Students should practice Free Consent – CA Foundation Business Law MCQ Questions with Answers based on the latest syllabus.
Free Consent – Business Law MCQ Questions with Answers
1. If there is no consent the agreement is:
(a) Void
(b) Voidable
(c) Illegal
(d) Valid
Answer:
(a) Void
2. If consent in not free due to coercion, undue influence, fraud, and misrepresentation then the agreement is:
(a) Void
(b) Voidable
(c) Illegal
(d) Valid
Answer:
(b) Voidable
3. If the agreement is made by obtaining consent by doing an act forbidden by the Indian Penal Code, the agreement would be caused by:
(a) Coercion
(b) Fraud
(c) Misrepresentation
(d) Undue influence
Answer:
(a) Coercion
4. A buys an article thinking that it is worth ₹ 100 when in fact it is worth only ₹ 50. There has been no misrepresentation on the part of the seller. The contract is:
(a) Valid
(b) Void
(c) Voidable
(d) Unenforceable
Answer:
(a) Valid
5. Where a person is in a position to dominate the will of another person and uses that position to obtain on unfair advantage it is called:
(a) Fraud
(b) Coercion
(c) Undue influence
(d) Misrepresentation.
Answer:
(c) Undue influence
6. An agreement caused by unilateral mistake of fact is:
(a) Void
(b) Voidable
(c) Illegal
(d) Valid
Answer:
(d) Valid
7. Unlawfully detaining or threatening to detain any property, to the prejudice of any person making him to enter into an agreement amounts to:
(a) Threat
(b) Coercion
(c) Undue influence
(d) Misappropriation
Answer:
(b) Coercion
8. An agreement made under mistake of fact, by both the parties, forming the essential subject matter of the agreement is:
(a) Void
(b) Voidable
(c) Valid
(d) Unenforceable
Answer:
(a) Void
9. “Active concealment of fact” is associated with which one of the following?
(a) Misrepresentation
(b) Undue influence
(c) Fraud
(d) Mistake
Answer:
(c) Fraud
10. Lending money to a borrower, at high rate of interest, when the money market is tight renders the agreement of loan:
(a) Void
(b) Valid
(c) Voidable
(d) Illegal
Answer:
(b) Valid
11. When a person, who is in dominating position, obtains the consent of the other by exercising his influence on the other, the consent is said to be obtained by:
(a) Fraud
(b) Intimidation
(c) Coercion
(d) Undue influence
Answer:
(d) Undue influence
12. With regard to the contractual capacity of a per-son of unsound mind, which one of the following statements is most appropriate?
(a) A person of unsound mind can never enter into a contract
(b) A person of unsound mind can enter into a contract
(c) A person who is usually of unsound mind can contract when he is, at the time of entering into a contract, of sound mind
(d) A person who is occasionally of unsound mind can contract although at the time of making the contract, he is of unsound mind
Answer:
(c) A person who is usually of unsound mind can contract when he is, at the time of entering into a contract, of sound mind
13. While obtaining the consent of the promisee, keeping silence by the promisor when he has a duty to speak about the material facts, amounts to consent obtained by:
(a) Coercion
(b) Misrepresentation
(c) Mistake
(d) Fraud
Answer:
(d) Fraud
14. ‘A’ threatened to commit suicide if his wife did not execute a sale deed in favour of this brother. The wife executed the sale deed. This transaction is:
(a) Voidable due to under influence
(b) Voidable due to coercion
(c) Void being immoral
(d) Void being forbidden by law
Answer:
(b) Voidable due to coercion
15. A threatens to shoot B, if B does not agree to sell his property to A at a stated price. B’s consent in this case has been obtained by ________.
(a) Fraud
(b) Undue influence
(c) Coercion
(d) None
Answer:
(c) Coercion
16. A master asks his servant to sell his cycle to him at less than the market price. This contract can be avoided by the servant on grounds of:
(a) Coercion
(b) Undue influence
(c) Fraud
(d) Mistake
Answer:
(b) Undue influence
17. If A sells, by auction to B a horse which A knows to be unsound and A says nothing to B about the horse’s unsoundness, this amounts to:
(a) Fraud
(b) Not fraud
(c) Unlawful
(d) Illegal
Answer:
(b) Not fraud
18. Silence is fraud when silence is, in itself equivalent to speech. This statement is:
(a) True
(b) False
(c) Untrue in certain cases
(d) None of these
Answer:
(a) True
19. A person is deemed to be in a position to dominate the will of another if he:
(a) Holds real or apparent authority
(b) Stands in a fiduciary relationship
(c) Both (a) and (b)
(d) Either (a) or (b)
Answer:
(c) Both (a) and (b)
20. If both the parties to a contract believe in the existence of a subject, which infact does not exist, the agreement would be ________.
(a) Unenforceable
(b) Void
(c) Voidable
(d) None of these
Answer:
(b) Void
21. When both the parties to an agreement are under a mistake as to a matter of fact essential to an agreement, the agreement is:
(a) Void
(b) Valid
(c) Voidable
(d) Illegal
Answer:
(a) Void
State Whether The Following Are True or False:
- A threat to commit suicide does not amount to coercion.
- A deceit which does not deceive is no fraud.
- Consent obtained by fraud makes the agreement void.
- A person who is usually of unsound mind but occasionally of sound mind can always enter into contract.
- Mere silence as to facts likely to affect the willingness of a person to enter into contract is not fraud.
- A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact.
- In the absence of consent, there can be no contract.
- A threat amounting to coercion must necessarily proceed from a party to the contract.
- Undue influence involves use of moral pressure.
- Undue influence can be exercised only by a party to the contract.
- If there is no damage, there is no fraud.
- In case of fraud, the aggrieved party loses the right to rescind the contract if he had the means of dis-covering the truth by ordinary diligence.
- Undue influence can be exercised only between the parties who are related to each other.
- A promise made without any intention of performing it amounts to fraud.
- If one of the parties to a contract was under a mistake as to the matter of fact, the contract is voidable.
- Ignorance of foreign law is put on a same level with ignorance of fact.
- A contract is not voidable only because there is a mistake of Indian law.
Answer:
- False
- True
- False
- False
- True
- True
- True
- False
- True
- True
- False
- False
- True
- True
- False
- True
- True