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Law Firm General Partnership Agreement with Sleeping Partner document sample
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CD on MCQs on Mercantile Laws: CPT
Table – 1
The errors observed in the CD have been rectified and specified in bold and irrelevant words have been struck
through as below:
Question Option 1 Option 2 Option 3 Option 4 Answer
Quotation of price is a Offer Invitation to Offer Cross offer None of these B
Can a person who is Yes, he can always Yes, but only No, he cannot None of these
usually of unsound, but make a contract when he is of Make a contract B
occasionally of sound sound mind
mind, make a contract?
Suppose the time fixed for Can rescind the To claim No remedy None of these
performance of the contract compensation available B
contract has expired but
the time is not essential.
What is the remedy of the
promisee in the
circumstances?
Operates as Operates as Operates on court Does not operate
Death or insanity of the revocation of the revocation only if order only on court order A
proposer proposal the acceptor
irrespective of knows about it
whether the before acceptance
acceptor has the
knowledge of the
same prior to his
acceptance
Which of the following It must be done at It may be done at The registration of It may be done at
statements, about the the time of its the time of a firm may be any time after its A
registration of firm, is not formation formation affected by formation
true? sending by post
to the Registrar a
statement in the
prescribed form
As per the accepted view, Complete Registrar files the Registrar is
the registration of the firm application for statement and satisfied that all Court records the B
is considered complete registration is filed makes entries in the provisions statement and
when with the the register of have been duly certifies the
Registrar of Firms firms complied with entries in Register
of firms
Which of the following is It cannot file a suit Its partners If an action is It cannot be sued
not disability of an against third parties cannot file a suit brought against by a third party D
unregistered firm? against a firm the firm by a third
party then neither
the firm nor the
partner can claim
any set off if the
suit be valued for
more than Rs. 100
Which of the following is Right to take part in Right to have Right to share Right to receive
not the right of a partner business access to account profit remuneration D
i.e., which he cannot claim books
as a matter of right?
Which of the following acts To buy or sell goods To borrow money To acquire To engage a
are not included in the on accounts of for the purposes immovable lawyer to defend C
implied authority of a partners of firm property on behalf actions against
partner? of the firm firm
After retirement from firm,
which of the following Active partner Sleeping partner Dead partner Both 2and 3 D
partners is not liable by
holding out, even if the
public notice of retirement
is not given?
Which of the following He can become a A minor has the He can become
He cannot become
statements is not true full-fledged right to receive partner on B
a full-fledged
about minor’s position as partner in an the agreed share becoming a major
partner
a partner? existing firm of profit
The reconstitution of the Change in profit All of the above
firm takes place in case Admission of a Retirement of a sharing ratio D
Partner partner
A new partner can be All the partners Simple majority of Partner having New partner only
admitted in the firm with partners major profit share A
the consent of
A partner may retire from With consent of all As per express By giving notice All of the above
an existing firm partners agreement in writing to all D
other partners of
his intention to
retire
A partner may be expelled As given by express In the interest of
from the firm on the contract By majority of the firm All of the above D
fulfillment of the condition partners
that the expulsion power is
exercised.
A partnership firm is All partners have Firm’s business One partner has In cases 1and 2
compulsorily dissolved become insolvent has become become insolvent only D
where unlawful
On which of the following Insanity of a partner Misconduct of a Willful or All of the above
grounds, a partner may partner persistent D
apply to the court for breaches of
dissolution of the firm? agreement by a
partner
A minor cannot A minor can Minor has to None of the
On attaining majority become a partner become a partner decide within six above C
Which statement is at any time months whether
correct? he shall remain in
the firm or leave it
Suppose you have
entered into a fixed term Partnership for a Partnership at will None of these Any of these B
partnership agreement fixed term
with me and the
partnership-deed provides
neither for the duration nor
for the determination of
our partnership. What is
the technical expression
for this kind of
partnership?
X contracts to sell a stack X Y None of these Both of these A
of hay to Y, to weigh and
deliver it at Rs. 100 per
tonne. A part of it was
weighed and taken away
but before anything more
could be done a flood
carried away the
remainder. On whom will
the loss as regards the
reminder fall?
The most important Business Sharing of Profits Mutual Business to be
element in partnership is understanding carried on by all or D
any of them acting
for all
A firm is the name of The Partners The minors in the Majority The collective
firm shareholders name under which D
it carries on
business
In the absence of Not entitled to share Entitled to share Entitled to share Entitled to share
agreement to the contrary profits in capital ratio in Current A/c profits equally D
all partners are ratio
A minor is A partner of a firm Representative of An active partner Entitled to the
the firm of the firm benefits of the firm D
A partnership at will is one Which does not Which does not Where the Which cannot be
have any deed have any partner partnership is not dissolved C
for a fixed period
of time
Active partner is one who Takes part in the Shares major part
business of the firm Actively of the profit Makes a show of A
participates authority
In co-curricular
activities
Every partner has the right Take part in the To share Receive Pay taxes
to business of the firm exclusive profits remuneration A
On reaching the On the balance in With the consent On the condition
A partner can retire age of the capital of all the partners of his nominee C
superannuation account reaching becoming a
a certain amount partner
A partner can be expelled Such expulsion is in The majority of A partner can not
if good faith the partner agree be expelled Compensation is A
on such expulsion paid
Death of partner has the Result in
effect of Dissolving the firm continuance of the Nil Computation of A
business of the profits up to the
firm date of death
Registration of a firm is Compulsory Optional Depends upon the None of the above
partnership deed B
An unregistered firm Set on Set off Both of these None of the above B
cannot claim
On dissolution the Accounts are settled Partners dues are Public notice is
The registrar
partners remain liable paid off given of the C
strikes off the
until dissolution
name
A general offer made to Comes forward and Acts accordingly, Acts accordingly None of these
the public at large is valid, acts accordingly and his act is and his act is not
and binding contract is ratified by the ratified by the
made with a person who offeror offeror
having the knowledge of
the offer
the public at large is valid, acts accordingly and his act is and his act is not A
and binding contract is ratified by the ratified by the
made with a person who offeror offeror
having the knowledge of
the offer
A, by a letter dated 15th A can revoke his A cannot revoke A can revoke the None of the
March, offers to sell his offer before he his offer as he offer at any time above B
car to B, who posts his receives the letter of becomes bound
acceptance on 20th acceptance by the acceptance
March. Here on 20th March
In the above question B cannot revoke B can revoke the None of the
B can revoke his his acceptance as offer at any time above A
acceptance at any he becomes
time till his letter bound by posting
reaches A his acceptance
letter
A, by a letter, offers to sell A binding contract No binding A voidable None of these
his T.V. to B for Rs. comes into contract comes contract is B
10,000. Without knowing existence into existence as entered into
A's offer, B, by a letter, B's letter is B's letter is merely
offers to buy the same equivalent to a cross offer
T.V. from A for Rs. acceptance of A's
10,000. Here offer
A invited B and his family
to dine with him on a Yes No B
particular night. The latter
accepted the former's
invitation. On the
scheduled date, B drove
with his family from Karol
Bagh to the residence of A
in Kalkaji (at a distance of
12 miles) and found the
latter’s residence
locked. Can B sue A?”
X's brother runs away
from the house. Y who is Yes No B
an employee of X offers to
search for the brother and
goes out for the purpose.
In the absence of Y, X
offers a reward of Rs.100
to any one who can either
find out the brother or give
clues enabling X to find
his brother. Y traces the
brother of X, and comes
to know the reward
announcement
thereafter. Can Y claim
the reward?
R's son was missing. N
who was a distant relation Yes No A
of R made a search for the
missing son, found him
and brought him back. R
then promised N that he
would compensate him for
the services rendered.
Later R refuses to keep
his promise. Could N
then promised N that he
would compensate him for
the services rendered.
Later R refuses to keep
his promise. Could N
enforce it? in
A gives to B Rs. 300 to be
given to C. B informs C Yes No B
that he is holding the
money for him. But
afterwards B refuses to
pay the money. C sues B
for the money. B contends
that C cannot sue, as he
was not a party to the
contract. Will the
contention of B be
upheld?
A minor, lent Rs. 100 to B
at the market rate of Yes No B
interest on the basis of a
promissory note. A year
thereafter, when he had
attained majority, he filed
a suit against B for the
recovery of the amount
thereon. B contended that
since A was minor at the
time of entering the
agreement, it is void. Is
the contention of B
valid?
A by misrepresentation,
leads B erroneously to Yes No B
believe that 500 maunds
of Indigo are made
annually at A's factory. B
examines the accounts of
the factory, which shows
that only 100 maunds of
Indigo have been made.
After this B buys the
factory. Can the co Is the
contract voidable?
A, a singer, enters into a
contract with B, the Yes No A
manager of a theatre, to
sing at his theatre two
nights in every week
during the next two
months and B engages to
pay her 100 rupees for
each night’s performance.
On the sixth night, A
willfully absents herself.
Can the singer be sued?
X and Y are co-owners of
a house let to a tenant. X Yes No B
and Y divide the net rents
(after deduction of the
incidental taxes; etc.)
between themselves. Is it
a partnership?
X and Y who are the co-
owners of the aforesaid Yes No A
house use the house as a
hotel managed either by
themselves or by a duly
appointed manager for
their common profit. Is it a
partnership?
X and Y buy 200 bales of
cotton, agreeing to share Yes No B
the same between them.
Is it a partnership?
X and Y agree to work
together as carpenters but Yes No B
X shall receive all profit
and shall pay wages to Y.
Is it a partnership?
X and Y are joint owners Yes No B
of a ship. Is it a
partnership?
X, a publisher, agrees to Yes No B
publish at his own
expense a book written by
Y and to pay Y half the net
profit. Is it a partnership?
X and Y purchase 10,000 Yes No B
bags of cement, which
they agree to sell for their
joint account. Is it a
partnership?
A and B are solicitors in Yes No A
partnership. C, a client of
the firm, hands a sum of
money to be invested on
security. A never invests it
but applies it to his own
use. B receives no part of
the money and knows
nothing of the transaction.
Is B liable? to make go
A and B are partners. A Yes No A
with the intention of
cheating B goes to a shop
and purchases such
articles on behalf of the
firm as might be use in the
ordinary course of the
partnership business, but
converts them to his own
separate use, there being
articles on behalf of the
firm as might be use in the
ordinary course of the
partnership business, but
converts them to his own
separate use, there being
no collusion. Is B liable?
A and B were partners Yes No A
with 70 P and 30 P shares
respectively. On the death
of A his son stepped into
his shoes and without any
express agreement
carried on the business. Is
it a partnership?
M, a shopkeeper, sold a The buyer has no The buyer has the
Television set to N, who right to reject the right to reject the Either of the above None of the above B
purchased it in good faith. television television and to [(1) & (2)]
The set had some have refund of the
manufacturing defect and price
it did not work after a few
days in spite of repairs. In
this case, the television
was not merchantable, as
it was not fit for ordinary
usage.
A agrees to sell a horse to Yes No A
B on a condition that B
will keep it for 6 days on
trial basis and have the
option to return on the
expiry of 6 days, if he
does not find it suitable.
Three days after the
making over of the horse
to B, it dies without the
fault of B. Is B liable?
X sold to Y certain Yes No A
quantities of 'foreign
refined rape oil warranted
only equal to samples'.
The samples consisted of
rape oil mixed with hemp
oil. The oil tendered
corresponded with the
samples, but it was not
such as is known in the
market as "foreign refined
rape oil. Can the buyer
reject the goods?
The defedendant Yes No A
purchased 975 bales of
rice being the whole
contents of a "Gola", paid
earnest money and took
part delivery of rice. The
rest was afterwards
destroyed by fire. Would
contents of a "Gola", paid
earnest money and took
part delivery of rice. The
rest was afterwards
destroyed by fire. Would
the defendant be liable to
pay the balance of the
price? in respect of the
A sells 50 quintal of wheat Yes No B
to B. The wheat remains
in A's warehouse after the
sale. B sells to C 10
quintals of wheat, and A at
B's desire sends those 10
quintals of wheat to C. In
the circumstances can it
be regarded as the
delivery of the whole
Quantity?
P agrees to sell and Yes No A
deliver to Y 300 quintals of
rice, but only 200 quintals
are delivered. Y has the
rice weighed and accepts
the quintals sent. Y
afterwards objects that the
whole of the 300 quintals
was not delivered and he
refuses to pay for 200
quintals. Is Y liable to pay
for what he has
accepted?
A, by a letter dated 25th 25th December, 27th December, 28th December, 30th December, B
December, 1998, offers to 1998 1998 1998 1998
sell his house to B for
Rs. 10 lakhs. The letter
reaches B on 27th
December 1998, who
posts his acceptance on
28th December 1998,
which reaches A on 30th
December 1998. Here,
the communication of offer
is completed as on
Which of the following In the case of fraud, In the case of Fraud does not In the case of
statements is correct? the person making misrepresentation, afford a ground for misrepresentation, D
the representation the maker does bringing an action the fact the
believes it to be true not believe it to be in tort for damages; plaintiff had
true whereas means of
Misrepresentation discovering the
does truth by exercising
ordinary diligence
can be good
defence against
the repudiation of
the contract but
such a defence
cannot be set up
in the case of
the repudiation of
the contract but
such a defence
cannot be set up
in the case of
fraud. Other than
fra
In case the delivery of False, as it is
goods is delayed due to True, as there is a against the A
the fault of party, the provision to this general rule
goods shall be at the risk effect
of defaulting party even
though the ownership is
with the other party.
Acceptance of delivery of Intimates to the Does any act to Retains the goods Any of the above
goods is deemed to take seller that he had the goods, which after the lapse of D
place when the buyer accepted the goods is inconsistent a reasonable time
with the without intimating
ownership of the the seller that he
seller has rejected them
A person who is not a True, as the rule is
False, as the rule
party to the contract can that a stranger to a B
is that a stranger
enforce the contract on contract can sue
to a contract
the same principle that
cannot sue
consideration furnished by
a stranger is valid.
Which of the following acts Intentional false Active Innocent false Promise made
does not fall under the statement of facts concealment of statement without intention C
categories of fraud? facts to perform
A grocer supplied monthly Yes No B
rations for five months to
B who was aged 17 years
and 5 months. B having
failed to pay the bills for
the supplies, the grocer
decided to sue him for the
realisation of his dues.
Could he succeed? had
he done so ?
Is registration of firms Yes No
compulsory in India? B
X, Y and Z are partners. Z Yes No A
who is an active partner
retires without giving
public notice of his
retirement. Will Z be liable
for the subsequent debts
of the firm?
Every partner cannot TRUE FALSE B
participate in the conduct
of the business.
Even in the absence of TRUE FALSE B
any contract between the
partners, a partner is
entitled to receive
remuneration for taking
part in the business. conduct of thebusiness
any contract between the
partners, a partner is
entitled to receive
remuneration for taking
part in the business. conduct of thebusiness
Every partner is bound to TRUE FALSE A
attend diligently to his
duties in the conduct of
the business.
Every partner can have TRUE FALSE A
access to, inspect and
take a copy of any of the
books of accounts of the
firm.
An unregistered firm can TRUE FALSE B
enforce by suit its dues
from a third party.
Neither the firm nor the TRUE FALSE A
partners of an
unregistered firm, when
sued, can claim a set-off.
In a contract of sale, TRUE FALSE B
subject matter of contract
must always be money.
Table - 2
The students should ignore following questions:
Question Option 1 Option2 Option 3 Option 4 Answer
X offered through an advertisement
in the Statesman to sell certain Yes No B
"antique" on a particular day at a
particular place in Delhi. In response
to the advertisement a person
travelled all the way from Bombay to
Delhi and found to his immeasurable
annoyance….
A's father had died leaving a house
to two sons. They agreed to partition Yes No B
the house, which did not admit the
division in exactly equal parts, and
one of the sons had agreed not to
construct a door at a certain place in
his portion of the house. In a
dispute….
B owes A Rs. 2,000. A desires B to
pay the amount to A's account with Yes No A
C banker. B who also banks with C,
orders the amount to be transferred
from the account to A's credit and
this is done by C. Afterwards, and
before A knows of the transfer, C
fails. Has….
this is done by C. Afterwards, and
before A knows of the transfer, C
fails. Has….
A and C carry on partnership
business as merchants trading Yes No A
between Bombay and London .D, a
merchant in London, to whom they
send their consignments secretly
allow….
A, B and C are partners in a
manufacture of machinery. A is Yes No B
entitled to 3/8th of the partnerships
property and profits. A becomes
bankrupt, and B and C continue the
business without paying A's share of
the partnership assets or settling
account with his ….
X enters into a druggist's shop and
asked for a hot water bottle. He is Yes No A
shown a bottle, which the proprietor
of the shop say will not stand boiling
waster, but it is meant for hot water.
X buys the bottle, and one day while
using it, it bursts and injures….
There was a sale by sample on the
5th May, of two parcels of rice Yes No A
containing 500 and 100 bushels
respectively. When, on the 12th
May, the buyer went to examine the
bulk, the parcel containing 500
bushels was shown to him but the
seller refused to show him….
In the pursuance of a contract to fill
20 bags of sugar out of a large Yes No A
quantity, the seller filled four bags,
which the buyer takes away.
Subsequently, the seller filled 16
more bags, informed the buyer of
this and requested him to take them
away. The ….
A agrees to purchase bales of paper
from B at Madras. The goods are Yes No B
sent by railway, delivery to be
against payment by A through bank.
A paid the amount and obtained a
delivery order. But the goods had
been destroyed by fire before he
had paid the amount….
The plaintiff entrusted a motorcar to
a mercantile agent for sale. Yes No B
Stipulating that the car should not be
sold below certain price. To this the
agent professed to agree, but
intended, from the outset, to sell the
car at such price as he could
obtain….
A manufacturing jeweller delivers
certain articles of jewellery to B Yes No A
(whose business is to travel about
the country selling jewellery) upon
the term that they should remain the
property of A until sold or paid for. B
fraudulently pledges the jewellery….
There was a sale of 100 tonnes of
paper to be shipped as early as Yes No A
possible by named ship or other
vessels. The named ship was not
available and the seller shipped 50
tonnes on other ship, informing the
buyer that he has done so and that
he had drawn on ….
B (a London merchant) places an
order with A (a Bombay merchant) Yes No A
for 100 bales of cotton. B sends his
ship to Bombay for cotton. A delivers
the cotton on board the ship, and
takes bill of lading from the master,
making the cotton deliverable to A's
order….
Table - 3
The students are advised to replace the following questions in place of the above-mentioned questions of
Table – 2
Question Option 1 Option 2 Option 3 Option 4 Answer
X sold his business to Y without
disclosing this to his customers. Yes No B
M, an old customer sent an
order for goods to X by name.
Y, the new owner, executed the
order. Is M bound to accept the
goods?
A and B are friends. B treats A
during A’s illness. B does not Yes No B
accept payment from for the
treatment and A promises B’s
son X to pay him Rs. 1000.A
being in poor circumstances is
unable to pay. X sues A for the
money. Can X recover?”
A contracts to indemnify B
against the consequences of Yes No A
proceedings which C may take
against B in respect of certain
sum of money. C obtains
judgment against B for the
amount. Without paying any
portion of the decree amount B
sues A for its recovery. Will B
succeed?”
A, B, C, D and E all adult
members of a Joint Hindu Yes No A
Family convert their family
business into partnership. Is
the partnership valid?”
A, B and C are partners. An
order is placed with D for Yes No B
supplying a certain quantity of
goods to the firm on credit.
Before D could supply the
goods C died. D supplies the
goods after C’s death being
totally ignorant about the fact of
C’s death. A and B
subsequently become
insolvent. Can D make C’s
estate liable for his debt?
N was shopping in a self-
service super market. He Yes No B
picked up a bottle of orange
squash from a shelf. While he
was examining it the bottle
exploded in his hand and
injured him. Can N claim
damages for the injury?
A agrees to supply to B a
certain quantity of timber of half Yes No A
inch thickness. The timber
actually supplied varies in
thickness. The timber is
merchantable and
commercially fit for the purpose
for which it was ordered. B
rejects the timber. Is his action
justified?”
A lady who knew that her skin
was abnormally sensitive Yes No B
bought a tweed coat and
developed skin trouble by using
it. She did not disclose to the
seller that her skin was
abnormally sensitive. Is the
seller liable?
Some mixed worsted coatings
were sold by sample. The Yes No A
goods when supplied
corresponded to the sample but
it was found that owing to a
latent defect in the cloth coats
made out of it would not stand
goods when supplied
corresponded to the sample but
it was found that owing to a
latent defect in the cloth coats
made out of it would not stand
ordinary wear and therefore
unsaleable. The same defect
existed in the sample also but
could not be detected on a
reasonable examination. Is
buyer entitled to reject the
goods?
A who owes B Rs. 10000
appoints B as his agent to sell Yes No B
his landed property at Delhi
and after paying himself (B)
what is due to him to hand over
the balance to A. Can A revoke
his authority delegated to B?
An agent authorized by a
power of attorney to operate a Yes No B
business but not to borrow
money asked for a loan on a
representation that he is
authorized to borrow and
produced the power of attorney
for the perusal of the lender.
But the lender did not read it
and advanced a loan. Is the
principal bound by the loan?
X of Cochin agreed to sell 400
tons of rice to Y of Calcutta to Yes No B
be shipped in November or
December 2005. X puts the rice
on ship in October 2005. Is the
buyer bound to accept the
consignment?
P sold barley to B by sample
delivery to be made at T Yes No B
railway station. B sold the
barley to X. The barley was
delivered at T railway station
and B after inspecting a sample
of it sent it to X. X rejected it as
not being according to sample
whereupon B seeks to reject
the goods. Will B succeed?
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