Contract II | Question Paper | Apr 2016

Q1. Answer the following questions in not more than two sentences each :

a) Give any 4 general duties of partners.

b) When does compulsory dissolution of a partnership firm become unavoidable ?

c) What is the remedy for the breach of warranty ?

d) What is the main meaning of sale on “Sale or return” basis ?

e) What would be the impact of insolvency or death of a partner on the partnership firm ?
f) What is the “Consideration” in a contract of guarantee ?

g) Define “bailment” ?

h) Give various types of partners.

i) Define “agency”.

j) Who is “substituted agency” ?

Q2. Write short notes on any of the following :

a) The rights and duties of the partners of a firm toward each other and towards third persons.

b) Mode of settlement of accounts between partners of a firm.

c) “Risk prima facie passes with property”.

d) Rights and duties of indemnifier.

e) “Qui facit Per Aien Facit Per Se”.

f) Agent’s Authority in a emergency.

Q3. Solve any two of the following situation based problems giving reasons and caselaw.

a) “X” the owner of a Bus gave it to a Travels company to maintain it for three years on a fixed annual payment. For the amount having become due as maintenance charge, the Travels Company claimed lien on the Bus.
(i) Can th eTravels Company retain the Bus for maintenance charges due ?
Give reasons.
(ii) What is the alternative remedy available to the Travels Company ?

b) “A” a partner of a firm, takes a loan inthe name of firm without informing
the other partners and utilises the same for his personal purposes.
(i) Can the other partners and the firm be held liable in default of “A”
for the said repayment ? Give reasons.
(ii) What will be the situation if “A” sent a notice for retirement after this transaction? Discuss in necessary detail.

c) “A” becomes surety to “C” for conduct of “B” as a manager inthe Bank of “C”.
Later on “B” and “C” enter into a contract without the knowledge and consent
of “A” that salary of “B” shall be raised and that “B” shall be liable for the 1/4th of the losses on overdrafts. “B” allows a customer to overdraw, without his authority and Bank loses a sum of money.
(i) Can “C” the owner of the bank recover the loss due to act of “B” from “A” the surety ? Give reasons.
(ii) Which principle / mode of discharge of a surety is applicable in this situation ?

Q4. Answer in detail any 4 of the following :

a) Comment on the status of a minor in a partnership firm as partner and elucidate his Liability towards the firm and third persons.

b) Distinguish between “condition and warranty”. What are the implied conditions and implied warranties ? When can breach of a condition be treated as breach of warranty ?

c) What is the meaning of registration of a firm ? Is it compulsory in the state of Maharashtra ? What are the legal consequences of non-registration of a firm ?

d) Discuss and distinguish between contract of guarantee and contract of indemnity.

e) Define “Bailment”. Write in full on the rights and duties of a Bailor and a Bailee.

f) What are the duties of transfer of property in the goods from seller to buyer ?
Explain the legal position if the sale is by :
i) person not a owner
ii) a joint owner
iii) under voidable contract
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