2022

“40 Cases Study

of Mercantile
Law”
 “40 Cases Study of Mercantile Law”

Prepared for:

Sharfuddin Ahmed

Lecturer

Department of Finance

Faculty of Business Studies

University of Dhaka

Prepared by:
Group: Moneypenny
Group members ID Number
27-
27-
27-
27-
Shuvo Aich 27-214

…………, 2022

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-----------, 2022

Sharfuddin Ahmed

Lecturer

Department of Finance

Faculty of Business Studies

University of Dhaka

Dear Sharfuddin Ahmed Sir,

Here is the report on the observational study on “40 Case solving of mercantile Law” that you asked us
to submit --------,2022.

In this report we have tried to represent a clear and relevant overview on Different types of law used in
Business through case solving. The report has also been prepared creating some imagined characters for
constructing cases. And, according to our learning objectives in the lessons, we maintained different
laws of including Indian Contract Act, 1872, The Sale Goods Act,1930, The Negotiable Instruments Act,
1881 etc. solving these cases.

We appreciate your choosing our group Moneypenny, for this assignment. If you should need any
additional research or implementing our recommendations, please contact us.

Sincerely yours

On the behalf of Moneypenny

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 Table of Contents
Executive Summery.....................................................................................................................................5
Case: void contract......................................................................................................................................6
Case: Executory contract.............................................................................................................................6
Case: Void Agreement.................................................................................................................................7
Case: Implied Agreement under Agency by Estoppel..................................................................................7
Case: Agency by Ratification........................................................................................................................8
Case: Apparent Agent’s Authority...............................................................................................................9
Case: Discharged by mutual consent or agreement under Novation..........................................................9
Case: Anticipatory breach of contract.......................................................................................................10
Case: Agreements to compensate for past voluntary service....................................................................10
Case: When goods are in a deliverable state.............................................................................................11
Case: Risk ‘prima-facie’ passes with property...........................................................................................11
Case: When goods have to be put into deliverable state..........................................................................12
Case: Uncertain contingency.....................................................................................................................12
Case: A stranger to a contract cannot sue.................................................................................................13
Case: Exception to the rule “No Consideration, No Contact”....................................................................13
Case: Illusory Consideration......................................................................................................................14
Case: Undue influence (conscionable transaction)....................................................................................14
Case: Fraud, a civil wrong..........................................................................................................................15
Case: Free consent (Right of rescission)....................................................................................................15
Case: Mistake as to the identity of person contracted with......................................................................16
Case: Illegal Contract- Restraining personal liberty...................................................................................17
Case: Consideration unlawful in part.........................................................................................................17
Case: Restitution in illegal agreement.......................................................................................................17
Case: Related contracts to an illegal agreement.......................................................................................18
Case: Minor`s agreement..........................................................................................................................18
Case: Agreement in restraint of trade.......................................................................................................19
Case: Sales of goodwill..............................................................................................................................20
Case: Uncertain Agreement.......................................................................................................................20
Case: Agreement of Persons of unsound mind..........................................................................................20
Case: Agreements of Disqualified Person..................................................................................................21

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Case-1:.......................................................................................................................................................21
Case-2........................................................................................................................................................22
Case-3:.......................................................................................................................................................22
Case-4:.......................................................................................................................................................23
Case-5:.......................................................................................................................................................23
Case-6:.......................................................................................................................................................24
Case-7:.......................................................................................................................................................24
Case-8:.......................................................................................................................................................25

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 Executive Summery

…………………………………………………………………………………………………………………………………………………………………

5
 Case: void contract

Sadia agrees to sell Saimon after one month 10 quintals of wheat at $1625 per quintal and receives $500
as advance. Soon after the contract, private sales of wheat are prohibited by an act of the legislature.
Saimon filed a suit against sadia to return the sum of $500 Taka. What will be the verdict from the
court?

Solution:

In this case the court will dismiss the suit and give verdict in favor of Saimon.

Reason:

First of all, it is a case of void contract. Because in the eye of law “A void contract is valid when it is
entered into, but subsequent to its formation something happens which makes it unenforceable by law
and it becomes void.” And we can see this scenario in the above case. So, the court will dismiss the case.
Secondly, the court will give verdict in favor of Saimon Co. Because in the eye of law “Obligation of
person who has received advantage under such void contract is bond to restore it,or make
compensation for it, to person from whom he received it.” So, the verdict will be, “Sadia must return the
sum of $500 taka to Saimon”

Case: Executory contract

Sadia promises to sell his car to Saimon for $100000 cash down, but Saimon pays only $10000 as earnest
money and promises to pay the balance on next Sunday. On the other hand, Sadia gives possession of
car to Saimon and promises to execute a sale deed on receipt of the full amount. But after a few days,
Saimon refused to pay due money to Sadia and claim to back his given money. Sadia filed a suit against
Saimon. What will be the verdict from the court?

Solution:

In this case, the court will dismiss the suit and give verdict in favor of Sadia.

Reason:

First of all, it is a case of executory contract. Because in the eye of law “A contract is said to be executory
when there remains something to be done under the contract on both sides. “And we can see this
scenario in the above case. So, the court will dismiss the case. Secondly, the court will give verdict in
favor of Sadia. Because according to the contract Saimon is bond to pay the due amount. He can’t refuse
to pay as it is an executory contract. So, the verdict will be, “Saimon must pay the due amount to Sadia
as it is an executory contract.”

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 Case: Void Agreement

Saimon agrees to pay Sadia $1000 and in consideration Sadia agrees to write for him 100 pages within
five minutes. So, Saimon pays the money to Sadia. But Sadia fails to do so. Saimon filed a suit against
Sadia to back his given money. What will be the verdict from the court?

Solution:

In this case, the court will dismiss the suit and give verdict in favor of Saimon Co.

Reason:

First of all, it is a case of void agreement. Because in the eye of law, “An agreement to do an act
impossible in itself is void.” And we can see the scenerio in the above case. So, the court will dismiss the
case. Secondly, the court will give verdict in favor of Saimon. Though it is a void agreement, Sadia is
bond to return money to Saimon as in the eye of law, “Obligation of person who has received advantage
under such void agreement is bond to restore it, or make compensation for it, to person from whom he
received it.” So, the verdict will be, “Sadia must return the money to Saimon.”

Case: Implied Agreement under Agency by Estoppel

Sabiha tells Sadia in the presence and within the hearing of Saimon that Sabiha is Saimon’s agent.
Saimon doesn’t contradict this statement and keeps quiet. Later on, Sadia enters into a transaction with
Sabiha believing honestly that Sabiha is Saimon ’s agent. After entering the transaction with Sabiha,
Saimon refused and claimed that he is not a part of this agency, even such an agency did not infect exist.
Sadia filed a suit against Saimon. What will be the verdict from the court?

Solution:

In this case, the court will dismiss the suit and give verdict in favor of Sadia Co.

Reason:

First of all, it is a case of implied agreement under agency by estoppel. Because in the eye of law,
“Where a person by his words or conduct has willfully led another to believe that certain set of
circumstances or facts exists, and that other person has acted on that belief, he is estopped or
precluded from denying the truth of such statements, although such a state of things did not in fact
exist.” And we can see the scenario in the above case. So, the court will dismiss the case. Secondly, the
court will give verdict in favor of Sadia. Because in the eye of law, Saimon is bound by this transaction
and he will be estopped from denying the existence of the agency, even though such an agency did not

7
in fact exist. So, the verdict will be, “Saimon is bound by this transaction even though such an agency did
not in fact exist according to agency by estoppel”.

Case: Agency by Ratification

The managing director of Sadia’s company, purporting to act as agent on company’s behalf, but without
its authority, accepted an offer made by Saimon, the defendant, for the purchase of some sugar works
belonging to them. Saimon, subsequently withdrew the offer but the company ratified the managing
director’s acceptance. Sadia’s company filed a suit against Saimon. What will be the verdict from the
court?

Solution:

In this case, the court will dismiss the suit and give verdict in favor of Sadia Co.

Reason:

First of all, it is a case of agency by ratification. Because in the eye of law, “Where acts are done by one
person on behalf of another, but without his knowledge or authority, he may elect to ratify or to disown
such acts. If he ratifies them, the same effects will follow as if they had been performed by his
authority.” And we can see the scenario in the above case. So, the court will dismiss the case. Secondly,
the court will give verdict in favor of Sadia’s. Because, Saimon is bound. In the eye of law, the
ratification, related back to the time of managing director’s acceptance this means, “The agency comes
into existence from the moment the agent acted and not from the time when the principal ratified.” An
offer once accepted cannot be withdrawn. So, the verdict will be, “The withdrawal of the offer was
inoperative according to agency by ratification.”

Case: Apparent Agent’s Authority

Sadia, is employed by Saimon, residing in London, to recover at Mumbai a debt due to Saimon Co. So,
Sadia adopts some legal process necessary for the purpose of recovering the debt without informing
Saimon. Saimon filed a suit against Sadia. What will be the verdict from the court?

Solution:

In this case, the court will dismiss the suit and give verdict in favor of Sadia.

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Reason:

First of all, it is a case of apparent agent’s authority. Because in the eye of law, “An agent having an
authority to do an act or to carry on a business has authority to do every lawful thing which is necessary
in order to do such act, or which is usually done in the course of conducting such Business.” And we can
see the scenario in the above case. So, the court will dismiss the case. Secondly, the court will give
verdict in favor of Sadia. Because according to the apparent agent’s authority, As Sadia is employed by
Saimon, she can adopt any legal step for recovering the debt without informing Saimon. So, the verdict
will be, “Sadia can take any legal process without informing his principal according to apparent agent’s
authority.”

Case: Discharged by mutual consent or agreement under Novation

Sadia is indebted to Saimon and Saimon to Sabiha. By mutual agreement Saimon ’s debt to Sabiha and
Saimon ’s loan to Sadia is cancelled and Sabiha accepts Sadia as his debtor. Later on, Sabiha refused to
accept Sadia as his debtor. Sadia filed a suit against Sabiha. What will be the verdict from the court?

Solution:

In this case, the court will dismiss the suit and give verdict in favor of Sadia.

Reason:

First of all, it is a case of discharged by mutual consent or agreement under Novation. Because in the eye
of law, “Novation occurs when a new contract is substituted for an existing contract, either between the
same parties or between different parties, the consideration mutually being the discharge of the old
contract.” And we can see the scenario in the above case. So, the court will dismiss the case. Secondly,
the court will give verdict in favor of Sadia. Because in the eye of law, “An offer once accepted cannot be
withdrawn” and in this case they were mutually agreed when the agreement occurred. So, no one can
refuse to accept their liability. So, the verdict will be, “Sabiha is bond to accept Sadia as his debtor.”

Case: Anticipatory breach of contract

Sadia agrees to sell his scooter to Saimon a month after the date of the contract. But just after 10 days
of the contract, Sadia sells the scooter to Sabiha. Saimon sues Sadia for the breach of contract. What will
be the verdict from the court?

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Solution:

In this case, the court will dismiss the suit and give verdict in favor of Sadia.

Reason:

First of all, it is a case of anticipatory breach of contract. Because in the eye of law, “An anticipatory
breach of contract is a breach of contract occurring before the time fixed for performance has arrived”.
And we can see the scenario in the above case. So, the court will dismiss the case. Secondly, the court
will give verdict in favor of Saimon. Because here anticipatory breach takes place impliedly by the
conduct of one of the parties. So, the verdict will be, “The scooter was sold to Sabiha before the fixed
time is valid under the anticipatory breach of contract.”

Case: Agreements to compensate for past voluntary service

Sadia and Saimon are business partners as well as friends for a long time. Sadia had a car accident last
month. Saimon donated blood and helped Sadia a lot during the of her illness. But Saimon did not
accept any payment from Sadia as he did it for their friendship. Sadia in gratitude promised to pay
$1,000 to Saimon’s younger brother Sakib. But later, Sadia being in poor circumstances, was unable to
pay. Sakib sues Sadia for the money. Will Sakib be able to recover the money? What will be the court`s
decision?

Solve:

No, Sakib won’t be able to recover the money from Sadia.

Reason:

The court will give the judgement that the agreement between Sadia and Sakib is not a contract at all
because of the absence of consideration. In this case Sakib’s elder brother, Saimon, voluntarily treats
Sadia during her illness. Apparently, it is not a valid consideration because it is voluntary whereas
consideration to be valid must be given at the desire of the promisor. The question is whether this case
is covered by the exception given in Section 25(2) which inter-alia provides: “A promise made without
consideration is also valid, if it is a promise to compensate a person who has already voluntarily done
something for the promisor.” Thus, as per the exception the promise must be to compensate a person
who has himself done something for the promisor and not to a person who has done nothing for the
promisor. As Saimon’s brother, Sakib, to whom the promise was made, did nothing for Sadia, so the
promise/agreement is not enforceable even under the exception.

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 Case: When goods are in a deliverable state

Sadia sells to Saimon a cow which is to be delivered to Saimon the next week. Saimon is to pay the price
on delivery. Sadia asks her servant to keep the horse separate from other horses. The horse, however,
dies before it is delivered and paid for. Who shall bear the loss?

Solve:

Saimon will bear the loss.

Reason:

It is a contract of sale of specific goods in a deliverable state. When there is an unconditional contract
for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer as soon
as the contract is made, and it is immaterial whether the time of payment of the price or the time of
delivery of the goods, or both are postponed. Therefore, the property in the cow passes to Saimon at
once at the time of contract. Hence Saimon should bear the loss.

Case: Risk ‘prima-facie’ passes with property

Saimon buys goods from Sadia and property has passed to him. But the goods remain in Sadia’s
warehouse. Before delivery of goods to Saimon, there is a fire in Sadia’s warehouse and all the goods are
destroyed. Saimon filed a suit in the court demanding that Sadia would bear the loss. Will Saimon win
suit?

Solve:

No, Saimon won’t win the suit. The court will give the verdict that Saimon should bear the loss of the
destroyed goods.

Reason:

As a general rule, the risk of the loss of goods is prima-facie in the person in whom the property is.
Section 26 provides the same effect, thus, “Unless otherwise agreed, the goods remain at the seller’s
risk until the property therein is transferred to the buyer, but when the property therein is transferred
to buyer, the goods are at the buyer’s risk whether delivery has been made or not”. So, Saimon must
bear the loss and pay the price of goods to Sadia, if he has not paid it so far.

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 Case: When goods have to be put into deliverable state

Sadia agrees to sell to Saimon the whole of turpentine oil lying in a cistern. It is further agreed that the
oil is to be put into casks by Sadia and then Saimon is to take them away. Some of the casks are filled in
the presence of Saimon, but before any are removed or the remainder filled, the whole is destroyed
accidentally by fire. Saimon claims that Sadia will bear all the loss. According to court’s verdict, will Sadia
bear the full loss?

Solve:

No, Sadia won’t bear the whole loss.

Reason:

Where there is a contract for the sale of specific goods and the seller is bound to do something to the
goods for the purpose of putting them into a deliverable state, the property does not pass until such
thing is done and the buyer has notice thereof. On the other hand, when goods are in adeliverable state,
the property in the goods passes to the buyer as soon as the contract is made. So, Saimon must bear the
loss of oil which had been put into the casks because in all these casks the property has passed to him as
nothing further remained to be done to them by the seller. But the property in the casks not filled up
remained in the seller, Sadia. So, Sadia has to bear the loss of those cases.

Case: Uncertain contingency

Saimon promises to pay Sadia for her services whatever Saimon himself will think right or reasonable.
Later, being dissatisfied with the payment made, Sadia sues Saimon. Decide.

Solve:

Sadia’s suit will not be admitted by the court.

Reason:

Because if the perform of a promise is contingent upon the mere will and pleasure of the promisor,
there is no contract. The rule of law being “agreements, the meaning of which is not certain or capable
of being made certain, are void”.

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 Case: A stranger to a contract cannot sue

For a valid consideration from Sadia, Saimon makes a promise to Sadia that he would coach Joya in the
month of March. Joya sues Saimon on the promise. Whether Joya can succeed?

Solve:

No, Joya cannot succeed.

Reason:

The general rule of law is that “a stranger to a contract cannot sue, only a person who is a party to a
contract can sue on it. In the above case, the contract is made between Sadia and Saimon. Joya is a third
party. So being a third party, Joya has no right to sue on it and therefore she cannot enforce the
promise.

Case: Exception to the rule “No Consideration, No Contact”

Sadia has a debt to Joya. Sadia’s husband, Saimon, on account of natural love and affection, promised
topay the debts of his wife under a registered agreement. But later Saimon refused to pay off the debts.
Sadia sues Saimon on the agreement. What will be the court’s judgement?

Solve:

The court will give verdict in favor of Sadia.

Reason:

In the above agreement, there’s no consideration from the side of Sadia. And there’s a common rule
that if there’s no consideration, there’s no valid contract. But some exceptions to this rule exist. If an
agreement is made on account of natural love and affection, that will be a valid contract inspite of not
having any consideration from the opposite party. Here, Saimon promised to pay off his wife’s debt
because of natural love. So, this is a valid contract. Therefore, when Saimon didn’t carry out the
agreement, Sadia has the right to sue on it. And the court will act in favor of Sadia. Saimon will have to
pay off the debts as he agreed.

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 Case: Illusory Consideration

Sadia (the plaintiff) received a subpoena (a kind of summon) to appear at a trial as a witness on behalf of
Saimon (the defendant). Saimon promised her a sum of money for her trouble. On default by Saimon,
Sadia filed a suit for the recovery of the promised sum. Will Sadia succeed?

Solve:

No, Sadia will not succeed.

Reason:

A consideration is illusory or deceptive if it consists in a promise to perform a public duty, or to perform

a contract already made with the promisor. And an illusory or deceptive consideration does not amount
to a valid consideration. In the mentioned case, it was a public duty for Sadia to attend and give
evidence. So, there was no consideration for the promise and hence the promise is unenforceable.

Case: Undue influence (conscionable transaction)

Mr. Saimon applies for loan in a bank. At that time there was stringency in the money market. The bank
declines to make loan except at an unusually high rate of interest. Mr. Saimon accepts this loan terms
and takes the loan. Later on, he found out from a friend that his loan may have been caused by undue
influenced. So, he refused to pay back the loan and sued the bank. Will he be able to use his option to
set aside the contract?

Solve:

No, he won’t be able to use his option here as the contract is perfectly valid.

Reasons:

In case of presumption in undue influence, it is presumed that undue influence exist between certain
relationship such as master and servant, father and son, doctor and patient, etc. Another thing to
consider in this is unconscionable transaction. If one party is in a dominant positon to make an
exorbitant profit of the other’s distress, then it can give rise to a presumption of undue influence. But,
for an unconscionable transaction of rate of interest to give rise to a presumption of due influence it
must fulfill two conditions:

1.The money lender was in a position to dominate the will of the borrower.

2.The bargain is unreasonable that the rate of interest is excessive without any valid reason.

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In the above case the banker is definitely in a position to dominate the will of Mr. Saimon the borrower
but the rate of interest is reasonable as there was stringency in the money market. As this transaction
does not fulfill both of the condition, it is a valid contract. Therefore, Mr. Saimon must pay back the loan
with the interest.

Case: Fraud, a civil wrong

Mr. Saimon buys a truck from Mr. Shakib. Mr. Shakib hid some major fault about the truck. At the 10 th
day of delivering goods, the truck’s break failed and had an accident which caused damage to goods and
the driver. Mr. Saimon later on confronted Mr. Shakib and Mr. Shakib only wanted to pay the trucks
total value but refused to compensate for the damage of the goods and the driver. So, Mr. Saimon sued
Mr. Shakib. Will he get compensation for the damages?

Solve:

Yes, Mr. Saimon will get compensation for the damages caused by this contract.

Reasons:

As Mr. Shakib intentionally hid some important information about the truck which was the main object
of the contract, it is a case of fraud. The contract became voidable at the option of Mr. Saimon. Mr.
Saimon used his option to rescind the contract and was restored the benefits he provided but did not
got compensation for the damages. As fraud is done intentionally, it is a civil wrong hence compensation
is payable. Therefore, the court will give verdict to compensate any damages caused by this fraud
contract.

Case: Free consent (Right of rescission)

Mr. Saimon bought a bike from Mr. Arif who intentionally hid some major information which could have
affected the price of that bike. Later on Mr. Saimon sold the bike to his uncle for a fair price but still did
not know about the faults in the bike. After a week, he came to know Mr. Arif’s business partner that
the bike had some major faults. Mr. Saimon wanted rescind the contract and went to the court. Will he
able to rescind the contract.

Solve:

No, Mr. Saimon won’t be able to rescind the contract as a bona fide third party has acquired rights in the
subject matter of the contract.

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Reasons:

In certain cases, party whose consent was so caused will not be able to rescind the contract. Such cases
are affirmation, restitution is impossible, lapse of time and rights of third parties. If third parties acquire
rights in the subject matter of the contract, then the right to rescind will no longer be available. In the
above case, Mr. Saimon’s consent was gained in a fraudulent way and later on he sold the bike to a bona
fide third party. As a bona fide third party now has right in the subject matter, the right to rescind is no
longer available.

Case: Mistake as to the identity of person contracted with.

Mr. Saimon wanted to buy some goods from Mr. Nafis. Mr. Nafis recently sold his business to Mr. Nakib
which Mr. Saimon had no idea about and place the order to Mr. Nafis. Mr. Nakib accepted the order.
Mr. Saimon received the goods and realized it’s from Mr. Nakib and wanted to use his option to accept
the contract. Will he be able affirm the contract?

Solve:

No, he won’t be able to use his option to accept the contract as the agreement is void-ab-initio.

Reasons:

In case of a unilateral mistake contract is either valid or voidable. But in some cases the agreement
becomes void-ab-initio such as mistake as to the identity of person contracted with and mistake as to
the nature and character of a written document. In the above case, the contract is unilateral and the
mistake is as to the identity of the person contracted with thus the agreement is void ab-initio.
Therefore, Mr. Saimon won’t be able to use his option as there is no option available here.

Case: Illegal Contract- Restraining personal liberty

Mr. Saimon borrowed money from Mr. Yasin and agreed that he would not without the written consent
of Mr. Yasin, leave his job, borrow money, dispose of his property or change his residence. Is this a valid
contract?

Solve:

No, the contract is not valid.

16
Reason:

If an agreement unduly restricts personal freedom, then it is a void and illegal agreement as being
against public policy. In the above case the money lender tried to put some terms that would restrict
Mr. Saimon’s personal freedom. Hence the agreement is void and illegal and the contract is void ab-
initio.

Case: Consideration unlawful in part

Mr. Saimon agrees to pay 10 thousand TK for a house but the seller also states that if he want use it for
prostitution then he will have to pay 50 thousand TK for it. Are the agreements legal?

Solve:

Yes, party. The first agreement is valid but the second agreement is illegal.

Reason:

In case of a reciprocal promise where one thing is legal and other is illegal, the legal part can be
separated from the illegal part as there is two different considerations. The legal part is a contract and
the illegal part is a void agreement. In the above case, Mr. Saimon agreed to a reciprocal promise where
the first part buying the house is legal contract and the second part buying the house for prostitution is
illegal agreement.

Case: Restitution in illegal agreement

Mr. Saimon promises to pay Mr. Rahim if he restrains from marrying someone whom Mr. Saimon likes.
Mr. Rahim takes the money but marries that girl anyway. Mr. Saimon sues Mr. Rahim and shows proof
of the contract. Will he get his money back?

Solve:

No, he won’t get his money back as the agreement is illegal.

Reasons:

17
No restitution is allowed in an illegal agreement that means parties to an illegal agreement cannot get
any help from a court of law. Nothing can be recovered under an illegal agreement. In the above case
promise to restrain from marriage is illegal therefore Mr. Saimon cannot recover any money he paid no
matter the work is done or not.

Case: Related contracts to an illegal agreement.

Mr. Saimon’s friend Mr. Karim agrees to pay someone 50 thousand TK to kill someone he disliked and
borrowed the money from Mr. Saimon where Mr. Saimon had knowledge his illegal agreement. Later on
the illegal agreement were carried out but Mr. Karim refused to pay Mr. Saimon. Mr. Saimon went to
the court. Will Mr. Saimon get his money back?

Solve:

No. Both the agreement is illegal.

Reasons:

When an agreement is illegal, other agreements which are incidental or collateral to it are also tainted
with illegality, hence void, provide that third parties have the knowledge of the illegal or immoral design
of the main transaction. In the above case the main transaction is a promise to murder which is illegal
and the incidental promise is a loan in order to pay for the murder where the lender had full knowledge
of the illegal transaction. Therefore, both the agreements are illegal and no restitution is allowed for
both the agreements.

Case: Minor`s agreement

Mohin, 17 years old, a neighbor of Sadia, once, impressed Sadia to obtain 10,000 TK loan on 10 th January
promising of repaying the full loan to Sadia within 2 weeks. 4 weeks have already been gone and asking
to repay the money by Sadia, Mohin denied. In this case, can Sadia sue against Mohin to return the
money?

Solve:

No, Sadia can`t sue against Mohin to repay the money.

Reason:

18
According to the law of contract, a minor`s agreement is void and a minor can`t be ordered to make
compensation for a benefit obtained under a void agreement. In this case, Mohin is a boy of 17 years is
known as minor and due to be a minor, the contract between Mohin and Sadia Co. is not enforceable by
law and so Moin can`t be ordered to make compensation by the court.

Case: Agreement in restraint of trade

Mr. Arman, an employee of Sadia Co. in Dhaka, agreed not to employ himself or to engage himself in

any similar business within 40 miles from Dhaka, for a period of five years from the date of the

termination of his service. But, in 2020, after the termination of his service on April 22, 2020, Arman

employed himself a same business in Dhaka city. Now, can Sadia Co. sue against Mr. Arman and

succeed?

Solve:

No, Sadia Com can`t sue against Mr. Arman and succeed.

Reason:

Because, it was held that the agreement is in restraint of lawful profession and hence void. According to
the law, an agreement of service which seeks to restrict the freedom of occupation for same period
after the termination of service is void. And so, Sadia Co. can`t sue against Mr. Arman being the contract
is void hence can`t sued.

Case: Sales of goodwill

On 2nd April 2020 Sadia Co. bought a business of shares from Mr. Joy that Joy’s collection would not
Shares in Dhaka city for a period of five years. In 2021, after founding another business of cloths by Mr.
Joy where he sales different kinds of dresses of man and woman. In the situation is there any possibility
winning the case if Sadia sues against Mr. Joy?

Solve

No, Sadia has no possibility to win the case if she sues against Mr. Joy.

19
Reason:

According to law, an agreement by which any one is restricted from engaging a lawful trade or business
of any kind is to the extend is valid, the business of clothes aimed to promote business and did not
restrain.

Case: Uncertain Agreement

Sadia Co. ordered two hundred standard pieces of shares from Arman’s Collection Co. with payment.
But after receiving the order, Sadia Co. noticed that the shares are not Jamdani what is expected. When
going to repay the money. In the case, will the result favor with Sadia Co.?

Solve:

Yes. If Sadia Co. sue in the court, the Arman’s Collection Co. will be forced to repay the money.

Reason: According to the law an agreement the meaning of which is not certain or capable of being
made certain are void. In these cast the world, standard pieces of shares used by the parties are vague
or indefinite and the laws cannot enforce the agreement.

Case: Agreement of Persons of unsound mind

Mr. Arman and Ms. Sadia met together in the birthday party of Ms. Joya. Mr. Arman promised to Ms.
Sadia that he would purchases 500 dresses of children within one week drinking 5th glasses of wine. If
Mr. Arman didn’t purchase the dresses. Can Ms. Sadia sue against him?

Solve:

No. Sadia can sue against Mr. Arman.

Reason:

According to the law, the entering into the contract must be a person who understands what he is doing
and is able to form a rational judgement as to whether what he is about to do is to his interest or not. In

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the case, due to unsound mind of Mr. Arman at the time of promising for drunk, the contract is invalid
and sue is not be possible.

Case: Agreements of Disqualified Person

Sadia Co. lend TK 2,00,000 from Mr. Arman and promised to repay the amount within one year for TK
1,000 interest per month. Suddenly, convicting with a guilty Mr. Arman has been arrested and
imprisoned.

In this situation, can Mr. Arman sue in the count for interest payment from Sadia Co.?

Solve:

No. Mr. Arman can`t sue in the court against Sadia Co. for interest payment.

Reason: According to the law, during the period of imprisonment, a convict is incompetent to enter into
contracts and to sue on contracts made before conviction. But on the expiry of the sentence, he is at
liberty to institute a suit and law of limitation is held I abeyance during the period his sentence

Case-1:

Sadia and Saimon both are involved in business of furniture. Sadia offered to sell a table to Saimon for
15,000. Saimon offered 12000 for which price Sadia refuses to sell. Subsequently Saimon offered to
purchase the table for 15,000. But this time sadia declined to adhere to her original offer. Saimon filed a
suit to obtain specific performance of the alleged contract. Will the court role in Saimon's favor?

Solve:

In this case the court will dismiss the suit and the court will state that Sadia was justified.

Reason:

No contract had come into existence as Saimon by offering 12,000 had rejected the original offer.
Subsequent willingness to pay 15,000 could be no acceptance of sadia’s offer as there was no offer to
accept. The original offer had already come to an end on account of counter offer and we know that an
offer lapses if it has been rejected by the offeree. The rejection may be expressed or implied and

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counter offer is one kind of implied rejection and that's why in this case the court will not rule in Saimo’s
favor.

Case-2

Sadia and Saimon are two friends. Saimon says during a conversation to Sadia that he will gift 10,000 to
the person who marries his daughter. Arju marries Saimon's daughter but Saimon refuse to pay 10,000
to Arju. For this Arju files a suit to recover 10,000. Will he succeed?

Solve:

No, Arju will not succeed.

Reason:

In order to be a valid offer, it should be communicated to the offeree with an intention to make an offer.
But in this case Saimon has expressed his wish only and has never made an offer with a view to
obtaining the assent of the other party.So it will not a valid offer and that’s why Arju will fail to recover
his claim.

Case-3:

Sadia sees a book displayed in a shelf of a book shop with a price tag of $85.She tenders $85 on the
counter and asks for the book. The book seller refuses to sell saying that the book has already been sold
to someone else and he has not had another copy of that book in the stock. Is that bookseller bound to
sell the book to Sadia?

Solve:

No, the book seller is not bound to sell the book.

Reason:

An invitation to offer is not an offer. In this case the bookseller’s object is merely to circulate information
that he is willing to deal with anybody who on such price is willing to open negotiations with him and
thus this is only an invitation and not an offer itself in the eye of law. Hence the bookseller is free to
accept the offer or not.

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 Case-4:

Sadia employs Saimon as his agent for selling her watch. Saimon is instructed to sell the watch for not
less than $80. Saimon buys the watch himself and hands over $80 to Sadia,who is quite satisfied with
the price and doesn't ask the name of the buyer. Sadia discovers the identity of the buyer few weeks
later after Saimon has resold the watch for $100. Can Sadia claim $20 from Saimon.

Solve:

No, Sadia cannot claim $20 from Saimon.

Reason:

According to sections 215 and 216 of the contract act, if the dealings of the agent have not been
disadvantageous to the principal, he cannot claim the profit made on subsequent sale by the agent,
even though the agent dealt on his own account without first obtaining the consent of the principal.

Case-5:

Sadia, an agent, authorized by a power of attorney to operate a business but not to borrow money,
asked for a loan on a representation that he is authorized to borrow and produce the power of attorney
for the perusal of the lender. But the lender didn’t read it and advanced a loan. Is the principal bound by
the loan?

Solve:

No, the principle is not bound by the loan.

Reason:

The borrowing by Sadia an agent, in the instant case, doesn’t come within the principal’s ostensible
authority. As the power of attorney was produced for the perusal of the lender, he(lender) had
constructive notice that the agent(Sadia) had no power to borrow and therefore he(lender) is bound by
the restriction on the agent’s ostensible authority and cannot recover the loan from the principal.

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 Case-6:

Sadia enters into a contract with Saimon for buying his motor car as agent of Arju and without Arju's
authority. Saimon repudiates the contract before Arju comes to know of it. Arju subsequently ratifies
the contract and sues to enforce it. What will happen?

Solve:

Arju is entitled to enforce the contract or claim damages. It is a case of agency by ratification, where the
agency comes into existence from the moment the agent acted and not from the time when the
principle ratified. Hence Saimon’s repudiation of the contract is inoperative.

Case-7:

A firm, consisting of two partners Sadia and Saimon, owes a same of $5000 to Arju. Arju filed a suit to
recover the sum against Sadia only and obtained a decree. The decree remains partially unsatisfied and
Arju could recover from a $3000 only. Arju now wants to file a suit against for the balance of
$2000.What will be appropriate done by Arju in the eye of law?

Solve:

Zara can file a suit against Saimon for recovering the balance amount because the liability of joint
promisors is “joint and several” as per section 43. But according to High Court Zara cannot file the suit
against Saimon for the balance amount because in the Court’s opinion once a judgment has been
obtained Zara merges in the decree.

Case-8:

Sadia obtains two loans of $25,000 each from a bank, one of which is guaranteed by Saimon. Sadia
sends the bank a sum of $30,000 without any direction regarding appropriation towards the loan. The
bank appropriates $25,000 towards the loan not guaranteed by Saimon and $5000 only towards the
loan guaranteed by Saimon. Saimon objects to such appropriation. Can he succeed?

Solve:

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He cannot succeed.

Reason:

In the absence of any express or implied instructions from the debtor regarding appropriation, the
creditor is entitled to apply the payment to any of the two debts. Here neither Sadia nor Saimon
instructed the bank about appropriation and hence the appropriation done by the bank is perfectly valid
and binding.

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