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CA Foundation — Answer Writing

Foundation splits in half: two papers are answered in writing and two are objective. The written half is where the ICAI habits are formed — provision, application, conclusion — and those habits are what Intermediate and Final are marked on for the next four years.

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
FOUNDATION EXAMINATION
PAPER 2 : BUSINESS LAWS
Time Allowed: 3 HoursMaximum Marks: 100

Question No. 1 is compulsory. Answer any four questions from the remaining five questions.

  1. 1. (a)A offers to sell his car to B for ₹3,00,000 by letter posted on 1st June. B posts his acceptance on 4th June. A posts a revocation on 3rd June, which reaches B on 5th June. Is there a contract? Give reasons.(4 Marks)
  2. (b)Explain the essential elements of a valid contract of sale under the Sale of Goods Act, 1930.(4 Marks)
  3. 2. (a)Distinguish between a partnership firm and a Limited Liability Partnership.(6 Marks)
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Studio 07:30
Business Laws4 marks

A offers to sell his car to B for Rs 3,00,000 by letter posted on 1 June. B posts his acceptance on 4 June. A posts a revocation on 3 June, which reaches B on 5 June. Is there a contract? Give reasons.

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Type Speak Paper
Yes there is a contract because B accepted the offer on 4 June. A revoked on 3 June but B received it on 5 June which is after acceptance. As per the Indian Contract Act revocation must reach before acceptance. So the contract is valid. This question is about the rules of communication given in the Indian Contract Act, 1872. Revocation of a proposal is permitted but only within the time which those rules allow.
75 / 100 words
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Your page, photographed and readMarked in red
Q. No. 1Business LawsMax. marks 4
Q1

Yes there is a contract because B accepted the offer on 4 June. A revoked on 3 June but B received it on 5 June which is after acceptance. As per the Indian Contract Act? revocation must reach before acceptance. So the contract is valid. This question is about the rules of communication given in the Indian Contract Act, 1872. Revocation of a proposal is permitted but only within the time which those rules allow.

Section 4 and Section 5 by number — half the marks on an ICAI law answer are the citationThat acceptance is complete against A the moment B posts on 4 June, which is why the 5 June receipt is irrelevant
/4
Page 1Marks for each expected point are written down the right margin
The pen marks on your page
StrongThe correct rule and the correct conclusion. The section number is what is missing.
VagueSection 5 governs revocation and Section 4 governs communication. Naming them is worth a mark each here.
What the examiner wanted and did not find
  • Section 4 and Section 5 by number — half the marks on an ICAI law answer are the citation
  • That acceptance is complete against A the moment B posts on 4 June, which is why the 5 June receipt is irrelevant
Model answer for this question

Provision: under Section 4, communication of an acceptance is complete as against the proposer when it is put in course of transmission. Under Section 5, a proposal may be revoked at any time before the communication of acceptance is complete as against the proposer. Application: B posted on 4 June, so acceptance was complete against A on 4 June; A's revocation reached B on 5 June, after that moment. Conclusion: the revocation is ineffective and a valid contract exists.

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Evaluation reportIllustrative
Step marking
  • Section 4 — communication of acceptance is complete against the proposer when posted0/1

    The rule is applied but never stated with its section.

  • Section 5 — a proposal may be revoked before acceptance is complete as against the proposer½/1

    The rule is paraphrased correctly without the section.

  • Application to the dates given1/1

    The dates are used correctly and the reasoning is sound.

  • Conclusion stated1/1

    A clear conclusion is given.

Total /4Above averageAI estimate — not an official score

CA Foundation at a glance

Conducting bodyThe Institute of Chartered Accountants of India (ICAI)
ModeHandwritten for the descriptive papers
Papers4
MarkingCA Foundation — step marking
Marked the way CA Foundation answers are marked — step marking against ICAI's published Suggested Answers: the provision stated, applied to the facts, and concluded.
ICAI revised the Foundation scheme recently. Confirm the paper list for your attempt.

What CA Foundation sets

The papers you sit, and what each is worth.

1Paper 1 — Accounting100 marks 180 min

Descriptive, with working notes.

2Paper 2 — Business Laws100 marks 180 min

Descriptive.

3Paper 3 — Quantitative Aptitude100 marks

Objective.

4Paper 4 — Business Economics100 marks

Objective.

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