Mercantile Law 2007-Solved MCQs RSET Set 1

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(1) Which of the following is a bilateral contract?

(a) A tells B that he will pay him Rs. 200 if B will wash his car which B does.

(b) A writes B a letter in which he promises that if B will wash his car, he will pay him Rs. 200

which B does.

(c) A and B both sign a piece of paper which says, “A agrees to pay B Rs. 200 if B agrees to

wash A’s car in exchange for Rs. 200.”

(d) None of these

Answer: (a)

(2) A called his friend B and offered to give him two tickets of a cricket match taking place next

month. B said “okay! I love to watch cricket matches.” A few days later A called B and told him

that he couldn’t give B the tickets. Assuming B sued A:

(a) He would probably win as a contract was formed.

(b) He would probably lose because the contract was not in writing.

(c) He would probably lose as the court would hold no contract was formed.

(d) None of these

Answer: (c)

(3) Under the doctrine of quasi contract, a plaintiff may recover in “quantum merit”, a Latin

phrase that means:

(a) “as much as he deserves”

(b) “treble damages”

(c) “only a token sum”

(d) None of these

Answer: ()

(4) Which of the following writings are negotiable instrument?

(a) A promise to pay Rs. 2000 for the services rendered if the services are renders as soon as

possible.

(b) An unconditional promise to pay a reasonable sum for the services rendered.

(c) An unconditional promise to pay Rs. 3000 sometime next month.

(d) None of these

Answer: (d)

(5) A has a bill of exchange that does not indicate when it is to be paid as the language of the bill only says “Pay”. When is it payable to A?

(a) In 30 days.

(b) Never as the instrument is void if it does not have a payment date.

(c) In a reasonable time.

(d) None of these

Answer: (c)

(6) A writes a cheque on his Habib Bank account to pay for groceries at Utility Stores. Who is

the drawee?

(a) Utility Stores

(b) Both Habib Bank and Utility Stores

(c) Habib Bank

(d) None of these

Answer: (c)

(7) Which of the following may count as the signature of a drawer?

(a) An “X” made by the drawer

(b) The signature of the drawer’s agent

(c) Both of the above

(d) None of these

Answer: (c)

(8) Which of the following language on an order will create a bill of exchange?

(a) “Pay X if you can”

(b) “I wish you pay X”

(c) “Please pay X”

(d) None of these

Answer: (d)

(9) Which of the following is payable at a definite time?

(a) “Payable when “Z” wins the presidential election.”

(b) “Payable on or before May 30.”

(c) Both (a) and (b)

(d) None of these

Answer: (b)

(10) Which of the following phrases makes an order bill of exchange?

(a) “Pay to the order of A.”

(b) “Pay to the order of my brother.”

(c) Both (a) and (b)

(d) None of these

Answer: (c)

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