MCQ Solutions - Basics of the Acts, Sale of Goods Act - 1930

a) Transfers the property in goods to the buyer as a gift
b) Agrees to transfer the property in goods to the buyer in exchange for Buyer's goods.
c) Transfers the property in goods to the buyer for a price
d) Agrees to transfer the property in goods to the buyer without any consideration.
Ans: c
Solution: Under Section 4(1) of the Sale of Goods Act, 1930, a contract of sale involves the transfer of property in goods from seller to buyer for a monetary consideration called the "price." Options a, b, and d lack the element of price or involve non-monetary exchanges/gifts, which do not qualify as sales.

Q2: The term 'goods' under Sale of Goods Act, means
a) Any movable property
b) Any movable property or immovable property
c) Any property
d) Any movable property other than actionable claim or money
Ans: d
Solution: Section 2(7) defines "goods" as every kind of movable property other than actionable claims and money. Immovable property (b) and all property (c) are excluded; a is incomplete as it omits exclusions.

Q3: The term 'property in goods' refers to
a) Possession
b) only title
c) Possession and Ownership
d) Goods
Ans: b
Solution: "Property in goods" under the Act (e.g., Section 4) refers to the general property or title/ownership, distinct from mere possession. Option c confuses it with possession, which is separate.

Q4: Contract of sale includes
a) Sale
b) Agreement to sell
c) Exchange
d) (a) and (b)
Ans: d
Solution: Section 4(1) defines a contract of sale as including both an "actual sale" (immediate transfer) and an "agreement to sell" (future transfer). Exchange (c) is barter, not a sale.

Q5: In the case of agreement to sell the ownership in goods is transferred to the buyer
a) Immediately
b) At some future date
c) When the delivery of good is made
d) When the price in paid
Ans: b
Solution: In an agreement to sell (Section 4(3)), property transfers at a future time or upon condition fulfillment, unlike immediate transfer in a sale.

Q6: Ascertained goods means
a) Goods specially identified at the time of contract
b) Goods which are in existence and apportioned
c) Goods not specially identified at the time of contract of sale
d) None of these
Ans: a
Solution: Section 2(1) (implied via unascertained goods contrast) defines ascertained goods as those identified and agreed upon at the time of contract, making them specific. B and C describe different categories; D is incorrect.

Q7: Contingent goods means
a) Goods which are not in existence
b) Goods which are yet to be manufactured
c) Existing or future goods the availability of which depends upon happing of an event
d) Specific goods identified and agreed upon at the time of contract of sale
Ans: c
Solution: Contingent goods are a subset of future goods where acquisition depends on an uncertain event (Section 6). A and B are broader future goods; D describes specific goods.

Q8: The term 'sale' indicates
a) Executed contract
b) Executory contract
c) Contingent contract
d) None of these
Ans: a
Solution: A "sale" (Section 4(3)) is an executed contract where property passes immediately, unlike executory (agreement to sell) or contingent contracts.

Q9: In the case of sale the responsibility for loss of goods
a) Lies on the buyer
b) Lies on the seller
c) Needs to be shared by buyer and seller
d) None of these
Ans: a
Solution: Under Section 46(1), post-sale (property passed), risk of loss passes to the buyer, regardless of delivery.

Q10: A contract of sale without consideration is
a) Void
b) Voidable
c) Valid
d) Illegal
Ans: a
Solution: Section 4 requires price (consideration) as essential; without it, the contract lacks validity under Section 25 of the Indian Contract Act, 1872, making it void.

Q11: In a contract of sale consideration Shall be
a) money only
b) Goods
c) Anything positive
d) Any abstinence
Ans: a
Solution: Section 2(h) and 4(1) specify that the price must be in money; barter/exchange of goods is not a sale but an exchange under Section 2(d).

Q12: A by a contract agrees to sell a TV to B in consideration of B's watch plus Rs. 1000/-. The contract is
a) Sale
b) Exchange
c) Transfer
d) None of these
Ans: a
Solution: Partial monetary consideration (Rs. 1000) qualifies it as a sale under Section 4(1); the watch is treated as part of the price equivalent.

Q13: Which of the following is not an essential element of a contract of sale?
a) Transfer of title in goods
b) Consideration in the form of price
c) Three parties viz seller, buyer and guarantor
d) Transfer of possession goods
Ans: c
Solution: A contract of sale requires two parties (seller and buyer) under Section 4; a guarantor is optional. A, b, and d are essential (transfer of title/price/possession may follow).

Q14: A contract of sale many provide for
a) Immediate payment of price
b) Immediate delivery of goods
c) Postponement of either delivery of goods or payment of price or both to a future date
d) All of these
Ans: d
Solution: Section 4(2) allows flexibility immediate payment/delivery or postponement of either/both to future.

Q15: Which of the following is not a 'good'?
a) Money
b) Stock in trade
c) Actionable claim
d) Both (a) and (c)
Ans: d
Solution: Section 2(7) excludes money and actionable claims from "goods"; stock in trade (b) qualifies as movable property.

Q16: Which of the type of goods can form the subject matter of contract?
a) Existing goods
b) Contingent goods
c) Future goods
d) All of these
Ans: d
Solution: Section 6 permits contracts for existing, future, and contingent goods.

Q17: A contract of sale of future good is
a) Sale
b) Voidable
c) Void
d) Agreement to sell
Ans: d
Solution: For future goods (Section 6(2)), it is an agreement to sell, as property cannot pass immediately.

Q18: A agreed to sell a LCD TV to B on Arrival of A's ship. It is a contract of sale of
a) Future good
b) Contingent good
c) Unascertained good
d) None of these
Ans: b
Solution: Availability depends on the uncertain event (ship's arrival), making it contingent (Section 6(2)).

Q19: A agreed to sell 10 bags of cement to B at certain price. But unknown to A the cement bags were already damaged due to rain water before making the contract of sale. The agreement is
a) Valid
b) Void
c) Voidable
d) Contingent
Ans: b
Solution: Section 7: If specific goods perish before contract without seller's knowledge, the agreement is void.

Q20: In the case of contract of sale of specific goods, the goods perished without the fault of the buyer before the agreement to sell becomes sale, the contract of sale is
a) Valid
b) Voidable
c) Void
d) Illegal
Ans: c
Solution: Section 8: If specific goods perish after agreement but before sale (property passes), without buyer's fault, the contract is void.

Q21: A delivered a horse to B for trial for 8 days on an agreement that B shall buy the horse if found suitable. The house died on the third day without any fault on the part of B. The agreement became
a) Void and A cannot recover price from B
b) Valid and enforceable and A can recover price
c) A quasi contract
d) None of these
Ans: a
Solution: Section 11: In agreements for specific goods subject to condition (suitability), if goods perish before fulfillment without fault, the agreement is void; no price recovery.

Q22: Price in a contract of sale can be fixed
a) Entirely by parties themselves by mutual consent
b) In a manner provided in the contract of sale
c) By a course of dealings based an custom or trade practice
d) By any of these methods
Ans: d
Solution: Section 9 allows price fixation by contract, course of dealing, or trade usage.

Q23: In a contract of sale price may be allowed to be fixed
a) By the third party
b) By the valuation of a third party
c) Both (a) and (b)
d) None of these
Ans: c
Solution: Section 10 permits fixation by third party or their valuation.

Q24: In a contract of sale if the price is to be fixed by the valuation of a third party and the third party fails to make valuation
a) The contract becomes void
b) The contract is voidable
c) The contract is valid and enforceable
d) None of them
Ans: a
Solution: Section 10(2): Failure to value by third party voids the contract unless goods are accepted.

Q25: A agreed to sell certain furniture to B at a price to be fixed by the valuation of C. But C failed to fix the price. The contract is
a) Valid
b) Void
c) Void able
d) None of these
Ans: b
Solution: As per Section 10(2), failure to fix price by third party valuation voids the contract.

Q26: When the price is to be fixed by the valuation of the third party who has failed to do so, but the buyer has received and appropriated the goods, the buyer is liable
a) To pay penalty
b) Damages
c) A reasonable price
d) Special damages and interest
Ans: c
Solution: Section 10(2): If buyer accepts goods despite valuation failure, they must pay a reasonable price.

Q27: In the installment purchase the buyer becomes the owner
a) When the goods are delivered to him
b) When the last installment is paid
c) Both (a) and (b)
d) None of these
Ans: b
Solution: In installment sales (hire-purchase like), ownership typically passes only after full payment, unless specified otherwise.

Q28: In the hire purchase agreement the buyer
a) Must buy the good
b) has an option to buy the goods
c) Is not given the possession of goods
d) Is the owner of goods
Ans: b
Solution: Hire-purchase is a bailment with an option to purchase upon installments (not mandatory buy, and possession is given as hirer).

Q29: Hire Purchase includes
a) sale
b) agreement to sell
c) agreement to sell and bailment
d) none of these
Ans: c
Solution: Hire-purchase combines bailment (possession) with an agreement to sell upon option exercise.

Q30: The main object of contract of sale is
a) Transfer of possession
b) Payment of price
c) Passing of property in goods
d) Both a) & b)
Ans: c
Solution: The core of a sale (Section 4) is the transfer/passing of property/title in goods, beyond mere possession or payment.