. i 2.An i Jn series 16 LAW OF CONTRACTS -t fro! ‘YE before his retirement if'an agreement is reached between the third parties and the a remaining partners of the firm discharging the retiring partner from all liabilities the ‘ler retirement the retiring partner shal be liable unless a public noice g¢ Fac ! his retirements piven, No such notice is requ se of retirement of a sleeping op An dormant partner . ¢ the PART-C 2 Not ' Iss ' “ ” . . Car 4. X an active partner of a firm with Y and Z. X retires Pri e without giving a public notice. Whether X is liable to tt = creditors to a loan sanctioned after his retirement. or = Decide. cor i co Facts of the case: a i th 4 Xa active partner ofa firm with ¥ and Z. + X retires without giving a public notice. Ju # X is liable to creditors to a loan sanctioned after his retirement mi Issues of the case: * Is X is liable to creditors to a loan sanctioned after his retirement ? 3.A Principle: A partner is an agent of the firm. This agency is only for the purposes ofthe te 2 business of the firm. He can enter into contracts, purchase and sell goods, borrow money b and do similar acts in so far as they are necessary for the carrying on of the business of t the firm and the firm will be bound by every such act. Every partner in the partnership has the right to retire as long as they give notice tothe h other partners, If the partner is retiring from a registered firm, they will need to announce s their retirement in three different ways: In the Registrar of Firms. In the Official Gazette é As the name suggests he takes active participation in the firm and the a running of the business. This will absolve him of the acts done by other partners afier i his retirement. Unless he gives a public notice, he will be liable for all acts even after ss his retirement. of sile in the given case the partner who retired without giving | r a loan sanctioned after his retirement.ithe ies, notice of eeping or Qa of the ey ess of o the ete. fter ving gh SERIES An unregistereg BSR Lawor. from the X. The firm ership fitm be CONTRACTS. ai oro} that can Mr. x recove led torepay it WSs Rs.1 lakh Facts of the es T the amount at in time. Now , Anunregist » Advice : HD firm borrows p, = Now that can Mr. X teeou tt ime *1 lakh om the x le Issues Of the case." fe . over the amount? ac Inder the Partner as : Inder the Partnership Act 19 & ately on the will ofthe Partners te eyo eeistration of fim isnot man eo: lo the same. ati regatered with the Registar ofthe ase Vn gov All others wh é ein ae ae ; constitution of the firm and thes the ge Math the fi bap | aoe Mite Te he firm must b . Bo Se Bearecis ce SOU us the documents which are Sapa Bt Se Retatrncive Gaeete Rea r people dealing with the frmaresidtohave "St “si . tails about the ‘a 2 re the firm registration is notdone a third, ven Supine ft se Judgement: As per the above pl le eeepc E i rrinciple In the given case also +c money borrowed by the firm by bringing legal ae ae ee fovea re fs . 3.A di a .A directs B his agent to buy a certain house forhim.B | Sf tells A that it can’t bought asit is already sold out but und buys the house for himself. A came to know about the na travelcommitted by B. CanA compel B to sell the = house to himself? Decide. aan Section 216 of the India Contract Act: Principal’ right 1o benefit gained by ages = 2 dealing on his account in business of agency”- As per this section, when the dishonest << sea ne ongent gives an advantage t the agent and the third party the principal hase aa righito claim the part of advantage with arising from his transaction. So, this section says, ifthe principal doest’t repudiate the transaction which involves the dishonest a tof the agent. The principal is entitled to claim the part from the transaction, So. in very simple terms ifwe define section 216, it says the agent not allowedto make a seoret profit and ifit arises from the dishonest act of the agent. The principal isalso entitled to claim the part from the profit of the agent. Jaiswal Coal Co. v Fatehganj Co-op MICTG Society In the present © duringthe course of the employment, ‘the agent while performing his duty gains some profit by fraudulent means. Inthe ‘case, the court held that ifthe agent does not perform hisduty honestly and gain some profit by changing the true nature of the ts. ‘Warning: Xerox/Photot18 SERIES ™ LAW OF CONTRACTS I .An entrusted some books to B for binding. B promised ie to complete the work and return the same within ten ¥ days. B failed to return the books within the agreed ' time. Subsequently the books were burnt in an accidental fire. Can A recover damages forthe loss E from B. Decide Is Facts of the case: A A entrusted some books to B for binding, B promised to complete the work and return the same within ten days B failed to return the books within the agreed time. Subsequently the books were burnt in an accidental fire Issues of the case: * Can A recover damages for the loss of his books from B Principle: Baileee’s Duty to take reasonable care of the goods bailed : Section 151 of the Contract Act provides that the bailee is under obligs ofthe goods bailed to him as an ordinarily prudent man in his place would have taken under the similar situation, This means that the duty laid down by this section is general and uniform in nature. This section does not provide for any exceptional situations: rather it covers all the contracts of bailment. In Giblin v. McMullen, the court pointed cout that “a gratuitous bailee is bound’ to take the same care of property entrusted to him as a reasonable, prudent and careful man may fairly be expected to take his property of the similar description.” r Therefore, the bailee is bound to take reasonable care whether the bailment is gratuitous or non-gratuitous. Additionally, the obligation of a bailee includes not only the duty to take all reasonable precautions to obviate the risks but also the duty of taking all proper measures for the protection of the goods when such risks had already occurred. Judgement: Yes, A can recover the loss from B to take care JBSERIESay JB SERIES a i » 5. Mr. Y an active Partner 149 OF cont C18 4 Ree ne Afterwards n °X compan ie business Competing wits "3 dec Decide. Ng with x Beane to start ap Facts of the case: + Mr. Y an active partner ofa com, 5 + He resigned from X company ipany. + Afterwards he has deci w ie has decided to start a new bu: or: usiness competing with X compan © Cany sta Y start anew business competing wth X company Principle: Ri ple: Rights of outgoing partners to cary on competing for business Section 36(1 iy ae iw a the Indian partnership act deals with the rights ofthe outgoing Testrictions but allows an outgoing partner to carry on the bu: competing with that Ro of the firm following are some of the estrietions regarding the + Cannot use the firm name.Cannot represent himselfas a member of the partner ' ‘he «Cannot solicit the customs of the person who was dealing with the firm before he ceased to be a partner. Section 36(2) of the Indian partnership act deals with the agreement in restraint oft trade. According to this section, an outgoing partner may make an agreement w partners that, when he ceases to be a partner of the firm, he will not carry on any busine Felated to that of the firm within a specified period or local limits. Judgment: Yes, As per the above rule, Mr. X cin start new Business comping ee “iththat of firm by complying with the above restrictions il to B. iB rees to supply 400 barrels of groundnut oil 2 A Fe eatches 420 barrels. Brefuses to receive on the 7 A i ground that he has supplied excess. Advice A. Facts of the case? «+ A-agrees to supply 100 barrels of ‘A dispatches 120 barrels. ; -B aes to receive onthe ground tat he as supplied excess issues of the case: available to A? ‘groundnut oil to B. So «What remedies arepris 78K) x0 LAW OF CONTRACTS -IL Py i: Principle: Rights of Buyer: Fo {At the heart of many international to the contract. Article 35 CISG ig question whether the goods delivered conform , | very core ofthe C1SG and presents aii appossh ” 4 respect ofthe goods delivered tothe buyer. [33 | ‘Accordingly, Aniele 35(1) C1SG provides that “the seller must deliver goog | 7A which are ofthe quantity, quality and description required by the contract and which re a contained or packaged in the manner required by the contract i ‘According to Section 31 and Section 32, the buyer has the right to get the delivery of goods as per the contract ; Section 37 is about the delivery of the wrong quantity. It ean be divided into three different cases: They are Ifthe quantity delivered by then the buyer can either accept th the seller to the buyer is more than what was contracted fo vat much and reject the remaining or he can reject the F ro whole. If, however, he accepts the whole of goods that are delivered, he shall pay fori : at the contract rate. mE b If the quantity delivered by the seller to the buyer is less than to what was contracted, y ff then the buyer can reject them. But if, however, the buyer accepts the goods then he shall three was to use his name t ontracted for an reject the ill Day for i Facts of the case: oA 2 an C carried ona business fora profi « But under very special condi 5 very special conditions as to C has to contribute neither labour nor money nd labour nor money a contra. he cea was not to receive any profits, ‘But the firm has to use his name. ones erate Issues of the case: «Is C liable for the debts of the firm hae Principle: A partnership is when two or more people work together and share te profs eee from the business or profession. However, one must not always assume that all partners participate in the work or profits or even liabilities of the firm equally. In fact, there are | Jud vious types of partners based onthe extent ofthe bility, or thei participation inte they he seller firm — like an active partner or dormant partner etc : Free al Partner: This isa parner tat doesnothave any rel or significant ere iy is 8 c ¢ partnership. He will not the partnership. So, inessence, he is only ending his name to the partnership. H a ile a cai ‘contributions to the firm, and so he will not have 2 share in the profits ' aie Bat the nominal partner wilbe lable toousiders and third parties for acts done by e athis m vartners. Hi Pe. ua oar ee Yes, Based onthe principe he is liable becose though he isanominal | on emis name and goodvil the frm might ye ot eneited in many ways fom ae oie jie, many outsiders might have invested in the firm because of him. Henee, he is Fa tiable for all those people. vag i oe 00k is CRIMINAL actau m A gave his suit for dry cleanin with printing conditions on its that B will not be liable for an The suit is damaged by B’s n the damages? Facts of the case: LAW OF CONTRACHS 1 9 to B. B gave a receipt back. One condition is 'y damage in dry cleaning legligence. Can A Page his suit for dry cleaning to B. B gave a receipt with printing conditions oni f back, One condition is that B will not be liable for any damage in dry cleaning, The suit is damaged by B's negligence : Issues of the case: Can A recover the damages? Principle: But that a bailee has accepted delivery of goods does not mean that he i responsible for their safekeeping no matter what. The law of bailments does not applya standard of absolute liabi ty: the bailee is not an insurer of the goods’ safety; her liability depends on the circumstances, Lack of Notice : The disclaimer must be brought to the attention of the bailor and must be unambiguous. Thus, posted notices and receipts disclaiming or limiting liability must set forth clearly and legibly the legal effects intended. Most American courts follow the rule that the defendant bailee must show that the bailor in fact knew about the disclaimer... Judgement: Baile is liable because the condition was printed on the backside of thereceipt. iE Ef f .A and B are partners ina firm. A is the managing the director who managed the firm for 3 years and misappropriated the funds. B wanted to file a suit regarding ainal s from he is Jud {wo to b 10. un cojgsues Of the case: LAW or OF CONTRACTS u tt sm yt B eet IUABEMEDE in his a rec rie: B 'S Tavou alton is rail “B"H Sie buipn” Bho s been stealing p_ ousiness a y cleaning fa Be Shs is tha uations the 8" fr beac on that belong i Using breach of fil rons I uShesand tees ciny day |A recover and goes beyond the scope of prope tor hishereres een Menge” par 5° Benn ‘nl lf does not benefit the breine” —— one a criminal RL fora since nb he ies, PUD. Y iti defined as "thet lane Paton) According te ast his business partes er ditions on its by 8 person in ‘eny ( theft of py HES Law, érvbeeslemin ne butt SPONSIbilly over thone nanan” OT PPETY). V Geran | dgement: Y Over those assets," 3) Y discov helecnt Yo, BomesstonAtemerny coe = Bb: punished eat ae fd sch sings parte of tatoo] ae > et his share bonsaPPoition of firm funds. He ecw Jay *= 1 rom him through court * ' Bei ae igh court decree h cl ' 0e8 Not applya Purchases typewriter from Y on Y’ we eysher | understanding that though itis old its in ven e ¢ is old it is in excell : condition. X find: eet ‘ : re: fee rand must work at all. Can pes ey that the typewriter does not oe ability must . reject the typewriter a i bys sity mist monet ‘ype rand recover his] .. as he dh Pacts of the case: oe * X purchases typewriter from Y on Y's understanding that though it is old it is Iss okside a excellent condition. : © X finds later on that the typewriter does not work at all ° Wh «Can he reject the typewriter and recover his money? Pri woh the Issues of the case: sl nd «Can he reject the typewriter and recover his money? a Principle: Principle: Conditions and Warranties 2 ‘When making a contract of sale, both the buyer and the seller make certain representations we cach other, While some ofthese representations are mer opinions and are not part ofthe +o met, while others may become a part oft, Those representations ‘which becomes part of the contract of sale can either be a condition or a warranty, Conditions These are stipulations that are essential to the purpose of the contract of sale and thei breach gives the right to the aggrieved party to terminate the contrac 7B SERIES SERIES Warning: Xerox/Photocopying ofthis! book is a CRIMINALfe20km/t JB SERIES 84 LAW OF CONTRACTS-1t However, A finds out that the ear has a mil F1Skm/It and will amount toa preach of condition as this stipulation was the essential tor that formed the contract. Warranty: They are stipulations, collateral to the main purpose of the contract. However, their breach doesn't give the aggrieved party the right to terminate the contract but they can claim damages for the same. For example, A buys a car that was warranted to be discovered that the car was not comfortab) breach of warranty comfortable while driving. La and A's only remedy is to seck dama A forthe nent: Based on the above principles condition and warranty in the “ly available to X is to claim damages for his loss he faced by bi 12 typewriter 11. A undertakes to save B free from liability arising out of any proceedings which Cmay take against B in respect of certain sum of Rs.200. What is the nature of his contract? Facts of the case: * A undertakes to save B free ftom liability arising out of any proceedings whichC may take against B in respect of certain sum of Rs.200. Issues of the case: + What is the nature of his contract? Principle: A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person,is called a “contract of indemnity.” —A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or bythe conduct of any other person, is called a “contract of indemnity.” Judgement: Based on the above principle in the given case the nature ofthe contract is called contract of indemnity. A’s ornaments having been stolen were by the police and while in police custody, I in. Can “A” take action against JB: SERIES accai go SERIES st ‘will amount ton d the contract, he main h doesn’t the contract iriving. Later A k damage forthe piven case the ying (ypewriter arising nst B in nature whichC may oss caused person, is to save the he conduct contract is 846 and ‘B" were + As per their agreement the ps ‘Warning: Xerox/Photoco} jesomaments having been gigi el Law in polic let Were OP 4 Anite in police custody, he eM Were re, 4 gnile in "y, they Were gt soses of the cases can “A” take action againg tye “principle: If police take gy (vesrous Eabilty) responsi ensure th eta dosue, Afr recovering the sen je Bolles epee ‘“ searest court. The property fom inte? det ue pe 0 the ofthe property, crime, officer in-charge Weeae eR MM in Ie Case ete i 3 In SC Of Seizure of day tave totake permission fom the cog Police stody MBErOUS items such as crackers a fr destin of eset pe Judgement: Based on the above whose property is lost or destroy + Incase the property has com application for the restoratio Criminal Procedure, + Secondly, in all other cases of los of property inthe governmental custody a civil action, alleging vicarious liability of the government. In the given case the person's goods are stolen in police custody. So, he has to take civil action alleging vicarious lability of the government. Principle Two courses of tion, fo ‘ction are open for a person od while in the governmental custody, They are ie in the custody of the court, he can institute an mn of property under Section 452 of the Code of 413. ‘A’ and ‘B’ were partners under an agreement, whi i hip could be which provided that Partners! me terminated by mutual agreement only. Now A : alone Wants to terminate the partnership. Can he do so? ts of the case: =e inder an agreement ; artnership could be terminated bymutual agreement only * But now ‘A’ al Issues of the ease: = Can ‘A’ alone terminate the partnership’ Jone wants to terminate the partnership. Principle: hi if only ship dissolvesby pel iple: Ifa partnership consists of only two persons the partnership eT ' operation of law when one of them departs E ‘YB SERIES prying of thisbook is @ CRIMINAL actoo LAW OF CONTRACTS II ip the parinership will be dissolved by the operation of 14. > ‘A’ Obtains a loan from a Co-operative society for r. The society waived repayment of loan. Explain B’s liability as a surety. cts of the ease: ‘A’ Obtains a loan from a co-operative society, For that loan B is the guarantor Issues of the case: is B’s liability as a surety? Section 134 of the ICA from its liabilities under a contract between the creditor provides that the guarantor shall stand discharged of guarantee in case of any agreement arrived at and the principal debtor, by which the principal debtor is released. In other words if the principal debtor is discharged of his liability to the creditor, the guarantor also stands discharged. Judgement: As per the above principle of Section 134 of the ICA in the given case iF B (Surety ) discharged from his liability because the society waived repayment of Joan taken by A and discharged him from his liability. So if the principal debtor is discharged of his liability to the creditor, the guarantor also stands discharged. 15. ‘A’ holds a lease from ‘B’ terminable on three months’ notice. C without B's authority gives notice of termination to ‘A’, ‘B’ ratifies the notice and files a suit = for rejectament a,’B’ is entitled to get decree or not? Facts of the case: + A? holds a lease from ‘B’ terminable on three months noice. _* C without B’s authority gives notice of termination to ‘A’, Issues of the case: + Is "BY entitled to get decree or not? p) in The Indian Contract Act, 1872 unauthorized by the actual party to the contract. inable on three months’ notice. Z, an IB SERIES Prin trans cheg that g aise wee trans The purek Jud are The exp cheto be binding on crs —— ment: No B is not ¢ the operation of ot entitled a panei inthe given case algo ¢ jg 8 decree ice of terminatior oa 8 Une Secause ice © nto A Buthoringd ot" 2 per a AU the same OTM person, an yt Sbove society for (6. ‘A’ sells goods oune eal cheque. Before B ¢ “B’ pays tog: 0 fr th surety. goods his cheque hay cbtin The delhery cr a a pank. ‘A’ therefore, fata dishonoured by the goods until paid, Is a" to give delivery of th ‘ $ action justi Ie Faets of the ease: On Justified or not? + ‘A’ sells goods to +B’ pays to ‘A’ through a cheque + Before B could obtain the delven and discharged ent arrived at ebtor i ity tb the by the bank. livery of goods his cheque has been dishonoured gi + ‘AY therefore rofses to give delivery ofthe goods until paid given case ayment of Issues of the case: ior is aged. ‘+ Ts A’s action of refusing to give delivery of the goods until paid justified? Principle: Any business transaction involve payment for the goods sol. In any such transaction, the seller delivers the goods only ‘after receiving cash or the realization of ee cheque / draft received by him. The receipt is sued by him ‘clearly mentions the fact z, that goods sold are delivered subject to the realization of cheques ‘and final bill finvoice is tice of raised only after the realization of cheque and amount credited to he ‘sellers account. Do | @ suit ‘we get the items purchased from a super market ‘when our eredit/ debit card i 2 transaction for the purchase fails? : pots “The answer is- No. So also, the purchaser has £9 right to demand forthe goods ‘ purchased on bounced cheqtes for any reason from the seller. es fs i ions t: Yes, |would definitely say that A's ac’ gid gerttied. He hasn't been paid. He 's anunpais ‘sellet.| 1 Hele are a ok ot atuatione Wet Oe pa for bye ag | * explicitly say that I e mel a =a check, ty Bag to clear before ‘the goods will be deliver ES zed wat estas i —————— CT 4B SERIES warning: Xe! 11B SERIES 88 LAW OF CONTRACTS it (7. “X’ being ‘Y's agent for the sale of goods, induces ‘K’ to buy them by a misrepresentation, which ‘x was not authorized by ‘Y’ to make. Can this contractbe set aside at the option of ‘kK’? State the reasons for your answer. 'S of the ease: “X’ being *Y’s agent for the sale of goods, induces ‘K’ to buy them by a misrepresentation. * °X was not authorized by *Y* to make Issues of the case: * Can this contract be set aside at the option of ‘K"? Principle: Section 18 of Indian Contract Act 1872 says: “Misrepresentation is about giving of inaccurate information by one party (or their agent) to the other before the contract is made which induces them to make the contract. "If the misrepresentation is identified, the contract can be declared void {fa person makes a contract in reliance on misrepresentation and has to face loss asa result, they can revoke the contract or claim damages. iconeaagaeai Judgement: Yes, this contract can be set aside at the option of *K" as per the Following remedies available to the aggrieved party form is representation Remedies of Misrepresentation : The contract made in misrepresentation is voidable which is not done intentionally by the party. So, by keeping this in mind, the remedies for misrepresentation are: The contract made in mistepresentation is voidable which is not done intentionally by the party. So, by keeping this in mind, the remedies for misrepresentation are: Rescind: Rescind means to cancel. When the aggrieved party wants, he can claim for cancellation of the contract and/or damages, Insist upon the performance: The aggrieved party can claim to the first party who have n ion to get the object in the manner which was prior tose RN ATRAC ona JBSERIES Nee OTT wa % E 48. Bis the Principar ; induces debt. A the creditge w btar ofa Greate 2s Was B pac time to ae Promise toa ity oft tbe set promise Onithergan S the effect ip a ighbour r your Facts ofthe ease; MACK of iUerane ifany of this” 6 isthe principal debtor of 'Y of th + Avthe creditor makes et ra Issues of the c 8 promise to q ive time to ne} “ehbour of B to give time to B Principle:1) y, ‘ i red Marian contract(Séctiont 33) in terms of the Wh nt a ha a Of guarantee has been materially altered through an agreement is because x are ant Principal debior, the suet is discharged from his ibility. This re Surety is liable only for what he has undertaken in the guarantee and any alteration made without the surety’s consent will discharge the surety as totransactions * subsequent to the variation, OSS as a Judgement: In the given case the creditor makes a promise to a neighbor of B to give time to B which is variance in terms of contract. Its effect is C the surety is discharged from his liability to pay the creditor B in case A fails to pay the debtas « guarantor. “ p \s peaeble: 49. Alends his motorcar to B for a drive by him medics only. B allows his daughter C whois an expert car to zs lly by drive the car. C drives the car carefully, but its axle a suddenly breaks, and the car is damaged. Is B liable S n for for the damage? 8 Facts of the case: fe ps : drive by him only = a ities Pies eaexpert oa to drive the ar oa . s his oe [en the car carefull, butts axle suddenly breaks, andthe cari damaged. s of the case: f Issug yge because C drives it? the car dama * Is B ab ion 154 indian Contact La, 1872 ses ‘of this book is a CRIMINAL act. “Liability of bailee making “JB SERIESJb seRies 0 tunauthorised use of goods bailed isnot accordiny bailorfor any d LAW OF CONTRACTS -I IF the baifee makes any use of the goods bailed which >the conditions of the bailment, he is liable to make compensation to the nage arising tothe noods from or during such use of them i makes anyuse ofthe goods bailed which isnot according o the conditions ofthe ballet, he is liable to make compensation othe bailo for any damage arising to the goods from or | during such uscof them." Hence, when C drives the car with care but hits with am pole B is liable fordamage to A's car f the bailee Judgement: In the case also B is liable for the damages based on the abo Section 154, Indian Contract I principle 1872, states "Liability of bailec making unauthorised useof goods bailed —If the bailee makes any use of the goods bailed which is not according tothe conditions of the bailment, he is liable to make compensation to the bailor for any damage arising to the goods from or during such use of them 20. Aengaged B an auctioneer, to sell some property on the terms that he shouldreceive his due commission of Rs.500. B however received secretlyRs200 as commission from the purchaser. Discuss the rights of A and B. Facts of the case: + A engaged B an auctioneer, to sell some property. + He engaged the auctioneer on the terms that he should receive hisdue commission of Rs.500. iy + B however received secretly Rs.200 as commission from the purchaser. Issues of the case: + What are the rights of A and B © ; AB: ae inciple: The auctioneer, as the agent of the seller, is in a fiduciary position an a a tum over proceeds of the auction sale in full, such proceeds being treated as tantamount to trust funds. The auctioneer must exercise ordinary care and skill in the performance ofthe duties confided to him or her. Ifthe auctioneer assumes a pesition ee with that of his or her agency relationship, the auctioneer ition for services, and the auctioneer may be ny secret profit received by him or her as a es not disclose to the principal. -_ pay compensation for his held accountable to the principal fors bailed which sation to the Ifthe bailee the bailment, pods from or an electronic ve principle authorised not (0 the bailor due er, ind has ated as | in the position joneer be a 22. Ahiresa carriage of B. The carriage is unsafe responsible to A for the injury? Facts of the case: Warning: Xerox/Photocot an 1 18 SERIES ee nest ccret profit ree 7 any secret profit feceiveq 1 Fr Isa by hi 1 does not disclose to the yay him or LAW oF the principal M88 a resulh eee si ce ale ie wetiongey 21. A advance, Qicrantoaley Kenn toa Minor B BROWSE pleads a emand forpayme: mes inorit nt. The amount from X» Y. Can A recover Facts of the case: ; * A lends B money \ 'y Rs.500 t + Xiisthe guarantor forgo ‘en A demands money B (ata ees in Issues of the case: ___Can A recover amount from X (guarantor)? Principle: Under section 10 if they are made by the free f'the Indian Contract Act. 1872, all agreements are contracts eer t Consent of parties competent to contract, for a lawful ideration and with a lawful object, and are not expressly declared to be void. Also, under section! 1, every person is competent to contract who is of the age of majority according to the law to which he issubject, and who is of sound mind and is not disqualified from contracting by any law to which he is subject In Mohiribibi ys Dharmados Ghose, with similar facts of the given case, it was held that the section10 and 11 of Contract Actmake the minors agreement void and therefore the mortgage was not valid. M pleaded for the refund of the amount from the minor. It was, held that the money advanced to minor can't be recovered because minors agreement was void. i In the given case, D is a minor who borrowed a sum from M by mortgaging his property, But as per the provisions, D is not competent to contract and any contract entereé reir be void and hence, the mortgage here isnot valid Als, due tothe void contract M wil vot sueceed in recovering the amount from the minor. : No, A cannot recover from X the Surety (guarantor) As per the above ., contract with a minor is void a initio. although B is not aware of itand A injured. Is B nie ing ofthis books @ CRIMINAL act ial Ai +h \s owl Pr. Ca Ca Ca h the oft co no WanSad RIES ox __LAWOR CONTRACTS tt _ : + Ahires a carriage of B. + The carriage had some de * B the owner of the carriage is not aware of it | + While using it A was injured. Issues of the case: + Is B responsible to A for the injury? : - ot Law, 1872, states "Bailor’s duty to ¢ Principle: Section 150 of Indian Contract Law, 1 disclose faults 4 20ods bailed The bailor is bound to disclose to the bailee faults in the goog, bailed, of which the bailor is aware, and which materially interfere with the use of them, expose the bailee to extraordinary risks; and ifhe does not make such disclosure, he i responsible for damage arising to the bailee directly from such faults. 1f such goods are bailed for hire, the bailor is responsible for such damage, whether he was or was not aw reof, the existence of such faults in the goods bailed. "According to this law, B is liable to A for > the injury. Judgement: Yes. B is responsible for A’s injury. E> = 23.Aagrees to sell B , 50 bales of cotton out of 300 bales in the godown, The godownat the time of contract has been destroyed by fire unknown to Bel A. What are the remedies of B against A? ified Facts of the case: * A agrees to sell B, 50 bales of cotton out of 300 bales in the godown. + The godown at the time of contract has been destroyed by fire + This was unknown to A Issues of the case: * What are the remedies of B against A? twas ‘efore twas twas ghis tered Iwill Principle: Legal position in each ofthe following alternative cases: to both the parties, the goods were, destroyed by fire at the point ease (a) applies to the given case . So not known that the godown at the time is void but A, the promisor, mustsn series X was given o—— 2 Given poyct = pusiness ag x nec Of ai his SON Z to log leave Kk hisfather. He entereg te and signed the Sai Facts of the ease: Me. Discuss therights and abi it z lites + X.was giver i n Power of attomey ®YY tor nd re a MAABE his business lose « As X had to le; Rs eee as to Jeave Be ikea Nan business Authorized his son Zo look afer th, Z.t0 look after the or a + Zhad a power from his father, + He entered c fe into ® Contract in the name of Y end s ee and signed the same, Ee Issues of the case: « What are the rights and liabilities? ea Cees holder is nothing, but an agent as defined in S. 1820f * his power anes 2. In other words, an agent or attomey cannot delegate na . \e IS expressly or impliedly authorised to do so. Judgement: Without the permission of the principal such delegation of power has mo legs to stand unless later the principal by words or acts ratifies such delegation . Hence | 44 in the given case the contract into which Z the son of first GPA holderentered is void. Added Part - C questions from 2022 paper tha who is i a surety for the good conduct of Ms. Lat ? a in a pene misappropriates some money but the bank excuses eae informing Suraj about Latha’s misconduct. Latha again misappropriates ‘Is Suraj liable to the bank. Facts of the case : i ‘ . .. Latha is employed ina bank one . WE Suraj stands as a surety for the good conduct of Latha misappropriates some money, SI apni But the bank excuses her without Infonning yesenis | “*" INAL act. i ‘ofthis book is RIM (erox/Photocopying:a el *s LAW OF CONTRACTS -II Issues in the case Is Suraj liable to the bank. | i ety’s consent, in the terms of the | Principle : Any variance, made without the surety’s consent, contract between the principal [debtor] and the creditor, discharges the surety ast | transactions subsequent to the variance. | Illustrations fA becomes surety to C for B's conduct as a manager in C's bank. Afterwards,B and ¢ | contract, without A's consent, that B's salary shall be raised, and thathe shall become | liable for one-fourth of the losses on overdrafts. B allows a customer to overdraw, an the bank loses a sum of money. A is discharged from his suretyship by the varianes | made without his consent, and is not liable to make good this loss. fC contracts o lend B 5,000 rupees on the Ist March, A guarantees repayment. C pays the 5,000 rupees to B on the Ist January. A is dischargedirom his liability, as the Contract has been varied, in as much as C might sueB for the money before the Ist o¢ March ‘Judgement : Based on the above principle and illustrations in the given caseSurj is hot liable to the bank because when Latha misappropriates somemoney first time ihe bank excuses her without informing Suraj about Latha’s misconduct i.e variance. made without the surety’s consent. + A asked B ,an expert driver , to drive his ear in order to demonstrate for sale, 8 drove it unskilfully and then collided it with a tree. Is B liable for loss ? Facts of the case : B is an expert driver. : A asked B , to drive his car in order to demonstrate for sale. B drove it unskilfully and then collided it with a tree Issues in the case : * IsB liable for H E ‘the car at the time of the accident: Whetlr i! * ving, the onus ison the person diving not in roadworthy condition. the given case the driver only willbeov CONTRACTS AE . ra or Pape ron 8 sn seRIES she choco ea Raed oi NOCOlateg OF CONTR Ac pesti Naseer'y oan ojales : a " j hat re ; Sono eee : wi emedy ig avail 8 eate Matter and ag keeper. Allable to Nace falls serious) " Facts of the case : + Mr. Naseer pure hac + One of the chocola es eo lates conta OM a sho Bic. + AS a result Naseer's gon nit & Poisonous my ‘s , th Who has cate it flig ne a alls serious fe 4 es sly illsues in the 'medy is available to Naseer agai Weer against the shoy i ; he shop keeper. Sale by sample :¢ tor the contrac | is ¢ the + that the buyer si sample; © that the goods a i B00ds shall be free from any defect, rendering them unmerchantable,which E would not be apparent on reasonable examination of the sample. Case law : Jackson v Watson Liability of all natural consequences: In Jackson v Watson , the plaintiff purchased tin of salmon from defendant. The contents of the tin being poisonous, his wife died. It was held the defendant was liable to pay damages Judgement :Based on the above principe inthe given case the shop keeper is ible to y damages to Mr. Naseer for is son's serious illness aftr eating thechocolate which was purchased chocolates from his shop. 4, Mohan and Ravi were partners under an agreement which provided that partnership could be terminated by mutual arrangement only. Mohan alone wants to terminate the partnership. Can Mohan do so ? Facts of the case : .d Ravi were partners under an agreement, Mohan ant = ying ofthis book isa CRIMINAL 2 ‘Warning: Xerox/PhotocorLAW OF CONTRACTS -I1 mnseRus % * According to that agreement partnership could be terminated bymutual f arrangement only * Mohan alone wants to terminate the partnership a Issues in the case ; + Can the partners ofa im go against the partnership agreement ? ; Principle : Yes, one partner can terminate a partnership. This can be done ifa Partnership comprises only two partners and one provides a written notice forexiting the partnership in a partnership-at-will situation Judgement ; Yes based on the above principle in the given case Mohan canterminat, 4 the partnership by providing a written notice for exiting the partnership | PART C FROM 2023 AUGUST PAPERS ae debt guaranteed by A. The debt becomes payable. C does not sue the debt has become payable. Is A discharged from his i 13.B owes to B foray suretyship? Facts of the case : * B owes to Ca debt guaranteed by A. + The debt becomes payable + C does not sue B fora year after the debt has become payable. Issues in the case : * Is A discharged from his suretyship ? Principle: Section 137: Creditor’s forbearance to sue does not discharge surety Section 137 of the Indian Contract Act of 1872 states that a creditor's forbearance to sue does not discharge a surety. This means that ifa creditor does not sue the principal debtor or enforce any other remedy against them, the surety is not discharged. Example: Sarah takes out a loan from a bank, and her friend Tom acts as a surety guaranteeing repayment of the loan, The loan becomes due, but Sarah faces financial difficulties and cannot pay it back on time, The bank, however, decides to wait en additional six months before taking any legal action against Sarah, hoping she will be able to repay the loan by then,# CONTRACTS AL SERIES ter age Judgement : Baseq ” ‘ ‘don the at fora year afer the g Above py Law 7 deb ri ore bt has become nar i te eMC Sy Payable Ven case i 14, A enters into 1A is no hough ¢ 98 contragt discharged fro fo tna instalme, With from fy MS Of about 1 h The buyer ra 0 tons Tises 10 46g Ans, Under the H three mony T the Sale of 30 fons in the first mine th first that govern their j b the rights of th, month interactions in com 02 C'S a seller " partis, : Rights of Buyer Meal tan ATE Biven rights and q nsactions, * Right to Delive 45 per the ofthe Sale of G Gods et, 1939 S88 per Contr 5 AS per Sections 3 expect timely 1 and 32 of th and exact delivery f * Right to Reject Non- ¢ delivered go the e c Oniraet, the buyer has the right to reject the Right i ‘4 re iy Repudiate the Contract in the Absence of Agreement for Instalments BE) ore eet delivers the goods in instalments without prior agreement, Sesion (1) grants the buyer the right to repudiate the concat Right to Be Informed and Arrange for Insurance: This enables the buyer to make arrangements for insurance coverage to protect against potential damage during transit. Section 39(3) * Right to Examine Goods for Conformity: The buyer has the right to examine the goods thoroughly to ascertain whether they conform to the specifications outlined the contract. Section 41 + Right to Sue for Price Recovery: In the event that the seller fails to deliver the goods as agreed, the buyer possesses the right 0 file a suit to recover the price already paid for the goods. Right to Sue for Damages for Non-Delivery: If the seller wrongfully neglects or refuses to deliver the goods to the buyer, Section 57 grants the buyer the right to seek damages for any losses incurred due to the non-delivery. Right to Sue for Specific Performance: The buyer has the right approach hes or specific performance ifthe seer fails to meet their contractual obligations. e Right to Sue for Breach of Warranty or Conlifon: Seaton 59 and 60 of of Sale of Goods Act, 1930 empower the buyer to sue the seller for damages in a a breach of warranty or a condition treated as a breach er — ly «Right to Sue for Interest on Breach of Contract: In situations where the the buyer becomes necessary, reaches the contac and a refund ofthe price 10 the buy a 61 Foi i puyer to claim interest as compensation for the breach, Section 61 al ee ‘erox/ Photocopying of this book's 2 CRIMINAL Warning:onthly onth, tog 30; the very of the tated in ments: ection an series, LAW OF CONTRACTS It Rights of Seller # Right 10 Reserve Disposal of Goods: ‘The seller has the right to retain control and ownership ofthe goods until specific conditions are fulfilled (as outlined in Section 25(1)). + Right to Assume Buyer's Acceptance: Under certain circumstances, the seller may assume thatthe buyer has accepted the goods. Section 24 + Right (o Deliver Goods upon Buyer's Application: The seller is obligated to deliver the goods only upon formal application by the buyer Section 35. ‘+ Right to Deliver Goods in Instalments: + When the agreement stipulates delivery in instalments, the seller has the right to deliver the goods accordingly (as per Section 39(1)). + Right to Exercise Lien and Retain Possession: The seller holds the right to exercise a lien on the goods and retain possession until the full payment of the price is received Section 47 (1) '* Right to Stop Goods in Transit: Ifthe buyer fails to make the payment, the seller has the right to stop the goods while they are in transit Sections 49(2) and 50). + Right to Resell Goods under Certain Cireumstances: In specific situations, such as the buyer's default, the seller has the right to resell the goods and claim damages, for any losses incurred (as per Section 54). ‘* Right to Withhold Delivery when Property has not Passed: If the property in the ‘goods has not passed to the buyer (as per Section 46(2)), the seller can withiold delivery until the necessary conditions for transfer of ownership are met. + Right to Sue for Price: The seller has the tight to sue the buyer for the price (as per Section 55 of of the Sale of Goods Act). This right ensures that the seller can seek Jegal recourse for unpaid dues.” 15. P allows his agent to purchase goods for him on credit from T. and pays for them. On one occasion he (agent) paysT .Can the agent recover the price of the goods from aaol and Section ller may o deliver to exercise seller , such, mages in the iid (as per seek or of the ID SERIES Principle: An LAW OF CONTRACTS «1 ‘gent can recov RaVTeL curl cpaty oehe eee of goods fom the prin ithe Ravers Agent on earlier occas oe le expenses while carrying ou athe The tee principal ieoreed 9 a8 06 the prints dts, This beeawe nnying the existence of agency reimbursement by the principal of expenses incured erg duties, as long as the dt red While car are reasonable. The a, Dienst goods, papers, and other property, AHS e tae intitled to retain the prine oa due to the agent for commission, disbursen Se ae has been paid or accounted for to them, ce the sou ments, and services in respect of the sar : Judgement : Based on the above the : n the above e principle in th eee given case the agent can recover Price of the goods from P because P has held out the agent as his agent on earlier occasions. 16. A bou Aba en a horse from B, A wanted to enter the horse in a race. A did not im the same to B. Tums out the horse was not capable of running a race on account of being lame - Can B made liable for defect? Decide Facts of the case : A bought a horse from B. A wanted to enter the horse ina race. ‘A did not inform the same to B. But the horse turns out to be incapable of running a race on account of being lame Issues in the case + Can B made liable for defect? principle: The doctrine of Caveat Emptor is an integral pat of the sateuf Goat aa, It means “let the buyer beware” This means it lays the responsibilty of ‘r choice on the buyer themselves. ; their chore esspectically defined in Sesion 18 of the act there no implied warranty OF as to the quality or the fitness for any particular F se of goods ‘supplied under such a ¢ of: fe ed Asellet makes his goods available in the open market. The buy' i and then accordingly makes his choice. oo doctrine says that ‘vill not be responsible for this the buyer more conscious of lity and the usefulness of gut to be defective or does not sible for this.