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Test Series: December, 2023
MOCK TEST PAPER - 2
FOUNDATION COURSE
PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING
SECTION A: BUSINESS LAWS
Question No. 1 is compulsory.
Answer any four questions from the remaining five questions.
1. (a) Mr. Nikhil has 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 latest by 31st January, 2023. On 31st January, 2023, Mr. Nikhil observed that only
20% to 30% work has been completed. He decided to cancel the contract with M/s Sherry Fine
Interiors. On cancellation of the contract, M/s Sherry Fine Interiors filed a suit against Mr. Nikhil for
recovery of the cost which it has incurred on the interior work. Mr. Nikhil argued that M/s Sherry
Fine Interiors did not complete the work within the time as per contract and further the work done
till 31st January, 2023 by M/s Sherry Fine Interiors was of no use for him as he has to appoint a
new interior designer. Explain, whether Mr. Nikhil is liable to pay the cost of work done by
M/s Sherry Fine Interiors under the provisions of Indian Contract Act, 1872? (4 Marks)
(b) ABC Private Limited is a registered company under the Companies Act, 2013 with paid up capital
of ` 35 lakhs and turnover of ` 2.5 crores. Whether the ABC Private Limited can avail the status
of a Small Company in accordance with the provisions of the Companies Act, 2013? Also discuss
the meaning of a Small Company. (4 Marks)
(c) Discuss the essential elements regarding the sale of unascertained goods and its appropriation as
per the Sale of Goods Act, 1930. (4 Marks)
2. (a) As per the general rule, "Stranger to a contract cannot file a suit in case of breach of contract".
Comment and explain the exceptions to this rule as per the provisions of the Indian Contract Act,
1872. (7 Marks)
(b) Discuss the liabilities of Limited Liability Partnership (LLP) and its partners in case of fraud as per
the provisions of the Limited Liability Partnership Act, 2008. (5 Marks)
3. (a) (i) What do you mean by 'Partnership for a fixed period' as per the Indian Partnership Act, 1932?
(2 Marks)
(ii) Can a minor become a partner in a partnership firm? Justify your answer and also explain the
rights of a minor in a partnership firm. (4 Marks)
(b) Ayush, who is a minor, purchased 10 fancy coats for the wedding ceremony of his sister on credit
from M/s Surjewala & sons. The cost of all coats was ` 80,000. Not even a single coat was a
necessity. Ayush has assets of worth of ` 1,00,000. M/s Surjewala & sons file a suit against Ayush
for recovery of ` 80,000 out of his assets. Following the provisions of Indian Contract Act, 1872,
whether Ayush is liable to pay ` 80,000 to M/s Surjewala & sons? (6 Marks)
4. (a) Describe in brief the rights of the buyer against the seller in case of breach of contract of Sale
under Sale of Goods Act, 1930. (6 Marks)

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(b) P, Q and R are partners in a partnership firm. R retires from the firm without giving public notice.
P approached S, an electronic appliances trader, for purchase of 25 fans for his firm. P introduced
E, an employee of the firm, as his partner to S. S believing E and R as partners supplied 25 fans
to the firm on credit. S did not receive the payment for the fans even after the expiry of the credit
period. Advise S, from whom he can recover the payment as per the provisions of the Indian
Partnership Act, 1932. (6 Marks)
5. (a) Samar was in search of a second-hand car. For this purpose, he approached “Car Wala 007”, a
dealer in pre-owned cars. The sales manager of “Car Wala 007” showed him three cars which were
standing in the parking lane just outside the office. Samar finalised red Wagon R car. After
completing the documenting formalities and receiving the price of car, sales manager of
“Car Wala 007” handed over the key of car to Samar. But when Samar was coming to parking area
for picking the car, the electric poll fell on the car which badly damaged the car. Samar claimed
that repair expenses of the car should be borne by “Car Wala 007” as car was not delivered to him.
Referring to the provisions of the Sales of Goods Act 1930, state who will be liable to get the car
repaired? (6 Marks)
(b) Explain the concept of 'Corporate Veil'. Briefly state the circumstances when the corporate veil can
be lifted as per the provisions of the Companies Act, 2013. (6 Marks)
6. (a) "Liquidated damage is a genuine pre-estimate of compensation of damages for certain anticipated
breach of contract whereas Penalty on the other hand is an extravagant amount stipulated and is
clearly unconscionable and has no comparison to the loss suffered by the pa rties". Explain the
statement by differentiating between liquidated damages and penalty with reference to provisions
of the Indian Contract Act, 1872. (5 Marks)
(b) What is the difference between partnership and co-ownership as per the Indian Partnership Act,
1932? (4 Marks)
(c) Mr. R, a manufacturer of toys approached MNO Private Limited for supply of raw material worth
` 1,50,000/-. Mr. R was offered a credit period of one month. Mr. R went to the company prior to
the due date and met Mr. C, an employee at the billing counter, who convinced the former that the
payment can be made to him as the billing-cashier is on leave.
Mr. R paid the money and was issued a signed and sealed receipt by Mr. C. After the lapse of due
date, Mr. R received a recovery notice from the company for the payment of ` 1,50,000/-.
Mr. R informed the company that he has already paid the above amount and being an outsider had
genuine reasons to trust Mr. C who claimed to be an employee and had issued him a receipt.
The Company filed a suit against Mr. R for non-payment of dues. Discuss the fate of the suit and
the liability of Mr. R towards company as on current date in consonance with the provision of the
Companies Act 2013? Would your answer be different if a receipt under the company seal was not
issued by Mr. C after receiving payment? (3 Marks)

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SECTION-B: BUSINESS CORRESPONDENCE AND REPORTING

Max Marks: 40 Marks
Instructions
The Question paper comprises of 5 questions of 10 Marks each. Question 1 is
compulsory. Out of 2 to 5, attempt any three.
1. (a) Read the passage and answer the questions that follow:
Wealth management is an extremely personal industry, with the client dictating the
face and personality of the management strategies being pursued. An in -depth
analysis of the wealth management space indicates that, over the years, there has
been a significant evolution in client segmentation. There has been a gradual yet
decided shift in the ownership of the person or client that wealth managers deal with,
and these are the people who have the decision-making power when it comes to
decoding portfolio tactics. While a male member of the family, usually a patriarch in
the 60 to 70-year age group, would have been the client and deciding force behind
wealth management portfolios a few decades earlier, managers today are meeting
with individuals in their 30s and 40s. Further, wealth management is no longer the
bastion of men – today, clients are both male and female and they have equal
decision-making power, indicating strong equality in the ecosystem. One of the
biggest changes in wealth management revolves around the average age of the
decision-makers. Wealth managers are witnessing a major shift in this area, with
millennials taking over from their predecessors and injecting a much-needed dose of
vitality and innovation into the environment. This generational shift in wealth is also
visible from the results of the IIFL Wealth Hurun India Rich List 2022, which indicates
that the youngest on the list today is a teenager, as against a 37-year-year-old a
decade ago. The decreasing age of the wealthy also adds an element of risk -taking
to the wealth management space because, being in their prime, these individuals are
willing to take on greater risk in the pursuit of higher returns, something which wasn’t
the case just a decade or so earlier.
The next major trend that wealth managers have witnessed is the increasing number
of female clients coming to the forefront of the ecosystem. With equal deciding power
as their male counterparts, women are taking the reins of finance into their own hands
and making decisions that attest to their individual personalities and requirements.
Gone is the era when a woman’s financial well-being was dependent on her father,
brother or husband. Today, women are charting their own path, be it on their
education and career fronts or in their financial lives. There is greater awareness and
understanding of the nuances of finance and wealth management is slowly
transitioning into a sector wherein women now play an active role.
As the average age of the decision-maker trends downward, there is one segment of
the clientele which is playing a bigger part in making this a reality and that is Gen Z.

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Wealth managers are now noticing youngsters, who belong to the late millennial and
early Gen Z tribe, coming in and playing a leading role in managing at least a part of
the portfolio themselves. Retail investments in India have grown steadily, as indicated
by the sustained rise in demat accounts, and a number of the younger individuals
today are extremely well-versed with money matters and proactively manage their
investment portfolios. In this scenario, while they invite advice from wealth managers,
these individuals are running the last mile of the race themselves, building up a
portfolio, which reflects their unique personas and focus sectors.
(1) What adds an element of risk today to wealth management? (1 Mark)
(2) What factors indicate that retail investments in India have grown steadily?
(1 Mark)
(3) ‘Women are taking the reins of finance into their own hands’. What does the
word ‘rein’ mean as used in this line? (1 Mark)
(a) Responsibility
(b) Wish
(c) Fear
(d) Command
(4) Select a suitable title for the passage: (1 Mark)
(a) Wealth an management
(b) Wealth management
(c) Wealth management and its changing trends
(d) Rise of wealth in management
(5) ‘Wealth management is no longer the bastion of men’. Choose a suitable
synonym for bastion: (1 Mark)
(a) Stronghold
(b) Control
(c) Dedication
(d) Duty
(b) Read the following passage
El Niño refers to the change in climate across the Pacific Ocean. Although it normally
occurs every two to seven years, the El Niño phenomenon has taken place more often
in the past three decades. El Niños have an effect on climate and weather around the

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globe. A single phase can last for about one and a half years and is often followed by
an opposite climate pattern called, La Niña.
The term El Niño means “Christ child” and was first used by Peruvian fishermen. They
discovered that in some years there were fewer fish around Christmas time.
In normal years, cold water comes from the Antarctic region and flows along the
eastern coast of South America. A high-pressure area develops, warms the water on
the surface and pushes it in a westward direction. In the western Pacific, the air
becomes warmer. A low-pressure area forms and leads to tropical rainfall in Indonesia
and northern Australia.
Because of this climate cycle cold water rises from deeper regions of the South
American coast to replace the warmer water on the surface. This part of the ocean
belongs to the richest fishing regions of the world because fish can find more than
enough food.
During a typical El Niño phase, the air pressure is higher than normal in the western
Pacific and lower than normal on the South American coast. Ocean temperatures
along Peru and Chile become higher and the water does not have the nutrients that
fish need to survive. They stay in the colder regions near the Antarctic. Other animals
that feed on fish also suffer so that the whole food chain is affected. In addition, more
rainfall comes to a normally dry area and occasional flooding also occurs. On the
other side, eastern Australia and Indonesia are hit by unusual periods of dry weather.
Climate experts have seen more tropical storms in the central Pacific during an El
Niño year.
El Niño does not only affect the climate of the Pacific regions but has an impact on
global climate. Climatologists claim that frequent occurrences of El Niño are another
sign of global warming.
(i) Make notes, sub-heading, abbreviations, wherever necessary giving a suitable
title (3 Marks)
(ii) Write a summary (2 Marks)
2. (a) Write a short note on ‘Oral Communication’ and its nuances. (2 Marks)
(b) (i) Choose the suitable synonym for the word: (1 Mark)
Exorbitant
a. Inflated
b. Reasonable
c. Initiate
d. Encouraging

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(ii) Choose the suitable antonym for the word: (1 Mark)

Innumerable
a. Resistive
b. Limited
c. Probable
d. Uncountable
(iii) Change the following sentence into direct speech
Rhea said that she had gone to the market the previous day. (1 Mark)
(c) Write a Précis and also give a suitable title to the passage given below : (5 Marks)
Knowledge Management is the management of the accumulated expertise and
abilities within the organization by the collaboration of right people and right
information. Knowledge management is the framework within which the organization
views all its processes as knowledge processes. In this respect, all business
processes involve creation, dissemination, renewal and application of information
towards organizational sustenance and survival. Knowledge management is
becoming increasingly important because of a paradigm shift in the world from one,
which was predictable to one of rapid discontinuous change.
The words Intellectual Capital and Knowledge Management are sometimes used
synonymously, however there is a slight difference. Intellectual Capital is all abo ut
measuring and quantifying the intellectual assets of a firm, whereas Knowledge
Management incudes the development, creation, and management of knowledge
assets. In other words, it is an active and dynamic procedure. At this point, there are
two schools of thought. The first believes in the management of information entirely
whereas the second focuses on people.
3. (a) Why is vertical communication a two-way process? (2 Marks)
(b) (i) Choose the option which best expresses the meaning of the word (1 Mark)
Abstract
(1) Trustworthy
(2) Powerful
(3) Hypothetical
(4) Empower

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(ii) Choose the option which best expresses the opposite meaning of the word
Inevitable (1 Mark)
(1) Recognizable
(2) Unruly
(3) Threatened
(4) Avoidable
(iii) Change the following into indirect speech (1 Mark)
John said to his teacher, ‘Please help me!’
(c) You are Ms. Lakshmi Ranganathan, Administration Head at Broadridge
Communications, Hyderabad, Telangana. Write a letter of enquiry to Woodland
Furniture Pvt Ltd Hyderabad, enquiring about the prices for office furniture (desks,
chairs, bookshelves etc.). You may ask about product details, delivery time, and
warranty. (5 Marks)
4. (a) Why may the chain network take a longer time? Explain briefly. (2 Marks)
(b) (i) Change the following sentence into indirect speech (3 Marks)
Shireen said “I want to go to the local market”.
(ii) Change the following sentence into active voice
The question paper was made by me.
(iii) Change the following sentence into passive voice
We cleared the trash yesterday.
(c) Write a 250 word article on the topic ‘Each one teach one’
OR
Write a 250 word article on the topic ‘United we stand, divided we fall’ (5 Marks)
5. (a) ‘Emotional awareness is a necessary element for good communication’. Comment .
(2 Marks)
(b) Select the correct meaning of the following idiom/phrase (3 Marks)
(i) A penny saved is a penny earned
(1) To spend all your money
(2) To get robbed
(3) Not spending money, saves it
(4) Spending your money, saves it

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(ii) A piece of cake

(1) Something very sweet
(2) A bakery item
(3) To have fun
(4) Something very easy
(iii) Change the sentence into passive voice
Farida switched on the fan.
(c) Choose the word that best expresses the meaning of the given word (1 Mark)
Forbidden
(1) Not allowed
(2) Permissible
(3) Dangerous
(4) Famous
(d) You are a senior member of the Sales team explaining the need to improve the sales
for FY 2024, to handle the growing competition in the field of FMCG. Write a report
using the official report format proposing to conduct monthly sales meets to
understand, explain, present and discuss the sales figures on a monthly basis.
OR
The Chairman of Arvind Agro industries has decided to stop operations and
manufacturing at one of their plants based in Solan, Himachal Pradesh. Prepare an
agenda of the meeting to discuss the need for the closure, causes and effects,
consequences and other related discussions. The meeting will be attended by the
heads of the sales and marketing division, Solan plant manager, Solan plant chairman
and vice chairman of the organization, admin heads and few members of the workers
Union. (4 Marks)

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