ICSI BUSINESS LAW Question Bank part 1
1.(a) State, with reasons in brief, whether the following statements are correct or incorrect. 

(i) A company cannot sue and be sued in its own name. 
(ii) A bill which is drawn and accepted without consideration is called accommodation bill
(iii) A person who does not invest or participate in the management of the firm but only gives his name to the firm, is called a nominal partner. 
(iv) Consideration is not necessary in a contract of agency.
(v) A contract of sale for future goods is a valid contract.
(vi) The liability of the surety is coextensive with that of the principal debtor. 


(b) Attempt any two of the following : 
(i) "Sharing of profit is not the conclusive test of partnership." Comment. 

(ii) Ajit is indebted to Balram for Rs.5 lakh. Ajit sells his property to Chinky for Rs.6 lakh. Chinky, the purchaser of Ajits property, promises to pay off the debt to Balram. Later, Chinky fails to pay the debt amount to Balram. Can Balram sue Chinky for the debt amount of Rs.5 lakh ? Give reasons.

(iii)Manjeet, a minor falsely represented himself to Nakul that he was a major and requested to lend him Rs.10,000. Nakul believed and acted upon Manjeets statement and lent him Rs.10,000. Later, Manjeet failed to repay the loan amount to Nakul who filed a suit against Manjeet in the court of law. Manjeet pleads his minority. Decide giving reasons

2. (a) State, with reasons in brief, whether the following statements are true or false: 
(i) A contract for the sale of future goods is always known as an agreement to sell. 
(ii) A partner can be expelled from a firm only with the consent of all the partners. 
(iii) A private company is required to file a statement in lieu of prospectus with the Registrar of Companies before allotting its shares. 
(iv) Revocation of offer does not take effect until it is actually communicated to the offere. 
(v) A promissory note is a threeparty instrument. 

(b) Write notes on any two of the following : 
(i) Subagent 
(ii) Statutory meeting 
(iii) Auction sales 
(iv) Forged endorsement
3. (a) State, with reasons in brief, whether the following statements are correct or incorrect. Attempt any six : 
(i) Besides minors and persons of unsound mind, there are others too who are disqualified from contracting by law. 
(ii) A contract to contract is not a contract
(iii) A continuing guarantee can be revoked as to the past transaction by giving notice to the creditor . . 
(iv) An auctioneer can refuse to accept the highest bid. 
(v) A preference shareholder does not have a right to vote on every resolution of the company. 
(vi) The liability of a sleeping partner is limited. 
(vii) Order instrument can be negotiated by delivery only. 
(viii) A firm cannot be appointed as a director of a company. 

(b) Write short notes on any two of the following : 
(i) Certificate of incorporation
(ii) Anticipatory breach of contract 
(iii) Irrevocable agency 


4. (a) State, with reasons in brief, whether the following statements are correct or incorrect 
(i) A specific guarantee once given is irrevocable. 
(ii) Future goods can be the subject matter of a sale. 
(iii) Sharing of losses is an essential element of the existence of partnership. (iv) Cheques are always payable on demand. 
(v) A company is an incorporated individual having a separate legal entity. 

(b) Attempt any two of the following : 
(i) No seller can give to the buyer a better title to the goods than what he himself has. Comment.
(ii) Explain the legal position of a minor under the Indian Contract Act, 1872 for necessaries supplied to him. 

iii) Anubhav, an author, enters into a contract with Balwant, a publisher, for writing a book for him. But, subsequently Anubhav refuses to write the book for Balwant. Now, Balwant files a suit against Anubhav for specific performance of the contract. Will Balwant succeed ? Give reasons. 

(iv) Amit promises to procure an employment for Bimal in a government department and Bimal promises to pay Rs.5,000 to Amit for the same. Amit gets the said job for Bimal. However, Bimal refuses to pay the promised money to Amit who files a suit in the court of law to recover Rs.5,000 from Bimal. Will Amit succeed ? Give reasons


5.(a) State, with reasons in brief, whether the following statements are correct or incorrect. 
(i) Specific offer can be accepted by any member of the general public. 
(ii) Drawer of a dishonoured cheque due to insufficiency of funds is liable to imprisonment for a maximum period of one year. 
(iii) In the case of an agreement to sell, ownership in the goods passes from seller to the buyer immediately. 
(iv) The partnership firm has no legal existence apart from its partners
(v) A company cannot sue a third party in its own name. . 
(vi) Any promise made for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee. 

(b) Write notes on any two of the following : 
(i) Continuing guarantee 
(ii) Association not for profit 
(iii) Contingent goods.

6. (a) State, with reasons in brief, whether the following statements are correct or incorrect.
(i) Consideration may move from the promisee or any other person. 
(ii) Goods in return of goods is an acceptable mode of sale of goods. 
(iii) Not negotiable crossing means the cheque cannot be further transferred. (iv) A shareholder of a private company can easily transfer his shares to anyon 
(v) A partner can retire in accordance with the partnership deed. 
(vi) A surety must be an adult person. 
(b) Attempt any four of the following : 
(i) Customs and trade usages 
(ii) Inchoate or incomplete instrument. 
(iii) Exceptions to the doctrine of caveat emptor. 
(iv) Statutory duties of a Company Secretary.