1.

A person cannot be a Director at the same time in more than _________companies – 15

2. A contract in which the terms are started in word (written or spoken) by the parties is known
as ____________________contract. – Express
3. A's nephew was missing. A sent his munim B in search of the missing boy. In the meanwhile
A issued hand bills offering Rs.5,000/- to any person who would find out the missing boy. B
could trace the boy and brought him home. Later on, he came to know about the reward
and sued A for the reward. Will he succeed? – No
4. A sent a telegram to B, "Will you sell your car? Quote lowest price". B sent a reply "Lowest
price Rs.25,000/-". A sent a second telegram to B, "I agree to buy your car for Rs.25,000/-". B
thereafter refuses to sell. (a) Can A compel B to do so? (b) Is there a contract between A and
B? – No
5. X at Delhi on 1st August, 1974 sends a letter to Y in Mumbai offering to sell his car for
Rs.16,000/-. Y on 2nd August, 1974 sends a letter to X accepting the offer. This acceptance
letter reaches X on 4th August, 1974. But on 3rd August X has sold the car to Z and wired Y
revoking the offer. This wire reaches on 3rd August, 1974 itself. Is there a breach of contract
committed by X? – Yes
6. X lent to Y three sums of Rs.100/-, Rs.200/- and Rs.500/-. Y sent a sum of Rs.100/- asking X to
appropriate this money towards the third debt of Rs.500/-. X wants to appropriate this
money to the first loan. Can he do so? – No
7. X agreed to supply certain goods to Y. The goods were to be procured from Algeria. Due to
riots and civil disturbances in that country, goods could not be procured. Can X be
discharged on the ground of riots, etc.? – No
8. A, a tradesman, sends some goods ordered by B. A's servant delivers the goods by mistake at
C's house. C uses the goods. Can A recover the price of the goods from C? – Yes
9. A minor fraudulently represented to a moneylender that he was of full age and executed a
mortgage deed for Rs.10,000/-. Has the moneylender any right of action against the minor
for the money lent or for damages for fraudulent misrepresentation? – No
10. A executed a pronote in favour of B while he was a minor. The pronote was renewed by A in
favour of B when he attained the age of majority. B brings a suit against A on the basis of the
second pronote. Will he succeed? – No
11. A tells his wife that he would commit suicide, if she did not transfer her personal assets to
him. She does so under this threat. Can the wife avoid the contract? – Yes
12. A pays some money to B by mistake. It is really due to C. Can C recover the amount from B?
– No
13. 5 persons are the only members of a private company. All of them go in a boat on a pleasure
trip into the open sea. The boat capsizes and all the 5 die being drowned. Does the private
company cease to exist? – No
14. During the war, all the members of a private company, while in general meeting, were killed
by a bomb. Does the company cease to exist because all the members died? – No
15. The promoters of a company, before its incorporation, enter into an agreement with P to
buy a plot of land on behalf of the company. After incorporation, the company refuses to
buy the said plot of land. Has P any remedy either against the promoters or against the
company? – No
16. The secretary of a company issued in favour of R a certificate which apparently complied
with the company's articles as it purported to be signed by 2 Directors and the secretary and
it had the company's seal affixed to it. In fact the secretary had forged the signatures of the
Director's and affixed the seal without authority. Is the certificate binding on the company?
– No
17. To foster better industrial relations, Directors of A.B. Ltd agree with its trade union to offer
1,000 shares of Rs.100/- each, fully paid upto its employees and to receive amount thereon
in 10 equal installments of Rs.10/- per share. Can the company make such an issue? – Yes
18. The secretary of a company purchased some stationery for the company but he took it home
and put it to his private use. The company refused to pay to the supplier of the stationery on
the plea that it never received the stationery. Is the company liable? – Yes
19. Anil aged 17 years, borrowed money from a moneylender by representing himself to be of
21 years. - Anil cannot be sued for fraud
20. An agreement made under coercion, renders the contract:- Voidable
21. The contract entered with a lunatic during the times of his sound mind is:- Valid
22. 'A' accepts 'B's invitation to dinner by phone. This is not a contract as:- There is no intention
to create a legal relationship
23. 'A' agreed to sell his car to 'B'. His consent was given at gun point. This contract is voidable
as it involves:- Coercion
24. A contract where consent is obtained by coercion is:- Voidable at the option of the party
whose consent was obtained by coercion
25. A contract which is wholly performed by both the parties is called:- Executed contract
26. The right of lien exercised by an unpaid seller is to: - Retain possession
27. A private company must have atleast:- Two Directors
28. A person dealing with a company having satisfied himself that the proposed transaction is
not in its nature inconsistent with the Memorandum and Articles, is not bound to enquire
into the regularly of the internal proceedings. This is known as:- Doctrine of Indoor
Management
29. Every person dealing with a company is presumed to have read the Memorandum and
Articles and understood them in their true perspective. This is known as:- Doctrine of
Constructive Notice
30. A public company:- ) Is required to file a prospectus and declaration of statutory
compliance under Section 149 with the registrar and Can commence business after
receiving the Certificate of Commencement of Business
31. The transferee becomes a member of the company when:- The transfer is registered by the
company
32. Transmission of shares:- Requires an application to be made by the person to whom shares
are transmitted
33. Total managerial remuneration payable by a public company to its Directors:- Cannot
exceed 11% of net profits for the financial year
34. The maximum number of Directors in the Board of a public limited company can be:- 12 but
excluding nominee and 12 without the approval of the Central Government
35. Portion of uncalled capital, to be called in the event of winding-up is called:- Reserve Capital
36. Inserting a coin in the slot of a weighing machine installed at the railway station is an
example of:- Implied acceptance
37. Mr.A accepts Mr.B's telephonic invitation for dinner. This is:- Not a contract
38. Who can be a beneficiary to a contract? A minor
39. The liability of members in a company limited by shares:- Is nil, if the shares are fully paid-
up
40. A public company:- Must have atleast 3 Directors
41. Vidyun purchased an used computer from Prajwal thinking it is a computer imported from
USA, Prajwal failed to disclose the fact to Vidyun on knowing the fact that Viyun wants to
repudiate the contract. C – Vidyun cannot repudiate the contract
42. Determine the status of Lakshmi Housing Co-operative society – D – Association of persons
43. A, a singer enters into a contract with B, the manager of a theatre, to sing in his theatre two
nights each week during the next two months and B agrees to pay her at the rate fo Rs, 100
each night. On the sixth night A willfully absents himself with the absent of B, A sings on the
seventh night but on the following day B puts an end to the contract. Can A claim damages
for the breach of contract, Advice A – No
44. An agreement, the meaning of which is not certain or capable of being made certain, is
valid? – False
45. The plaintiff hired a godown from the defendant for a period of 12 months and paid the
whole rent to him in advance. After six months, the godown was destroyed by fire and the
plaintiff claimed a refund of proportionate amount of the rent, is the claim valid? No
46. Which of the following is an exception to the rule that “an agreement of restraint in trade is
voide”? Agreement of restraint of carrying of trade after sale of goodwill
47. Chandu orally offered to pay Ashok, an auto mechanic Rs. 100 for testing a used car which
Chandu was about to purchase from Dharam. Ashok agreed and tested the Car, chandu paid
Ashok rs 100 in cash. Agreement between Chandu and Ashok is? – Express, executed and
Valid
48. A foreign company is one which is incorporated? - incorporated outside India, but has a
place of business in India or conducts any business
49. The quorum for a valid meeting in case of a public limited company is – 5 members
50. M asked for a bottle of stone’s Ginger wine at F’s shop which was licensed for the sale
of wines. While M was drawing the cork, the bottle broke because of defect in the
glass and M was injured can M claim damages for the injury? Yes
51. X agreed to give his house to a school for the library on the condition that the library would
be named after him. The management of the school accepted his condition. Later on X
changed his mind. Could the management enforce the contract? – Yes
52. A sold a new singer car to B. on delivery, B found that it was not a new car. What is the
remedy for B? Can B repudiate the contract? – Yes
53. The first directors of a company is appointed as its statutory meeting – False
54. A borrows Rs.500/- from B to purchase certain smuggled goods from C. Can B recover the
amount from A if he? a) knows of A’s purpose for which he borrows money b) does not
know of A’s purpose? – Yes
55. the right of lien exercised by an unpaid seller is to: retain possession
56. A contract which is wholly performed by both the parties is called:- Executed contract
57. The memorandum of association should contain the following fundamental clauses – Name,
registered office, objects, liability and subscription clause
58. Payments made by a debtor are always appropriated in chronological order – False
59. A person who is usually of unsound mind cannot enter into a contract even when he is of
sound mind – False
60. A, by advertisement in newspaper, offers a reward of rs 10000 to anyone who contracts
influenza after taking his medicine for the disease. B used it and contracted influenza, Can B
recover the reward? – Yes
61. Risk follows ownership – True
62. A firm is liable for the wrongful acts of a partner – Yes
63. Social agreements are enforceable in Courts – false
64. In which of the following relationships, there is no presumption of undue influence? –
creditor and debtor
65. Commercial impossibility does not make the contract void. – True
66. Every person dealing with a company is presumed to have read the memorandum and
articles and understood them in their true perspective. This is known as:- doctrine of
constructive notice
67. A company is government company, if? - company in which not less than fifty-one
per cent of the paid-up share capital is held by the Central Government
68. A sells B a certain quantity of rice. It is agreed three months credit shall be given. B allows
the rice to remain in A’s warehouse till the expiry of the three months and then does not pay
for them. Can A retain the goods for price? – Yes
69. A person dealing with a company having satisfied himself that the proposed transaction is
not in its nature inconsistent with the Memorandum and Articles, is not bound to enquire
into the regularly of the internal proceedings. This is known as - doctrine of indoor
management
70. M mows L’s lawn without being asked by L to do so L watches M do the work but does not
attempt to stop him. Is L bound to pay any charges to M? – Yes
71. Contracts purported to be made on behalf of a company before its incorporation will - Bind
the company only after it obtains the Certificate of Commencement of Business
72. which of the following relationship do not raise the presumption of undue influence? –

a) doctor and patient b) debtor and creditor c) trustee and beneficiary d) landlord and
tenant e) both (b) and (d)

b) Which of the following is a

quasi contract? – A
consumed the goods
delivered to him by mistake
c) by
d) Which of the following is a
quasi contract? – A
consumed the goods
delivered to him by mistake
e) by
f) Which of the following is a
quasi contract? – A
consumed the goods
delivered to him by mistake
g) by
h) Which of the following is a
quasi contract? – A
consumed the goods
delivered to him by mistake
i) by
j) Which of the following is a
quasi contract? – A
consumed the goods
delivered to him by mistake
k) by
l) Which of the following is a
quasi contract? – A
 consumed the goods
delivered to him by mistake
m) by
73. Which of the following is a quasi contract? A consumed the goods delivered to him by
mistake by B
74. X agreed to supply certain goods to Y. The goods were to be procured from Algeria. Due to
riots and civil disturbances in that country, goods could not be procured. Can X be
discharged on the ground of riots, etc.? – No
75. which of the following contracts is not void? - contract with a minor
76. A and B, two Indians were returning to India from London by a ship. A will throw him into
the canal until B agrees to sell his scooter parked at Bombay for Rs. 1,000/- only. B agreed to
sell the scooter. After reaching Bombay, B refuses to sell the scooter. Advice A. Is the
contract valid? – No
77. Srinivas offered to sell his house to Aravind for Rs. 5,00,000/-. Aravind accepted the offer by
post. On the next day, Aravind sent a telegram withdrawing the acceptance which reached
Srinivas before the letter of acceptance sent by Aravind reaches Srinivas. Which of the
following statement(s) is/are correct? There is no valid contract between Srinivas and
Aravind withdrawal reached before the letter of acceptance
78. A company cannot be sued on a pre-incorporation contract because - Before incorporation
a company is not liable for void contracts
79. Goods displayed by a shopkeeper in a showcase this is an example of - An invitation
to offer
80. Display of goods by a shopkeeper with prices marked on them is: implied offer
81. An auctioneer advertised in a newspaper that a sale of office furniture would be held at
Delhi. B, a broker of Bombay, reached Delhi on the appointed date and time. But the
auctioneer withdrew all the furniture from the auction sale. The broker sues him for his loss
of time and expenses. Will he succeed? – No
82. B selects certain furniture in a shop. The price is settled. He arranges to take delivery of
furniture the next day through his servant and agrees to pay for the furniture on the first of
next month. The furniture was destroyed by fire the same evening. Is B liable to pay the
price? – Yes
83. A delivered his horse to B on trail for a week a condition that if found suitable he will buy the
horse for Rs. 1,000/-. The horse died on the third day. Is B liable to pay the price? No
84. A offers to sell some goods to B thinking him to be X. B accepted the offer. Later on when A
discovered that the acceptor is B and not X, he declines to sell the goods. Can he do so? –
Yes
85. A company which controls the composition of the board of directors of another company is:
A subsidiary company
86. Which of the following is not an exception to the Doctrine of Indoor Management? - No
knowledge of irregularity
87. A, B and C, jointly borrow from D rs. 3000, D proceeds to recover his entire amount from C,
will he succeed? – No (Plz crosscheck)
88. A and B jointly owe rupees 100 to C. A repays the entire loan to C, B not knowing the fact
pays over again rupees 100 to C. Can B recover the amount from C? – YES
89. Prabhas hired the house of Sanjay to run a gambling house at a monthly rent of Rs. 5,000/-,
on his failure to pay the rent Sanjay wants to sue Prabhas for recovery of rent. Which of the
following statement(s) is/are correct?
a) Sanjay can recover the rent amount from Prabhas
b) Sanjay cannot recover the rent amount from Prabhas
c) The contract between the Prabhas and Sanjay is void as the of the contract is
unlawful
d) Sanjay can recover the rent amount from Prabhas only if he now knows the
object of the contract
e) both (c) and (d)