Q.

1 PRINCIPLE 1 :A wagering agreement can be defined as an agreement alone by

which two persons professing to hold opposite views touching the issue of a future
uncertain event, mutually agree that dependent upon the determination of that event, one
shall win from other and that event’ one shall win from other and that and that the other
shall pay to him , a sum of money ,neither of the contracting parties have any other
interest in the contract other that the sum at stake ,there being no other real consideration
for making the contract. A wagering contract is void.
Principle 2: a contingent contract is a contract to do o not to do something, if an event
collateral to the contract, does or does not happen.
Facts: a and b enter into an agreement whereby A promises to pay B ,a sum of RS.100,000/-
if b’s car meets an accident .the car actually meets with an accident and B demands payment
of money from A. A refuses performance on the ground that the agreement was a wagering
agreement, whereas B demands performance on the ground that it was a contingent contract.
B files a suit against A. if you were asked to decide the issue as a judge, you would decide
what:
(a) Declare that the agreement is a wagering agreement, thus void and refuse to enforce
the agreement.
(b) Declare that the agreement is neither a wagering agreement nor a contingent contract.
(c) Declare that the agreement is a contingent contract and enforce the same.
(d) None of the above.
SOLUTION: C
EXPLANATION: here the agreement is contingent contract because A promises to pay B, if
his car meets an accident. The contract comes into existence as soon as A, makes the promise
however A becomes liable only once the collateral event that is the accident happens.

Q.2 PRINCIPLE: an agent is person employed to do any act for another or to represent
another in dealing with third persons. The person for whom such act is done, or who is
represented, is called the principal.
FACTS: ram moves to new city Mathura. Before moving he asks his friend shyam to appoint
a servant for him to do his daily chores. Shyam appoints aman as ram’s help. After ram
moves to the city aman joins him at his home and starts working for him. AMAN DURING
THE course of employment buys household items from ali, the local grocer without paying
on the promise that ram shall pay for the items. aman knows the arrangement. One day ali
asks ram for the payment of the items bought by aman, ram refuses saying that aman had no
express authority to act on his behalf. Decide whether aman is an agent of ram?
(a) Aman is an agent of ram as he had implied authority to act on his behalf .aman
was aware of the arrangement and never objected to the same.
(b) Aman is not an agent of ram, as ram never expressly authorized aman to transact
on his behalf thereby binding him contractually.
(c) Aman is an agent of ram for all his acts as he was appointed by shyam, at the
request of ram.
(d) None of the above.
SOLUTION: A
EXPLANATION: here aman is having implied authority since aman is not
appointed by ram, aman is appointed by ram’s friend shyam but aman is working
only for the ram so aman will be regarded as an agent of ram.

Q.3 AND Q.4 HAVE COMMON SETS OF PRINCIPLES AND FACTS

PRINCIPLE 1: delivery of goods by one person to another for some purpose,

upon a contract that they shall when the purpose is accomplished, be returned or
otherwise disposed of according to the directions of the persons delivering them is
called bailment. The person who delivers the goods is called the bailor and the
person to whom goods are delivered is called the bailee.

PRINCIPLE 2: bailor is bound to disclose the faults in the goods of which he is

aware and which materially interferes with the use of the good or which exposes
the bailee to extraordinary risk. A bailor for hire is liable for damage irrespective
of his knowledge of faults in the goods.

FACTS: X and Y are friends. X was going out of station for two months and Y
asked him for his scooty for his daily use X told Y that he could keep the scooty
as X would be buying a new scooty soon upon his return. There were faults in the
brakes of the scooty and X was not aware of it. Y afterwards gave the scooty to Z
for a day in lieu of rs.500. as Z needed to go to his home. When Z was driving the
scooty on the highway, at high speed, suddenly a bullock cart came in front of
him. As he tried to apply the brakes, the brakes failed resulting in injury to Z.
decide:

Q.3 whether X has bailed his scooty to Y?

(A) X has not bailed his scooty to Y as the necessary conditions of bailment have
not been fulfilled.
(b) X has not bailed but sold his scooty to Y.
(c) X has bailed the car to Y so as to enable him to be bail it to Z.
(d) none of the above.

SOLUTION : C
EXPLANATION: Here the essential elements of bailment is that the goods
delivered must be upon a contract to be returned or otherwise disposed of. So
therefore there was no bailment between X and Y.

Q.4 whether a contract of bailment has arisen between Y and Z, making Y liable:

(a) A contract of bailment has arisen between Y and Z but Y cannot be held liable
as he was unaware of the fault.
(b) A contract of bailment has arisen but Y cannot be held liable as Z himself was
driving the scooty very fast.
 (c) A contract of bailment has arisen and Y can be made liable.
(d) None of the above
SOLUTION: C
EXPLANATION: here the scooty was delivered to Z for a purpose that facilitating Z’s visit
home upon an understanding that the Scooty to be returned at the end of the day. Further Y is
liable for the injuries caused to him.

Q.5 PRINCIPLE: mere exposure of goods for sale by a shopkeeper indicates to the public
that he is willing to treat it amounts to invitation to treat.
FACTS: ashu advertised a sale by auction in the city Delhi. Tarun who lives in Agra comes to
known about this auction. So he travelled from Agra to Delhi by airplane. When he reached
Delhi he comes to known that ashu who is the auctioneer has cancelled the auction without
giving any prior notice to anyone. Tarun brought an action against ashu to recover the
expenses of his travel as he travelled via airplane from Agra to Delhi which incurred him a
heavy cost. Decide whether ashu is liable or not?
(a) Ashu is not liable as there was no contract between him and tarun.
(b) Ashu is liable as he didn’t have any prior notice.
(c) Ashu is liable as he showed negligence
(d) None of the above.
SOLUTION: A
EXPLANATION: tarun was not entitled to recover the same as there was no contract
between the two parties about the auction. It was merely an invitation to treat.