Moot Problem 2

Friday Batch
Course Teacher: Dr. Sridevi Krishna

A company “F K”, in the name of F K Paramahamsa Pvt. Ltd. operates in ladies wear. It earned huge
profits and after some years, decided to expand its business by introducing a number of varieties for
kidswear.

In order to achieve abovementioned objective, they approach the “S.K” in the name S.K Samrudhi Pvt.
Ltd., a large manufacturer of garments in kids wear. “FK” entered into contract for the purchase of kids
wear garments. The contract price was Rs. 6, 00,000/ and both parties agree upon a payment schedule. FK
Parmahamsa Pvt. Ltd., agreed to pay Rs.4, 00,000/ partially upon delivery of the kids wear clothes on 1st
January 2021 and a final payment of Rs. 2, 00,000/ on 1st March, 2021.

S.K delivered the garments to F.K on the agreed date i.e. 1st January 2021 as per the contract. However,
shortly after taking delivery of the clothes, F.K loses a profitable contract with its large booking agents
which resulted in a significant down in the demand for their kids wear garments. S.K, was also suffering
from financial difficulties due to a number of legal actions brought against it.

It was realized by S.K that F.K would be unable to pay the remaining amount of Rs. 2, 00,000. On 1st
March, 2021, S.K agreed to accept Rs. 50,000/ in full satisfaction of the debt. F.K duly paid such amount
on 1st March 2021.

On 3rd march 2021, S.K delivered the remaining clothes to F.K.

On delivery it was found that the clothes were of low quality. On 4th march a notice was sent to S.K., to
exchange the low quality clothes. The notice was acknowledged and accepted by S.K. However, no
exchange took place. On 20th March second notice was sent, which was neither acknowledged nor
replied.

Hence, F.K filed a suit against S.K and claims Rs. 1, 50,000 for breach of contract. S.K. contended that it
was not bound to pay the amount claimed in the suit because the clothes were of good quality.

Prepare issues and arguments on behalf of the parties