Mercantile Law 2004-Solved MCQs MPSET Set 1

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(1) A person on attaining age of majority.

Answer: Can ratify an agreement made by him during his minority.

(2) A person who has attained the age of 18 while under guardian:

Answer: Is not competent to contract

(3) A person who is usually of unsound mind:

Answer: Can make a contract during the interval when he is of sound mind.

(4) When a contract is substituted with a new contract.

Answer: The original contract need not be performed.

(5) For a breach of contract:

Answer: The plaintiff can recover compensation if the subject matter of the contract was not

easily available in the market.

(6) The supplier of necessaries:

Answer: Can recover the price from the property of the minor.

(7) A contract of which one party promises to save the other from loss caused to him by the

conduct of the promise himself or by the conduct of any other person.

Answer: IS called a contract of indemnity

(8) Surety is a person:

Answer: Who promises to perform or discharge the liability of a third person in case of his

default.

(9) If the bailee’s lawful charges are not paid, he may retain the goods:

Answer: None of these

(10) A person who works under the control of another:

Answer: Is known as an agent

(11) A promises to pay Rs. 1000 to B and takes a promissory note from him for that amount but

pays only Rs. 500 on it.

Answer: None of these

(12) A bill of exchange is addressed to B. It is accepted by

(i) B as a partner of a firm in the firm’s name, (ii) it is accepted by B and C.

Answer: None of these

(13) A buys nylon pant from a store and starts wearing it. A contracts skin disease:

Answer: None of these

(14) A, B & C are partners in a business. An order for certain goods is placed with D. Before the

goods are delivered, C dies. D had no notice of the death of C:

Answer: A & B are jointly as well as severally liable

(15) When a firm is put to an end as between all the parties:

Answer: It is dissolution

(16) A partner may be expelled from a firm if there is agreement to that effect:

Answer: By majority of the partners

(17) Differences between the arbitrators are:

Answer: Decided by an Umpire

(18) A authorizes B to buy 50 sheep for him. B buys the whole lot of 44 sheep and 15 lambs for

one sum of Rs. 30000:

Answer: A can repudiate the whole transaction

(19) A public limited company must have:

Answer: None of these

(20) An agreement based on bilateral mistake:

Answer: Is void

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