1 a) A contract is a legally binding agreement or relationship that exists between two or

more parties to do or abstain from performing certain acts. A contract can also be defined as a legally binding exchange of promises between two or more parties that the law will enforce. For a contract to be formed an offer made must backed acceptance of which there must be consideration. Both parties involved must intend to create legal relation on a lawful matter which must be entered into freely and should be possible to perform. An agreement is a form of cross reference between different parties, which may be written, oral and lies upon the honor of the parties for its fulfillment rather than being in any way enforceable. All contracts are agreement because there must be mutual understanding between two parties for a contract to be formed. All parties should agree and adhere to the terms and conditions of an offer. The following cases illustrate ways in which all contracts are agreements; In the case of invitation to treat, where an invitation to treat is merely an invitation to make an offer. When a firm's offer is accepted it results into a contract provided other elements of contracts are accepted. Considering person A buying a radio on hire purchase from person B who deals with electronics and its appliances. Both parties must come to an agreement on payment of monthly installment within specified period of time. Such an agreement result to specialty contract which a contract under seal. All contracts are agreement until avoided for example, avoidable contract where one of the parties can withdraw from it if s/he wishes. This occurs due to minor agreement and misrepresentation or undue influence. Considering a case where person A make contract with person B but during the contract period B realizes that he was engaged to perform an agreement under undue influence.
1b)

A contract has been defined in section 2(h) as "an agreement enforceable by law." To be enforceable by law, an agreement must possess the essential elements of a valid contract as contained in sections 10, 29 and 56. According to section 10, all agreements are contracts if they are made by the free consent of the parties, competent to contract, for a lawful consideration, with a lawful object, are not expressly declared by the Act to be void, and where necessary, satisfy the requirements of any law as to writing or attention or registration. As the details of these essentials form the subject matter of our subsequent chapters, we propose to discuss them in brief here. The essential elements of a valid contract are as follows. 1. Offer and acceptance. There must a 'lawful offer' and a 'lawful acceptance' of the offer, thus resulting in an agreement.. 2. Intention to create legal relations. There must be an intention among the parties that the agreement should be attached by legal consequences and create legal obligations. 3. Lawful consideration. The third essential element of a valid contract is the presence of 'consideration'. Consideration has been defined as the price paid by one party for the promise of the other.

4. Capacity of parties. The parties to an agreement must be competent to contract. But the question that arises now is that what parties are competent and what are not. 5. Lawful object. For the formation of a valid contract it is also necessary that the parties to an agreement must agree for a lawful object. 6. Writing and registration. According to the Indian contract Act, a contract to be valid, must be in writing and registered. For example, it requires that an agreement to pay a time barred debt must be in writing and an agreement to make a gift for natural love and affection must be in writing and registered to make the agreement enforceable by law which must be observed. 7. Certainty. Section 29 of the contract Act provides that " Agreements, the meaning of which is not certain or capable of being made certain, are void." In order to give rise to a valid contract the terms of the agreement must not be vague or uncertain. 8. Possibility of performance. Yet another essential feature of a valid contract is that it must be capable of performance.

2a) Meaning of consent: it means an act of assenting to an offer. According to section 13, "Tow
or more persons are said to consent when they agree upon the same thing in the same thing in same sense." Thus, consent involves identity of minds in respect of the subject matter of the contract. In English Law, this is called 'consensus-ad-idem'. Effect of Absence of consent:

When there is no consent at all, the agreement is void ab-initio, i.e. it is not enforceable at the option of either party. Example: X has one Maruti car and one fiat car. He wants to sell fiat car. Y does not know that X has two cars. Y offers to buy X's Maruti car Rs 50,000. X accepts the offer thinking it to be an offer for his Fiat car. Here, there is no identity of mind in respect of the subject of the subject matter. Hence there is no consent at all and the agreement is void ab-initio. Meaning of Free consent: It is one of the essential elements of a valid contract as it is evidenced by section 10 which provides that all agreements are contracts if they are made by the free consent of the parties... according to section 14, consent is said to be free when it is not caused by (a) Coercion, or (b)Undue influence, or (c) Fraud, or (d) Misrepresentation, or (e) Mistake. Effect of Absence of free consent when is consent to be free:

Parties consenting to the same thing in the same sense is not sufficient. Consent must be free. Section 14 of the Act proceeds to define free consent as under: Consent is said to be free when it is not caused by (1) coercion (2) undue influence, (3) fraud, (4) misrepresentation, or (5) mistake. Consent is said to be so caused when it would not have been given but for the existence of such coercion undue influence, fraud, misrepresentation or mistake. When there is no consent there is no contract at all. When there is consent but not free consent, the contract is void at the option of the party whose consent was not free. If consent is given under the first four circumstances, then the contract is void at the option of the party whose consent was so caused. A consent induced by false representation may not be free within the meaning of section 14, but it can nevertheless be real; and ordinarily the effect of fraud or misrepresentation is to render a transaction void only and most void. When consent is caused by mistake of both the parties, then the agreement is void. It will,

therefore, be observed that consent under the first four circumstances, i.e. under coercion, undue influence, fraud and misrepresentation makes the contract void, while consent under mistake of both the parties makes the agreement void.

q2(b) Bailment

(n) Bailment is the process by which the custody of a property is transferred to another person or legal entity for safe keeping of such property. Normally bailment is a paid service and imparts a responsibility and obligation on the custodian to protect the goods Duties or responsibilities: Following are the duties or responsibilities of bailee. (I) Care of goods: Bailee is bound to take as much as care as the man take care of his own good. (II) Act according to the contract: Bailee is bound to act according to the contract of bailment. (III) Not deny the title: Bailee can not deny the title of the goods delivered to him. (IV) Return the goods: It is the duty of bailee to return or deliver the goods to bailor or according to his directions. (V) Return at proper time: Bailee should return the goods at proper time. (VI) Return of profit: Baliee should return the increase or profit to bailee. (VII) Proper use of goods: He should use the goods according to the contract of bailment. 9. Rights of bailee:

Following are the rights of bailee. (I) Recovery of loss: A bailee is entitled to recover damages if he suffers any loss. (II) Recovery of compensation: A bailee is entitled to receive compensation from the bailor for any loss resulting from the defect of bilor title. (III) Recovery of expenses: Bailee is entitled to recover all expenses for any purpose of the bailment. (IV) Rights to retain: Baailee has right to retain the goods until debtor claim is paid. (V) Right against third person: He has right to receive the amount of indemnity from bailor for any loss which may sustain by reason that the bailor was not entitled to make the bailment. (VI) Right against third person: If a third person wrongfully deprives the bailee of the use or possession of the good bailed. He can file suit against such person. (VII) Right of remuneration: He is entitled to lawful charge for providing services. Q3 A Name for the arrangement where an agent intermediates between buyers and sellers and charges a commission for his participation. The agent buys and sells for the account of the client, but the client assumes all risk.

There are many ways to terminate an agency relationship. Once the relationship is terminated, the agent no longer has authority to act for the principal. The principal is required to inform third parties (that dealt with the agent) that the agency relationship has been terminated. Ways to terminate an agency relationship include:

Lapse of time: If the parties agree to set a time period for the agency

relationship, the agency relationship terminates when the time period passes. For example, you hire a person to be your agent for one year. After one year passes, the agency relationship automatically terminates unless you extend it. Purpose achieved: Some agents are hired to achieve a certain purpose. Once that purpose is achieved, the agency relationship is automatically terminated (but you can extend it). A prime example is when professional sports players hire an agent to only negotiate contracts. Mutual agreement: Both parties can agree to terminate the relationship. If both parties agree to part ways, the reason for the termination does not matter. Certain events: An agency relationship will automatically terminate upon the occurrence of certain events. Such events include death, insanity, or bankruptcy of either the principal or agent. A court of law will usually step in and terminate the agency relationship if one of the parties refuses to do so. Both parties may also specify particular events that can cause termination. 3(b)Difference between Bailment and Pledge -

Pledge is a special kind of Bailment. Thus, all Pledges are Bailments but the reverse is not true.

Bailment

Pledge

Bailment can be for many reasons ranging for reward to gratuitous. A pledge is bailment done for a specific type of purpose, which is to secure a loan or performance of a promise. The bailee does not get a right to sell the goods. goods in case of default. A pawnee has a right to sell the

The bailee only get a right of lien over the goods. A pawnee gets a right of retainer and a special interest in the goods, which is more that just the lien. The bailee can use the goods bailed. The pawnee has no right to use the goods.

The bailee is not responsible for the loss, destruction, or deterioration if he uses the goods with reasonable care. The pawnee is absolutely liable for the upkeep of the goods. Bailment means to deliver or to handover the goods. It is the delivery of goods by one person to another for specific purpose upon a contract that when the performance is accomplished, the goods shall be returned or disposed off according to the directions of the person delivering

them. The person delivering the goods is called the bailor. The person to whom the goods are delivered is called the bailee. The transaction is called the bailment. Essentials of bailment: (1) Delivery of goods is upon a contract. There is a change of possession of goods by delivery by one person to another for a temporary period. (2) Delivery may be actual or constructive. (3) Delivery of goods must be for specific purpose (4) Bailment can be only of lawful goods (5) The bailee must return the specific goods either to the bailor or to somebody according to his directions. Kinds of bailment: (1) Gratuitous bailment i.e. bailment without any reward or remuneration (2) Bailment for reward or remuneration (3) Goods delivered as security for money borrowed called pawn or pledge. Bailors rights: (1) to treat bailment as voidable; (2) to the return of the goods; (3) to claim compensations for wrongful use of goods by the bailee; (4) in case of mixture of the goods by the bailee (a) where it is done with the consent of the bailor to a proportionate share in the mixed goods; (b) where it is done without the consent of the bailor to claim expenses of separation, if goods can be separated and goods cannot be separated, to claim compensation for the loss of goods (5) to receive any increase of profit from the goods bailed. Duties and liabilities of the bailor: (1) to put the bailee into possession of the goods; (2) to disclose faults in the goods bailed; (3) to repay necessary expenses; (4) to indemnity gratuitous bailee; (5) to compensate for any loss to bailee due to defect in title; (6) to take back the goods Bailees rights: (1) to a particular lien; (2) to know faults in the goods bailed to him; (3) to claim proportionate share in the goods mixed; (4) to claim expenses of bailment; (5) to claim loss for defect in the title of the bailor. If the bailee is gratuitous then to claim indemnity. If he is wrongfully deprived of the goods, then right action against third person. Duties and liabilities of bailee: (1) to take reasonable care of the goods bailed; (2) to make compensation to the bailor for unauthorized use of the goods bailed (3) to return the goods to the bailor or according to his directions; (4) to deliver any increase or profit accrued on the goods; (5) to pay damages under certain circumstances; (6) if he mixes his goods with the bailors goods, with his consent, to give a proportionate interest in the mixture produced. If he mixes the goods without the consent of the bailor and if the goods can be separated, he is bound to bear the expenses of the separation and if the goods cannot be separated, he is liable to compensate the bailor of the loss of the goods. Lien: It is a right of one person to retain that which is in his possession until certain demands of a person in possession are satisfied. In simple words, it is a right the possession of goods until the claim is paid. Lien may arise by statute or by express or implied contract in ordinary course of dealings. Lien is of two kinds general lien and particular lien. General lien is a right of goods not only towards the demands arising out of the article in possession, but for general balance of account. It is available to, pawnors, factors, wharfingers, attorneys and policy brokers. Particular lien is also called a special lien. It is a right of retaining the particular goods until claims arising on those goods are satisfied. Bailees right of lien is that which extends only in respect of the goods bailed to him. It can be exercised by the bailee only certain circumstances. Finder of goods: a finder of goods is subject to the same responsibilities as the bailee. He is entitled to retain the goods against the whole world except the true owner thereof. He is entitled to the lien. He entitled to sue for the reward if the owner has offered a specific reward. He is also entitled to sell the goods under certain circumstances. He must, however, use reasonable diligence to find out the true owner and must take due care of the goods. He must not use the goods for his own purpose.

Pledge: When goods are bailed as security for payment of a debt or performance of a promise, it is called pledge. The bailor is called the pawnor, the bailee is called the pawnee. The transaction is called the pledge or pawn. The goods must be delivered as security. Delivery may be actual or constructive delivery. Pledge can be made of movable goods only. Transfer of possession of goods is essential.

4 a) Condition and warranty distinguished:

1) Stipulation: Condition is an essential term or stipulation of the contract which must be fulfilled for the performance of the contract. Warranty is a collateral or incidental stipulation to the main purposes of the contract. It is not as essential a stipulation of the contract as a condition. 2) Remedy: Breach of condition gives right to repudiate or treat the contract as broken or rescinded and also aright to claim damages. Breach of warranty gives right to claim damages only. A breach of warranty does not entitle a buyer to reject the goods and his only remedy would be to set up against the seller the breach of warranty in diminution or extinction of the price or to sue the seller for damages for breach of warranty. 3) Exercise of options as to treatment; Breach of condition may be treated as a breach of warranty. A breach of warranty cannot be treated as a breach of condition. Whether stipulation in a contract is a condition or warranty depends on the construction of the contract. Stipulation may be a condition even though called a warranty. Option is given to the party to either claim damages or repudiate the contract even if stipulation is a condition. Where damages are only claimed, the condition is reduced to a warranty. Opening para of section 16 makes it clear that there is no implied warranty or condition as to quality of fitness of goods for any particular purpose, except those specified in Sale of Goods Act or any other law. - - This is the basic principle of caveat emptor i.e. buyer be aware. However, there are certain stipulations which are essential for main purpose of the contract of sale of goods. These go the root of contract and non-fulfilment will mean loss of foundation of contract. These are termed as conditions. Other stipulations, which are not essential are termed as warranty. These are collateral to contract of sale of goods. Contract cannot be avoided for breach of warranty, but aggrieved party can claim damages. - - A breach of condition can be treated as breach of warranty, but vice versa is not permissible. Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition or elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the contract as repudiated. [section 13(1)]. Where a contract of sale is not severable and the buyer has accepted the goods or part thereof, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is a term of the contract, express or implied, to that effect. [section 13(2)]. Nothing in this section shall affect the case of any condition or warranty fulfillment of which is excused by law by reason of impossibility or otherwise. [section 13(3)]. 4b)

Failure to act within the time required constitutes a breach of the contract. The general rule is that time is not of the essence unless the contract expressly so provides. As a result, with respect to real estate transactions, the modern view is that time is not of the essence unless the parties have manifested such an intent. The same is generally true in construction contracts and in contracts relating to the manufacture of goods. When time is not of the essence, courts generally permit parties to perform their obligations within a reasonable time.
If the other party to a contract does not perform its obligations on time, you may find yourself late for a very important date, much like the White Rabbit in Alice in Wonderland. Parties to a contract are sometimes surprised to learn that missing a contractual deadline does not always amount to a material breach of the contract .When it comes to many types of contracts -- for example, construction, real estate sales, loans, or other non-goods contracts -- courts often don't consider timing to be essential. They believe that minor deviations from a contract's schedule aren't important enough to warrant damages or termination of the contract. In some circumstances, however, the parties would beg to differ. For example, the timing of a loan contract may be very important indeed, if the lender's failure to fund the loan on time means that you can't buy a house or pursue a lucrative business opportunity. For that reason, lawyers began to use "time is of the essence" provisions in contracts. When a party wants to make sure that the agreement makes it clear that it is important that the contract obligations be completed on time, a contract can include a provision that specifically states: "Time is of the essence with respect to all [obligations/deliveries/payments] under this Agreement."

Q8 a) minor contract
A contract is an agreement by two or more parties that is enforceable by law. All contracts are agreements but all agreements are not contracts. A contract should have few essential elements to be considered as valid. In case any of the requirements are not fulfilled, the contract is considered to be void. One such essential requirement is that both the parties entering the contract should have attained the age of majority. As per the Indian Majority Act, 1875, a person who has not completed the age of 18 years on the date of contract is considered as a minor. There are two exceptions where a person may be considered major only on completion of the age of 21 years.

The two special cases are: Where the court has appointed a guardian to the individual or property. Where the property of the minor is under the guardianship of the Court of Wards. Typically in India, this refers to the court that assumes overall superintendence of the ward or the minor.

8 b) sale of goods
Sale of Goods Act is one of very old mercantile law. Sale of Goods is one of the special types of Contract. Initially, this was part of Indian Contract Act itself in chapter VII (sections 76 to 123). Later these sections in Contract Act were deleted, and separate Sale of Goods Act was passed in 1930. The contract of sale of goods is a broader term that includes sale and an agreement to sell. The agreement to sell is defined as a legal agreement between parties regarding the transfer of the property in the goods, that is to take place at future time period or subjected to execution of specific conditions.

Simply put, suppose you want to sell a house and a plot that comes with it. You can enter into an

agreement to sell your property with a prospective buyer stating that in six months if the transaction is not complete, the agreement is null and void and that you get to retain the advance amount paid for this agreement and that you dont need to return it if the buyer is unable to pay the rest of the amount agreed on to complete the transaction.

8 c) Creation of agency: Fiduciary element in agency, though the key to much of the law
government relation is not the essential element in relation. Contract of agency may be created as under: Agency by agreement (Secs. 186 and 187 of Indian Contract Law)) Express: The authority of an agent may be express (1) by writing under seal like power of attorney; or (2) by oral or simple agreement. The authority is said to be express when it is given by words spoken or written. Implied: The authority of an agent may be implied. An authority is said to be implied when it is inferred from the conduct, situation or relationship of the parties, circumstances of the case; and things spoken or written, or by the ordinary course of dealings. The relationship of principal and agent need not be expressly constituted but can be brought about by implication of law on a particular situation arising or from the necessity of case. Advocates power to compromise suit or confess judgment is implied in every Vakalatnama unless expressly excluded. Agent by necessity: Where one is compelled to act as an agent of another without the authority of that other, such agency is known as agency by necessity

8 d) coercion coercion, in law, the unlawful act of compelling a person to do, or to abstain from doing, something
by depriving him of the exercise of his free will, particularly by use or threat of physical or moral force. In many states of the United States, statutes declare a person guilty of a misdemeanor if he, by violence or injury to another's person, family, or property, or by depriving him of his clothing or any tool or implement, or by intimidating him with threat of force, compels that other to perform some act that the other is not legally bound to perform. Coercion may involve other crimes, such as assault. In the law of contracts, the use of unfair persuasion to procure an agreement is known as duress; such a contract is void unless later ratified. At common law, one who commits a crime under coercion may be excused if he can show that the danger of death or great bodily harm was present and imminent. However, coercion is not a defense for the murder or attempted murder of an innocent third party.