PRACTICAL PROBLEMS Anemp( the following prrbiems, giving reasons* for your answers; LA iuvites & tp a dimer. 2 ercapts the invitation’ A made elaborate ae Scanned with CamScannerNature anp Kinps of Contracts 21 ment but 3 failed to (urn up. Can A sue B for the loss he has suffered? [Hint. No, A cannot suc B for the loss he has suffered because the agreement was of & social nature and hence lacked the intention to create legal relationship — one of the essentials of a valid contract.) 2. M agrees to pay N Rs 100 and in consideration N agrees to write for him 100 pages within five minutes. Is it a valid contract? (Hint. No. it is not a valid contract, It is’ a void agreement because as per 56 “an agreement ta do an act impossible in itself is void." Section Scanned with CamScannerPRACTICAL PROBLEMS s for your answers: to a person e Rs 10,000 10 Beir t0 Answer the following problems, giving reason: and files 1. Harish says in conversation to Suzesh that he will giv Whosoever marries his daughter. Alok marries Harish’s daughter recover Rs 10,000. Will he succeed? an 0) [Hint. No, Harish has expressed his wish only, and hias never made with a view to obtaining the assent of the other party.) . rice tag Of 2..¥ sees a book displayed in a shelf of a book shop with a ees refuses Rs 85. X tenders Rs 85 an the counter and asks for the book. The bool 1 does not to sell saying that the book has already been sold to someone else and tithe book have another copy of that book in the stock. Is the bookseller bound to se! tox? invitati [Hint. No, a display of goods with prices marked thereon is only an ba for offer, and not an offe: itself, Hence the bookseller is free to accept the offer not} fer 3. B offered to sell his ear to.4 for Rs 95,000. A accepts to purchase it (or Rs 94,500. B refused to seli the car for Rs 94,500. Subsequently 4 agrees to purchase the car for Rs 95,000 but B refused to sell the car. A sues B for the specific performance of the contract. Will he succeed? [Hint. No, B's offer comes to an end by the counter offer of A, and there was Anson's Law of Contract, 23rd Ed. p.55. Scanned with CamScannerOFFER AND ACCEPTANCE 39 ffer available for acceptance subsequently.] 4, P sold his business to Q without disclosing this to his customers. Af, an old customer sent an order for goods to P by name. Q. the new owner, executed the order. Is Af bound to accept the goods? {Hint. No. AM is not bound to accept the goods because a specific offer made to P can be accepted only by P and none else (Boulton vs Jones).] 5. B offered to sell his house to 4 for Rs 50.000. 4 accepted the offer by post. On the next day’ A sent a telegram revoking the acceptance which reached B before > the letter. Is the revocation of acceptance valid? Would it make any difference if both the letter of acceptance and the telegram of revocation of acceptance reach B at the no 0! same time? {Hint. Yes. the revocation of acceptance is valid because the acceptor may revoke his acceplance at any time before the letter of acceptance reaches the offeror. if the letter of acceptance and the telegram of revocation of acceptance reach B at the same time, the formation of contract will depend on the fact that which of the two is opened first by B. If B reads the telegram first. revocation is valid but if he reads the letter first. revocation is not possible.) - Scanned with CamScannerDiscuanae oF Conrract 141 PRACTICAL PROBLEMS tempt the following problems giving reasons for your answers We unloading of a ship was delayed beyond the date agreed ipowners owing to a strike of dock Iabourers. On a suit by the ‘shipowners for aime the eso psy of pevrmance wa aed. Ae he shipown th the © atthe shipowners ate Bound sccm the sit She by wakenen seen pvtrmance only ict of expensive an ot ose ant as se reg ever unde the ews ory afterwards he breaks off repeatedly begging, hin to adhere 1 Just before the expiry of two years, a change in fav. makes tiles! Ac ton te tm ay 8 Othe expt of tvo yeas. sues forthe eae ofthe Writ she succeed? int No. B wil not succeed Senate when se ies the sit for beach, the enetas alety een dahaied by saperseing impossibility and 4 nile cones vantage oF tha (Rett 10 “Aniiatory Bren) ‘nine merchant contact to sell toa customer five dozen bats of & esi and of Change Ath tne of the contact te wine mera pari Wot wime had Ween destroyed by fe, but he was not ava of hs ft wink fhe eect on the legal ig of the pis? {tine The legal sights ofthe pares remain wnafected is ony the deste on Mapcite sebjecemaer which cannot be replaced, thatthe contract i Jt ‘on tuner impossibility. Axi isnot s0 hee and the Bots can be procures shaders ete, the wine merchant i bound to supp} {°F ges to sl his scooter to» moh afer the dt of the contact, a sus es 10 days othe contact he sel the cole to C. Thereupon B sues A for ies ety ental contends that he cou stil efor the contact By ePU= tne the scooter from. Decide the st ‘Mine ttre there 1 anticipatory breach of contact by conduc from As side ant peter hs coteation will not be upheld Bi enlile to eet to eat He re rescinded and sue forthe breach of conc edit) Scanned with CamScannerPRACTICAL PROBLEMS Attempt the following problems, giving reasons for your answers: 1. A contracts to pay a sum of moncy to B on a specified day. A does not pay the amount on that day. B in consequence of not receiving the money on that day, is unable to pay his debts and is totally ruined, B claitns heavy damages. Advise 4, [Hint. 4 is liable (0 pay interest only from the specified day upto the date of payment, In other words B can claim only ordinary damages. B cannot claim heavy damages unless A had notice of the special circumstances resulting in the special loss at the time of entering into the contract.) 2. A agreed to erect a plant for B by 31st March, 1976. A further agreed to pay Rs 500 per month as damages in case of delay beyond the agreed date. A was late by four months. B sued A for Rs 4,500, the actual loss caused to him as a result of the delay. What damages will you award, and why? -[Hint B is entitled to recover Rs 2,000 only, because when a sum is named in the contract as the amount to be paid in case of breach, the court will allow only (1852), 1 De G.M. & G. 604. '*(1901), 2 Ch. 799, Scanned with CamScannerRementes For BreacH oF Contract [6% able compensation so as to cover the actual loss sustained, within the limits a gin the contract.) satel, A employs B as manager of his factory for a term of three years al a monthly ‘of Rs 3.000. Without any lapse on the part of B, A dismisses him after two sh * service. B could not get an alternate job elsewhere and files a suit for rr ees for breach of contract against A. Will he succeed? If yes, assess the amount mjgmages recoverable by him. of Msint. Yes. B will succeed. If it cannot be proved that B has failed in his duty mitigate the loss subsequent upon the breach. B will be entitled to full salary for a whole of the unexpired period of service i.e.,one year. Hence the amount of gumages recoverable by B amounts to Rs 36,000.] 4, A mate was engaged for a lump sum to be paid after the completion of woyage. The mate dies when only 2/3 of the voyage was completed His legal representatives claim damages on quantum meruit. Decide. (Hint. The legal representatives of the mate cannot recover anything as the doctrine of quantum meruit is inapplicable under the circumstances (Cutter vs powell, 6 T-R. 320). The rule of law on the point is that “party in default’ cannot gue upon quantum meruit, if the contract is ‘indivisible’ and a lump sum is to be raid for the job 2s a whole, because no money is due till the job is done.] Scanned with CamScannerPRACTICAL PROBLEMS ‘Attempt the following problems, giving reasons for your answers: 1. A gives some cloth to a tailor for making a suit of it. The tailor’s charges aye settled at Rs 1,000. After the suit is ready A tenders Rs 1,000 for the charges put the tailor refuses to deliver the suit till A pays an old debt of Rs 200. Is the tailor gniled 10 40 SO? (Hint, The tailor is not entitled to refuse to deliver the suit for the old debt of fs 200, because a bailec, who renders a service involving the exercise of labour or «killin respect of the goods bailed, so as to confer an additional value on the isentitled only to a tight of ‘particular lien’ i, a right to retain only that particular thing in respect of which the charge is due. (Sec. 170) 2. A lady employed a goldsmith for the purpose of melting old jewellery and raking new ones. Every evening as soon as the goldsmith’s work for the day was aver, the lady used to receive the half made jewellery from the goldsmith and put it into a box which was left in a room in the goldsmith’s house of which she resined the key. One night the box was stolen. fs the goldsmith liable to make good the Loss? : [Hint. The goldsmith is not liable to make good the loss of jewellery because he cannot be said a bailee of the goods. The bailment must be taken to have come to an end as soon as, the lady was put in possession of the half made jewellery. Again, the lady herself took away the key and therefore there was no effective delivery of the contents of the box to the goldsmith cither actually or construc- ively. As such the goldsmith cannot be regarded as bailce thereof and cannot be nade liable for the loss (Kaliqperumal Pillai vs Visalakshmi, A.LR., 1938, Mad. md 3.4, finds a horse which carries 2 reward of Rs 200 to the finder offered by B, the owner. A télegraphically informs B about the horse and spends Rs 15 thereon. Becomes to take the horse after two days and during the intervening period A spent Rs 80 on feeding the horse. 4 returns the horse to B without insisting prepayment of his lawful charges of Rs 95 and the amount of reward. Subsequently B refuses tb pay. 4 files a suit against B for the recovery of Rs 295. Will he succeed? Scanned with CamScanner198 Mexcamus Law the recovery of the amount of reward, hs 28 becase here tere isa contact between A and BB while offering aoa en genral omer which 4 accepted hy returing the Bore, But cag, ceva mount of expenses /e, Rs 95 as there iS fo COMBE DIWEEn the yg tee cad lg cannot exercise the right of Hen as posesion Bas been py eT ee with B jewels worth Rs 60,000 and borrows Rs 30,000 ay yp percent ares et annum, promising 10 repay the moun’ and ‘redeem the jewel reine year, B, having aprenension about the safety of the jewel, because op sarin burlves in he vown, not only insures the jewels bu alo Buys x sto sora tost of Rs 600, there being no safety valli that town and keep the jewel, sl cafe: Now, when A comes to repay the loan, claims the amount due fy pri T insurance and cost of the safe. But A admits liabilny ‘only for the principal and interest. Decide? {Hint Bis entitled to recover from A the amount ofthe principal andthe interest plus the cost of insurance and of the safe. There is no dispute so far asthe mount of principal and interest is concerned. As regards cost of insurance and of the safe it should be noted that under Section 175, B, the pawnec, is entitled to these expenses also as they have been incurred for the preservation of the goods pawned and are such which any person of ordinary prudence would reasonably incur in the given circumstances.) S.B handed her jewellery to M to value it and tell her what advance he could make on them, it being agreed that M was to keep the jewellery as security if he trade the advance. On the same day M pledged the jewellery with 4, a pawnbroker, ‘who advanced £1,000 in good faith. Four days later M advanced £500 to B on the Security of her jewellery. Subsequently on coming to know of the transaction be- tween Mf and A, B paid the amount she had borrowed and sued 4 for the recovery of her jewellery contending that when M advanced the money, no valid pledge could arise as there was no delivery of goods in pursuance of the contract of pledge land M had already parted with the possession of the goods by pledging them with ‘A. Will B succeed? Give Yeasons. {Hint No, B will not succeed as the pledge is valid, The facts in the instant case are similar to Blundell vs Auten (1921.3 K.B. 233). In that case it was held that the pledge was vali. Delivery made four days before was a good delivery for the purpose of creating a pledge, whenever that pledge was created. “Delivery of pos- Sestion and advance need not be simultancous and a pledge may be perfected by delivery before or after the advance is made” (Lallan Prasad vs Rakmat Ali, ALR. 1967, SC, 1322) B would have succeeded had she made the payment of £500 along with interest to A instead of M because the pledge in between M and A was valid only tothe extent of M's interest inthe jewellery, namely, £500 (amount of advance to B). Of course, on making the payment to M, B has a right to sue M for the redemption of her je elt ty.) [Hint, A will succeed only for Scanned with CamScannerPRACTICAL PROBLEMS a ° answers: ‘as agent of C and know of it. C u decide? ‘tempt the following problems, giving reasons for your 1, A enters into a contract with B for buying B's motor car shout C's authority. B repudiates the contract before C comes (0 witivently ratifies and contract and sues (0 enforce it, How would yo Hint, Cis entitled to enforce the contrat or claim damages. tis a case © agency by raticton, where the agency comes into existence from the moment the Ty ted and not from the time when the principal ratified. Hence B's repudiation She contract is inoperative. (Bolton vs Lambert)] : 9. A policeman, thinking that the driver of an omnibus was drunk, ordered him scontinue driving, the omnibus being then only 2 quarter of a mile from its n, The driver and the conductor then authorised a person standing nearby ve the omnibus home. That person drove the omnibus negligently and injured ‘The boy claims damages from the owners of the omnibus. Are the owners w di wedi 1 boy. ible? [Hint The owners are not liable to the boy. It is not a case of agency by aecessiy (which does not arise if the agent can communicate with his principal) the owners were only a quarter of a mile away and m'ght have been easily communicated with. There was thus no necessity for the driver and conductor ta employ another person.) 3.4 enters into 2 contract with B to sell him 1,000 bales of cotton and after- vas discovers that 8 was acting as agent of C. Advise 4 as to the person against whom he should bring s suit for the’ price of the cotton, [Hint. 4 may sue either B or C of both, for the price of the cotton. It is a case af oni a! and , nen” ip ouch # once Sec. Scanned with CamScanner228 Mercantite Law gent for selling his (4's) wateh. F 1s instructed to sey $60, P buys the watch himself and hands over Rs gy ithe price and does not ask the name of the buye wv weeks later after Phas resold the watch 4. 4 employs P as his a1 the watch for not less than Rs to A, who is quite satisfied wit A discovers the identity of the buyer a fe for Rs 10, Can A claim Rs 20 from P? {Hint, No, A cannot claim Rs 20 from P, According, to Sections 215 and 214 of the Convract Act, if the dealings of the agent have not been disadvantageous 1g ial, he cannot claim the profit made on subsequent sale by the agent. even the pri though the agent dealt or bis own account without first obtaining the consent of the principal.) . 5, An agent, authorised by a power of attorney t0 operate a business but nat i borrow money, asked for a loan on a representation that he is authorised to borrow and produced the power of attorney for the perusal of the lender. But the lender dig rot read it and advanced a loan. Is the principal bound by the loan? {Hint, No, the principal is not bound by the loan because the borrowing by the agent, in the instant case, dozs not come within his ostensible authority. As the power of :ttomey wes produced for the perusal of the lender. he had constructive notice that the agent had no pewer to borrow, and therefore he is bound by the restriction cn the agent's ostensible authority and cannot recover the loan from the principal (Jocabs vs Morris, '962, 1-Ch. 816).} 6. A, siho owes B Rs 10,006, appoints B as his agent to sell his landed property at Delhi and after paying himself (B) what is due to him, to hand over the balance to A. Can 4 revoke his authorty delegated to 8? THint. No, A cannot revoks the authority delegated to B. The doctrine of agency coupicd with interest applies in the instant case.) Scanned with CamScanner