Mercantile Law Paper 2013
Q: 1 Part 1 Objective

Part-I (MCQs) (COMPULSOR)

Q.1. (i) Select the best option/ answer and fill in the appropriate Circle on the OMR Answer Sheet.( 20x1=20)
(ii) Answers given anywhere, other than OMR Answer Sheet, shall not be considered.

1. Jurisdiction in company matters is to be exercised by:
(a) Civil Court
(b) Any judge of high court
(c) Company Bench of High Court
(d) None of These

2. Any alteration in Article of Association affecting the substantive right or liabilities of members of the company can be made
(a) If Board of Director pass such alteration
(b) By vote of simple majority of members
(c) By a vote ¾ majority of members
(d) None of these

3. A special audit of a company can be ordered by a commission on an application made by members holding not less than
(a) 20% Voting Rights
(b) 25% Voting Rights
(c) 51% Voting Rights
(d) None of these

4. A listed company in accordance with companies ordinance is required to have at least:
(a) Two director
(b) Seven director
(c) Three Directors
(d) None of these

5. When a negotiable instrument may be construed either as a promissory note or bill of exchange, law recognizes it as:
(a) Promissory note
(b) Bill of Exchange
(c) Ambiguous Instrument
(d) (d) None of these

6. When a bill of exchange has been dishonored, the holder can cause such dishonor be certified by a notary public, such certificate is a:
(a) Claiming
(b) Presentment
(c) Protest
(d) None of these

7. If a cheque is transferred to any person to constitute him as a holder, the instrument is said to be:
(a) Delivered
(b) Negotiated
(c) Presented
(d) None of these

8. A partner can be expelled from a Firm:
(a) By simple majority of partners
(b) If all partner consent to it
(c) Only by exercise of powers conferred by the Contract
(d) None of these


9. A new partner can be inducted in an existing partnership:

(a) By recommendation of any partner
(b) By the consent of all partners
(c) By the consent of half of the partners
(d) None of these

10. Any admission made by a partner regarding the affairs of the firm in ordinary course of business:
(a) Is evidence against the firm
(b) Has no validity against the firm
(c) Ordinary statement
(d) None of these

11. An agreement between partners imposing reasonable restriction on a partner for not carrying on any business within a specified time or local limits on ceasing to be a partner is:
(a) Void
(b) Valid
(c) Illegal
(d) None of these

12. The goods which form the subject of a sale can be:
(a) Existing Goods
(b) Existing and future Goods
(c) Existing, Future and Contingent Goods
(d) None of These
13. If the seller make use of pretended bidding to raise the price the sale is:
(a) Voidable
(b) Void
(c) Illegal
(d) None of these

14. The principle of indemnity does not apply in the case of:
(a) Life Insurance
(b) Marine Insurance
(c) Fire Insurance
(d) None of these

15. Promise which form the consideration or part of the consideration for each other are called:
(a) Agreement
(b) Contract
(c) Reciprocal Agreement
(d) None of these

16. Mr. Aslam applied to a bank for a loan at a time when there is stringency in the money market, the banker declines to make the loan except at an unusually high rate of interest, this is called:
(a) Undue influence
(b) Transaction in the ordinary course of business
(c) Free consent
(d) None of these

(17) When consent to an agreement is caused by coercion, fraud, or misrepresentation, the agreement is:
(a) Valid
(b) Void
(c) Voidable
(d) None of these

(18) A person who finds goods belonging to another and takes them into his custody; is subject to the same responsibilities as:
(a) Trustee
(b) Owner
(c) Bailee
(d) None of these
(19) An agreement in restraint of the marriage of any person other than a minor is called:
(a) Valid
(b) Invalid
(c) Illogical
(d) None of these

(20) Authority of any appointed arbitrator or umpire can be revoked:
(a) At the discretion of either party
(b) With the leave of the court
(c) Irrevocable
(d) None of these


PART II:

Attempt only four questions:

Q.2. Discuss the methods for discharge of contract and clarify discharge by operation of law and Discharge by Agreement with examples.

Q.3 Distinguish between winding up and dissolution. Under what circumstances the Court can order the Compulsory winding up of a company and in what circumstance may a company be wound up voluntarily?

Q.4. Distinguish between condition and warranty. Suppose Mr. Imran shopping in a self-service market, he picked up a bottle of Maka cola from a shelf. While he was examining it, the bottle exploded in his hand and injured him. Can Mr. Imran claim damages for the injury?

Q.5. Define partnership deed and describe its contents.

Q.6. Write essay on any two of the following.
(a) Undue Influence
(b) Memorandum of Association
© Presumptions as to negotiable Instruments

Q.7. Write comprehensive note on any two of the following:
(a) Implied authority of partner as agent of the firm
(b) Sale by person not the owner
© Crossing of Cheque

Q.8. Write Short notes on any Four of the following
(a) Fraud
(b) Associated Companies
(c) Cases when presentment of a bill of exchange is excused
(d) Mode of determining existence of partnership
(e) How unpaid seller stop goods in transit
(f) Re-Insurance

Corrections are welcome...
Part-I (MCQs) (COMPULSOR)

Q.1. (i) Select the best option/ answer and fill in the appropriate Circle on the OMR Answer Sheet.( 20x1=20)
(ii) Answers given anywhere, other than OMR Answer Sheet, shall not be considered.

1. Jurisdiction in company matters is to be exercised by:
(a) Civil Court
(b) Any judge of high court
(c) Company Bench of High Court
(d) None of These

2. Any alteration in Article of Association affecting the substantive right or liabilities of members of the company can be made
(a) If Board of Director pass such alteration
(b) By vote of simple majority of members
(c) By a vote ¾ majority of members
(d) None of these

3. A special audit of a company can be ordered by a commission on an application made by members holding not less than
(a) 20% Voting Rights
(b) 25% Voting Rights
(c) 51% Voting Rights
(d) None of these

4. A listed company in accordance with companies ordinance is required to have at least:
(a) Two director
(b) Seven director
(c) Three Directors
(d) None of these

5. When a negotiable instrument may be construed either as a promissory note or bill of exchange, law recognizes it as:
(a) Promissory note
(b) Bill of Exchange
(c) Ambiguous Instrument
(d) (d) None of these

6. When a bill of exchange has been dishonored, the holder can cause such dishonor be certified by a notary public, such certificate is a:
(a) Claiming
(b) Presentment
(c) Protest
(d) None of these

7. If a cheque is transferred to any person to constitute him as a holder, the instrument is said to be:
(a) Delivered
(b) Negotiated
(c) Presented
(d) None of these

8. A partner can be expelled from a Firm:
(a) By simple majority of partners
(b) If all partner consent to it
(c) Only by exercise of powers conferred by the Contract
(d) None of these


9. A new partner can be inducted in an existing partnership:

(a) By recommendation of any partner
(b) By the consent of all partners
(c) By the consent of half of the partners
(d) None of these

10. Any admission made by a partner regarding the affairs of the firm in ordinary course of business:
(a) Is evidence against the firm
(b) Has no validity against the firm
(c) Ordinary statement
(d) None of these

11. An agreement between partners imposing reasonable restriction on a partner for not carrying on any business within a specified time or local limits on ceasing to be a partner is:
(a) Void
(b) Valid
(c) Illegal
(d) None of these

12. The goods which form the subject of a sale can be:
(a) Existing Goods
(b) Existing and future Goods
(c) Existing, Future and Contingent Goods
(d) None of These
13. If the seller make use of pretended bidding to raise the price the sale is:
(a) Voidable
(b) Void
(c) Illegal
(d) None of these

14. The principle of indemnity does not apply in the case of:
(a) Life Insurance
(b) Marine Insurance
(c) Fire Insurance
(d) None of these

15. Promise which form the consideration or part of the consideration for each other are called:
(a) Agreement
(b) Contract
(c) Reciprocal Agreement
(d) None of these

16. Mr. Aslam applied to a bank for a loan at a time when there is stringency in the money market, the banker declines to make the loan except at an unusually high rate of interest, this is called:
(a) Undue influence
(b) Transaction in the ordinary course of business
(c) Free consent
(d) None of these

(17) When consent to an agreement is caused by coercion, fraud, or misrepresentation, the agreement is:
(a) Valid
(b) Void
(c) Voidable
(d) None of these

(18) A person who finds goods belonging to another and takes them into his custody; is subject to the same responsibilities as:
(a) Trustee
(b) Owner
(c) Bailee
(d) None of these
(19) An agreement in restraint of the marriage of any person other than a minor is called:
(a) Valid
(b) Invalid
(c) Illogical
(d) None of these

(20) Authority of any appointed arbitrator or umpire can be revoked:
(a) At the discretion of either party
(b) With the leave of the court
(c) Irrevocable
(d) None of these

corrections
1- (c) company bench of high court
6- (c) protest
8- (b)
11- (b)
13- (a)
14- (a)
16- (a)
19- (b)
20 (c)

Question 11, A partner can prevent other partner from doing similar business, outside the partnership, for which they are partner; However, Partner can not restrict other partner from doing any business other than the business for which they are partner, so I think you should read the statement again if I am not wrong.
Question 19, the right option is D as there is no place for ordinary word Invalid/valid etc. So the right answer is VOID which is not present.

11-reading a statement is pre-requisite in any law and on this restriction can be imposed on partners for certain limit of time based of general consensus of all and it is imposed via partnership deed....
19- you stated correct that it is void , but you missed your own point that (one should read it) .... invalid means "not valid" and in technical language not valid means void so answer was in the options stay blessed tc sister

Yes,restriction can be imposed but only for that business for which they are partner and not for any other business. In the question the word ANY is ignored by many aspirants. I am afraid you also ignored the word ANY. secondly, unfortunately, I could not study the word Invalid for any thing that is void or voidable in my study of law. Might be possible you are right, but chances of it are too grim.

sister i was not in a mood to argue . .. . but your answers are written below ... by the way i am attached with the subject from 7 years in many fields so was telling you on that experience .... chalen kuch nai hota mein b galt ho sakta tha.... because in forum many give their own view
INVALID--

http://www.google.com.pk/#hl=en&site... /> 80&bih=923
http://www.businessdictionary.com/de...n/invalid.html

given you web addresses because they are best available source to make you sure...

and for partners restriction
if you have bare act or any other book than cheema and bok is good enough to cover all sections than refer to section 36(2) which is straightaway copied by the examiner stay blessed

Do we have to quote the original words of acts and sections in paper or we can write them in our own words?
paper of mercantile law has been in case study form for the past few years, has it been reversed again?

No case laws questions. Has the trend of case laws questions changed ? Good to see this change - I will opt for it in 2014 InshAllah.

__________________
Tribal Khan

sorry for jumping into this issue so late but i couldn't help it

"and for partners restriction
if you have bare act or any other book than cheema and bok is good enough to cover all sections than refer to section 36(2) which is straightaway copied by the examiner stay blessed"

here is the exact text you were talking about


36.Rights of outgoing partner to carry on competing business.—
(1) An outgoing partner
may carry on a business competing with that of the firm and he may advertise such business, but,
subject to contract to the contrary, he may not -
(a)
use the firm name,
(b)
represent himself as carrying on the business of the firm, or
(c)
solicit the custom of persons who were dealing with the firm before the ceased to be
a partner.
(2)
Agreements in restraint of trade
- a partner may make an agreement with his
partners that on ceasing to be a partner he will not carry on any business similar to that of the firm
within a specified period or within specified local limits; and, notwithstanding anything contained in
section 27, of the Contract Act 1872, such agreement shall be valid if the restrictions imposed are
reasonable.

so Sehar Bano is correct on this as the statement is not straightaway copied from the text of the law.

restraining from any business would obviously be unreasonable