CBSE Questions for Class 12 Commerce Legal Studies Topics Of Law Quiz 18 - MCQExams.com

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, under influence, fraud, misrepresentation or mistake.
FACTUAL SITUATION: A went to a doctor to get himself treated. The doctor asked him to sign a consent form 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 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
In the above fact situation, _____.
  • There is undue influence exercised by Dhanraj on Baalu
  • There is undue influence exercised by Aadil on Chulbul
  • There is no undue influence
  • None of the above
Given below are Legal Principles followed by a Factual Situation. Apply the principles followed by a factual Situation. Apply the principle to it and select the most appropriate answer for question among the four choices given.
LEGAL PRINCIPLE: A  contract is an agreement freely entered into between the parties.
FACTUAL SITUATION: Sharat is a dealer of wheat. The Government issued an order under the Essential Commodities Act, 1955 for fixed price of wheat and also the quantity which a person can buy from the dealer. Sharat carried on his dealership under the order of a while but he refused to pay VST on his sale transactions on the ground that these were not the contracts freely entered into by him.
DECIDE.
  • Sharat would succeed because the price and quantity was fixed.
  • Sharat would not succeed because free consent between the parties was there despite the transaction on price and quantity.
  • He would succeed because the Government under the new order forced him to enter into contracts.
  • Both (a) and (c).
Given below are Legal Principles followed by a Factual Situation. Apply the principles followed by a factual Situation. Apply the principle to it and select the most appropriate answer for question among the four choices given.
LEGAL PRINCIPLE: An agreement is void and unenforceable if considerations and objects are unlawful.
FACTUAL SITUATION: A enters into an agreement with B for ten countrymade pistols and ten landmines. A promises to pay a sum of Rs. 2,50,000 to B. He paid 75,000 in advance. On completing the work and handing over the materials as required, A refuses to pay the remaining sum of Rs. 1,75,000 to B.
DECIDE.
  • B cannot move any court for enforcement of this contract.
  • B can move the civil court for enforcement of this contract.
  • B can move the High Court for the enforcement of this contract.
  • B can move the Supreme Court directly as his fundamental and legal right is violated.
Given below are Legal Principles followed by a Factual Situation. Apply the principles followed by a factual Situation. Apply the principle to it and select the most appropriate answer for question among the four choices given.
LEGAL PRINCIPLE: Any person who has received any unjust benefit, must return it to the rightful owner.
FACTUAL SITUATION: A and B were staying in the same hostel room. B's father had sent a parcel to him on his birthday containing expensive gifts. This parcel was delivered to A as B had gone out for a movie.
DECIDE.
  • A can retain the parcel without informing B.
  • A can keep some gifts from the parcel and return the rest to B.
  • A can inform B about the parcel and need not return the parcel to B.
  • A has to return the entire contents of the parcel to B.
LEGAL PRINCIPLE: Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so or to provide gratuitously, and such other person takes the benefit of that; the latter is bound to compensate the former for something done or thing provided, or to restore, the thing so delivered.
FACTUAL SITUATION: Trader 'A' delivers certain eatables at 'B's house by mistake. 'B' consumed the eatables without asking anything. Which of the following derivations is correct?
  • 'B' is bound to pay 'A' for the eatables
  • 'B' is not bound to pay 'A' for the eatables
  • 'B' can be made liable to pay for the eatables, only if 'A' establishes an express contract between 'A' and 'B'
  • It is the discretion of 'B' to make payment to 'A'
Given below are Legal Principles followed by a Factual Situation. Apply the principles followed by a factual Situation. Apply the principle to it and select the most appropriate answer for question among the four choices given.
LEGAL PRINCIPLE: The acceptance to an offer should be given only in the mode prescribed by the proposer, for a contract to become enforceable.
FACTUAL SITUATION: A offered to buy a horse from B and sent his acceptance through his servant, who reached A's office a day after A's agent reached.
QUESTION: Is A bound by B's acceptance?
  • No, because the contract is binding only when the acceptance is made in the prescribed mode.
  • No, because B should have intimated A about the servant coming with the acceptance.
  • Yes, because B did send the acceptance.
  • Yes, because the servant is B's employee.
LEGAL PRINCIPLE: Every agreement, by which any party is restricted absolutely from enforcing his right in respect of any contract, by the usual legal proceedings in the ordinary Tribunals, is void to that extent. The law also provides that nobody can confer jurisdiction to a civil court by an agreement between parties.
FACTUAL SITUATION: A and B entered into a valid contract for rendering certain service. A clause in the contract was that in case of any dispute arose out of the contract; it shall be referred to for Arbitration only. Is the contract valid?
  • Arbitrator cannot be termed as an ordinary Tribunal. Hence, the agreement is void and would be unenforceable
  • The parties were trying to confer jurisdication to some authority to decide a dispute and hence the clause would be invaild
  • The contract is valid but the clause regarding Arbitration is void
  • Arbitration is also a valid dispute settlement machinery recognized by law and hence the entire contract is valid
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 idustrialist 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 to accept the portrait drawn by Vishal's son and also 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
Given below are Legal Principles followed by a Factual Situation. Apply the principles followed by a factual Situation. Apply the principle to it and select the most appropriate answer for question among the four choices given.
LEGAL PRINCIPLE: Law of contract mandates that two or more people are free to create mutual rights and obligations provided such rights and obligations are not opposed to public policy.
FACTUAL SITUATION: Ashish enters into an agreement with Rajesh under which Rajesh undertook to kill Ashish when he is asleep. For this act, Ashish deposited Rs. 5000 with a bank, which Rajesh could withdraw once he has performed the aforesaid task. Rajesh kills Ashish according to terms of agreement.
DECIDE.
  • Rajesh must get Rs. 5000 because he has performed his task.
  • Rajesh must be prosecuted because he has killed Ashish.
  • Rajesh must not be prosecuted because Ashish consented to be killed.
  • Rajesh must be prosecuted for killing Ashish but he should get Rs. 5000 as agreed by Ashish.
Given below are Legal Principles followed by a Factual Situation. Apply the principles followed by a factual Situation. Apply the principle to it and select the most appropriate answer for question among the four choices given.
LEGAL PRINCIPLE: When at the desire of the promisor, the promisee or any other person, promises to do something, then such promise is called a consideration for the said promise.
FACTUAL SITUATION: A arranged a friendly party at his home for his home for his closed friends and one of his friends B promised to prepare a special dish for other friends. But on the occasion of party B did not come. There a major quarrel broke between A between B and his other friends.
QUESTION: Will A succeed if A sues for such breach of contract against B?
  • A will not succeed because there is no consideration in the contract of preparing special dish.
  • A will not succeed because the contract between A and B is a social contract which is unenforceable at law.
  • A will succeed because B is responsible for quarrel of A with other friends.
  • Both (a) and (b).
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 is a person can buy from the dealer. Tapan carried on his business under this order for a while but be refused to pay sales tax on 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
Given below are Legal Principles followed by a Factual Situation. Apply the principles followed by a factual Situation. Apply the principle to it and select the most appropriate answer for question among the four choices given.
LEGAL PRINCIPLE: Every agreement in of restraint of the marriage of any person, other than a minor, is void.
FACTUAL SITUATION: Rohan entered into an agreement with a banker and deposited Rs. five lakhs with the banker. The terms of the contract provided that Rohan's son Mohan shall be the beneficiary of the deposited amount only if the marries after he attains legally marriageable age.
QUESTION: Is agreement between Rohan and Banker void?
  • Yes, since the agreement is restraining the marriage of Mohan.
  • Yes, because Mohan has right to marry only when he is eligible to cast his vote.
  • No, agreement is valid and enforceable.
  • None of the above.
Given below are Legal Principles followed by a Factual Situation. Apply the principles followed by a factual Situation. Apply the principle to it and select the most appropriate answer for question among the four choices given.
 LEGAL PRINCIPLE: A contract obtained by misrepresentation is voidable at the option of the buyer.
FACTUAL SITUATION: Anand wants to sell his house. Anupama approaches him with an offer to buy the house and Anand shows her the house. The house is not in a very good condition and visibly repairs, without which it and visibly requires repairs, without which it is uninhabitable. Anand does not tell anything regarding the required repairs. Anupama purchases the house for a huge consideration. Later on when she wants to move in the realizes that the house requires repair urgently.
  • Anupriya will not succeed because she has to be careful about what she is purchasing in all circumstances, unless the defects are concealed and cannot be seen or have been covered
  • Anupama will succeed because Anand knowingly sold the house and he should have informed Anupama about the condition of the house
  • Anupama will succeed because she would never have purchased the house in case she was told about the status of the house
  • A buyer always has the option to refuse performance of his part of the contract
M agreed on Monday to sell his property to B by a written agreement which stated "that this offer to be left open until Saturday 10 am. "In the meantime on Wednesday, M enters into a contract to sell the property to O. N, who was sitting in the next room, hears about the deal between M and O. On Friday, N accepts the offer and delivers to M the letter of acceptance. Is N's acceptance valid?
  • No, since offer is revoked by M
  • Yes, since overhearing by B does not amount to a valid revocation by M
  • No, since O has a clean title to the property
  • Cannot decide based on the above facts
Given below are Legal Principles followed by a Factual Situation. Apply the principles followed by a factual Situation. Apply the principle to it and select the most appropriate answer for question among the four choices given.
LEGAL PRINCIPLE: In a contract of agency, no liability exists upon the agent towards his principal, if he acts with responsible diligence in the matter of agency.
FACTUAL SITUATION: Ganesh, the owner of an estate, instructed Dinesh, an estate agent to find a buyer for his estate. Dinesh got an offer from Krishna Bhat for Rs. 9,50,000 and the same was promptly communicated to Ganesh. Before the contract of sale was concluded, the agent got an offer of Rs. 10,25,000 from Dayanand. Dinesh did not communicate this to Ganesh. The latter brings an action over the former for not having performed his function as an agent.
  • Dinesh is not liable to Ganesh as his job was only to find a buyer for his estate.
  • Dinesh is not liable as he got good price for the estate which under the prevalling market conditions, was a bonanza.
  • Dinesh is liable to Ganesh as he did not completely perform the function of an agent.
  • None of the above.
From the above passage, which of the following conclusions can be inferred?
  • Demonetization did not hit the target audience for which it was intended.
  • Demonetization largely hit the target audience for which it was intended but also affected some who were not its key targets
  • Demonetization only hit the target audience for which it was intended hence it was highly focused in its impact.
  • None of the above.
In Bridges vs. Hawkesworth, the finder was allowed to keep the good on the ground that ______.
  • The owner of the shop was not traceable
  • The owner of the shop was nor aware of the fact that the item was in his shop
  • The item was found in and are where public is admitted and the finder was one among them
  • If given to the owner it would to unjust enrichment
Kabir starts a new company that provides offices on rent to other businesses and argues that the new law described in the previous question is invalid since it prevents him from growing his business. Based on the information and arguments in the given passage, would Kabirs challenge succeed?
  • Yes, since the 10% limit on rent increases means that Kabirs businesses can only grow 10% each year.
  • No, since the law does not increase the regulatory burden on Kabirs business, and he can grow his business through means other than increasing rents more than 10% every year.
  • Yes, since Kabir will be required to submit reports to the authorities proving that his business has not increased rents more than 10% in any year.
  • No, since a rental business cannot be considered a startup.
A new law is passed that permits startups to operate their offices twenty-four hours a day, and removes an existing obligation on them to provide transport for their female employees between 9 p.m. and 6 a.m. Would such a law be valid in light of the authors statements in the given passage?
  • No, it would not be valid, since it would lead to a more lax regime about office operating hours.
  • No, it would not be valid, since it is unfair towards businesses other than startups.
  • No, it would not be valid, since it compromises on the safety and security of startups female employees.
  • All of the above.
Given below are Legal Principles followed by a Factual Situation. Apply the principles followed by a factual Situation. Apply the principle to it and select the most appropriate answer for question among the four choices given.

LEGAL PRINCIPLE: Qui facit per alium facit per se, which means, "he who does an act through another is deemed in law to do it himself". 

FACTUAL SITUATION:  A gave some amount and cheques to his friend B, who was an employee of the State Bank of India, to deposit the same in the account of his wife, C. The employee misappropriated the amount. C files suit against the State Bank of India. Choose the correct option.

DECIDE.
  • The State Bank of India would not be vicariously liable to C
  • The State Bank of India would be vicariously liable to B
  • B would be liable to A
  • Neither State Bank of India nor B would be liable
Principle: In case where there is an infringement of legal right even without any actual loss or damage, the person whose right is infringed has a cause of action.
Facts: 'P' was wrongfully prevented by the Returning officer from exercising his vote in an assembly election. Still he ('P') brought an action claiming damages. Which of the following derivations is correct?
  • 'P' would succeed in his action, as it is mandatory to cast vote
  • 'P' would succeed in his action, as he was wrongfully prevented from exercising his legal right of voting in that election
  • 'P' would not succeed in his action, as he did not suffer any loss in that election
  • 'P' would not succeed in his action, as the candidate for whom he wanted to give his vote won the election
The authors key suggestion for tackling the issue of black money is
  • replacing humans with technology
  • enacting more stringent laws
  • increasing awareness among the public towards the more proper exercise of the right to vote
  • All of the above
The author has used the term "black economy" to denote:
  • economies where generation and circulation of black money is prevalent
  • economies where the tax rate is low
  • economies where the tax rate is nil
  • economies where money majorly exists in digitized form instead of cash
Which sections of the IBC are relevant to insolvency of the companies according to the passage?
  • Section 10A of the IBC
  • Section 7,8 and 10 of the IBC
  • Section 7, 8 and 9 of the IBC
  • Section 7, 8 and 10A of the IBC
The insolvency and bankruptcy code applies to Indian companies which default in their operations. Mr. Anil floated a company which defaulted and went bankrupt due to corona virus disruption in May,What legal protection he is entitled to?
  • The company is protected against the insolvency resolution process due to new ordinance by the government in June 2020
  • The company is not protected against the insolvency resolution process as the ordinance is passed after the company went bankrupt
  • The company can itself file for bankruptcy in the tribunal prescribed by the IBC.
  • None of the above
What kind of idealogy the government is following for the Indian companies according to the passage?
  • The protectionist strategy citing the lockdown, the corona pandemic and loss of business.
  • Averting the economic meltdown of the financial institutions and the creditors of the companies.
  • Saving employment of the workforce working in such companies.
  • All of the above
Which of the following statements clearly explain the ordinance inserting article 10A in the IBC.
  • The corporate debtor is protected against any default occurring during the suspension period
  • The corporate debtor can be sued by the creditors relating to default during the suspension period.
  • The insolvency fresh cases can be managed by the insolvency tribunals during the suspension period.
  • The bankruptcy cannot be filed by the companies during the suspension period.
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