Quick recall · 183 cards
Short MCQ-style retrieval prompts. Tap a card to reveal the answer.
PYQ
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How many persons are required to form a contract?
B · B) two
PYQ
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Where is the definition of the term 'Contract' enshrined under the Indian Contract Act, 1872?
D · D) Section 2(h)
PYQ
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How can the acceptance of the proposal be made?
D · D) by performing conditions or receiving consideration
PYQ
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________________ is absolute and capable of converting an agreement into a contract
C · C) Acceptance
PYQ
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A valid proposal can be made in which of the following manner?
B · B) words (written or spoken)
PYQ
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When the offeree makes modifications and variations in the terms of the original offer, he is said to have made a:
B · B) counter offer
PYQ
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In a contract for the sale of goods, a stipulation essential to the main purpose of the contract is known as:
A · A. Condition
PYQ
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In case of transfer of property the seller is:
B · B. is entitled to rents and profits of the property till the ownership thereof passes to buyer
PYQ
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Which of the following statements is true regarding rights of the seller under the Transfer of Property Act, 1882?
A · A. The seller is entitled to the rents and profits thereof till the ownership thereof passes to the buyer
PYQ
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In a contract of sale, if there is excess delivery (more than the contracted quantity), the buyer can:
D · D. Either (A), (B) or (C)
PYQ
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The main object of contract of sale is:
C · C. Transfer of property
PYQ
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A consideration in contract of sale must be ______________ only.
C · C. Price
PYQ
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The term 'Unpaid Seller' has been defined in which section of the Sale of Goods Act, 1930?
A. Section 44
B. Section 45
C. Section 46
D. Section 47
B · Section 45
PYQ
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Which of the following is NOT a remedy available for breach of contract under the Indian Contract Act, 1872?
A. Damages
B. Specific Performance
C. Rescission
D. Quantum Meruit
B · Specific Performance
PYQ · 2011
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In a sale of goods by auction, as soon as the hammer falls, the goods:
B · become the property of buyer even if there is a condition that the goods shall not be removed before payment
PYQ
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In an auction sale, if the seller makes use of pretended bidding to raise the price, then:
C · sale is voidable at the option of the buyer
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Which of the following best defines the formation of a contract of sale under the Sale of Goods Act?
A · An agreement between two parties where one transfers ownership of goods for a price
A contract of sale involves an agreement where ownership of goods is transferred from seller to buyer for a price, which is the essence of sale under the Sale of Goods Act.
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Which section of the Sale of Goods Act, 1930 defines a 'contract of sale'?
A · Section 2(1)
Section 2(1) of the Sale of Goods Act, 1930 defines a contract of sale as an agreement whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price.
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Which of the following is NOT essential for the formation of a valid contract of sale of goods?
D · Registration of contract
Registration is not required for the formation of a contract of sale of goods. Essential elements include offer, acceptance, consideration, and free consent.
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In the context of contract formation, what is the legal effect of a 'counter-offer'?
B · It rejects the original offer and proposes a new offer
A counter-offer rejects the original offer and proposes a new offer, which must be accepted for a contract to be formed.
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Which of the following statements about the formation of a contract of sale is correct?
D · A contract of sale requires an offer, acceptance, and consideration
A contract of sale requires offer, acceptance, and consideration. An agreement to sell is distinct and not a contract of sale until ownership passes.
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In a contract of sale, the term 'offer' means:
A · A definite proposal made with the intention to be bound
An offer is a definite proposal made with the intention that it shall become binding as soon as it is accepted by the person to whom it is made.
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Which of the following is an example of a valid offer in a contract of sale of goods?
B · Seller states: 'I will sell you my car for \( \text{₹} 5,00,000 \) if you accept by tomorrow.'
A valid offer must be definite and show intention to be bound. The seller's statement with a fixed price and time for acceptance qualifies as a valid offer.
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When does an offer lapse under the Sale of Goods Act?
D · All of the above
An offer lapses if revoked before acceptance, rejected by the offeree, or a counter-offer is made, as these terminate the original offer.
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Which of the following is NOT a valid mode of acceptance in a contract of sale?
C · Acceptance by silence without prior agreement
Silence cannot amount to acceptance unless there is a prior agreement or established practice to that effect.
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In the Sale of Goods Act, acceptance is said to be complete when:
B · The acceptance is communicated to the offeror
Acceptance is complete when it is communicated to the offeror, thereby creating a binding contract.
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A buyer sends an acceptance letter by post. The contract is formed when:
A · The letter is posted
According to the postal rule, acceptance is complete when the acceptance letter is posted, not when received.
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Which of the following statements about consideration in a contract of sale is true?
B · Consideration must be sufficient but need not be adequate
Consideration must be sufficient in law but need not be adequate in value; the law does not require equal exchange.
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Which of the following is NOT valid consideration in a contract of sale of goods?
C · Past voluntary act without expectation of reward
Past voluntary acts without expectation of reward do not amount to valid consideration.
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In a contract of sale, if the buyer agrees to pay a higher price than originally agreed without any new consideration, the agreement is:
B · Void for lack of consideration
An agreement to pay more without fresh consideration is not enforceable under the Indian Contract Act.
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Which of the following best illustrates the principle of consideration in a contract of sale?
A · Seller transfers goods, buyer promises to pay price
Consideration involves a promise to pay price by the buyer in exchange for goods from the seller.
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Which of the following statements about the contract of sale is correct?
C · A contract of sale may be absolute or conditional
A contract of sale may be absolute or conditional depending on whether the transfer of ownership is immediate or subject to conditions.
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A buyer offers to purchase goods at a specified price. The seller replies with a different price. This is:
B · A counter-offer
Changing the terms of the offer constitutes a counter-offer which rejects the original offer.
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Which of the following is true regarding acceptance in the formation of a contract of sale?
B · Acceptance must be absolute and unqualified
Acceptance must be absolute and unqualified to create a binding contract.
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A contract of sale is formed when:
B · The offer is accepted
A contract is formed when the offer is accepted by the offeree.
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Assertion (A): An offer can be revoked at any time before acceptance.
Reason (R): Acceptance must be communicated to the offeror to be valid.
Choose the correct option:
A · Both A and R are true and R is the correct explanation of A
An offer can be revoked any time before acceptance, and acceptance must be communicated to the offeror to be valid, making the reason a correct explanation of the assertion.
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A buyer orders goods by telephone and the seller dispatches the goods immediately. The buyer receives the goods but refuses to pay. Which of the following is true?
B · Contract was formed upon dispatch of goods by seller
A contract is formed when the buyer makes an offer by ordering goods and the seller accepts by dispatching the goods, implying acceptance.
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A seller agrees to sell goods to a buyer for \( \text{₹} 50,000 \). The buyer promises to pay \( \text{₹} 60,000 \) instead. The seller accepts. Is the agreement to pay the higher price enforceable?
B · No, because there is no fresh consideration for the higher amount
An agreement to pay more without fresh consideration is not enforceable under the Indian Contract Act.
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Which of the following best defines a 'condition' in the Law of Sale of Goods?
B · A fundamental term that goes to the root of the contract
A condition is a fundamental term of the contract, breach of which allows the aggrieved party to repudiate the contract.
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Under the Sale of Goods Act, which of the following is an example of a warranty?
A · The seller guarantees the goods are free from encumbrances
A warranty is a subsidiary term, such as the guarantee that goods are free from encumbrances, breach of which entitles the buyer to damages but not repudiation.
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Which section of the Sale of Goods Act, 1930 defines 'conditions' and 'warranties'?
B · Section 12
Section 12 of the Sale of Goods Act, 1930 defines conditions and warranties in a contract of sale of goods.
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Which of the following best distinguishes a 'condition' from a 'warranty'?
B · Breach of a condition allows contract repudiation; breach of a warranty only allows damages
The key distinction is that breach of a condition allows the aggrieved party to repudiate the contract, whereas breach of a warranty only entitles them to damages.
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Which of the following is a correct statement regarding contract terms in a sale of goods contract?
B · Terms can be conditions, warranties, or innominate terms
Contract terms can be conditions, warranties, or innominate terms, each with different legal consequences upon breach.
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If a buyer breaches a condition of the contract, what is the seller entitled to do?
B · Repudiate the contract and claim damages
Breach of a condition allows the innocent party to repudiate the contract and also claim damages.
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Which section of the Sale of Goods Act implies a condition that goods must be of merchantable quality?
A · Section 14(2)
Section 14(2) of the Sale of Goods Act implies a condition that goods sold in the course of business must be of merchantable quality.
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Which of the following best describes the legal consequence of breaching a warranty in a sale of goods contract?
C · The aggrieved party can claim damages only
Breach of warranty entitles the aggrieved party to claim damages but does not allow repudiation of the contract.
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In which case did the court hold that a stipulation as to time of delivery is a condition?
A · Poussard v Spiers and Pond
In Poussard v Spiers and Pond, the court held that a stipulation as to time of delivery was a condition, breach of which allowed contract repudiation.
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Which of the following remedies is NOT available for breach of a condition under the Sale of Goods Act?
D · Claim for restitution
Claim for restitution is generally not a remedy for breach of condition; repudiation, damages, and specific performance are recognized remedies.
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A buyer orders 100 branded watches but receives 90 branded and 10 unbranded watches. This is a breach of which contract term?
B · Condition
The term specifying the exact quantity and brand is a condition; breach allows repudiation or damages.
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Which section of the Sale of Goods Act deals with the implied condition as to fitness for a particular purpose?
A · Section 14(3)
Section 14(3) implies a condition that goods shall be reasonably fit for a particular purpose made known to the seller.
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Which of the following statements about breach of warranty is correct?
C · Breach of warranty entitles the buyer to damages only
Breach of warranty entitles the buyer to claim damages but not to reject goods or terminate the contract.
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Which of the following best explains an 'innominate term' in contract law related to sale of goods?
A · A term that is neither a condition nor a warranty and whose breach consequences depend on the effect
An innominate term is one where the consequences of breach depend on the seriousness of the breach and its effect on the contract.
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In the context of sale of goods, which of the following is true about the 'condition precedent'?
A · It is a condition that must be fulfilled before a contract becomes binding
A condition precedent is a condition that must be satisfied before the contract or an obligation under it becomes effective.
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Which case established that breach of warranty does not entitle the buyer to reject goods but only to claim damages?
A · Bettini v Gye
In Bettini v Gye, the court held that breach of warranty does not entitle repudiation but only damages.
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A contract states that delivery must be made on 1st July. Delivery on 5th July occurs. The court treats this term as a condition. What is the buyer's right?
B · Reject goods and repudiate the contract
If time is of the essence and the term is a condition, breach allows repudiation and rejection of goods.
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Which of the following remedies is available for breach of warranty but NOT for breach of condition?
B · Claim for damages
Claim for damages is available for breach of both, but repudiation and termination are not available for breach of warranty.
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Which section of the Sale of Goods Act implies a warranty that the buyer shall have and enjoy quiet possession of the goods?
A · Section 12(1)
Section 12(1) implies a warranty that the buyer shall have and enjoy quiet possession of the goods.
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Assertion (A): Breach of a condition always entitles the innocent party to repudiate the contract.
Reason (R): Innominate terms are treated as conditions in all cases of breach.
D · A is false but R is true
While breach of a condition generally entitles repudiation, innominate terms are not always treated as conditions; their treatment depends on the breach's effect.
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A seller delivers goods that do not conform to the description but are of merchantable quality. The buyer refuses to accept them. Which statement is correct?
A · The buyer can reject the goods because description is a condition
Sale by description is a condition; breach allows the buyer to reject the goods.
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Which of the following best describes the remedy available when there is a breach of condition as to fitness for purpose under the Sale of Goods Act?
B · The buyer can reject the goods and repudiate the contract
Breach of a condition as to fitness for purpose entitles the buyer to reject the goods and repudiate the contract.
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Which judicial principle was established in the case of Hong Kong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd. regarding contract terms?
C · The concept of innominate terms was introduced
The case introduced the concept of innominate terms, where the remedy depends on the effect of the breach.
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Which of the following best defines the term 'property transfer' in the context of the Sale of Goods Act?
A · The passing of ownership from the seller to the buyer
Property transfer refers to the passing of ownership or title in the goods from the seller to the buyer under the Sale of Goods Act.
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Under the Sale of Goods Act, when does the risk in goods generally pass from the seller to the buyer?
A · When the property in the goods passes to the buyer
As a general rule, risk passes with property. That is, the risk passes to the buyer when ownership in the goods passes to him.
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Which of the following best describes 'ownership' in the context of sale of goods?
A · The right to possess and use the goods exclusively
Ownership means the legal right to possess, use, and dispose of the goods exclusively.
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Which of the following is an essential element of a valid sale agreement under the Sale of Goods Act?
A · Transfer of property in goods for a price
A sale agreement must include the transfer of property in goods from the seller to the buyer for a price.
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According to the Sale of Goods Act, which rule applies when goods are specific and in a deliverable state at the time of the contract?
A · Property passes to the buyer when the contract is made
For specific goods in a deliverable state, property passes to the buyer at the time the contract is made, unless otherwise agreed.
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Which of the following statements correctly explains the passing of risk in a sale involving unascertained goods?
A · Risk passes only when goods are ascertained and appropriated to the contract
In the case of unascertained goods, risk passes only when the goods are ascertained and appropriated to the contract.
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Which of the following best describes the effect of a condition on the passing of risk in a sale of goods contract?
A · Risk does not pass until the condition is fulfilled
If the sale is subject to a condition, risk does not pass until that condition is fulfilled.
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In a contract for the sale of specific goods, if the seller wrongfully neglects or refuses to deliver the goods, when does the risk pass to the buyer?
A · Risk passes to the buyer despite non-delivery
If the seller wrongfully neglects or refuses to deliver, risk passes to the buyer as if the goods had been delivered.
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Which of the following best describes the intention of parties in the transfer of property in goods under a sale agreement?
A · Property passes when parties intend it to pass
The transfer of property depends on the intention of the parties as expressed or implied in the contract.
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Which of the following statements correctly distinguishes legal ownership from equitable ownership in the sale of goods context?
A · Legal ownership confers full title; equitable ownership confers beneficial interest
Legal ownership is the formal title recognized by law, whereas equitable ownership refers to the beneficial interest in the goods.
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Under the Sale of Goods Act, when does the property in unascertained goods pass to the buyer?
A · When the goods are ascertained and appropriated to the contract
Property in unascertained goods passes only when the goods are identified and appropriated to the contract.
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Which of the following rules applies when goods are delivered to a carrier for transmission to the buyer without any reservation of right of disposal by the seller?
A · Risk passes to the buyer when goods are delivered to the carrier
If goods are delivered to a carrier without reservation of right of disposal, risk passes to the buyer at that point.
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In a sale where the price is payable on delivery, when does the property in goods pass to the buyer according to the Sale of Goods Act?
A · When the goods are delivered to the buyer
When price is payable on delivery, property passes when the goods are delivered to the buyer.
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Which of the following best illustrates the effect of a warranty on the passing of risk in a sale of goods contract?
A · Risk passes to the buyer even if the warranty is breached
Unlike conditions, breach of warranty does not affect the passing of risk; risk passes with property.
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In a contract for the sale of specific goods, if the seller delivers the goods to the buyer but the goods are damaged during transit by a third party, who bears the risk?
A · Risk lies with the buyer once property passes
Once property passes to the buyer, the risk also passes to the buyer even if damage occurs during transit.
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A contract states that property in goods shall pass to the buyer only when payment is made in full. Which rule of property transfer does this illustrate?
A · Intention of parties governs transfer of property
The parties’ intention to transfer property only on full payment controls the timing of property transfer.
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Which of the following scenarios best illustrates equitable ownership in the sale of goods context?
A · A buyer has paid the price but legal title is retained by the seller as security
Equitable ownership arises when the buyer has a beneficial interest (e.g., has paid price) but legal title is retained by the seller as security.
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In a contract for the sale of unascertained goods, the seller appropriates goods to the contract by marking and setting them aside. When does the risk pass to the buyer?
A · When goods are appropriated to the contract
Risk passes when unascertained goods are appropriated to the contract by the seller or buyer.
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A buyer agrees to purchase goods and pay the price in installments. The contract states that property shall pass only after full payment. Which of the following is true regarding risk?
A · Risk passes with property after full payment
Where property passes only after full payment, risk also passes only after property passes, i.e., after full payment.
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Which of the following best explains the rule for transfer of property when goods are delivered to a carrier for transmission to the buyer with a reservation of right of disposal by the seller?
A · Property does not pass until the buyer receives the goods
If the seller reserves the right of disposal, property does not pass until the buyer receives the goods.
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Assertion (A): Risk in goods passes to the buyer only when the goods are delivered.
Reason (R): Property and risk always pass simultaneously under the Sale of Goods Act.
Choose the correct option:
C · A is false but R is true
Risk generally passes with property, which may pass before delivery. Therefore, risk does not always pass only on delivery, making A false and R true.
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In a sale agreement, the parties agree that property shall pass only when the buyer inspects the goods and approves them. Which principle governs this transfer?
A · Intention of the parties
The transfer of property depends on the intention of the parties, which can include conditions like inspection and approval.
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A buyer purchases goods which are yet to be manufactured. The contract states that property will pass when the goods are completed and appropriated to the contract. When does the risk pass to the buyer?
A · When the goods are completed and appropriated to the contract
Risk passes when the goods are ascertained and appropriated to the contract, i.e., when completed and identified.
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Which section of the Sale of Goods Act, 1930 primarily deals with the performance of the contract of sale?
B · Section 37
Section 37 of the Sale of Goods Act, 1930 deals with the performance of the contract of sale, including delivery and payment obligations.
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In a contract of sale, the term 'performance' primarily refers to:
C · Both delivery of goods and payment of price
Performance of contract of sale involves both the delivery of goods by the seller and payment of the price by the buyer.
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Which of the following best describes the legal obligation of the seller regarding delivery under the Sale of Goods Act?
B · Seller must deliver goods at the time and place agreed upon in the contract
The seller is legally bound to deliver the goods at the time and place agreed upon in the contract, as per the Sale of Goods Act.
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Under the Sale of Goods Act, when is the payment of price generally due in a contract of sale?
B · At the time and place the goods are delivered
Payment of price is generally due at the time and place the goods are delivered, unless otherwise agreed by the parties.
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Which of the following statements about acceptance of goods is correct?
B · Acceptance can be implied by the buyer's conduct
Acceptance of goods can be implied by the buyer's conduct, such as using or retaining the goods without objection.
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Which of the following is NOT a mode of delivery under the Sale of Goods Act?
D · Conditional delivery
Conditional delivery is not recognized as a mode of delivery; the recognized modes are actual, constructive, and symbolic delivery.
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If the seller wrongfully neglects or refuses to deliver the goods, the buyer may:
A · Cancel the contract and claim damages
The buyer has the right to cancel the contract and claim damages if the seller wrongfully neglects or refuses to deliver the goods.
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Which of the following best illustrates 'constructive delivery' of goods?
B · Delivering the key to a warehouse where goods are stored
Constructive delivery occurs when the seller delivers something that gives the buyer control over the goods, such as keys to a warehouse.
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A buyer who accepts goods but later discovers defects may:
B · Claim damages for breach of warranty
If the buyer accepts goods and later finds defects, they may claim damages for breach of warranty but cannot reject the goods outright.
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Which section of the Sale of Goods Act states that unless otherwise agreed, the buyer must pay the price at the time and place the goods are delivered?
C · Section 39
Section 39 of the Sale of Goods Act provides that the buyer must pay the price at the time and place the goods are delivered unless otherwise agreed.
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In which situation is the buyer deemed to have accepted the goods under the Sale of Goods Act?
B · When the buyer uses the goods without objection
The buyer is deemed to have accepted the goods when they use or retain the goods without raising objections.
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A contract of sale requires the seller to deliver goods and the buyer to pay the price. If the contract does not specify the place of delivery, where is the delivery presumed to take place?
A · At the seller's place of business
If the contract does not specify the place of delivery, delivery is presumed to take place at the seller's place of business.
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Which of the following best describes the effect of non-payment of price by the buyer when the goods have been delivered?
A · The seller can sue for price and retain the goods until payment
If the buyer does not pay the price after delivery, the seller can sue for the price and retain possession of the goods until payment is made.
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Which of the following statements about the time of payment in a contract of sale is TRUE?
C · Payment is due at the time and place of delivery unless otherwise agreed
Payment is generally due at the time and place of delivery unless the parties agree otherwise.
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A seller delivers goods to a carrier for transmission to the buyer. The buyer refuses to accept the goods upon arrival. What is the seller's right in this situation?
A · Seller can sue for price and damages
If the buyer refuses to accept goods, the seller can sue for the price and damages for breach of contract.
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Which of the following best describes the legal consequence if the buyer wrongfully neglects or refuses to accept and pay for the goods?
A · Seller can sue for damages and resell the goods
If the buyer wrongfully refuses to accept and pay for goods, the seller may sue for damages and resell the goods after giving notice.
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Which of the following is an example of symbolic delivery in the context of sale of goods?
C · Delivering a document of title to the goods
Symbolic delivery involves delivering something that represents the goods, such as a document of title.
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Assertion (A): The buyer is not bound to pay the price if the goods are not delivered at the agreed time and place.
Reason (R): Time and place of delivery are conditions of the contract of sale.
A · Both A and R are true and R is the correct explanation of A
Time and place of delivery are conditions of the contract; failure to deliver accordingly entitles the buyer to withhold payment.
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Which of the following statements is CORRECT regarding the acceptance of goods by the buyer?
B · Acceptance can be inferred from the buyer’s conduct
Acceptance can be implied by the buyer’s conduct, such as using or retaining the goods without objection.
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If the goods are delivered to the buyer but are damaged before acceptance, who bears the risk according to the Sale of Goods Act?
A · Seller bears the risk until acceptance
The risk remains with the seller until the buyer accepts the goods, unless otherwise agreed.
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Which of the following is TRUE about payment of price when the contract is silent about the time of payment?
B · Payment is due at the time and place of delivery
When the contract does not specify, payment is due at the time and place of delivery as per the Sale of Goods Act.
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A buyer orders 100 units of goods to be delivered by a specific date. The seller delivers only 80 units on that date. What is the buyer’s right?
B · Reject the entire delivery and cancel the contract
Delivery of less than the contracted quantity is a breach of condition, entitling the buyer to reject the entire delivery and cancel the contract.
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Which of the following statements is TRUE regarding the seller’s right to withhold delivery of goods?
A · Seller can withhold delivery if the buyer has not paid the price
The seller has the right to withhold delivery if the buyer has not paid the price or is not ready to pay.
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Who is considered an unpaid seller under the Sale of Goods Act?
B · A person who has sold goods but has not received the whole or any part of the price
An unpaid seller is defined as a person who has sold goods but has not received the whole or any part of the price due to him under the contract of sale.
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Which of the following best describes the status of an unpaid seller?
A · He is a creditor of the buyer for the price of goods
The unpaid seller is essentially a creditor of the buyer for the price of the goods and has certain rights to protect his interest until payment is made.
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Under what condition does the unpaid seller acquire a lien on the goods sold?
B · When the goods are in possession of the seller and payment is due
The unpaid seller has a right of lien on the goods in his possession when the payment is due but has not been made by the buyer.
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Which of the following is NOT a condition for the right of lien to exist?
C · The goods must have been delivered to the buyer
The right of lien exists only when the seller is in possession of the goods; once goods are delivered to the buyer, the lien is lost.
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An unpaid seller can exercise the right of lien on goods when:
B · The buyer refuses to accept the goods
The unpaid seller can exercise lien if the buyer refuses to accept the goods or the price is due and unpaid, provided the seller has possession of the goods.
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Which section of the Sale of Goods Act deals with the right of lien of the unpaid seller?
A · Section 47
Section 47 of the Sale of Goods Act, 1930, specifically deals with the unpaid seller's right of lien on the goods.
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What does the right of stoppage in transit allow an unpaid seller to do?
A · Stop the goods from being delivered to the buyer while in transit if the buyer is insolvent
The right of stoppage in transit allows the unpaid seller to stop the goods from reaching the buyer when the buyer becomes insolvent while the goods are in transit.
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Which of the following is a necessary condition for the exercise of the right of stoppage in transit?
B · The buyer must have become insolvent
The unpaid seller can exercise the right of stoppage in transit only if the buyer has become insolvent and the goods are still in transit.
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If the goods have been delivered to the carrier but not yet reached the buyer, the unpaid seller can exercise the right of stoppage in transit. This right is lost if:
C · The goods have been delivered to the buyer or his agent
The right of stoppage in transit ceases once the goods are delivered to the buyer or his authorized agent.
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An unpaid seller stopped goods in transit due to buyer's insolvency. The goods were subsequently lost in transit. Who bears the loss?
B · The seller
Once the unpaid seller exercises the right of stoppage in transit, the goods are considered in his possession, so the loss is borne by the seller.
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Which section of the Sale of Goods Act deals with the right of stoppage in transit?
A · Section 50
Section 50 of the Sale of Goods Act, 1930, provides the unpaid seller the right of stoppage in transit.
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What is the right of resale available to an unpaid seller?
A · The right to resell goods if the buyer defaults in payment after reasonable notice
The unpaid seller has the right to resell the goods if the buyer fails to pay the price after a reasonable notice has been given.
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Which of the following conditions must be fulfilled before an unpaid seller can exercise the right of resale?
B · The price must have become due and unpaid for a reasonable time after notice
The right of resale can be exercised only if the price has become due and remains unpaid after a reasonable notice to the buyer.
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An unpaid seller resells the goods without giving a reasonable notice to the buyer. What is the legal consequence?
B · The resale is invalid and the seller is liable for damages
Resale without reasonable notice is wrongful and the seller may be liable to the buyer for damages.
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Which section of the Sale of Goods Act governs the right of resale by the unpaid seller?
A · Section 55
Section 55 of the Sale of Goods Act, 1930, deals with the unpaid seller's right of resale.
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Which of the following is a limitation on the right of lien of an unpaid seller?
C · Lien is lost if the goods are delivered to a carrier for transmission to the buyer
The right of lien is lost when the goods are delivered to a carrier or other bailee for transmission to the buyer.
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Which of the following statements about the right of stoppage in transit is correct?
C · It is lost once the goods reach the buyer or his agent
The right of stoppage in transit is lost once the goods reach the buyer or his authorized agent.
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The unpaid seller's rights of lien, stoppage in transit, and resale are subject to:
B · Certain conditions and limitations prescribed by law
The rights of the unpaid seller are subject to specific conditions and limitations as prescribed under the Sale of Goods Act.
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Which of the following distinguishes an unpaid seller from an insolvent buyer?
A · An unpaid seller has sold goods and not received payment, whereas an insolvent buyer cannot pay the price
An unpaid seller is one who has not received payment for goods sold, whereas an insolvent buyer is unable to pay the price due to insolvency.
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Which of the following best explains the difference between an unpaid seller and an insolvent buyer in terms of rights?
B · An unpaid seller can exercise lien and stoppage in transit, an insolvent buyer cannot
The unpaid seller has specific rights such as lien and stoppage in transit to protect his interest, which the insolvent buyer does not possess.
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In a dispute, the unpaid seller claims lien on goods, but the buyer is insolvent and goods are in transit. The seller also wants to resell the goods without notice. Which of the following is correct?
B · The seller can exercise lien and stoppage in transit but must give reasonable notice before resale
The seller can exercise lien and stoppage in transit, but resale requires reasonable notice to the buyer even if insolvent.
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Match the following rights of the unpaid seller with their corresponding sections under the Sale of Goods Act:
A · 1. Right of Lien - Section 50, Right of Stoppage in Transit - Section 55, Right of Resale - Section 47
Section 47 deals with lien, Section 50 with stoppage in transit, and Section 55 with resale rights of the unpaid seller.
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Assertion (A): The unpaid seller can exercise the right of lien even after delivering the goods to the buyer.
Reason (R): The unpaid seller retains ownership of goods until full payment is made.
Choose the correct option:
C · A is false but R is true
The unpaid seller loses the right of lien once the goods are delivered to the buyer. Also, ownership passes to the buyer as per contract terms, so the assertion is false but the reason is true.
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Which of the following statements about the right of resale is correct?
B · The unpaid seller must give reasonable notice to the buyer before resale
The unpaid seller must give reasonable notice to the buyer before exercising the right of resale to avoid liability.
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Which of the following rights can an unpaid seller exercise if the buyer becomes insolvent after goods have been dispatched but before delivery?
B · Right of stoppage in transit only
If the buyer becomes insolvent while goods are in transit, the unpaid seller can exercise the right of stoppage in transit to regain possession of the goods.
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Which of the following is NOT a right of an unpaid seller under the Sale of Goods Act?
D · Right to cancel the contract unilaterally without notice
The unpaid seller does not have an automatic right to cancel the contract unilaterally without notice; other rights are recognized under the Act.
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If the goods are unascertained and the buyer becomes insolvent, can the unpaid seller exercise the right of lien?
B · No, lien applies only to specific or ascertained goods
The right of lien applies only to specific or ascertained goods in the possession of the seller.
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Which of the following best defines a 'breach of contract' under the Law of Sale of Goods?
A · Failure to perform any promise under the contract without lawful excuse
A breach of contract occurs when a party fails to perform any promise or obligation under the contract without lawful excuse.
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Under the Sale of Goods Act, which section primarily deals with the seller's right to damages for non-acceptance of goods by the buyer?
A · Section 55
Section 55 of the Sale of Goods Act provides the seller the right to claim damages when the buyer wrongfully neglects or refuses to accept and pay for the goods.
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Which of the following remedies involves the court ordering the party in breach to perform their contractual obligations exactly as agreed?
B · Specific performance
Specific performance is an equitable remedy where the court orders the party in breach to perform the contract as agreed, rather than awarding damages.
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Which of the following statements correctly describes rescission of contract as a remedy?
A · It involves the cancellation of the contract and restoration of parties to their original position
Rescission is the remedy that cancels the contract and aims to restore the parties to the position they were in before the contract was made.
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A seller delivers goods to a buyer, but the buyer refuses to accept them without lawful excuse. What is the seller entitled to claim under the Sale of Goods Act?
B · Damages for non-acceptance
When a buyer wrongfully refuses to accept goods, the seller is entitled to claim damages for non-acceptance under Section 55 of the Sale of Goods Act.
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Which of the following is NOT a condition for claiming specific performance of a contract for sale of goods?
B · Damages are an adequate remedy
Specific performance is granted when damages are NOT an adequate remedy. If damages suffice, courts usually do not order specific performance.
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Which of the following best explains the principle of 'mitigation of loss' in the context of damages for breach of contract?
A · The injured party must take reasonable steps to reduce the loss caused by breach
The injured party is required to mitigate or minimize the loss resulting from breach; failure to do so may reduce the damages recoverable.
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A contract for sale of a rare painting is breached by the seller. The buyer seeks specific performance. Which of the following is the most likely outcome?
A · The court will order specific performance because the painting is unique
Specific performance is typically granted for unique goods such as rare paintings where damages are inadequate to compensate the buyer.
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Which section of the Sale of Goods Act allows the buyer to rescind the contract if the seller delivers goods that do not correspond with the contract description?
A · Section 15
Section 15 of the Sale of Goods Act permits the buyer to reject goods and rescind the contract if the goods delivered do not correspond with the contract description.
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A buyer contracts to purchase 100 units of a commodity but receives only 80 units. The buyer refuses to accept the 80 units delivered. What remedy is available to the seller?
B · Damages for non-acceptance of 80 units
The seller can claim damages for non-acceptance of the 80 units that the buyer refused to accept.
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Which of the following statements about rescission of contract is CORRECT?
A · Rescission can be claimed only if the breach is fundamental
Rescission is generally available only when the breach is fundamental or goes to the root of the contract.
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Which of the following best describes the legal effect of a breach of contract in the sale of goods?
B · It entitles the innocent party to remedies including damages, specific performance, or rescission
A breach entitles the innocent party to remedies such as damages, specific performance, or rescission depending on the circumstances.
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A contract for sale of goods specifies delivery on a fixed date. The seller delivers the goods late but the buyer accepts them. What remedy is available to the buyer for the delay?
B · Damages for breach of warranty of time
If time is not of the essence, late delivery is a breach of warranty, entitling the buyer to damages but not rescission.
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Which of the following is TRUE regarding damages as a remedy for breach of contract under the Sale of Goods Act?
B · Damages aim to put the injured party in the position as if the contract was performed
Damages aim to compensate the injured party to the position they would have been in had the contract been performed, not better.
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A buyer contracts to purchase 50 units of a product. The seller delivers 50 units but 10 units are defective. The buyer refuses to accept any units. What is the buyer's right?
B · Reject the entire delivery and rescind the contract
If the goods do not conform to the contract, the buyer may reject the entire delivery and rescind the contract under the Sale of Goods Act.
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A seller contracts to sell 100 units of goods to a buyer. The seller delivers 90 units and the buyer refuses to accept them. The seller sues for damages. Which principle applies to the seller's claim?
A · The seller must mitigate loss by reselling the goods
The seller is expected to mitigate loss by reselling the goods; damages are calculated based on the difference between contract price and resale price.
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Which of the following scenarios is LEAST likely to result in a court ordering specific performance in a sale of goods contract?
C · Sale of generic bulk commodities like wheat
Courts generally do not order specific performance for generic or fungible goods where damages are an adequate remedy.
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A buyer contracts to purchase goods described as 'new and unused.' The seller delivers goods that are used but in good condition. Which remedy is available to the buyer?
C · Rescission of contract
Delivery of goods not conforming to description entitles the buyer to rescind the contract.
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Which of the following best explains the difference between damages and specific performance as remedies for breach of contract?
A · Damages compensate financially; specific performance enforces actual performance
Damages provide monetary compensation, whereas specific performance compels the breaching party to perform the contract.
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In which of the following cases is rescission NOT an appropriate remedy for breach of contract in sale of goods?
A · When the breach is trivial and does not affect the contract's essence
Rescission is not appropriate for trivial breaches that do not go to the root of the contract.
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What is the correct definition of an auction in the context of sale of goods?
B · A public sale where goods are sold to the highest bidder
An auction is a public sale in which goods are sold to the highest bidder through a bidding process.
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Which of the following best describes an auction sale?
B · Goods are sold to the highest bidder after acceptance by the auctioneer
In an auction sale, goods are sold to the highest bidder upon acceptance of the bid by the auctioneer.
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Which of the following statements correctly defines the bidding process in an auction sale?
B · Bidding is the process where buyers make successive offers to purchase goods
Bidding is the process where prospective buyers make successive offers to purchase goods at increasing prices.
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In an auction sale, when does acceptance of a bid occur?
A · When the auctioneer announces the sale by the fall of the hammer
Acceptance in an auction sale occurs when the auctioneer announces the sale, usually by the fall of the hammer.
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Which legal principle governs the sale by auction under the Sale of Goods Act, 1930?
B · The contract is complete when the auctioneer accepts the highest bid
Under the Sale of Goods Act, 1930, the contract of sale by auction is complete when the auctioneer accepts the highest bid.
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Which type of auction involves the auctioneer setting a minimum price below which the goods will not be sold?
B · Reserve auction
In a reserve auction, the auctioneer sets a minimum reserve price below which the goods will not be sold.
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What is the primary role of an auctioneer in an auction sale?
B · To accept bids on behalf of the seller and announce the sale
The auctioneer acts as an agent of the seller, accepting bids and announcing the sale to the highest bidder.
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Under what condition can a bidder revoke or withdraw their bid in an auction sale?
A · At any time before the fall of the hammer
A bidder can revoke or withdraw their bid at any time before the auctioneer announces the sale by the fall of the hammer.
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Which of the following best describes contract formation in an auction sale?
B · Contract is formed when the auctioneer accepts the highest bid
The contract of sale in an auction is formed when the auctioneer accepts the highest bid, typically by the fall of the hammer.
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Which duty is primarily the responsibility of the seller in an auction sale?
A · To deliver the goods to the highest bidder after sale
The seller's primary duty is to deliver the goods to the highest bidder after the sale is completed.
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At what point does the ownership of goods transfer in a sale by auction without reserve?
B · When the auctioneer accepts the highest bid
Ownership transfers when the auctioneer accepts the highest bid, which completes the contract of sale.
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Which section of the Sale of Goods Act, 1930 specifically deals with sale by auction?
B · Section 64
Section 64 of the Sale of Goods Act, 1930 deals specifically with sale by auction.
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Which of the following is a key distinction between an auction sale and a private sale?
A · Auction sale involves bidding; private sale does not
The key distinction is that auction sales involve competitive bidding, whereas private sales do not.
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Which of the following best describes an absolute auction?
A · An auction where goods are sold regardless of the bid amount
An absolute auction is one where goods are sold to the highest bidder regardless of the bid amount, with no reserve price.
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Which of the following statements about the role of the auctioneer is correct?
B · The auctioneer acts as an agent of the seller
The auctioneer acts as an agent of the seller, conducting the sale and accepting bids on their behalf.
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If a bidder withdraws their bid before the fall of the hammer, what is the legal effect?
B · The bid is revoked and no contract arises from it
A bid can be revoked before acceptance (fall of the hammer), so no contract arises from the withdrawn bid.
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In an auction sale, when is the contract considered to be formed?
B · When the auctioneer accepts the highest bid by the fall of the hammer
The contract is formed when the auctioneer accepts the highest bid, usually indicated by the fall of the hammer.
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Which of the following rights does the buyer acquire immediately upon acceptance of the highest bid in an auction sale?
A · Right to possess and ownership of goods
Upon acceptance of the highest bid, the buyer acquires the right to possess and ownership of the goods.
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Under the Sale of Goods Act, 1930, which of the following is true regarding auction sales without reserve?
B · The goods must be sold to the highest bidder
In an auction without reserve, the goods must be sold to the highest bidder.
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Which of the following best distinguishes auction sale from private sale?
A · Auction sale involves public competitive bidding; private sale does not
Auction sales involve public competitive bidding, whereas private sales are negotiated privately without bidding.
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Which of the following statements about acceptance in auction sale is correct?
B · Acceptance occurs when the auctioneer announces the sale
Acceptance occurs when the auctioneer announces the sale, usually by the fall of the hammer.
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Which of the following statements about the legal principles of sale by auction is TRUE?
C · The contract is formed when the auctioneer accepts the highest bid
The contract of sale by auction is formed when the auctioneer accepts the highest bid.
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A bidder placed a bid of \( \text{₹} 50,000 \) but withdrew it before the fall of the hammer. What is the legal consequence?
B · The bid is revoked and no contract arises from it
A bid can be revoked before acceptance (fall of the hammer), so withdrawal is valid and no contract arises.
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Which of the following best explains the transfer of ownership in a sale by auction with reserve price?
B · Ownership transfers only when the reserve price is met and bid accepted
In a reserve auction, ownership transfers only when the reserve price is met and the bid is accepted by the auctioneer.
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Which of the following best describes the rights and duties of the auctioneer in an auction sale?
B · The auctioneer has the duty to conduct the sale fairly and accept the highest bid
The auctioneer must conduct the sale fairly and accept the highest bid unless there is a reserve price or other valid reason.
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Which of the following statements is correct regarding acceptance in auction sales under the Sale of Goods Act, 1930?
B · Acceptance is signified by the fall of the hammer by the auctioneer
Acceptance in auction sales is signified by the fall of the hammer by the auctioneer, completing the contract.
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Which of the following best applies the principle of contract formation in an auction sale scenario: A bidder offers \( \text{₹} 1,00,000 \) but the auctioneer refuses to accept the bid. Is a contract formed?
B · No, contract is not formed until auctioneer accepts the bid
In auction sales, contract formation depends on acceptance by the auctioneer; mere bidding does not form a contract.
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Which of the following statements about the distinction between auction sale and private sale is FALSE?
B · Private sale is always conducted online; auction sale is offline
Private sale is not always online; it can be conducted offline as well. This statement is false.
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Which of the following best explains the revocation of bids in an auction sale scenario: A bidder bids \( \text{₹} 75,000 \) but immediately withdraws the bid before the hammer falls. What is the legal position?
B · The bid is revoked and no contract arises from it
A bid can be revoked before acceptance (fall of the hammer), so withdrawal is valid and no contract arises.
