THE INSTITUTE OF COST ACCOUNTANTS OF INDIA - AHMEDABAD CHAPTER

CMA FOUNDATION DECMBER 2024

BUSINESS LAW
Name :
Registration No. 25th October 2024

1) An agreement enforceable at law is a______.

(a) enforceable acceptance (b) accepted offer (c) approved promise (d) contract

2) Every promise and every set of promises, forming the consideration for each other, is an _____.
(a) agreement (b) contract (c) offer (d) acceptance.

3) An agreement not enforceable by law is stated to be void under ______.

(a) section 2(d) (b) section 2(e) (c) section 2(f) (d) section 2(g)

4) Offer as defined under section 2(a) is_______.

(a) communication from one person to another
(b) suggestion by one person to another
(c) willingness to do or abstain from doing an act in order to obtain the assent of other thereto
(d) none of the above

5) When, at the desire of the promisor, the promisee or any other person has done or abstained from doing or, does
or abstain from doing or promises to do or to abstain from doing something, such act or abstinence or promise
under section 2(d) is called_______.
(a) reciprocal promise (c) counter offer
(b) consideration for the promise (d) acceptance

6) An agreement enforceable by law at the instance of one party & not of other party under section 2(i) is
called______.
(a) a valid contract (c) void contract
(b) an illegal contract (d) a voidable contract

7) Under section 2(c) promisor is the_________.

(a) person who makes the proposal (c) person who makes the promise
(b) person who accepts the proposal (d) person to whom the proposal is made

8) Communication of acceptance is complete as against the acceptor_____.

(a) when it comes to the knowledge of the proposer
(b) when it is put in the course of transmission
(c) when it is communicated to the acceptor that the acceptance has reached the proposer
(d) when the proposer conveys the acceptance to the acceptor

9) Revocation of offer by letter or telegram can be complete____.

(a) when it is despatched (c) when it reaches the offeree
(b) when it is received by the offeree (d) both (a) and (c)

10) Voidable contract ____.

(a) are enforceable by law if they are not avoided (d) can be enforced with prior permission of Court /
(b) are not enforceable by law Government
(c) can be enforced if the court directs

11) An agreement created by words spoken or written is called____.

(a) express agreement (c) implied agreement
(b) execute agreement (d) voidable agreement
12) Which of the following statements is false_____.
(a) Law of contract is the whole law of obligations (c) All contracts are agreements
(b) Certain contracts must be in writing (d) All illegal agreements are void

13) An offer stands revoked _____.

(a) If the fact of the death or insanity is known to offeree (c) By rejection of offer
(b) By counter offer (d) All the above

14) For an acceptance to be valid, it must be_____.

(a) Partial & qualified (b) Absolute & unqualified (c) Partial & unqualified (d) Absolute & qualified

15) Communication of offer is complete when_____.

(a) It comes to the knowledge of the offeree (c) When the offeror writes the letter but does not post it
(b) It is posted to the offeree (d) None of the above

16) General offers open for world at large can be accepted by______
(a) Any person in the world (c) Any person who complies with the conditions of the
(b) Any person within the country offer
(d) Any person who reads the advertisement

17) The term consensus ad-idem means____

(a) Formation of the contract (c) Meeting of minds
(b) Reaching of agreement (d) General consensus

18) Consideration is______.

(a) Doing or abstaining from doing something at the (c) Element of exchange in a contract
desire of promisor (d) All the above
(b) Essential condition of a contract

19) A valid consideration includes_____.

(a) Executed or executory consideration (c) Inadequate consideration
(b) Past consideration (d) All of these

20) The latin term "quid pro quo" refers to ______

(a) Something in return (c) Something sensible
(b) Stranger to consideration (d) Something valuable

21) A stranger to a consideration can file a suit and such a stranger is_____.
(a) A person who is not a party to the contract
(b) A person who has given consideration
(c) A person who has not given consideration
(d) A person who is a party to the contract but not given consideration

22) Which of the following statements is not true____.

(a) Consideration must be real & not illusory (d) Consideration should not consist of a legal
(b) Consideration may be inadequate obligation
(c) Past consideration is no consideration

23) An agreement without consideration is void except in case of compensation for______.

(a) Voluntary services rendered
(b) Voluntary services rendered at the request of the other party to the agreement
(c) Voluntary services rendered at the request of third person
(d) Reimbursement of expenses incurred
24) Which of the following is not competent to contract?
(a) A minor (b) A person of unsound mind
(c) A person who has been disqualified from contracting by some law
(d) All of these

25) An agreement entered into by a minor is______.

(a) Valid and binding (c) Void ab initio
(b) Voidable at the option of the minor (d) Voidable at the option of either party

26) When a minor has been supplied with necessaries in credit____.

(a) The minor is not liable (c) The minor is personally liable
(b) The minor's property' is liable (d) The minor is liable at his option

27) If consent in not free due to coercion, undue influence, fraud, and misrepresentation then the agreement is____
(a) Void (b) Voidable (c) Illegal (d) Valid

28) An agreement caused by unilateral mistake of fact is___

(a) Void (b) Voidable (c) Illegal (d) Valid

29) "Threatening to commit certain acts forbidden by Indian Penal Code" is associated with which one of the
following?
(a) Misrepresentation (b) Fraud (c) Coercion (d) Unenforceable

30) "Active concealment of fact" is associated with which one of the following?
(a) Misrepresentation (b) Undue influence (c) Fraud (d) Mistake

31) If A sells, by auction to B a horse which A knows to be unsound and A says nothing to B about the horse's
unsoundness, this amounts to____.
(a) Fraud (b) Not fraud (c) Unlawful (d) Illegal

32) In Indian Contract Act, the term consensus ad idem means_____.

(a) Parties under a mistake (c) Parties agreeing upon the same thing in same sense
(b) Parties under the free consent (d) None of these

33) A wagering agreement is___.

(a) Voidable (b) Void (c) Valid (d) Illegal

34) P engages B to kill C and borrows ` 100 from D to pay B. If D is aware of the purpose of the loan, the transaction
is____.
(a) Valid (b) Void (c) Illegal (d) Not enforceable

35) A makes a contract with B to buy B's horse if A survives C. This is____.
(a) a Quasi-contract (b) a Void contract (c) a Contingent contract (d) a Conditional contract

36) Which one of the following is not a characteristic of a contingent contract?

(a) Performance depends upon a future event (c) The event must be collateral to the contract
(b) The event must be uncertain (d) There must be reciprocal promises

37) Contingent contracts to do or not to do anything if a specified uncertain event does not happen within a fixed
time become ______.
(a) Void, if before the time fixed, such event becomes impossible
(b) Valid, if before the time fixed, such event becomes impossible
(c) Voidable, if before the time fixed, the promisor becomes lunatic
(d) Illegal, if before the time fixed, the promisor dies
38) The phrase "Quantum Meruit" literally means _____.
(a) As much as earned (c) A contract for the sale
(b) The fact in itself (d) None of these

39) Which of the following statement is true in connection with Quasi-contract_____.

(a) It is imposed by law (c) Damages cannot be claimed for breach of Quasi-
(b) A Quasi-contract is a revoking contract contractual right.
(d) It arises out of an agreement

40) "Goods" means_____.

(a) every kind of movable property other than actionable claims and money
(b) some kinds of immovable property only
(c) every kind of movable property including actionable claims and money
(d) Both 'a' and 'b'

41) A valid contract of sale______.

(a) includes 'an agreement to sell' (c) includes hire purchase contract
(b) does not include 'an agreement to sell' (d) includes contract a work and labour

42) Conditions are stipulations____.

(a) essential to the main purpose of the contract (c) either 'a' or 'b'
(b) collateral to the main purpose of the contract (d) neither 'a' nor 'b'

43) Breach of a warranty gives rise to_____.

(a) claim for damages (c) both 'a' and 'b'
(b) a right to treat the contract as repudiated (d) either 'a' or 'b'

44) The implied condition as to the description of goods means that____.

(a) the goods shall perfectly correspond to the description
(b) the goods should be capable of being sold in the market by that description
(c) both 'a' and 'b' (d) neither 'a' nor 'b'

45) The doctrine of Caveat emptor is not applicable_____.

(a) in case of sale under a patent name (d) where the buyer relies on the skill and judgment of
(b) in case of sale under a trade name the seller
(c) where the seller is guilty of fraud

46) The general rule of Sale of Goods Act is, risk prima facie passes with____.
(a) Ownership (b) Possession (c) Delivery (d) Custody

47) "Nemo dat quad non habet", means____.

(a) no one is greater than god (c) every one can give everything he has
(b) none can give who does not himself possess (d) everyone is bound by is habit

48) Delivery of goods means____.

(a) Voluntary transfer of possession (c) Exchange of goods
(b) Compulsory transfer of possession (d) Voluntary transfer of ownership

49) Delivery of the keys of a godown where goods are kept amounts to____.
(a) Actual delivery (b) Symbolic delivery (c) Constructive delivery (d) All of these

50) Unless otherwise agreed, the buyer___.

(a) must apply for delivery (c) must be ready to accept delivery
(b) has no duty to ask for delivery (d) must tell the carrier to visit the seller for delivery