1. Pritam of Bangalore entered into a contract with Vishal Mishra of Rajasthan for supply of liquor. Later, the Government imposed prohibition. Pritam could not supply the liquor to Vishal Mishra due to prohibition by Government.
Vishal Mishra of Rajasthan sued Pritam of Bangalore for specific performance and damages.
Which of the following statements is/are true?
(a) Vishal Mishra can demand performance of the contract
(b) Vishal Mishra can sue for damages
(c) Vishal Mishra cannot demand the performance of the contract, since the non-performance is due to operation of law
(d) Pritam has to pay damages for non-performance of the contact.
Since non-performance of contract is due to operation of law, Vishal Mishra can not demand for specific performance of contract. Hence, option (c) is the correct answer.
2. W, a singer enters into a contract with M, the manager of a theatre, to sing at his theatre 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
When a party to a contract fails to perform his promise in its entirety, the promisee may put an end to the contract. So, M is at liberty to put an end to the contract. Hence, option (c) is the correct answer.
3. A promises B to pay C a sum of Rs.500. Adoes not pay the amount to C.
(a) Only B can take action against A
(b) Only C can take action against A
(c) Both B & C can take action against A
(d) None of the above.
A person who is not a party to a contract cannot sue upon it even though the contract is for his benefit and he provided consideration. So, only B can take action against A. Hence, option (a) is the correct answer.
4. A contract need not be performed when
(a) Performance becomes impossible
(b) Parties agree to rescind, alter or substitute the contract
(c) Promisee neglects or refuses to afford the promisor reasonable facilities for the performance of his promise
(d) All the above
A contract need not be performed when:
its performance becomes impossible (s. 56)
the parties agree to substitute a new contract for it or to rescind or alter it (s. 62).
the promisee neglects or refuses to afford the promisor reasonable facilities for the performance of his promise (s. 67).
Hence, option (d) is the correct answer.
5. Time fixed for performance of the contract has expired. In this case, 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
Where time is not the essence of the contract, failure to perform within the fixed time does not make the contract voidable, but the promisee is entitled to compensationfor any loss caused to him by such failure. Hence, option (b) is the correct answer.
6. 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 promisee
Where time is essence, on failure to perform by the promisor by the specified time, the contract becomes voidable at the option of promisee. Hence, option (d) is the correct answer.
7. Mr. X opened a fire works shop for Divali and entered into a contract with Crackers Ltd. for supply of crackers on or before 10th October, 2008 (i.e. before Divali). He paid some advance to the company and agreed to pay the balance amount on receipt of the crackers. But Crackers Ltd. sent the consignment on 15th October after Divali. Mr. X rejected the crackers, which led to filing of a suit by the company for breach of contract, claiming compensation and damages. In the context of the present situation, which of the following statements is/are true?
(a) The contract is enforceable, hence Mr. X must Accept the goods
(b) Mr. X breached the contract, hence suit lies against him
(c) X may rescind the contract and claim refund of advance paid
(d) The company can claim compensation and damages from Mr. X.
Time is very much essence for certain contracts. If the performance of the contract is subject to fulfillment within a specified time, the contract becomes voidable at the option of other party. So, in the present case, the agreement becomes voidable as the Crackers Ltd. failed to supply the goods within specified time. Hence, option (c) is the correct answer.
8. A asks B, who owes him Rs.1,000, to send him a promissory note for Rs.1,000 by post.
(a) The debt is discharged as soon as B sends the promissory note duly addressed to A, by post
(b) The debt is not discharged till B pays in cash A for the debt
(c) The debt is not discharged till the Promissory Note is discharged by B
(d) None of the above.
The performance of any promise must be made in manner specified by the promise. So, the debt is discharged as soon as B sends the promissory note duly addressed to A, by post. Hence, option (a) is the correct answer.
9. 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 of the above
Written Promise to pay a time barred debt is enforceable. Hence, the written promise of mother to pay Rs.3,000 on account of her debt is enforceable. Hence, option (c) is the correct answer.
10. A owed 2 Bills # 35 for Rs. 5,000 & Bill # 128 for Rs.7,000 from B. A paid Rs.4000 in payment of Bill # 128. B adjusted the payment against Bill # 35
(a) The adjustment of the payment by B against Bill # 35 is valid
(b) A can compel B to adjust the payment against Bill # 128
(c) A cannot compel B to adjust the payment against Bill # 128
(d) B can adjust the payment against any outstanding bill due from A.
When a debtor owes several debts to the same creditor and makes a payment which is not sufficient to discharge all debts, the creditor is obliged to discharge off the debtor for the particular debt for which the payment is intended. So, A can compel B to adjust the payment against Bill # 128. Hence, option (b) is the correct answer.
11. 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
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.
Joint Promise
1. In case of death of a joint promisor(s), the promisee can:
(a) Not enforce the contract against the other surviving joint promisor
(b) Enforce the contract against the other surviving joint promisor
(c) Not enforce the contract at all
(d) None of the above
In case of death of a joint promisor(s), the promisee can enforce the contract against the surviving promisor(s) and legal representative of the deceased promisor. Hence, option (b) is the correct answer.
2. A, B and C jointly promise to pay X. A and B are untraceable.
(a) X can compel C to pay him in full
(b) X cannot compel C to pay
(c) X can compel C to pay one third amount only
(d) None of the above.
The promisee may compel any one or more of the joint promisors to perform the whole of the promise, if there is no express agreement to the contrary. In the given problem, C is liable to pay the whole amount as A and B becomes untraceable.
Hence, option (a) is the correct answer.
3. A, B and C jointly promise to pay X a sum of Rs.12,000.
(a) X can compel A to pay Rs.12,000 when B & C are untraceable
(b) X can compel B to pay Rs.12,000 when A & C are unable to pay
(c) X can compel C to pay Rs.12,000 when A & B refuse to pay
(d) All of the above.
If the parties do not discharge their obligations of their own volition, the promisee may compel any one or more of the joint promisors to perform the whole of the promise. Hence, option (d) is the correct answer.
4. 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 C recover anything form A and B ?
(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 can’t recover anything from A and B
When a Joint promisor is compelled to perform the whole of the promise, he may compel the other Joint promisors to contribute equally with himself for the performance of the promise. So, C can recover Rs.30,000 each from A and B. Hence, option (c) is the correct answer.
5. A, B and C jointly promise to pay X a sum of Rs.12,000. C is compelled to pay Rs.12,000. A is not able to pay anything.
(a) C can recover Rs.4,000 from B
(b) C can recover Rs.6,000 from B
(c) C can recover Rs.5,000 from B
(d) None of the above.
As per section 43, if any one of the Joint promisors (or his legal representatives after his death) makes default in the contribution, the remaining joint promisors must bear the loss arising from such default in equal proportion. So, in the given case, C can recover Rs.6,000 from B. Hence, option (b) is the correct answer.
6. A, B and C jointly promise to pay X a sum of Rs. 12,000. C is compelled to pay Rs 12000. Ais insolvent (but not B) and pays 50% to his creditors.
(a) C can recover Rs. 2000 from A and Rs. 5000 from B
(b) C can recover Rs. 2000 from A and Rs. 4000 from B
(c) C can recover Rs. 4000 from A and Rs. 4000 from B
(d) None of the above.
As per section 43, if any one of the Joint promisors (or his legal representatives after his death) makes default in the contribution, the remaining joint promisors must bear the loss arising from such default in equal proportion. In the given problem, A pays Rs.2,000 (50% of his debt i.e.4,000) to creditors. So, C can recover Rs.2,000 from A and Rs.5,000 (1/2 of Rs.10,000) from B. Hence, option (a) is the correct answer.
7. A, B & C jointly owe a debt to D. D releases A from his liability and files a suit against B and C for payment of the debt.
(a) B and C are also released from their Liability
(b) A is discharged from his Liability to B & C for contribution
(c) A is not discharged from his Liability to B & C for contribution
(d) None of the above.
As per section 44, a release by the promisee of any of the joint promisors does not discharge the other Joint promisors from liability. The released joint promisor also continues to be liable to the other Joint promisors. In the given problem, though A is released by D from his liability, he will remain liable to B & C for contribution. Hence, option (c) is the correct answer.
8. B and C jointly lend Rs.10,000 to A who promises B and C jointly to repay them the loan with interest on a specified date. B dies before the loan is repaid.
(a) C can alone claim the money from A
(b) B’s representative along with C can claim the money from A
(c) B’s representative alone can claim the money from A
(d) None of the above.
As per s.45, if one of the Joint promisees dies, the right to claim performance rests with his legal representatives jointly with other surviving joint promises. So, B’s representative alongwith C can claim the money from A. Hence, option (b) is the correct answer.
