Mercantile Law 2006-Solved MCQs CA Set 1

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(1) When an offer can only be accepted by the performance of the person to whom the offer is

made, is characteristic of:

(a) bilateral contracts;

(b) unilateral contracts;

(c) implied contracts;

(d) None of these

Answer: (c)

(2) A tells B, “If you stood first in the class, I’ll pay you Rs.5000.00. B stood first in class and A

paid him Rs.5000.00. Which of the following is correct?

(a) A and B had a unilateral contract;

(b) A and B had an executory contract;

(c) A and B had an executed contract;

(d) None of these

Answer: (c)

(3) A offers to sell B his motorcycle at some time in the future. B accepts. Is there a valid

contract?

(a) Probably not, the terms are not definite;

(b) Probably yes;

(c) Definitely not because A failed to communicate the offer;

(d) None of these

Answer: (c)

(4) Which of the following is not an effective way to terminatean offer?

(a) By rejection;

(b) By acceptance;

(c) By counter offer;

(d) None of these

Answer: (c)

(5) A offers to sell B his collection of rare books for Rs.5000.00. Before B even has a chance to

accept, A says, “Sorry, I changed my mind, no deal.” This is an example of:

(a) Revocation;

b) Rejection;

(c) Counter Offer;

(d) None of these

Answer: (a)

(6) A and B enter into a contract in which A agrees to deliver milk to a restaurant. They forget to

include a price in the agreement. A court will:

(a) refuse to enforce the agreement;

(b) select the lowest quoted price for milk and insert it into the contract;

(c) determine a reasonable price and insert it into the contract;

(d) None of these.

Answer: (c)

(7) A agreed to supply food for Walima to B at 1: 00 pm. However, he could hardly supply the

food at 5: 00 pm.

(a) B can reject the delivery;

(b) He cannot reject the delivery;

(c) B must accept the delivery;

(d) None of these

Answer: (a)

(8) Which of the following actions an unpaid seller can not take against a buyer:

(a) Lien;

(b) Stoppage in transit;

(c) Sale;

(d) None of these

Answer: (d)

(9) When a partnership is found liable for a debt, which assets are first used to pay the debt?

(a) Individual assets of the partners;

(b) Personal property of the limited partners;

(c) Partnership assets.

(d) None of these

Answer: (c)

(10) A partnership involves three essential elements. Which of the following is not one of those

elements?

(a) An equal right in the management of the business;

(b) Limited liability for breach of contract;

(c) A joint ownership of the business

(d) None of these

Answer: (b)

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