PART I

Question 1: A employs B to beat C and agrees to indemnify him against all consequences of
the act. Be thereupon beats C, and to pay damages to C for so doing.

A. A is liable to indemnify B for those charges.

B. A is partially liable to indemnify B for those charges.

C. A is not liable to indemnify B for those charges.

D. None of these

Ans. C

Question 2: In which of the cases, did the court held that the indemnify becomes liable to
pay as soon as the damage becomes absolute and deferred from the English rule “You must
be damnified before you can claim to be indemnified”.

A. Gajanan Moreshwar Parelkar v. Moreshwar Madan Mantri

B. Secy. Of State for India in Council v. Bank of India

C. Pepin v. Chunder Seekur Mukherjee

D. New India Insurance Co. v. State Trading Corp. of India

Ans. A

Question 3: Which Section of the Indian Contract Act, defines Contract of Guarantee?

A. Section 124

B. Section 126

C. Section 142

D. Section 128

Ans. B
Question 4: Which is an example of Contract of Indemnity?

A. Void Agreement

B. Quasi Contract

C. Contingent Contract

D. Wagering Agreement

Ans. C

Question 5: Choose the correct option with respect to Right of Subrogation?

A. The surety will step into the shoes of the creditor.

B. He is entitled to the benefit of every security which the creditor has

C. The surety can claim indemnity from the Principal debtor.

D. All of the above

Ans. D

Question 6: What is defined as the goods which are lent free to bailee for his use?

A. Commodation

B. Gratuitous Bailment

C. Non-Gratuitous Bailment

D. Deposition

Ans. B

Question 7: What do you mean by lien?

A. A Charge

B. A particular status

C. A guarantee

D. A legal claim to hold property as security.

Ans. D
Question 8: Who is a sub- agent?

A. Who works under the main agent?

B. Who carries out the order and direction of a person under whom he works directly?

C. Who works on behalf of the main agent?

D. Employed by and acting under the control of the original agent in the business of agency.

Ans. D

Question 9: Which of the following leads to the termination of an agency?

A. By the principal revoking under the authority.

B. By the agent renouncing the business of agency

C. By either the Principal or agent dying or becoming of unsound mind.

D. All of the above

Ans. D

Question 10: What is defined as the money consideration for a sale of good?

A. Price

B. Value

C. Purchase Money

D. None of the above.

Ans. A

Question 11: The Sale of Goods Act, 1930 deals with which of the following options?

A. Movable property only

B. Immovable Property only.

C. Both (A) and(B)

D. None of the above

Ans. A
Question 12: Which of the following courts has its jurisdiction for trying an offence punishable

under Section 138 of the Negotiable Instrument Act, 1881?

A. Judicial Magistrate Second Class

B. Chief Judicial Magistrate

C. Judicial Magistrate First Class

D. None of the above

Ans. C

Question 13: What is the nature of the offence u/s 138 of the Negotiable Instrument Act, 1881?

A. Bailable and cognizable

B. Cognizable and Non- Bailable

C. Non- Cognizable and Non- Bailable

D. Non- Cognizable and bailable.

Ans. D

Question 14: A guarantees to B, the extent of Rs. 80,000, that C shall pay all the bills that B shall

drawn upon him. B draws upon C; C accepts the bill. A gives the notice of revocation. C

dishonors the bill at maturity. Which of the following option is correct?

A. A is liable upon his guarantee

B. A is partly liable upon his guarantee

C. A is not liable because of the revocation.

D. None of the above.

Ans. A

Question 15: Under what circumstances can the agent be disentitled to relief under S. 226 of the

Indian Contract Act, 1872?

A. If the injury is on the ground of common employment.

B. If the injury was done due to contributory negligence

C. None of the above

D. Either (A) or (B)

Ans. D

Question 16: A and D go into a shop. A says to the shopkeeper “let him have the goods, I will

see you paid”. Which kind of contract is this?

A. Bailment

B. Guarantee

C. Pledge

D. Indemnity

Ans. D

Question 17: Which of the indemnity is covered under Indian Contract, Act, 1872?

A. Liability incurred by something done by the indemnifies at the request of the indemnifier.

B. Life Insurance

C. Indemnity for loss caused by human agency

D. None of the above.

Question 18: What kind of liability arises in a contract of guarantee?

A. Primary

B. Partial liability

C. Collateral and Secondary

D. All of the above

Question 19: Which of the following is an example of the bailment without a contract?

A. Giving something in Courier

B. Finder of the lost goods.

C. Giving it to third party for security.

D. None of the above

Question 20: Which of the options are correct with respect to finder of goods?

A. Entitled to retain goods.

B. Not entitled to compensation

C. Entitled to compensation when specific reward is offered.

D. Both (A) and (C)

Question 21: Which of the following are the rights of the surety against the Co-sureties?

A. Right to contribution

B. Effect of releasing a party

C. Both (A) and (B)

D. None of the above.

Question 22: What is the concept which means “Let the buyer beware”?

A. Caveat emptor

B. Unfair trade practices

C. Caveat emptor

D. None of the above.

Question 22: Which of the following is not the right of an unpaid seller under Sale of Goods Act,

1930?

A. Right of lien on goods for the price while the goods are in possession of seller.
B. Right of resale as limited by the Act.

C. Right of withholding delivery where the property in the goods has passed by the buyer.

D. Right of stopping the goods in transit, in case if insolvency of buyer.

Question 23: Which of the following is not Negotiable Instrument?

A. Bill of exchange

B. Promissory note

C. Cheque

D. Postal Order

Question 24: When an endorser willing to transfer to an endorsee only a part of the amount of the

instrument, then it is defined as which type of endorsement?

A. Restrictive endorsement

B. Special endorsement

C. Conditional endorsement

D. Partial endorsement

Question 25: State which of the following is true?

A. Partner is an agent of the firm

B. Partner is owner of the firm

C. Partner is the director of the firm

D. None of the above

Question 26: “Quit facitperalium, facitper se” what does this maxim means?

A. Delegatee cannot delegate further

B. Something in return

C. He who acts through an agent is acting himself

D. For an act of agent, principal is liable

Question 27: Which Section says that no consideration is necessary to create agency?

A. Section 185

B. Section 187

C. Section 186

D. Section 189

Question 28: What is the kind of guarantee which extends to a series of transaction?

A. Specific guarantee

B. Continuing guarantee

C. General Guarantee

D. None of the above.

Question 29: To whom will be the notice of a continuing guarantee be given to revoke by the

surety`s liability as to future transactions?

A. The creditor

B. The principal debtor

C. Without giving any notice to either party

D. None of the above

Question 30. What does Lien mean?

A. Right to purchase goods

B. To retain goods in his possession

C. Right to sell the goods

D. Right to destroy the goods