Tag: business law and contract act

Questions Related to business law and contract act

A, a singer enters into a contract with B, the manager of a theatre to sing at his theatre two nights in every week during the next two months and B engages to pay her Rs. 1,00,000 for each night's performance. On the sixth night, A willfully absents himself from the theatre. If A turns up after a week and B without saying anything allowed A to perform that night __________.

commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

  1. B is at liberty to put an end to the contract

  2. B cannot put an end to the contract but can claim damages from A

  3. The contract is left at the liberty of A

  4. The contract is unlawful

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Correct Option: B

A contract may be discharged by

commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

  1. Lapse of time

  2. Operation of the law

  3. Mutual agreement

  4. Any of above

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Correct Option: D

A contract is discharged by operation of law:

commerce discharge and breach of a contract discharge of contract performance, discharge, breach and remedies of contract business law and contract act

  1. by death of the promisor;

  2. by insolvency of promisor;

  3. by death or insolvency of promisor.

  4. any of the above.

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Correct Option: D

This section consists of fifty $(50)$ questions. Each question consists of legal propositions/ principles (hereinafter referred to as 'principles') and facts. These principles have to be applied to the given facts to arrive at the most reasonable conclusion. Such principles may or may not be true in the real sense, yet you have to conclusively assume them to be true for the purposes of this section. In other words, in answering the following questions, you must not rely on any principles except the principles that are given here in below for every question. Further you must not assume any facts other than those stated in the question. The objective of this section is to test your interest towards study of law, research aptitude and problem solving ability even if the "most reasonable conclusion" arrived at may be unacceptable for any other reason. It is not the objective of this section to test your knowledge of law.
Principle: An agreement may be oral or written. However, if a law specifically required that an agreement must be in writing, then the agreement must be in writing. A law specifically requires that the agreements relating to transfer of the copyright in noval between an author of a novel and the producer of a motion picture must be in writing.
Facts: The author of a novel, Love at Lost Sight, had several rounds of discussion with a producer of motion picture regarding making of a motion picture based on Love at Lost Sight. During the last discussion, they decided to make a motion picture on Love at Lost Sigh. The producer made a motion picture on Love at Lost Sight after making a payment of $Rs. 10,00,000$ (ten Lac only) in cash to the author, who happily accepted this amount as full and final payment. Later on, one the advice of his lawyer, who author brought a case in a court of law against the producer on the ground that there is no written agreement between the producer and him.

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  1. The author is likely to succeed in the case as the agreement is not in accordance with the law

  2. The author cannot succeed in the case as he has given his consent to the agreement

  3. The author is not likely to succeed in the case because he has already accepted the amount of $Rs. 10,00,000/$ as full and final payment

  4. The author can succeed in the case as the consideration is not adequate

Show answer
Correct Option: A
Explanation:

It is clearly mentioned in the principle, that the agreements relating to transfer of the copyright in novel between an author of a novel and the producer of a motion picture must be in writing. In this case though author accepted $Rs. 10$ lakh, but the agreement was not in writing according to the provisions of law, which is mandatory in case of transfer of copyright in novel.

In the year $2002$ the Competition Act was enacted replacing ___________.

introduction of business laws business law and contract act business studies

  1. Trade Marks Act

  2. Copy Right Act

  3. Contract Act

  4. MRTP Act

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Correct Option: D
Explanation:

The Competition Act 2002 replaced the Monopolistic and Restrictive Trade Practices, 1969; as it brought with itself the various safeguards which were need post the Liberalization, Privatization and Globalization (LPG) Policy of 1991.

·         Primarily MRTP was based on size of the trade as factor and CA was based on structure as a factor. In MRTP, Competition offences were implicit or not defined but were explicit and defined in CA. The MRTP was Complex in arrangement and language, whereas the Competition Act is Simple in arrangement and language and easily comprehensible.

·         Basically, the Competition Act 2002, is a modernized, simplified and practical evolution of the MTRP 1969.

Principle: The consideration or object of an agreement is unlawful if it is forbidden by law. Every agreement of which the object or consideration is unlawful is void.
Facts: 'X' promises to pay 'Y' $Rs. 50000$, if he ('Y') commits a crime, 'X' further promises to indemnify him ('Y') against any liability arising thereof. 'Y' agrees to act as per X's promise.
Which of the following derivations is correct?

introduction of business laws business law and contract act business studies

  1. There is a contract between 'X' and 'Y'

  2. There is an agreement between 'X' and 'Y' which can be enforced by the court of law

  3. There is an agreement between 'X' and 'Y' which cannot be enforced by the court of law

  4. There is a voidable contract between 'X' and 'Y'

Show answer
Correct Option: C
Explanation:

Section $23$ of the Indian Contract Act $1872$, states that the consideration or object of an agreement is lawful, unless It is forbidden by law; or is of such nature that, if permitted it would defeat the provisions of any law or is fraudulent, of invalnes or implies, injury to the person or property of another, or the court regards it as immoral or opposed to public policy.
In the present scenario, X promises to pay Y $Rs. 50000$ if he (Y) commits a crime. Here both the object and consideration are unlawful and forbidden by law, So, the agreement between X and Y cannot be enforced by the court of Law.

The term business includes every lawful trade, occupation and profession.

introduction of business laws business law and contract act business studies

  1. True

  2. False

  3. Sometimes false

  4. None of the above

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Correct Option: A
Explanation:

As per the Income Tax Act, 1961 the term business includes any lawful trade, commerce, manufacture or even any adventure or concern in nature of trade, commerce or manufacture. The term includes every trade occupation or profession.

The 39th Amendment laid that election of any person to Lok Sabha holding, the office of Prime Minister cannot be challenged before a Court of Law, but only before an authority established by Parliament. This was declared unconstitutional by the Supreme Court in  

introduction of business laws business law and contract act business studies

  1. Keshvananda Bharti Case

  2. Menaka Gandhi Case

  3. Indira Gandhi v. Raj Narain Case

  4. None of the above

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Correct Option: C
Explanation:

The 39th Amendment Act came amidst allegations of mala fide electoral usage charges against Indira Gandhi, which were held up in the court and then came the darkest period of the history of democratic India – the period of internal emergency.  

·         The 39th Amendment Act was passed in the parliament where Indira Gandhi was in majority, so that her election could not be challenged.

·         Clause 4 of the 39th Amendment act 1975 inserted Articles 71(2) and 329A to the Indian Constitution which provided that disputes regarding the election of four high officials, namely, the President, Vice-President, the Prime Minister and Speaker of the Lok Sabha, should be adjudicated by whatever authority and procedure was provided by law, and that any court order, made before its commencement, declaring such an election to be void, should be deemed null and void. This was struck down as unconstitutional in Indira Gandhi vs Raj Narain (1975).

·         The 39th Amendment was the first amendment to be struck down by the Supreme Court.

 

This problem consists of a set of rules and facts. Apply the specified rules to the set of facts and answer the questions.
(Questions 66-69):
Rules:
A. When land is sold, all 'fixtures' on the land are also deemed to have been sold.
B. If a moveable thing is attached to the land or any building on the land, then it becomes a 'fixture'.
Facts:
Khaleeda wants to sell a plot of land she owns in Begbmara, Meghalaya and the sale value decided for the plot includes the fully-furnished palatial six-bedroom house that she has built on it five years ago. She sells it to Gurpreet for sixty lakh rupees. After completing the sale, she removes the expensive Iranian carpet which used to cover the entire wooden floor of one of the bedrooms. The room had very little light and Khaleeda used this light-coloured radiant carpet to negate some of the darkness in the room. Gurpreet, after moving in, realizes this and files a case to recover the carpet from Khaleeda.
As a judge you would decide in favour of

introduction of business laws business law and contract act business studies

  1. Gurpreet because when the price was agreed upon, Khaleeda did not inform her about removing the carpet.

  2. Gurpreet because the carpet was integral to the Door of the bedroom and therefore attached to the building that was sold.

  3. Khaleeda because a fully-furnished house does not entail the buyer to everything in the house.

  4. Khaleeda because by virtue of being a carpet it was never permanently fixed to the floor of the building. Assume that in the above fact scenario, Khaleeda no longer wants the carpet. She removes the elaborately carved door to the house after the sale has been concluded and claims that Gurpreet has no claim to the door. The door in question was pan of Khaleeda's ancestral home in Nagercoil, Tamil Nadu for more than 150 years before she had it fitted as the entrance to

    her Baghmara house.

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Correct Option: B
Explanation:

Yes, Gurpreet will succeed because as mentioned in the Principle B, a moveable thing which is attached to the land or any building on the land, is a 'fixture', and the expensive Iranian carpet even after being a movable thing was used to cover the entire wooden floor of one of the bedrooms, and hence, was a fixture. By the virtue of Principle A, which asserts that when land is sold, all 'fixtures' on the land are also deemed to have been sold; the carpet was sold to Gurpreet and now, Khaleeda cannot take it away.

Who stated explicitly for the first time, the Law of Comparative Costs?

introduction of business laws business law and contract act business studies

  1. David Ricardo

  2. Adam Smith

  3. James Mill

  4. Thomas Mun

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Correct Option: A