0421-213 Midterm Solved Questions & Study Guide (Summer 2026)

0421-213 Business Law Midterm Exam Solved Questions — Summer 2026 (DIU BBA)

Introduction

Business Law (0421-213) is a core course in the BBA program at Daffodil International University (DIU), designed to equip students with a foundational understanding of legal principles governing business transactions in Bangladesh. This course covers key topics such as the Contract Act 1872, offer and acceptance, intention to create legal relations, and the distinction between offers and invitations to treat. For DIU BBA students, mastering these concepts is essential not only for academic success but also for real-world business decision-making.

Practicing past midterm and final exam questions is one of the most effective ways to prepare for assessments. Solved questions help students clarify complex legal concepts, identify common exam patterns, and build confidence in applying the law to practical scenarios. In this post, we provide a detailed, step-by-step solution to the Summer 2026 Midterm exam paper for Business Law (0421-213), ensuring you understand each concept thoroughly and can replicate the reasoning in your own answers.

Exam Overview & Mark Distribution

The Business Law (0421-213) Midterm Exam for Summer 2026 consists of one part (PART-A) with three questions, totaling 10 marks. The questions assess different cognitive levels, from recall (Level I) to analysis (Level IV), as defined by the course learning outcomes (CLOs).

• Question 1 (3 marks): Recall the chain of contract formation and define two legal terms from the Contract Act 1872.
• Question 2 (3 marks): Explain the concept of "Intention to Create Legal Relations" with examples.
• Question 3 (4 marks): Analyze the concept of "Invitation to Treat" and differentiate it from an offer, with illustrations.

Solved Questions

Question 1: Recall the basic chain by which an offer becomes a contract, and define any two of the following terms according to Section 2 of the Contract Act 1872

(i) Proposal (offer) – Section 2(a)

(ii) Acceptance – Section 2(b)

(iii) Agreement – Section 2(e)

(iv) Contract – Section 2(h)

Steps to Answer:

1. Understand the chain of contract formation:

The process begins with a proposal (offer), which is accepted to form an agreement. If the agreement is supported by consideration and made with free consent, competent parties, and a lawful object, it becomes a contract.

1. Choose two terms to define (e.g., Proposal and Contract):

- Proposal (Offer) – Section 2(a):

When one person signifies to another their willingness to do or abstain from doing something with a view to obtaining the other’s assent, it is called a proposal (or offer).

Example: A offers to sell their laptop to B for ৳30,000. This is a proposal.

- Contract – Section 2(h):

An agreement enforceable by law is a contract.

Example: If B accepts A’s offer and pays ৳30,000, the agreement becomes a contract.

1. Final Answer:

The chain is: Proposal → Acceptance → Agreement → Contract (if legally valid).

- Proposal (Section 2(a)): A proposal is an expression of willingness to do or abstain from doing something to obtain the other party’s assent.

- Contract (Section 2(h)): A contract is an agreement enforceable by law.

Question 2: Explain the concept of “Intention to Create Legal Relations.” In your answer, give one commercial example where intention is usually presumed and one social/family example where it is usually not presumed.

Steps to Answer:

1. Define "Intention to Create Legal Relations":

It refers to the willingness of parties to enter into a legally binding agreement. Courts presume this intention in commercial dealings but not in social or domestic agreements.

1. Commercial Example (Intention Presumed):

- Scenario: A company signs a contract with a supplier to deliver 100 units of a product at a fixed price.

- Reasoning: Business agreements are presumed to have legal intent unless proven otherwise.

1. Social/Family Example (Intention Not Presumed):

- Scenario: A father promises to give his son ৳10,000 as a gift for passing exams.

- Reasoning: Family promises are typically not legally enforceable unless formalized (e.g., via a deed).

1. Final Answer:

Intention to Create Legal Relations means the parties’ willingness to be legally bound. In commercial agreements (e.g., a supply contract), intention is presumed. In social/family agreements (e.g., a parent’s gift promise), intention is not presumed.

Question 3: Analyze the concept of ‘Invitation to Treat’ in contract law, pointing out how it differs from an offer, with reference to catalogues, display of goods, and auctioneer’s calls for bids. Briefly state with illustration when an advertisement may be treated as a real offer.

Steps to Answer: