CBSE Questions for Class 11 Commerce Legal Studies Classification Of Law Quiz 6 - MCQExams.com

Principle: Limitation bars the remedy, not the right.
Facts: After the expiry of the period of limitation of three years, debtor Rohan makes a part payment of debt to creditor Sohan. Sohan then files a suit against Rohan for recovery of the debt after two years from the date of part payment. 
  • The part payment extends the period of limitation.
  • The suit is time barred as part payment is made after the expiry of period of limitation.
  • Fresh period of limitation begins from the date of part payment.
  • None of the above
Legal Principle : Agreements, the meaning of which is not certain, or not capable of being made certain, are void.
Facts : A horse was bought for certain price coupled with a promise to give Rs.500 more if the horse is proved lucky. 
  • This is a valid agreement.
  • This agreement is void for uncertainty because it is very difficult to determine what luck, bad or good, the horse has brought to the buyer.
  • The agreement is partially valid and partially void.
  • None of the above.
Legal Principle: Every person, who is of the age of majority, is competent to contract according to the law to which he is subject.
Facts: A minor mortgaged his house in favour of Thakur Das, a moneylender, to secure a loan of Rs. 20,A part of this,i.e. Rs.10,500 was actually advanced, the attorney who was acting for the moneyender, received information that the plaintiff was still a minor. Subsequently, the minor commenced an action stating that he was underage when the executed the mortgage and the same should, therefore, be cancelled. He prayed for setting aside the mortgage.The mortagagee/ moneylender prayed for the refund of Rs.10,500 from the minor.
  • As a minor's contract is void, any money advanced to a minor can be recovered.
  • A minor's contract is void ab initio, any money advanced to a minor cannot be recovered.
  • A minor's contract is voidable, any money advanced to a minor can be recovered.
  • Advanced money can be recovered because the minor has given wrong information about his age.
Legal Principle: Permanence of a legal duty cannot be a consideration for a promise.
Factual Situation:  'A's wallet is stolen by a thief.'A' lodges a complaint in the police station. 'A' promises to pay a sum of Rs.500 to the person who is able to apprehend the thief and get back his wallet. The policeman's servant 'X' apprehends the thief and gets back the wallet. 'A' refuses to pay 'X' the promised Rs.Choose the correct option.
I. The servant is entitled to the reward
II. The policeman would have been entitled to the reward had he been the person to apprehend the thief.
III. The policeman would be entitled to the reward even if he had not apprehended the thief.
IV. The servant would not be entitled to the reward,
  • I and III
  • I only
  • I, II and IV
  • III only
Legal Principle : Performance of a legal duty cannot be a consideration for a promise.
Factual Situation: 'A's wallet is stolen by a thief. 'A' lodges a complaint in the police station 'A' promises to pay a sum of Rs.500 to the person who is able to apprehend the thief and get back his wallet. The policeman's servant 'X' apprehends the thief and gets back the wallet. 'A' refuses to pay 'X' the promised Rs.Choose the correct option: 
I.The servant is entitled to the reward.
II. The policeman would have been entitled to the reward had he been the person to apprehend the thief. 
III. The policeman would be entitled to the reward even if he had not apprehended the thief. 
IV. The servant would not be entitled to the reward
  • I and III
  • I only
  • I, II and IV
  • III only
Principle: A contract requires a proposal and an acceptance of the proposal.It is necessary to make a binding contract, not only that the proposal be accepted, but also that the acceptance is notified to the proposer. A sent a letter to B stating that he was willing to sell to B, 10 bags of rice at Rs.20 each. B made a telephone call to A ti inform him that he had accepted the offer. Just as he was stating his acceptance, a very noisy aircraft flew over B's house. A was not able to hear the acceptance.
  • There is no contract since the acceptance has not been notified to A.
  • There is no contract since the reply also has to be in writing.
  • This is a valid contract since B conveyed his acceptance to A. It does not matter if A heard it or not.
  • None of the above.
Principle :An agreement becomes a contract when it is entered into between two or more people with each other's free consent. Two or more people are said to consent when they agree to the same thing in the same sense. Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake.
Factual Situation: A went to a doctor to get himself treated. The doctor asked him to sign a consent from and said that unless he signs it, he will not examine him. A signed the form waiving his right to sue the doctor.
  • This is a valid contract since A understood and consented to the terms.
  • This is not a valid contract since A had no other option, but to sign.
  • This is a valid contract since it is a doctor-patient relationship
  • None of the above
Principle: An agreement, the meaning of which is not certain, or capable of being made certain, is void.
Factual Situation: A and B, who were brothers, entered into an agreement which stated that A would sell his entire share of the ancestral property to B. The agreement did not mention the specific details (Like survey number) of the property.
  • The contract will be void since it is vaque.
  • the contract will be void because it is not possible to ascertain the property which is being referred to.
  • The contract will be void since it is illegal.
  • The contract is valid since there is clarity about the property sought to be sold.
Legal Principle: Contract is an agreement freely entered into between the parties.
Factual Situation: Tapan was a dealer in mustard oil. The Government of India by an order issued under the Essential Commodities Act, fixed the price of mustard oil and also the quantity which a person can buy from the dealer. Tapan carried on his business under this order for a while, but he refused to pay sales tax for his sale transactions on the ground that these were not the contracts freely entered into by him.
  • Tapan would succeed because the price and quantity were not negotiated by him.
  • Tapan would not succeed because free consent between the parties was there despite the restriction on price and quantity.
  • He would succeed because the government under the new order forced him to enter into contracts.
  • Both (a) and (c).
Principle: Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, to that extent is void.
Factual Situation: A company entered into a contract with Coca Cola Ltd. to bottle soft drinks produced by Coca Cola. One of the terms of the contract was that te company would not bottle soft drinks for any other competitor of Coca Cola during the pendency of the contract.
  • The contract is void since it restrains the lawful right of the company to engage in business.
  • The contract is void because there is no consideration being paid.
  • The contract is valid.
  • The contract is void since the competitor is not a party to the contract.
Principle: An agreement is void to the extent that it restricts absolutely, a party from enforcing his contractual rights by usual proceedings in any ordinary court. A and B resided or carried on business in Chennai.
  • The contract is valid since it is still an Indian court that has jurisdiction.
  • The contract is void since it ousts the jurisdiction of the competent court.
  • The contract is void since the consent of the court is required before entering into such a contract.
  • The contract is valid since Chennai courts have expertise with respect to contractual matters.
Legal Principle: When a contract has been broken, the party who suffers by such breach is entitled to receive from the party who has broken compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such a breach, or which the parties knew, when they made the contract to be likely to result from the breach of it. Such compensation is not given for any remote or indirect loss or damage sustained by reason of the breach. Decide, whether and to what extent B is entitled to damages in the following situation:
Factual Situation: A contracts with B to sell him 1,000 tonnes of iron at Rs.100 per tonne. B tells A that he needs the iron for export purposes, and that he would be selling the iron at Rs.200 per tonne. A breaks the contract. When the question comes about damages because the same variety of iron was available in the market at Rs.105 per tonne. B, however, contends that he should be given Rs.100,000 because that was the profit which he would have made had A fulfilled the contract. B had actually bought the iron at Rs.110 and had exported it. B is ________________.
  • not entitled to damages.
  • entitled to Rs.10,000 as damages.
  • entitled to Rs.5,000 as damages.
  • entitled to Rs.100,000 as damages.
Which of the following is not an essential element of a valid contract under the Indian Contract Act, 1872?
  • Free consent
  • Nationality of the parties
  • Lawful consideration
  • Lawful object
Principle: The object of an agreement is lawful unless it is forbidden by law; is of such a nature that, if permitted, it would defeat the provisions of any law; is fraudulent; involves or implies injury to the person or property of another person; the court regards it as immoral; it is opposed to public policy.
Factual Situation: A and B entered into a contract,whereby A agreed to get married to B, is her parents paid A Rs. 100,000 before the wedding. B's parents failed to pay the promised amount. A sues B and her parents. 
  • A will succeed because all the requirements of a contract are met.
  • A will succeed since the payment of the amount was the condition percedent for the wedding.
  • A will not succeed since the contract is void, its object being against the law.
  • A will not succeed since B was not a party to the contract.
Principle : Where both parties to an agreement are under a mistake as to matter of fact essential to the agreement, the agreement is void.
A had a piece of land. He believed that the value of the land was Rs.1,000 per sq.ft.. B knew that the value of the land was in fact Rs.1,500 per sq.ft. However, he did not inform A and purchased the land at Rs.1,000. 
  • The contract is valid since A should have been more careful.
  • The contract is valid since B paid for the land.
  • The contract is void since A was mistaken about the cost of the land.
  • The contract is valid since the land has already been purchased.
Legal Principle: 
The act of using influence on another and taking undue advantage of that person is called undue influence.
In order to prove undue influence, there has to be a pre-existing relationship between the parties to a contract.The relationship has to be of such a nature that one is in a position to influence the other. If it is proven that there has been undue influence, the party who has been influenced need not enforce the contract or perform his obligations under the contract.
Factual Situation: A, a person of weak intelligence made a gift of his entire property to B, who in a position to dominate it. The gift having been obtained by fund influence is voidable at the option of A.
Issue: Is this contract valid?
  • The contract is valid as A voluntary makes gift.
  • The contract is not valid because A made a gift under undue influence so is voidable at the option of A.
  • It is void ab initio.
  • The contract is invalid because A voluntary makes gift.
Legal Principle: A contract requires a proposal and an acceptance of the proposal. It is necessary to make a binding contract, not only that the proposal be accepted, but also that the acceptance is notified to the proposer.
Factual Situation: A writes to B, 'I offer to sell my house for Rs.40,If I do not receive a reply by Monday next, I shall assume that you have accepted the offer'. 
Issue: Is there a valid contract between A and B?
  • Yes, there is a valid contract.
  • No, there is no valid contract because A made a offer but did not accept it.
  • The contract is voidable at the option of A because A had made an offer.
  • None of these.
Legal Principle: A contract obtained by misrepresentation is voidable at the option of the buyer.
Factual Situation: S, intending to deceive Y,falsely represents that 500 maunds of indigo are made annually at X's factory and thereby induces Y to buy the factory.
Issue: Is it a valid contract ? 
  • It is a valid contract
  • It is a contract voidable at the option of Y because he has been falsely misrepresented.
  • It is void ab initio.
  • It is invalid contract
Legal Compliance: When the parties to an agreement agree on the same thing in the same sense, there arises legally binding obligations between them. 
Factual Situation: A who owns two cars, one Maruti and the other Santro, offers to sell B one car. A intends it to be the Maruti car. B accepts the offer thinking that it is the Santro. 
Issue: Is A liable? 
  • A is not liable because there is no consensus and hence no contract.
  • A is liable because once he had offered the contract, it is complete.
  • It is up to the court to decide the liability.
  • A is liable because there is no consensus hence the contract.
When the consent of a party to a contract has been obtained by undue influence, fraud or misrepresentation the contract is __________.
  • legal
  • void
  • voidable
  • enforceable.
Legal Principle: The contract after death of one party can be continued if it is ratified by the surviving party.
Factual Situation: Vishal, a famous artist, was requested by Arun, an industrialist, to draw the portrait of his deceased wife and paid Rs.20,000 in advance and agreed to pay when the work was completed, a sum of Rs. 2 lakhs. When the portrait was half drawn, Vishal died due to heart attack. His son also a fine artist, completed his father's work and demanded the money from Arun. Arun refused to pay and also accept the portrait drawn by Vishal's son and demanded the advance to be returned. 
  • Arun cannot demand the advance amount from the son of Vishal, because in normal cases the son is not responsible for the father's contractual obligation.
  • Son of Vishal cannot demand the rest of amount from Arun because Arun has not assigned him the work.
  • Arun can demand the rest of the amount.
  • Both (a) and (b).
In Unnikrishnan vs Calicut University, Unnikrishnan, a candidate for the L.L.B. Part I exam, who was short of attendance, did not mention of the fact himself in the admission form for the examination. Neither the head of the law department nor the university authorities made proper scrutiny to discover the truth. It was held by the Supreme Court that __________________.
  • there was fraud by the candidate.
  • there was misrepresentation by the candidate.
  • there was no fraud by the candidate.
  • none
A tender is _______________.
  • an agreement.
  • a proposal.
  • an invitation to offer.
  • an offer.
A proposal can be accepted _______________.
  • by performance of condition.
  • by notice.
  • by acceptance of consideration for a reciprocal promise.
  • all the above.
'A' agrees to pay Rs.5,000 and 'B' if it rains and 'B' promises to pay a like amount to 'A' if it does not rain, this agreement is called _____________.
  • Quasi contract
  • COntingent contract
  • Wagering agreement
  • Voidable contract
The person accepting the proposal is called ______________.
  • promisor
  • promisee.
  • acceptor
  • offered.
Which one of the following statements is true ?
  • The transfer of possession is more technical than the transfer of ownership
  • The right of possession is superior to that of ownership
  • The right of possession involves the right to own a property
  • Animus and corpus are necessary for acquisitions of possession
One of the important elements in the concept of possession in possessions which means ______.
  • Direct content with the obect
  • Effective control of the object
  • An intention of hold the object as owner
  • An intention on the part of the possessor to exclude any interference by others
Which of the following is not a mode of transfer of Partners' Interest u/s 29?
  • Absolute Transfer
  • Mortgage
  • Creation of a charge on such interest by the Transferor.
  • Sale
Which theory is not connected with the concept of property?
  • The Natural law theory
  • The labour theory
  • Psychological theory
  • Realist theory
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Practice Class 11 Commerce Legal Studies Quiz Questions and Answers