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Default Please Verify the Answers!!!

Every One is invited to please verify the answers of these MCQs. Since there there were no solved MCQs of Mercantile Law therefore i am trying to facilitate the members of the forum with the team efforts....
but please on cocksure answers or faults must be pointed out with corrections.

@ Raz Sahib
Janab kindly counter verify these MCQs n also write the answers of the missing one

@ Tahir Rauf (red Hawk)
Thank u brother for ur personal efforts.


FEDERAL PUBLIC SERVICE COMMISSION
COMPETITIVE EXAMINATION FOR RECRUITMENT TO POSTS
IN B.P.S. -17, UNDER THE FEDERAL GOVERNMENT, 2005
MERCANTILE LAW
(Compulsory Question)



8. Write the correct answer in the Answer Book. Do not reproduce the question.
(1) Talal is forming a business which he wants to control completely. He knows nobody else with whom he wishes to work, he values his privacy, and he dislikes formality, paper work, state filing requirements, and lawyers. What type of business organization should he prefer?
(a) general partnership (b) Sole Proprietorship
(c) Single Member Company (d) None of these
(2) The Articles of Association of a company contain:
(a) a set of governing rules adopting by the company
(b) resolutions of the board of directors
(c) information about the corporation, including its organization and functions.
(d) None of these
(3) A partnership involves three essential elements. Which of the following is not one of those elements?
(a) An equal right in the management of the business
(b) Limited liability for the liabilities of the firm
(c) A joint ownership of the business
(d) None of these
(4) Rashid, Shahid and Talal agree to form a computer business. Rashid agrees to manage the business and to assume full personal liability. Shahid and Talal agree to invest in the firm but to be liable only to that extent. These three have formed
(a) a limited liability company (b) a limited liability partnership
(c) an unlimited partnership (d) None of these
(5) The members of a limited partnership include:
(a) general and limited partners (b) general partners only
(c) creditors (d) None of these
(6) A bearer cheque may be negotiated by:
(a) Mere delivery (b) Endorsement and delivery
(c) Delivery with a separate written contract
(d) None of these
(7) The responsibility of overall management of a company belongs to:
(a) the chief financial officer (b) the employees
(c) the board of directors (d) None of these
(8) The best definition of a quorum is which of the following?
(a) It is 51% of all shareholders
(b) It is the number of members of a company that must be present before business may be transacted.
(c) It is the number of voters who must agree to alter the company’s articles.
(d) None of these
(9) When a partnership is found liable for a debt, which assets are first used to pay the debt?
(a) Individual assets of the partners
(b) Personal property of the limited partners
(c) Partnership assets (d) None of these
(10) The board of directors does not have responsibility over which of the following areas?
(a) The appointment, supervision, and removal of corporate officers
(b) The appointment, supervision, and removal of employees generally
(c) The declaration and payment of corporate dividends
(d) None of these
(11) A found a wallet full of money on a roadside and upon finding the address of the owner in the wallet he returned it to its owner. When he came back he read the announcement of a reward for the return of such wallet in the newspaper:
(a) The owner is liable to pay him the reward
(b) The owner is not liable to pay him the reward
(c) The owner is liable to pay him half of the reward
(d) None of these
(12) Muhsin in considering forms of business organisation for his law firm. One advantage of the limited liability partnership form is that it allow the limited partners to avoid personal liability for:
(a) the malpractice of other limited partners regarding the conduct of the firm’s business
(b) the obligation of the firm beyond their contributions to the capital
(c) the obligations of the firm within the limit their contributions to be capital
(d) None of these
(13) A’s son has forged B’s name to a pronote. B under threat of prosecuting A’s son demanded that A should sell him his house that is worth Rs. 1000,000/- for Rs. 300,000/- A agrees with the proposal. The contract is
(a) Valid (b) Voidable
(c) Void (d) None of these
(14) The best, simple definition of a contract is:
(a) an objective “meeting of the minds”
(b) a legally enforceable agreement
(c) a document reflecting a “meeting of the mind” between two or more competent parties
(d) None of these
(15) Salman signs a written contract with Khalid giving him the right to cast his votes in the election for the directors of Hashiya Limited, whose
shares Salman holds. This agreement between Slaman and Khalid is known as:
(a) a derivative (b) a proxy
(c) a Memorandum of Understanding
(d) None of these
(16) A sent a proposal to B by post for the sale of his house. B accepted the offer by post. A may revoke his proposal at any time before
(a) B receives the letter of proposal
(b) B posts the letter of acceptance
(c) A receives the letter of acceptance
(d) None of these
(17) Danish offers to sell to Sadiq a mobile phone for Rs. 550. Sadiq tells Danish that he will take the phone for Rs. 540. Nothing further is said and the next day, Danish demands Rs. 450 from Sadiq in exchange for the phone. Choose the correct statement
(a) Sadiq is bound to pay as his offer has been accepted by Danish;
(b) Although there is no contract Sadiq;
(c) Sadiq is not bound to pay as there is no contract;
(d) None of these
(18) If you want to start a partnership what formal requirements do you have to meet?
(a) You must register the firm with the Registrar of Firms;
(b) You do not need to satisfy any formal requirements;
(c) Your firm cannot operate until you draft and get registered the Article of Partnership;
(d) None of these
(19) The relation between the partners of a firm is of:
(a) Employer and Employee (b) Trustee and Beneficiary
(c) Principal and Agent (d) None of these
(20) A bearer instrument may be negotiated by:
(a) Mere delivery
(b) Endorsement and delivery
(c) Delivery with a separate written contract
(d) None of these



FEDERAL PUBLIC SERVICE COMMISSION
COMPETITIVE EXAMINATION FOR RECRUITMENT TO POSTS
IN B.P.S. -17, UNDER THE FEDERAL GOVERNMENT, 2006
MERCANTILE LAW
(Compulsory Question)



8. In each of the following clauses of this question only one statement is correct. Write down in your answer book only the correct statement of the following clauses. DO NOT WRITE THE WHOLE CLAUSE:
(1) When an offer can only be accepted by the performance of the person to whom the offer is made, is characteristic of:
(a) bilateral contracts; (b) unilateral contracts;
(c) implied contracts; (d) None of these
(2) A tells B, “If you stood first in the class, I’ll pay you Rs.5000.00. B stood first in class and A paid him Rs.5000.00. Which of the following is correct?
(a) A and B had a unilateral contract;
(b) A and B had an executory contract;
(c) A and B had an executed contract;
(d) None of these
(3) A offers to sell B his motorcycle at some time in the future. B accepts. Is there a valid contract?
(a) Probably not, the terms are not definite;
(b) Probably yes;
(c) Definitely not because A failed to communicate the offer;
(d) None of these
(4) Which of the following is not an effective way to terminatean offer?
(a) By rejection; (b) By acceptance;
(c) By counter offer; (d) None of these
(5) A offers to sell B his collection of rare books for Rs.5000.00. Before B even has a chance to accept, A says, “Sorry, I changed my mind, no deal.” This is an example of:
(a) Revocation; (b) Rejection;
(c) Counter Offer; (d) None of these
(6) A and B enter into a contract in which A agrees to deliver milk to a restaurant. They forget to include a price in the agreement. A court will:
(a) refuse to enforce the agreement;
(b) select the lowest quoted price for milk and insert it into the contract;
(c) determine a reasonable price and insert it into the contract;
(d) None of these.
(7) A agreed to supply food for Walima to B at 1: 00 pm. However, he could hardly supply the food at 5: 00 pm.
(a) B can reject the delivery;
(b) He can not reject the delivery;
(c) B must accept the delivery;
(d) None of these
(8) Which of the following actions an unpaid seller can not take against a buyer:
(a) Lien; (b) Stoppage in transit;
(c) Sale; (d) None of these
(9) When a partnership is found liable for a debt, which assets are first used to pay the debt?
(a) Individual assets of the partners;
(b) Personal property of the limited partners;
(c) Partnership assets. (d) None of these
(10) A partnership involves three essential elements. Which of the following is not one of those elements?
(a) An equal right in the management of the business;
(b) Limited liability for breach of contract;
(c) A joint ownership of the business
(d) None of these
(11) Which of the following actions requires the unanimous consent of all partners before it may be undertaken?
(a) Hiring a new employee
(b) Purchasing new office equipment;
(c) Admitting new partners;
(d) None of these
(12) An Order Instrument is the one which is payable to:
(a) A named person; (b) To a bearer;
(c) To both (d) None of these
(13) A bearer Instrument is the one which is payable to:
(a) A named person; (b) To a bearer;
(c) To both; (d) None of these
(14) A holder in due course is the one:
(a) Who finds an instrument;
(b) Who steals an instrument;
(c) Who gets an instrument as a gift;
(d) None of these
(15) For the incorporation of a limited liability company filing of Memorandum of Association is essential:
(a) for a public limited company only;
(b) for a private limited company, a public limited company and an unlimited company;
(c) for a Public Limited company only;
(d) None of these
(16) A subsidiary company is the one:
(a) which holds the majority shares of another company;
(b) which deals in the trading of shares of other companies;
(c) in which the majority shares are held by another company;
(d) None of these
(17) A is considering different forms of business organization for his business. For the purposes of owning property and being a party to litigation, forms which are legal entities separate from their owners include:
(a) Limited Partnership only;
(b) Private Limited Companies only;
(c) Both Private and Public Limited Companies
(d) None of these
(18) A decision made by arbitrators is called:
(a) Sentence; (b) Award;
(c) Judgment (d) None of these
(19) An empire in an arbitration reference is appointed when the number of arbitrators is:
(a) Odd; (b) Even;
(c) More than 10. (d) None of these
(20) The appointment of a person of the minor age as an agent is:
(a) Void; (b) Valid;
(c) Voidable (d) None of these


FEDERAL PUBLIC SERVICE COMMISSION
COMPETITIVE EXAMINATION FOR RECRUITMENT TO POSTS
IN BPS - 17, UNDER THE FEDERAL GOVERNMENT, 2007
MERCANTILE LAW
(Compulsory Question)



Q.8. Write only the correct answer in the Answer Book. Do not reproduce the question.
(1) Which of the following is a bilateral contract?
(a) A tells B that he will pay him Rs. 200 if B will wash his car which B does.
(b) A writes B a letter in which he promises that if B will wash his car, he will pay him Rs. 200 which B does.
(c) A and B both sign a piece of paper which says, “A agrees to pay B Rs. 200 if B agrees to wash A’s car in exchange for Rs. 200.”
(d) None of these
(2) A called his friend B and offered to give him two tickets of a cricket match taking place next month. B said “okay! I love to watch cricket matches.” A few days later A called B and told him that he couldn’t give B the tickets. Assuming B sued A:
(a) He would probably win as a contract was formed.
(b) He would probably lose because the contract was not in writing.
(c) He would probably lose as the court would hold no contract was formed.
(d) None of these
(3) Under the doctrine of quasi contract, a plaintiff may recover in “quantum merit”, a Latin phrase that means:
(a) “as much as he deserves” (b) “treble damages”
(c) “only a token sum” (d) None of these
(4) Which of the following writings are negotiable instrument?
(a) A promise to pay Rs. 2000 for the services rendered if the services are renders as soon as possible.
(b) An unconditional promise to pay a reasonable sum for the services rendered.
(c) An unconditional promise to pay Rs. 3000 some time next month.
(d) None of these
(5) A has a bill of exchange that does not indicate when it is to be paid as the language of the bill only says “Pay”. When is it payable to A?
(a) In 30 days.
(b) Never as the instrument is void if it does not have a payment date.
(c) In a reasonable time.
(d) None of these
(6) A writes a cheque on his Habib Bank account to pay for groceries at Utility Stores. Who is the drawee?
(a) Utility Stores
(b) Both Habib Bank and Utility Stores
(c) Habib Bank
(d) None of these
(7) Which of the following may count as the signature of a drawer?
(a) An “X” made by the drawer
(b) The signature of the drawer’s agent
(c) Both of the above
(d) None of these
(8) Which of the following language on an order will create a bill of exchange?
(a) “Pay X if you can” (b) “I wish you pay X”
(c) “Please pay X” (d) None of these
(9) Which of the following is payable at a definite time?
(a) “Payable when “Z” wins the presidential election.”
(b) “Payable on or before May 30.”
(c) Both (a) and (b)
(d) None of these
(10) Which of the following phrases makes an order bill of exchange?
(a) “Pay to the order of A.”
(b) “Pay to the order of my brother.”
(c) Both (a) and (b)
(d) None of these
(11) A writes a postdated cheque. Is it negotiable?
(a) Yes
(b) No, because it does not specify a definite date of payment
(c) No, because postdated cheques are void
(d) None of these
(12) You write a cheque to pay for your haircut. In this transaction, who is the drawee?
(a) You because you drew up the cheque
(b) Your bank because it must pay the cheque
(c) The person who cuts your hair because the cheque is payable to him
(d) None of these
(13) The best, simple definition of a contract is:
(a) An objective “meeting of minds.”
(b) A negotiated two-party agreement upon which each party will act or refrain from acting.
(c) A document reflecting a “meeting of the minds” between two or more competent parties.
(d) None of these
(14) If A is hit by a car, and B, a doctor, sees the incident and performs emergency first aid upon A which results in A recovery:
(a) A unilateral contract is created whereby A is obligated to pay Dr. B for services rendered.
(b) A bilateral contract is created and both parties must perform their duties.
(c) A quasi contract is created between the parties.
(d) None of these
(15) A offers to sell to B a mobile phone for Rs. 5500. B tells A that he will take the phone for Rs. 4500. Nothing further is said and the next day, A demands Rs. 4500 from B in exchange for the phone. Choose the true statement:
(a) B is not obligated to pay Rs. 4500 to A
(b) B is obligated to pay Rs. 4500 to A
(c) B is obligated to pay Rs. 5500 to A
(d) None of these
(16) The most common form of agency is:
(a) Implied (b) Express
(c) Injunctive (d) None of these
(17) Assume that a new partner enters an ongoing partnership. The new partner’s liability to preexisting creditors is best described by which of the following?
(a) The new partner is not liable to preexisting creditors of the firm.
(b) The new partner must negotiate his or her liability with the preexisting creditors.
(c) The new partner is only liable to the preexisting creditors to the extent of his capital contribution.
(d) None of these
(18) What is not a correct statement concerning promoters?
(a) They are agents of the company
(b) They generally are active before the company is formed
(c) They owe fiduciary duties to the company
(d) None of these
(19) The phrase “piercing the corporate veil” refers to:
(a) Inspecting the books of the company
(b) The ignoring by courts of the corporate entity in order to do justice
(c) Learning the identity of the shareholders of the company
(d) None of these
(20) When someone gives to another person a power of attorney, this means that:
(a) Such person is an undisclosed principal
(b) Such person is a disclosed principal
(c) Such person given the power has authority to act as an agent
(d) None of these

FEDERAL PUBLIC SERVICE COMMISSION
COMPETITIVE EXAMINATION FOR
RECRUITMENT TO POSTS IN BPS-17 UNDER
THE FEDERAL GOVERNMENT, 2008

MERCANTILE LAW
(Compulsory Question)

Q. 1 Select the best option/answer and fill in the appropriate box on the Answer Sheet.
(i) If the consideration for an agreement is inadequate, the agreement is:
(a) Valid (b) Void
(c) Voidable (d) None of these
(ii) On a contract by an Agent on behalf of an undisclosed Principal, the Principal:
(a) May sue on contract (b) Cannot sue
(c) Is hit by privity of contract (d) None of these
(iii) Carlill v Carbolic Smoke Ball Co. Ltd. deals with:
(a) Counter proposal (b) Implied acceptance
(c) Implied revocation (d) None of these
(iv) What is the amount of care a bailee is required to take in respect of goods bailed to him:
(a) Extraordinary (b) Ordinary
(c) Reasonable (d) None of these
(v) A Void Contract is:
(a) An illegal agreement
(b) Parlty valid agreement
(c) Ceased to be a valid agreement
(d) None of these
(vi) X agrees not to carry on a similar business with Y for two years in consideration of Rs. 50,000/- as goodwill. The agreement is:
(a) Void due to restraint of trade (b) Valid
(c) Against X’s fundamental rights (d) None of these
(vii) Which one of the following cannot be called an Act of God:
(a) An unprecedented rainfall (b) An earthquake
(c) Fire not caused by lightening (d) None of these
(viii) An obligation arises from:
(a) A contract (b) From a wrongful act
(c) Both (a) & (b) (d) None of these
(ix) The rule nemo dat quod non habet means:
(a) No-one should interfere in another’s business

(b) No-one should be retained in a partnership against his will
(c) No-one can give what he has not got
(d) None of these
(x) In a public company the shares are subscribed by:
(a) Government (b) Management
(c) Creditors (d) None of these
(xi) Can a minor be:
(a) Admitted as partner in a firm
(b) Admitted to the benefits of partnerships
(c) Admitted as a sleeping partner
(d) None of these
(xii) Transfer of property means:
(a) Delivery of goods (b) Transfer of possession
(c) Transfer of ownership (d) None of these
(xiii) Caveat Emptor rule means:
(a) Employer beware (b) Seller beware
(c) Creditor beware (d) None of these
(xiv) A liquidator is a person:
(a) Who is chairman of Board of Directors
(b) Promoter of a company
(c) Who winds-up a company
(d) None of these
(xv) Which one of the following clauses is considered vital in a memorandum of association of a public company:
(a) Name clause (b) Object clause
(c) Capital clause (d) None of these
(xvi) A subsidiary company means
(a) A supporting company (b) A non-entity
(c) An unregistered company (d) None of these
(xvii) Which of the following actions an unpaid seller cannot take against a buyer:
(a) Exercise the right of lien
(b) Stoppage of goods in transit
(c) Sale
(d) None of these
(xviii)X draws a gun and asks Y to sign an agreement. This is:
(a) Persuasion (b) Coercion
(c) Undue influence (d) None of these
(xix) X is involved in some business; he transfers his share without the consent of all its members. He is working in:
(a) A company
(b) A firm

Last edited by marwatone; Saturday, September 05, 2009 at 07:05 PM. Reason: Smilies deleted.
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