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UGC-NET Agribusiness Law & Ethics: practice questions

UGC-NET (June 2025) · India · National Testing Agency

Original practice questions written to the published syllabus · not past papers
10worked here, free
42written to this exam in this subject
10syllabus units

What this subject covers

The laws an agribusiness manager meets most, from contracts and sale of goods to company, commodity, consumer and competition law, and the ethics of business.

In the exams: agricultural master's entrance examinations, principles of corporations (present)

Where the 42 questions fall

How our questions for UGC-NET spread across the units of Agribusiness Law & Ethics. Difficulty: 13 easy, 20 medium, 9 hard.

Business ethics9
Contract law principles (with national contract acts as examples)6
Sale of Goods Act 19305
Companies Act5
Legal systems: common law, civil law and mixed systems4
Consumer Protection Act4
Competition Act 20024
Negotiable Instruments Act2
Regulation of international business2
Right to Information Act1

10 practice questions, worked

Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.

1 · Legal systems: common law, civil law and mixed systems · medium

A federal constitution lists trade in foodstuffs as a concurrent subject, so both the national and the state legislatures may legislate on it. If a valid national law and a state law on that subject conflict, the usual rule is that:

  1. the later of the two laws prevails, whichever legislature happened to pass it
  2. the national law prevails to the extent of the inconsistency
  3. the state law prevails, because it is closer to the producers and consumers it affects
  4. both laws become void until the apex court rewrites them into one harmonised text
Answer and working

B. the national law prevails to the extent of the inconsistency

Federal constitutions commonly give national law priority on shared subjects to the extent of any inconsistency: section 109 of Australia's Constitution, Article 31 of Germany's Basic Law and Article 254 of India's Constitution are examples. Neither the date of enactment nor closeness to producers decides the conflict.

2 · Legal systems: common law, civil law and mixed systems · medium

A sugar mill's effluent kills fish in the river below it. Applying the polluter pays principle, who should bear the cost of cleaning the river and compensating the fishers?

  1. The mill that discharged the effluent, which bears cleanup and compensation costs
  2. The government, from general taxation, because the river is public property held in trust
  3. The downstream fishers, who chose to fish in a stretch below a known discharge point
  4. The cane farmers who supply the mill, in proportion to the tonnes of cane they delivered
Answer and working

A. The mill that discharged the effluent, which bears cleanup and compensation costs

The polluter pays principle, set out by the OECD in 1972 and as Principle 16 of the Rio Declaration 1992, puts the cost of prevention and remedy on the polluter; courts in several countries have applied it, India's in a 1996 tannery case among them. The public trust doctrine makes the State a trustee of rivers but does not shift the polluter's cost to taxpayers.

3 · Contract law principles (with national contract acts as examples) · easy

In common-law contract theory, a contract is best defined as:

  1. any promise made with the intention of creating legal relations
  2. a proposal that has been communicated
  3. an agreement enforceable by law
  4. an agreement that is in writing and signed
Answer and working

C. an agreement enforceable by law

A contract is an agreement enforceable by law; contract codes in the English tradition state it in those words. Writing is not an essential of a contract in general, and an intention to create legal relations is necessary but not sufficient.

4 · Contract law principles (with national contract acts as examples) · medium

How do civil-law systems such as those of France and Germany generally differ from common law on consideration?

  1. They need no consideration: a seriously intended promise binds, sometimes subject to form
  2. They require consideration to be adequate, whereas common law accepts any consideration of value
  3. They recognise only past consideration, whereas common law accepts only executory consideration
  4. They make every promise given without consideration voidable rather than void at common law
Answer and working

A. They need no consideration: a seriously intended promise binds, sometimes subject to form

Civil-law systems have no doctrine of consideration; some gratuitous promises need form, such as notarisation of a promise of a gift in Germany. Within the common law, codes differ too: English law requires consideration to move from the promisee and not be past, while India's code accepts consideration from a third person and past consideration.

5 · Contract law principles (with national contract acts as examples) · medium

The rule that damages for breach cover only loss arising naturally from the breach or which both parties contemplated as likely when contracting, followed across the common-law world and written into several codes, comes from:

  1. Carlill v Carbolic Smoke Ball Co (1893)
  2. Hadley v Baxendale (1854)
  3. Salomon v A Salomon and Co Ltd (1897)
  4. Royal British Bank v Turquand (1856)
Answer and working

B. Hadley v Baxendale (1854)

Hadley v Baxendale set the two-limb remoteness rule. Salomon and Turquand are company-law cases; Carlill concerns offer and acceptance.

6 · Sale of Goods Act 1930 · easy

Under sale-of-goods law in the English tradition, where property in goods is to pass at a future time or on fulfilment of a condition, the contract is:

  1. an agreement to sell
  2. a sale
  3. a hire-purchase agreement
  4. a barter
Answer and working

A. an agreement to sell

Sale-of-goods statutes in this tradition distinguish a sale (property passes at once) from an agreement to sell (property passes later or on a condition). Barter is exchange of goods for goods, not for money.

7 · Sale of Goods Act 1930 · hard

A trader contracts to buy '50 tonnes of wheat from the 200 tonnes in warehouse X'. Before any wheat is set aside, the warehouse floods. Who bears the loss, as a general rule?

  1. The buyer, because the contract was made before the flood
  2. The buyer and seller equally
  3. The warehouse keeper, as bailee, in all cases, because the wheat was in his custody at the time it was damaged
  4. The seller: the goods are unascertained, so property has not passed, and risk prima facie follows property
Answer and working

D. The seller: the goods are unascertained, so property has not passed, and risk prima facie follows property

No property passes in unascertained goods until they are ascertained, and risk prima facie follows property. The warehouse keeper is liable only if it failed to take reasonable care.

8 · Companies Act · easy

The principle that a company is a legal person separate from its members was established in:

  1. Ashbury Railway Carriage and Iron Co v Riche (1875)
  2. Salomon v A Salomon and Co Ltd (1897)
  3. Royal British Bank v Turquand (1856)
  4. Carlill v Carbolic Smoke Ball Co (1893)
Answer and working

B. Salomon v A Salomon and Co Ltd (1897)

Salomon is the separate-personality case. Ashbury is the ultra vires case and Turquand the indoor management rule; Carlill is contract law.

9 · Competition Act 2002 · medium

In most competition laws, which agreement is treated as the most serious, being illegal per se or presumed to harm competition?

  1. An exclusive distribution agreement between a fertiliser maker and a dealer
  2. A resale price maintenance clause between a tractor maker and each of its regional dealers
  3. An agreement among rival rice millers to fix the price they pay farmers for paddy
  4. A tie-in agreement between a seed company and a retailer
Answer and working

C. An agreement among rival rice millers to fix the price they pay farmers for paddy

Horizontal agreements between competitors to fix prices, including purchase prices, are per se illegal in the United States, restrictions 'by object' in the EU and presumed harmful under many other laws. The other three are vertical agreements, usually judged by their effects.

10 · Business ethics · medium

The principle that one should act only on a maxim one could will to become a universal law, and treat people as ends and never merely as means, belongs to:

  1. Kant's deontological ethics
  2. Bentham's hedonistic utilitarianism
  3. Aristotle's ethics of virtue
  4. Friedman's shareholder theory
Answer and working

A. Kant's deontological ethics

These are formulations of Kant's categorical imperative. Utilitarianism looks to consequences; virtue ethics to character.

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Agribusiness Law & EthicsThe full study manual, free UGC-NETFormat, sections and how it has changed

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