CA-CPT MOCK TEST MERCANTILE LAW

TIME : 50 MARKS :40

1. Consideration and object of an agreement is unlawful if it is
(a) is forbidden by law (b) is fraudulent
(c) creates injury to third person (d) all of these
2. In case of anticipatory breach of contract, the aggrieved party may treat the contract as
(a) breach and bring immediate action for damages
(b) operative and wait till the time of performance arrives
(c) either (a) or (b)
(d) none of these
3. X promises Y to drop legal proceeding against him for murder case lodged against him, Y
in turn promised to pay him 500,000. This agreement is
(a) Void being opposed to public policy
(b) Voidable
(c) Void being in the nature of trafficking in public offices
(d) Illegal being an unconscionable agreement
4. In an agreement to sell buyer ____________ goods on insolvency of sell.
(a) cannot claim (b) can claim (c) conditional claim (d) None
5. The right of lien of an unpaid seller depends upon
(a) Ownership of goods (b) possession of goods
(c) title of goods (d) both (a) and (c)
6. Where the partner is entitled to interest on capital , the interest shall be payable
(a) out of capital only (b) out of profits only
(c) either (a) or (b) (d) None of these
7. According to the implied condition as to title, it is presumed that the seller has right to
______________
(a) Sell the goods (b) recover the price (c) recover damages (d) sue the buyer
8. A agree to sell his plot of land worth of Rs 10 lakhs in Rs 2 lakhs only and As consent was
obtain by a threat to kill his son. Here the contract is
(a) Voidable (b) Void (c) Punishable by law (d) Valid
9. C.I.F means
(a) cartage, indemnity and free (b) cost, indemnity and freight
(c) cartage , insurance and forward (d) cost insurance and freight




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10. A and B are the partners in transport business and A buys two trucks n his own name with
money of partnership business. Here the trucks so purchased are
(a) As personal property (b) Bs personal property
(c) Partnership property (d) Security of firm
11. In case of minor, an agreement in restraint of marriage of minor is
(a) valid (b) Void (c) voidable at option of minor (d) none of above
12. When there is breach of contract special damages are awarded
(a) in all the cases (b) only under special circumstances
(c) only when there is special loss (d) only when the defaulting party knew about such
loss
13. Which of the contract is invalid ?
(a) A promise made without consideration to compensate the person who has already
done something voluntarily or has done something which the promisor was legally
bound to do
(b) A written promise to pay time barred debt
(c) Completed gifts between parties who do not stand in a near relation to each other
(d) A promise to pay Rs.1000 p.m. to wife for her maintenance by a Hindu Husband by a
registered document after referring to quarrels
14. A and B contract to marry each other, before the time fixed for the marriage, A goes
mad, the contract becomes-
(a) Voidable contract (b) Valid contract
(c) Void contract (d) Contingent contract
15. Where the order in which reciprocal promises are to be performed is expressly fixed by
the contract, they shall be performed in that order; and where the order is not expressly
fixed it shall be performed-
(a) ln that order which the nature of transaction requires
(b) ln the order as one of the parties prefer
(c) As desired by the proposal
(d) None of the above
16. The application for registration must be signed by
(a) all of the partners or their authorized agents (b) the active partner only
(c) min. two even though there are more than two (d) the managing partner only
17. Duty to indemnify the firm for the losses caused by partner fraud is an absolutely duty
and
(a) cannot be excluded by an agreement to the contrary
(b) can only be excluded by an agreement to the contrary
(c) makes the guilty partner liable for imprisonment
(d) both (a) and (c)
18. When a party commits the fraud but fraud does not induce the other party to enter into
the contract , the contract is
(a) void (b) voidable (c) not voidable (d) void ab initio


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19. When banker wrongfully dishonours customers cheque, the court may award
(a) Ordinary damages (b) special damages
(c) exemplary damages (d) none of these
20. When buyers failure to pay the price within reasonable time , the unpaid seller can resell
the goods to someone else, where
(a) goods are perishable (b) seller hase reserved such right
(c) both (a) and (b) (d) none of these
21. A agrees to sell the entire crop of sugarcane to a miller that may grow in his firm in the
next sugar season. This is a contract for sale of
(a) Future goods (b) Ascertained goods
(c) Contingent goods (d) Specific goods
22. Which of these are not treated as goods as per Sale of Goods Act
(a) Copy right (b) Stock and shares (c) Electricity (d) None
23. A took Bs car on loan for 5 days. Later on A sold his car to C in the presence of B for
50,000 and tells C to give Rs.48,000 to B. B took the payment, later on B cannot
challenge the deal under the principle of
(a) Caveat Emptor (b) Estoppel (c) Silent amount to speak (d) Quantum merit
24. In a FOB contract, property and risk passes on
(a) As soon an contract is signed
(b) Landing of goods at the port of destination
(c) After the goods are actually put on board
(d) Making the shipment document
25. An unpaid seller can exercise right of lien for
(a) Price of the goods (b) Godown rent (c) Dock charges (d) Warehousing charges
26. A contract f insurance which provide the fixed amount of money to be paid on
happening of the event eg fire accident is a
(a) Contingent contract (b) wagering agreement
(c) contract of indemnity (d) contract of guarantee
27. An un-paid seller has the following rights against the buyer personally except
(a) Sue for price (b) Sue for interest
(c) To use reasonable physical force (d) Repudiate the contract
28. According to section 27 of the Contract Act, the buyer of goods may get valid title to the
goods if the owner is by his conduct precluded from denying the sellers authority to sell
the goods. This is called
(a) Holding out (b) Estoppel (c) Inaction (d) Lapse






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29. Which of these rights are available to a partner under the Partnership Act
(a) Overtime and conveyance charges for attending firms business
(b) To open bank a/c in his name on behalf of the firm
(c) Right to share profits
(d) Right to transfer his share outside the firm without consent of other partner
30. In which circumstances a public notice is not required to be given
(a) By incoming partner on his admission
(b) By a dormant partner that he is not taking part in management
(c) Death of an active partner
(d) All the three
31. Which of these is / are not contained in a partnership deed
(a) Dates of retirement or admission of any partner
(b) Salaries and commission etc. if any payable to the partners
(c) Duration of partnership
(d) Interest on capital and drawings
32. X, Y and Z are three partners in the firm, having capital 100,000, 75,000 and 50,000
respectively. During the year 2006-07 the firm made a profit of Rs.90,000. How the profit
will be distributed amongst the three partners.
(a) 40,000, 30,000 and 20,000 to X, Y and Z respectively
(b) 30,000 to each partner
(c) 20,000, 30,000 and 40,000 to X, Y and Z respectively
(d) According to seniority
33. Which of these event does not cause reconstitution of the firm
(a) Admission of a partner (b) Death of a partner
(c) Retirement of a partner (d) A partner proceeding on foreign trip
34. Partnership property vests
(a) In the partners of the firm (b) In the firm itself
(c) On Sr. partner of the firm (d) On Solicitor General of India
35. Register of firm is open to inspection
(a) Free of cost (b) On payment of such fee as is prescribed
(c) Subject to furnishing Bank Guarantee (d) On filing an affidavit to this effect
36. Limited partnership is found in
(a) English Limited Partnership Act, 1907 (b) Partnership Act, 1932
(c) Partnership Act, 1870 (d) Contract Act
37. When the seller agrees to deliver the goods at a place other than at which they are sold
the risk of deterioration in transit will be borne by
(a) The seller (b) The buyer (c) Transporter (d) Proportionately by all the
three


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38. Neglect or refusal of the buyer to take delivery of goods amount to . of the
contract
(a) Discharge (b) Remission (c) Repudiation (d) Lapsed
39. Loss due to destruction of goods falls upon in the case of an agreement to
sell
(a) The seller (b) The buyer (c) Transporter (d) The Insurance Company
40. X agrees to sell goods worth 50,000 to Y with the stipulation that Y shall make
payment as soon as X dispatch the goods. X dispatched the goods on 21
st
January but Y
did not tender payment due even after 10 days from the date of dispatch. X becomes an
(a) Unpaid seller (b) Holder in due course (c) Aggrieved seller (d) Creditor






Correct Questions ________________ 1 = _______________
Wrong Questions _________________ -0.25 = _______________
N.A. Questions _________________ 0 = _______________
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