INDIAN CONTRACT ACT
Q. X, a creditor carrying on business at Delhi, wrote to Y, one of its customers who resided at Chandigarh, saying "the favour of a cheque for the due amount within a week shall oblige". The customer upon such request sent a cheque by post. Cheque was stolen in the transit and was paid by the bank to the thief. X having not received the payment, sued Y for recovery of amount. Decide the case by a reasoned order. (D.J.S. 1989)
Q. Defendant, a female, agreed to pay Rs. 5000 to plaintiff in consideration of latter having the former trained in art of singing and dancing at his own cost. It was found that the plaintiff's sister and not plaintiff himself had rendered those services. In a suit for recovery of the agreed amount, defendant denied her liability to pay any amount to plaintiff under the said agreement. How would you decide the controversy. (D.J.S. 1989)
Q. (a) Delegatus no potest delegate (a delegate cannot further delegate). Discuss the implications of this maxim in relation to agency and state the exceptions to the rule.
(b) L instructs his lawyer in another town to engage an estate agent to sell his house in that town. Accordingly the lawyer selects B, the leading estate agent of the town for the purpose. B is able to sell the house for a good price. But B delays to remit the sale amount to L and meanwhile becomes insolvent. L holds his lawyer responsible for the loss. How would you decide? State your reasons.
(c) L a wholesale clothe dealer, appoints Y as his agent for the sale of cloth on the basis of 5% commission on the sales done by him. Y had an agreement with his principal L that he could retain part of the sale amount of the goods to adjust the commission due to him. L terminates the agency of Y. Y refuses to hand over the cloth in his possession to L and claims that he is vested with authority coupled with interest and that the agency could not be terminated. How would you decide?
(d) A carrier discovers that a consignment of tomatoes owned by E has deteriorated badly before the destination has been reached. He therefore sells the consignment for what he can get: this is about a third of the market price for the good tomatoes. E now sued D for damages. D claims he was an agent of necessity. Advise him. (D.J.S. 1990)
Q. (a) "Acceptance is to offer what a lighted match is to train of gunpowder. It produces something, which cannot be recalled or undone. But the powder may have lain till it has become damp or the man who has lain the train may remove it before the match is applied". Explain with illustrations the principles sought to be expressed in the above passage.
(b) B is A's daughter and has just come of age. A sells to B a horse which A knows to be unsound. A says nothing to B about the horse's unsoundness. Does A's silence amount to a fraud? If so why? If not, why not?
(c) A undertakes to repay B a loan of Rs. 1000/- by 5 equal monthly installments with a stipulation that in default of payment of any installment the whole shall become due. Can the contact be enforced according to its terms? Give reasons. (D.J.S. 1990)
Q. (a) A died intestate on 12-10-1961. He filed a proposal for insurance for Rs. 50000 on 27-12-1960. There was medical examination BY DOCTOR OF Insurance company of deceased on 27.12.60. Deceased had issued 2 cheques for Rs. 300 and 220 respectively in favour of Life Insurance Corp. Cheque for Rs. 300 was encashed by Ins. Co. and cheque of Rs. 220 was dishonoured 3 times but was finally encashed on 11.1.1961. Insurance papers were put up by the concerned insurance staff to Divisional Manager but he did not sign the Insu. Policy. Divisional Manager was the competent authority to accept the policy. No communication accepting proposal of Insurance. Policy was issued by Insurance Corporation.
Widow of A wrote to Insurance Corporation on 16.1.1961 intimating death of A on 12.1.1961 and demanded payment of Rs. 50,000. Divisional Manager denied liability on 28.1.1961. Thereafter there was correspondence between the parties between 1.2.1961 to 23.2.1963 wherein wife of deceased A claimed payment and Insurance Company denied liability for the same. Widow of deceased A filed suit on 10.1.1964 for recovery of Rs. 50,000 with costs. How will you decide? Give reasons. (D.J.S. 1991)
Q. (a) Defendant offered to sell a house on 25.11.1989 to the plaintiff for Rs. 90,000. On 10.12.1989, the plaintiff made an offer of Rs. 80,000. This offer was refused by Defendant-owner on 15.12.1989. On 20.12.1989, the plaintiff wrote to the Defendant that he was now prepared to pay Rs. 90,000/-. The defendant-owner refused to sell the house. The plaintiff filed a suit against the defendant for Breach of Contract. How would you decide? Your reasons.
(b) A, a Doctor, employed another Doctor B, as assistant for a period of 3 years on a salary of Rs. 3000/- per mensum. There was an agreement between A and B which provided that after the termination of his employment B shall not practice as a Doctor within a radius of 3 kms of A's dispensary for a period of three years and if B did so, B should pay Rs. 50,000 as 'liquidated damages'. Immediately after the termination of his employment, B started his practice as a Doctor next to A's dispensary. A, thereupon sued B for the recovery of Rs. 50,000.
(c) The plaintiff, who was a tailor, delivered a sewing machine and some clothe to the defendant Railway Company to be sent to a place where he expected to carry on his business with special profit by reason of a forthcoming festival. Through the fault of the Company's servants the goods were delayed in transition and were not delivered until some days after the conclusion of the festival. The plaintiff had given no notice to the company of his special purpose. He claimed as damages the expenses of his traveling up to the festival and of staying there and the loss of profits which he would have earned. Decide, giving reasons. (D.J.S. 1991)
Q. (a) Describe the liabilities (duties) of Bailor. Give illustrations.
(b) The defendant made an offer the Managing Director of a company who having no authority to do so, accepted it. That gave the company an option to ratify the contract. But the company ratified only after the defendant had withdrawn his offer. The company sued the defendant for specific performance. Decide.
(c) The defendant employed the plaintiff to fined a tenant for his premises. When the plaintiff was telephoning to prospective tenant 'X', a third party 'Y', overheard the conversation, ascertained the locality from X, went to the premises where there was a "To Let" board with address of the defendant and engaged the premises. The plaintiff claims his remuneration. Is the claim tenable? Discuss.
(d) A lends his motor-car to B for a drive by him only. B allows his dauthter C, who is an expert car driver, to driver the vehicle. C drives the car carefully but the axle suddenly breaks and the car is damaged. Is B liable for the damage?
(e) "The liability of surety is co-extensive with that of the principal debtor." Discuss. (D.J.S. 1991)
Q. M/s Jainsons, a firm dealing in readymade garments advertises in newspaper about Clearance Sale of their stocks. C, a customer visits the shop, picks up a shirt lying in the lot with price tag of Rs. 400/-, takes to salesman, asks him to pack the shirt and prepare the bill. Salesman discovers that shirt in question should have been in the lot of articles with price tag of Rs. 500/- and refuses to sell the shirt to C and tells him it was wrongly put in the lot of articles with price tag of Rs. 400/-. Can C compel the firm Jainsons to sell the particular shirt to C at Rs. 400/-? Discuss whether contract had been concluded. (D.J.S.1996)
Q. X, a resident of Ambala is in the manufacturing business of household appliances. For the past five years he is participating in display of goods in Exhibition-cum-Sale held every year at Ashoka Hotel, New Delhi. X used to send his goods through a particular transporter, who had knowledge about X participating in Exhibition-cu-Sale. In 1995, he again delivers his goods to same transporter well in time for the purpose of participating in Exhibition-cu-Sale, also mentions so in the consignment note. But this time due to negligence on the part of employee of the transporter, goods reached New Delhi only after the exhibition. X then files a suit for loss of his freight charges as well as for the loss of profits which he would have made in Exhibition-cum-Sale. Will he succeed? Discuss. (D.J.S. 1996)
Q. B holds agriculture land on lease from 'A' the landlord. A was in arrears of land revenue payable to Government. The land was advertised for sale by the Government Consequent to the sale taking place lease in favour of 'B' is also liable to be annulled under Revenue Laws. B in order to prevent the same pays arrears to Government. Can B recover the same from A? Decide. (D.J.S. 1996)
Q. A applies to a banker for loan when there is stringency in the money market. The banker declines to make the loan except at unusual high rate of interest. A accepts the loan on the terms of high rate of interest. Can A refuse to pay high rate of interest taking the pleas of undue influence? Discuss. (D.J.S.1996)
Q. (a) What are the essentials of a valid contract under Indian Contract Act?
(b) X, a leading manufacturer of sports goods appoints Y as his distributor for Delhi. According to the agreement Y cannot sell sports goods including sports shoes and apparel in Delhi during the subsistence of agreement. Is this condition valid. Discuss?
(c) A enters into an agreement to sell with B and upon receipt of consideration executes will, agreement to sell and a power of attorney in favour of B authorizing him to sell, mortgage or part with the property. However there was no clauses in the power of attorney that it would not be revoked. After about six months of the transaction A revokes his Power of Attorney in favour of B. is it legally permissible? Discuss.
(d) Distinguish between "quantum Meruit" and "Claim for Damages". (D.J.S. 1999)
Q. (a) What are the essential requirements of Consideration under Indian Contract Act? Is an agreement without consideration void? Are there some exceptions to this general Rule? Please Discuss.
(b) Section 27 of the Indian Contract Act provides that an agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is void to that extent.
In a given case, landlord is the owner of shop running a Sophisticated Cosmetic Hair Dressing Saloon in Delhi. He gives on rent the said shop with the said business along with all tools, machinery, plants, fans, air-conditioners, telephone, furniture and other equipments, to a tenant with the stipulation that the tenant shall do the said business only under said particular name and style.
Is this agreement of lease hit by section 27 of the Indian Contract Act? Decide.
(c) X executes Power of Attorney in favour of his advocate Y while X was in good state of health and mental understanding. Later on, X becomes old, infirm, weak and incapable of apprehending due to mental incapacity.
Does the power of Attorney executed by him become worthless and redundant in the eye of law, on account of change in the state of health and mental infirmity of X? Please discuss giving reasons.
(d) Section 74 of the Indian Contract Act provides:
"When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party, who has broken the contract, reasonable compensation not exceeding the amount so named, or as the case may be the penalty stipulated for".
A gives bond for the repayment of Rs. 1,000/- with interest @ 12% at the end of six months, with stipulation that, in case of default interest shall be payable @ 75% w.e.f. the date of default.
Discuss the liability of A in case he fails to repay the amount of loan of Rs. 1,000/- after six months. To how much compensation, B will be entitled and what would be the measure of assessing damages in such case? (D.J.S. 2000)
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