Business Law: Contracts and Legal Instruments

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Questions and Answers

Under what circumstances can a condition in a contract be considered void?

If the condition is impossible to perform from the beginning. (correct)
If the condition involves a minor.
If the condition benefits only one party.
If the condition is not clearly stated.

Which of the following is a primary right of an unpaid seller under the Sale of Goods Act?

Right to receive a bonus.
Right to sue the buyer for price and damages. (correct)
Right to demand the goods back, even if ownership has transferred.
Right to alter the terms of the original agreement.

According to Section 138 of the Negotiable Instruments Act, what is the primary consequence of a check bouncing?

The payee can claim double the amount of the check.
The bank must immediately issue a new check.
The drawer commits an offense punishable by imprisonment or fine or both. (correct)
The drawer's bank account will be permanently frozen.

What is a key characteristic that distinguishes a 'negotiable instrument' from other types of financial documents?

It is freely transferable by endorsement and delivery. (B) Signup and view all the answers

Which type of crossing on a check mandates that the check's payment can only be made to a bank?

General Crossing (B) Signup and view all the answers

Under what legal principle does a minor's agreement become voidable?

The principle of restitutio in integrum. (C) Signup and view all the answers

What is the primary objective of the Consumer Protection Act?

To protect consumers from unfair trade practices. (C) Signup and view all the answers

Which of these is a type of contract based on enforceability?

Quasi Contract (B) Signup and view all the answers

In a contract of guarantee, who is primarily responsible for fulfilling the obligation to the creditor?

The principal debtor (B) Signup and view all the answers

Which of the following is a key condition for someone to be considered a 'holder in due course' of a negotiable instrument?

They must have acquired the instrument without knowledge of any defects in the title. (A) Signup and view all the answers

Flashcards

Conditions (in contract law)

Stipulations essential to the main purpose of the contract, breach of which gives the injured party a right to sue for damages as well as to repudiate the contract.

Rights of Unpaid Seller

Rights include lien, stoppage in transit, resale, and withholding delivery if the buyer is insolvent or breaches the contract.

Section 138 of Negotiable Instruments Act

This section of the Negotiable Instruments Act deals with dishonor of cheques due to insufficient funds.

Negotiable Instrument

A document guaranteeing payment of a specific amount, either on demand or at a set date, including features such as transferability and negotiability.