1.If a major portion of the price is paid but a small balance is pending, the seller becomes
(a) Unpaid seller
(b) Not an unpaid seller
(c) Partly paid seller
(d) Paid seller.
If goods are sold on credit, the seller becomes unpaid seller if the full payment is not tendered by due date. Option (b), (c), (d) are not correct
Hence, option (a) is correct.
2. When the goods are sold on credit, payment not received and credit period has not expired, the seller of goods is
(a) Called unpaid seller
(b) Is treated as owner of goods
(c) Not called an unpaid seller
(d) Buyer does not become owner of goods
If the goods have been sold on credit, the seller becomes unpaid seller if payment is not tendered by due date. Seller of goods does not become unpaid seller till due date. Option (a), (b), (d) are not correct
Hence, option (c) is the correct answer.
3. P sells to Q on credit of 9 months on 1st Jan. Q does not pay by due date. P extends credit period by 1 month. Can P exercise his right of lien in Oct?
(a) Yes, if P is in possession of goods
(b) No, since there is an implied waiver of lien
(c) Only when Q gives a written proof regarding the payment of price of goods after expiry of extended credit period
(d) None of the above
As P has extended the credit period, P cannot exercise his right of lien till extended credit period, (original 9 months + 1 month extension), due to implied waiver of lien. Option (a), (c), (d) are not correct
Hence, option (b) is correct.
4. When the unpaid seller has parted with the goods to a carrier and the buyer has become insolvent, he can exercise
(a) Right of lien
(b) Right of resale
(c) Right of stoppage in transit
(d) None of these.
An unpaid seller can exercise the right of stoppage in transit when he has parted with the goods to a carrier and the buyer has become insolvent. Option (a), (b), (d) are not correct
Hence, option (c) is the correct answer.
5. If the buyer, or his agent in his behalf, obtains delivery of the goods before the arrival at the appointed destination, the transit is
(a) In continuance
(b) Deemed to have come to an end
(c) Still in sellers hand
(d) None of the above.
When the buyer or his agent obtains delivery of the goods before their arrival at the appointed destination, the transit of goods is deemed to come to an end. Option (a), (c), (d) are not correct
Hence, option (b) is correct.
6. Where the seller expressly reserves the right of resale in case the buyer makes a default, if there are losses to the seller, on a resale, the seller
(a) Cannot claim the loss from the buyer as damages
(b) Can claim the loss from the buyer as damages
(c) Can claim the entire loss only from the second buyer on resale
(d) Can claim 50% of loss only from the second buyer on resale.
Where the seller expressly reserves the right of resale in case the buyer makes a default, the seller can recover the loss on resale. Option (a), (c), (d) are not correct
Hence, option (b) is correct.
7. A sells goods to B, to be delivered on 4..7.21, while payment to be made by 4.5. 21. B did not pay by 4.5.21 on plea that property in the goods has not passed to him. Can A sue B for the price before the delivery of the goods takes place?
(a) Yes, A can sue B for the price
(b) No, A cannot sue B for the price
(c) A has to deliver the goods before receiving the price of goods
(d) None of the above.
Where the price is payable by specific date irrespective of delivery, and the buyer does not pay, the seller may sue him for the price. So, A (the seller) can sue B (the Buyer) for the price. Option (b), (c), (d) are not correct
Hence, option (a) is the correct answer.
8. P sells a car by auction to Q, Q is allowed to by cheque on signing document that the property in the car would not pass to him until the cheque is cleared. The cheque is subsequently dishonoured. Can P ask Q to return the car as the property in the car has not passed to Q on dishonour of cheque.
(a) Yes, P’s contention is justified
(b) No, P’s contention is not justified
(c) Car should be re-auctioned by Q
(d) None of these.
The ownership of car is transferred to Q in Auction Sale when Q has issued a cheque to P. So, P cannot claim back the car from Q, but can claim payment for dishonoured cheque. Hence, P’s contention is not justified. Option (a), (c), (d) are not correct.
Hence, option (b) is correct.
9. An auction sale is complete on
(a) Fall of hammer
(b) Delivery of goods
(c) Payment of price
(d) Placing of bids.
An auction sale is complete by some usual mode of acceptance, like, fall of hammer. Option (b), (c), (d) are not correct.
Hence, option (a) is the correct answer
10. If the seller appoints more than one bidder in an auction sale, the sale is
(a) Void
(b) Illegal
(c) Valid
(d) Voidable.
If the seller appoints more than one bidder in an auction sale, the sale is voidable at the option of the aggrieved party. Option (a), (b), (c) are not correct.
Hence, option (d) is correct .
11. Where in an auction sale notified with reserve price, the auctioneer mistakenly knocks down the goods for less than the reserve price, then
(a) The auctioneer is bound by auction
(b) Such acceptance is not valid
(c) The auctioneer becomes liable for damages
(d) None of the above
If the auctioneer mistakenly accepts a bid below the reserve price, such acceptance will not be valid and the auctioneer cannot be compelled to perform the contract of sale. Option (a), (c), (d) are not correct.
Hence, option (b) is the correct answer.
12. In Auction, where a seller has notified the reserve price :
(a) He is bound to sell to the highest bidder above or at par with the reserve price
(b) He is not liable to sell the goods even if the bid is at par or above the reserve price
(c) He can sale the goods at a price below the reserve price
(d) He can freely sale the goods at any price irrespective of reserve price.
Reserve price means that the auctioneer may fix the minimum amount below which the bidders are not allowed to place their bids. Auctioneer must sell to the highest bidder above or at par with the reserve price. Options (b), (c), (d) are not correct.
Hence, option (a) is correct.
13. In a sale by auction, implied warranties include
(a) Authority to sale
(b) Being not aware of any defect in title of the principal
(c) Giving guarantees in quiet possession of goods by the buyer
(d) All of the above.
Implied warranties in an auction sale are that the auctioneer has an authority to sell the goods put up for auction, he does not know about any defects in the title of the principal owner and he undertakes to give quiet possession of the goods on payment of price. So, all the statements under options (a), (b), (c) are true.
Hence, option (d) is correct .
