Nirma University

Institute of Law
Continuous Evaluation,September 2020
B.A./B.Com., LL.B. (Hons.), Semester-III
2BL341/2BL335 Contract Law II

Roll/Exam No. Supervisor’s Initial with date

Time: 2 Hours 30 Minutes Max. Marks : 40

Instructions: 1. Attempt all questions.
2. Figures to right indicate full marks

 
Q.1 A policy covers- accidental fire but specifically excludes earthquake fire.
There is an earthquake fire somewhere near the insured building. Due to the
prevailing wind, the fire was in the air and the air carries this fire and sets the
property of insured under fire. The fire caused by earthquake is an excepted
peril, but fire caused due to any other reason is an insured peril. Whether the
insured will be able to claim insurance?
(300
words) (05)
  B. The insured A took two separate insurance policies from General
Insurance Company and Bajaj Alliance Insurance company. Both the policies
were taken by A, one on his name and one on his sister’s name. Sister owned
half of the property on which insurance was taken by A. There was a fire in the
premises which was covered under both the insurance policies. The insurance
companies were liable to pay. The insured’s insurance company paid the
amount in full and asked for the contribution from the other insurance
company.  Would the principle of contribution apply?
If in the above facts, assume the property was solely owned by A and he had
taken two insurance policies on the same property from two different
companies General Insurance and Bajaj Alliance and the property became a
total loss. Bajaj Alliance had an exclusion clause in its contract wherein it had
mentioned that if the same property and same interest is insured by another
insurance company the liability to pay does not arise. The property was
damaged by fire, and General Insurance paid the loss in total and claimed
contribution from Bajaj Alliance. Is Bajaj Alliance liable to contribute? Would
the situation have differed where the insured failed to give notice to Bajaj
Alliance within 10 days of loss and assume there is no exclusion clause, could
general insurance after making the payment in full, claim contribution after
Bajaj Alliance has revoked their liability?
(500 words)

(15)

Q2. In the absence of any usage or custom of trade to the contrary, the implied
authority of a partner does not empower him to do certain acts. Explain the
concept of implied authority and state the acts which are beyond the implied
authority of a partner with examples. Point out the extent of partner’s implied
authority in case of emergency, referring to the provisions of the Indian
Partnership Act, 1932.
(500 words)
(10)

Q3. Mr. M, Mr. N and Mr. P were partners in a firm, which was dealing in
refrigerators. On 1st October, 2018, Mr. P retired from partnership, but failed
to give public notice of his retirement. After his retirement, Mr. M, Mr. N and
Mr. P visited a trade fair and enquired about some refrigerators with latest
techniques. Mr. X, who was exhibiting his refrigerators with the new
techniques was impressed with the interactions of Mr. P and requested for the
visiting card of the firm. The visiting card also included the name of Mr. P as a
partner even though he had already retired. Mr. X. supplied some refrigerators
to the firm and could not recover his dues from the firm. Now, Mr. X wants to
recover the dues not only from the firm, but also from Mr. P. Analyse the above
case in terms of the provisions of the Indian Partnership Act, 1932 and decide
whether Mr. P is liable in this situation.
(500 words)
(10)