Assignment-1

Of
Business Law

Submitted to: Submitted By :

Ms. Suruchi Amrit Singh
(10902636)
RQ1906A19
BBA (Hons).
 Homework I

1. A fraudulently informs B that A's estate is free from encumbrance. B there- upon buys
the estate. The estate is subject to a mortgage. Is it a void or voidable contract? State
reasons.

Ans 1: The Contract is voidable as B signed the contract on the basis of the fact that the
property was free from any kind of encumbrance. If B want to keep the contract as it is,
he can do that or he could take actions against A.

2. A invites B to see a picture with him. B accepts the offer. A purchase a ticket for B and
waits for him outside the cinema hall. B does not turn up. Has A any cause of action
against B

Ans 2: No, A cannot take any legal actions against B as they had a social contract which
is not a legally enforced contract

3. A offers to sell a cannon to B. A knows that the cannon has a defect in it and puts a metal plug to
conceal the defect. B accepts the cannon without examining it. The cannon bursts before it is paid
for. Is B liable to pay the price ?

Ans 3: Yes B will be liable for the price as it’s not the seller’s duty to point out all the flaws
within an item, rather he should have inspected it. Moreover the contract was completed ie: The
revocation was made after the acceptance was given.

4. An artist offers to sell a painting to an industrialist for Rs. 10,000. The industrialist offers to buy
it for Rs. 8,000, which is not accepted. The industrialist then sends a cheque for Rs. 10,000
and asks the artist to sell the painting to him. Comment on the legal position.

Ans 4: Basically first the artist offers the industrialist to sell the painting foe Rs 10,000
but the industrialist rejects the offer and then offers to pay Rs 8000 and the artist rejects,
Therefore both situations didn’t complete a contract and if the industrialist wants to buy
the painting for the initial cost, the artist can refuse to do so.

5. A, a minor, borrows Rs. 10,000 and executes a pronote for the amount in favour of B.
After attaining the majority, A executes another pronote in settlement of the first pronote.
Will B succeed in recovering money from A? Give reasons in support of your answer.

Ans 5: Any contract made with a minor is void and therefore there will be no
consequences against him.

6. A, a dealer in horses, sold a mare to B with the knowledge that the mare had a cracked
hoof which A had filled up so as to prevent detection even after a diligent examination.
Discuss the right of B when he subsequently detects it.

Ans 6: A is the seller , so he has to responsibility to tell all the true facts about the mare
he sold. Secondly B didn’t ask about any problems and thirdly B had all the resources to
 find out any problem. So if there was a contract signed B would have to go through it.
Other than that B had the resources to find the truth.

7. C with the intention of inducing D to enter into a contract with him, makes a statement to
D, which is, in fact, untrue and thereby induces D to enter into the contract. What are D's
rights, if the statement is made by C :
(i) knowing that it was untrue, (ii) recklessly, without caring to know whether it was
true or false, (iii) in good faith but negligently, (iv) in good faith and without
negligence?

Ans 7:
(i) This would turn out to being a case of fraud and C could be sued for losses
(ii) This would turn out to being a case of fraud and C could be sued for losses as C is
misrepresentating to induce D into entering a contract.
(iii) This would turn out to being a case of fraud and C could be sued for losses
(iv) It would be a misrepresentation case in which C could be still sued but it wouldn’t
be considered as a crime.

8. A agrees with B to give a motor car to B's son in consideration of his marrying A's
daughter. Can B's son sue A on the agreement? Yes- B's son can sue. A stranger to the
contract

Ans-8 Yes B’s son can sue A despite being a stranger to the contract, because this is a
contract entered through an agent (B).

9. Ram's son absconded from home. He sent his servant in search of the boy. When the
servant had left, Ram, by handbills, offered to pay Rs. 500 to anybody discovering the
boy. The servant came to know of this offer only when he had already traced the missing
boy. He, however, brought an action to recover the reward. Will he succeed in his
attempt? Give reasons.

Ans-9 no the servant will not succeed in this situation as the communication between the
offerer and offeree was not complete.

10. A authorises B to sell a camera for him, and agrees to give B, a commission of 10 per
cent of the sale price. A afterwards, by a telegram, revokes B's authority. B, after the
telegram is sent, but before he receives it, sells the camera to C for Rs. 10,000. C is also
not aware of the revocation of authority by A. A later refuses to deliver the camera to C
and pay commission to B for the sale, on the ground that the sale was not binding upon
him. Decide
(i) whether A's contention is valid ? (ii) whether B is entitled to commission on the
sale price ? (iii) what are the provisions of the Indian Contract Act in this regard ?

Ans-10
(i) gfb
(ii) Yes B is entitled to the commission as the contract would have been accepted when B
sold the camera. And despite A sending the revocation statement, he didn’t complete
the communication in time.
(iii) F

11. A agrees to sell to B "my white horse for rupees five hundred or rupees one thousand." Is
the agreement valid?

Ans-11 No it is not as there is not clarification/accuracy in the contract.

12. A, a minor and an undergraduate student of a university, buys on credit from B, a

clothier, seven suit lengths for his own use. Is B entitled to any payment in respect of the
goods?

Ans-12 Yes because despite A being a minor, any contract entered by a minor for
necessities like food and clothes is valid.

13. A is a minor aged seventeen years, who broke his right leg in a football match. He
engaged B, a doctor, to set it. Does the doctor have a valid claim for his services? Give
reasons.

Ans-13 no this is a Void contract, although A should ethically pay him for checking his
leg but legally he has to duty to fulfil so.

14. A, a minor, borrowed Rs. 5,000 on loan from B, staling that he was a major and executed
a receipt in his favour. Discuss the remedies available to B to recover the money lent by
him.

Ans-14 This was a void contract but since A lied about his age to enter the contract B
could sue him for lying to enter the contract although he would not receive the full
amount.

15. X, an old lady, by a deed of gift made over certain property to her daughter D, with the
specific directions that she should pay P, who is the sister of the old lady, a sum of Rs.
100 per month. The same day D entered into an agreement with P to pay her the agreed
amount. D now refuses to pay her aunt P, the above amount on the plea that no
consideration had moved from P to D. P,therefore, sues D. Is the suit maintainable and
can D be held liable to pay the amount? Decide.

Ans-15

16. A, seeing a watch in B's shop, marked for sale for Rs. 200, entered the shop, placed Rs.
200 on the counter and asks for the watch. Is B bound to sell the watch ? Give reasons.
 Ans-16

17. M agreed on Monday to sell his property to N by a written agreement which stated "that
this offer to be left open until Saturday 10 a.m." In the meantime on Wednesday, M
enters into a contract to sell the property to 0. N, who was sitting in the next room, hears
about the deal between M and 0. On Friday, N accepts the offer and delivers to M the
letter of acceptance. Is N's acceptance valid? Give reasons.

Ans-17

18. A minor, who wanted to become a professional cricket player, entered into a contract
with a coach and agreed to pay him certain amount to learn the game. Is the minor liable
to pay the amount?

Ans-18 Although it’s his moral duty to pay the coach, but No a minor is always on the
beneficiary side in a contract and if he wants he won’t have to pay him.

19. A woman fraudulently represented to a firm of jewellers that she was the wife of a certain
minister and thus obtained two pearl necklaces on credit on the pretend of buying them.
She subsequently sold those necklaces to a third party. Can the jeweler recover the
necklaces from the third party ?

Ans-19 No the jewellers cannot recover the jewellery from the third party, as this is an
exception to Fraud cases that intervention of third party will not be involved in the
contract.

20. C orally offered to pay A, an auto mechanic, Rs.50 for testing a used car which C was
about to purchase from D. A agreed and tested the car. C paid A Rs. 50 in cash for his
services. Is the agreement between A and C

(a) Express or implied

(b) Executed or executory
(c) Valid, voidable or void

Ans-20
(a) Implied as there was no written down paperwork, stamps etc involved.
(b) Executor as the favour is to be paid for in the future, not on the spot while making the
contract.
(c) It is Valid as the agreement was two sided and met all the requirements of the law.