1. Before Sale of Goods Act, 1930, the law relating to sale of goods were governed by:

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1 1. Before Sale of Goods Act, 1930, the law relating to sale of goods were governed by: a) Indian Contact Act, 1872 b) Negotiable Instrument Act, 1881 c) Indian Bailors Act, 1923 d) none of the above 2. The law relating to sales of goods are governed by: a) Central Sales Act, 1956 b) Sales of Goods Act, 1930 c) Indian Contact Act, 1972 d) The Companies Act, Which of the following statements, is correct? a) sales of movable property / goods covered under Sales of Goods Act b) sale of immovable property is covered under Transfer of property Act. c) The contact for sale of goods is subject to general principles of Indian Contact Act. 4. The features of contact of sale of goods are: a) The seller transfers or agrees to transfer the property in goods to the buyer b) such transfer is for a price c) this includes actual sale or agreement to sell 5. Goods means: a) movable property other than actionable claim and money b) this includes stocks and shares c) growing crop[s, grass and things attached to land

2 6. Difference between Sale and Agreement to sell is: a) when property in goods is transferred from seller to buyer, it is sale b) where transfer of property in the good is to take place in future is called agreement to sell c) An agreement to sell becomes a sale when conditions are fulfilled subject to which the property in goods is to be transferred 7. Which of the following statements is not correct? a) A sale is an executed contact where as an agreement to sell is an executor contact b) in agreement to sell, the buyer become the owner c)a sale can take place only in respect of existing and specific goods while agreement to sell pertains to future and contingent goods d) in the sale, risk of loss follows immediately 8. In the contact of sale in case of breach of contract, the buyer has right to sue the seller for: a) damage for non- delivery of goods b) recovery of price c) specific performance of contract d) Any or all of the above 9. Which of the following statements, is not correct? a) In a sale, the seller cannot resell the goods b) If seller resells the goods the subsequent buyer does not get the proper title to the goods c) In the sale, seller does not have a right to lien in case the buyer becomes insolvent d) If the buyer becomes insolvent, the agreement to sell becomes void

3 10. Which of the following statements, is correct in case the seller of a sale contract becomes insolvent? a) the buyer is entitled to recover the goods from receiver b) the official receiver is entitled to receive payment from buyer c) in agreement to sell the contact becomes void 11. The essential elements of sale are: a) there should be a minimum of two parties b) the subject matter of a contact of sale must be goods c) the consideration of sale must be in money d) All the above 12. Which of the following is not essential of a contract? a) Transfer of ownership b) Immediate delivery of the goods c) the contract must satisfy essential of a valid contract d) goods must be a movable property 13. The essential of a valid contract are a) there should be an offer b) offer must be accepted c) the parties to the contract must have free consent 14. Which of the following statements, is correct regarding contact of sale? a) It may provide immediate delivery of the goods and immediate payment of price or both b) It may provide delivery or payment by instalment c) It may provide delivery or payment or both at a future date

4 d) any of the above 15. What does an actionable claim mean? a) it is a claim to any debt or any beneficial interest in movable property not in possession b) such claim can be recovered by means of a suit or an action c) it is enforceable by court of law 16. The kinds of goods can be: a) existing goods b) specific goods c) future goods d)any of these 17. If A agrees to sell to B certain goods which shall arrive on a ship. Which kind of goods it would be? a) contingent goods b) future goods c) unascertained goods d) specific goods 18. What is meant by document of title to goods? a) it entitles and enable its rightful holder to deal with the goods represented by it as an owner b) it is a proof of ownership of goods c) it confers a right on the possessor to transfer the goods to another person 19. The feature of earnest money are : a) it is title of a security deposit for the due performance of a contact

5 b) if a contact is performed the earnest money is returned or adjusted against purchase price c) if buyer fails to perform a contact, the earnest money is forfeited 20. Which of the following is correct? a)when certain terms and specification about the goods are vital to the contact is called stipulation b) When stipulation is essential to the main purpose of the contact, it is called condition c) When stipulation is subsidiary to main purpose of contact, it is warranty 21. Which of the following statements, is not correct? a) conditions and warranty have different legal implications. b) if there is a breach of condition the aggrieved party has a right to repudiate the contact c) in case of breach of a warrant the aggrieved party can claim damages 22. Which of the following statements refers to a Contract? a) An agreement enforceable by law is a contract b) An agreement not enforceable by law is a contract c) None of the above 23. Every contract is an agreement but every agreement is not a contract. (True/False) 24. What are the key components of a contract? a) There should be a proposal and it is accepted by the other party b) There should be a proposal but it may be or may not be accepted by the other party c) None of the above

6 25. When does a promise arises? a) When the proposal is accepted by the other party b) When the proposal is not accepted by the other party c) None of these Key 1.a 2.b 3.d 4.d 5.d 6.d 7.b 8.d 9.c 10.d 11.d 12.b 13.d 14.d 15.d 16.d 17.a 18.d 19.a 20.d 21.d 22.a 23.T 24.a 25.a

7 1. Which of the following statements is true? a) A contract with consideration is void b) A contract without consideration is void c) None of these 2. A contract made with unlawful consideration is not enforceable in law. (True/False) 3. In which of the following, an agreement without consideration is valid? a) If it is expressed in writing and made out of natural love and affection between the parties standing in a near relation to each other b) If it is made to compensate a person who has already done something voluntarily for the promisor c) If it is a promise in writing to pay a debt barred by the law limitation d) All the above e) None of the above 4. Which among the following persons are not competent to enter into a contract? a) Minor b) Lunatic c) Insolvent d) a and b e) None of these 5. An agreement may be : a) Oral b) Written c) Either a or b d) None of these 6. A consideration is said to exist when at the desire of the promisor, the Promisee or any other person: a) Has done something or abstained from doing

8 b) Does or abstains form doing c) Promises to do or promises to abstain from doing something d) All of these e) None of these 7. A contract with a minor is void abinitio as he is not supposed to have a mature judgment. (True/False) 8. Essentials of a valid contract enforceable by law are: a) There must be a lawful proposal by one party and the other party must accept the proposal b) It may be oral or written c) There must be a lawful consideration to enter into contract d) The parties must be competent to enter into contract e) All of these f) None of these 9. A contract in which a party to the contract has the option to treat the contract as void or valid contract is called: a) Valid contract b) Void contract c) Voidable contract d) None of these 10. A threatens to shoot B is B does not agree to sell his house to A at a stated price. In this case B s consent to the contract has been obtained by: a) Coercion b) Undue influence c) Fraud d) None of these

9 11. A sell his horse to B which is unsound and A himself does not know about this and this a: a) Fraud b) Coercion c) Misrepresentation d) None of these 12. When there is a breach of contract, the aggrieved party can claim for: a) Ordinary damages b) Special damages c) a or b d) No damages at all 13. Identify the void contracts from the following: a) Minor b) Lunatic c) Drunkard d) Married woman e) a,b and c 14. A and b have a joint overdraft account and A dies. The bank has decided to call up the advance. In this case, bank can enforce the liability on: a) B alone b) B along with the legal representatives of A c) Cannot be enforced d) Anybody 15. X, Y, Z jointly promises to pay a sum of Rs. 5000/- to A. If the amount is not paid, what is the position of A? a) A can recover jointly from X,Y,Z b) A can recover either from X,Y,or Z c) A cannot recover from X,Y,Z d) a orb

10 e) None of these 16. A and B are maintaining a current account operated by both of them jointly. A has informed that B has died. The account has a credit balance of Rs.10,000/- The bank will have to pay the amount to: a) A only b) A and legal representatives of B jointly c) It will be paid only after A s death to the legal heirs of A and B d) None of these 17. A Cheque for Rs. 100/- issued by X and Co., a current account holder was wrongly dishonored by the bank.the bank is liable for: a) Simple damages b) Exemplary damages c) Either a or b d) Not liable 18. A asks a horse dealer to supply him a quiet and gentle horse. If the horse turn out to be vicious, what will be the consequences? a) this will amount to breach of a condition b) A has right to reject the horse c)a can claim damage for injury suffered 19. Which of the following is not a feature of condition? a) a beach of condition gives the aggrieved party a right to repudiate the contact b) it may be subsidiary stipulation to the contact c) a condition is a stipulation essential to the main purpose d) the effected party may maintain an action for damages 20. The difference between condition and warranty is: a) condition is a stipulation essential to the main purpose, while warranty is a collateral to the main purpose

11 b) Breach of condition gives right of effected party right repudiate the contract, warranty gives only right to damage c) Breach of condition may be treated as breach of warranty but breach of warranty cannot be treated as breach of condition 21. While making a contact,p specifies that he needs a bike can give mileage of 70 kms. The bike dealer assured that X brand of bike would suit him. P purchases the same bike but he finds that actual mileage of the bike is 50 kms per litre of petrol.which of the following statements, is not correct? a) The above is a contact of warranty b) P has right to repudiate the contract c) P can return the bike and get the price back d) P has right to claim damages if any 22. Breach of condition is treated as breach of warranty if : a) the buyer voluntarily waive it b) buyer accepted the goods c) in both the conditions buyer can claim from damages only 23. The buyer deemed to have accepted the goods: a) An intimation to seller that he has accepted goods b) when buyer consumes, uses, pledges or resells it c) after a lapse of reasonable time, buyer retains the goods without intimating the seller about rejection 24. Which of the following statements is correct? a) conditions and warranties may be either expressed or implied b) when they are inserted at the will of parties in the contact they are called expressed, when law presumes their existence, they are called implied c) implied conditions may be varied by express agreement

12 25. Which of the following are implied conditions? a) conditions as to title b) conditions as to Description, Quality or Fitness c) conditions as to Merchantability Key 1.b 2.T 3.d 4.d 5.c 6.d 7.T 8.e 9.c 10.a 11.c 12.c 13.e 14.b 15.d 16.b 17.c 18.d 19.b 20.d 21.a 22.d 23.d 24.d 25.d

13 1. Condition as to title implies: a) in case of sale, the seller has right to sell goods b) in an agreement to sell, seller has right to sell the goods at the time when the buyer is really to buy c) if seller s title turns out be defective, buyer may reject the goods 2. A purchased a second hand car from B. After a few months, the car was found to be stolen and A was required to hand it over to its real owner. What are the implications for A? a) The title of B, the seller was defective b) The seller cannot pass a god title c) A can recover full price from seller, B including damages 3. A sale by description includes: a) If contact of sale of goods is by description, there is implied condition that the goods shall correspond with the description b) The buyer has been the goods but he relies more on what has been described by the seller c) where goods do not confirm to the method of packing 4. A purchased a car described as 1961 model. A relief on what was described by seller. Though A has seen the car but deviation was not apparent. Later it was found that car was made of two parts welded together. Only one part was from 1961 model. What are the consequences? a) A relied on description by seller and fault was not apparent b) the description was false c) A can reject the contact and recover price from the seller 5. The condition of fitness shall apply, if: a) the buyer make known to the seller the particular purpose for which the goods are required b) the buyer relies on seller s skills or judgment

14 c) the goods are of a description which of his business ordinarily supplies in the course of his business 6. What are the features of a condition as to merchantability? a) the goods should be such as would be commercially marketable b) it should be saleable at full value c) merchantability should also include the use, i.e., a watch that will keep time 7. Which of the following is not included as a condition in a sale by sample? a) the goods should have market value b) the goods should be supplied correspondent with the sample in quality c) the buyer should have opportunity to compare with the sample d) the goods should be free from any defect rendering them un merchantable 8. The features of condition implied by custom, or trade usage is implied by: a) conduct of parties b) nature of goods c) description of goods d) all these 9. Can a continuing guarantee be revoked by the guarantor? a) Yes for all the existing and future transitions b) Yes only for all the future transactions c) None of these 10. The features of implied warranty are: a) the buyer shall have and enjoy quiet possession of goods b) the goods shall be free from any charge or encumbrance in favour of third party c) if encumbrance is declared in the contact

15 11. Any implied warranty may be varied by: a) express agreement b) course of dealing between parties c) if usage is such as to bind parties to the contact d) any of these 12. What is doctrine of caveat emptor i.e., let the buyer beware? a) when a buyer effects purchase of goods realise on his own judgment b) the buyer takes the risk of suitability of goods for his purpose c) the buyer cannot hold seller responsible 13. M/S. Kumar &Co. Deposited a sum of Rs.10, 000/- into their current account with the bank which was wrongly credited by the bank to M/S Kumar & Son s current account which was withdrawn by them. M/S Kumar & Co. threatens to use the bank. What is the position of the bank? a) The bank cannot recover the amount from M/S Kumar & Sons account b) The bank can recover the amount only with the prior consent of M/S Kumar & Sons c) The bank can recover the amount from M/S Kumar & Sons and credit to the account of M/S Kumar & Co. d) None of these 14. A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person is a: a) Conduct of Guarantee b) Contract of Indemnity c) None of these 15. The person who promises to make good the loss is called as: a) Indemnifier b) Indemnified c) None of these

16 16. An indemnity holder is entitled to recover from the promisor: a) All damages which he may have compelled to pay in any suit in respect to any matter to which the promise to indemnity applies b) All costs which he may be compelled to pay in any suit c) All sums paid in compromise of any such suit not contrary to the order of the indemnifier d) All the above e) None of the above 17. Indemnifier is entitled to the benefits of all the securities which the creditor ahs against the principal debtor whether he was aware of them or not. (True/False) 18. All insurance contracts are contracts of indemnity as these are contracts which indemnify a person from certain losses he may suffer due to fire, floods, earthquake etc. (True/False) 19. A contract to perform the promise or discharge the liability of a third person in case of his default is a: a) Contract of Guarantee b) Contract of Indemnity c) None of these 20. Which of the following gives rise to a consideration to the surety for giving a guarantee? a) Any promise made to the principal debtor b) Anything done for the benefit of the principal debtor c) Either a or b d) None of the above 21. Which of the following statements are true? a) The liability of the surety exists along with the liability of the principal debtor b) The liability of the surety does not exists along with the liability of the principal debtor c) The liability of the surety is primary and that of the principal debtor is secondary

17 22. The liability of the surety crystallizes when: a) There is demand on the principal debtor to repay the debt b) There is a default on the part of principal debtor in repayment of debt c) None of the above 23. In a contract of guarantee, the liability of the surety is: a) Primary b) Secondary c) None of these 24. Can the creditor file a suit against the surety without suing the principal debtor? a) Yes b) No c) None of these 25. What is continuing guarantee? a) It is a guarantee which can be continued by the bank for ever b) It is a guarantee which extends to a series of transitions c) None of the above Key 1.d 2.d 3.d 4.d 5.d 6.d 7.d 8.a 9.b 10.c 11.d 12.d 13.c 14.b 15.a 16.d 17.T 18.T 19.a 20.c 21.a 22.b 23.b 24.a 25.b

18 1. What happens to a guarantee on the death of guarantor? a) It is revoked by the death of the surety as to the future transactions b) The estate of the deceased surety is liable for those transitions which have already taken place during the lifetime of the deceased surety c) Both a and b d) None of the above 2. What happens when there is a variation in terms of contract between the creditor and the principal debtor without the consent of the guarantor? a) It discharge the surety as to transactions subsequent to such variance b) It does not discharge the surety as to transactions subsequent to such variance c) None of the above 3. What happens if the creditor by omission discharges the principal debtor without the consent of the guarantor? a) This act of the creditor does not discharge the guarantor b) This act of the creditor discharge the guarantor c) None of these 4. Does mere forbearance on the part of the creditor to use the principal debtor or to enforce any remedy against him discharge the surety? a) Yes b) No c) None of these 5. What is right of subrogation? a) It is surety getting the rights of the creditor to use the principal debtor after payment of debt b) It is the principal debtor getting the rights of the creditor to use the surety after payment of debt c) None of the above 6. The parties to a contract of guarantee are: a) Principal Debtor

19 b) Creditor c) Surety d) All of these 7. Which of the following the doctrine of caveat emptor does not signify? a) buyer must take chance b) the must examine the goods thoroughly c) the buyer must rely upon his own skills d) if buyer makes a bad selection he cannot blame any other person except himself 8. The exception to the rule of caveat emptor are: a) When the buyer makes known to the seller the particular purpose of the relies on seller s skill and judgment b) where the goods are sold by description by a seller who is bound to deliver the goods of merchantable quality c) where the seller fraudulently conceals the latent defect d) any of the above 9. What does appropriation signify? a) In involves selection of goods with the exclusive intension of using them in performance of the contact with the manual consent of parties b) Appropriation of goods may be done either by the seller with the buyer s assent c) it can also be done by the buyer with the seller s assent 10. How does appropriation by seller with buyer s assent take place? a) Appropriation is usually done by the seller b) The seller sorts out the goods out of a larger quantity c) once the goods is sorted out the property in goods passes to the buyer d) any one or all of the above

20 11. In a sale of 20 bags of sugar out of a large quantity 4 bags were filled and taken away by the buyer and seller filled the remaining 16 bags and informed to buyer. The buyer promised them to take away. Before the buyer could take them the goods was destroyed. What are the consequences? a) By filling the bags the seller had unconditionally appropriated them to contract and buyer by promising to take them away had signified his consent to the appropriation b) the property had passed to the buyer at the time of loss c) the seller will not be responsible for loss 12. What is appropriation by buyer with seller s assent? a) when buyer picks up the goods, he appropriates the goods to the performance of the contact b) the seller signifies is assent in appropriation by accepting the cash c) property in goods immediately passes to buyer 13. Which of the following modes, the seller may appropriate the goods? a) By separating the goods contract far from larger quantity b) by putting the goods contracted separately and informing the same to the buyer c) by delivery of goods 14. The rule regarding the transfer of title to goods are: a) only owner cash sell the goods b) if a person transfers articles not belonging to him, the transferee acquires no title c) the rule applies that no one can give better title than he himself has 15. It is the owner of goods or a person authorized who can sell the goods. This has the following exemptions:

21 a) when an owner by an act or omission leads the buyer to believe the buyer that seller has authority to sell. The buyer acquires good title b) a bonafied buyer who buy goods from a mercantile agent having no authority from the principal to sell, get a good title c) if one of the several joint owners of goods has the sale possession by permission of co- owners 16. A sells B certain goods to be delivered on third day. Before delivery, A sells goods again to C, who buys in good faith and without notice of previous sale to B, What are the consequences? a) C get a good title in certain circumstances b) C acts in good faith and without notice of prior sale c) B can sue A 17. The seller though not an owner of the goods conveys a good title to the buyer in case of: a) sale by a finder in certain circumstances b) sale by a pledge under certain circumstances c)sale by an official receiver or liquidator 18. Conditions for performance of a sale contact are: a) the seller has to deliver the goods b) the buyer should accept the delivery and make payment c) delivery of goods and payment of price are concurrent conditions 19. The features of delivery of goods are:

22 a) It is a voluntary transfer of goods from one person to another b) delivery of goods may be by any mode for which parties agree c) the effect should be to put the goods in the possession of buyer or his agent 20. Delivery can be: a) actual b) symbolic c) constructive d) any of these 21. A delivery of goods will be constructive in the following cases: a) when a seller agrees to hold goods on behalf of a buyer b) The buyer is already in possession of the goods and seller agrees to buyer s holding c) when the goods are in possession of third person who acknowledge to hold them on behalf of buyer d) any of the above 22. Which of the following statements, is not correct regarding delivery of goods? a) when a seller agrees to hold goods on behalf of buyer, it is called symbolic delivery b) the seller is not bound to deliver the goods until buyer applies c) the seller s duty to deliver the goods as per the terms of the contact applied by the buyer d) If the goods are in possession of third person the delivery would be completed only if he acknowledges to buyer holding goods on his behalf 23. The place of delivery will be:

23 a) it is to be delivered at the place at which they are at the time of sale b) in case of an agreement to sale the delivery will be at the place where they are at the time of agreement c) when the goods is not in existence at the time of agreement, they are manufactured d) any of the above places 24. Is a guarantee obtained by means of misrepresentation made by the creditor enforceable in law? a) Yes b) No c) None of these 25. In every c contract of guarantee, there is an implied promise by principal debtor to indemnify the surety. (True/False) Key 1.c 2.a 3.b 4.b 5.a 6.d 7.a 8.d 9.d 10.d 11.d 12.d 13.d 14.d 15.d 16.d 17.d 18.c 19.d 20.d 21.d 22.a 23.d 24.b 25.T

24 1. Where there are co-sureties, a release of one of them by the creditor : a) Does not discharge the other sureties b) Discharge all other sureties c) Does not free the discharged surety from his responsibility to other sureties d) a and c e) None of these 2. A partnership firm is converted into a private limited company. In this case bank has to : a) Continue the same guarantee b) Obtain a fresh guarantee c) Either a or b d) None of these 3. X and Y are guarantors to a term loan granted to Z. X are released from the guarantee as he is seriously ill. In this case Y: a) Continues to be liable b) If discharged from the liability c) His liability gets reduced to 50% d) None of these 4. The bank has sanctioned a loan to Mr. A by taking the guarantee of Mr. B. B has died. What is the position of the bank? a) The bank can recover the loan only from A since B has died b) The bank cannot recover the loan from A since B has died c) The bank recover the loan from A or from B s estate d) None of these 5. X has guaranteed a loan to Y. Y fails to repay the loan. The creditor makes a demand against X who repays the amount. Whether X can recover the amount from Y? a) X can recover the amount form Y b) x cannot recover the amount from Y c) None of these

25 6. Can the guarantor revoke his guarantee given the repayment of the loan to the borrower by the bank? a) No since the bank has given the loan only on the strength of the guarantee b) No since the guarantor is committed to ensure that the borrower repays the loan c) Yes it can be revoked any time but only for future transitions d) None of the above 7. The bank has issued a guarantee to Mr. A on behalf of their customer Mr. B assuring Mr. A that Mr. B will complete the project within 3 months as per the contract. This guarantee given by the bank is? a) Financial guarantee b) Performance guarantee c) Deferred Payment Guarantee d) None of these 8. A Government department has insisted that Mr. X deposit a sym of Rs.1 lakh as earnest money deposit before awarding the contract or get a bank guarantee for the said amount. The bank guarantee issued by the bank in this case will be: a) Performance guarantee b) Financial Guarantee c) Deferred payment Guarantee d) None of these 9. The bank issues a guarantee to Mr. X guaranteeing payment of installments spread over a period of time on behalf of their customer Mr. Y. This type of guarantee is called as: a) Financial Guarantee b) Deferred payment Guarantee c) Performance guarantee d) None of these

26 10. A&B claim certain goods from a lorry transport company as rival owners. A takes delivery of the goods by a agreeing to compensate the loss in case B turns out to be true owner. In this case: a) There is a contract of indemnity between A and the lorry transport company b) There is a contract of indemnity between A and B c) There is no contract of indemnity d) None of the above 11. Bank guarantee facility sanctioned by a bank is: a) Fund based facility b) Non- fund based facility c) Botha a and b d) None of these 12. Which one of the following is not a financial guarantee? a) Bid bond guarantee b) Advance payment guarantee c) Retention money guarantee d) None of these 13. Which one of the following is not obtained by the bank for issuing a bank guarantee? a) Cash margin b) Counter guarantee a) Additional collateral security wherever appropriate d) None of the above 14. When a bank guarantee is invoked, the following requirements have to be satisfied. a) Invocation must be made within the validity period b) Invocation amount does not exceed the guarantee amount c) Only ager seeking permission from Court d) None of these

27 15. When a bank guarantee is invoked, the following requirements have to satisfied: a) Invocation must be made within the validity period b) Invocation amount does to exceed the guarantee amount c) Guarantee has been invoked by the competent authority d) All of these e) None of these 16. What is bailment? a) It is delivery of goods by one person to another person b) Upon a contract that the goods shall be returned after accomplishment of purpose c) Or the goods may be disposed of according the directions of the person delivering them d) All the above e) None of the above 17. The person delivering the goods is called as: a) Bailer b) Baliee c) None of these 18. Is there any duty on the part of the bailor to disclose the faults in the goods bailed on which the bailor is aware of? a) No b) Yes c) None of these 19. In all cases of bailment, the baliee is bond to take as much care of the goods bailed to him as a man of ordinary prudence would under similar circumstances take of his own goods of the same bulk, quality and value of the goods bailed (True/False)

28 20. Can the baliee mix the bailor s goods with his own goods? a) Yes b) No c) None of these 21. Can the baliee retain the goods of the bailor after the purpose is accomplished? a) No b) Yes c) None of these 22. Which of the following are essentials of bailment? a) Delivery of goods by one person to another person for some purpose b) The goods are to be returned when the purpose is accomplished c) The bailee can keep the goods bailed to him and he need not return the same to the bailor d) a and b e) None of the above 23. Which of the following are the duties of the bailor? a) To disclose known facts relating to the goods bailed b) To bear the extra ordinary expenses incurred by the bailee in maintain the goods bailed c) To receive back the goods bailed when the purpose is accomplished d) All the above e) None of the above 24. Ornaments kept is Safe Deposit Locker are stolen in spite of due care exercised by the bank. In this case the bank is to the depositor of the ornament. a) Liable b) Not liable c) Bank should compensate the hirer of the locker d) None of the above 25. What is pledge? a) It is bailment of goods as security for payment of a debt

29 b) It is bailment of goods as security for performance of a promise c) Both a and b d) None of these Key 1.d 2.b 3.a 4.c 5.a 6.c 7.b 8.b 9.b 10.a 11.b 12.d 13.d 14.a 15.d 16.d 17.a 18.b 19.T 20.b 21.b 22.d 23.d 24.b 25.c

30 1. Can the pawnee (pledge) sell the goods pledged for payment of a debt? a) Yes, after giving a reasonable notice of sale to the pawnor (pledgor) b) Yes, even without giving a reasonable notice of sale to the pawnor c) Yes, only with the prior permission of the Court d) None of these 2. If the proceeds of sale of goods is less than the amount due in respect of the debt, can t the pawnee proceed against the pawnor legally for recovery of the balance amount of debt? a) No b) Yes c) None of these 3. Can the bailee file a suit for theft of goods which was in his possession? a) Yes, as if he was the owner b) No, only bailor cash file a suit c) Yes, only after obtaining a prior consent from the bailor d) None of these 4. Which of the following statements are correct? a) Pawnee can retain the goods pledged, for payment of debt b) Pawnee can retain the goods pledged, for payment of interest due on the debt c) Both a and b d) None of the above 5. If the pledgor makes default in respect of which goods were pledged, the pledge has the following rights: a) File suit against the pledgor and retain the goods pledged as security till payment b) Sell the goods pledged ager giving reasonable notice of sale to the pledgor c) If the proceeds of sale are less than the amount due in respect of the debt, the pledgor is still liable to pay the balance d) All the above e) None of the above

31 6. Which among the following is an agent of the principal? a) Power of Attorney holder b) Partner of a firm c) Security of a Club d) Both and b e) None of these 7. Which among the following person can appoint an agent? a) A major person b) A minor c) A sound mind person d) Lunatic e) Both a and c f) None of these 8. Can the minor be appointed as an agent? a) Yes b) No c) None of these 9. Can the minor as an agent, bind himself to the principal? a) Yes b) No c) None of these 10. Is consideration an essential element in a contract of agency? a) It is not essential b) It is essential c) None of these

32 11. Can an agent delegate his authority to others? a) He can delegate his powers to others b) He cannot delegate as he himself is a delegate c) None of these 12. delivery of goods in wrong quantity comprises of a) short delivery b) excess delivery c) delivery of mixed goods d) any of these 13. The type of contact with regard to delivery of goods can be: a) FAS or FAR contact b) FOB or FOR contact c) CIF or Ex-ship contact d) any of these 14. The features of FAS(Free Alongside Ship or Rail) are: a) the seller is required to deliver the goods alongside the ship or rail notified in the contact b) the property of goods passes to buyer when goods is delivered at the ship c) the freight and insurance will be borne by buyer d) any of the above 15. The features of FOB (Free On Board or Rail) are: a) seller has to deliver goods at the ship named in the contact b) seller has to bear all the expenses upto and including shipment on behalf of buyer c) the buyer has to bear freight insurance and subsequent expenses d) any of the above 16. Which of the following is not a feature of CIF (Cost Insurance and Freight) contact? a) the seller is require to bear all the expenses including insurance and send bill of lading b) deliver the goods at the port of destination c) documents are delivered to the banks against payment of bill or acceptance of bill

33 d) the seller continue to be owner of goods until the buyer obtains documents 17. What is ex-ship contract? a) seller has to deliver the goods to the buyer at the port of destination b) property in the goods does not pass until actual delivery c) the goods are at seller s risk during voyage d) any of the above 18. The buyer is deemed to have accepted the goods when: a) he intimates to the seller to have accepted goods b) he retains the goods beyond reasonable time without imitating about rejection to the seller c) he does any act in relation to goods which is in consistent with the ownership of the seller i.e., he re- sells the goods d) any of the above 19. The buyer will be liable if he fails to accept delivery for the following: a) any loss occurred to seller by his refusal or negligence b) reasonable changes for care and custody of goods c) (a) and (b) both d) any of the above 20. The buyer s liability does not arise in the following cases where: a) property in goods has not passed to buyer b)the seller has a lien on goods c) the buyer s refusal to take delivery amount to repudiation of the contact d) any one of the above 21. Who is an unpaid seller? a) When all of the price has not been paid or tendered b) when conditional payment has been made by way of negotiable instrument and such instrument is dishonored before delivery of goods c) the seller includes the actual seller or any other authorized person

34 22. Which of the following rights an unpaid seller have against the goods? a) right to lien b) right of stoppage in transit c) right of re-sale d) All these 23. An unpaid seller who is in possession of goods is entitled to retain goods where: a) goods have been sold without any stipulation as to credit b) the goods sold on credit but term of credit has expired c) the buyer became insolvent 24. Which of the following is not correct? a) right of lien can be exercised for payment of other charges such as storage b) if seller has delivered part of goods, he may exercise lien on the remainder c) where delivery of part is intended to the whole, the right of lien is lost d)where delivery is to be made in instalments the seller cannot retain remaining instalment 25. The effect of lien would be: a) the seller retain the possession of goods b) the contact of sale is not rescinded c) buyer can claim delivery of goods by making of price KEY 1.a 2.b 3.a 4.c 5.d 6.d 7.e 8.a 9.b 10.a 11.b 12.d 13.d 14.d 15.d 16.d 17.d 18.d 19.c 20.d 21.d 22.d 23.d 24.a 25.d

35 1. The right of lien is lost in the following circumstances: a) the delivery of goods to a carrier puts an end to the right of lien b) when the buyer or his agent lawfully obtain possession of goods c)when the seller expressly or impliedly waives his right of lien d) in all the above cases 2. Right of stoppage in transit is: a) the seller has right to resume possession of goods while they are in the course of transit b) the seller can exercise the right when buyer become insolvent and goods are in transit c) the goods can be retained until payment of price 3. The difference between right of lien and right to stoppage is : a) right of goods can be exercised only when buyer has become insolvent. While right of lien can be exercised where the buyer is solvent b) lien is exercised when seller is in actual or constructive possession whereas right to stop is applicable when seller has parted the possession of goods c) right of stoppage is an extension of right of lien 4. The goods deemed to be in transit: a) when it is delivered to a carrier or other Bailee for purpose of transmission b) until the buyer or agent takes delivery of goods c) the transit end as soon as goods are handed over to the buyer are applicable 5. Which of the following cases transit comes to end? a) when buyer intercept and takes delivery of the goods before the arrival at the destination b) when goods are delivered to a carrier who is acting as an agent to the buyer c) When the carrier wrongfully refuses to deliver the goods to the buyer

36 6. The transit does not come to an end: a) the buyer has rejected the goods and carrier continues to be in possession b)when goods have been delivered in part and there is no agreement that part delivery shall amount to the delivery of whole c) when goods have been delivered in part in the circumstances which shows an agreement to give up the possession of the whole 7. Can an agent appoint a sub agent? a) Yes if the custom of trade or nature of agency provides for it b) No since he being an agent has no authority to appoint a sun-agent c) None of the above 8. Can the sub-agent be made responsible to the principal? a) Sub agent is responsible to the principal b) Sub-agent is not responsible to the principal c) None of the above 9. In which of the following cases, a contract of agency gets terminated a) On the death of the principal b) On the insolvency of the principal c) On the insanity of the principal d) All of these e) None of these 10. When an agent is employed by the principal to do an act which is criminal, is the principal liable to the agent to indemnify him against the consequences of such criminal act? a) Yes b) No c) None of these

37 11. In a contract of agency: a) An agent is person employed to do an act b) An agent will represent another person in dealings with some third person c) The person for whom such an act is done is who is represented by the agent is called the principal d) All the above e) None of the above 12. An agent: a) Has authority to do all acts to protect his principal from loss as would be done by a person in his own case b) Can employ a sub-agent if the custom of trade or the nature of agency so requires and the agent is responsible to the principal forth acts of the sub-agent c) Can act on behalf of the principal without his knowledge or authority which can be ratified or disowned by the principal d) All the above e) None of the above 13. Mr. X appoints Mr. Y, a minor, to sell his car for not less than Rs.50, 000/-. But Y sells it for Rs. 40,000/- Whether X is bound by this transaction and whether he has any right against Y for claiming compensation for having not obeyed his instructions? a) X is not bound by this transactions as Y was acting as an agent and not obeyed his instructions b) X is not bound by this transaction but claim compensation from Y c) X is bound by this transaction but cannot claim compensation from Y for not obeying his instructions d) None of the above 14. Mr. X books a bus ticket through Mr. Y who is booking tickets on behalf of ABC Travel Agents who are the authorized agent for Jaijavan Road lines, for traveling to Kanpur. Here Mr. Y is: a) Sub-agent b) Substituted agent c) Agent

38 d) None of these 15. Mr. A who has sold goods to X&Co. in Kolkata, authorizes Mr. B, a merchant in Kolkata, to recover the moneys due to him firm the firm. Mr. B instructs Mr.D, an Advocate to take legal action against X&Co. for recovery of the money. What is the role of Mr. D? a) Sub-agent b) Substituted agent c) Agent d) None of these 16. M/S A&Co have authorized the bank to collect the moneys due to the firm from XYZ Company on account of goods sold to them. The bill was submitted to the bank for collection. The bank had allowed M/S A7Co to draw the amount against the said bill. What is the role of the bank? a) Here the bank is acting as an agent to collect the bill but has no interest in the bill b) Here the bank is acting as an agent to collect the bill and has interest in the bill as it has allowed drawings against the bill c) Here the banker is a holder is due course and hence has an interest in the bill d) None of the above 17. A and B who have a joint current account at your branch have issued a Power of Attorney favoring C according to which C is operating the account. Yesterday a notice was received by you intimating the death of B. Today, a cheque drawn by C is presented for payment. How would you deal? a) Pay the cheque as it was drawn by C before B s death b) Return the cheque as the Power of Attorney ceases to exist c) None of the above 18. X, Y, Z and Z are partners in the firm of Honest Trades. The firm has a current account with you which is operated by any one of the partners. X gives a mandate favoring A to operate the firm s account on his behalf and the bank pays the cheque of Rs. 10,000/- drawn by A under the mandate. The firm refused to accept the debit. What is the position of the bank? a) Bank can recover the amount from the firm b) bank cannot recover the amount from the firm c) None of these

39 19. A has a credit balance in his account upon which he has given B the authority to draw cheques. Sometimes afterwards the bank learns that A is incapacitated by temporary derangement from managing his affairs and at intervals in asylum for lunatics. Has B still power to operate the account? a) He can continue to operate the account b) Operations on the account cannot be allowed c) Operations on the account can be allowed when A is sound mind d) None of the above 20. A enters into an arrangement with B to buy his property. The property is Mortgaged to the bank. B informs A that his property is free from encumbrance. A comes to know of the fact. The agreement becomes: a) Void b) Voidable at the option of A c) None of these 21. Sale of Goods Act is enacted with the objective of a) Laying down the law relating to selling of movable goods in a particular State b) Laying down the law relating to sale and purchase of movable goods in the country c) None of the above 22. Document of title goods refers to: a) Title to a person over the goods b) Title to a person over the movable assets c) Either a or b d) None of these 23. Which of the following are documents of title to goods? a) Bill of Lading b) Airway Bill c) Railway Receipt d) Lorry receipt

40 e) Warehouse Receipt f) a,c and e g) None of these 24. When are goods treated as sold? a) When the property in the goods will be transferred to the buyer at a future date b) When the property in the goods is transferred from the seller to the buyer c) None of the above 25. What tare the essential features of Contract of sale of goods? a) There must be two parties, one seller and the other buyer b) There must be transfer of ownership of goods from the seller to the buyer c) The subject matter of a contract of sale must be movable goods d) Consideration in a contract of sale has to be necessarily money e) A contract of sale may be express or implied from the conduct of the parties f) All of the above g) None of the above 1.d 2.d 3.d 4.d 5.d 6.c 7.a 8.b 9.d 10.b 11.d 12.d 13.c 14.b 15.b 16.b 17.b 18.b 19.b 20.b 21.b 22.a 23.f 24.b 25.f

41 1. What is the difference between sale and agreement to sell? a) In sale the buyer becomes the owner o goods immediately but in an agreement to sell the ownership is transferred at a future date b) In a sale it is an executed contract whereas in an agreement to sell it is an executor contract c) In a sale, any breach of the contract, the seller can use for the price, but in an agreement to sell, any breach of the agreement, the seller can use for damages d) All the above f) None of the above 2. What do you understand by a absolute contract of sale? a) In an absolute contract of sale the seller and buyer agree that the sale of goods will be final only on fulfillment of the condition b) In an absolute contract of sale there are no conditions to be fulfilled by the seller or buyer for the sale and purchase of goods c) None of the above 3. Which of the following are covered under Sale of Goods Act? a) Stocks and Shares b) Growing crops, grass c) Every kind of moveable properly other the an actionable claims and money d) All of these 4. Under the Sale of Goods Act? a) Buyer means a person who buys or agrees to buy goods b) Seller means a person who sells or agrees to sell goods c) Price means the money consideration for sale of goods d) Delivery means voluntary transfer of possession from one person to another person e) All the above f) None of the above

42 5. In an agreement to sell: a) The parties are yet to perform their mutual promises b) The ownership of goods is yet to pass form the seller to the buyer which will be passed on fulfillment of certain conditions as agreed upon by the seller and the buyer c) The risk in goods is still with the seller and passes to the buyer only after the agreement to sell becomes a sale d) If the seller does not deliver the goods the buyer can only claim damages in a suit and cannot demand delivery as the sale is not concluded and the seller can only use for damages e) All of the above f) None of the above 6. What do you understand by Condition? a) A stipulation will be a condition where it is essential to the main purpose of the contract b) A stipulation will be a condition where it is collateral to the main purpose of the contract c) None of the above 7. If stipulation is collateral to the main purpose to the contract, if is, warranty. (True/False) 8. What happens to a breach of warranty? a) It gives rise to claim for damages b) The buyer cannot reject the goods c) The buyer cannot repudiate the contract d) All of these e) None of these 9. What is an implied condition? a) A condition is said to be implied when the law incorporates them into the contract b) A condition is said to be implied when it is mutually agreed to by the parties c) None of the above 10. Which of the following examples refer to the implied conditions?

43 a) In a contract of sale by description b) In a contract by sale by sample c) Both a and b d) None of the above 11. When the buyer enjoys quiet possession of the goods, there is a: a) Implies condition b) Implied warranty c) None of these 12. In which of the following cases, there is an implied warranty? a) When the goods sold are free from encumbrance in favor of any third party b) When the goods sold are encumbered in favor of any third party c) None of the above 13. The stoppage in transit may be exercised: a) by taking actual possession of goods b) by giving notice of the seller s claim to carrier in whose possession the goods are c) notice can given either to the person in the actual possession of goods or to the principal d) any of these 14. An unpaid seller has right to resale in the following circumstances: a) when goods are perishable nature without giving notice to the buyer b) the buyer does not pay any attention even after giving the notice in reasonable time c) where seller has expressly received the right of resale in the contact 15. The effect of resale is:

44 a) the goods once become the property of the seller b) he can sell the goods as an original owner c) the seller is entitled to recover from buyer not the price but only the shortfall 16. Right of withholding delivery means: a) where the property in the goods has not passed to buyer b)unpaid seller has right to withhold delivery of goods c)it is similar to right of lien and storage in transit 17. What are the rights of an unpaid seller against the buyer personally? a) suit for price b) suit for damage for non- acceptance c) suit for interest from the date of notification 18. What is the measure of damage resulting from the buyer s breach of contract? a) the buyer is liable to compensate the seller with the loss which seller may suffer on account of re- sale b) if seller does not re- sell, the difference between the contact and market price on the day of breach is taken as a damage c) the above principles applies even if the seller sustains a lesser loss 19. What course of action of seller can adopt for repudiation of contact before date of delivery? a) the seller may sue the buyer for damage b)the damage will be assessed according to the prices prevailing on the date of breach c) the seller may treat the contact as subsisting and wait till the date of delivery 20. Which of the following remedies available to buyer against seller for breach of contract?