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Business Laws
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B.Com. (Programme) · Sem 1
Mar 2023 Examination
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Mumbai
B.Com. (Programme) Sem 1 Business Laws Mar 2023 Question Paper with Solutions
First published on munotes.in on 26 October 2026.
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The question paper reproduced here is the paper as set by University of Delhi at the Mar 2023 examination.
Contents
The questions below are the paper as University of Delhi set it at the Mar 2023 examination, in the order it was set.
MarksPage
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the Mar 2023 examination, reproduced as University of Delhi set them, in the order it set them. Nothing has been reworded, added or left out. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 90 · 28 questions answered
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
a and b, OR the second a and b · 18 Marks
(a)State with reason whether the following statements are true or false :[12]
- (i) A voidable contract remains valid till it is rejected
- (ii) A general offer can be accepted only by one person
- (iii) Transactions collateral to illegal agreements are also illegal
Answer
For full marks, cover: for each statement, the verdict, the section and reasoning, and a case or example. (i) sections 2(i), 19 and 64, the rights of third parties before rescission (section 29 of the Sale of Goods Act); (ii) general offers, section 8, Carlill v. Carbolic Smoke Ball Co., and the kinds of general offer that only one person can accept; (iii) section 23, the rule on collateral transactions, and the contrast with void agreements in Gherulal Parakh; a conclusion.
(i) A voidable contract remains valid till it is rejected
True.
Section 2(i) defines a voidable contract. It is an agreement enforceable by law at the option of one or more of the parties, but not at the option of the others. Consent caused by coercion, fraud or misrepresentation makes a contract voidable (section 19). So does undue influence (section 19A).
Until the party entitled to avoid it does so, the contract is valid and binding. Both parties must perform it. The aggrieved party may choose to affirm it and enforce it. If that party chooses to rescind it, the contract ends from then, and each side must restore any benefit received (section 64).
The validity in the meantime has real effects. A person who obtains goods under a voidable contract can pass a good title to a buyer in good faith. The contract must not have been rescinded before the resale (section 29 of the Sale of Goods Act, 1930). In Phillips v. Brooks, [1919] 2 KB 243, a rogue bought a ring by fraud and pledged it before the jeweller rescinded. The pawnbroker kept it, because the rogue's contract was still valid when the ring was pledged.
The right to rescind can also be lost: by affirming the contract, by delay, or where third parties have acquired rights in good faith.
So the statement is true.
Example. A induces B, by threats, to sell B's car to A for a low price. Until B rescinds, the sale stands. If A sells the car to C, who buys in good faith before B acts, C gets a good title. B's remedy is then against A for compensation.
(ii) A general offer can be accepted only by one person
False, as a general rule.
A general offer is an offer made to the public at large, not to a particular person. Under section 8, anyone who performs its conditions accepts it.
A general offer can be accepted by any number of persons, unless its terms limit it. In Carlill v. Carbolic Smoke Ball Co., [1893] 1 QB 256, the company offered 100 pounds to anyone who caught influenza after using its smoke ball as directed. The court held that the offer was made to the whole world. Anyone who performed the conditions could claim. Many people could have claimed, and each would have had a separate contract.
Some general offers, by their nature, can be accepted by only one person. An offer of a reward for finding a lost child or a lost dog is accepted by the person who first finds and returns it. Once found, the offer cannot be accepted by anyone else. An offer of a reward for information leading to an arrest is similar.
So the statement is false as a general proposition. Whether one person or many can accept depends on the terms and nature of the offer.
A general offer also differs from a specific offer, which is made to a particular person and can be accepted only by that person. The statement describes a specific offer, not a general one. Communication of acceptance is also usually unnecessary for a general offer, because the offeror dispenses with it by asking for performance.
(iii) Transactions collateral to illegal agreements are also illegal
True.
Section 23 makes an agreement with an unlawful object or consideration void. Such an agreement is illegal. The law treats illegality as infecting other transactions connected with it. An agreement collateral to an illegal agreement, made with knowledge of the illegal purpose, is also tainted with illegality and void.
Example. A lends money to B, knowing that B will use it to smuggle goods. The smuggling agreement is illegal, so A's loan, made to further it, is also illegal. A cannot recover the money.
This must be contrasted with a void agreement that is not illegal. In Gherulal Parakh v. Mahadeodas Maiya, AIR 1959 SC 781, two persons formed a partnership to enter into wagering transactions in wheat. The Supreme Court held that a wager is void under section 30 but not illegal. So the partnership, collateral to the wagers, was valid, and one partner could recover the share of losses from the other.
So the statement is true for illegal agreements, though collateral transactions to agreements that are merely void remain valid.
The test is knowledge and connection. A collateral transaction is tainted only if it is made to further the illegal purpose, by a party who knows of it. A shopkeeper who sells food to a smuggler in the ordinary way, without knowing of or helping the smuggling, has a valid sale.
Conclusion. (i) is true, because a voidable contract is binding until the aggrieved party rescinds it, and rights acquired in good faith before that survive. (ii) is false as a general rule. A general offer can be accepted by anyone who performs its conditions, unless it is the kind of offer only one person can fulfil. (iii) is true, because illegality taints collateral transactions, though a merely void agreement does not, as Gherulal Parakh shows.
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