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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101.	A contract is made where:
A.	X agrees with Y to discover a treasure by magic.
B.	X bids at a public auction
C.	A sees a sea
D.	A sit in a public Omni bus.
Answer» D. A sit in a public Omni bus.

102.	In case of void agreements, collateral transactions are
A.	Also void
B.	Unenforceable
C.	Not affected
D.	Illegal
Answer» C. Not affected

103.	The delivery of goods by one person to another for some purpose, upon a contract and that they shall, when the purpose is accomplished, be returned or otherwise disposed of by accounting to the directions of the person delivering them, then it is called:
A.	Contingent contract
B.	Bailment
C.	Pledge
D.	Contract of indemnity
Answer» B. Bailment

104.	A, a minor bought 11 expensive coasts from B. he was, at that time, adequately provided with clothes, but B did not know this fact. In such a case
A.	Minor is personally liable to pay for the coast
B.	Minor’s property can be attached for payment
C.	Minor is liable since he has Misled into supply of coats
D.	Minor is not liable at all
Answer» C. Minor is liable since he has Misled into supply of coats

105.	A husband, by a registered agreement promised to pay wife Rs 5,000 p.m. there was no consideration moving from the wife to the husband. This contract is
A.	Void
B.	Illegal
C.	Valid
D.	Unenforceable
Answer» C. Valid

106.	In Indian Contract Act, the term consensus ad idem means
A.	Parties under a mistake
B.	Parties under the free consent
C.	Parties agreeing upon the same thing in same sense
D.	None of these
Answer» C. Parties agreeing upon the same thing in same sense

107.	Sonia contracts with Anshul to buy a necklace, believing it is made of pearls whereas in fact it is made of imitation pearls of no value. Anshul knows that Sonia is mistaken and takes no steps to correct the error. Now Sonia wants to cancel the contract based on fraud. Which of the following statement is correct?
A.	Sonia can cancel the contract alleging fraud
B.	Sonia cannot cancel the contract
C.	Sonia can cancel the contract alleging undue influence
D.	Sonia can claim damages
Answer» D. Sonia can claim damages

108.	Which of the following is false with respect to minor entering a contract?
A.	An agreement with or by a minor is void ab initio
B.	A minor can be a beneficiary of a contract
C.	The guardian of a minor is responsible for his acts
D.	A minor cannot ratify a contract on attaining majority
Answer» C. The guardian of a minor is responsible for his acts

109.	Anuj agrees to pay Rs10,000 to Manoj if a certain ship returns within a year. However, the ship sinks within the year. In this case, the contract becomes:
A.	Valid
B.	Void
C.	Voidable
D.	Illegal
Answer» B. Void

110.	A invites B for coffee in Coffee day Restaurant and B accepts the invitation. On the appointed date, B goes there but A does not come. In this case
A.	B has no remedy against A.
B.	B has to wait for another invitation from A.
C.	B can sue A for not honoring his words.
D.	A has to invite B again, to keep the promise.
Answer» A. B has no remedy against A.

111.	Where a contract has to be inferred from the conduct of parties, it is called
A.	Express contract.
B.	Implied contract.
C.	Tacit contract.
D.	Unlawful contract
Answer» B. Implied contract.

112.	Voidable contract is one
A.	Which is lawful.
B.	Which is invalid.
C.	Which is valid if it is not avoided by the party entitled to do so.
D.	Which is unlawful.
Answer» C. Which is valid if it is not avoided by the party entitled to do so.

113.	Undue influence can be presumed between
A.	Guardian and Ward
B.	Mother and Daughter
C.	Doctor and Patient
D.	All of the above
Answer» D. All of the above

116.	Future goods mean goods to be manufactured or produced or acquired by the seller
A.	In future prescribed time
B.	After making of contract
C.	Before making of contract
D.	None of above
Answer» B. After making of contract

117.	A sold a stolen car to B which was subsequently recovered by the police form B's possession and he (B) was forced to return the same to the true owner. Here, there is breach of implied condition as to
A.	Merchantability
B.	Fitness for buyer's purpose
C.	Title
D.	None of these
Answer» C. Title

114.	Wagering Agreement is a _____________ agreement
A.	Valid
B.	Voidable
C.	Void
D.	Illegal
Answer» C. Void

115.	A minor was facing a criminal prosecution for smuggling drugs. He borrowed Rs. 5000 to hire an advocate to defend him in the court of law. What is the remedy available to the creditor if the minor does not return the money on his own?
A.	The creditor cannot recover the amount from the minor since a contract with a minor is void ab initio
B.	The amount of loan can be recovered from minor’s property since it is a loan for necessaries
C.	The creditor can recover his amount of loan from the minor on his (minor’s) attaining the age of majority
D.	The creditor can recover his amount from the parent or guardian of the minor
Answer» A. The creditor cannot recover the amount from the minor since a contract with a minor is void ab initio

118.	Where the goods are sold by description, there is an implied condition that the goods shall
A.	Be fit for buyer's purpose
B.	Free from any defects
C.	Correspond with the description
D.	Free form any encumbrance
Answer» C. Correspond with the description

119.	As per the doctrine of caveat emptor incorporated in Section 16, there is no implied conditions or warranty in a contract of sale as to the
A.	Merchantability.
B.	Wholesomeness.
C.	Quality or fitness for buyer's purpose.
D.	None of these.
Answer» C. Quality or fitness for buyer's purpose.

120.	Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue for:
A.	Damages for non-delivery
B.	Damages for non-acceptance
C.	Specific performance
D.	Compensation
Answer» A. Damages for non-delivery

121.	The unpaid seller has right of stoppage of goods in transit only where the buyer
A.	Becomes insolvent
B.	Refuses to pay price
C.	Acts fraudulently
D.	All of these
Answer» A. Becomes insolvent

122.	An unpaid seller is having rights against
A.	Goods only
B.	The buyer only
C.	Both goods and buyer
D.	None of the above
Answer» C. Both goods and buyer

123.	Seller has right of resale where
A.	Goods are perishable
B.	Seller has reserved such right.
C.	Seller gives notice
D.	All of these.
Answer» D. All of these.

124.	The voluntary transfer of possession from one person to another is called
A.	Transfer
B.	Change of possession
C.	Delivery
D.	None of above
Answer» C. Delivery

125.	The agent having in customary course of business as such agent authority either to sell goods or to consign goods for the purpose of sale or to buy goods or to raise money on the security of goods is called
A.	Agent
B.	Mercantile agent
C.	Partner
D.	None of above
Answer» B. Mercantile agent

150+ Business Laws Solved MCQs

A contract is made where:

In case of void agreements, collateral transactions are

The delivery of goods by one person to another for some purpose, upon a contract and that they shall, when the purpose is accomplished, be returned or otherwise disposed of by accounting to the directions of the person delivering them, then it is called:

A, a minor bought 11 expensive coasts from B. he was, at that time, adequately provided with clothes, but B did not know this fact. In such a case

A husband, by a registered agreement promised to pay wife Rs 5,000 p.m. there was no consideration moving from the wife to the husband. This contract is

In Indian Contract Act, the term consensus ad idem means

Which of the following is false with respect to minor entering a contract?

Anuj agrees to pay Rs10,000 to Manoj if a certain ship returns within a year. However, the ship sinks within the year. In this case, the contract becomes:

A invites B for coffee in Coffee day Restaurant and B accepts the invitation. On the appointed date, B goes there but A does not come. In this case

Where a contract has to be inferred from the conduct of parties, it is called

Voidable contract is one

Undue influence can be presumed between

Wagering Agreement is a _____________ agreement

A minor was facing a criminal prosecution for smuggling drugs. He borrowed Rs. 5000 to hire an advocate to defend him in the court of law. What is the remedy available to the creditor if the minor does not return the money on his own?

Future goods mean goods to be manufactured or produced or acquired by the seller

A sold a stolen car to B which was subsequently recovered by the police form B's possession and he (B) was forced to return the same to the true owner. Here, there is breach of implied condition as to

Where the goods are sold by description, there is an implied condition that the goods shall

As per the doctrine of caveat emptor incorporated in Section 16, there is no implied conditions or warranty in a contract of sale as to the

Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue for:

The unpaid seller has right of stoppage of goods in transit only where the buyer

An unpaid seller is having rights against

Seller has right of resale where

The voluntary transfer of possession from one person to another is called

The agent having in customary course of business as such agent authority either to sell goods or to consign goods for the purpose of sale or to buy goods or to raise money on the security of goods is called

According section 5(2) subject to provision of any law for the time being in force a contract of sale may be

A stipulation in contract of sale with reference to goods which are the subject there of may be

Where an unpaid seller has made part delivery of the goods he may exercise his Right of _______

Delivery of key of the warehouse by the seller to the buyer will amount to:

The Right of Lien is exercised:

Which company shares can be freely transferable?

Maximum number of members in case of public company is:

The liability of members if company is limited by guarantee.

The liability of members if company is limited by shares

The companies which are formed under special charter granted by the king or queen of England are called

In the MOA there are 7 clauses. We can alter all clauses expect one clause. What is that clause?

Ultra vires means

Alteration of objects clause of MOA of a company requires

AOA is a

Memorandum of association governs the relationship of the company:

The association clause of a public company must be signed by:

Quorum should be present at the

Total managerial remuneration cannot exceed ____% of net profit

When a private company is converted into public company. In which form it should be

The undertaking contained in a promissory note, to pay a certain sum of money is

A bill of exchange contains a/an

Cheque is a

The term 'negotiation' in section 14 of the Negotiable Instruments Act, 1881 refers to

If an instrument may be construed either as a promissory note or bill of exchange, it is

When an endorser willing to transfer to an endorsee only a part of the amount of the instrument, then it is which type of endorsement?

126.	According section 5(2) subject to provision of any law for the time being in force a contract of sale may be
A.	Made in writing
B.	By words of mouth
C.	Partly in writing or partly in words of mouth
D.	All above ways
Answer» A. Made in writing

127.	A stipulation in contract of sale with reference to goods which are the subject there of may be
A.	A condition
B.	A warranty
C.	Both (a) and (b)
D.	None of above
Answer» C. Both (a) and (b)

128.	Where an unpaid seller has made part delivery of the goods he may exercise his Right of _______
A.	Return of remaining goods
B.	Lien on the remaining goods
C.	Sale to any other person
D.	None of above
Answer» B. Lien on the remaining goods

129.	Delivery of key of the warehouse by the seller to the buyer will amount to:
A.	Symbolic Delivery
B.	Actual Delivery
C.	Constructive Delivery
D.	No delivery
Answer» A. Symbolic Delivery

130.	The Right of Lien is exercised:
A.	To retain the possession of goods
B.	To regain the possession of goods
C.	To resell the goods
D.	To transfer the goods
Answer» A. To retain the possession of goods

131.	Which company shares can be freely transferable?
A.	Private company
B.	Public company
C.	Both a & b
D.	None of the above
Answer» B. Public company

132.	Maximum number of members in case of public company is:
A.	50
B.	100
C.	Unlimited
D.	200
Answer» C. Unlimited

133.	The liability of members if company is limited by guarantee.
A.	Unpaid value of shares
B.	Guarantee amount
C.	Unlimited liability
D.	None of the above
Answer» B. Guarantee amount

134.	The liability of members if company is limited by shares
A.	Unpaid value of shares
B.	Guarantee amount
C.	Unlimited liability
D.	None of the above
Answer» A. Unpaid value of shares

135.	The companies which are formed under special charter granted by the king or queen of England are called
A.	Statutory companies
B.	Registered companies
C.	Chartered companies
D.	None of these
Answer» C. Chartered companies