Karachi Institute of Economics and Technology - City Campus

Course: Corporate & Business Law

Faculty: Humayun Fareed Uddin Max Duration 2 Hours

Class ID:109775 & 109533 Total 30

Marks:

Examination: Mid Term (Spring - 2022) Date: 4th April 2022

Student Name: Student ID:

PART A MCQ’S (14 Marks)

1. An offer may lapse by

A. Revocation
B. Counter Offer
C. Rejection of offer by offeree
D. All of these

2. Which of the following statement is true?

A. There can be a stranger to a contract

B. There can be a stranger to a consideration
C. There can be a stranger to a contract & consideration
D. None of the above

3. Ordinarily, a minor's agreement is

A. Void ab initio
B. Voidable
C. Valid
D. Unlawful

4. The threat to commit suicide amounts to

 A. Coercion
B. Undue influence
C. Misrepresentation
D. Fraud

5. On the valid performance of the contractual obligations by the parties, the contract;

A. Is discharged
B. Becomes enforceable
C. Becomes void
D. None of these

6. In case of anticipatory breach, the aggrieved party may treat the contract;

A. As discharged and bring an immediate action for damages

B. As operative and wait till the time for performance arrives
C. Exercise option either (a) or (b)
D. None of these

7. A contingent contract depend on the happening of the future uncertain event can be
enforced when the event;

A. Happens
B. Becomes impossible
C. Doesn't happen
D. Either of these

8. On the acceptance of an offer by an offeree

A. Only the acceptor becomes bound by accepting the offer

B. Only the offereor becomes bound as his terms are accepted
C. Both the acceptor and offeree becomes bound by the contract
D. None of these

9. 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
10. 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

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

A. Valid
B. Void
C. Voidable
D. Illegal

12. 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

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

A. Valid
B. Void
C. Voidable
D. Contingent

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

A. Yes, he can always make a contract

B. Yes, but only when he is sound mind
C. No, he cannot make contract
D. Can't be determined

15. Which of the following is false? An acceptance:

A. Must be communicated
B. Must be absolute and unconditional
 C. Must accepted by a person having authority to accept
D. May be presumed from silence of offeree

16. Which is the following is false? Consideration:

A. Must move at the desire of the promisor

B. May move from any person
C. Must be illusory
D. Must be some value

17. Consideration may be

A. Past
B. Present
C. Future
D. All of the above

18. Consent is not said to be free when it is caused by

A. Coercion
B. Undue influence
C. Fraud
D. All of these

19. In case of illegal agreements, the collateral agreements are;

A. Void
B. Valid
C. Voidable
D. Any of these

20. A contract is discharged by novation which means the;

A. Cancellation of the existing contract

B. Change in one or more terms of the contract
C. Substitution of existing contract for a new one
D. None of these

21. Sometimes, a party is entitled to claim compensation in proportion to the work done
by him. It is possible by a suit for;

A. Damages
 B. Injunction
C. Quantum merit
D. None of these

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

A. Void
B. Voidable
C. Valid
D. Unlawful

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

A. Idiot
B. Lunatics
C. Drunken
D. Alien

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

A. Void
B. Valid
C. Voidable
D. Illegal

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

A. Valid
B. Void
C. Voidable
D. Contingent

26. 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)

27. 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

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

A. General offer
B. Cross offer
C. Counter offer
D. Special offer

PART B - DESCRIPTIVE

BRIEFLY ANSWER THE FOLLOWING QUESTIONS IN YOUR OWN WORDS

AS TO WHAT YOU UNDERSTAND WITH REFERENCE TO BUSINESS LAW.

1. What is contract? What are various ways in which a contract may be discharged?

2. What remedies are available to aggrieved party on the breach of contract

3. Define the relationship between law and society? Explain difference b/w Substantive law and &

procedural law?

4. What are the purposes of law? Define the sources of law?

5. How offer is classified? How consideration is classified? How consent is classified?

6. What do you understand by capacity of parties under contract act?

7. What is mean by Minor? What are the rules regarding minor’s contractors?

8. Define contingent contract & difference between contingent contract & wagering?

9. Define performance of contract? Explain the termination by performance?

10. What do you understand by valid, Invalid, Void, Voidable and enforceable contract?
 11. Briefly describe the following terms with reference to:

Law of Sale of Goods

Meaning and definition of contract of sales

Difference between sale and agreement to sale

Importance of condition and warranty in a contract of sale

Implied condition and warranty

Rights and duties of unpaid seller

12 Briefly describe the following terms with reference to:

Law of Carriage

• Meaning and importance of law of carriage

• Classification of carriers

• Rights, duties and liabilities of common carriers

• Contract of affreightment (chapter party and bill of lading)

• Air way bill, other documents relating to carriage by air

13. Briefly describe the following terms with reference to:

Law of Agency

• Define agent and principal

• What is agency? Who is sub-agent and a substituted agent.

 • What do you mean by agency by ratification? Explains the conditions
for a valid ratification

• What is termination? Explain the methods of termination of agency

business.

PART C CASE STUDY (4 Marks)

CASE 1

Gary is a real estate agent. He is trying to sell a large mansion on behalf of its owners. A
potential purchaser, Eric, asks Gary whether the lawn at the back of the
mansion is big enough to accommodate the construction of a full sized tennis court in
the future. Gary does not answer, but instead hands Eric a pamphlet on the property. The
pamphlet includes a surveyor’s diagram of the Property which
gives dimensions of the backyard and makes it clear that it can accommodate atennis
court. In the pamphlet, there are also 4 pages of writing that describe the property in detail. At
the bottom of one of these pages is the following statement, in
very small font: “Gary Real Estate does not guarantee the accuracy of the information
contained in this pamphlet and advises potential purchasers to make their own enquiries.”
Eric does not read the pamphlet, but buys the mansion anyway. He then discovers that the
surveyor’s diagram was inaccurate, and that
the backyard is not big enough to accommodate a tennis court. Has Gary breached any law
under the contract? Which of the following option’s best describe your decision, if you were
the judge of this case? And why?

CASE 2

Vincenzo is a newly arrived in Australia and has recently become an employee of “Elegance
Coffee”. He asks one of his colleagues, a barista at “Elegance Coffee”, for advice on how to use
a toaster he has at his rented accommodation, saying that he is having trouble using it as its very
different to the ones they have initially. The barista provides Vincenzo with wrong advice and as
result; he suffers a severe burn to one of his hands. Does section 18 of the ACL potentially apply
to “Elegance Coffee” in respect of the advice provided by its barista? Choose the answer that best
reflects the legal position of this issue.