Test 2 QP

Certificate in Accounting and Finance Stage Examination
Time: 1 Hour 25 Min Additional reading time – 10 Minutes

Marks: 45 marks Syllabus: Chapter 4, 5, 8 & 9
Fast Track Test 2
Business Law
Instructions to examinees:
Answer all nine questions.

Answer in black pen only.
Start new question on new page
Write page number on top of your answer scripts.
Question # 1
Mr. SAMANT owned a motor car. He approached Mr. CHHOTU and offered to sell his motor car for Rs. 3.0 million. Mr.
SAMANT told Mr. CHHOTU that the motor car is running at the rate of 30 KMs per liter of petrol.
Both the fuel meter and the speed meter of the car were working perfectly. Mr. CHHOTU agreed with the proposal of
Mr. SAMANT and took delivery of the car by paying Rs. 3.0 million to Mr. SAMANT. After 10 days, Mr. CHHOTU came
back with the car and stated that the claim made by Mr. SAMANT regarding fuel efficiency was not correct and
therefore there was a case of misrepresentation.
Referring to the provisions of the Contract Act, 1872, decide and write whether Mr. CHHOTU can rescind the contract
in the above ground. (04)
Question # 2
Shareef Admi , innocently in good faith tells Chalak Admi that his TV set is made in Japan. Chalak Admi thereupon buys
he TV set. However it comes out to be a China make.
In context of Contract Act 1872 explain whether it is a misrepresentation or fraud and how would it be dealt (03)
Question # 3
In one of BT’s showrooms, a famous actor came to return an air conditioner purchased one month ago. He demanded
for the replacement of his air conditioner with the latest model. The actor got upset when the showroom manager
refused to replace the air conditioner with the latest model and threatened to damage the products displayed in the
showroom. Considering the situation, the manager agreed to deliver the latest model of air conditioner to actor’s
house. Discuss the status of the contract between BT and the customer. (04)
Question # 4
Under the provisions of the Contract Act, 1872:
(a) Explain any four rules regarding the performance of reciprocal promises. (04)
(b) Discuss the enforceability of an agreement when consent is caused by mistake. (04)
Question # 5
Under the provisions of the Contract Act, 1872 describe contingent contracts and identify the circumstances in which
a contingent contract can and cannot be enforced. (06)
Question # 6
On 1st November; X contracted to sell and deliver 50 tons of wheat @ Rs. 8,000 per ton to Y on 1st January. On 20th
December Y, afterwards, contracted to sell those goods to Z at Rs. 10,000 per ton. X failed to deliver goods on 1st
January when the price of the wheat was Rs. 9,500 per ton.
Explain with reasons how much amount can be recovered by Y and how much not. (03)
Question # 7
Under the provisions of Contract act,1872 describe constructive contracts and identify the circumstances in which a
constructive contract may be formed. (05)
Question # 8
Jamali holds land in Quetta, on a lease granted by Jagirdar. The tax payable by Jagirdar to the Government being
remained unpaid and his land is advertised for sale by the Government. Under the tax law, the consequence of such
sale will be the cancellation of Jamali's lease. Jamali, to prevent the sale and the consequent cancellation of his own
lease, pays the Government the sum due from Jagirdar,
Under the provisions of Contract Act, 1872 explain whether Jamali can recover such amount from Jagirdar.(04)
Question # 9
Mark the correct answer:- (09)
1. Relation between the parties must exist to use
(a) Fraud
(b) Undue influence
(c) Coercion
(d) Void agreement
2. Undue influence implies

(a) It involves moral pressure
(b) Criminal liability is incurred
(c) Pressure of money
(d) Physical pressure on the party
3. Coercion may be directed upon

(a) The party whose consent is being caused
(b) Any other party
(c) Either (a) or (b)
(d) None of the above
4. Fraud exists, if it is shown that false statement has been made

(a) Knowingly
(b) Without belief in its truth
(c) Recklessly without caring it be true and false
(d) All of the above, if done, with an intention to deceive
5. Undue influence is legally not presumed in case of

(a) Guardian and ward
(b) Creditor and debtor
(c) Solicitor and client
(d) Trustee and beneficiar
6. Mr. A, in consideration of Rs. 100,000/- from Mr. B agrees to publish defamatory material against Mr. Talal, a famous
lawyer, in order to damage his goodwill and reputation. This agreement is void because
a) It is fraudulent
b) It is immoral and against public policy
c) It involves an injury to a person
d) it defeats the provision of any law
7. Contingent contracts are
(a) Absolute contracts
(b) Partly absolute contracts
(c) Conditional contracts
(d) None of the above
8. Which one of the following statement is true

a. All contingent contracts are not wagering in nature
b. Contingent contracts and wagering contracts are one and same
c. Contingent contracts are absolute contracts
d. Contingent contracts are not conditional contract

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Certificate in Accounting and Finance Stage Examination

Time: 1 Hour 25 Min Additional reading time – 10 Minutes

Answer all nine questions.

2. Undue influence implies

3. Coercion may be directed upon

4. Fraud exists, if it is shown that false statement has been made

5. Undue influence is legally not presumed in case of

8. Which one of the following statement is true

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