National Law University, Jodhpur

Commercial Transactions

Semester III

CA-2

Instructions:
a. Attempt both the questions.
b. Both questions carry equal marks.
c. Try to answer the questions citing the relevant provisions and case laws.
d. The email ids to which students have to send their completed answer scripts: 
i. online3ug02@nlujodhpur.ac.in, and
ii. onlinebackup3@nlujodhpur.ac.in  
e. Late submissions shall not be accepted. In case of plagiarism zero marks shall be
awarded.

Time: 55 Minutes

Question No. 1.

M/s Hazarilal and son’s is firm of art dealers which is owned and controlled by Anurag which
carried on business from a Connaught Palace gallery of New Delhi. In 2010 Anurag wanted to
sell two paintings which had been described in 2008 auction catalogue as being by Mr. G.
Munter an artist of the German expressionist school.

Anurag specialized in young contemporary British artists and had no training, experience or
knowledge which would have enabled him to conclude from an examination of the pictures
whether they are of Munter. He also contacted Rajendra who carried on business as art dealers at
C.P. Gallery specializing in the German expressionist school. He told Rajendra that he had two
paintings by Munter for sale and employee of Rajendra visited Anurag’s gallery to view the
painting. Anurag made it clear that he did not know much about the paintings and that he is not
an expert in them. Rajendra’s employees agreed to buy one of the paintings for Rs.1,00,000/-
without asking any questions about the proverance of the painting or making any further
inquiries about them. The invoice for the paintings described it as being Munter.

The painting was later discovered to be a forged and Rajendra sought repayment of the purchase
price, claiming, inter alia, that the contract is for the sale of goods by description, therefore could
be avoided on the grounds of mis-description or because the painting was not of merchantable
quality.

Rajendra brought a suit in the Tis Hazari District Court of Delhi for repayment.

Argue and decide the case citing relevant provisions and case laws.
Marks 5
Question No.2

Rational Law University, Jodhpur, which is established under the Act No.22 of 1999, invited
tenders for the supply of paints of required specifications. The plaintiff company’s tender was
accepted. A contract was made. According to the terms of the contract, ‘goods’ were to be
inspected by the Inspector for the ensuring the quality. The dates of delivery of the goods were
fixed. The delivery date was extended many times and finally extended to a particular date. The
plaintiff failed to supply the goods in the extended time as well. The Rational Law University,
Jodhpur terminated the contract without giving a notice. The plaintiff’s contention now is that
time of delivery is not the essence since it was extended from time to time by the University. It
would appear there from conduct of the Rational Law University, Jodhpur that it did not consider
the fixed time to be a condition precedent and at the most, it was warranty and action of the
Rational Law University, Jodhpur in cancelling the contract was an anticipatory breach and
would entitle them to damages.

Argue the above case from both sides citing relevant provisions of law(s) and case laws. Suppose
you are a judge, how would you decide the case?

Marks 5