Originally posted by Mr Ahmed Bilal

MCQs 2010

(i) A signs promissory instrument in the following terms:
(a) Mr. B I.O.U. Rs.1000
(b) I promise to pay Rs. 500 seven days after my marriage with C
(c) I acknowledge to be indebted to B in Rs.1000 to be paid on demand, for value received
(d) I promise to pay Rs. 500 to B and to deliver my black horse on 1st January next
(e) None of these

The answer should be (c) I acknowledge to be indebted to B in Rs.1000 to be paid on demand, for value received

According to Negotiable Instrument Act 1881, Chapter II, Section 4

"Illustrations
A signs instruments in the following terms:
(a) "I promise to pay B or order Rs. 500."
(b) "I acknowledge myself to be indebted to B in Rs. 1,000 to be paid on demand, for value received.
(c) "Mr B, I O U Rs. 1,000."
(d) "I promise to pay B Rs. 500 and all other sums which shall be due to him"
(e) "I promise to pay B Rs. 500, first deducting there out any money which he may owe me."
(f) "I promise to pay B Rs. 500 seven days after my marriage with C."
(g) "I promise to pay B Rs. 500 on D's death, provided D leaves me enough to pay that sum."
(h) "I promise to pay B. Rs. 500 and to deliver to him my black horse on 1st January next.

The instruments respectively marked (a) and (b) are promissory notes. The instruments respectively marked (c), (d), (e), (f), (g) and (h) are not promissory notes."

(ii) How many parties are there to a “Promissory note” and a “bill of exchange”?
(a) There are three parties to a “Promissory note” and four to a “bill of exchange”
(b) There are four parties to a “Promissory note” and three to a “bill of exchange
(c) There is one party to a “Promissory note” and two to a “bill of exchange”
(d) There are two parties to a “Promissory note and three to a bill of exchange”
(e) None of these

The answer should be (d) There are two parties to a “Promissory note and three to a bill of exchange”

(v) A Voidable contract is:
(a) An illegal agreement (b) Partly valid agreement
(c) Void ab initio (d) None of these

The answer should be (b) Partly valid agreement