National University of Study and Research in Law, Ranchi

End Term Examination 2021

Semester - II
Subject- Contract II
Subject Code – L104

Total Marks: 70 Maximum Time: 5 Hours

Instructions:
1) No clarifications shall be provided about the question paper during the course of the
exam.
2) Attempt any 5 question out of 7.

1) A husband (H) and his wife (W) working as managers at a hotel were provided with
accommodation in the same hotel. W bought some jewellery, clothes and kitchen
grocery from a shop on credit. Arguing that the W acted as H’s agent, shopkeeper (X)
demanded money from H. Argue from the sides of both H and X as to the liability of
H. [Marks: 14]

2) D went to a jeweller, J, to buy diamond set for his wife. D liked a particular set and
wanted to show it to his wife before purchasing. J allowed D to take the set to his
house. D pledged this with Y in lieu of a loan. J sues Y to get back the set. Decide
with respect to the following situations- [Marks: 14]

i) Y is unaware of the situation between D and J and enters into the pledge.
ii) Y knows of the want of title in D and still extends loan on the.

3) Sameer, a minor, hires an agent, Rishi, to manage a business of food preparation and
delivery. On one such instance, order delivered to a customer Shaivya turned out to
be stale and unfit for consumption causing her food poisoning. Shaivya sued Sameer
for the damage she faced. Being a minor, Sameer claimed exemption. Discuss what
remedies Shaivya has, against whom. [Marks: 14]

4) Asif lends his car to be used by Sonam. It turned out that the car had a defective
steering because of which Sonam met with an accident and injured herself. She sues
Asif for the loss. Discuss Asif’s liability when- [Marks: 14]

i) Asif was ignorant of the defect and had lent the car gratuitously
ii) Asif was ignorant of the defect and had lent the car on a hire basis
iii) Asif was aware of the defect but forgot to inform Sonam about the same

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5) X, Y, Z enter into a partnership agreement. A clause in the partnership deed provided
that if one of the partner dies, the firm will not be dissolved and instead the eldest
child of the deceased partner will automatically become a partner. X dies and his
eldest son of 17 years wishes to become a partner. Y and Z however do not wish to
continue with him as a partner. Decide. [Marks: 14]

6) Can guarantee be revoked in the following cases-

[Marks: 14]
i) M lends to N a sum of Rs. 1 lac on the suretyship of S.
ii) Pooja a wholesaler frequently supplies clothes to Rashmi who runs a boutique
on the guarantee of Q (guarantee given for one year).

7) E, a retailer of edible oil, bought some oil worth Rs. 2 lacs from a supplier. The oil
was sent as a railway consignment, the receipt of which was with E. In order to
expand his business, E took loan of Rs. 5 lacs from one F bank and kept the railway
receipt as a security to it. The consignment was mishandled by the railway because of
which it got destroyed. Meanwhile, E also suffered loss and defaulted in the payment
of the loan. The bank claimed oil’s worth from the railway, railway denied any privity
with the bank. Railway also argued that under any circumstances, railway has to pay
only Rs. 2 lacs to the bank. Decide. [Marks: 14]

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