Students should practice Conditions and Warranties – CA Foundation Business Law MCQ Questions with Answers based on the latest syllabus.
Conditions and Warranties – Business Law MCQ Questions with Answers
1. Conditions are stipulations __________.
(a) essential to the main purpose of the contract
(b) collateral to the main purpose of the contract
(c) either ‘a’ or ‘b’
(d) neither ‘a’ nor ‘b’
Answer:
(a) essential to the main purpose of the contract
2. A warranty is stipulation __________.
(a) essential to the main purpose of the contract
(b) collateral to the main purpose of the contract
(c) very important to the seller
(d) very important to the buyer
Answer:
(b) collateral to the main purpose of the contract
3. Breach of a condition gives rise to __________.
(a) claim for damages
(b) a right to treat the contract as repudiated
(c) both ‘a’ and ‘b’
(d) either ‘a’ or ‘b’
Answer:
(c) both ‘a’ and ‘b’
4. Breach of a warranty gives rise to __________.
(a) claim for damages
(b) a right to treat the contract as repudiated
(c) both ‘a’ and ‘b’
(d) either ‘a’ or ‘b’
Answer:
(a) claim for damages
5. What are implied stipulations of a contract?
(a) agreed by the parties.
(b) incorporated by law unless specifically agreed otherwise.
(c) implied by the circumstances
(d) implied by trade customs
Answer:
(b) incorporated by law unless specifically agreed otherwise.
6. If the condition as to the title of goods is not fulfilled, the buyer __________.
(a) may reject the goods
(b) has no alternative but to buy the goods
(c) may reject the goods and claim damages
(d) all the above
Answer:
(c) may reject the goods and claim damages
7. In a sale by sample and description, there is an implied condition __________.
(a) that bulk of the goods correspond with the sample
(b) that bulk of goods must correspond to the j description as well as the sample thereof
(c) the bulk of goods must correspond either to the description or to the sample
(d) the bulk of goods must correspond to the description only
Answer:
(b) that bulk of goods must correspond to the j description as well as the sample thereof
8. “If you contract to sell peas, you cannot oblige a party to have beans”: this statement applies to __________.
(a) a implied condition as to be description of goods
(b) the implied condition as to fitness of goods for a particular purpose
(c) implied condition as to sample
(d) implied condition as to title
Answer:
(a) a implied condition as to be description of goods
9. Under section 11 of the Sale of Goods Act, 1930, the time of payment can be of the essence of the contract __________.
(a) by agreement between the parties
(b) by operation of law
(c) both (a) and (b)
(d) either (a) or (b)
Answer:
(a) by agreement between the parties
10. Whether or not any stipulation other than time of payment is of the essence of the contract depends upon __________.
(a) application of section 11
(b) operation of law
(c) terms of the contract
(d) all of the above
Answer:
(c) terms of the contract
11. A stipulation in a contract of sale which is collateral to the main purpose of contract is called as __________.
(a) guarantee
(b) warranty
(c) condition
(d) term
Answer:
(b) warranty
12. Merchantable quality of goods means __________.
(a) that the goods are commercially saleable
(b) they are fit for the purpose for which they are generally used
(c) both ‘a’ and ‘b’
(d) the quality should be of high standard
Answer:
(c) both ‘a’ and ‘b’
State Whether The Following are True or False:
- Where the buyer is deprived to goods by their true owner then the buyer may recover the price for breach of the condition as to title.
- A stipulation essential to the main purpose of the contract is called as guarantee.
- There is an implied condition that the goods shall be free from all encumbrances.
- If a contract of sale contains a stipulation which has become impossible to perform the law excuses such a stipulation by reason of impossibility.
- Breach of implied warranties leads to the repudiation of a contract.
- Once the buyer decides to waive the condition he cannot insist on its fulfilment later on.
- Implied condition as to description can be given by the type of packing.
Answer:
- True
- False
- False
- True
- False
- True
- True