Test -1
1. A contract is formed when:
a) Offer + Acceptance + Consideration
b) Offer only
c) Acceptance only
d) Consideration only
2. E-contracts are valid because:
a) They lack signatures
b) They fulfil essential elements of a contract
c) They are oral
d) They are informal
3. Doctrine of frustration arises when:
a) Performance becomes unlawful
b) Debtor refuses payment
c) Parties change contract
d) Notice is issued
4. A void agreement is:
a) Enforceable
b) Not enforceable
c) Partly enforceable
d) Optional
5. Quasi-contract is based on:
a) Law
b) Offer and acceptance
c) Concluded contract
d) Executed consideration
6. Bailor delivers goods for:
a) Ownership transfer
b) Temporary purpose
c) Sale
d) Pledge
7. A Pawnee is:
a) One who delivers goods
b) One who receives goods as security
c) Buyer
d) Seller
8. In guarantee, liability of surety is:
a) Secondary
b) Primary
c) Optional
d) None
9. Agency may arise by:
a) Ratification
b) Necessity
c) Estoppel
d) All
10. Future goods can be:
a) Sold
b) Only agreed to be sold
c) Pledged
d) Gifted
11. Specific goods are:
a) Unascertained
b) Identified and agreed upon
c) Future goods
d) Hypothetical
12. Right of unpaid seller include:
a) Lien
b) Stoppage in transit
c) Resale
d) All
13. Maximum number of partners in a partnership:
a) 10
b) 50
c) 20
d) No limit
14. LLP provides:
a) Unlimited liability
b) Limited liability
c) No liability
d) Fixed liability
15. A promissory note is made by:
a) Drawer
b) Maker
c) Payee
d) Holder
16. Bill of exchange requires:
a) Two parties
b) Three parties
c) No parties
d) Four parties
17. A cheque is always payable:
a) On demand
b) After 30 days
c) After acceptance
d) After endorsement
18. Incorporation gives a company:
a) Legal recognition
b) Share capital
c) Licences
d) GST number
19. A prospectus invites:
a) Directors
b) Public
c) Employees
d) Bankers
20. Debentures are secured by:
a) Mortgage
b) Guarantee
c) Pledge of goods
d) Delivery
21. Director acts as:
a) Trustee
b) Agent
c) Auditor
d) Officer
22. Minimum number of directors in a public company:
a) 1
b) 2
c) 3
d) 7
23. Quorum for Board meeting is usually:
a) Majority of directors
b) One-third or two directors
c) Only chairman
d) 10% shareholders
24. CSR applies to companies fulfilling:
a) Profit criteria
b) Net worth criteria
c) Turnover criteria
d) Any of the above
25. CSR spending must be at least:
a) 1% of net profit
b) 2% of the average net profit
c) 2.5% of turnover
d) 5% of capital
26. A contract becomes voidable when consent is obtained by:
a) Coercion
b) Fraud
c) Undue influence
d) Any
27. Acceptance must be:
a) Conditional
b) Absolute and unqualified
c) Silent
d) Optional
28. Consideration must move from:
a) Only promisor
b) Only promisee
c) Promisee or third party
d) None
29. An agreement in restraint of marriage is:
a) Valid
b) Void
c) Illegal
d) Voidable
30. A person incompetent to contract:
a) Minor
b) Unsound mind
c) Disqualified by law
d) All
31. A gratuitous bailment is:
a) Without reward
b) For reward
c) For sale
d) For pledge
32. In pledge, goods must be:
a) Immovable
b) Movable
c) Perishable only
d) Digital
33. Contract of guarantee requires:
a) Consideration
b) Writing only
c) Registration
d) Notarisation
34. An agent must follow:
a) Principal’s directions
b) Lawful instructions
c) Custom of trade
d) All
35. Delivery of goods under the Sale of Goods Act means:
a) Transfer of ownership
b) Voluntary transfer of possession
c) Transfer of title
d) All
36. Negotiable instrument must be transferable:
a) Freely
b) With approval
c) With registration
d) With court order
37. Dishonour by non-acceptance applies to:
a) Cheque
b) Bill of exchange
c) Demand draft
d) Promissory note
38. Company is governed by:
a) Companies Act, 2013
b) Contract Act
c) LLP Act
d) Partnership Act
39. Shares can be:
a) Equity
b) Preference
c) Both a & b
d) None
40. A debenture-holder is a:
a) Creditor
b) Owner
c) Director
d) Partner
41. AGM stands for:
a) Annual General Meeting
b) Annual Governance Meeting
c) Administrative Group Meeting
d) All
42. Extraordinary General Meeting is held:
a) Annually
b) When required
c) Monthly
d) Never
43. CSR activities exclude:
a) Political contributions
b) Education
c) Healthcare
d) Rural development
44. Doctrine of indoor management protects:
a) Outsiders
b) Directors
c) Shareholders
d) Creditors
45. A minor can be:
a) Partner
b) Admitted to benefits of partnership
c) Both
d) None
46. LLP must have minimum:
a) 1 designated partner
b) 2 designated partners
c) 3 partners
d) No minimum
47. A post-dated cheque is:
a) Invalid
b) Valid
c) Illegal
d) Voidable
48. A company limited by guarantee:
a) Has share capital
b) No share capital
c) Partners
d) Unlimited liability
49. Directors are appointed in:
a) AGM
b) EGM
c) Board meeting
d) By bank approval
50. A contract is discharged by:
a) Performance
b) Agreement
c) Impossibility
d) All
ANSWER KEY
1-a, 2-b, 3-a, 4-b, 5-a, 6-b, 7-b, 8-a, 9-d, 10-b,
11-b, 12-d, 13-c, 14-b, 15-b, 16-b, 17-a, 18-a, 19-b, 20-a,
21-b, 22-c, 23-b, 24-d, 25-b, 26-d, 27-b, 28-c, 29-b, 30-d,
31-a, 32-b, 33-a, 34-d, 35-b, 36-a, 37-b, 38-a, 39-c, 40-a,
41-a, 42-b, 43-a, 44-a, 45-b, 46-b, 47-b, 48-b, 49-a, 50-d.