Capacity of Parties – MCQ on Business Law with Answers

Students should practice Capacity of Parties – CA Foundation Business Law MCQ Questions with Answers based on the latest syllabus.

Capacity of Parties – Business Law MCQ Questions with Answers

1. For necessaries supplied to a minor __________.
(a) he is personally liable
(b) his parents are liable
(c) his estate is liable
(d) the contract is valid under Indian law
Answer:
(c) his estate is liable

2. A minor is a person who has not attained the age of:
(a) 15 years
(b) 18 years
(c) 21 years
(d) 25 years
Answer:
(b) 18 years

3. An agreement with a minor is:
(a) Void
(b) Voidable
(c) Valid
(d) Illegal
Answer:
(a) Void

4. A contract for the benefit of the minor is:
(a) Valid
(b) Void
(c) Voidable
(d) Illegal
Answer:
(a) Valid

5. Minor’s contract is __________.
(a) Voidable
(b) Voidable at the option of the minor
(c) Illegal
(d) Void
Answer:
(d) Void

6. A supplies B, a lunatic, with necessaries suitable to his condition in life. A is __________.
(a) Not entitled to be reimbursed from B’s property
(b) Entitled to be reimbursed from B’s property
(c) Personally liable
(d) None of these
Answer:
(b) Entitled to be reimbursed from B’s property

7. A mortgage executed by minor is __________.
(a) Void
(b) Voidable
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer:
(a) Void

8. __________ is the most extreme form of mental un-soundness?
(a) Lunacy
(b) Incapacity
(c) Minority
(d) Idiocy
Answer:
(d) Idiocy

9. A minor __________.
(a) Can be a promisee
(b) Cannot be an agent
(c) Can be a principal
(d) Can ratify a past contract entered during minority
Answer:
(a) Can be a promisee

State Whether The Following Are True or False:

1. A minor can be a promisee in a contract.
2. A person, who is usually of unsound mind but occasionally of sound mind, can always enter into a valid contract.
3. A minor can be a partner in a firm.
4. A minor can ratify his contract after attaining majority.
5. Minor can be held personally responsible for the necessaries supplied to him.
6. A person who is usually of unsound mind cannot enter into a contract even when he is of a sound mind.
7. Contracts with a lunatic during lucid intervals are valid.
8. A minor can be declared as an insolvent.
9. A minor can be an agent.
10. Husband and wife cannot enter into a valid contract.
11. A contract to take a loan by a boy of sixteen years of age from a money lender of 50 years old is a valid contract.
12. A promissory note duly executed in favour of a minor is void.
13. A person who is usually of sound mind, but occasionally of unsound mind cannot enter into contract when he is of unsound mind.

Answer:

1. True
2. False
3. False
4. False
5. False
6. False
7. True
8. False
9. True
10. False
11. False
12. False
13. True