JS
Law of Contract
Time: 3 hours
Fun Marks: 150
The figures in the right-hand margin indicate marks.
Answersixquestions, selecting fwo questions
each from any two Sections and one each
from remaining two Sections.

. SECTION .
1. "The test of contractual intention is objective, not subjective. What matters is not what the parties had in mind, but what a reasonable
.person would think, in the circumstances, their intention to be"? Analysl! this slatement with the help of the judicial decisions in vie-v of the common intention of the parties to enter into legal obligation. 15
Analyse the concept ofrnistake of fact as . the Indian Contract ,..ct,
1872: .• 10
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2. ·Section 73 of the Indial1 Contract Act declaratory of the common laW principle as to damages,· Critically analyse the above statement with judicial deCisions. . 15
a singer enters into a contract with the manager of a theater party to sing at his t!'leater two nights in every week during the next two months in a consideration of Rs. 100 for each night's performance. On the
sixth night, willfully remains absent With the assent of sings in the seventh night. State the effect of refusal of party to perform promise wholly and determine the rights and Iiabllities of the parties. 10
3. "The Dability of the surety is co-extensive witp that of the principal debtor, unless it is othefwise provided by the contract.· Explain this with the provisions of law and jUdicial decisions. 15
The Board of Directors of a company appoints Mr. as managing director for
KE-613 Contd.
managing the affairs of the company with expressly limiting his powers to order goods only up to Rs. 5,000 and beyond that amount with the prior sanction Of the Board. But Mr. orders goods worth of Rs. 10,000 to Mr. the third party.
Analyse the authority of Mr. and
determine the liability ofthe company before .
the third party in the context of agenfs
10
SECTION-B
4. Define with its essentials. Distinguish between 'Contract of Sale' and 'Kire­purchase'. 15
sold a car by auction to the highest bidder. offered to pay for the car by a cheque and he was allowed to do so when he signed the document stating that the property in the car would not pass to the buyer until the amount ofthe cheque had
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been credited to account. The cheque was subsequently dishonoured, but in the mean time, sold the car to and sold it to sued to recover back the car and his contention was that could not get a good title to the car because had .not become the owner of the car as the cheque given by him had been dishonoured and no transferee from him could get a good
title. Can recover the car from Decide by giving justifications. 10
5. Discuss the rules regarding delivery of goods. Explain the duties and liabilities of the seller when he delivers the goods to the carriers or wharfinger. 25
6.. Explain the maxim nemo dat quod non habet with exceptions to the rule. 15
"The implied conditions and warranties prOVided in the Act 'are binding in every
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contract of sale unleSs they are inconsistent
with any express conditionS and warranties
agfeed to by the parties.· Explain. 10

SECTION-C
7.
"The scope of the implied authority of a partner has been limited through statutory restrictions." Explain this. Can restrictions of implied authority be imposed through an agreement between parties? 25

8.
'The rights of the parties to make any contract to regulate their mutual rights and duties is subject to the provisions of the Partnership Act.' Explain. 15


who is not actually a partner in the firm consisting of represents to that he is also a partner in that firm. On the faith of that representation, gives credit to the firm. Can make liable under the doctrine of holding out? Decide with suitable case laws. 10
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9. Explain the position of minor admitted to the benefits of Partnership. What,would happen to the firm if a minor is made full-fledge partner in the partnership firm at the time of its creation. 15
entered into partnership and contributed a capital of Rs. 20,000 and Rs. 5,000 respectively, but they share the profits and losses equally. On dissolution, if. the assets realize Rs. 17,000 only, there is deficiency of capital to'the extent of Rs. 18,000. Determine the mode of settlement of accounts. 10

SECTION-D
10. Explain the conditions necessary to be a holder in due course. What is the difference between holder in due course and holder for collections 15
State the legal validity of 'electronic cheque'
and 'truncated cheque'. 10 KE-6/3 Contd.
11. Explain the circumstances in which the maker,acceptor 9r indorser are dispharged from liability.
15
has his account with bank. One day in the momilig the balance in account was
Rs. 1,000. About 1 PM of the same day, Rs. 500.was paid into his account; a little later at 3 PM a cheque drawn by for Rs. 1,200 was presented. Rs. 500 have not yet been credited to the account of the payment was refused. Discuss with case law, whether ,the refusal is justified. 10
12. ·Presumption as provided under the Negotiable Instrument Act operate in favour of or against parties to the negotiable instrument or their privies.· Explalri this with the special rules of evidence. 15
A bill of exchange was drawn by in Califomia where the rate of interest is and accepted by payable in Washington where the rate of interest is 6%. The bill is
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