Test: Contract Of Law - 4 - CLAT MCQ

Principle: Agreement by way of wager is void and no suit lies for recovering anything won by such wager

Facts: Mr. X and Mrs. Y enter into a contract with R who is an expert in betting on horse racing. Both pay a sum of Rs. 2000 to R to bet on a particular horse. R followed the instructions and he won a sum of Rs. 20 lakhs

Principle: For a contract an offer has to be made that is accepted and there is consensus ad idem

Facts: A goes to a shop and asks the shopkeeper to deliver rice at his residence in their previous dealings of about 12 years; he had always ordered the Basmati variety of rice. The shopkeeper stores five varieties of rice. He delivers krishnakali variety. A had wanted basmati. Shopkeeper wants to enforce the contract

Principle: Any person who has received any unjust benefit, he/she must return it to the right/owner

Facts: A and B had similar sounding names. The postman delivered a parcel meant for B at A’s residence, by mistake

When the consent to an agreement is obtained by undue influence, the agreement is at the option of

Mere silence is no fraud unless           

The mother owes Rs. 10000 to her daughter. By this debt has become barred by the limitation act. The mother signs a written promise to par Rs. 3000 on account of the debt. In this case which one of the following is correct

A minor estate is liable for the ………….supplied to him           

Principle 1: A minor is a person who is below the age of eighteen. However, where a guardian administers the minor’s property the age of majority is twenty one.

Principle 2: A minor is not permitted by law to enter into a contract. Hence, where a minor enters into a contract with a major person, the contract is not enforceable. This effectively means that neither the minor nor the other party can make any claim on the basis of the contract.

Principle 3: In a contract with a minor, if the other party hands over any money or confers any other benefit on the minor, the same shall not be recoverable from the minor unless the other party was deceived by the minor to hand over money or any other benefit. The other party will have to show that the minor misrepresented her age, he was ignorant about the age of the minor and that he handed over the benefit on the basis of such representation.

Facts
Ajay convinces Bandita, a girl aged 18 that she would sell her land to him. Bandita’s mother Chaaru is her guardian. Nonetheless Bandita, without the permission of Chaaru, sells the land to Ajay for a total sum of rupees fifty lakh, paid in full and final settlement of the price. Chaaru challenges this transaction claiming the Bandita is a minor and hence the possession of the land shall not be given to Ajay. Thus Ajay is in a difficult situation and has no idea how to recover his money from Bandita.

Q.

Chaaru is justified in challenging the sale transaction because:

Principle 1: A minor is a person who is below the age of eighteen. However, where a guardian administers the minor’s property the age of majority is twenty one.

Principle 2: A minor is not permitted by law to enter into a contract. Hence, where a minor enters into a contract with a major person, the contract is not enforceable. This effectively means that neither the minor nor the other party can make any claim on the basis of the contract.

Principle 3: In a contract with a minor, if the other party hands over any money or confers any other benefit on the minor, the same shall not be recoverable from the minor unless the other party was deceived by the minor to hand over money or any other benefit. The other party will have to show that the minor misrepresented her age, he was ignorant about the age of the minor and that he handed over the benefit on the basis of such representation.

Facts
Ajay convinces Bandita, a girl aged 18 that she would sell her land to him. Bandita’s mother Chaaru is her guardian. Nonetheless Bandita, without the permission of Chaaru, sells the land to Ajay for a total sum of rupees fifty lakh, paid in full and final settlement of the price. Chaaru challenges this transaction claiming the Bandita is a minor and hence the possession of the land shall not be given to Ajay. Thus Ajay is in a difficult situation and has no idea how to recover his money from Bandita.

Q.

Ajay can be allowed to recover the money only if he can show that:

Principle 1: A minor is a person who is below the age of eighteen. However, where a guardian administers the minor’s property the age of majority is twenty one.

Principle 2: A minor is not permitted by law to enter into a contract. Hence, where a minor enters into a contract with a major person, the contract is not enforceable. This effectively means that neither the minor nor the other party can make any claim on the basis of the contract.

Principle 3: In a contract with a minor, if the other party hands over any money or confers any other benefit on the minor, the same shall not be recoverable from the minor unless the other party was deceived by the minor to hand over money or any other benefit. The other party will have to show that the minor misrepresented her age, he was ignorant about the age of the minor and that he handed over the benefit on the basis of such representation.

Facts
Ajay convinces Bandita, a girl aged 18 that she would sell her land to him. Bandita’s mother Chaaru is her guardian. Nonetheless Bandita, without the permission of Chaaru, sells the land to Ajay for a total sum of rupees fifty lakh, paid in full and final settlement of the price. Chaaru challenges this transaction claiming the Bandita is a minor and hence the possession of the land shall not be given to Ajay. Thus Ajay is in a difficult situation and has no idea how to recover his money from Bandita.

Q.

In order to defend the sale, Bandita will need to show that

Principle 1: A minor is a person who is below the age of eighteen. However, where a guardian administers the minor’s property the age of majority is twenty one.

Principle 2: A minor is not permitted by law to enter into a contract. Hence, where a minor enters into a contract with a major person, the contract is not enforceable. This effectively means that neither the minor nor the other party can make any claim on the basis of the contract.

Principle 3: In a contract with a minor, if the other party hands over any money or confers any other benefit on the minor, the same shall not be recoverable from the minor unless the other party was deceived by the minor to hand over money or any other benefit. The other party will have to show that the minor misrepresented her age, he was ignorant about the age of the minor and that he handed over the benefit on the basis of such representation.

Facts
Ajay convinces Bandita, a girl aged 18 that she would sell her land to him. Bandita’s mother Chaaru is her guardian. Nonetheless Bandita, without the permission of Chaaru, sells the land to Ajay for a total sum of rupees fifty lakh, paid in full and final settlement of the price. Chaaru challenges this transaction claiming the Bandita is a minor and hence the possession of the land shall not be given to Ajay. Thus Ajay is in a difficult situation and has no idea how to recover his money from Bandita.

Which of the following is correct?

Principle 1: A minor is a person who is below the age of eighteen. However, where a guardian administers the minor’s property the age of majority is twenty one.

Principle 2: A minor is not permitted by law to enter into a contract. Hence, where a minor enters into a contract with a major person, the contract is not enforceable. This effectively means that neither the minor nor the other party can make any claim on the basis of the contract.

Principle 3: In a contract with a minor, if the other party hands over any money or confers any other benefit on the minor, the same shall not be recoverable from the minor unless the other party was deceived by the minor to hand over money or any other benefit. The other party will have to show that the minor misrepresented her age, he was ignorant about the age of the minor and that he handed over the benefit on the basis of such representation.

Facts
Ajay convinces Bandita, a girl aged 18 that she would sell her land to him. Bandita’s mother Chaaru is her guardian. Nonetheless Bandita, without the permission of Chaaru, sells the land to Ajay for a total sum of rupees fifty lakh, paid in full and final settlement of the price. Chaaru challenges this transaction claiming the Bandita is a minor and hence the possession of the land shall not be given to Ajay. Thus Ajay is in a difficult situation and has no idea how to recover his money from Bandita.

Q.

Which  of the following is correct?

Principle: A contract obtained by misrepresentation is voidable at the option of the buyer.

Facts: Anand wants to sell his house. Anupama approaches him with an offer to buy the house and Anand shows her the house. The house is not in a very good condition and visibly requires repairs, without which it is uninhabitable. Anand does not tell anything regarding the required repairs to be livable. Anupama purchases the house for a huge consideration. Later on when she wants to move in her things into the house to start living she realizes the heavy repairs that the house requires urgently.

Legal Principle: Performance of a legal duty cannot be a consideration for a promise
Factual Situation: ‘A’s wallet is stolen by a thief. ‘A’ lodges a complaint in the police station. ‘A’ promises
to pay a sum of Rs. 500 to the person who is able to apprehend the thief and get back his wallet. The policeman’s servant ‘X’ apprehends the thief and gets back the wallet. ‘A’ refuses to pay ‘X’ the promised Rs. 500.

Q.

Choose the correct option:
I. The servant is entitled to the reward
II. The policeman would have been entitled to the reward had he been the person to apprehend the thief
III. The policeman would be entitled to the reward even if he had not apprehended the thief
IV. The servant would not be entitled to the reward

Legal Principle: Performance of a legal duty cannot be a consideration for a promise
Factual Situation: ‘A’s wallet is stolen by a thief. ‘A’ lodges a complaint in the police station. ‘A’ promises
to pay a sum of Rs. 500 to the person who is able to apprehend the thief and get back his wallet. The
policeman’s servant ‘X’ apprehends the thief and gets back the wallet. ‘A’ refuses to pay ‘X’ the promised
Rs.500.

Q

A voidable contract is one which is:

“A” promise to give money or money’s worth upon the determination or ascertainment of an uncertain event is called

“A” offers to sell his car to “B” for Rs. 50,000/-. “B” agrees to buy the car offering Rs. 45,000/-. The reply of “B” amounts to:

When goods are displayed in a show – window bearing price tags, it indicates:

PRINCIPLE: Time is the essence of a contract.

FACTS: Ghoshwal Woolens Ltd. is an apparel store in the small town of Bajipur. More than half the people in the town buy clothes from this shop, since it is well known for its quality and reliability. In the month of October, Mr. Ghoshwal, proprietor of Ghoshwal Woolens Ltd., entered into a contract with Mr. Basu, who agreed to supply a thousand pieces of woolen apparel, including sweaters, caps, mufflers and gloves, to the apparel store by November end. He was given half the amount as advance. However, Mr. Basu failed to supply the woolens within the given period and instead supplied it in the month of February. Mr. Ghoshwal accepted the stock, however since he couldn’t sell any of it, he asked Mr. Basu for reimbursement for the losses suffered by him.

Q.

Is Mr. Ghoshwal entitled to compensation by Mr. Basu?

PRINCIPLE: Express or implied consent should be given for extension of time period, by the party likely to suffer loss by the extension.

Facts: Applying the above principle to the facts of the previous question, will Mr.

Q. Basu be liable to pay compensation to Mr. Ghoshal?

PRINCIPLE: A proposal made by one party and its acceptance by another, with the intention of establishing legal relations, is an agreement.

FACTS: Sahil goes to ‘The Great Indian Bargain’, an exhibition held in the Gymkhana grounds of Mumbai, where the producers sell their products at great discounts. Here, he comes across the window of a shop where a beautiful painting is placed along with a board which says ‘Paintings for Rs. 500’. Knowing the real value of the painting to be much more than Rs. 500, Sahil rushes inside and asks the seller to sell him the painting immediately. The seller refuses to sell him the painting. Sahil sues the seller, claiming that he had breached the contract.

Q. Which of the following is true?

Principle: When one of the parties to a contract is in such a relation with the other party as to be able to dominate his will, and uses this superior position to obtain the other party’s consent to a contract, he is said to be exercised undue influence. Such a contract is not valid.

FACTS: Vijay Jain has three sons- Amar, Bharat and Chaitanya. Only Amar and Bharat are married. Bharat has two sons and one daughter, and Amar has one son, Diwakar. On the occasion of Vijay Jain’s 75th birthday, he gifts some of his lands to his sons, and he gifts his largest piece of land, and all his farms and orchards to Diwakar. Bharat and Chaitanya sue Vijay Jain, claiming that his consent has been obtained by undue influence and hence, the transfer of property to Diwakar is void. Decide.

PRINCIPLE 1: An agent has the right to hold his master’s goods in lien until his previous debts are satisfied.

PRINCIPLE 2: A lien is a right to hold chattels of a debtor as security against the debtor.

PRINCIPLE 3: When a transaction is going on, the goods should be transferred before the payment can be made.

FACTS: Inamdar is a sales agent and he specializes in paintings and other works of art. He finds out who is selling paintings and other artifacts at the lowest prices and sources them to the buyer, thus enabling the buyer to make a good deal. In this deal, he makes a profit equivalent to 5% of the sales proceeds. Mr. Vallya is interested in an ancient painting of Raja Rammohun Roy and Inamdar is aware of the same. After a few months, he informs Vallya that the said painting is available, and can be procured for a price of 15,000 pounds. Mr. Vallya agrees to the conditions and hands over the money to Inamdar. For the deal, Inamdar’s fees would be 1,000 pounds. When he demands his payment from his client, Vallya, the latter refuses to pay until the painting is handed over to him.

Q. Can Inamdar hold the painting with him till the payment is made?

PRINCIPLE 1: An agreement entered into with a minor is void ab initio. Any agreement entered into with a major is valid.

PRINCIPLE 2: A minor is anyone who is below 15 years of age.

PRINCIPLE 3: A contract is incomplete without consideration.

FACTS: Rebecca was born in 1997 in a small town in Karnataka. She is from an affluent family, but her parents are very strict and don’t give her enough pocket money to meet her expenses. Hence, she has to manage her income in other ways. On one occasion, she enters into an agreement with Uncle Mario, her father’s friend, to sell her old cell phone, which is perfect working condition. Mario hands over Rs. 2000 in advance as consideration for the deal.

Q. Is the contract entered into between the two valid?

PRINCIPLE: A partner is liable for the debts incurred by the other partners in the course of partnership.

FACTS: Aditya, Ravi and Suraj enter into a partnership to open a restaurant, Golden Harvest in Mumbai. Initially the restaurant does good business, but after a year, owing to staff shortage, the quality of food starts deteriorating. People start criticizing the restaurant and their business reduces significantly. There comes a day when they are forced to shut down their restaurant, and end their partnership. Following this, Ravi goes to Seth Karodimal to borrow some money on the pretext of re-opening his restaurant. However, he runs away with the money. Seth Karodimal sues Aditya and Suraj for the money. Decide.

PRINCIPLE: Any agreement in absolute restraint of the marriage of any person is void.

FACTS: Zoya and Benazir are both married to Azhar. He dies in October 2012, reducing them both to the status of co-widows. When Azhar’s will is read out, they discover a clause which states that if either of the co-widows remarry, they would be deemed to have forfeited their claim to any property or maintenance. However, Benazir gets married in February, 2013 and claims her share of maintenance and property, from Azhar’s lawyer, claiming that any clause in restraint of marriage is void. Hence, she should be entitled to maintenance. Decide.

PRINCIPLE: The finder of a chattel does not acquire an absolute property right over it, but only has the title superior to everyone else, except the rightful owner.

FACTS: Varun was dining in a restaurant with his family, and when he was about to leave, he came across an envelope, full of money, lying on the floor of the restaurant. Being an honest man, he immediately handed over the envelope to the Manager of the restaurant, Tarun, so that he could return it to the rightful owner, if he came looking for it. When Varun visited the same restaurant after two months, he remembered the envelope and asked the Manager about it. Tarun said that no one had come looking for the envelope. On hearing this, Varun asked him to hand over the envelope to him, and Tarun refused. Decide, using the above principle strictly.