CAF-4 Chapter-13 RELATIONS OF PARTNERS TO THIRD PARTIES

CAF-4 | Ch-13 | RELATIONS OF PARTNERS TO THIRD PARTIES

CAF-4 Chapter-13 Relations of partners to third parties

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Business Law Quiz for the ICAP CA students.

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Question 1 of 15

1. Question
1 points

Category: CAF4
The implied authority of a partner does NOT empower him to:
- submit a business dispute to arbitration
- withdraw a suit filed on behalf of the firm
- open a banking account on behalf of the firm
- all the above
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Question 2 of 15

2. Question
1 points

Category: CAF4
A firm is liable to make good the loss of a third party if:
- one of the partners acting within his apparent authority misapplies the money or property received from a third party
- one of the partners misapplies the money or property received from a third party by the firm in the course of its business while it is in the custody of the firm
- by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, loss or injury is caused to any third party
- all of the above
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Question 3 of 15

3. Question
1 points

Category: CAF4
Emma and Faraz are partners in the cloth trading business. In the presence of Faraz, his friend Ghalib boasted that he is also a partner in the business, in front of Haroon, a customer. Haroon gave this information to Ismail and on this belief, Ismail supplied cloth on credit to the firm. Can Ismail make Ghalib liable for the unpaid amount in this transaction?
- No, as Ghalib did not present himself as a partner, in front of Ismail
- Yes, as Ismail gave credit to the firm on the faith of Ghalib’s representation
- No, as Ghalib is not a partner in the firm
- Yes, as Ghalib did it intentionally to deceive others
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Question 4 of 15

4. Question
1 points

Category: CAF4
Hamid and Ismail are partners and work as legal advisors. Jehangir, an old client of theirs, gave a sum of money to Hamid while he was in the firm’s premises for investment in some good security which Hamid misappropriated without knowledge of Ismail. Jehangir filed a suit against the firm for recovery of his money. Can Jehangir succeed?
- Yes, as money was given to Hamid in firm’s premises
- No, as this transaction is not the ordinary business of legal advisors
- Yes, as Hamid had previously carried out similar transactions with the knowledge of Ismail
- Both (b) and (c)
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Question 5 of 15

5. Question
1 points

Category: CAF4
Select the false statement.
- On the death of a partner, his heir becomes a partner.
- Minor partner has no right to see secret books/records of the partnership.
- A partner has no authority to submit a dispute relating to the business of the firm to arbitration.
- A partner has no authority to enter into a partnership with another firm on behalf of the firm.
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Question 6 of 15

6. Question
1 points

Category: CAF4
Partner is
- Only an agent of the firm
- Only principal to other partners
- An agent as well as principal
- None of these
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Question 7 of 15

7. Question
1 points

Category: CAF4
Mr. X, Mr. Y and Mr. Z are partners in a firm. By an agreement, they decided that no partner would have authority to sell goods of the firm above the value of Rs. 50,000/- without the consent of other partners. Owing to the sudden slump in the market, the prices crashed. One partner sold all the stock worth Rs. 500,000/- without consulting other partners. Is the partner liable for this breach of the partnership agreement?
- The partner is liable as he is in breach of the agreement
- The partner is liable because he is acting without the consent of other partners
- The partner is not liable as he is acting in order to save the firm from loss
- The partner is not liable as he has express authority to do so
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Question 8 of 15

8. Question
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Category: CAF4
For the debts of the firm, partners are liable
- Jointly
- Jointly and severally
- Severally
- Individually
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Question 9 of 15

9. Question
1 points

Category: CAF4
A minor
- Can be a partner in the firm
- Can be held personally liable when he is admitted to the partnership
- Cannot be admitted to the benefits of the firm with the consent of all partners
- Can be admitted to the benefits of the firm with the consent of all partners.
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Question 10 of 15

10. Question
1 points

Category: CAF4
A minor admitted to the benefits of the firm, towards third party
- He is personally liable
- He is liable for half of the loss
- He is liable only up to his share in the firm
- He has no liability at all
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Question 11 of 15

11. Question
1 points

Category: CAF4
Mr. A, Mr. B and Mr. C are partners in an instalment sales business. Mr. A asked one of the customers to deposit security worth Rs. 100,000/- in order to purchase goods in instalments. Subsequently, Mr. A misappropriated the security and absconded. Who will be liable for such loss?
- Mr. A and Mr. B will be liable to compensate for the loss
- No one is liable to compensate the loss
- Mr. A is liable only to compensate the loss
- All the partners are liable to compensate for the loss
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Question 12 of 15

12. Question
1 points

Category: CAF4
Restrictions on the partner by partnership deed is binding on the third party provided
- Such restrictions are valid
- Are according to the provisions of the partnership Act
- Such restrictions have been imposed by mutual agreement.
- Such restrictions are in the knowledge of third party
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Question 13 of 15

13. Question
1 points

Category: CAF4
Mr. A tells Mr. B (Supplier) within the hearing of Mr. C (Partner) that he (Mr. A) is a partner in the partnership firm of Mr. C. Mr. C does not object to this statement of Mr. A. Later Mr. B supplies certain goods to Mr. A who pretends to act as partner with Mr. C. State the legal position
- Mr. C will not be held liable to pay the price
- Mr. A will be held liable personally to pay the price
- Mr. B cannot claim the price from Mr. C
- Mr. C will be liable to pay the price.
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Question 14 of 15

14. Question
1 points

Category: CAF4
On attaining majority, the minor partner has to decide within six months whether he shall continue in the firm or leave it. Where such minor elects to become a partner, he will be personally liable
- From the date when he attained the majority
- From the date when he gives public notice
- Since the date of admission to the benefits of the firm
- After the lapse of six months
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Question 15 of 15

15. Question
1 points

Category: CAF4
Under the implied authority the partner may not
- Employ servants for the business of the firm
- Pledge movable property of the firm
- Buy a movable property of the firm
- Transfer immovable property of the firm
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CAF-4 | Ch-13 | RELATIONS OF PARTNERS TO THIRD PARTIES