Unit VI · Topic 4Specific contracts - Bailment, pledge, indemnity, guarantee and agency – Previous Year Questions

An undisclosed principal cannot intervene when he knows that the other party would have dealt with him

An undisclosed principal can intervene when he knows that the other party would not have dealt with him

1. (a)1 and 2 are correct
2. (b)2 and 3 are correct✓
3. (c)3 and 4 are correct
4. (d)4 and 1 are correct

Match items from Table-A with item in Table-B, using codes given below: Table-A: A. Lakshmi Ratan Cotton Mills v. J.K. Jute Mills Co., AIR 1957 All 311 B. Automatic Self-cleansing Filter Syndicate Co.Ltd. v. Cuningham, (1906) 2 Ch. 34 C. G. Ramesh v. ROC, (2007) 135 Comp Cas 655 D. City Equitable Fire Insurance Company, Re, (1924) AH E Rep 485 Table-B:

Director's duty of care, diligence and skill related to Directors' duty

Statutory protection to Directors against liability

Powers of Directors

Scope of authority of Directors Codes:

1. (a)A-4, B-3, C-2, D-1✓
2. (b)A-3, B-2, C-1, D-4
3. (c)A-2, B-1, C-4, D-3
4. (d)A-1, B-4, C-3, D-2

Match List I with List II (Indian Contract Act, 1872): List-I (A) Section 162 of the Indian Contract Act, 1872 (B) Section 178 of the Indian Contract Act, 1872 (C) Section 214 of the Indian Contract Act, 1872 (D) Section 150 of the Indian Contract Act, 1872 List-II (I) Pledge by Mercantile Agent (II) Bailor's duty to disclose faults in goods bailed (III) Termination of gratuitous bailment by death (IV) Agent's duty to communicate with principal Choose the correct answer from the options given below:

1. (a)(A)-(I), (B)-(IV), (C)-(III), (D)-(II)
2. (b)(A)-(II), (B)-(I), (C)-(IV), (D)-(III)
3. (c)(A)-(IV), (B)-(II), (C)-(I), (D)-(III)
4. (d)(A)-(III), (B)-(I), (C)-(IV), (D)-(II)✓

In a contract of Guarantee under the Indian Contract Act, 1872 there are:

1. (a)Two parties and two contracts
2. (b)Three parties and three contracts✓
3. (c)Three parties and one contract
4. (d)Two parties and one contract

Between the creditor and the debtor,

Between the creditor and the surety,

Between the debtor and the surety.

Given below are two statements: One is labelled Assertion (A) and the other is labelled as Reason (R): Assertion A: Under the Companies Act of 2013, Central Government is authorized to implement a facility to file documents in electronic form. Reason R: Central Government is authorized to make rules to implement this facility and section 398, 401 and 402 have been incorporated in the Act of 2013. In the light of the above statements, choose the correct answer from the options given below:

1. (a)Both A and R are true and R is the correct explanation of A✓
2. (b)Both A and R are true and R is not the correct explanation of A
3. (c)A is true but R is false
4. (d)A is false but R is true

Given below are two statements: Statement I: A becomes surety to C for B's conduct as a manager in C's bank. Afterwards, B and C contract, without A's consent that B's salary shall be raised and that he shall become liable for one-fourth of the losses on overdrafts. B allows a customer to overdraw and the bank loses a sum of money. Statement II: A is liable to make good the loss as he is a surety to C for B's conduct. In light of the above statements, choose the most appropriate answer from the options given below:

1. (a)Both Statement I and Statement II are correct
2. (b)Both Statement I and Statement II are incorrect
3. (c)Statement I is correct but Statement II is incorrect✓
4. (d)Statement I is incorrect but Statement II is correct

The sub-Agent is responsible for his acts to the Agent, but not to the Principal, except in case of:

1. (a)Fraud
2. (b)Fraud or misrepresentation
3. (c)Fraud or wilful wrong✓
4. (d)Principal himself undertaking the responsibility

Which of the following are correct in case of a contract of bailment? A. The person who delivers the goods is called the bailee. B. If the bailee does any act which is inconsistent with the conditions of bailment, the contract is void. C. A gratuitous bailment is terminated by death either of the bailor or of the bailee. D. The bailee is bound to take care of the goods bailed. E. Bailee has no general lien. Choose the correct answer from the options given below:

1. (a)A, B and C only
2. (b)D and E only
3. (c)B and C only
4. (d)C and D only✓

Which one of the following is NOT one of the modes of termination of agency?

1. (a)Insolvency of principal
2. (b)Principal or agent's death
3. (c)General Lien✓
4. (d)Revocation

The 'bailment of the goods,' as security for payment of a debt or performance of a promise, is called

1. (a)Indemnity
2. (b)Guarantee
3. (c)Mortgage
4. (d)Pledge✓

"Consideration is not necessary for creation of Agency" This is provided in

1. (a)Section 185 of the Indian Contract Act, 1872✓
2. (b)Section 4 of the Partnership Act, 1932
3. (c)Section 4 of the Indian Agency Act, 1950
4. (d)Section 2 of the Companies Act, 2013

What are the duties of a bailee under the Indian Contract Act?

A. Duty to take reasonable care of the goods bailed

B. Duty not to make unauthorized use of the goods

C. Duty not to mix bailor's goods with his own goods

D. Duty to return the goods on fulfilment of the purpose

E. Duty not to deliver to the bailor increase or profit on the goods bailed

Choose the correct answer from the options given below

1. (a)B, C, D, E only
2. (b)C, D, E, A only
3. (c)D, E, B, A only
4. (d)A, B, C, D only✓

Arrange the following concepts as per their order of appearance in the Indian Contract Act, 1872

A. Continuing guarantee

B. Care to be taken by bailee

C. Compensation for loss or damage caused by breach of contract

D. Claims for necessaries supplied to person incapable of contracting

Choose the correct answer from the options given below

1. (a)D, B, C, A
2. (b)D, C, A, B✓
3. (c)C, D, B, A
4. (d)B, A, C, D

Match List I with List II LIST I (Concept) LIST II (Provisions)

A. ‘Agent’ and ‘Principal’ I. Section 148 of the Indian Contract Act, 1872

B. ‘Bailment’ II. Section 124 of the Indian Contract Act, 1872

C. Contract of Indemnity III. Section 126 of the Indian Contract Act, 1872

D. Contract of Guarantee IV. Section 182 of the Indian Contract Act, 1872

Choose the correct answer from the options given below

1. (a)A-IV, B-I, C-II, D-III✓
2. (b)A-II, B-I, C-IV, D-III
3. (c)A-III, B-IV, C-II, D-I
4. (d)A-I, B-III, C-IV, D-II