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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51.	As a general rule, an agreement made without consideration is;
A.	Void
B.	Voidable
C.	Valid
D.	Unlawful
Answer» A. Void

52.	A agrees to sell his car worth Rs. I00000 lakh to B for rs.20000 and A’s consent was obtained by coercion. Here, the agreement is;
A.	Void
B.	Valid
C.	Voidable
D.	Unlawful
Answer» C. Voidable

53.	An agreement made with free consent to which the consideration is lawful but inadequate is;
A.	Void
B.	Valid
C.	Voidable
D.	Unlawful
Answer» B. Valid

54.	Which of the following persons are not competent to contract?
A.	Minors
B.	Persons of unsound mind
C.	Persons disqualified by law
D.	All of these
Answer» D. All of these

55.	For entering into a contract, a minor is a person who has not completed the age of;
A.	16 years
B.	18 years
C.	20 years
D.	21 years
Answer» B. 18 years

56.	A contract with the minor, which is beneficial for him, is;
A.	Void ab initio
B.	Voidable
C.	Valid
D.	Illegal
Answer» C. Valid

57.	Which of the following persons do not fall under the category of persons of unsound mind?
A.	Idiot
B.	Lunatics
C.	Drunken
D.	Alien
Answer» D. Alien

58.	Which of the following elements does not affect the free consent of the parties.
A.	Coercion
B.	Fraud
C.	Incompetency
D.	Undue influence
Answer» C. Incompetency

59.	When the consent of a party is obtained by coercion undue influence, fraud or misrepresentation, the contract is;
A.	Void
B.	Voidable
C.	Valid
D.	Illegal
Answer» B. Voidable

60.	A threatens to kill B if he does not agrees to sell his scooter from him for Rs.1000. Here B’s consent is obtained by
A.	A undue influence
B.	Fraud
C.	Coercion
D.	None of these
Answer» C. Coercion

61.	When the consent to an agreement is obtained by coercion, the agreement is voidable at the option of
A.	Either party to the agreement
B.	A party whose consent was so obtained
C.	A party who obtained the consent
D.	None of these
Answer» B. A party whose consent was so obtained

63.	Which of the following acts does not fall under the categories of fraud?
A.	Intentional false statement of facts
B.	Active concealment of facts
C.	Innocent false statements
D.	Promise made without intention to perform
Answer» C. Innocent false statements

65.	Which of the following statement is false?
A.	A contract is not voidable if fraud or misrepresentation does not induce the other party to enter a contract.
B.	A party cannot complain of fraudulent silence or misrepresentation if he had the means of discovering the truth with ordinary means
C.	In case of fraud or misrepresentation, aggrieved party can either rescind or affirm the contract
D.	A party who affirms the contract , can also change his option afterwards if he so decides
Answer» D. A party who affirms the contract , can also change his option afterwards if he so decides

67.	As per Section 20, the contract is void, on account of bilateral mistake of fact. But as per Section 22, if there is mistake of only one party, then the contract is;
A.	Void
B.	Valid
C.	Voidable
D.	Illegal
Answer» B. Valid

70.	A mistake as to law not in force in India has the same effect as;
A.	Mistake of fact
B.	Mistake of Indian Law
C.	Fraud
D.	Misrepresentation
Answer» A. Mistake of fact

62.	When one party is in a position to dominate the will of another and uses his superior position to obtain the consent of a weaker party, the consent is said to be obtained by;
A.	Coercion
B.	Undue influence
C.	Fraud
D.	Misrepresentation
Answer» B. Undue influence

64.	Where the consent of a party is obtained by misrepresentation, the contract is;
A.	Valid
B.	Void
C.	Voidable
D.	Illegal
Answer» C. Voidable

66.	Where the consent of both the parties is given by mistakes, the contract is;
A.	Void
B.	Valid
C.	Voidable
D.	Illegal
Answer» A. Void

68.	A contract made by mistake about Indian Law, is;
A.	Void
B.	Valid
C.	Voidable
D.	Illegal
Answer» B. Valid

69.	A contract made by mistake about some foreign law, is;
A.	Void
B.	Valid
C.	Voidable
D.	Illegal
Answer» A. Void

71.	The consideration or object of agreement is considered unlawful, if is
A.	Forbidden by law
B.	Fraudulent
C.	Immoral
D.	All of these
Answer» D. All of these

72.	A agrees to pay Rs.5 lakhs to B procures an employment for A in Income Tax Department. This agreement is
A.	Void
B.	Valid
C.	Voidable
D.	Contingent
Answer» A. Void

73.	A agrees to pay Rs.50000 to B if he kills C. the agreement is
A.	Void
B.	Valid
C.	Voidable
D.	Contingent
Answer» A. Void

74.	An agreement in restraint of marriage, ie, which prevents a person from marrying is
A.	Valid
B.	Voidable
C.	Void
D.	Contingent
Answer» C. Void

75.	An agreement in restraint of marriage is valid incase of the following persons
A.	Minors
B.	Educated
C.	Married
D.	None of these
Answer» A. Minors

150+ Business Laws Solved MCQs

As a general rule, an agreement made without consideration is;

A agrees to sell his car worth Rs. I00000 lakh to B for rs.20000 and A’s consent was obtained by coercion. Here, the agreement is;

An agreement made with free consent to which the consideration is lawful but inadequate is;

Which of the following persons are not competent to contract?

For entering into a contract, a minor is a person who has not completed the age of;

A contract with the minor, which is beneficial for him, is;

Which of the following persons do not fall under the category of persons of unsound mind?

Which of the following elements does not affect the free consent of the parties.

When the consent of a party is obtained by coercion undue influence, fraud or misrepresentation, the contract is;

A threatens to kill B if he does not agrees to sell his scooter from him for Rs.1000. Here B’s consent is obtained by

When the consent to an agreement is obtained by coercion, the agreement is voidable at the option of

When one party is in a position to dominate the will of another and uses his superior position to obtain the consent of a weaker party, the consent is said to be obtained by;

Which of the following acts does not fall under the categories of fraud?

Where the consent of a party is obtained by misrepresentation, the contract is;

Which of the following statement is false?

Where the consent of both the parties is given by mistakes, the contract is;

As per Section 20, the contract is void, on account of bilateral mistake of fact. But as per Section 22, if there is mistake of only one party, then the contract is;

A contract made by mistake about Indian Law, is;

A contract made by mistake about some foreign law, is;

A mistake as to law not in force in India has the same effect as;

The consideration or object of agreement is considered unlawful, if is

A agrees to pay Rs.5 lakhs to B procures an employment for A in Income Tax Department. This agreement is

A agrees to pay Rs.50000 to B if he kills C. the agreement is

An agreement in restraint of marriage, ie, which prevents a person from marrying is

An agreement in restraint of marriage is valid incase of the following persons

An agreement, which prevents a person from carrying lawful business is

An agreement in restraint of legal proceedings is void. It does not cover an agreement which

A agrees to sell his car to B at a price which B may be able to pay. This agreement is

An agreement to pay money money’s worth on the happening or non happening of a specified uncertain event is a

An agreement to do an illegal act(eg: sharing the earnings of smuggling business) is

Where an agreement consists of two parts once legal and the other illegal and the legal part is separable from the illegal one, such legal part is

A contingent contract dependent on the non happening of a future uncertain event becomes void when such event

A agrees to pay Rs.1000 to B if a certain ship returns within a year. However, the ship sinks within the year. In this case, the contract becomes

A contingent contract dependent on the non happening of specified uncertain event within fixed time can be enforced if the event

The basis of ‘quasi contractual relations’ is the

Sometimes, a person finds certain goods belonging to some persons. In such case, the finder

A, B and C jointly promised to pay Rs.60000 to D. A was compelled by D to pay the entire amount of Rs.60000. Here

In commercial transactions, time is considered to be of the essence of contract, and if the party fails to perform the contract within specified time, the contract becomes

Where the performance of a promise by one party depends on the prior performance of promise by the other party, such reciprocal promises fall under category of

When after the formation of a valid contract, an event happens which makes the performance of contract impossible then the contract becomes

A party entitled to rescind contract, losses the remedy where

The special damages ie, the damages which arise due to so a special or unusual circumstances

Which of the following statements is correct?

When offer is made to a definite person, it is known as

Standing offer means

When the offeree offers to qualified acceptance of the offer subject to modifications and variations he is said to have made a

What is legal terminology for the doing or not doing of something which the promisor desires to be done or not done?

Can a person who is usually of unsound, but occasionally of sound mind, make a contract?

A and B both believe that a particular kind of rice is being sold in the market@Rs.3000 per quintel and A sells rice of that kind to B @3000/quintel. But in fact, the market price was Rs.4000, the contract is

A sells the goodwill of his business to B and agrees with him to refrain from carrying on a similar business within specified local limits. This contract is

77.	An agreement in restraint of legal proceedings is void. It does not cover an agreement which
A.	Restrict absolutely the parties from enforcing their legal rights.
B.	Cuts short the period of limitation
C.	Discharges a party from liability or extinguishes the rights of a party
D.	Provides for a reference to arbitration instead of court of law
Answer» D. Provides for a reference to arbitration instead of court of law

79.	An agreement to pay money money’s worth on the happening or non happening of a specified uncertain event is a
A.	Wagering agreement
B.	Contingent contract
C.	Quasi contract
D.	Uncertain agreement
Answer» A. Wagering agreement

82.	A contingent contract dependent on the non happening of a future uncertain event becomes void when such event
A.	Happens
B.	Does not become impossible
C.	Does not happen
D.	Both (a) and (b)
Answer» D. Both (a) and (b)

84.	A contingent contract dependent on the non happening of specified uncertain event within fixed time can be enforced if the event
A.	Does not happen within fixed time
B.	Becomes impossible before the expiry of fixed time
C.	Happens within the fixed time
D.	Both (a) and (b)
Answer» D. Both (a) and (b)

85.	The basis of ‘quasi contractual relations’ is the
A.	Existence of a valid contract between the parties
B.	Prevention of unjust enrichment at the expense of others
C.	Provision contained in section 10 of the Contract Act
D.	Existence of a voidable contract between the parties
Answer» B. Prevention of unjust enrichment at the expense of others

86.	Sometimes, a person finds certain goods belonging to some persons. In such case, the finder
A.	Becomes the owner of the goods and can use them
B.	Is under a duty to trace the true owner and return the goods
C.	Can sell the perishable goods if true owner cannot be found
D.	Both (b) and (c)
Answer» D. Both (b) and (c)

87.	A, B and C jointly promised to pay Rs.60000 to D. A was compelled by D to pay the entire amount of Rs.60000. Here
A.	A can file a suit against D for recovery of the amount exceeding his share
B.	A is entitled to recover Rs.20000 each from B and C
C.	On payment by A, the contract is discharged and B and C are also not liable to A.
D.	D is not justified here and is liable to refund the entire amount to A
Answer» B. A is entitled to recover Rs.20000 each from B and C

88.	In commercial transactions, time is considered to be of the essence of contract, and if the party fails to perform the contract within specified time, the contract becomes
A.	Voidable at the option of the other party
B.	Void and cannot be enforced
C.	Illegal for non compliance of legal terms
D.	Enforceable in higher court only
Answer» A. Voidable at the option of the other party

89.	Where the performance of a promise by one party depends on the prior performance of promise by the other party, such reciprocal promises fall under category of
A.	Mutual and Concurrent
B.	Conditional and dependent
C.	Mutual and independent
D.	Both (a) and (b)
Answer» B. Conditional and dependent

91.	A party entitled to rescind contract, losses the remedy where
A.	He has ratified the contract
B.	Third party has acquired right in good faith
C.	Contract is not separable and recession is sought of a party only
D.	All of these
Answer» D. All of these