Mercantile Law 2005-Solved MCQs Competitive Exams Set 2

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(11) A found a wallet full of money on a roadside and upon finding the address of the owner in

the wallet he returned it to its owner. When he came back he read the announcement of a rewardfor the return of such wallet in the newspaper:

(a) The owner is liable to pay him the reward

(b) The owner is not liable to pay him the reward

(c) The owner is liable to pay him half of the reward

(d) None of these

Answer: (b)

(12) Muhsin in considering forms of business organisation for his law firm. One advantage of thelimited liability partnership form is that it allow the limited partners to avoid personal liability for:

(a) The malpractice of other limited partners regarding the conduct of the firm՚s business

(b) The obligation of the firm beyond their contributions to the capital

(c) The obligations of the firm within the limit their contributions to be capital

(d) None of these

Answer: (d)

(13) A՚s son has forged B՚s name to a pronote. B under threat of prosecuting A՚s son demanded

That A should sell him his house that is worth ₹ 1000,000/- for ₹ 300,000/- A agrees with the

proposal. The contract is

(a) Valid

(b) Voidable

(c) Void

(d) None of these

Answer: (c)

(14) The best, simple definition of a contract is:

(a) An objective “meeting of the minds”

(b) A legally enforceable agreement

(c) A document reflecting a “meeting of the mind” between two or more competent parties

(d) None of these

Answer: (b)

(15) Salman signs a written contract with Khalid giving him the right to cast his votes in the

election for the directors of Hashiya Limited, whose

shares Salman holds. This agreement between Slaman and Khalid is known as:

(a) a derivative (b) a proxy

(c) a Memorandum of Understanding

(d) None of these

Answer: (b)

(16) A sent a proposal to B by post for the sale of his house. B accepted the offer by post. A may

revoke his proposal at any time before

(a) B receives the letter of proposal

(b) B posts the letter of acceptance

(c) A receives the letter of acceptance

(d) None of these

Answer: (a)

(17) Danish offers to sell to Sadiq a mobile phone for ₹ 550. Sadiq tells Danish that he will

take the phone for ₹ 540. Nothing further is said and the next day, Danish demands ₹ 450

from Sadiq in exchange for the phone. Choose the correct statement

(a) Sadiq is bound to pay as his offer has been accepted by Danish;

(b) Although there is no contract Sadiq;

(c) Sadiq is not bound to pay as there is no contract;

(d) None of these

Answer: (c)

(18) If you want to start a partnership what formal requirements do you have to meet?

(a) You must register the firm with the Registrar of Firms;

(b) You do not need to satisfy any formal requirements;

(c) Your firm cannot operate until you draft and get registered the Article of Partnership;

(d) None of these

Answer: (b)

(19) The relation between the partners of a firm is of:

(a) Employer and Employee

(b) Trustee and Beneficiary

(c) Principal and Agent

(d) None of these

Answer: (c)

(20) A bearer instrument may be negotiated by:

(a) Mere delivery

(b) Endorsement and delivery

(c) Delivery with a separate written contract

Answer: (a)