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LOVELY PROFESSIONAL UNIVERSITY

ASSIGNMENT-3
Name of the Student s : SNEHA RAJPUT

Course Title : MERCANTILE LAW

Course No : COM103

Class : B.COM( PROFESSIONAL)-MBA DUAL DEGREE

Term : 1st

Section : S1009

Batch : 2010 – 2014

Max. Marks : 15

PART-A
Q.1 A power of attorney was given from amol to bhushan, his agent to present the
document for registration. Amol died before the document was presented for registration.
The registrar was aware of the death of A and registered the document. Examine the
position

Answer: In this case, Anmol died before the document was presented for registration and
registrar was also aware of the death of a and registered the document. In this case Bhushan is
bound to take all reasonable steps because when an agency is discharged by the principal dying,
the agent is bound to take so, on behalf of the representatives of his late principal, all reasonable
steps for the protection and preservation of the interests entrusted to Bhushan his agent for taking
all legal steps.

Q.2. A engaged B, an auctioneer to sell some property on the terms that he should receive
his due commission of Rs. 500. B , however received Rs. 200 as commission from the
purchaser secretly. Discuss the rights of A and B.

Answer: RIGHTS OF A (PRINCIPAL)

1)In this case if B without the knowledge and assent of A makes any secret profits out of the
purchaser , A has the right to recover them from B. Not only this, B also take away his right to
any commission in respect of the transaction .Where B makes a secret profit , the contract with
the third party is not rendered void .

RIGHTS OF B (AGENT)

1)In this case B is entitled to his agreed remuneration or if there is no agreement to a reasonable
remuneration. But in the absence of any special contract , payment for the performance of any act
is not due to B until the completion of such act .

Q.3. P. a solicitor entrusted all his work to his clerk and rarely attended to it himself. The
clerk induced to sign a conveyance of his property under the impression that it was mere a
power of attorney. Later he sold the property and absconded with the money. The client
sues P. Is P liable?

Answer: In this case as the Agent/clerk acts on the behalf of P a solicitor who entrusted all his
work to his clerk and never attended to it himself. So when the clerk induced a sign of the
conveyance of his property under the impression that it was mere a power of attorney so in
this case the client should definitely sue P and he will definitely be
liable.
Q.4. At a Sale by auction without reserve the auctioneer is instructed not to sell for less than
a certain price. The auctioneer accepts the highest bonafide bid which is lower than that
price. Is the auction valid?

Answer: As in this case auctioneer accepts the highest bonafide bid which is definitely lower
than that the price that was fixed by the owner.This is a valid a aution because as it was a highest
price.and noboby is willing to pay that amount for that property.

Q.5. P instructed his agent A to sell a picture at a named price. P died. Afterwards, before
the fact of his death became known to A, A sold and delivered the picture. Was this sale
binding on the P’s executors?

Answer: :In this case P has instructed his agent A to sell a picture at a named price and aft
erwords P died .So as in this case A is unaware about the death of P so, this case is a valid
sale. If A knew about the of the p death and he still sells the picture then in that case it will be not
a valid sale. So , in that. This sale will bind on the P’s executors.

Q.6. A enters into a contract with B to sell him 200 bales of cotton. But afterwards, he
discovers that B was acting as an agent of C. discusses what A can sue.

Answer :As in this above case A enters into a contract with B to sell him 200 bales of cotton but
later it was discovered that B was acting as an agent of C. So in this case A can sue both B and C
because in a contract with an agent for an undisclosed principal ,the third party may select to sue
either the principal or the agent or both.

Q.7. P sends his agent A to buy certain goods on credit for him. Later he pays for the goods.
On another occasion, he again sends A to buy goods but pays sufficient amount to A for the
purpose. A, however buys goods on credit from the old merchant. After some time, A runs
away. Is P bound to pay the merchant?

Answer:In this case P sends his agent A to buy certain goods on credit for him. But after some
time, A runs .In this case took about that P is bounded to pay the merchant as P sends A as an
agent on prior occasions. Agency by holding a out is a branch of agency by estoppel :so In this
case, a prior positive or affirmative act on the part of the principal is required to establish agency
subsequently.
Part-B
Q.8. A agrees to sell his two second hand cars on the terms that the price was to be fixed by
C. B takes the delivery of one car immediately. C, however, refuses to fix the price. A asks
for the return of the car already delivered whereas B insists on the delivery of the second
car to him for a reasonable price of both the cars. What shall B have to pay?

Answer:The parties may agree to sell and buy goods on the terms that price is to be fixed by the
valuation of the third party.If the third party or does not make the such valuation the agreement
was becomes void.But if the goods of any part thereof have been delivered to and appropriated
by the buyer he shall pay a reasonable price therefore.If the third party is prevented or exploiting
from making the valuation by the fault of the seller or buyer, the party not in fault may maintain a
suit for damages against the party in fault.So B has to pay the amount decided by C.

Q.9. A businessman sold 20 quintals of mustard oil to B. Before it could be delivered, the
government of India requisitioned the whole quantity lying with the businessman in public
interest. B wants to sue the businessman for the breach of the contract. Advice B If he really
can sue?

Answer: : In this case tells that B cannot sue or claim any damages from A who sold 20 quintals
of mustard oil. Before it could be delivered, because the government of India requisitioned that
the whole quantity lying with the businessman in public interest.

Q.10. A sold to B 200 bags of groundnuts of a special variety which were lying in a
warehouse. Unknown to A, 50 bags have already been stolen. A tendered the delivery of 150
bags. Discuss if the sale is void?

Answer In this case A sold to B 200 bags of groundnuts of special variety which were lying in
the warehouse.Out of that 50 bags have already been stolen.So A tendered the delivery of 150
bags.In this case the sale is void and B cannot be compelled anyone to take the remainder
because a contract for the sale of specific goods is void if at the time when the contract was
made ,the goods have,without the knowledge of the seller ,perished.This rule is based on the
ground of mutual mistake or impossibility of performance.

Q.11. A agrees to sell 100 tins of ghee to B out of 500 tins which are lying in the godown.
Unaware to both A and B, the tins have been destroyed due to breaking out of fire in the
godown. Discuss if A should pay for the breach?

Answer:As the tins of ghee have been destroyed by fire without the notice of A and B,he is not
liable to pay for the breach because a contract for sale of specific goods is void if at the time
when the contract was made,the goods have,without the knowledge of the seller,perished.The
same would be the case where the goods become damaged as no longer to answer to their
explaination or description in the contract.
Q.12. A person A buys a television set from B, who has in turn hired it from C. A has no
knowledge of this deal between B and C. does he gets the title of the television?

Answer:In this case A buys a television from B who has in turn hired it from C means that A
will be the owner hence in a hire purchase the owner have the right to hire it to someone further
hence in this case B had hired it from C . Even if he ‘A’ has no knowledge about the deal between
B and C, he will only be the owner and gets the title of the television.

Q.13. A cargo of wheat was sold. However, due to negligence in rainy season, fermentation
took place hence they could only be used now for making cheap methanol. Is the contract
void?

Answer:In this case the cargo of wheat was sold but due to negligence in the rainy season
,fermentation of wheat took place hence they could now only be used for making cheap
menthol.In this case the contract is void because as the wheat was no longer answered their it
was spoiled by the the rainy season and not in condition to use the wheat.so in this sale is made
for specific good. so a contract for sale of specific goods is void if at the time when contract was
made ,the goods have,without the knowledge of the seller,perished.This
rule is based on
the ground of mutual mistake or impossibility of performance.
Q.14. Balaji industries - partnership firm was dissolved and surplus assets were divided
among the partners in the same form. Is this a contract of sale?

Answer:In this case the Balaji industries have been dissolved,the surplus assets will be divided
among the partners in the same form but it was not a sale as the partners themselves were the
joint owners of the goods and they could not be both are sellers and buyers.therefore the profit or
the assets of the firm will be divided equally among to the partners as well as in the same form
also.