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All questions of Unit 4: Performance of Contract for CA Foundation Exam
Novation requires :
- a)Mutual agreement
- b)Mutual consent
- c)Free consent
- d)None
Correct answer is option 'B'. Can you explain this answer?
Novation requires :
a)
Mutual agreement
b)
Mutual consent
c)
Free consent
d)
None
|
Freedom Institute answered |
With a novation, all parties must consent. If you are novating your rights under contract to a third party, you need the consent of the other party to the contract and the third party who will be obtaining your rights. With an assignment, only some parties must consent.
A, B and C jointly promised to pay Rs. 60,000 to D. Before performance of the contract C dies. The contract- a)Becomes void on C’s death
- b)Should be performed by A and B along with C’s legal representatives.
- c)Should be performed by A and B alone
- d)Should be renewed between A, B and D
Correct answer is option 'B'. Can you explain this answer?
A, B and C jointly promised to pay Rs. 60,000 to D. Before performance of the contract C dies. The contract
a)
Becomes void on C’s death
b)
Should be performed by A and B along with C’s legal representatives.
c)
Should be performed by A and B alone
d)
Should be renewed between A, B and D
|
|
Geethika Chenna answered |
The contract should be performed by the legal representative of C because here the contract does not requires the personal skills of C
A servant is employed for one year on a monthly salary of Rs. 1800, the whole salary to be paid at the end of the year. The servant wrongfully leaves the service after six months. Is he entitled to any salary?
- a)He is entitled to the whole salary
- b)He is entitled to the salary of six months.
- c)He is entitled to the salary which his master thinks suitable
- d)He is not entitled to any salary
Correct answer is option 'D'. Can you explain this answer?
A servant is employed for one year on a monthly salary of Rs. 1800, the whole salary to be paid at the end of the year. The servant wrongfully leaves the service after six months. Is he entitled to any salary?
a)
He is entitled to the whole salary
b)
He is entitled to the salary of six months.
c)
He is entitled to the salary which his master thinks suitable
d)
He is not entitled to any salary
|
Rajat Patel answered |
Correct Answer :- d
Explanation : When a party to a contract fails to perform his promise in its entirety, the promisee may put an end to the contract. So, the servant is not entitled to the salary for the period he has been employed because, by leaving the service, he has failed to perform his promise in its entirety. Hence, option (d) is the correct answer.
Impossibility existing subsequent to the formation of contract is called_____________.
- a) Supervening impossibility
- b) Subsequent impossibility
- c) Both of above
- d) None of these.
Correct answer is option 'C'. Can you explain this answer?
Impossibility existing subsequent to the formation of contract is called_____________.
a)
Supervening impossibilityb)
Subsequent impossibility c)
Both of aboved)
None of these.
|
Alok Mehta answered |
A contract to do an act, which after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, becomes void when the act becomes impossible or unlawful. This is called “Supervening Impossibility”, i.e. impossibility arising subsequent to the formation of the contract.
The original contract need not be performed if there is: - a)Alteration of contract
- b)Recession of contract
- c)Novation
- d)All of these
Correct answer is option 'D'. Can you explain this answer?
The original contract need not be performed if there is:
a)
Alteration of contract
b)
Recession of contract
c)
Novation
d)
All of these
|
Sahil Malik answered |
The original contract need not be performed if there is an alteration, recession, or novation. Let's understand these terms in detail:
Alteration of Contract:
An alteration of a contract means a change made to the terms of the original contract. Such changes may be in terms of the price, delivery date, quality, quantity, etc. Alteration of a contract is only possible if both parties agree to the changes. Once the changes are made, the original contract becomes void, and the new contract comes into existence.
Recession of Contract:
Recession of a contract means the cancellation of the contract. It takes place when one party does not fulfill its obligation, or there is a breach of contract by either party. In such a situation, the aggrieved party can cancel the contract and claim damages for the breach.
Novation:
Novation means the substitution of a new contract for an old one. It takes place when both parties agree to substitute the old contract with a new one. Novation requires the consent of all parties involved, and the new contract must be in writing.
All of these:
If any of the above situations arise, the original contract becomes void, and the parties are no longer bound to perform their obligations under the original contract. The new contract or the altered terms of the contract will govern the relationship between the parties.
In conclusion, the original contract need not be performed if there is an alteration, recession, or novation. These situations arise when there is a change in circumstances or a breach of contract, and the parties agree to substitute or cancel the original contract.
Alteration of Contract:
An alteration of a contract means a change made to the terms of the original contract. Such changes may be in terms of the price, delivery date, quality, quantity, etc. Alteration of a contract is only possible if both parties agree to the changes. Once the changes are made, the original contract becomes void, and the new contract comes into existence.
Recession of Contract:
Recession of a contract means the cancellation of the contract. It takes place when one party does not fulfill its obligation, or there is a breach of contract by either party. In such a situation, the aggrieved party can cancel the contract and claim damages for the breach.
Novation:
Novation means the substitution of a new contract for an old one. It takes place when both parties agree to substitute the old contract with a new one. Novation requires the consent of all parties involved, and the new contract must be in writing.
All of these:
If any of the above situations arise, the original contract becomes void, and the parties are no longer bound to perform their obligations under the original contract. The new contract or the altered terms of the contract will govern the relationship between the parties.
In conclusion, the original contract need not be performed if there is an alteration, recession, or novation. These situations arise when there is a change in circumstances or a breach of contract, and the parties agree to substitute or cancel the original contract.
Which of the following contract is not discharged by frustration ?- a)Government Intervention
- b)Destruction of goods
- c)Change of law
- d)Commercial Impossibility
Correct answer is option 'D'. Can you explain this answer?
Which of the following contract is not discharged by frustration ?
a)
Government Intervention
b)
Destruction of goods
c)
Change of law
d)
Commercial Impossibility
|
|
Arjun Singhania answered |
A frustrated contract is a contract that, subsequent to its formation, and without fault of either party, is incapable of being performed due to an unforeseen event (or events), resulting in the obligations under the contract being radically different from those contemplated by the parties to the contract.
Acceptance of consideration lesser than that agreed is known as _______.- a)Recission
- b)Novation
- c)Remission
- d)Alteration
Correct answer is option 'C'. Can you explain this answer?
Acceptance of consideration lesser than that agreed is known as _______.
a)
Recission
b)
Novation
c)
Remission
d)
Alteration
|
Nikita Singh answered |
Remission means an act of reducing or cancelling the amount of money that somebody has to pay
A servant is employed for one year on a monthly salary of Rs. 1800, the whole salary to be paid at the end of the year. The servant wrongfully leaves the service after six months. Is he entitled to any salary?- a)He is entitled to the whole salary
- b)He is entitled to the salary of six months.
- c)He is entitled to the salary which his master thinks suitable
- d)He is not entitled to any salary
Correct answer is option 'D'. Can you explain this answer?
A servant is employed for one year on a monthly salary of Rs. 1800, the whole salary to be paid at the end of the year. The servant wrongfully leaves the service after six months. Is he entitled to any salary?
a)
He is entitled to the whole salary
b)
He is entitled to the salary of six months.
c)
He is entitled to the salary which his master thinks suitable
d)
He is not entitled to any salary
|
Poonam Reddy answered |
Correct Answer :- d
Explanation : According to the contract, he was unable to complete his contract period. As the salary is decided according to the year. so he is not entitled to any salary.
Ram Lal and Shyam jointly promise to pay Mohan Rs. 30,000. Shyam paid the whole amount to Mohan, In case Ram and Lal are solvent, Shyam can recover:- a)Rs. 15,000 from Lal
- b)Rs. 30,000 from Ram
- c)Rs. 20,000 from Lal
- d)Rs. 10,000 each from Ram and Lal
Correct answer is option 'D'. Can you explain this answer?
Ram Lal and Shyam jointly promise to pay Mohan Rs. 30,000. Shyam paid the whole amount to Mohan, In case Ram and Lal are solvent, Shyam can recover:
a)
Rs. 15,000 from Lal
b)
Rs. 30,000 from Ram
c)
Rs. 20,000 from Lal
d)
Rs. 10,000 each from Ram and Lal
|
|
Priya Dharsini answered |
•As Ram & Lal are solvent,we can recover the amount in their respective ratios.
•First we should find out the ratio in which the amount to be paid to Mohan by each parties.
•Since the ratio is not given,Ram,Lal & Shyam should pay the amount in equal ratio i.e.1/3
•Amount to be paid by each the parties
=₹30,000×1/3
=₹10,000
•So,each the parties should pay ₹10,000 to Mohan.
•Shyam paid the amount ₹10,000 to Mohan.
Therefore, Ram & Lal should pay ₹10,000 each.
So,the correct answer is option 'D'
A promises to paint a picture for B by a certain date for a certain amount. A dies before painting the picture. Which one of the following is correct in such a situation?- a)The agreement does not lapse for A
- b)The agreement becomes voidable at the option of A’s legal representatives.
- c)The agreement becomes unlawful.
- d)The agreement lapses for both parties.
Correct answer is option 'D'. Can you explain this answer?
A promises to paint a picture for B by a certain date for a certain amount. A dies before painting the picture. Which one of the following is correct in such a situation?
a)
The agreement does not lapse for A
b)
The agreement becomes voidable at the option of A’s legal representatives.
c)
The agreement becomes unlawful.
d)
The agreement lapses for both parties.
|
Lakshmi Kumar answered |
A) The agreement does not lapse for A.
Explanation:
In this situation, the agreement between A and B does not become void or voidable just because A has died. The legal principle of "doctrine of frustration" applies in such cases, which means that the contract becomes impossible to perform due to unforeseen circumstances (such as death in this case). However, the contract is not automatically terminated but rather remains in force until the parties decide to terminate it. In this case, B may choose to enforce the contract against A's estate or negotiate a new agreement with A's legal representative.
Explanation:
In this situation, the agreement between A and B does not become void or voidable just because A has died. The legal principle of "doctrine of frustration" applies in such cases, which means that the contract becomes impossible to perform due to unforeseen circumstances (such as death in this case). However, the contract is not automatically terminated but rather remains in force until the parties decide to terminate it. In this case, B may choose to enforce the contract against A's estate or negotiate a new agreement with A's legal representative.
What is 'renunciation?' - a)Renunciation occurs where one party, through his own act or default, incapacitates himself from performing his contractual obligations.
- b)Renunciation occurs where a party fails to perform adequately his contractual obligations.
- c)Renunciation occurs where both parties decide to abandon the contract.
- d)Renunciation occurs where one party demonstrates an intention not to perform his contractual obligations.
Correct answer is option 'D'. Can you explain this answer?
What is 'renunciation?'
a)
Renunciation occurs where one party, through his own act or default, incapacitates himself from performing his contractual obligations.
b)
Renunciation occurs where a party fails to perform adequately his contractual obligations.
c)
Renunciation occurs where both parties decide to abandon the contract.
d)
Renunciation occurs where one party demonstrates an intention not to perform his contractual obligations.
|
|
Freedom Institute answered |
Renunciation occurs where one party demonstrates an intention not to perform his contractual obligations. Where one party renunciates, the other party may terminate the contract.
Suppose the time fixed for performance of the contract has expired but the time is not essential. What is the remedy of the promisee in this case:- a)Can rescind the contract
- b)To claim compensation
- c)No remedy available
- d)Can’t be determined
Correct answer is option 'B'. Can you explain this answer?
Suppose the time fixed for performance of the contract has expired but the time is not essential. What is the remedy of the promisee in this case:
a)
Can rescind the contract
b)
To claim compensation
c)
No remedy available
d)
Can’t be determined
|
|
Charvi Roy answered |
Still demand performance of the contract
d) Can still demand performance of the contract.
If the time fixed for performance of the contract has expired but the time is not considered essential, the promisee can still demand performance of the contract. However, if the delay has caused any loss or damage to the promisee, they may also be entitled to claim compensation. Rescinding the contract is not an available remedy in this case as the contract is still valid and enforceable.
d) Can still demand performance of the contract.
If the time fixed for performance of the contract has expired but the time is not considered essential, the promisee can still demand performance of the contract. However, if the delay has caused any loss or damage to the promisee, they may also be entitled to claim compensation. Rescinding the contract is not an available remedy in this case as the contract is still valid and enforceable.
___________ of a Contract taken place when all or some of the terms of the contract are cancelled.- a)Novation
- b)Alteration
- c)Merger
- d)Recession
Correct answer is option 'D'. Can you explain this answer?
___________ of a Contract taken place when all or some of the terms of the contract are cancelled.
a)
Novation
b)
Alteration
c)
Merger
d)
Recession
|
|
Priya Patel answered |
Recession means termination of a contract where parties mutually decide to cancel the terms of the contract, the contract need not be performance. In rescission, the old contract is cancelled and no new contract comes into existence.
_________ of a contract takes place when all or some of the terms of the contract are cancelled.- a)Novation
- b)Alteration
- c)Merger
- d)Rescission
Correct answer is option 'D'. Can you explain this answer?
_________ of a contract takes place when all or some of the terms of the contract are cancelled.
a)
Novation
b)
Alteration
c)
Merger
d)
Rescission
|
|
Nikita Singh answered |
Rescission in contract law refers to the termination or cancellation of a contract. The word rescission comes from the word “rescind” which means to cancel or annul. The purpose of contract rescission is to restore the parties to their original status before the contract was made.
A mother owes Rs. 10,000 to her daughter. But this debt has become barred by the Limitation Act. The mother signs a written promise to pay Rs. 3,000 on account of the debt. In such a case which one is correct : - a)There is no contract as the debt is already barred by Limitation and so it cannot be revived by as subsequent promise
- b)There is no contract because the mother has promised to give only a part of time debt
- c)This is enforceable against the mother because such a promise is valid and binding under the Indian Contract Act.
- d)None
Correct answer is option 'C'. Can you explain this answer?
A mother owes Rs. 10,000 to her daughter. But this debt has become barred by the Limitation Act. The mother signs a written promise to pay Rs. 3,000 on account of the debt. In such a case which one is correct :
a)
There is no contract as the debt is already barred by Limitation and so it cannot be revived by as subsequent promise
b)
There is no contract because the mother has promised to give only a part of time debt
c)
This is enforceable against the mother because such a promise is valid and binding under the Indian Contract Act.
d)
None
|
|
Akshay Das answered |
Validity of a Promise to Pay a Time-Barred Debt
Legal Background: Limitation Act and Indian Contract Act
• The Limitation Act, 1963 prescribes a time limit within which a person can file a suit to recover a debt or enforce a right.
• The Indian Contract Act, 1872 governs the law of contracts in India and sets out the rules for creating, executing, and enforcing contracts.
Scenario: Mother's Debt to Daughter
• A mother owes Rs. 10,000 to her daughter, but the debt has become barred by the Limitation Act.
• The mother signs a written promise to pay Rs. 3,000 on account of the debt.
Legal Analysis: Enforceability of the Promise
• Option (a) is correct insofar as the Limitation Act bars the recovery of the entire debt, which means that the daughter cannot sue her mother for the full amount of Rs. 10,000.
• However, the Limitation Act does not prevent the parties from entering into a new contract that modifies the terms of the original debt.
• Option (b) is not entirely accurate, as a debtor can make a partial payment towards a time-barred debt, and such payment can be legally valid.
• Option (c) is also partially correct, as a promise to pay a time-barred debt can be valid and binding under certain circumstances.
• The Indian Contract Act provides that a promise to pay a time-barred debt is enforceable if it is made in writing and signed by the debtor or his agent.
• However, such a promise must be supported by fresh consideration, which means that the debtor must receive something of value in exchange for the promise.
• In this case, the mother's promise to pay Rs. 3,000 on account of the debt is legally valid only if the daughter provides some new consideration in return, such as releasing the mother from liability for the remainder of the debt.
Conclusion: Answer Choice
• The correct answer is (c), with the caveat that the promise is enforceable only if it is supported by fresh consideration.
• Therefore, the daughter should ensure that she receives something of value in exchange for accepting the mother's promise to pay Rs. 3,000, and should document the agreement in writing.
Legal Background: Limitation Act and Indian Contract Act
• The Limitation Act, 1963 prescribes a time limit within which a person can file a suit to recover a debt or enforce a right.
• The Indian Contract Act, 1872 governs the law of contracts in India and sets out the rules for creating, executing, and enforcing contracts.
Scenario: Mother's Debt to Daughter
• A mother owes Rs. 10,000 to her daughter, but the debt has become barred by the Limitation Act.
• The mother signs a written promise to pay Rs. 3,000 on account of the debt.
Legal Analysis: Enforceability of the Promise
• Option (a) is correct insofar as the Limitation Act bars the recovery of the entire debt, which means that the daughter cannot sue her mother for the full amount of Rs. 10,000.
• However, the Limitation Act does not prevent the parties from entering into a new contract that modifies the terms of the original debt.
• Option (b) is not entirely accurate, as a debtor can make a partial payment towards a time-barred debt, and such payment can be legally valid.
• Option (c) is also partially correct, as a promise to pay a time-barred debt can be valid and binding under certain circumstances.
• The Indian Contract Act provides that a promise to pay a time-barred debt is enforceable if it is made in writing and signed by the debtor or his agent.
• However, such a promise must be supported by fresh consideration, which means that the debtor must receive something of value in exchange for the promise.
• In this case, the mother's promise to pay Rs. 3,000 on account of the debt is legally valid only if the daughter provides some new consideration in return, such as releasing the mother from liability for the remainder of the debt.
Conclusion: Answer Choice
• The correct answer is (c), with the caveat that the promise is enforceable only if it is supported by fresh consideration.
• Therefore, the daughter should ensure that she receives something of value in exchange for accepting the mother's promise to pay Rs. 3,000, and should document the agreement in writing.
A agrees to pay Rs. 10,000 to B after 2 years. During this period B dies. After 2 years, B’s son C claims the amount from A. C’s claim is __________- a)Invalid
- b)Enforceable
- c)Not enforceable
- d)Unlawful.
Correct answer is option 'B'. Can you explain this answer?
A agrees to pay Rs. 10,000 to B after 2 years. During this period B dies. After 2 years, B’s son C claims the amount from A. C’s claim is __________
a)
Invalid
b)
Enforceable
c)
Not enforceable
d)
Unlawful.
|
|
Rithika Nair answered |
's legal heirs can claim the payment from A. The agreement between A and B is a legally binding contract, and B's death does not invalidate it. Therefore, A is still obligated to make the payment to B's legal heirs.
The process by which one person succeeds rights interest and benefits and obligations of another person is termed as:-- a)Assignment
- b)Succession
- c)Remission
- d)Recission.
Correct answer is option 'B'. Can you explain this answer?
The process by which one person succeeds rights interest and benefits and obligations of another person is termed as:-
a)
Assignment
b)
Succession
c)
Remission
d)
Recission.
|
|
Simran Pillai answered |
The correct answer is option 'B', succession.
Explanation:
Succession refers to the process by which one person succeeds to the rights, interests, benefits, and obligations of another person. It typically occurs when there is a change in ownership or control of property or assets.
Succession can occur in various contexts, such as in the case of inheritance, where the rights and obligations of a deceased person are transferred to their legal heirs. In this situation, the legal heirs succeed to the property, assets, and liabilities of the deceased person.
Similarly, succession can also occur in the context of business or corporate entities. When a business owner or shareholder transfers their ownership or interest in the company to another person, the new person succeeds to the rights and obligations associated with that ownership or interest. This can happen through various mechanisms, such as selling or transferring shares, or through the appointment of a successor in a will or legal document.
In the legal field, succession is an important concept as it governs the transfer of rights and obligations from one person to another. It ensures the smooth transition of ownership or control, and allows for the orderly transfer of assets and liabilities. Without a proper process of succession, there can be confusion, disputes, and legal complications regarding the rights and obligations associated with a person or entity.
In conclusion, succession is the process by which one person succeeds to the rights, interests, benefits, and obligations of another person. It is an essential concept in various areas of law, including inheritance and business transactions, and ensures the orderly transfer of rights and responsibilities.
Explanation:
Succession refers to the process by which one person succeeds to the rights, interests, benefits, and obligations of another person. It typically occurs when there is a change in ownership or control of property or assets.
Succession can occur in various contexts, such as in the case of inheritance, where the rights and obligations of a deceased person are transferred to their legal heirs. In this situation, the legal heirs succeed to the property, assets, and liabilities of the deceased person.
Similarly, succession can also occur in the context of business or corporate entities. When a business owner or shareholder transfers their ownership or interest in the company to another person, the new person succeeds to the rights and obligations associated with that ownership or interest. This can happen through various mechanisms, such as selling or transferring shares, or through the appointment of a successor in a will or legal document.
In the legal field, succession is an important concept as it governs the transfer of rights and obligations from one person to another. It ensures the smooth transition of ownership or control, and allows for the orderly transfer of assets and liabilities. Without a proper process of succession, there can be confusion, disputes, and legal complications regarding the rights and obligations associated with a person or entity.
In conclusion, succession is the process by which one person succeeds to the rights, interests, benefits, and obligations of another person. It is an essential concept in various areas of law, including inheritance and business transactions, and ensures the orderly transfer of rights and responsibilities.
X sold rice to Y by sample and Y thinking that they were old rice, purchased them. In fact, the rice were new. In this case:- a)Y is bound by the contract
- b)Y is not bound by the contract
- c)Y can recover damages from X
- d)Y can sue for replacement of new rice with old rice
Correct answer is option 'A'. Can you explain this answer?
X sold rice to Y by sample and Y thinking that they were old rice, purchased them. In fact, the rice were new. In this case:
a)
Y is bound by the contract
b)
Y is not bound by the contract
c)
Y can recover damages from X
d)
Y can sue for replacement of new rice with old rice
|
|
Siddharth Sen answered |
Explanation:
The given scenario involves a contract between X and Y for the purchase of rice. X sold rice to Y by showing a sample and Y, believing that the rice was old, purchased them. However, it was later found that the rice was new. In this case, the following points should be considered:
1. Contractual obligation: When two parties enter into a contract, they are bound by its terms and conditions. In this case, X sold rice to Y and Y purchased it believing that it was old rice. Although the rice turned out to be new, Y is still bound by the contract as they agreed to purchase the rice based on the sample shown by X.
2. Importance of sample: In this case, the sample played a crucial role in the contract. Y relied on the sample shown by X and made the purchase decision based on it. Therefore, it is important for both parties to ensure that the sample accurately represents the goods being sold.
3. Remedies for breach of contract: If one party breaches the terms of the contract, the other party may be entitled to remedies such as damages or replacement of goods. However, in this case, Y cannot recover damages or sue for replacement of old rice with new rice as they were bound by the contract.
Conclusion:
In conclusion, Y is bound by the contract despite the fact that the rice turned out to be new. It is important for both parties to be diligent in their dealings and ensure that the sample accurately represents the goods being sold.
The given scenario involves a contract between X and Y for the purchase of rice. X sold rice to Y by showing a sample and Y, believing that the rice was old, purchased them. However, it was later found that the rice was new. In this case, the following points should be considered:
1. Contractual obligation: When two parties enter into a contract, they are bound by its terms and conditions. In this case, X sold rice to Y and Y purchased it believing that it was old rice. Although the rice turned out to be new, Y is still bound by the contract as they agreed to purchase the rice based on the sample shown by X.
2. Importance of sample: In this case, the sample played a crucial role in the contract. Y relied on the sample shown by X and made the purchase decision based on it. Therefore, it is important for both parties to ensure that the sample accurately represents the goods being sold.
3. Remedies for breach of contract: If one party breaches the terms of the contract, the other party may be entitled to remedies such as damages or replacement of goods. However, in this case, Y cannot recover damages or sue for replacement of old rice with new rice as they were bound by the contract.
Conclusion:
In conclusion, Y is bound by the contract despite the fact that the rice turned out to be new. It is important for both parties to be diligent in their dealings and ensure that the sample accurately represents the goods being sold.
Which of the following is not applicable in relation to performance of reciprocal promises?- a)They can be performed simultaneously
- b)They cannot be performed simultaneously
- c)They can be performed in an order fixed by the parties
- d)The order of performance may be decided by the nature of transaction
Correct answer is option 'B'. Can you explain this answer?
Which of the following is not applicable in relation to performance of reciprocal promises?
a)
They can be performed simultaneously
b)
They cannot be performed simultaneously
c)
They can be performed in an order fixed by the parties
d)
The order of performance may be decided by the nature of transaction
|
|
Subhankar Sen answered |
In the context of performance of reciprocal promises, the option that is not applicable is option B - "They cannot be performed simultaneously."
Explanation:
Reciprocal promises refer to a situation where two or more parties promise to do something for each other. In such cases, the performance of these promises can be carried out in various ways. Let's examine the given options to understand which one is not applicable.
a) They can be performed simultaneously:
Reciprocal promises can be performed simultaneously when both parties agree to perform their obligations at the same time. For example, if Party A promises to deliver goods to Party B and Party B promises to make the payment upon delivery, they can agree to perform their promises simultaneously.
c) They can be performed in an order fixed by the parties:
Reciprocal promises can also be performed in an order fixed by the parties. This means that the parties can agree on a specific sequence or order in which they will perform their promises. For example, if Party A promises to provide a service to Party B and Party B promises to pay after receiving the service, they can agree on a specific order of performance.
d) The order of performance may be decided by the nature of the transaction:
The order of performance of reciprocal promises can also be decided by the nature of the transaction. In some cases, the nature of the transaction may require one party to perform their promise before the other party can fulfill their obligation. For example, if Party A promises to provide raw materials to Party B and Party B promises to manufacture goods using those materials, it is logical for Party A to perform their promise first.
b) They cannot be performed simultaneously:
This option is not applicable because reciprocal promises can indeed be performed simultaneously, as explained in option a. Parties can agree to perform their promises at the same time, especially when the promises are interdependent and require simultaneous action.
In conclusion, option B - "They cannot be performed simultaneously" is not applicable in relation to the performance of reciprocal promises. Reciprocal promises can be performed simultaneously, as well as in an order fixed by the parties or based on the nature of the transaction.
Explanation:
Reciprocal promises refer to a situation where two or more parties promise to do something for each other. In such cases, the performance of these promises can be carried out in various ways. Let's examine the given options to understand which one is not applicable.
a) They can be performed simultaneously:
Reciprocal promises can be performed simultaneously when both parties agree to perform their obligations at the same time. For example, if Party A promises to deliver goods to Party B and Party B promises to make the payment upon delivery, they can agree to perform their promises simultaneously.
c) They can be performed in an order fixed by the parties:
Reciprocal promises can also be performed in an order fixed by the parties. This means that the parties can agree on a specific sequence or order in which they will perform their promises. For example, if Party A promises to provide a service to Party B and Party B promises to pay after receiving the service, they can agree on a specific order of performance.
d) The order of performance may be decided by the nature of the transaction:
The order of performance of reciprocal promises can also be decided by the nature of the transaction. In some cases, the nature of the transaction may require one party to perform their promise before the other party can fulfill their obligation. For example, if Party A promises to provide raw materials to Party B and Party B promises to manufacture goods using those materials, it is logical for Party A to perform their promise first.
b) They cannot be performed simultaneously:
This option is not applicable because reciprocal promises can indeed be performed simultaneously, as explained in option a. Parties can agree to perform their promises at the same time, especially when the promises are interdependent and require simultaneous action.
In conclusion, option B - "They cannot be performed simultaneously" is not applicable in relation to the performance of reciprocal promises. Reciprocal promises can be performed simultaneously, as well as in an order fixed by the parties or based on the nature of the transaction.
Commercial Impossibility does not make the contract _________.- a)Valid
- b)Void
- c)Illegal
- d)Voidable
Correct answer is option 'B'. Can you explain this answer?
Commercial Impossibility does not make the contract _________.
a)
Valid
b)
Void
c)
Illegal
d)
Voidable
|
Jayant Mishra answered |
It is important to note the distinction between impossibility and frustration (often called impracticability or commercial frustration). Impossibility involves cases in which a party is unable to perform due to a supervening event occurring after execution of the contract.
R contracts to sell his car to S for Rs. 7 Lacs and S agrees to pay on delivery. Once the car is delivered to S and S pays Rs. 7 Lacs, Contract comes to an end. This is called: - a)Breach of a contract
- b)Discharge of a contract
- c)Rescission of a contract
- d)Waiver of a contract
Correct answer is option 'B'. Can you explain this answer?
R contracts to sell his car to S for Rs. 7 Lacs and S agrees to pay on delivery. Once the car is delivered to S and S pays Rs. 7 Lacs, Contract comes to an end. This is called:
a)
Breach of a contract
b)
Discharge of a contract
c)
Rescission of a contract
d)
Waiver of a contract
|
|
Meera Joshi answered |
Discharge of a Contract
Discharge of a contract refers to the termination of a contractual relationship between the parties involved. In the given scenario, the contract between R and S comes to an end once the car is delivered to S and S pays Rs. 7 Lacs. This is called the discharge of a contract.
Importance of Discharge of a Contract
Discharge of a contract is important because it ensures that the parties involved in the contract are no longer bound by the terms and conditions of the contract. This means that the obligations and responsibilities that were agreed upon in the contract are no longer applicable.
Types of Discharge of a Contract
There are various ways in which a contract can be discharged, some of which are:
1. Performance - This is when both parties have fulfilled their obligations as per the contract.
2. Agreement - This is when both parties agree to terminate the contract by mutual consent.
3. Breach - This is when one party fails to fulfill their obligations as per the contract, leading to termination of the contract.
4. Frustration - This is when an unforeseen event occurs, making it impossible to fulfill the contract.
Conclusion
In conclusion, the discharge of a contract is an important aspect of any contractual relationship. It ensures that the parties involved are no longer bound by the terms and conditions of the contract. There are various ways in which a contract can be discharged, but in the given scenario, it is discharged through performance.
Discharge of a contract refers to the termination of a contractual relationship between the parties involved. In the given scenario, the contract between R and S comes to an end once the car is delivered to S and S pays Rs. 7 Lacs. This is called the discharge of a contract.
Importance of Discharge of a Contract
Discharge of a contract is important because it ensures that the parties involved in the contract are no longer bound by the terms and conditions of the contract. This means that the obligations and responsibilities that were agreed upon in the contract are no longer applicable.
Types of Discharge of a Contract
There are various ways in which a contract can be discharged, some of which are:
1. Performance - This is when both parties have fulfilled their obligations as per the contract.
2. Agreement - This is when both parties agree to terminate the contract by mutual consent.
3. Breach - This is when one party fails to fulfill their obligations as per the contract, leading to termination of the contract.
4. Frustration - This is when an unforeseen event occurs, making it impossible to fulfill the contract.
Conclusion
In conclusion, the discharge of a contract is an important aspect of any contractual relationship. It ensures that the parties involved are no longer bound by the terms and conditions of the contract. There are various ways in which a contract can be discharged, but in the given scenario, it is discharged through performance.
Supervening impossibility is related to:-- a)Frustration
- b)Quid pro Quo
- c)Privity of contract
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
Supervening impossibility is related to:-
a)
Frustration
b)
Quid pro Quo
c)
Privity of contract
d)
None of the above
|
|
Arka Kaur answered |
Explanation:
Supervening impossibility refers to a situation where performance of a contract becomes impossible after it has been entered into due to an unforeseen event or change in circumstances. This impossibility must be such that it cannot be avoided or overcome by reasonable means.
Related to Frustration:
Supervening impossibility is related to frustration, as it is one of the grounds for frustration of a contract. Frustration occurs when the performance of a contract becomes impossible or radically different from what was initially contemplated due to an event outside the control of the parties.
Example:
For example, if a person enters into a contract to rent a venue for a wedding reception, but the venue is destroyed by fire before the date of the reception, the contract becomes impossible to perform due to supervening impossibility. The parties are not liable for breach of contract as the performance has become impossible due to an event beyond their control.
Conclusion:
In conclusion, supervening impossibility is a legal doctrine that recognizes that a contract may become impossible to perform due to unforeseen events or changes in circumstances. It is related to frustration of a contract, which is one of the grounds for terminating a contract when performance becomes impossible or radically different from what was initially contemplated.
Supervening impossibility refers to a situation where performance of a contract becomes impossible after it has been entered into due to an unforeseen event or change in circumstances. This impossibility must be such that it cannot be avoided or overcome by reasonable means.
Related to Frustration:
Supervening impossibility is related to frustration, as it is one of the grounds for frustration of a contract. Frustration occurs when the performance of a contract becomes impossible or radically different from what was initially contemplated due to an event outside the control of the parties.
Example:
For example, if a person enters into a contract to rent a venue for a wedding reception, but the venue is destroyed by fire before the date of the reception, the contract becomes impossible to perform due to supervening impossibility. The parties are not liable for breach of contract as the performance has become impossible due to an event beyond their control.
Conclusion:
In conclusion, supervening impossibility is a legal doctrine that recognizes that a contract may become impossible to perform due to unforeseen events or changes in circumstances. It is related to frustration of a contract, which is one of the grounds for terminating a contract when performance becomes impossible or radically different from what was initially contemplated.
X and Y contract that Y shall build a house for X Rs. 20 Lacs. Y is ready and willing to construct the house but X prevents him from doing so. In such case: - a)Y is entitled to recovers compensation for any loss suffered by him
- b)Y can opt to rescind the contract
- c)(a) or (b)
- d)(a) and (b)
Correct answer is option 'D'. Can you explain this answer?
X and Y contract that Y shall build a house for X Rs. 20 Lacs. Y is ready and willing to construct the house but X prevents him from doing so. In such case:
a)
Y is entitled to recovers compensation for any loss suffered by him
b)
Y can opt to rescind the contract
c)
(a) or (b)
d)
(a) and (b)
|
Aman Chaudhary answered |
Contractual Obligations and Breach
When two parties enter into a contract, they have certain obligations to fulfill. The party who fails to fulfill their obligations is said to have breached the contract. In such cases, the other party may have certain rights to recover their losses or terminate the contract.
X and Y Contract
In the given scenario, X and Y have entered into a contract where Y is supposed to build a house for X for a sum of Rs. 20 Lacs. Y is ready and willing to construct the house, but X prevents him from doing so.
Breach of Contract
X's prevention of Y from building the house is a breach of contract. Y has fulfilled his obligation by being ready and willing to construct the house, but X has prevented him from doing so. Therefore, Y has the right to recover compensation for any loss suffered by him.
Rescind the Contract
Y also has the option to rescind the contract in such a case. Rescinding the contract means that the contract is terminated, and both parties are released from their obligations. In this case, Y can choose to rescind the contract and claim compensation for any losses suffered.
Conclusion
In conclusion, Y has the right to recover compensation for any losses suffered due to X's breach of contract. Y also has the option to rescind the contract and claim compensation. Therefore, the correct answer is (d) (a) and (b).
When two parties enter into a contract, they have certain obligations to fulfill. The party who fails to fulfill their obligations is said to have breached the contract. In such cases, the other party may have certain rights to recover their losses or terminate the contract.
X and Y Contract
In the given scenario, X and Y have entered into a contract where Y is supposed to build a house for X for a sum of Rs. 20 Lacs. Y is ready and willing to construct the house, but X prevents him from doing so.
Breach of Contract
X's prevention of Y from building the house is a breach of contract. Y has fulfilled his obligation by being ready and willing to construct the house, but X has prevented him from doing so. Therefore, Y has the right to recover compensation for any loss suffered by him.
Rescind the Contract
Y also has the option to rescind the contract in such a case. Rescinding the contract means that the contract is terminated, and both parties are released from their obligations. In this case, Y can choose to rescind the contract and claim compensation for any losses suffered.
Conclusion
In conclusion, Y has the right to recover compensation for any losses suffered due to X's breach of contract. Y also has the option to rescind the contract and claim compensation. Therefore, the correct answer is (d) (a) and (b).
The right of joint promises to demand performance is: - a)Joint
- b)Several
- c)Joint or several
- d)Joint and several
Correct answer is option 'A'. Can you explain this answer?
The right of joint promises to demand performance is:
a)
Joint
b)
Several
c)
Joint or several
d)
Joint and several
|
Shah Dhruv answered |
As the promises are made jointly made to the promisee.... so it's performance must be done jointly ... as all the partners are jointly liable for that contract
In case of default by joint promisors, the promisee: - a)Cannot sue any single promisee
- b)Can sue any one of them to the extent of his share in the joint promise
- c)Can sue any one of them for the entire promise
- d)Both (a) and (b)
Correct answer is option 'C'. Can you explain this answer?
In case of default by joint promisors, the promisee:
a)
Cannot sue any single promisee
b)
Can sue any one of them to the extent of his share in the joint promise
c)
Can sue any one of them for the entire promise
d)
Both (a) and (b)
|
|
Rutuja Dasgupta answered |
Explanation:
In case of default by joint promisors, the promisee has the right to sue any one of the joint promisors for the entire promised amount. This is because a joint promise is a contract in which two or more persons make a promise to the same promisee to perform the same obligation. The promise of each promisor is co-extensive with the promise of every other promisor, and they are jointly and severally liable.
However, there are certain limitations to this right of the promisee. The limitations are discussed below:
Cannot sue any single promisee:
The promisee cannot sue any single promisor for the entire promised amount because the promise of each promisor is co-extensive with the promise of every other promisor. Therefore, the promisee has to sue all the joint promisors together for the entire promised amount.
Can sue any one of them to the extent of his share in the joint promise:
If the promisee cannot sue all the joint promisors together for the entire promised amount, he can sue any one of them to the extent of his share in the joint promise. This means that the promisee can recover from each promisor only the proportion of the promised amount for which he is liable.
Can sue any one of them for the entire promise:
If the promisee has already recovered a proportionate amount from one of the joint promisors, he can still sue any one of them for the entire promised amount. However, the promisor from whom the promisee has already recovered a proportionate amount will have the right to claim contribution from the other promisors for their share in the joint promise.
Conclusion:
Therefore, in case of default by joint promisors, the promisee has the right to sue any one of them for the entire promised amount, but he cannot sue any single promisor for the entire promised amount. The promisee can recover from each promisor only the proportion of the promised amount for which he is liable.
In case of default by joint promisors, the promisee has the right to sue any one of the joint promisors for the entire promised amount. This is because a joint promise is a contract in which two or more persons make a promise to the same promisee to perform the same obligation. The promise of each promisor is co-extensive with the promise of every other promisor, and they are jointly and severally liable.
However, there are certain limitations to this right of the promisee. The limitations are discussed below:
Cannot sue any single promisee:
The promisee cannot sue any single promisor for the entire promised amount because the promise of each promisor is co-extensive with the promise of every other promisor. Therefore, the promisee has to sue all the joint promisors together for the entire promised amount.
Can sue any one of them to the extent of his share in the joint promise:
If the promisee cannot sue all the joint promisors together for the entire promised amount, he can sue any one of them to the extent of his share in the joint promise. This means that the promisee can recover from each promisor only the proportion of the promised amount for which he is liable.
Can sue any one of them for the entire promise:
If the promisee has already recovered a proportionate amount from one of the joint promisors, he can still sue any one of them for the entire promised amount. However, the promisor from whom the promisee has already recovered a proportionate amount will have the right to claim contribution from the other promisors for their share in the joint promise.
Conclusion:
Therefore, in case of default by joint promisors, the promisee has the right to sue any one of them for the entire promised amount, but he cannot sue any single promisor for the entire promised amount. The promisee can recover from each promisor only the proportion of the promised amount for which he is liable.
Where the performance of a promise by one party depends on the prior performance of promise by the other party, such reciprocal promises fall under the category of : - a)Mutual and Concurrent
- b)Conditional and Dependent
- c)Mutual and Independent
- d)Both (a) & (b)
Correct answer is option 'B'. Can you explain this answer?
Where the performance of a promise by one party depends on the prior performance of promise by the other party, such reciprocal promises fall under the category of :
a)
Mutual and Concurrent
b)
Conditional and Dependent
c)
Mutual and Independent
d)
Both (a) & (b)
|
|
Nandini Iyer answered |
1. Mutual and independent reciprocal promise:
When each party performs his promise independently and irrespective of the fact whether the other party has performed, or is willing to perform his promise or not, the promises are mutual and independent. Example: X agrees Y to supply milk daily, while Y agrees to pay the price of milk every month. Both these are mutual and independent promises.
2. Conditional and dependent reciprocal promises:
When the performance of a promise by one party depends upon the prior permission of the other party, it will be a conditional and dependent promise.
Example:
X promises to construct Y’s house, provided that Y supplies cement and bricks. This will be a conditional and dependent promise. Here, X need not perform the promise if Y fails to supply cement and bricks.
3. Mutual and concurrent or simultaneous reciprocal promise:
This is the state when two contracts are to be performed simultaneously.
Example:
All cash sales are examples of simultaneous or concurrent promises, as delivery of goods and payment of price take place simultaneously.
If time is the essence of a contract and it is not performed within specified time then______- a)The contract cannot be performed later on
- b)The promisor can compel the promisee to accept the performance later on
- c)The contract becomes voidable at the option of the promisee
- d)The contract becomes voidable at the option of the promisor
Correct answer is option 'C'. Can you explain this answer?
If time is the essence of a contract and it is not performed within specified time then______
a)
The contract cannot be performed later on
b)
The promisor can compel the promisee to accept the performance later on
c)
The contract becomes voidable at the option of the promisee
d)
The contract becomes voidable at the option of the promisor
|
|
Aditya Jain answered |
Because as per indian contract act,if promisor donot perform the contract within specified time limit it can be avoided by promise and he can het compensation for this
A holds a house under a lease agreement. Subsequently he buys the house and becomes the owner of the house. The contract is discharged by - a)Rescission
- b)Merger
- c)Waiver
- d)Remission
Correct answer is option 'B'. Can you explain this answer?
A holds a house under a lease agreement. Subsequently he buys the house and becomes the owner of the house. The contract is discharged by
a)
Rescission
b)
Merger
c)
Waiver
d)
Remission
|
|
Arka Kaur answered |
Merger:
Merger is a legal concept that occurs when two or more separate entities combine to form a single entity. In the context of contracts, merger refers to the situation where two or more contracts are combined or merged into a single contract.
Explanation:
In the given scenario, A initially holds a house under a lease agreement, which means that A is the lessee and the owner of the house is the lessor. However, A later decides to buy the house and becomes the owner. As a result of this transaction, the lease agreement is discharged by merger.
Reason:
When A purchases the house, the roles of the lessee and the lessor are merged into a single entity, A. A is now both the owner and the occupant of the house, eliminating the need for a separate lease agreement. The ownership of the house itself includes the rights and obligations that were previously governed by the lease agreement.
Effect:
The merger of the lease agreement into the ownership of the house effectively discharges the lease agreement. This means that the lease agreement is no longer valid or enforceable, as it has been replaced by the ownership rights of A. A is now free to use and occupy the house as the owner without any obligations under the lease agreement.
Other Options:
- Rescission: Rescission refers to the cancellation or termination of a contract. However, in this scenario, there is no indication that the contract is being cancelled or terminated.
- Waiver: Waiver refers to the intentional relinquishment of a contractual right. It does not apply in this scenario as there is no indication that A has intentionally given up any rights under the lease agreement.
- Remission: Remission refers to the release or forgiveness of a debt or obligation. It does not apply in this scenario as there is no debt or obligation being released or forgiven.
Merger is a legal concept that occurs when two or more separate entities combine to form a single entity. In the context of contracts, merger refers to the situation where two or more contracts are combined or merged into a single contract.
Explanation:
In the given scenario, A initially holds a house under a lease agreement, which means that A is the lessee and the owner of the house is the lessor. However, A later decides to buy the house and becomes the owner. As a result of this transaction, the lease agreement is discharged by merger.
Reason:
When A purchases the house, the roles of the lessee and the lessor are merged into a single entity, A. A is now both the owner and the occupant of the house, eliminating the need for a separate lease agreement. The ownership of the house itself includes the rights and obligations that were previously governed by the lease agreement.
Effect:
The merger of the lease agreement into the ownership of the house effectively discharges the lease agreement. This means that the lease agreement is no longer valid or enforceable, as it has been replaced by the ownership rights of A. A is now free to use and occupy the house as the owner without any obligations under the lease agreement.
Other Options:
- Rescission: Rescission refers to the cancellation or termination of a contract. However, in this scenario, there is no indication that the contract is being cancelled or terminated.
- Waiver: Waiver refers to the intentional relinquishment of a contractual right. It does not apply in this scenario as there is no indication that A has intentionally given up any rights under the lease agreement.
- Remission: Remission refers to the release or forgiveness of a debt or obligation. It does not apply in this scenario as there is no debt or obligation being released or forgiven.
Rescission of a voidable contract is communicated and revoked in the same manner as the communication of revocation of : - a)Proposal
- b)Acceptance
- c)Breach
- d)Impossibility
Correct answer is option 'A'. Can you explain this answer?
Rescission of a voidable contract is communicated and revoked in the same manner as the communication of revocation of :
a)
Proposal
b)
Acceptance
c)
Breach
d)
Impossibility
|
|
Rajat Patel answered |
“The rescission of a voidable contract may be communicated or revoked in the same manner, and subject to the same rules, as apply to the communication or revocation of the proposal.”
A enters into a contract with B for dancing at his theatre for three nights for a fee of Rs. 2,00,000. A dances for two nights and is faller ill. What remedy is available to B?- a)B can repudiate the contract
- b)B can claim damages from A
- c)B is not bound to pay fees
- d)B cannot claim damages from A
Correct answer is option 'D'. Can you explain this answer?
A enters into a contract with B for dancing at his theatre for three nights for a fee of Rs. 2,00,000. A dances for two nights and is faller ill. What remedy is available to B?
a)
B can repudiate the contract
b)
B can claim damages from A
c)
B is not bound to pay fees
d)
B cannot claim damages from A
|
|
Meera Basak answered |
Remedy available to B when A falls ill during a contract for dancing at his theatre
The contract between A and B was for dancing at B's theatre for three nights for a fee of Rs. 2,00,000. However, A fell ill after dancing for two nights. In this scenario, the remedy available to B is:
D. B cannot claim damages from A
Explanation:
When a party to a contract fails to perform its obligations due to an unforeseen event such as illness, the other party may have a remedy available to them. In this case, since A fell ill, B cannot claim damages from A for not performing on the third night as it was due to an unforeseen event that was beyond A's control.
It is important to note that the contract may have included a specific clause addressing what would happen in case of illness or other unforeseen events. If such a clause exists, it will dictate the remedy available to both parties. However, in the absence of such a clause, the general rule is that the party affected by the unforeseen event is excused from performance and the other party cannot claim damages for non-performance.
In conclusion, B cannot claim damages from A for not performing on the third night due to A's illness as it was an unforeseen event beyond A's control.
The contract between A and B was for dancing at B's theatre for three nights for a fee of Rs. 2,00,000. However, A fell ill after dancing for two nights. In this scenario, the remedy available to B is:
D. B cannot claim damages from A
Explanation:
When a party to a contract fails to perform its obligations due to an unforeseen event such as illness, the other party may have a remedy available to them. In this case, since A fell ill, B cannot claim damages from A for not performing on the third night as it was due to an unforeseen event that was beyond A's control.
It is important to note that the contract may have included a specific clause addressing what would happen in case of illness or other unforeseen events. If such a clause exists, it will dictate the remedy available to both parties. However, in the absence of such a clause, the general rule is that the party affected by the unforeseen event is excused from performance and the other party cannot claim damages for non-performance.
In conclusion, B cannot claim damages from A for not performing on the third night due to A's illness as it was an unforeseen event beyond A's control.
In a contract where personal consideration is not the foundation of the contract, the contract may be performed by:- a)Promisor himself
- b)Promisor’s agent
- c)Promisor’s legal representative
- d)Any of the above
Correct answer is option 'D'. Can you explain this answer?
In a contract where personal consideration is not the foundation of the contract, the contract may be performed by:
a)
Promisor himself
b)
Promisor’s agent
c)
Promisor’s legal representative
d)
Any of the above
|
Rachana Pandey answered |
Section 40 of the Indian Contract Act 1872 states that the promise under a contract may be performed, as the circumstances may permit, by the promisor himself, or by his agent or his legal representatives.
When an inferior right accruing to a party in a contract merges into a superior right accruing to the same party, then : - a)The contract conferring the superior right is discharged
- b)The contract conferring the inferior right is discharged
- c)Both contracts are not discharged
- d)Both contracts are discharged
Correct answer is option 'B'. Can you explain this answer?
When an inferior right accruing to a party in a contract merges into a superior right accruing to the same party, then :
a)
The contract conferring the superior right is discharged
b)
The contract conferring the inferior right is discharged
c)
Both contracts are not discharged
d)
Both contracts are discharged
|
|
Gayatri Khanna answered |
When an inferior right accruing to a party in a contract merges into a superior right accruing to the same party, the contract conferring the inferior right is discharged. This means that the party no longer has the right or obligation associated with the inferior right.
Explanation:
1. What is an inferior right?
- An inferior right in a contract is a lesser or subordinate right compared to another right in the same contract.
- It is usually a right that is contingent upon the occurrence of certain conditions or events.
2. What is a superior right?
- A superior right in a contract is a higher or dominant right compared to another right in the same contract.
- It is usually a right that is more comprehensive, enforceable, or valuable.
3. Merger of rights:
- When an inferior right merges into a superior right, it means that the superior right encompasses or supersedes the inferior right.
- This can happen when the conditions or events necessary for the inferior right to be exercised are fulfilled, and the superior right comes into effect.
4. Discharge of the contract conferring the inferior right:
- As the superior right replaces or absorbs the inferior right, the contract that confers the inferior right becomes discharged.
- This means that the party no longer has any rights or obligations under that particular contract.
- The discharge of the contract conferring the inferior right is a natural consequence of the merger of rights.
5. Effect on the other contract:
- The contract conferring the superior right remains valid and enforceable.
- It is not discharged because it is the superior right that has merged with the inferior right, not the entire contract.
- Therefore, the party still has rights and obligations under the contract conferring the superior right.
In conclusion, when an inferior right accruing to a party in a contract merges into a superior right accruing to the same party, the contract conferring the inferior right is discharged. The party no longer has any rights or obligations under that contract. However, the contract conferring the superior right remains valid and enforceable.
Explanation:
1. What is an inferior right?
- An inferior right in a contract is a lesser or subordinate right compared to another right in the same contract.
- It is usually a right that is contingent upon the occurrence of certain conditions or events.
2. What is a superior right?
- A superior right in a contract is a higher or dominant right compared to another right in the same contract.
- It is usually a right that is more comprehensive, enforceable, or valuable.
3. Merger of rights:
- When an inferior right merges into a superior right, it means that the superior right encompasses or supersedes the inferior right.
- This can happen when the conditions or events necessary for the inferior right to be exercised are fulfilled, and the superior right comes into effect.
4. Discharge of the contract conferring the inferior right:
- As the superior right replaces or absorbs the inferior right, the contract that confers the inferior right becomes discharged.
- This means that the party no longer has any rights or obligations under that particular contract.
- The discharge of the contract conferring the inferior right is a natural consequence of the merger of rights.
5. Effect on the other contract:
- The contract conferring the superior right remains valid and enforceable.
- It is not discharged because it is the superior right that has merged with the inferior right, not the entire contract.
- Therefore, the party still has rights and obligations under the contract conferring the superior right.
In conclusion, when an inferior right accruing to a party in a contract merges into a superior right accruing to the same party, the contract conferring the inferior right is discharged. The party no longer has any rights or obligations under that contract. However, the contract conferring the superior right remains valid and enforceable.
A, B and C jointly promise to pay D a sum of Rs 90,000. C is compelled to pay the whole of the amount to D. Can he recover any thing form A and B when both A and B were solvent?- a)Yes, C can recover Rs. 60,000 from A
- b)Yes, C can recover Rs. 90,000 from A
- c)Yes, C can recover Rs. 30,000 each from A and B
- d)No, C cant recover anything from A and B
Correct answer is option 'C'. Can you explain this answer?
A, B and C jointly promise to pay D a sum of Rs 90,000. C is compelled to pay the whole of the amount to D. Can he recover any thing form A and B when both A and B were solvent?
a)
Yes, C can recover Rs. 60,000 from A
b)
Yes, C can recover Rs. 90,000 from A
c)
Yes, C can recover Rs. 30,000 each from A and B
d)
No, C cant recover anything from A and B
|
|
Charvi Roy answered |
Joint Promise and Liability
When two or more persons make a promise jointly, the liability is also joint. This means that all the persons who made the promise are equally liable for its performance. In case one person is compelled to pay the whole amount, he can recover a portion of it from the other persons who were also liable for the promise.
Application to the given situation
In the given situation, A, B, and C jointly promised to pay D a sum of Rs 90,000. This means that all three persons were equally liable for the promise. However, C was compelled to pay the whole amount to D. In such a situation, C can recover a portion of the amount from A and B.
Calculation of Recovery Amount
Since all three persons were equally liable for the promise, the amount payable by each person would be Rs 30,000 (i.e., Rs 90,000/3). As C has already paid the entire amount, he can recover Rs 30,000 each from A and B.
Conclusion
Hence, the correct option is (c) Yes, C can recover Rs. 30,000 each from A and B.
When two or more persons make a promise jointly, the liability is also joint. This means that all the persons who made the promise are equally liable for its performance. In case one person is compelled to pay the whole amount, he can recover a portion of it from the other persons who were also liable for the promise.
Application to the given situation
In the given situation, A, B, and C jointly promised to pay D a sum of Rs 90,000. This means that all three persons were equally liable for the promise. However, C was compelled to pay the whole amount to D. In such a situation, C can recover a portion of the amount from A and B.
Calculation of Recovery Amount
Since all three persons were equally liable for the promise, the amount payable by each person would be Rs 30,000 (i.e., Rs 90,000/3). As C has already paid the entire amount, he can recover Rs 30,000 each from A and B.
Conclusion
Hence, the correct option is (c) Yes, C can recover Rs. 30,000 each from A and B.
_________ of a contract takes place when all or some of the terms of the contract are cancelled.- a)Novation
- b)Alteration
- c)Merger
- d)Rescission
Correct answer is option 'B'. Can you explain this answer?
_________ of a contract takes place when all or some of the terms of the contract are cancelled.
a)
Novation
b)
Alteration
c)
Merger
d)
Rescission
|
|
Jayant Mishra answered |
By alteration: Alteration means change in one or more of the conditions of the contract.
Alteration made by the mutual consent of the parties will be perfectly valid. But any material alteration in terms of a written contract by the one party without the consent of other party will discharge such party from its obligations under the contract.
In case of novation a new contract replaces an old contract. The parties may also change. While in case of alteration only some of the terms of the contract are changed. Parties also continue to be the same.
Discharge by mutual agreement may involve ___________:- a)Novation
- b)Rescission
- c)Alteration
- d)All of these
Correct answer is option 'D'. Can you explain this answer?
Discharge by mutual agreement may involve ___________:
a)
Novation
b)
Rescission
c)
Alteration
d)
All of these
|
|
Maheshwar Goyal answered |
Discharge by mutual agreement is a method of ending a contract wherein both parties agree to terminate the contract. This type of discharge can involve various methods such as novation, rescission, and alteration.
Novation:
Novation is a process where the original contract is canceled, and a new contract is formed between the same parties or new parties. In this process, the rights and obligations of the original contract are transferred to a new contract. Novation requires the consent of all parties involved and can only be used if the original contract does not prohibit it.
Rescission:
Rescission is a process by which the parties to a contract agree to cancel the contract and return to the state they were in before the contract was made. In this process, the parties must return any property or money that was exchanged under the contract. Rescission can be used when there has been a mistake, fraud, undue influence, or other factors that make the contract voidable.
Alteration:
Alteration is a process where the parties to a contract agree to change the terms of the contract. This process requires the consent of all parties involved and can only be used if the original contract does not prohibit it. Alteration may involve changing the price, delivery date, or other terms of the contract.
In conclusion, discharge by mutual agreement can involve various methods such as novation, rescission, and alteration. These methods require the consent of all parties involved and may only be used if the original contract does not prohibit them.
Novation:
Novation is a process where the original contract is canceled, and a new contract is formed between the same parties or new parties. In this process, the rights and obligations of the original contract are transferred to a new contract. Novation requires the consent of all parties involved and can only be used if the original contract does not prohibit it.
Rescission:
Rescission is a process by which the parties to a contract agree to cancel the contract and return to the state they were in before the contract was made. In this process, the parties must return any property or money that was exchanged under the contract. Rescission can be used when there has been a mistake, fraud, undue influence, or other factors that make the contract voidable.
Alteration:
Alteration is a process where the parties to a contract agree to change the terms of the contract. This process requires the consent of all parties involved and can only be used if the original contract does not prohibit it. Alteration may involve changing the price, delivery date, or other terms of the contract.
In conclusion, discharge by mutual agreement can involve various methods such as novation, rescission, and alteration. These methods require the consent of all parties involved and may only be used if the original contract does not prohibit them.
W, a singer enters into a contract with M, the manager of a theatre, to sing at his threatre for two nights in every week during the next two months and M engages to pay her Rs. 5 Lacs for each night’s performance. On the 7th night, W willfully absents herself from the theatre :- a)M cannot put an end to the contract
- b)The contract is unlawful
- c)M is at liberty to put an end to the contract
- d)The contract is left at the liberty of W
Correct answer is option 'C'. Can you explain this answer?
W, a singer enters into a contract with M, the manager of a theatre, to sing at his threatre for two nights in every week during the next two months and M engages to pay her Rs. 5 Lacs for each night’s performance. On the 7th night, W willfully absents herself from the theatre :
a)
M cannot put an end to the contract
b)
The contract is unlawful
c)
M is at liberty to put an end to the contract
d)
The contract is left at the liberty of W
|
|
Nilanjan Saha answered |
Of performance. However, due to unforeseen circumstances, W is unable to fulfill her obligations and perform on one of the scheduled nights. M is entitled to terminate the contract and may seek damages for any losses suffered as a result of W's breach of contract. Additionally, M may also seek a replacement performer for the cancelled night and deduct any costs incurred from W's payment. W may be liable for any losses suffered by M due to her breach of contract, unless the breach was caused by factors beyond her control, such as illness or injury.
Impossibility existing subsequent to the formation of contract is called_____________.
- a)Subjective Impossibility
- b)Subsequent impossibility
- c)Supervening impossibility
- d)None of these.
Correct answer is option 'C'. Can you explain this answer?
Impossibility existing subsequent to the formation of contract is called_____________.
a)
Subjective Impossibility
b)
Subsequent impossibility
c)
Supervening impossibility
d)
None of these.
|
|
Jayant Mishra answered |
A contract to do an act, which after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, becomes void when the act becomes impossible or unlawful. This is called “Supervening Impossibility”, i.e. impossibility arising subsequent to the formation of the contract. In such a case the contract will be void as soon as such events make the performance of the contract impossible.
X contract with Y to sell his imported car for Rs. 50,000. Later on both the parties decide not be honour the deal. This is a case of discharge of contract by - a)Novation
- b)Alteration
- c)Rescission
- d)Remission
Correct answer is option 'C'. Can you explain this answer?
X contract with Y to sell his imported car for Rs. 50,000. Later on both the parties decide not be honour the deal. This is a case of discharge of contract by
a)
Novation
b)
Alteration
c)
Rescission
d)
Remission
|
Shereen Shaik answered |
Here the parties r not willing to honour the deal.means they want to cancel it .this is a case of rescission
The original contract need not be performed if there is :- a)Novation of contract
- b)Recession of contract
- c)Alteration of contract
- d)In all the above cases
Correct answer is option 'D'. Can you explain this answer?
The original contract need not be performed if there is :
a)
Novation of contract
b)
Recession of contract
c)
Alteration of contract
d)
In all the above cases
|
Vivek Vivek answered |
As per Indian contract act 1872
novation:- new contract in place of old contract.
recession:- cancellation of contract.
alternation:-changing the terms of contract.
In all these cases old contract gets cancelled and consideration for new contract is cancellation of old contract
novation:- new contract in place of old contract.
recession:- cancellation of contract.
alternation:-changing the terms of contract.
In all these cases old contract gets cancelled and consideration for new contract is cancellation of old contract
Contractual impossibilities are known as?- a)Initial
- b)Absolute
- c)Supervening
- d)None.
Correct answer is option 'C'. Can you explain this answer?
Contractual impossibilities are known as?
a)
Initial
b)
Absolute
c)
Supervening
d)
None.
|
|
Jayant Mishra answered |
A contract, which at the time it was entered into, was capable of being performed may subsequently become impossible to perform or unlawful. In such cases the contract becomes void. This is known as the doctrine of supervening impossibility. It is also known the doctrine of frustration. For example, where after making a contract of marriage, one of the parties goes mad, or where a contract is made for the import of goods and the import is forbidden by a govt. order, or where a singer contracts to sing and becomes too ill to do so, the contract in each case becomes void.
A contract of personal volition is not performed by: - a)The agent
- b)The promisees
- c)The legal representative
- d)All of these
Correct answer is option 'D'. Can you explain this answer?
A contract of personal volition is not performed by:
a)
The agent
b)
The promisees
c)
The legal representative
d)
All of these
|
|
Arun Khanna answered |
According to Indian Contract Act.
Agreement As per Section 2(e): Every Promise and every set of promises, forming the consideration for each other, is an agreement. Thus it is clear from this definition that 'a Promise' is an agreement.
Agreement As per Section 2(e): Every Promise and every set of promises, forming the consideration for each other, is an agreement. Thus it is clear from this definition that 'a Promise' is an agreement.
If time is the essence of a contract and the promisor fails to perform the contract by the specified time. The contract: - a)Remains Valid
- b)Becomes void
- c)Becomes Unenforceable
- d)Becomes Voidable at the instance of the promise
Correct answer is option 'D'. Can you explain this answer?
If time is the essence of a contract and the promisor fails to perform the contract by the specified time. The contract:
a)
Remains Valid
b)
Becomes void
c)
Becomes Unenforceable
d)
Becomes Voidable at the instance of the promise
|
|
Dhruba Choudhary answered |
The correct answer is option 'D': The contract becomes voidable at the instance of the promise.
Explanation:
When it comes to contracts, time is often considered to be an essential element. The parties involved in a contract usually specify a particular time frame within which the contract must be performed. If the promisor fails to fulfill their obligations within the specified time, it can have implications on the validity and enforceability of the contract.
Voidable Contract:
A voidable contract is a contract that is initially considered valid, but due to certain circumstances or actions of one party, it can be voided or cancelled at the option of the other party. In this case, if the promisor fails to perform the contract within the specified time, the promisee has the option to either enforce the contract or treat it as voidable.
Key Points:
Here are some key points to understand why the correct answer is option 'D':
1. Time as an essential element: The question states that time is the essence of the contract. This means that the parties have explicitly agreed that performance within the specified time is crucial.
2. Failure to perform within specified time: If the promisor fails to fulfill their obligations within the specified time, they have breached the contract. This breach gives the promisee the right to consider the contract as voidable.
3. Voidable at the instance of the promisee: The promisee has the option to treat the contract as voidable due to the promisor's failure to perform on time. This means that the promisee can choose whether to enforce the contract or terminate it.
4. Difference between void and voidable: A void contract is considered to have no legal effect from the beginning, while a voidable contract is initially valid but can be cancelled or voided later.
In conclusion, if the promisor fails to perform the contract within the specified time, the contract becomes voidable at the instance of the promisee. The promisee can choose to either enforce the contract or treat it as voidable and seek remedies for the breach of contract.
Explanation:
When it comes to contracts, time is often considered to be an essential element. The parties involved in a contract usually specify a particular time frame within which the contract must be performed. If the promisor fails to fulfill their obligations within the specified time, it can have implications on the validity and enforceability of the contract.
Voidable Contract:
A voidable contract is a contract that is initially considered valid, but due to certain circumstances or actions of one party, it can be voided or cancelled at the option of the other party. In this case, if the promisor fails to perform the contract within the specified time, the promisee has the option to either enforce the contract or treat it as voidable.
Key Points:
Here are some key points to understand why the correct answer is option 'D':
1. Time as an essential element: The question states that time is the essence of the contract. This means that the parties have explicitly agreed that performance within the specified time is crucial.
2. Failure to perform within specified time: If the promisor fails to fulfill their obligations within the specified time, they have breached the contract. This breach gives the promisee the right to consider the contract as voidable.
3. Voidable at the instance of the promisee: The promisee has the option to treat the contract as voidable due to the promisor's failure to perform on time. This means that the promisee can choose whether to enforce the contract or terminate it.
4. Difference between void and voidable: A void contract is considered to have no legal effect from the beginning, while a voidable contract is initially valid but can be cancelled or voided later.
In conclusion, if the promisor fails to perform the contract within the specified time, the contract becomes voidable at the instance of the promisee. The promisee can choose to either enforce the contract or treat it as voidable and seek remedies for the breach of contract.
W, a singer enters into a contract with M, the manager of a theatre, to sing at his threatre for two nights in every week during the next two months and M engages to pay her Rs. 5 Lacs for each night’s performance. On the 7th night, W willfully absents herself from the theatre :- a)M cannot put an end to the contract
- b)The contract is unlawful
- c)M is at liberty to put an end to the contract
- d)The contract is left at the liberty of W
Correct answer is option 'C'. Can you explain this answer?
W, a singer enters into a contract with M, the manager of a theatre, to sing at his threatre for two nights in every week during the next two months and M engages to pay her Rs. 5 Lacs for each night’s performance. On the 7th night, W willfully absents herself from the theatre :
a)
M cannot put an end to the contract
b)
The contract is unlawful
c)
M is at liberty to put an end to the contract
d)
The contract is left at the liberty of W
|
|
Nisha Saini answered |
C
Which of the following is not applicable in relation to performance of reciprocal promises?- a)They can be performed simultaneously
- b)They cannot be performed simultaneously
- c)They can be performed in an order fixed by the parties
- d)The order of performance may be decided by the nature of transaction
Correct answer is option 'B'. Can you explain this answer?
Which of the following is not applicable in relation to performance of reciprocal promises?
a)
They can be performed simultaneously
b)
They cannot be performed simultaneously
c)
They can be performed in an order fixed by the parties
d)
The order of performance may be decided by the nature of transaction
|
|
Jayant Mishra answered |
Some contracts consist of a reciprocal promise or promises which are to be performed simultaneously. In such cases, there is no obligation on the promisor to perform his promise unless the promisee is willing to perform his reciprocal promise.
Reciprocal promises are _______________.- a)Promises made by both parties to the contract
- b)Promise made by promisor only
- c)Promise made by promisee only
- d)None of these.
Correct answer is option 'A'. Can you explain this answer?
Reciprocal promises are _______________.
a)
Promises made by both parties to the contract
b)
Promise made by promisor only
c)
Promise made by promisee only
d)
None of these.
|
|
Vivek Vivek answered |
Reciprocal promises are the promises made by the both parties to each other .
If a new contract is substituted in place of an existing contract it is called: - a)Alteration
- b)Rescission
- c)Novation
- d)Waiver
Correct answer is option 'C'. Can you explain this answer?
If a new contract is substituted in place of an existing contract it is called:
a)
Alteration
b)
Rescission
c)
Novation
d)
Waiver
|
|
Arun Khanna answered |
Novation is the act of either replacing a party in contract with another or replacing one contractual obligation with another, requiring the consent of all parties involved.
Substitution of an original party to a contract with a new party, or substitution of an original contract with a new contract. Upon substitution, the obligations of the withdrawing-party are automatically discharged and no express-release is required. To be effective, however, the substitution must be agreed-to by all the original and new parties to the contract. Novation is never presumed; if the novation agreement is not in writing, it must be established from the acts and conduct of the parties. Novation is not the same as assignment of an agreement where no new agreement is needed and the rights and duties are transferred from the assignor to the assignee.
In contracts of sale of movable properties, time is:- a)Presumed to be the essence of the contract
- b)No presumption as to time can be raised
- c)Not presumed to be the essence of the contract
- d)All of the above
Correct answer is option 'A'. Can you explain this answer?
In contracts of sale of movable properties, time is:
a)
Presumed to be the essence of the contract
b)
No presumption as to time can be raised
c)
Not presumed to be the essence of the contract
d)
All of the above
|
|
Priya Patel answered |
In the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are (evident?) :
(1) from the express terms of the contract;
(2) from the nature of the property; and
(3) from the surrounding circumstances, for example, the object of making the contract.”
(1) from the express terms of the contract;
(2) from the nature of the property; and
(3) from the surrounding circumstances, for example, the object of making the contract.”
A lets out a theatre to B for a series of drama for certain days. The theatre was completely destroyed by fire before the scheduled dates. In the case :- a)The contract is discharged by impossibility of performance
- b)The contract is void ab initio
- c)The contract is voidable at the option of B
- d)A cannot be discharged of the contract
Correct answer is option 'A'. Can you explain this answer?
A lets out a theatre to B for a series of drama for certain days. The theatre was completely destroyed by fire before the scheduled dates. In the case :
a)
The contract is discharged by impossibility of performance
b)
The contract is void ab initio
c)
The contract is voidable at the option of B
d)
A cannot be discharged of the contract
|
|
Lakshmi Sadhika Nagavara answered |
The contract is discharged due to impossibility of performance bcoz he lets theatre for drama before dates it is on fire so there is impossibility so the contract becomes discharged.
A contract can be discharged by: - a)Mutual agreement and performance
- b)Lapse of time and operation of law
- c)Breach of contract
- d)All of these
Correct answer is option 'D'. Can you explain this answer?
A contract can be discharged by:
a)
Mutual agreement and performance
b)
Lapse of time and operation of law
c)
Breach of contract
d)
All of these
|
|
Sinjini Gupta answered |
Discharge of Contract
A contract is an agreement between two parties that creates legal obligations for both parties. A contract can be discharged in several ways, which are explained below.
Mutual Agreement and Performance
When both parties agree to end the contract and have fulfilled their obligations, the contract is discharged by mutual agreement and performance. This means that both parties have agreed to end the contract and have performed all of the obligations that were required under the contract. This is the most common way that contracts are discharged.
Lapse of Time and Operation of Law
A contract can also be discharged by the lapse of time or the operation of law. If the contract has a specific end date or expiration date, the contract will be discharged when that date arrives. Additionally, a contract can be discharged by operation of law if there is a change in the law that makes the contract illegal or if one of the parties becomes incapacitated or dies.
Breach of Contract
A contract can also be discharged by breach of contract. When one party fails to fulfill their obligations under the contract, they are said to have breached the contract. If the breach is significant, the other party may have the right to terminate the contract and seek damages for the breach.
Conclusion
In conclusion, a contract can be discharged by mutual agreement and performance, lapse of time and operation of law, or breach of contract. It is important for both parties to understand how a contract can be discharged and to fulfill their obligations under the contract to avoid any potential legal disputes.
A contract is an agreement between two parties that creates legal obligations for both parties. A contract can be discharged in several ways, which are explained below.
Mutual Agreement and Performance
When both parties agree to end the contract and have fulfilled their obligations, the contract is discharged by mutual agreement and performance. This means that both parties have agreed to end the contract and have performed all of the obligations that were required under the contract. This is the most common way that contracts are discharged.
Lapse of Time and Operation of Law
A contract can also be discharged by the lapse of time or the operation of law. If the contract has a specific end date or expiration date, the contract will be discharged when that date arrives. Additionally, a contract can be discharged by operation of law if there is a change in the law that makes the contract illegal or if one of the parties becomes incapacitated or dies.
Breach of Contract
A contract can also be discharged by breach of contract. When one party fails to fulfill their obligations under the contract, they are said to have breached the contract. If the breach is significant, the other party may have the right to terminate the contract and seek damages for the breach.
Conclusion
In conclusion, a contract can be discharged by mutual agreement and performance, lapse of time and operation of law, or breach of contract. It is important for both parties to understand how a contract can be discharged and to fulfill their obligations under the contract to avoid any potential legal disputes.
Where the performance of a promise by one party depends on the prior performance of promise by the other party such reciprocal promises fall under the category. - a)Mutual and concurrent
- b)Conditional and dependant
- c)Mutual and Independent
- d)Both (a) and (b)
Correct answer is option 'B'. Can you explain this answer?
Where the performance of a promise by one party depends on the prior performance of promise by the other party such reciprocal promises fall under the category.
a)
Mutual and concurrent
b)
Conditional and dependant
c)
Mutual and Independent
d)
Both (a) and (b)
|
|
Jayant Mishra answered |
Conditional and dependent reciprocal promises:
When the performance of a promise by one party depends upon the prior permission of the other party, it will be a conditional and dependent promise.
Example:
X promises to construct Y’s house, provided that Y supplies cement and bricks. This will be a conditional and dependent promise. Here, X need not perform the promise if Y fails to supply cement and bricks.
Chapter doubts & questions for Unit 4: Performance of Contract - Business Laws for CA Foundation 2025 is part of CA Foundation exam preparation. The chapters have been prepared according to the CA Foundation exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for CA Foundation 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
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