Free Consent – MCQ on Business Law with Answers

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

Free Consent – MCQ on Business Law with Answers

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

Free Consent – MCQ on Business Law with Answers

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

Free Consent – MCQ on Business Law with Answers

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

Free Consent – MCQ on Business Law with Answers

State Whether The Following Are True or False:

  1. A threat to commit suicide does not amount to coercion.
  2. A deceit which does not deceive is no fraud.
  3. Consent obtained by fraud makes the agreement void.
  4. A person who is usually of unsound mind but occasionally of sound mind can always enter into contract.
  5. Mere silence as to facts likely to affect the willingness of a person to enter into contract is not fraud.
  6. 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.
  7. In the absence of consent, there can be no contract.
  8. A threat amounting to coercion must necessarily proceed from a party to the contract.
  9. Undue influence involves use of moral pressure.
  10. Undue influence can be exercised only by a party to the contract.
  11. If there is no damage, there is no fraud.
  12. 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.
  13. Undue influence can be exercised only between the parties who are related to each other.
  14. A promise made without any intention of performing it amounts to fraud.
  15. If one of the parties to a contract was under a mistake as to the matter of fact, the contract is voidable.
  16. Ignorance of foreign law is put on a same level with ignorance of fact.
  17. A contract is not voidable only because there is a mistake of Indian law.

Answer:

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

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