Mercantile Law 2007-Solved MCQs Competitive Exams Set 2

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(11) A writes a postdated cheque. Is it negotiable?

(a) Yes

(b) No, because it does not specify a definite date of payment

(c) No, because postdated cheques are void

(d) None of these

Answer: (a)

(12) You write a cheque to pay for your haircut. In this transaction, who is the drawee?

(a) You because you drew up the cheque

(b) Your bank because it must pay the cheque

(c) The person who cuts your hair because the cheque is payable to him

(d) None of these

Answer: (b)

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

(a) An objective “meeting of minds.”

(b) A negotiated two-party agreement upon which each party will act or refrain from acting.

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

(d) None of these

Answer: (d)

(14) If A is hit by a car, and B, a doctor, sees the incident and performs emergency first aid upon

A which results in A recovery:

(a) A unilateral contract is created whereby A is obligated to pay Dr. B for services rendered.

(b) A bilateral contract is created and both parties must perform their duties.

(c) A quasi contract is created between the parties.

(d) None of these

Answer: (c)

(15) A offers to sell to B a mobile phone for ₹ 5500. B tells A that he will take the phone for

₹ 4500. Nothing further is said and the next day, A demands ₹ 4500 from B in exchange for

the phone. Choose the true statement:

(a) B is not obligated to pay ₹ 4500 to A

(b) B is obligated to pay ₹ 4500 to A

(c) B is obligated to pay ₹ 5500 to A

(d) None of these

Answer: (a)

(16) The most common form of agency is:

(a) Implied

(b) Express

(c) Injunctive

(d) None of these

Answer: (b)

(17) Assume that a new partner enters an ongoing partnership. The new partner՚s liability to

preexisting creditors is best described by which of the following?

(a) The new partner is not liable to preexisting creditors of the firm.

(b) The new partner must negotiate his or her liability with the preexisting creditors.

(c) The new partner is only liable to the preexisting creditors to the extent of his capital Contribution.

(d) None of these

Answer: (a)

(18) What is not a correct statement concerning promoters?

(a) They are agents of the company

(b) They generally are active before the company is formed

(c) They owe fiduciary duties to the company

(d) None of these

Answer: (a)

(19) The phrase “piercing the corporate veil” refers to:

(a) Inspecting the books of the company

(b) The ignoring by courts of the corporate entity in order to do justice

(c) Learning the identity of the shareholders of the company

(d) None of these

Answer: (d)

(20) When someone gives to another person a power of attorney, this means that:

(a) Such person is an undisclosed principal

(b) Such person is a disclosed principal

(c) Such person given the power has authority to act as an agent

(d) None of these

Answer: (c)