non-delivery

b) Damages for non-acceptance

c) Specific performance

d) Compensation

48. Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer

may sue for:

a) Damages for non-delivery

b) Damages for non-acceptance

c) Specific performance

d) Compensation

49. In case of breach of condition, the breach gives rise to:

a) Claim for damages

b) Rejection of goods

c) A right to repudiate the contract

d) A right of indemnification

50. When the price is not determined in the contract or agreed between the parties, the buyer

shall pay the seller:

a) a fair price

b) a reasonable price

c) market price

d) average price

51. Condition is a stipulation which is

a) Essential to the main purpose of contract

b) Collateral to the main purpose of contract

c) Not essential to the main purpose of contract

d) Collateral to the main purpose of contract

52. The sale of goods Act deals only with goods which are ______________ in nature

a) Immovable

b) Movable

c) Specific

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Business Law MCQs with Answers

Business Law MCQs with Answers

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