CA Foundation Law Important Questions - Jan 26

To help you prepare effectively for the January 2026 CA Foundation exams, we've compiled a list of important practice questions for each chapter of the Business Laws syllabus. From mastering the Indian Contract Act, 1872, to understanding Partnership Laws and Companies Act, this blog is your go-to resource for revising the most exam-relevant questions. Designed to enhance conceptual clarity and exam readiness, these questions will give you the confidence to tackle any challenge in the CA Foundation Law paper. Don't miss out—start your preparation today!

Table of Content

1. Indian Regulatory Framework
2. The Indian Contract Act, 1872 
3. The Sale of Goods Act, 1930 
4. The Indian Partnership Act, 1932
5. The Limited Liability Partnership, 2008
6. The Companies Act, 2013
7. The Negotiable Intrsuments Act, 1881 

CA Foundation Jan 26 Important Question Other Subjects Blogs :

1. Important Question Jan 26 Paper 1 : Accounting
2. Important Question Jan 26 Paper 3 : Quantitative Aptitude 
3. Important Question Jan 26 Paper 4 : Business Economics 
4. CA Foundation Syllabus (New Updates)

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Chapter 1: Indian Regulatory Framework

Question : 1

Desciibe in brief about the following Regulatory bodies of the Government of India: - 

(i) Securities Exchange Board of India 

(ii) Reserve Bank of India 

(iii) Insolvency & Bankruptcy Board of India 

Solution:

Question : 2

What is the significance of the Supreme Court and High Court in the Indian judiciary?

Solution:

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Chapter 2: The Indian Contract Act, 1872

Question : 3

Define the term acceptance under the Indian Contract Act, 1872. Explain the legal rules regarding a valid acceptance.

Solution:

Question : 4

Distinguish between Void Contract and Voidable Contract according to the Indian Contract Act, 1872. 

Solution:

Question : 5

What are the conditions need to be fulfilled to make the following agreements valid without consideration as per the provisions of the Indian Contract Act, 1872?

(A) Agreement made based on natural love and affection

(B) Promise to pay time-barred debts

Solution:

Question : 6

Shri Shivay Temple Trust decided to get renovation of the temple under trust. For this purpose, the President of the trust discussed the budget with contractor. The contractor provided the budget of ₹ 5,00,000. After gaining enough membership to support the funds required renovating the temple, the committee entered in a contract with contractor for renovation. The plans for the proposed structure were submitted and passed. But as the membership list increased, the plans also expanded. Hence, the expected cost of construction is increased from ₹ 5,00,000 to ₹ 7,00,000. Now, increased amount of ₹ 7,00,000 stayed approved and obligated by the committee and contractor. Renovation work was completed, and contractor demanded the payment from committee. Meanwhile, new members who promised to contribute did not turnup. President had filed the suit against the members who promised to contribute. Members denied on the views that their contract with committee to contribute was without any consideration hence invalid. State with reason whether committee will succeed under the provisions of the Indian Contract Act, 1872?

Solution:

Question : 7

Kashish was running a business of artificial jewellery since long. He sold his business to Naman and promises, not to carry on the business of artificial jewellery and real diamond jewellery in that area for a period of next one year. After two months, Kashish opened a show room for  real diamond jewellery. Naman filed a suit against Kashish for closing the business of real diamond jewellery business as it was against the agreement. Whether Kashish is liable to close his business of real diamondjewellery following the provisions of Indian Contract Act, 1872? 

Solution:

Question : 8

Explain the term Wagering agreement in the light of the Indian Contract Act, 1872. Also, explain some transactions resembling with wagering transaction but which are not void. 

Solution:

Question : 9

Rahul is manufacturer of jute bags. He contracted with Sonia to supply raw jute for the purpose of making bags. Rahul informed Sonia that production process of jute bags would start from 27.06.2024 but Sonia must supply raw jute till 25.06.2024 so that quality verifications can be done in next two days. Sonia supplied the jute on 27.06.2024 and informed Rahul that she couldn’t supply on 25.06.2024 due to some unavoidable reasons and she also assured that quality measures were not anyway compromised in supplies. But Rahul wanted to avoid the contract as he was not given opportunity to examine the goods. In light of provisions of Indian Contract Act, 1872, state whether Rahul can avoid the contract? 

Solution:

Question : 10

M/s GS Famous General Store in NK Market Delhi got a purchase order of 5 kg. Mamra Badam @ ₹ 3,400/- per kg. from Mr. PK to deliver at his residence in Rohini. When the delivery boy of M/s GS Famous General Store reached at Mr. PK's residence, he found the door locked. When the delivery boy called him on mobile telephone, he told him to hand over the goods to his neighbour Mr. Shah. Mrs. Shah was unaware of the fact that the Mamra Badam were not belonging to them, mixed the Mamra Badam with California Almond. When Mr. Shah told her that the Mamra Badam were belonging to Mr. PK, she again packed the 5 kg. Mamra Badam and delivered it to Mr. PK. This fact came to light when Mr. PK returned the packet to M/s GS Famous General Store by saying that it is not up to the quality and he refused to accept the packet.

In above circumstances, what is the remedy available to Mr. PK according to provisions of the Indian Contract Act, 1872?

Solution:

Question : 11

What are the rights of a buyer, when seller commits a breach of contract under the provisions of the Sale of Goods Act, 1930? 

Solution:

Question : 12

In case of breach of contract, the court may award compensation or damages. Explain the circumstances when court may award ordinary damages, special damages and liquidated damages under the provisions of The Indian Contract Act, 1872.

Solution:

Question : 13

CA. Sarthak Jain had decided to get interior work for his new office. For this purpose, he entered into a contract with M/s Sherry Fine Interiors. It was agreed that M/s Sherry Fine Interiors will complete the interior work upto 31.01.2025. On 31.01.2025, CA. Sarthak Jain observed that only 20% to 30% work is completed. He decided to cancel the contract with M/s Sherry Fine Interiors. M/s Sherry Fine Interiors filed the suit against  CA. Sarthak Jain for recovery of the cost which he incurred on the interior work. CA. Sarthak Jain argued that M/s Sherry Fine Interiors did not complete the work within the time as per contract and further the work done till 31.01.2025 by M/s Sherry Fine Interiors was of no use to him as he has to appoint new interior designer. Explain, whether CA. Sarthak Jain is liable to pay the cost of work done by M/s Sherry Fine Interiors under the provisions of the Indian Contract Act, 1872?

Solution:

Question : 14

Explain the concept of Quantum Meruit with reference to the Indian Contract Act, 1872. Under what circumstances can a party claim compensation under this doctrine?

Solution:

Question : 15

Who is considered as an agent under the Indian Contract Act, 1872, and what are the duties and obligations associated with this role?

Solution:

Question : 16

Rama directs Shyam to sell laptops for him and agrees to give Shyam eleven percent (11%) commission on the sale price fixed by Rama for each laptop. As Government of India put restrictions on import of Laptops, Rama thought that the prices of laptops might go up in near future and he revokes Shyam s authority for any further sale. Shyam, before receiving the letter at his end, sold 5 laptops at the price fixed by Rama. Shyam asked for 11% commission on the sale of 5 Laptops for ₹1 lakh each. Explain under the provisions of The Indian Contract Act, 1872 : 
(1) Whether sale of laptops after revoking Shyam’s authority is binding on Rama? 

(2) Whether Shyam will be able to recover his commission from Rama, if yes, what will be the amount of such commission? 

Solution:

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Chapter 3: The Sales of Goods Act, 1930

Question : 17

Explain the term “Delivery and its forms” under the Sale of Goods Act, 1930.

Solution:

Question : 18

Contract of sale resembles with contracts of hire-purchase. However, sale is distinguished from hire-purchase. Explain hire-purchase agreement and state any five points of distinction between Sale and Hire-purchase.

Solution:

Question : 19

Discuss the various types of implied warranties as per the Sales of Goods Act, 1930?

Solution:

Question : 20

J, a wholesaler of premium Basmati rice delivered on approval 100 bags of rice of 10 kg each to a local retailer, on sale or returnable basis within a month of delivery. The next day the retailer sold 5 bags of rice to a regular customer K. A week later K informed the retailer that the quality of rice was not as per the price.

The retailer now wants to return all the rice bags to J, including the 4 bags not used by K. Can the retailer do so?

Also briefly describe the provisions underlying in this context of the Sale of Goods , 1930. 

Solution:

Question : 21

Mr. G sold some goods to Mr. G sold some goods to  Mr. H for certain price by issue of an invoice, but payment in respect of the same was not received on that day. The goods were packed and lying in the godown of Mr. G. The goods were inspected by H's agent and were found to be in order. Later on, the dues of the goods were settled in cash. Just after receiving cash, Mr. G asked Mr. H that goods should be taken away from his godown to enable him to store other goods purchased by him. After one day, since Mr. H did not take delivery of the goods, Mr. G kept the goods out of the godown in an open space. Due to rain, some goods were damaged.

Referring to the provisions of the Sale of Goods Act, 1930, analyse the above situation and decide who will be held responsible for the above damage. Will your answer be different, if the dues were not settled in cash and are still pending?

Solution:

Question : 22

A purchases a motorcycle from B and uses it for some time. It turns out that the motorcycle sold by B to A was a stolen one and had to be returned to a rightful owner. A brings action against B for the return of the price. Will he succeed? Examine this with reference to the provisions of the Sale of Goods Act, 1930. 

Solution:

Question : 23

What are the rights of an unpaid seller against goods under the Sale of Goods Act, 1930?

Solution:

Question : 24

P sold certain antique items to Q for ₹3,00,000/- on 13.12.2024. As per the terms of agreement 75% of the amount was to be paid within a week and the balance 25% was to be paid till 31.12.2024. Q appointed his agent R to take delivery of the goods after payment of first installment. Q transferred a sum of ₹2,80,000/- in the account of P through NEFT on 18.12.2024 which was credited in P’s account on the same date. R failed to take delivery of antique items due to medical emergency.

By the meantime, Q failed to make payment of the second installment till 31.12.2024. On 10.01.2025, Q’s agent came to take the delivery of goods. But, P refused to deliver the goods and exercised his right of lien over the goods.

According to provisions of The Sale of Goods Act, 1930, give your opinion whether P was justified in exercising right of lien as only ₹20,000/- was left to be paid?

Solution:

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Chapter 4: The Indian Partnership Act, 1932

Question : 25

Ms. Lucy while drafting partnership deed taken care of few important points. What are those points? She want to know the list of information which must be part of partnership deed drafted by her. Also, give list of information to be included in partnership deed?

Solution:

Question : 26

Mr. Ram and Mr. Raheem are working as teacher in Ishwarchand Vidhyasagar Higher Secondary School and also are very good friends. They jointly purchased a flat which was given on rent to Mr. John. It was decided between landlords and tenant that the rent would be ₹ 10,000 per month inclusive of electricity bill. It means electricity bill will be paid by landlords. The landlords, by mistake, did not pay the electricity bill for the month of March 2021. Due to this, the electricity department cut the connection. Mr. John has to pay the electricity bill of ₹ 2800 and ₹ 200 as penalty to resume the electricity connection. Mr. John claimed ₹ 3000 from Mr. Ram but Mr. Ram replied that he is liable only for ₹ 1500. Mr. John said that Mr. Ram and Mr. Raheem are partners therefore he can claim the full amount from any of the partner. Explain, whether under the provision of Indian Partnership Act, 1932, Mr. Ram is liable to pay whole amount of ₹ 3000 to Mr. John? 

Solution:

Question : 27

Explain in detail the circumstances which lead to liability of firm for misapplication by partners as per provisions of the Indian Partnership Act, 1932.

Solution:

Question : 28

A and B operate a textile merchant business in partnership. Mi. A finances the business and is a sleeping partner. In the regular course of business, B acquires certain fabric goods belonging to C. However, B is aware that these goods are stolen property. Despite this knowledge, B proceeds to purchase and sell some of these stolen goods. Moreover, B records proceeds from these sales in the firm’s books. Now, A wants to avoid the liability towards C on the grounds of misconduct by B. The light of the provisions of the Indian Partnership Act, 1932 discuss the liability of A and B towards C. 

Solution:

Question : 29

P, Q, and R formed a partnership agreement to operate motor buses along specific routes for a duration of 12 years. After operating the business for four years, it was observed that the business incurred losses each year. Despite this, P is determined to continue the business for the remaining Period. Examine with reference to the Indian Partnership Act, 1932, Can P insist to continue the business? If so, what options are available to Q and R who are reluctant to continue operating the business? 

Solution:

Question : 30

State the circumstances, in which a Court may, at the suit of the partner, dissolve a partnership firm under the provisions of the Indian Partnership Act, 1932.

Solution:

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Chapter 5: The Limited Liability Partnership, 2008

Question : 31

Dyana and Bharti, newly qualified chartered accountants, wish to form a Limited Liability Partnership (LLP) to provide their professional services. They seek information about the provisions of the Limited Liability Partnership Act, 2008, specifically regarding the incorporation document. Additionally, they want to know whether the statement filed along with the incorporation document serves as sufficient evidence that all legal requirements for the incorporation of the LLP have been fulfilled. Explain these aspects to them.

Solution:

Question : 32

Explain the incorporation by registration of a Limited Liability Partnership and its essential elements under the LLP Act, 2008. 

Solution:

Question : 33

State the circumstances under which a LLP and its partners may face unlimited liability under the Limited Liability Partnership Act, 2008.

Solution: