1. X and Y formed a partnership firm to undertake construction of a shopping plaza.

Such
a partnership is called:
(a) limited partnership
(b) particular partnership
(c) partnership at will
(d) implied partnership

2. Consideration needs to be adequate.

(a) True
(b) False

3. A firm is liable to make good the loss of third party if:

(a) one of the partners acting within his apparent authority misapplies the
money or property received from a third party.
(b) one of the partners misapplies the money or property received from a third party
by the firm in the course of its business while it is in the custody of the firm.
(c) by the wrongful act or omission of a partner acting in the ordinary course of the
business of a firm, loss or injury is caused to any third party.
(d) all of the above.

4. A person who is not a party to a contract can sue upon it even though the contract is for
his benefit and he provided consideration.
(a) True
(b) False

5. The conclusive evidence of a partnership is:

(a) mutual agency
(b) sharing of profit and loss
(c) mutual understanding
(d) capital contribution

6. Consideration must be present & past only.

(a) True
(b) False

7. In a ‘partnership at will’, a partner may retire:

(a) with the consent of all other partners.
(b) in accordance with an express agreement between the partners.
(c) by giving notice in writing to all the other partners, of his intention to retire.
(d) in any one of the manners described above.
8. The consideration is the price for which the promise of the other is bought and the
promise thus given for value is enforceable.
(a) True
(b) False

9. Partnership is:
(a) the relationship between persons who have agreed to share the profits of jointly
owned property managed by all or any of them acting for all.
(b) the relationship created by an agreement between a banking company and
person(s) providing for sharing of profit and loss arising from the finance provided
to such person(s).
(c) both of the above.
(d) the relation between persons arising from a contract who have agreed to share
the profits of a business carried on by all or any of them acting for all.

10. Natural Love and Affection, Completed Gift, Contract of agency are enforceable even
though they are made without consideration.
(a) True
(b) False

11. A partnership firm comes into existence by agreement between all the partners, and such
agreement should be
(a) Express agreement only
(b) Implied agreement only
(c) Either express or implied
(d) Registered

12. Privity of contract means relationship existing between the parties who have entered into
agreement.
(a) True
(b) False

13. A partnership deed usually contain the particulars relating to

(a) Name of firm and partners
(b) Nature of business and duration of firm
(c) Capital contribution, profit/loss sharing ration and other agreed terms
(d) All of these

14. A partner is the agent of the firm for the business of the firm
(a) True, as the mutual agency relationship is the foundation of the law of partnership.
(b) False, as in that case a firm is reduced to the status of a mere agency.
15. Which of the following statement is incorrect?
a) A person who receives the profits is always a partner.
b) A person who receives the profits is not necessarily a partner.
c) The true test of partnership is the mutual agency i.e., agency relationship among
partners.
d) The partnership comes into existence only through agreement.

16. An agreement can become a contract only when it is made for a lawful consideration and
with a lawful object.
(a) True
(b) False

17. Which of the following statement about a minor partner is incorrect?

(a) A minor can be admitted only to the benefits of an existing firm.
(b) A minor cannot be admitted to the benefits of a new firm taking minor as partner.
(c) A minor cannot be a full-fledged partner in a firm.
(d) A minor can be a full-fledged partner in a firm.

18. The consideration or object of an agreement is lawful if it is forbidden by law.

(a) True
(b) False

19. A takes the house from B on rent. There is nothing unlawful in this case. But A wants to
set up an illegal distillery in the house, the agreement is void because of its unlawful
object.
(a) True
(b) False

20. Minor cannot become an agent.

(a) True
(b) False

21. A diplomatic agent can make an agreement if he is acting as an executor, administrator

and heir as private person.
(a) True
(b) False

22. Bashir agree to sell his watch to Niaz for 400 Bashir deliver the watch and Niaz make the
payment, it’s tender.
(a) True
(b) False
23. Performance of contract means that each party to a contract has done, whatever he has
required to do under the contract, within the prescribed time in a manner that no party to
the contract has any claim, grievance or right outstanding against the other party and the
contract has come to an end.
(a) True
(b) False

24. In waiver, rescission and remission, previous contract is cancelled and no new contract
comes into existence.
(a) True
(b) False

25. Remission means reducing the performance of the contract.

(a) True
(b) False

26. Discharge by operation of law includes insolvency and merger.

(a) True
(b) False

27. In injunction, if a party to a contract does something which he promised not to do, the
court may issue an order prohibiting him from doing so.
(a) True
(b) False

28. A agreed to sell an old painting to B for Rs. 500,000. Subsequently, A refused to sell the
painting. Here, B cannot file suit against A for the specific performance of the contract.
(a) True
(b) False

29. A agreed to play cricket for Apple Cricket Club during the contract period of 3 years.
During the contract period, A made a contract with Orange Cricket Club and refused to
play cricket for Apple Cricket Club. Here, A could be restrained by injunction from doing
so.
(a) True
(b) False
30. Ghaffar and Jabbar purchased a shop, incurred additional expenses to renovate it
contributing in the ratio of 50:50 and then leased out the shop on rent which was shared
equally by them. It is a partnership as they are co-owners and carrying out a business.
(a) True
(b) False

31. A, who knows that B has stolen goods amounting to Rs.500,000, receives Rs.100,000
from B in consideration of not exposing A. This agreement is illegal.
(a) True
(b) False

32. A agrees with B to discover treasure by magic. The agreement is valid.

(a) True
(b) False

33. Games of skill do not include wagering agreement.

(a) True
(b) False

34. A and B carried on business in a certain locality in Karachi. A promised to stop business
in that locality if B paid him Rs. 1,000. A stopped his business but B did not pay him the
promised money. It was held that A could not recover anything from B because the
agreement was in restraint of trade and was thus void.
(a) True
(b) False

35. Agreements in Restraint of Legal Proceedings affect the law relating to arbitration.
(a) True
(b) False

36. A seller of goodwill may be restrained from carrying on a similar business, within
specified local limits, so long as the buyer carries on a like business: provided that such,
limits appear to the Court reasonable regard being had to the nature of the business.
(a) True
(b) False

37. Agreements by way of wager are valid.

(a) True
(b) False
38. Opposite views about an uncertain event is one of the essentials of a wagering agreement.
(a) True
(b) False

39. Mr. Peers promised Mrs. Catherine Lowe, that he would not marry anyone other than
Mrs. Lowe and promised further to pay, Mrs. Lowe, 2000 pounds on default. This is
valid Agreement.
(a) True
(b) False

40. The consideration or object of an agreement is unlawful if the court regards it as immoral.
(a) True
(b) False