150+ Business Laws Solved MCQs

These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) , Union Public Service Commission (UPSC) , Indian Administrative Service (IAS) , Staff Selection Commission (SSC) , Common Law Admission Test (CLAT) .

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1.	The Law of Contract in India is contained in
A.	Indian Contract Act 1862
B.	Indian Contract Act 1962
C.	Indian Contract Act 1872
D.	Indian Contract Act 1972
Answer» C. Indian Contract Act 1872

2.	An agreement enforceable by Law is a
A.	Promise
B.	Contract
C.	Obligation
D.	Lawful promise
Answer» B. Contract

3.	A void agreement is one which is
A.	Valid but not enforceable
B.	Enforceable at the portion of both parties
C.	Enforceable at the portion of one party
D.	Not enforceable in a Court of Law
Answer» D. Not enforceable in a Court of Law

4.	An agreement which is enforceable by law at the portion of one or more of the parties thereon but not at the option of the other or others is a :
A.	Valid Contract
B.	Void Contract
C.	Voidable Contract
D.	Illegal Contract
Answer» C. Voidable Contract

5.	Which is the following is false? An offer to be valid must;
A.	Intend to create legal relations
B.	Have certain and unambiguous terms
C.	Contain a term the non‐compliance of which would amount to acceptance
D.	Be communicated to the person to whom it is made
Answer» C. Contain a term the non‐compliance of which would amount to acceptance

6.	When the consent of a party is not free, the contract is:
A.	Void
B.	Voidable
C.	Valid
D.	Illegal
Answer» B. Voidable

7.	Which is the following is false? An acceptance:
A.	Must be communicated
B.	Must be absolute and unconditional
C.	Must accepted by a person having authority to accept
D.	May be presumed from silence of offeree
Answer» D. May be presumed from silence of offeree

8.	In case of illegal agreements the collateral agreements are
A.	Valid Contract
B.	Void Contract
C.	Voidable Contract
D.	None of these
Answer» B. Void Contract

9.	An offer may lapse by
A.	Revocation
B.	Counter Offer
C.	Rejection of offer by offeree
D.	All of these
Answer» D. All of these

10.	A proposal when accepted becomes a:
A.	Promise
B.	Contract
C.	Offer
D.	Acceptance
Answer» A. Promise

11.	Which of the following statement is true?
A.	Consideration must result in a benefit to both parties
B.	Past consideration is no consideration in India
C.	Consideration must be adequate
D.	Consideration must be something which a promisor is not already bound to do
Answer» D. Consideration must be something which a promisor is not already bound to do

13.	Which of the following statement is false?
A.	Generally a stranger to a contract can not sue
B.	A verbal promise to pay a time barred debt is valid
C.	Completed gifts need no consideration
D.	No consideration is necessary to create an agency
Answer» B. A verbal promise to pay a time barred debt is valid

14.	Consideration must move at the desire of:
A.	Promisor
B.	Promisee
C.	Any other person
D.	Any of these
Answer» A. Promisor

15.	Which of the following statement is true?
A.	There can be a stranger to a contract
B.	There can be a stranger to a consideration
C.	There can be a stranger to a contract & consideration
D.	None of the above
Answer» B. There can be a stranger to a consideration

17.	Consideration in sample term means
A.	Anything in return
B.	Something in return
C.	Everything in return
D.	Nothing in return
Answer» B. Something in return

12.	Which is the following is false? Consideration:
A.	Must move at the desire of the promisor
B.	May move from any person
C.	Must be illusory
D.	Must be some value
Answer» C. Must be illusory

16.	Consideration may be
A.	Past
B.	Present
C.	Future
D.	All of the above
Answer» D. All of the above

18.	Which of the following is not an exception to the rule – No consideration, No contract.
A.	Compensation for involuntary services
B.	Love & Affection
C.	Contract of agencies
D.	Gift
Answer» A. Compensation for involuntary services

19.	Ordinarily, a minor’s agreement is
A.	Void ab initio
B.	Voidable
C.	Valid
D.	Unlawful
Answer» A. Void ab initio

20.	A minor’s liability for ‘necessaries’ supplied to him
A.	Arises after he attains majority age
B.	Is against only minor’s property
C.	Does not arise at all
D.	Arises if minor gives a promise for it
Answer» B. Is against only minor’s property

21.	Which of the following statement is not true about minor’s position in a form?
A.	He cannot become a partner in an existing firm
B.	He can become a partner in an existing firm
C.	He can be admitted only to the benefits of any existing firm
D.	He can become partner on becoming a major
Answer» B. He can become a partner in an existing firm

22.	Which of the following statement is true?
A.	A contract with a minor is voidable at the option of the minor
B.	An agreement with the minor can be ratified after he attains majority
C.	A person who is usually of an unsound mind cannot enter into contract even when he is of a sound mind
D.	A person who is usually of an sound mind cannot enter into contract even when
Answer» D. A person who is usually of an sound mind cannot enter into contract even when

23.	Consent is not said to be free when it is caused by
A.	Coercion
B.	Undue influence
C.	Fraud
D.	All of these
Answer» D. All of these

24.	When the consent of a party is obtained by fraud, the contract is
A.	Void
B.	Voidable
C.	Valid
D.	Illegal
Answer» B. Voidable

25.	The threat to commit suicide amounts to
A.	Coercion
B.	Undue influence
C.	Misrepresentation
D.	Fraud
Answer» A. Coercion

150+ Business Laws Solved MCQs

The Law of Contract in India is contained in

An agreement enforceable by Law is a

A void agreement is one which is

An agreement which is enforceable by law at the portion of one or more of the parties thereon but not at the option of the other or others is a :

Which is the following is false? An offer to be valid must;

When the consent of a party is not free, the contract is:

Which is the following is false? An acceptance:

In case of illegal agreements the collateral agreements are

An offer may lapse by

A proposal when accepted becomes a:

Which of the following statement is true?

Which is the following is false? Consideration:

Which of the following statement is false?

Consideration must move at the desire of:

Which of the following statement is true?

Consideration may be

Consideration in sample term means

Which of the following is not an exception to the rule – No consideration, No contract.

Ordinarily, a minor’s agreement is

A minor’s liability for ‘necessaries’ supplied to him

Which of the following statement is not true about minor’s position in a form?

Which of the following statement is true?

Consent is not said to be free when it is caused by

When the consent of a party is obtained by fraud, the contract is

The threat to commit suicide amounts to

Moral pressure is involved in the case of

A wrong representation when made without any intention to deceive the other party amounts to

Which of the following statement is true?

In case of illegal agreements, the collateral agreements are;

An agreement the object or consideration of which is unlawful, is:

An agreement is void if it is opposed to public policy. Which of the following is not covered by heads of public policy.

On the valid performance of the contractual obligations by the parties, the contract;

Which of the following persons can perform the contract?

A, B and C jointly promised to pay Rs.6000 to D. Before the performance of the contract, C dies. Here the contract;

A contract is discharged by novation which means the;

A contract is discharged by recission which means the;

When prior to the due date of performance, the promisor absolutely refuses to perform the contract, it is known as:

In case of anticipatory breach, the aggrieved party may treat the contract;

In case of breach of contract, which of the following remedy is available to the aggrieved party?

Sometimes, a party is entitled to claim compensation in proportion to the work done by him. It is possible by a suit for;

Generally, which of the following damages are not recoverable?

A contract depend on the happening or non happening of the future uncertain event, is a

A contingent contract is ;

A contingent contract depend on the happening of the future uncertain event can be enforced when the event;

A agrees to pay Rs.1,00,000 to B if he brings a star from the sky. This is a contingent contract and

Which of the following statement is true?

A voidable contract is one which;

On the acceptance of an offer by a offeree

A, by a letter dated 25th December 1998, offers to sell his house to B for Rs.10 lakhs. The letter reaches on 27th Dec.1998, who posts his acceptance on 28th Dec. 1998 which reaches A on 30th Dec.1998. Here the communication of offer is completed on;

In the above question, the communication of acceptance is complete against A on 28th Dec.1998 and against B on;

28.	Which of the following statement is true?
A.	A threat to commit suicide does not amount to coercion
B.	Undue influence involves use of physical pressure
C.	Ignorance of law is no excuse
D.	Silence always amounts to fraud
Answer» C. Ignorance of law is no excuse

31.	An agreement is void if it is opposed to public policy. Which of the following is not covered by heads of public policy.
A.	Trading with an enemy
B.	Trafficking in public offices
C.	Marriage brokerage contracts
D.	Contracts to do impossible acts
Answer» D. Contracts to do impossible acts

32.	On the valid performance of the contractual obligations by the parties, the contract;
A.	Is discharged
B.	Becomes enforceable
C.	Becomes void
D.	None of these
Answer» A. Is discharged

33.	Which of the following persons can perform the contract?
A.	Promisor alone
B.	Legal representatives of the Promisor
C.	Agent of the Promisor
D.	All of these
Answer» D. All of these

34.	A, B and C jointly promised to pay Rs.6000 to D. Before the performance of the contract, C dies. Here the contract;
A.	Becomes void on C’s death
B.	Should be performed by A and B along with C’s legal representatives
C.	Should be performed by A and B alone
D.	Should be renewed between A, B and D
Answer» B. Should be performed by A and B along with C’s legal representatives

35.	A contract is discharged by novation which means the;
A.	Cancellation of the existing contract
B.	Change in one or more terms of the contract
C.	Substitution of existing contract for a new one
D.	None of these
Answer» C. Substitution of existing contract for a new one

36.	A contract is discharged by recission which means the;
A.	Change in one or more terms of the contract
B.	Acceptance of lesser performance
C.	Abandonment of rights by a party
D.	Cancellation of the existing contract
Answer» D. Cancellation of the existing contract

37.	When prior to the due date of performance, the promisor absolutely refuses to perform the contract, it is known as:
A.	Abandonment of a contract
B.	Remission of contract
C.	Actual breach of contract
D.	Anticipatory breach of contract
Answer» D. Anticipatory breach of contract

38.	In case of anticipatory breach, the aggrieved party may treat the contract;
A.	As discharged and bring an immediate action for damages
B.	As operative and wait till the time for performance arrives
C.	Exercise option either (a) or (b)
D.	None of these
Answer» C. Exercise option either (a) or (b)

39.	In case of breach of contract, which of the following remedy is available to the aggrieved party?
A.	Suit for recission
B.	Suit for damages
C.	Suit for specific performance
D.	All of these
Answer» D. All of these