Solved MCQs Questions and Answers: Business Law and Corporate Governance

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AIMA Assignment Business Law GM06

AIMA Fourth Semster Assignments

Business Law & Corporate Governance (GM06)

NOTE: The answers are boldly marked.

Question 1:- A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property:

a) for a price

b) in goods

c) in goods to the buyer for a price

d) none of the options provided

Question 2:- According to Section 2(7) of Sale of Goods, ‘goods’ means:

a) every kind of movable property,

b) property other than actionable claims and money

c) every kind of property

d) every kind of movable property, other than actionable claims and money

Question 3:- The goods which form the subject of a contract of sale:

a) may be either existing goods, owned or possessed by the seller, or future goods.

b) are goods which are owned or possessed by the seller

c) are existing goods only

d) none of the options provided

Question 4:- where trees are sold to be cut and then taken away by the buyer;

a) that will be a contract for sale of immovable property.

b) that will be a contract for sale of movable property.

c) that will be a contract of existing goods

d) that will be a contract of future goods

Question 5:- A contract of sale may be made:

a) in writing

b) by word of mouth,

c) may be implied from the conduct of the parties.

d) all options are correct

Question 6:- where the transfer of the property in the goods is to take place at a future time, the contract is called:

a) sale

b) an agreement to sell.

c) provisional sale

d) conditional sale

Question 7:- A stipulation collateral to the main purpose of the contract of sale of goods, is called:

a) a condition

b) warranty

c) guarantee

d) stipulation

Question 8:- In a contract of sale of goods, Breach of a condition gives the aggrieved party right to:

a) repudiate the contract

b) claim damages

c) repudiate the contract and also claim damages

d) none of the options provided

Question 9:- The implied conditions, in a sale by sample include:

a) The bulk shall correspond with the sample in quality

b) The buyer shall have a reasonable opportunity of comparing the bulk with the sample

c) The goods shall be free from any defects rendering them un-merchantable, which would not be apparent on reasonable examination of the sample.

d) all points given as option A, B and C

Question 10:- In a contract for sale of goods, Buyer may have an action, in respect of physical injuries caused by defect in the goods;

a) against the manufacturer

b) against the dealer

c) aginast the dealer as also the manufacturer

d) none of the options is correct

Question 11:- In a contract for sale of goods, When the seller is bound to weigh, measure, test or do some other act for ascertaining the price, the property in the goods:

a) passes at the time of agreement

b) passes at the time of payment

c) does not pass until such act is done and the buyer has a notice of it.

d) does not pass until a fresh agreement is made

Question 12:- The maxim is “nemo det quod non habet” which means that:

a) no one can be the owner unless he makes payment

b) no one can give what he has not got.

c) no one can get title of goods unless given in writing

d) giving is better than taking

Question 13:- The fundamental principle of the law on sale of goods is, that:

a) the seller is bound to point out defects of his goods

b) The seller is not bound to point out defects of his own goods.

c) the buyer must inspect the goods to find out if they will suit his purpose.

d) both options at B and C are correct

Question 14:- ‘Negotiable’ means transferable. In the case of a negotiable instrument Negotiation can take place from one person to another:

a) by mere delivery or by endorsement and delivery.

b) only by endorsement and delivery.

c) all negotiable instruments cannot be negotiated

d) negotiation of a negotiable instrument cannot take place by mere delivery

Question 15:- A promissory note, bill of exchange or cheque is payable to bearer which is:

a) expressed to be so payable

b) on which the only endorsement is an endorsement in blank.

c) on which the last endorsement is an endorsement in blank.

d) expressed to be so payable or on which the only or last endorsement is an endorsement in blank.

Question 16:- Money orders; Postal orders; Fixed Deposit receipts; share certificates; Letters of Credit are examples of:

a) Negotiable Instruments

b) Non-negotiable instruments

c) some of these are negotiable instruments while others are not

d) none of given options is correct

Question 17:- bills of lading; dock warrants; railway receipts and wharfinger certificates are examples of:

a) negotiable Instruments

b) non-negotiable instruments

c) quasi- negotiable instruments

d) none of the options

Question 18:- A Bill of Exchange, not payable on demand, is entitled to get:

a) 3 days grace period.

b) 7 days of grace period

c) grace period only if the maturity fals due on a bank holiday

d) none of the options

Question 19:- An accommodation bill is not supported by consideration or a trading transaction. It is drawn with the object of providing financial help either to drawer or to both drawer and the drawee. Which of the options is true in case of an accommodation bill?

a) An accommodation bill creates no obligation of payment between the parties to the transaction.

b) The accommodation party is liable on the bill to any subsequent ‘holder for value’.

c) both option A and B are correct

d) none of the given options is correct

Question 20:- Section 31 of Reserve Bank of India, Act overrides the Negotiable Instruments Act. which of the options mentions the provisions of the Section 31 0f RBI Act?

a) No person in India, other than RBI or the Central Government can make or issue a promissory note “payable to bearer”. No person in India other than RBI or the Central Government can draw or accept a bill of exchange ‘payable to bearer on demand’.

b) A cheque ‘payable to bearer on demand’ can be drawn on a person’s account with the banker.

c) both the options A and B are correct

d) none of the given options is correct

Question 21:- which of the options is correct in respect of a negotiable instrument bearing "NOT NEGOTIABLE" crossing?

a) mean that the cheque is not transferable

b) It is still transferable, but the transferee cannot get title better than what transferor had.

c) cheque will be credited only after verification from the drawer

d) banker is required to keep a separate record of such instruments

Question 22:- In case of dishonor of a negotiable instrument, notice is required to be given to:

a) drawer only

b) all earlier endorsees.

c) drawer and all earlier endorsees.

d) all options are correct

Question 23:- Where a person receives a negotiable instrument without consideration, he may be:

a) called ‘holder in due course’.

b) a holder

c) beneficiary

d) assignee

Question 24:- If a cheque is dishonored for insufficiency of funds, the penalty can be up to:

a) two years imprisonment or fine up to twice the amount of cheque or both.

b) no imprisonment but fine up to twice the amount of cheque

c) three years imprisonment or fine up to twice the amount of cheque or both.

d) two years imprisonment or fine up to five times the amount of cheque or both.

Question 25:- Company is called a legal person or and artificial person, it implies that:

a) is not a human being.

b) It is created with the sanction of law, and is clothed with certain rights and obligations

c) company cannot file a suit in a court of law

d) Only options A and B are correct

Question 26:- In case of a dishonest and fraudulent use of the facility of incorporation, the law lifts the corporate veil. What does this phrase mean?

a) company is not a legal person

b) company will be managed by Board of Directors appointed by the Government

c) The law will identify the persons who are behind the scene for perpetration of fraud.

d) none of the options is correct

Question 27:- under the Companies Act 1956, contracts entered into by public company after obtaining the certificate of incorporation, but before getting the certificate to commence business are termed as:

a) pre-incorporation contracts

b) Provisional contracts

c) preliminary agreements

d) contracts at arm's length

Question 28:- The articles of a company contain:

a) the regulations for management of the company

b) the objects for which the company is proposed to be incorporated

c) the State in which the registered office of the company is to be situated;

d) all options are correct

Question 29:- Any transaction which is outside the scope of the powers specified in the objects clause of the Memorandum:

a) requires prior sanction of the central government

b) must be informed to the members in the annual report

c) is ultra-vires the company and therefore void

d) requires unanimous consent of the Board of Directors

Question 30:- Every person dealing with the company is presumed to have read The Memorandum and Articles and understood them in their true perspective. This is known as Doctrine of:

a) indoor management

b) Constructive Notice

c) Ultra vires

d) Caveat Emptor

AIMA Online Assignment Business Law GM06

AIMA Online Assignments

Business Law & Corporate Governance (GM06)

NOTE: The answers are boldly marked.

Question 1:- The legal term for tangible property is:

a) trust

b) chattel

c) mortgage

d) private property

Question 2:- Law is enforced by

a) Parliament

b) Legislature

c) Executive

d) Society

Question 3:- Ignorance of Law is:

a) a good excuse

b) cannot be excused

c) no excuse

d) always an excuse

Question 4:- Substantive Law defines:

a) methods by which law is made

b) the legal rights/ obligations

c) principle underlying a decision

d) decision of the judge

Question 5:- An artificial person is also called:

a) Corporation

b) Company

c) Office

d) legal entity

Question 6:- An offer made to a specific person is called:

a) express offer

b) implied offer

c) specific offer

d) general offer

Question 7:- An agreement of a purely social nature is:

a) a valid contract

b) a void contract

c) a voidable contract

d) not a contract

Question 8:- The parties to a contract must be competent to contract. The flaw in capacity to contract may be due to-

a) minority

b) lunacy

c) idiocy

d) any of the three mentioned as options A,B,C

Question 9:- At the time of entering into a contract, parties must be thinking of the same thing in the same sense. This is also known as:

a) intention to create a legal relationship

b) lawful consideration

c) consensus-ad-idem

d) free and genuine consent

Question 10:- Which option is a true statement?

a) All contracts must be reduced to writing

b) No contract need to be in writing

c) If a particular type of contract is required by law to be in writing it must comply with the necessry formalities

d) None of the given Options is correct

Question 11:- In the context of consideration for a contract, the Rule is that:

a) Consideration need not be adequate

b) Consideration must be real and competent

c) both the options i.e. A and B are correct

d) none of the options is correct

Question 12:- A saves B's life. B promises to pay A Rs. One lac out of gratitude.

a) There is no consideration, hence the contract is void

b) It is a void contract as Rs. One lac is too little for saving life.

c) it is a valid contract because the consideration for B's promise is present consideration

d) it is a valid contract because the consideration for B's promise is past consideration

Question 13:- A dealer enters into an agreement to sell a smuggled item to X. import of such type of goods is illegal. A refuses to deliver the item as promised. What are the rights of X?

a) sue the dealer for breach of a contract.

b) wait till such imports become legal and then sue the dealer.

c) it is a voidable contract.

d) it is a void contract

Question 14:- A' signed a promissory note which he was told was a letter of guarantee. Will he be bound to honor the Promissory Note?

a) Yes, he affixed his signatures on the promissory note

b) No, he did not know how to sign properly.

c) He is not bound as there was no consent to the agreement entered into by him

d) He could have made a verbal agreement

Question 15:- With respect to causing any person to enter into an agreement, "Coercion" is-

a) the committing any act forbidden by Indian Penal Code

b) threatening to commit any act forbidden by Indain Penal Code

c) unlawful detaining any property to the prejudice of any person

d) all the three options under A, B, and C

Question 16:- The party to contract aggrieved or wronged by 'misrepresentation' can:

a) avoid the performance of the contract

b) avoid the contract and sue for damages

c) neither avoid the contract, nor can he sue for damages

d) none of the given option is correct

Question 17:- A clause in agreement provides that no action should be brought after two years. The Limitation Act, 1963, however an action for breach of contract may be brought within three years from the date of breach. In view of given facts, the correct position is:

a) parties are free to agree upon any terms they like, the clause in the Agreement is operative.

b) the clause in the Agreement is valid, as there is no ambiguity in the language, and both the parties have agreed upon it

c) the clause in the Agreement is void, as it is opposed to the provisions of the Limitation Act

d) none of the given option is correct

Question 18:- A agrees to sell to B 100 tons of oil.

a) the agreement is void for uncertainty, as it does not show what kind of oil was intended

b) this agreement is valid

c) this agreement s voidable at the option of A

d) this agreement is voidable at the option of B

Question 19:- A agrees to pay B Rs. Ten lacs if B's house is burnt.

a) It is not a valid agreement

b) it is a void agreement being 'uncertain'

c) it is a void agreement being 'contingent 'upon happening or non-happening of the event

d) it is a valid 'contingent' contract

Question 20:- Quasi contract' is a situation in which law imposes upon one person an obligation similar to that which arises from a true contract. It is based on natural justice. In view of these provisions which of the option is a quasi-contract?

a) A supplies B, a lunatic, with necessaries suitable to his condition in life

b) A tradesman leaves goods at B's house by mistake

c) a party pays to another money by mistake, which is not due to him

d) all the three cases mentioned under varios options ar quasi contracts

Question 21:- the phrase “quantum meruit” means:

a) as much as earned

b) to each according to his need

c) to each according to his condition

d) none of the options is correct

Question 22:- Section 10 of the Contract Act enumerates some essentials of a valid contract. Which if the options is thus enumerated in Section 10?

a) agreements made by free consent of parties, competent to contract

b) agreements made for a lawful consideration and with lawful object

c) agreements not expressed declared by law to be void

d) All given the options are enumerated in Section 10

Question 23:- A promisor offers performance of his obligation under the contract, at the proper time and place, but the promisee refuses to accept the performance. This is called:

a) Tender

b) Attempted performance

c) both A, and B options are correct

d) none of the options is correct

Question 24:- A contract is deemed to have become impossible of performance under the circumstances that the subject matter of a contract is destroyed for no fault of the promisor. Such circumstances are called:

a) inherent impossibility

b) supervening impossibility

c) Expected impossibility

d) all given options are correct

Question 25:- A contract is discharged by death of the promisor, by insolvency of the promisor, by entering into a new contract where inferior rights under the previous agreement are merged in the new one; such discharge of a contract is called: discharge by

a) Operation of law

b) by breach

c) supervening impossibility

d) all given options are correct

Question 26:- A contract to perform the promise or discharge the liability of a third person in case of his default is called:

a) a contract of insurance

b) a contract of guarantee

c) a contact of bailment

d) none of the given options is correct

Question 27:- In a contract of guarantee the person for whom the guarantee is given is called:

a) surety

b) principal debtor

c) creditor

d) none of the options is correct

Question 28:- Which of the options is correct, about a contract of guarantee?

a) a contract of guarantee is not a cotract 'uberrimae fidei'

b) the creditor must inform the surety about all his previous dealings with the debtor

c) both options A and B are correct

d) none of the options is correct

Question 29:- Which of the options is correct, about a contract of guarantee?

a) a contract of guarantee may either be oral or in writing

b) a contract of guarantee must be in writing

c) both options A and B are correct

d) none of the options is correct

Question 30:- which of the options is correct with regard to rights of a creditor ina contract of guarantee?

a) all remedies against the principal debtor should be exhausted by the creditor before proceeding against the surety

b) the creditor is entitled to demand payment from the surety as soon as the principal debtor refuses to pay or makes a default in payment

c) both options A and B are correct

d) none of the options is correct