Multiple Choice Questions (MCQs) – Business Law (LAW2130)

Fixed And Floating Charges

1. What is a debenture?

a) A type of company share

b) A written document evidencing a loan

c) A fixed asset of the company

d) A type of dividend payment

Answer:b) A written document evidencing a loan

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2. In case of liquidation, who has priority over unsecured creditors?

a) Shareholders

b) Debenture holders

c) Employees

d) Trade creditors

Answer: b) Debenture holders

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3. What is a fixed charge typically secured against?

a) A company’s future assets

b) A company’s stock-in-trade

c) Specific assets like land or buildings

d) Floating assets

Answer: c) Specific assets like land or buildings

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4. What happens if a company fails to register a charge within 21 days of creation?

a) The charge becomes invalid, and the creditor is treated as unsecured

b) The charge remains valid but with lower priority

c) The company is fined

d) The charge automatically converts to a floating charge

Answer a) The charge becomes invalid, and the creditor is treated as unsecured

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5. Which of the following best describes a floating charge?

a) A charge attached to specific fixed assets

b) A charge that applies to a company’s overall assets, both present and future

c) A charge that cannot be registered

d) A charge that ranks above fixed charges

Answer: b) A charge that applies to a company’s overall assets, both present and future

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6. When does crystallisation of a floating charge occur?

a) When the company issues new shares

b) When the company repays the loan

c) Upon liquidation, receivership, or default

d) Only when the creditor agrees

Answer: c) Upon liquidation, receivership, or default

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7. Which of the following is a characteristic of a floating charge?

a) The company cannot use the assets without creditor consent

b) The assets remain available for use in the ordinary course of business

c) It ranks above fixed charges

d) It cannot be registered

Answer: b) The assets remain available for use in the ordinary course of business

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8. According to the Enterprise Act 2002, which of the following is a preferential creditor?

a) Ordinary shareholders

b) Unsecured trade creditors

c) Employees owed wages (up to £800 per employee)

d) Floating charge holders

Answer c) Employees owed wages (up to £800 per employee)

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9. Under S.245 IA 1986, when is a floating charge invalid?

a) If created more than 5 years before liquidation

b) If created within 12 months before winding up (for unconnected persons)

c) If the company was solvent at the time of creation

d) If the charge was registered late

Answer:b) If created within 12 months before winding up (for unconnected persons)

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10. Who is considered a "connected person" under S.249 IA 1986?

a) Any trade creditor

b) A director or shadow director of the company

c) A customer of the company

d) A competitor

Answer: b) A director or shadow director of the company

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11. What is the main remedy available to a debenture holder if a company defaults?

a) Forcing the company into compulsory liquidation

b) Selling the charged property to recover the debt

c) Converting the debt into shares

d) Suing the directors personally

Answer: b) Selling the charged property to recover the debt

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12. Which of the following charges ranks first in priority

a) A floating charge created earlier

b) A fixed charge created later

c) A fixed charge created earlier

d) An unregistered charge

Answer: c) A fixed charge created earlier

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13. What is the key difference between a fixed and floating charge?

a) A fixed charge applies to changing assets, while a floating charge applies to fixed assets

b) A fixed charge is secured against specific assets, while a floating charge covers a class of
assets

c) A floating charge cannot be registered

d) A fixed charge is only used for unsecured loans

Answer: b) A fixed charge is secured against specific assets, while a floating charge covers a class
of assets
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14. What happens to a floating charge upon crystallisation?

a) The company gains full control of the assets

b) The charge becomes invalid

c) The company loses control of the assets

d) The charge converts into a fixed charge automatically

Answer: c) The company loses control of the assets

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15. Which of the following is NOT a requirement for registering a charge?

a) The name and number of the company

b) The date of charge creation

c) The company’s annual profit figures

d) The amount secured by the charge

Answer: c) The company’s annual profit figures

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16. What is the effect of late registration of a charge?

a) The charge is always void

b) It is permitted if no third-party rights are prejudiced

c) The company is automatically liquidated

d) The charge converts into an unsecured loan

Answer: b) It is permitted if no third-party rights are prejudiced

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17. Which of the following is true about preferential debts?

a) They rank below floating charge holders

b) They include unpaid taxes

c) They rank equally among themselves

d) They are paid after unsecured creditors

Answer: c) They rank equally among themselves

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18. What is the main risk for a creditor if a floating charge is avoided under S.245 IA 1986?

a) The creditor loses secured status and becomes unsecured

b) The creditor gains priority over fixed charges

c) The company can sell the assets without restriction

d) The creditor can sue the directors

Answer:a) The creditor loses secured status and becomes unsecured

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19. Which of the following is NOT a characteristic of a floating charge (per Re Yorkshire
Woolcombers)?

a) It covers present and future assets

b) The assets can change in the ordinary course of business

c) The company cannot use the assets until repayment

d) The charge "floats" until crystallisation

Answer: c) The company cannot use the assets until repayment

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20. Under what condition is a floating charge NOT invalid under S.245 IA 1986?

a) If created within 2 years for connected persons

b) If the company was solvent at the time of creation

c) If the charge was registered late

d) If the creditor is a bank

Answer: b) If the company was solvent at the time of creation

Multiple Choice Questions (MCQs) – Business Law (LAW2130) – Formation of a Company

1. What is the primary role of a promoter in company formation?

a) To act as an agent of the company before incorporation

b) To undertake the formation of a company and take preliminary steps

c) To manage the company after incorporation

d) To issue shares to the public

Answer: b) To undertake the formation of a company and take preliminary steps

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2. Under S.51 Companies Act 2006, who is liable for a pre-incorporation contract?

a) The company once incorporated

b) The person purporting to act for the company

c) The shareholders

d) The Registrar of Companies

Answer: b) The person purporting to act for the company

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3. In *Kelner v Baxter (1866)*, why were the promoters held liable for the wine contract?

a) The company ratified the contract but went into liquidation

b) The company was already incorporated when the contract was made

c) The promoters acted fraudulently

d) The wine was never delivered

Answer: a) The company ratified the contract but went into liquidation

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4. Which of the following is NOT a fiduciary duty of a promoter?

a) Not to make a secret profit

b) To disclose material facts to the board

c) To ensure the company is profitable

d) To act in the best interests of the intended company

Answer:c) To ensure the company is profitable

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5. What is the legal effect of a certificate of incorporation?

a) It confirms the company’s profitability

b) It is conclusive evidence that the company is properly registered

c) It allows the company to avoid pre-incorporation liabilities

d) It permits the company to issue debentures

Answer: b) It is conclusive evidence that the company is properly registered

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6. Which document states that subscribers agree to form a company and become members?

a) Articles of Association

b) Memorandum of Association

c) Certificate of Incorporation

d) Statement of Capital

Answer: b) Memorandum of Association

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7. What is required to alter a company’s articles under S.21 CA 2006?

a) An ordinary resolution (50% majority)

b) A special resolution (75% majority)

c) Unanimous shareholder approval

d) Director approval only

Answer: b) A special resolution (75% majority)

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8. What is an "entrenched provision" in the articles?

a) A clause that cannot be amended under any circumstances

b) A provision that requires stricter conditions than a special resolution to amend

c) A rule that applies only to public companies

d) A default clause under the Model Articles

Answer:b) A provision that requires stricter conditions than a special resolution to amend

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9. Which of the following is an advantage of buying a company "off the shelf"?

a) No need to file documents with the Registrar

b) Guaranteed profitability
c) Pre-set objects always align with the buyer’s needs

d) Immediate access to shareholder dividends

Answer: a) No need to file documents with the Registrar

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10. What is the tort of "passing off"?

a) Using another company’s registered trademark without permission

b) Misrepresenting goods/services as those of another business, causing confusion

c) Failing to register a company name

d) Breaching fiduciary duties as a promoter

Answer: b) Misrepresenting goods/services as those of another business, causing confusion

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11. Which case involved a soft drink (*Viagrene*) being confused with Pfizer’s *Viagra*?

a) *Halifax Plc v Halifax Repossessions Ltd*

b) *Irvine v Talksport*

c) *Pfizer v Eurofood*

d) *Croft v Day*

Answer: c) *Pfizer v Eurofood*

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12. Under S.69 CA 2006, when can a company name be challenged?

a) If it is identical or too similar to an existing name

b) If it is longer than 20 characters

c) If it includes the word "Limited"

d) If it is registered in Wales

Answer: a) If it is identical or too similar to an existing name

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13. What must a claimant prove in a passing-off action?

a) Goodwill, misrepresentation, and financial loss

b) Fraudulent intent and actual damages

c) Breach of contract and negligence

d) Copyright infringement

Answer: a) Goodwill, misrepresentation, and financial loss

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14. Which of the following is NOT a duty of the Registrar of Companies?

a) Issuing certificates of incorporation

b) Striking off dissolved companies

c) Approving all pre-incorporation contracts

d) Maintaining public records of company documents

Answer: c) Approving all pre-incorporation contracts

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15. What happens if a company fails to comply with S.9 CA 2006 during registration?

a) The Registrar may refuse to issue a certificate of incorporation

b) The company automatically becomes a public company

c) The promoters are fined

d) The articles of association are void

Answer: a) The Registrar may refuse to issue a certificate of incorporation

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16. Which case established that altering articles must be "bona fide for the benefit of the
company as a whole"?

a) *Kelner v Baxter*

b) *Bushell v Faith*

c) *Irvine v Talksport*

d) *Pfizer v Eurofood*

Answer: b) *Bushell v Faith*

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17. What is the purpose of the "statement of capital" in registration?

a) To list the company’s assets

b) To detail the initial shareholdings and share classes

c) To declare the company’s annual revenue

d) To identify the company’s creditors

Answer: b) To detail the initial shareholdings and share classes

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18. Which of the following is a disadvantage of buying a company "off the shelf"?

a) The objects clause may not suit the buyer’s needs

b) The company cannot change its name

c) The directors cannot alter the articles

d) The company cannot issue shares

Answer:a) The objects clause may not suit the buyer’s needs

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19. In passing off, what does "goodwill" refer to?

a) The company’s net profit

b) Public association of a name/mark with a specific business

c) The legal status of a registered trademark

d) The promoter’s fiduciary duty

Answer:b) Public association of a name/mark with a specific business

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20. Who can order a company to change its name under S.69 CA 2006?

a) The court

b) The Company Names Adjudicator

c) The Registrar of Companies

d) The shareholders

Answer:b) The Company Names Adjudicator

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### **Answer Key**

1. B

2. B

3. A

4. C

5. B

6. B

7. B

8. B

9. A

10. B

11. C
12. A

13. A

14. C

15. A

16. B

17. B

18. A

19. B

20. B

Multiple Choice Questions (MCQs) – Business Law (LAW2130) – Business Organisations

1. Which business structure has unlimited liability and no separate legal personality?

a) Private Limited Company (Ltd)

b) Sole Proprietorship

c) Limited Liability Partnership (LLP)

d) Public Limited Company (plc)

Answer: b) Sole Proprietorship

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2. Under the Partnership Act 1890, what is a key characteristic of a general partnership?

a) Limited liability for all partners

b) Partners are agents of each other and the partnership

c) Registration with Companies House is mandatory

d) Perpetual succession

Answer: b) Partners are agents of each other and the partnership

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3. In a limited partnership, who has unlimited liability?

a) All partners equally

b) The limited partner only

c) The general partner only

d) Neither partner

Answer c) The general partner only

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4. What is a key advantage of a Limited Liability Partnership (LLP)?

a) No requirement to register with Companies House

b) Members have limited liability and the LLP has separate legal personality

c) Profits are tax-free

d) Unlimited liability for all members

Answer: b) Members have limited liability and the LLP has separate legal personality
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5. Which case established the principle of separate legal personality for companies?

a) *Tesco v Nattrass*

b) *Salomon v Salomon*

c) *Gilford Motor v Horne*

d) *Adams v Cape Industries*

Answer: b) *Salomon v Salomon*

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6. What is required to form a private limited company?

a) A partnership agreement

b) Registration with HMRC only

c) A certificate of incorporation from Companies House

d) An annual general meeting

Answer: c) A certificate of incorporation from Companies House

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7. In *Tesco v Nattrass (1971)*, why was Tesco not held liable for false advertising?

a) The manager was not part of the company’s "directing mind"

b) Tesco had no knowledge of the issue

c) The customer was at fault

d) The Trade Descriptions Act did not apply

Answer:a) The manager was not part of the company’s "directing mind"

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8. Which business structure involves paying royalties to use an established brand?

a) Sole Proprietorship

b) Franchise

c) Social Enterprise

d) General Partnership

Answer: b) Franchise

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9. What is the primary purpose of a social enterprise?

a) Maximizing shareholder dividends

b) Reinvesting profits into social or environmental programs

c) Avoiding tax liabilities

d) Operating as a charity

Answer:b) Reinvesting profits into social or environmental programs

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10. When might a court "lift the corporate veil"?

a) To protect shareholders from liability

b) If the company is used for fraudulent purposes

c) To delay tax payments

d) To increase share prices

Answer: b) If the company is used for fraudulent purposes

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11. Which of the following is NOT a characteristic of a company?

a) Perpetual succession

b) Unlimited liability for shareholders

c) Separate legal personality

d) Ability to own property

Answer: b) Unlimited liability for shareholders

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12. What is a key difference between a charity and a social enterprise?

a) Charities cannot own property

b) Social enterprises rely solely on donations

c) Charities must reinvest all profits into their cause

d) Social enterprises generate revenue through trade

Answer: d) Social enterprises generate revenue through trade

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13. Which business structure is part of the "gig economy" and works on a per-job basis?

a) Franchisee

b) Freelancer

c) Sole Proprietor

d) General Partner

Answer: b) Freelancer

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14. In *Adams v Cape Industries*, what did the court rule about subsidiaries?

a) Parent companies are always liable for subsidiaries

b) Subsidiaries are separate legal entities unless used as a façade

c) Subsidiaries cannot operate abroad

d) Parent companies must merge with subsidiaries

Answer: b) Subsidiaries are separate legal entities unless used as a façade

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15. What is the main tax implication for a sole trader?

a) Paying corporation tax

b) Paying income tax and National Insurance on profits

c) Tax-free profits up to £12,570

d) No tax obligations

Answer: b) Paying income tax and National Insurance on profits

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16. Which of the following is a disadvantage of equity financing?

a) No obligation to repay funds

b) Loss of ownership and control

c) High interest rates

d) Limited access to capital

Answer: b) Loss of ownership and control

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17. What is the "corporate veil"?

a) A legal requirement for annual audits

b) The separation between a company and its owners

c) A tax avoidance strategy

d) A type of shareholder agreement

Answer: b) The separation between a company and its owners

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18. Which legislation governs Limited Liability Partnerships (LLPs)?

a) Partnership Act 1890

b) Companies Act 2006

c) Limited Liability Partnerships Act 2000

d) Economic Crime Act 2023

Answer: c) Limited Liability Partnerships Act 2000

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19. What is a "wholly-owned subsidiary"?

a) A subsidiary with no parent company

b) A subsidiary 100% owned by another company

c) A subsidiary that operates only abroad

d) A subsidiary with unlimited liability

Answer: b) A subsidiary 100% owned by another company

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20. Which of the following is a requirement for a company name under S.69 CA 2006?

a) It must include the founder’s name

b) It cannot be offensive or too similar to an existing name

c) It must be in Latin
d) It must reflect the company’s profits

Answer: b) It cannot be offensive or too similar to an existing name

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### **Answer Key**

1. B

2. B

3. C

4. B

5. B

6. C

7. A

8. B

9. B

10. B

11. B

12. D

13. B

14. B

15. B

16. B

17. B

18. C

19. B
20. B

Multiple Choice Questions (MCQs) – Business Law (LAW2130) – Partnerships

1. Under the Partnership Act 1890, what defines a general partnership?

a) A business structure with limited liability for all partners

b) A relation between persons carrying on a business in common with a view to profit

c) A legal entity separate from its members

d) A structure requiring registration with Companies House

Answer: b) A relation between persons carrying on a business in common with a view to profit

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2. Which section of the Partnership Act 1890 grants every partner the right to participate in
management?

a) Section 5

b) Section 24(5)

c) Section 24(7)

d) Section 45

Answer: b) Section 24(5)

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3. In a general partnership, when can a new partner be introduced?

a) By majority vote of existing partners

b) Only with unanimous consent of all partners

c) At the discretion of the managing partner

d) Without consulting other partners

Answer: b) Only with unanimous consent of all partners

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4. Under Section 5 of the Partnership Act 1890, when are partners bound by the acts of one
partner?

a) Only if all partners explicitly approve the act

b) If the act is for carrying on business in the usual way, unless the third party knows the partner
lacks authority

c) Never, unless the partnership agreement permits it

d) Only for acts involving small sums of money

Answer: b) If the act is for carrying on business in the usual way, unless the third party knows
the partner lacks authority

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5. What is the liability of partners in a general partnership for torts committed by one partner?

a) Only the acting partner is liable

b) The firm is jointly and severally liable

c) Liability is limited to the partnership’s assets

d) No liability unless the act was criminal

Answer: b) The firm is jointly and severally liable

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6. How can a partnership "at will" be dissolved?

a) Only by court order

b) By one partner giving notice to the others

c) By unanimous agreement only

d) Automatically after 5 years

Answer: b) By one partner giving notice to the others

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7. Which of the following is a key feature of a Limited Liability Partnership (LLP)?

a) Partners have unlimited liability

b) It lacks separate legal personality

c) Members have limited liability, and the LLP has perpetual succession

d) It cannot own property

Answer: c) Members have limited liability, and the LLP has perpetual succession

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8. In *Cragg v Ford (1842)*, what principle was upheld regarding partnership management?

a) Majority partners can expel a minority partner without cause

b) Every partner has the right to participate in management

c) New partners can be added by majority vote

d) Partners can be excluded if they are unproductive

Answer: b) Every partner has the right to participate in management

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9. Under Section 29 of the Partnership Act 1890, when does dissolution by notice take effect?

a) Immediately upon notice

b) After court approval

c) After the notice period specified in the partnership agreement

d) Upon unanimous agreement

Answer: a) Immediately upon notice

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10. What is required to form an LLP under the Limited Liability Partnership Act 2000?

a) A verbal agreement between members

b) Registration with Companies House and submission of incorporation documents

c) Approval from HMRC

d) A fixed-term partnership agreement

Answer: b) Registration with Companies House and submission of incorporation documents

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11. Which case established that a partnership can be dissolved due to a breakdown of trust?

a) *Salomon v Salomon*

b) *Bentley v Craven (1853)*

c) *Tesco v Nattrass*

d) *Adams v Cape Industries*

Answer:b) *Bentley v Craven (1853)

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12. What happens to an outgoing partner’s liability for partnership debts under Section 17 of
the Partnership Act 1890?

a) Liability ends immediately upon departure

b) Liability continues for existing debts but not new ones

c) Liability transfers to the remaining partners

d) Liability is limited to capital contributions

Answer: b) Liability continues for existing debts but not new ones

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13. Which of the following is an advantage of an LLP over a general partnership?

a) No requirement to file annual accounts

b) Members have limited liability

c) Profits are tax-free

d) Unanimous consent is not needed for new members

Answer: b) Members have limited liability

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14. In *Hamlyn v Houston (1903)*, what was the basis for the firm’s liability?

a) A partner’s fraudulent act outside the scope of business

b) A partner’s wrongful act in the ordinary course of business

c) Breach of contract by the managing partner

d) Failure to register the partnership

Answer: b) A partner’s wrongful act in the ordinary course of business

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15. What is the primary purpose of the "asset lock" in a social enterprise structured as an LLP?

a) To limit member liability

b) To ensure profits are reinvested into social objectives

c) To avoid registration with Companies House

d) To restrict membership changes

Answer: b) To ensure profits are reinvested into social objectives

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16. Under Section 30 of the Partnership Act 1890, on what grounds can a court dissolve a
partnership?

a) If one partner becomes insolvent

b) If the business is profitable

c) If partners unanimously agree to continue

d) If the partnership term expires

Answer: a) If one partner becomes insolvent

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17. Which of the following is a disadvantage of a general partnership

a) Complex registration process

b) Unlimited liability for partners

c) Inability to own property

d) Lack of management rights

Answer: b) Unlimited liability for partners

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18. In *Byrne v Reid (1902)*, what was the outcome regarding the introduction of a new
partner?
a) New partners can be added by majority vote

b) Unanimous consent is required

c) The managing partner has sole discretion

d) New partners are automatically accepted

Answer: b) Unanimous consent is required

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19. What is the legal effect of a partner’s death in a general partnership?

a) The partnership automatically continues

b) The partnership is dissolved unless otherwise agreed

c) The deceased partner’s heirs assume management

d) The remaining partners gain unlimited liability

Answer: b) The partnership is dissolved unless otherwise agreed

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20. Which of the following is a key difference between an LLP and a company?

a) LLPs cannot enter into contracts

b) LLPs are not subject to the Companies Act 2006

c) LLPs have less public disclosure requirements

d) LLPs cannt own property

Answer: c) LLPs have less public disclosure requirements

Multiple-Choice Questions (MCQs) - Tort Law (Negligence and Defences)

1. What is the legal definition of a tort?

A) A criminal offence requiring intent

B) A civil wrong causing harm due to negligence or wrongful acts

C) A breach of contractual terms

D) A statutory violation punishable by fines

2. In *Donoghue v Stevenson (1932)*, what key principle was established?

A) Strict liability for defective products

B) The "neighbour principle" for duty of care

C) The "but for" test for causation

D) The defence of contributory negligence

3. Which of the following is *not* a required element of negligence?

A) Duty of care

B) Breach of duty

C) Intent to harm

D) Causation

4. In *Bolton v Stone (1951)*, why was the cricket club not liable for the injury caused by a stray
ball?

A) The claimant was trespassing

B) The risk was minimal and precautions were reasonable

C) The club had posted warning signs

D) The claimant assumed the risk voluntarily

5. What is the purpose of the "but for" test in negligence?

A) To determine if the defendant owed a duty of care

B) To establish factual causation (whether the harm would have occurred without the breach)

C) To assess the claimant’s contributory negligence

D) To evaluate the remoteness of damage

6. Which case established that a "material contribution" to harm suffices for causation?

A) *Barnett v Chelsea Hospital*

B) *Bonnington Castings v Wardlaw*

C) *Wagon Mound*

D) *Roe v Minister of Health*

7. In *Hughes v Lord Advocate (1963)*, why was the local authority held liable for the child’s
injury?

A) The exact sequence of events was foreseeable

B) The *type* of harm (explosion) was foreseeable, even if the specifics were not

C) The authority acted intentionally

D) The child was not warned of the danger

8. What is the "eggshell skull" rule?

A) Defendants are not liable for unforeseeable injuries

B) Claimants must prove pre-existing conditions

C) Defendants take victims as they are (including vulnerabilities)

D) Only physical injuries are compensable

9. Which defence applies if the claimant voluntarily consented to the risk?

A) Contributory negligence

B) *Volenti non fit injuria*

C) Illegality

D) Necessity

10. In *Froom v Butcher (1976)*, why were damages reduced?

A) The claimant was intoxicated

B) The claimant failed to wear a seatbelt

C) The defendant acted under duress

D) The accident was unavoidable

11. Which case demonstrates that an intervening act (*novus actus interveniens*) may break
the chain of causation?

A) *Smith v Leech Brain*

B) *Lamb v Camden LBC*

C) *Jolley v Sutton LBC*

D) *Wagon Mound*

12. What is required for a successful psychiatric harm claim?

A) Proof of physical injury

B) A recognized psychiatric illness (e.g., PTSD)

C) Witnessing any minor accident

D) Being a distant relative of the victim

13. In *Revill v Newbery (1996)*, why could the burglar claim damages despite his illegal act?

A) The court always protects criminals

B) The defendant’s force was excessive

C) The burglar had a contractual relationship with the defendant

D) The defence of illegality does not apply to theft

14. Which statute governs contributory negligence in the UK?

A) Occupiers’ Liability Act 1957

B) Law Reform (Contributory Negligence) Act 1945

C) Unfair Contract Terms Act 1977

D) Road Traffic Act 1988

15. In *Roe v Minister of Health (1954)*, why was the hospital not liable for the contaminated
anaesthetic?

A) The defect was unforeseeable at the time

B) The patient signed a waiver

C) The doctor followed standard procedures

D) The claimant was contributorily negligent

16. What is the primary purpose of the *Caparo* three-part test?**

A) To define contractual terms

B) To establish duty of care in novel situations

C) To assess damages in negligence claims

D) To determine criminal liability

17. Which case illustrates the defence of *volenti non fit injuria* in a workplace context?
A) *Smith v Baker*

B) *ICI v Shatwell*

C) *Paris v Stepney BC*

D) *Latimer v AEC*

18. What is the legal effect of an exclusion clause that is ambiguous?

A) It is automatically void

B) It is interpreted against the party who drafted it (*contra proferentem*)

C) It is enforced as written

D) It requires court approval

19. In *Wagon Mound (1961)*, why was the defendant not liable for the fire damage?

A) The oil spill was intentional

B) The fire was too remote a consequence

C) The claimant was contributorily negligent

D) The defendant had posted warnings

20. Which remedy is *not* available for negligence?

A) Compensatory damages

B) Specific performance

C) Injunction

D) Aggravated damages

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### **Answers:**
1. **B**

2. **B**

3. **C**

4. **B**

5. **B**

6. **B**

7. **B**

8. **C**

9. **B**

10. **B**

11. **B**

12. **B**

13. **B**

14. **B**

15. **A**

16. **B**

17. **B**

18. **B**

19. **B**

20. **B**
Multiple-Choice Questions (MCQs) - Law of Agency

1. What is the primary purpose of an agency relationship?

A) To create a partnership between two businesses

B) To allow an agent to form contracts on behalf of a principal

C) To transfer ownership of property between parties

D) To establish criminal liability for third parties

2. Which of the following is NOT an example of an agent?

A) A shop assistant

B) A company director

C) A customer purchasing goods

D) An auctioneer

3. In *Watteau v Fenwick (1893)*, what principle was established regarding implied authority?

A) An agent can only act within express written authority

B) An agent has authority to do what is usual in their trade or profession

C) An agent must always disclose their lack of authority

D) Only directors have implied authority

#### **4. What is required for ratification of an agent's unauthorized act to be valid?**

A) The principal must have been unaware of the agent's actions

B) The principal must have full contractual capacity and knowledge of the facts

C) The third party must agree to cancel the contract

D) The agent must have acted fraudulently

#### **5. Which case demonstrates that a signed contract binds parties even if unread?**

A) *Curtis v Chemical Cleaning & Dying Co*

B) *L'Estrange v Graucob*

C) *Thornton v Shoe Lane Parking*

D) *Spurling v Bradshaw*

#### **6. In which situation can agency by necessity arise?**

A) When an agent wants to earn extra commission

B) When an emergency prevents contacting the principal

C) When the principal is temporarily unavailable but contactable

D) When the agent has a personal interest in the transaction

#### **7. Which duty does an agent NOT owe to the principal?**

A) To avoid conflicts of interest

B) To make secret profits

C) To exercise reasonable care and skill

D) To follow the principal's lawful instructions

#### **8. What happens if a principal terminates an agency agreement prematurely without
cause?**

A) The agent can sue for breach of contract

B) The agent retains all rights to future commissions

C) The principal faces criminal penalties

D) The termination has no legal consequences

#### **9. Which of the following automatically terminates an agency relationship?**

A) The agent taking a short vacation

B) The principal changing their business name

C) The death of either party

D) The agent delegating minor tasks

#### **10. In *Keighley v Durant (1901)*, what was the key issue regarding ratification?**

A) The agent acted outside their authority, and the principal later approved

B) The principal was unaware of the agent's actions

C) The third party refused to honor the contract

D) The agent had no fiduciary duties

#### **11. What is the legal effect of apparent authority?**

A) It binds the principal even if the agent exceeded actual authority

B) It only applies to criminal cases

C) It requires written confirmation from the principal

D) It allows agents to act against the principal's interests

#### **12. Which case established that an agent's authority can extend beyond what is
expressly conferred?**

A) *Ramsay v Love*

B) *Hely Hutchinson v Brayhead*

C) *Ukraine v Law Debenture Trust*

D) *Kelner v Baxter*

#### **13. What is required for agency by necessity to be valid?**

A) The agent must act in bad faith

B) The principal must be unreachable due to an emergency

C) The agent must have a financial interest in the outcome

D) The third party must approve the arrangement

#### **14. Which remedy is available to a principal when an agent breaches their fiduciary
duty?**

A) Right to reinstatement

B) Right to account for profits

C) Right to punitive damages

D) Right to criminal prosecution

#### **15. In *Curtis v Chemical Cleaning & Dying Co (1951)*, why was the exclusion clause not
enforceable?**

A) It was not signed by the customer

B) It was misrepresented to the customer

C) It conflicted with statutory law

D) It was displayed after the contract was made

#### **16. What terminates an agency relationship by operation of law?**

A) The agent receiving a bonus

B) The principal moving offices

C) The bankruptcy of either party

D) The agent taking a leave of absence

#### **17. Which case illustrates that regular dealings can incorporate terms into a contract?**

A) *Hollier v Rambler Motors*

B) *Spurling v Bradshaw*

C) *Olley v Marlborough Court*

D) *Thornton v Shoe Lane Parking*

#### **18. What is the key characteristic of a fiduciary relationship in agency?**

A) The agent must maximize their own profits

B) The agent must act in the principal's best interests

C) The principal must monitor the agent constantly

D) The relationship must be in writing

#### **19. Which statute primarily governs agency relationships in the UK?**

A) The Companies Act 2006

B) The Sale of Goods Act 1979

C) There is no single statute; it's based on common law

D) The Consumer Rights Act 2015

#### **20. What is the consequence if an agent makes a secret profit?**

A) The agent can keep the profit if undiscovered

B) The principal can dismiss the agent and recover the profit

C) The profit must be shared with the third party

D) The agent must pay double the profit as a penalty

---

### **Answers:**

1. **B**
2. **C**

3. **B**

4. **B**

5. **B**

6. **B**

7. **B**

8. **A**

9. **C**

10. **A**

11. **A**

12. **B**

13. **B**

14. **B**

15. **B**

16. **C**

17. **B**

18. **B**

19. **C**

20. **B**

Here are 10 additional high-quality multiple-choice questions on Employment Law, continuing

from the previous set:
### **Additional Multiple-Choice Questions (MCQs) - Employment Law**

#### **11. Which case established that an employer must provide a safe working environment
as an implied term of employment?**

A) *Donovan v Invicta Airways*

B) *Wilsons & Clyde Coal Co v English*

C) *Spring v Guardian Assurance*

D) *Faccenda Chicken v Fowler*

#### **12. What is the primary purpose of the "mutuality of obligation" test in determining
employment status?**

A) To assess whether the employer provides tools

B) To determine if there is an ongoing exchange of work for pay

C) To evaluate the skill level of the worker

D) To check compliance with health and safety regulations

#### **13. In *Polkey v AE Dayton Services (1988)*, what principle was established regarding
unfair dismissal?**

A) Employers must always follow strict dismissal procedures

B) A dismissal can be fair even if procedures are flawed, if the outcome would have been the
same

C) Employees must prove discrimination in dismissal cases

D) Only written warnings constitute valid grounds for dismissal

#### **14. Which of the following is NOT a potentially fair reason for dismissal under s.98 ERA
1996?**

A) Redundancy
B) Conduct

C) Pregnancy

D) Capability

#### **15. What was the key finding in *Western Excavating v Sharp (1978)* regarding
constructive dismissal?**

A) The employer's breach must be fundamental to justify resignation

B) Employees must give 3 months' notice before resigning

C) Only written breaches of contract count

D) Constructive dismissal claims require union approval

#### **16. Under the Equality Act 2010, which characteristic is NOT a protected characteristic?
**

A) Pregnancy

B) Trade union membership

C) Sexual orientation

D) Age

#### **17. In *Morrow v Safeway Stores (2002)*, what was the key issue regarding implied
terms?**

A) The duty to provide a reference

B) The duty to pay bonuses

C) The duty to maintain mutual trust and confidence

D) The duty to provide training

#### **18. Which case established that employers owe a duty of care when providing
references?**
A) *Spring v Guardian Assurance*

B) *Faccenda Chicken v Fowler*

C) *Pepper v Webb*

D) *Devonald v Rosser & Sons*

#### **19. What is the time limit for bringing an unfair dismissal claim to an employment
tribunal?**

A) 1 month

B) 3 months

C) 6 months

D) 1 year

#### **20. In *Taylor v Kent CC (1969)*, what was the significance of the "trial period" for
alternative employment?**

A) It allows employees to test new roles without losing dismissal rights

B) It extends the notice period by 4 weeks

C) It requires employers to pay double wages

D) It voids all previous employment contracts

---

### **Answers:**

11. **B** (*Wilsons & Clyde Coal Co v English* established the employer's duty to provide a
safe system of work)

12. **B** (The test examines whether there is an ongoing obligation to provide/accept work)

13. **B** (The "Polkey principle" allows procedural flaws if dismissal was inevitable)

14. **C** (Pregnancy-related dismissal is automatically unfair)

15. **A** (The breach must go to the root of the contract)

16. **B** (Trade union membership is protected under separate legislation)

17. **C** (Implied duty of mutual trust and confidence)

18. **A** (*Spring v Guardian Assurance* established the duty of care in references)

19. **B** (3 months from the effective date of termination)

20. **A** (Employees can trial alternative roles without losing dismissal rights)

Here are 20 multiple-choice questions (MCQs) based on the content of the PowerPoint, along
with the answers provided separately at the end.
---

### **MCQs for Business Law Exam**

#### **1. When is a contract generally considered made in the context of exclusion clauses?**

A) When the terms are displayed prominently

B) When the offer is accepted

C) When the money is paid

D) When the goods are delivered

#### **2. Under the Consumer Rights Act 2015, which section ensures goods must be of
satisfactory quality?**

A) Section 9

B) Section 10

C) Section 11

D) Section 12

#### **3. Which statute primarily regulates business-to-business contracts regarding unfair
terms?**

A) Consumer Rights Act 2015

B) Sale of Goods Act 1979

C) Unfair Contract Terms Act 1977

D) Supply of Goods and Services Act 1982

#### **4. In *Grant v Australian Knitting Mills [1936]*, what was the key issue?**

A) Misrepresentation

B) Breach of implied term under Sale of Goods Act

C) Penalty clause enforcement

D) Exclusion clause validity

#### **5. What is the consequence of breaching a *condition* in a contract?**

A) Only damages can be claimed

B) The injured party can terminate the contract and claim damages

C) The contract becomes void

D) The term is reclassified as a warranty

#### **6. Which case established the concept of *innominate terms*?**

A) *Poussard v Spiers (1876)*

B) *Bettini v Gye (1876)*

C) *Hong Kong Fir Shipping v Kawasaki Kisen Kaisha (1962)*

D) *George Mitchell v Finney Lock Seeds (1983)*

#### **7. How can an exclusion clause be incorporated into a contract?**

A) By notice, signature, or previous dealings

B) Only if it is signed by both parties

C) Only if it is displayed before payment

D) Only in business-to-consumer contracts

#### **8. In *Thornton v Shoe Lane Parking (1974)*, why was the exclusion clause invalid?**

A) It was not signed

B) It was displayed after the contract was made

C) It was unreasonable

D) It was ambiguous
#### **9. What is the *contra preferentum* rule?**

A) Exclusion clauses must be reasonable

B) Ambiguous terms are construed against the drafter

C) All terms must be in writing

D) Penalty clauses are automatically void

#### **10. Which case held that a limitation clause was unreasonable due to negligence?**

A) *George Mitchell v Finney Lock Seeds (1983)*

B) *L’Estrange v Graucob (1934)*

C) *Curtis v Chemical Cleaning & Dying Co (1951)*

D) *Spurling v Bradshaw (1956)*

#### **11. What is the limitation period for simple contracts under the Limitation Act 1980?**

A) 3 years

B) 6 years

C) 12 years

D) 5 years

#### **12. Which remedy is an equitable remedy for breach of contract?**

A) Damages

B) Quantum meruit

C) Reliance loss

D) Penalty clause enforcement

#### **13. In *Hadley v Baxendale (1854)*, what principle was established?**

A) Duty to mitigate losses

B) Remoteness of damages

C) Penalty clauses are void

D) Exclusion clauses must be incorporated

#### **14. What is required for an exclusion clause to be incorporated by previous dealings?**

A) At least one prior transaction

B) Consistent and regular dealings

C) A signed agreement

D) A verbal confirmation

#### **15. Which statute implies that goods must match their description in commercial sales?
**

A) Consumer Rights Act 2015

B) Sale of Goods Act 1979

C) Unfair Contract Terms Act 1977

D) Supply of Goods and Services Act 1982

#### **16. What is the key difference between a *condition* and a *warranty*?**

A) A condition is minor, while a warranty is fundamental

B) A condition allows termination, while a warranty only allows damages

C) A warranty is always implied, while a condition is express

D) There is no difference

#### **17. In *Curtis v Chemical Cleaning & Dying Co (1951)*, why was the exclusion clause not
binding?**

A) It was not signed

B) It was misrepresented

C) It was unreasonable

D) It was not displayed

#### **18. Which of the following is NOT a guideline for the *reasonableness test* under UCTA
1977?**

A) Strength of bargaining positions

B) Whether the customer received an inducement

C) The price of the goods

D) Custom of the trade

#### **19. What is the limitation period for personal injury claims arising from breach of
contract?**

A) 3 years

B) 6 years

C) 12 years

D) 5 years

#### **20. Which case involved a singer missing rehearsals, leading to a breach of warranty?**

A) *Poussard v Spiers (1876)*

B) *Bettini v Gye (1876)*

C) *Hong Kong Fir Shipping (1962)*

D) *Anglia TV v Reed (1972)*

---

### **Answers**
1. **B**

2. **A**

3. **C**

4. **B**

5. **B**

6. **C**

7. **A**

8. **B**

9. **B**

10. **A**

11. **B**

12. **B**

13. **B**

14. **B**

15. **B**

16. **B**

17. **B**

18. **C**

19. **A**

20. **B**

Here are 20 well-structured multiple-choice questions (MCQs) based on the content of the
PowerPoint, along with the answers provided separately at the end.

---
### **MCQs for Business Law Exam**

#### **1. What is an offer in contract law?**

A) An invitation to negotiate

B) An expression of willingness to make a contract with the intention to be bound upon

acceptance

C) A preliminary discussion of terms

D) A promise to perform in the future

#### **2. Which of the following is NOT a requirement for a valid offer?**

A) It must be clear

B) It must be an invitation to treat

C) It must be communicated

D) It must be intended to create legal relations

#### **3. How can an offer be terminated?**

A) Revocation, lapse of time, death, or rejection

B) Only by written notice

C) Only by mutual agreement

D) Only by performance

#### **4. What is acceptance in contract law?**

A) A conditional agreement to some terms of the offer

B) An unconditional agreement to all the terms of the offer

C) A counter-offer
D) A request for further information

#### **5. Which case established the postal rule for acceptance?**

A) *Currie v Misa (1875)*

B) *Adams v Lindsell (1818)*

C) *Thomas v Thomas (1842)*

D) *Williams v Roffey Bros (1990)*

#### **6. What is consideration in contract law?**

A) A moral obligation to perform

B) Something of value given in exchange for a promise

C) A gift given without expectation of return

D) A formal written agreement

#### **7. Which case defined consideration as "some right, interest, profit, or benefit accruing
to one party"?**

A) *Currie v Misa (1875)*

B) *Thomas v Thomas (1842)*

C) *Collins v Godefroy (1831)*

D) *Pinnel’s Case (1602)*

#### **8. Which of the following is a rule of consideration?**

A) Consideration must be adequate

B) Consideration must be past

C) Consideration must move from the promisee

D) Consideration must be a public duty

#### **9. In which case was it held that a promise to perform an existing contractual duty is not
valid consideration?**

A) *Williams v Roffey Bros (1990)*

B) *Stilk v Myrick (1809)*

C) *Ward v Byham (1956)*

D) *Collins v Godefroy (1831)*

#### **10. What was the outcome in *Williams v Roffey Bros (1990)*?**

A) Past consideration was valid

B) Performance of an existing duty could be valid consideration if it conferred a practical benefit

C) Consideration must always be adequate

D) Public duty was valid consideration

#### **11. Which case illustrates the principle that consideration must not be past?**

A) *Re McArdle (1951)*

B) *Lampleigh v Braithwaite (1615)*

C) *Pao On v Lau Yiu Long (1980)*

D) *Thomas v Thomas (1842)*

#### **12. What is the principle of *Pinnel’s Case (1602)*?**

A) Part payment of a debt is valid consideration

B) Part payment of a debt is not valid consideration unless there is additional benefit

C) Past consideration is valid

D) Consideration must be adequate

#### **13. Which case confirmed that promissory estoppel can prevent a party from going back
on a promise?**

A) *Central London Property Trust v High Trees House (1947)*

B) *Combe v Combe (1951)*

C) *D & C Builders v Rees (1966)*

D) *Foakes v Beer (1884)*

#### **14. Promissory estoppel is described as:**

A) A sword to enforce new rights

B) A shield to defend against enforcement of existing rights

C) A form of past consideration

D) A substitute for all contract requirements

#### **15. In which case was promissory estoppel NOT applied because the promisee did not
act inequitably?**

A) *Hughes v Metropolitan Railway (1877)*

B) *Combe v Combe (1951)*

C) *D & C Builders v Rees (1966)*

D) *Central London Property Trust v High Trees House (1947)*

#### **16. What is the key requirement for promissory estoppel to apply?**

A) The promise must be in writing

B) The promise must be supported by fresh consideration

C) It must be inequitable for the promisor to go back on the promise

D) The promise must be made to a third party

#### **17. Which of the following is NOT a requirement for promissory estoppel?**
A) An existing contractual relationship

B) A clear promise not to enforce rights

C) Reliance on the promise by the promisee

D) The promise must be made under seal

#### **18. What was the outcome in *Foakes v Beer (1884)*?**

A) Part payment of a debt discharged the entire debt

B) Part payment of a debt was valid consideration

C) Part payment of a debt did not discharge the entire debt

D) Past consideration was valid

#### **19. Which case involved a promise to pay more for the same performance, which was
held enforceable?**

A) *Stilk v Myrick (1809)*

B) *Williams v Roffey Bros (1990)*

C) *Collins v Godefroy (1831)*

D) *Pinnel’s Case (1602)*

#### **20. What is the central objective of the law of contract, as stated by Lord Steyn?**

A) To enforce moral obligations

B) To give effect to the reasonable expectations of the parties

C) To ensure all contracts are in writing

D) To penalize breaches harshly

---
### **Answers**

1. **B**

2. **B**

3. **A**

4. **B**

5. **B**

6. **B**

7. **A**

8. **C**

9. **B**

10. **B**

11. **A**

12. **B**

13. **A**

14. **B**

15. **C**

16. **C**

17. **D**

18. **C**

19. **B**

20. **B**

### **MCQs for Business Law Exam (Workshop 2: Offer, Acceptance, Postal Rule, and Privity)**
#### **1. What is a contract?**

A) A moral obligation between parties

B) A voluntary agreement enforceable by law

C) A unilateral promise without consideration

D) A social arrangement

#### **2. Which of the following is NOT an essential element of a valid contract?**

A) Offer and acceptance

B) Consideration

C) Intention to create legal relations

D) A written document

#### **3. What is an "invitation to treat" (ITT)?**

A) A binding offer

B) An indication of willingness to negotiate

C) A formal acceptance

D) A counter-offer

#### **4. In *Pharmaceutical Society of Great Britain v Boots (1953)*, what was held about
goods displayed on shelves?**

A) They constitute an offer

B) They are an invitation to treat

C) They are a unilateral offer

D) They are a counter-offer

#### **5. Which case established that an advertisement can be a unilateral offer?**
A) *Carlill v Carbolic Smoke Ball Co. (1893)*

B) *Hyde v Wrench (1840)*

C) *Fisher v Bell (1960)*

D) *Partridge v Crittenden (1968)*

#### **6. How can an offer be terminated?**

A) Only by revocation

B) By revocation, lapse of time, rejection, or death

C) Only by acceptance

D) Only by performance

#### **7. In *Hyde v Wrench (1840)*, what was the effect of a counter-offer?**

A) It modified the original offer

B) It terminated the original offer

C) It was a valid acceptance

D) It had no legal effect

#### **8. What is the "postal rule"?**

A) Acceptance is effective when received

B) Acceptance is effective when posted

C) Offers must be sent by post

D) Revocation must be communicated by post

#### **9. In which case was the postal rule first established?**

A) *Adams v Lindsell (1818)*

B) *Entores v Miles Far East Co. (1955)*

C) *Felthouse v Bindley (1862)*

D) *Holwell Securities v Hughes (1974)*

#### **10. Which of the following is true about silence as acceptance?**

A) Silence can always constitute acceptance

B) Silence can never constitute acceptance unless agreed

C) Silence is equivalent to a counter-offer

D) Silence revokes the offer

#### **11. In *Felthouse v Bindley (1863)*, why was silence not acceptance?**

A) The offeree did not intend to accept

B) The offeror cannot impose silence as acceptance

C) The postal rule applied

D) The offer was revoked

#### **12. What is the "battle of the forms"?**

A) A dispute over contract terms where conflicting standard forms are exchanged

B) A negotiation tactic to lower prices

C) A requirement for written contracts

D) A rule about postal acceptance

#### **13. Which case illustrates the "battle of the forms"?**

A) *Butler Machine Tool Co Ltd v Ex-Cell-O Corp (1979)*

B) *Carlill v Carbolic Smoke Ball Co. (1893)*

C) *Hyde v Wrench (1840)*

D) *Shuey v US (1875)*
#### **14. What is the doctrine of privity of contract?**

A) Only parties to a contract can enforce it

B) Third parties can always enforce contracts

C) Contracts must be in writing

D) Offers must be communicated to all parties

#### **15. Which case confirmed the privity rule?**

A) *Dunlop Pneumatic Tyre Co Ltd v Selfridge Ltd (1915)*

B) *Carlill v Carbolic Smoke Ball Co. (1893)*

C) *Williams v Roffey Bros (1990)*

D) *Central London Property Trust v High Trees House (1947)*

#### **16. What was the effect of the *Contracts (Rights of Third Parties) Act 1999*?**

A) It abolished privity entirely

B) It allowed certain third parties to enforce contract terms

C) It made all contracts void if a third party was involved

D) It only applied to unilateral contracts

#### **17. In auctions, when is a sale complete under the *Sale of Goods Act 1979*?**

A) When the highest bid is made

B) When the auctioneer’s hammer falls

C) When payment is made

D) When the bidder signs a contract

#### **18. Which case held that an auctioneer must sell to the highest bidder?**
A) *Payne v Cave (1789)*

B) *Warlow v Harrison (1859)*

C) *Barry v Davies (2000)*

D) *Harris v Nickerson (1872)*

#### **19. In *Entores v Miles Far East Co. (1955)*, what was the rule for acceptance in
instantaneous communication?**

A) Acceptance is effective when posted

B) Acceptance is effective when received

C) Silence constitutes acceptance

D) Revocation must be in writing

#### **20. What was the outcome in *Shanklin Pier Ltd v Detel Products Ltd (1951)* regarding
third-party rights?**

A) A third party could sue for breach of contract

B) Privity prevented any third-party claim

C) The contract was void for illegality

D) The case involved past consideration

---

### **Answers**

1. **B**

2. **D**

3. **B**

4. **B**

5. **A**
6. **B**

7. **B**

8. **B**

9. **A**

10. **B**

11. **B**

12. **A**

13. **A**

14. **A**

15. **A**

16. **B**

17. **B**

18. **B**

19. **B**

20. **A**

### **MCQs for Business Law Exam (Lecture 1: Introduction to English Legal System)**

#### **1. What is the primary source of law in a Common Law system?**
A) Legal codes

B) Case law and judicial precedent

C) Religious texts

D) Executive orders

#### **2. Which of the following countries follows a Civil Law system?**

A) England

B) United States

C) France

D) Australia

#### **3. What is the standard of proof in a civil case?**

A) Beyond reasonable doubt

B) Balance of probabilities

C) Clear and convincing evidence

D) Preponderance of evidence

#### **4. Which court is at the top of the hierarchy in England and Wales?**

A) High Court

B) Crown Court

C) Supreme Court

D) Court of Appeal

#### **5. What is the doctrine of *stare decisis*?**

A) Judges must follow precedents set by higher courts

B) Laws must be written down in a legal code

C) The state has absolute power in legal matters

D) Judges can ignore previous rulings

#### **6. Which of the following is an example of Private Law?**

A) Criminal Law

B) Constitutional Law

C) Contract Law

D) Administrative Law

#### **7. What is the purpose of Criminal Law?**

A) To compensate victims

B) To punish offenders

C) To regulate business transactions

D) To enforce private agreements

#### **8. Which of the following is NOT a stage in the law-making process for UK legislation?**

A) First Reading

B) Royal Assent

C) Judicial Review

D) Committee Stage

#### **9. What is *obiter dictum*?**

A) The binding part of a judicial decision

B) A statement made by the judge that is not part of the ruling

C) A type of legislation

D) A legal code
#### **10. Which court primarily handles criminal cases at the trial level in England?**

A) County Court

B) Crown Court

C) High Court

D) Magistrates' Court

#### **11. What is the main difference between Common Law and Civil Law systems?**

A) Common Law relies on judicial precedent, while Civil Law relies on legal codes

B) Common Law is only used in the UK

C) Civil Law does not have courts

D) Common Law is based on Roman Law

#### **12. Which of the following is a characteristic of Public Law?**

A) Governs relationships between private individuals

B) Includes Contract Law

C) Deals with relationships between the state and individuals

D) Focuses on tort disputes

#### **13. What is the role of the European Court of Human Rights?**

A) To enforce EU trade laws

B) To interpret the European Convention on Human Rights

C) To create new UK legislation

D) To replace the UK Supreme Court

#### **14. Which rule of statutory interpretation focuses on the literal meaning of words?**
A) Golden Rule

B) Mischief Rule

C) Literal Rule

D) Purposive Approach

#### **15. What happens when a higher court *overrules* a precedent?**

A) The precedent is no longer binding

B) The case is sent back to a lower court

C) The law is declared unconstitutional

D) A new statute is created

#### **16. Which of the following is a function of the County Court?**

A) Hearing serious criminal cases

B) Dealing with minor civil disputes

C) Reviewing government decisions

D) Creating new legislation

#### **17. What is the significance of *ratio decidendi*?**

A) It is the binding legal principle of a case

B) It is an irrelevant judicial comment

C) It refers to the facts of the case

D) It is a type of legislation

#### **18. Which of the following is an example of a civil wrong (tort)?**

A) Theft

B) Murder
C) Negligence

D) Fraud

#### **19. What is the primary purpose of Contract Law?**

A) To punish breaches of agreement

B) To enforce promises between parties

C) To regulate criminal behavior

D) To interpret statutes

#### **20. Which institution is responsible for drafting EU legislation?**

A) European Council

B) European Parliament

C) European Commission

D) Council of Europe

---

### **Answers**

1. **B**

2. **C**

3. **B**

4. **C**

5. **A**

6. **C**

7. **B**

8. **C**
9. **B**

10. **B**

11. **A**

12. **C**

13. **B**

14. **C**

15. **A**

16. **B**

17. **A**

18. **C**

19. **B**

20. **C**

### **MCQs for Business Law Exam (LAW2130)**

#### **1. What is the primary source of law in a Common Law system?**
A) Legal codes

B) Case law and judicial precedent

C) Religious texts

D) Executive orders

#### **2. Which of the following is an example of Private Law?**

A) Criminal Law

B) Constitutional Law

C) Contract Law

D) Administrative Law

#### **3. What is the standard of proof in a civil case?**

A) Beyond reasonable doubt

B) Balance of probabilities

C) Clear and convincing evidence

D) Preponderance of evidence

#### **4. Which court is at the top of the hierarchy in England and Wales?**

A) High Court

B) Crown Court

C) Supreme Court

D) Court of Appeal

#### **5. What is the doctrine of *stare decisis*?**

A) Judges must follow precedents set by higher courts

B) Laws must be written down in a legal code

C) The state has absolute power in legal matters

D) Judges can ignore previous rulings

#### **6. In contract law, what constitutes an "offer"?**

A) An invitation to negotiate

B) A final and unequivocal acceptance of terms

C) A promise to perform in the future

D) A proposition with intention to be bound upon acceptance

#### **7. Which case established that an advertisement can be a unilateral offer?**

A) *Pharmaceutical Society v Boots*

B) *Carlill v Carbolic Smoke Ball Co.*

C) *Fisher v Bell*

D) *Partridge v Crittenden*

#### **8. What is the "postal rule" in contract law?**

A) Acceptance is effective when received

B) Acceptance is effective when posted

C) Offers must be sent by post

D) Revocation must be communicated by post

#### **9. Which of the following is NOT a requirement for valid consideration?**

A) It must be sufficient but need not be adequate

B) It must move from the promisee

C) It must be a moral obligation

D) It must not be past

#### **10. In *Williams v Roffey Bros (1990)*, what was the key principle established?**

A) Past consideration is valid

B) Performance of an existing duty can be valid consideration if it confers a practical benefit

C) Consideration must always be adequate

D) Public duty is valid consideration

#### **11. What is the effect of breaching a *condition* in a contract?**

A) Only damages can be claimed

B) The injured party can terminate the contract and claim damages

C) The contract becomes void

D) The term is reclassified as a warranty

#### **12. Which statute implies that goods must be of satisfactory quality in commercial
sales?**

A) Consumer Rights Act 2015

B) Sale of Goods Act 1979

C) Unfair Contract Terms Act 1977

D) Supply of Goods and Services Act 1982

#### **13. What is the purpose of promissory estoppel?**

A) To enforce new contractual rights

B) To prevent a party from going back on a promise if it would be inequitable

C) To replace consideration in all contracts

D) To punish breaches of contract

#### **14. In *Central London Property Trust v High Trees House (1947)*, what was the
outcome?**

A) The landlord could claim full rent for the war years

B) The landlord was estopped from claiming full rent during the war years

C) The tenant had to pay double rent

D) The contract was void for lack of consideration

#### **15. What is the limitation period for simple contracts under the Limitation Act 1980?**

A) 3 years

B) 6 years

C) 12 years

D) 5 years

#### **16. Which of the following is an equitable remedy for breach of contract?**

A) Damages

B) Quantum meruit

C) Reliance loss

D) Penalty clause enforcement

#### **17. What is the key difference between a *condition* and a *warranty*?**

A) A condition is minor, while a warranty is fundamental

B) A condition allows termination, while a warranty only allows damages

C) A warranty is always implied, while a condition is express

D) There is no difference

#### **18. In *Foakes v Beer (1884)*, what was the outcome regarding part payment of a debt?
**
A) Part payment discharged the entire debt

B) Part payment was valid consideration

C) Part payment did not discharge the entire debt

D) Past consideration was valid

#### **19. Which case involved a promise to pay more for the same performance, which was
held enforceable?**

A) *Stilk v Myrick (1809)*

B) *Williams v Roffey Bros (1990)*

C) *Collins v Godefroy (1831)*

D) *Pinnel’s Case (1602)*

#### **20. What is the central objective of the law of contract, as stated by Lord Steyn?**

A) To enforce moral obligations

B) To give effect to the reasonable expectations of the parties

C) To ensure all contracts are in writing

D) To penalize breaches harshly

---

### **Answers**

1. **B**

2. **C**

3. **B**

4. **C**

5. **A**
6. **D**

7. **B**

8. **B**

9. **C**

10. **B**

11. **B**

12. **B**

13. **B**

14. **B**

15. **B**

16. **B**

17. **B**

18. **C**

19. **B**

20. **B**