Q1) Attempt any five: [5 × 2 = 10]

a) Company:
A company is a legal entity formed by a group of individuals to engage in and operate a
business—commercial or industrial—enterprise. It has separate legal existence from its
members.

b) Unfair trade practice:

It refers to deceptive, fraudulent, or unethical methods to gain business. Examples include
false advertising or misleading pricing.

c) Digital signature:
A digital signature is an electronic form of a signature used to authenticate the identity of the
sender of a message or the signer of a document.

d) Promissory note:
A promissory note is a written promise to pay a certain sum of money to a specified person or
bearer either on demand or at a fixed future date.

e) Sale by auction:
A sale by auction is a public sale where goods are sold to the highest bidder. It is governed by
specific rules under the Sale of Goods Act, 1930.

f) Contingent contract:
A contingent contract is a contract that depends on the occurrence or non-occurrence of a
future uncertain event.

g) Price in a contract of sale must be:

Certain or capable of being made certain.

h) A promissory note cannot be made payable to bearer.

True.

Q2) Attempt any two: [2 × 5 = 10]

a) Noting vs Protest:

Basis Noting Protest

A note made by notary on A formal declaration by notary
Definition
dishonour of a bill confirming dishonour
Legal
Optional in some cases Mandatory for foreign bills
Requirement
Authority Done by a notary public Also done by a notary public
Purpose Evidence of dishonour Evidence and notification to drawer
Cost Relatively lower Higher, due to formal process

b) Conditions vs Warranties:
 Basis Condition Warranty
Importance Essential to the contract Subsidiary to the contract
Breach effect Breach allows termination of contract Breach allows claim for damages only
Example Fitness of goods Packaging defects

c) Shares vs Debentures:

Basis Shares Debentures

Ownership Represents ownership in a company Represents loan to the company
Return Dividends (variable) Interest (fixed)
Risk Higher risk Lower risk
Voting Rights Yes No
Convertibility Not generally convertible Can be convertible

Q3) a) Composition, Functions and Jurisdiction of National Forum: [10]

Composition:

 President (retired Supreme Court Judge)

 Minimum 4 other members, with legal, administrative, or technical expertise

Functions:

 Address complaints where value > ₹2 crores (as per latest amendment)
 Handle appeals from State Commissions
 Ensure speedy redressal of consumer grievances
 Issue directions and penalties

Jurisdiction:

 Monetary: Claims exceeding ₹2 crores

 Territorial: Whole of India
 Appellate: Appeals against State Commission orders

OR

b) Has e-governance curbed offences under the Act?

Yes, e-governance has improved transparency, efficiency, and tracking in consumer redressal
mechanisms.
Example:

 The E-Daakhil portal allows consumers to file complaints online, reducing delay and
middlemen.
 Digital payments, e-signatures, and e-filing of affidavits have made the process faster
and more reliable.
 Case study: Maharashtra reported increased resolutions through the e-Daakhil
system, reducing case pendency.
Q4) a) Performance of Contract & Buyer’s Rights and Duties: [10]

Performance of contract:
The act of carrying out the obligations specified in the contract.

Rights of Buyer (under Sale of Goods Act, 1930):

 To receive delivery of goods

 To reject goods not matching contract
 To claim damages for non-delivery
 To examine goods on delivery

Duties of Buyer:

 To accept and pay for the goods

 To take delivery within the agreed time
 To apply for delivery
 To notify seller in case of rejection

OR

b) Case of Mr. X and Y’s Factory:

Legal Provision:
Under the Indian Contract Act, 1872, a company cannot be bound by pre-incorporation
contracts unless it adopts the contract after incorporation. The promoter acts personally liable.

Conclusion:
‘Y’ cannot enforce the contract against the company since it was not in existence when the
contract was made. The contract is not binding unless the company later agrees to adopt it,
which it did not.

Q5) a) Endorsement & Types: [10]

Endorsement:
It refers to the act of signing the back of a negotiable instrument to transfer ownership.

Types:

1. Blank endorsement: Just signature, no endorsee mentioned

2. Full endorsement: Specifies the person to whom the amount is payable
3. Restrictive endorsement: Limits further negotiation
4. Conditional endorsement: Payment depends on a condition
5. Sans recourse endorsement: Endorser excludes personal liability

OR
b) Define Consumer and Discuss Rights:

Consumer:
A person who buys goods or avails services for personal use and not for resale or commercial
purposes (as per Consumer Protection Act, 2019).

Rights of a Consumer:

1. Right to Safety
2. Right to be Informed
3. Right to Choose
4. Right to be Heard
5. Right to Redress
6. Right to Consumer Education
7. Right to be Protected against unfair trade practices

a) Capacity to contract:
As per Section 11 of the Indian Contract Act, 1872, a person is competent to contract if they
are of the age of majority, of sound mind, and not disqualified by law.

b) According to Section 2(d) of the Contract Act, 1872:

Proposal is when one person signifies to another his willingness to do or to abstain from
doing anything, with a view to obtaining the assent of that person to such act or abstinence.

c) The Sale of Goods Act, 1930 implies a condition that the seller has the right to:
Sell the goods being sold.

d) Holder in due course:

A holder in due course is a person who obtains a negotiable instrument in good faith and for
consideration, before it becomes overdue, and without notice of any defect in the title of the
previous holder.

e) A bill of exchange must always be drawn on a banker.

False. It can be drawn on any person, not necessarily a banker.

f) Consumer:
As per the Consumer Protection Act, a consumer is someone who buys goods or avails
services for a consideration but not for resale or commercial purposes.

g) UTP (Unfair Trade Practice):

A practice that deceives or misleads consumers and affects competition unfairly. Examples
include false advertising, misleading packaging, or fake claims.

h) Sale by auction:
A public sale where goods are sold to the highest bidder. Governed under Section 64 of the
Sale of Goods Act, 1930.
a) Agreement vs Contract:

Basis Agreement Contract

Every promise or set of promises forming An agreement enforceable by
Definition
consideration law
Legal
Not legally enforceable Legally enforceable
Binding
Agreement + Legal
Elements Offer and acceptance
enforceability
Narrower (only legal
Scope Wider (includes social agreements)
agreements)
Example Promise to meet for lunch Employment agreement

b) Memorandum vs Articles of Association:

Basis Memorandum of Association (MOA) Articles of Association (AOA)

Defines company’s objectives and
Purpose Rules for internal management
scope
Voting rights, appointment of
Content Name, object, liability, capital clauses
directors
Alteration Difficult and needs special resolution Easier to alter
Legal Priority Supreme document for company Subordinate to MOA
Filing Mandatory to file with ROC Also mandatory but less stringent

c) Conditions vs Warranties:

Basis Condition Warranty

Nature Essential to contract Secondary or collateral
Breach Effect May repudiate contract and claim damages Only claim damages
Purpose Main basis of sale Additional assurance
Example Right quantity and description of goods Faulty packaging

Q3) Attempt any one: [10]

a) Implied Condition or Warranty in Sale of Goods:

Under the Sale of Goods Act, 1930, the law implies certain conditions and warranties into
contracts unless expressly excluded.

Implied Conditions Include:

 Goods shall correspond to description.

 Goods shall be of merchantable quality.
 Goods shall be fit for the particular purpose.
 The seller has the right to sell the goods.
Example: If a customer buys a refrigerator for home use, and it fails to cool, the implied
condition of fitness is breached.

Conclusion: These protections ensure fairness and encourage confidence in commercial

transactions.

OR

b) Valid Contract – Essential Elements:

To advise Mr. G., these are the essentials of a valid contract:

1. Offer and Acceptance – Clear and definite offer from Mr. G, and acceptance by Mr.
T.
2. Intention to Create Legal Relationship
3. Lawful Consideration – Rs. 15,000.
4. Capacity to Contract – Mr. T must be of sound mind. Since he is in a coma, he
currently lacks capacity.
5. Free Consent – Not applicable due to unconsciousness.
6. Lawful Object

Conclusion: As Mr. T is in a coma, there is no capacity or valid acceptance. Hence, no

enforceable contract has been formed.

Q4) Attempt any one: [10]

a) State Consumer Forum – Composition, Functions, Jurisdiction

Composition:

 President (a retired High Court judge)

 At least two members with knowledge of law, economics, or commerce

Jurisdiction:

 Monetary: ₹50 lakhs to ₹2 crores (as per 2019 Act)

 Territorial: Within the state
 Appellate: Can hear appeals from District Forum

Functions:

 Handle complaints regarding defective goods or deficient services

 Provide redressal (replacement, compensation)
 Issue directions to businesses
OR

b) Steps to Incorporate a Public Limited Company:

1. Obtain DSC & DIN for all directors

2. Name Approval via RUN form (Reserve Unique Name)
3. Draft MOA and AOA
4. Filing of Forms (SPICe+)
5. Payment of Fees and stamp duty
6. Verification of Registered Office (Form INC-22)
7. Certificate of Incorporation issued by ROC
8. PAN and TAN Allotment
9. Open a Bank Account
10. Commence Business Certificate (within 180 days)

Q5) Attempt any one: [10]

a) Promissory Note – Definition & Essentials:

Definition:
A promissory note is a written instrument in which one party (maker) promises to pay a
definite sum of money to another (payee).

Essential Elements:

1. Must be in writing
2. Unconditional promise to pay
3. Specific sum of money
4. Payable to a certain person or order
5. Signed by the maker
6. Stamped as per Indian Stamp Act
7. Proper date and place of payment

OR

b) Case: Mr. Kumar & Mr. Singh – Conditional Acceptance

Mr. Kumar offers to sell the car for ₹2,00,000. Mr. Singh accepts with a condition (two
monthly installments). This is not unconditional acceptance.

Legal Rule:
As per Section 7 of the Indian Contract Act, 1872 – acceptance must be absolute and
unqualified.
Conclusion:
Since Mr. Singh’s response modifies the terms, it is a counter-offer, not acceptance.
Hence, no enforceable contract exists unless Mr. Kumar accepts the new terms.

a) Consideration:
As per Section 2(d) of the Indian Contract Act, consideration is something in return – an act,
abstinence, or promise given by the promisee for a promise.

b) Free consent:
Consent is said to be free when it is not caused by coercion, undue influence, fraud,
misrepresentation, or mistake.

c) The contract becomes _____ if it is entered into under coercion.

Voidable – at the option of the aggrieved party.

d) According to the Sale of Goods Act, 1930, goods must be _____ and of merchantable
quality.
Fit for purpose.

e) Cheque:
A cheque is a bill of exchange drawn on a specified banker and payable on demand.

f) A promissory note cannot be made payable to bearer. (True/False)

True – As per the RBI Act, it must be payable to order, not bearer.

g) One Person Company:

A type of private company with only one member and one director, introduced under the
Companies Act, 2013.

h) List the Redressal Forums:

1. District Forum
2. State Commission
3. National Commission

Q2) Attempt any Two [2 × 5 = 10]

a) Coercion vs Undue Influence:

Basis Coercion Undue Influence

Definition Threat or use of force Influence due to dominance
Nature Physical pressure Mental/moral pressure
Governed by Section 15, Indian Contract Act Section 16, Indian Contract Act
Examples Threat to life Doctor influencing patient’s will
Consequence Contract is voidable Contract is voidable
b) Five Rights of a Consumer under Consumer Protection Act:

1. Right to Safety – Protection against hazardous goods.

2. Right to Information – Full product details.
3. Right to Choose – Access to variety of products at fair prices.
4. Right to be Heard – Represent interests in forums.
5. Right to Redressal – Compensation for unfair trade practices.

c) “All contracts are agreements but all agreements are not contracts” – Comment:

 Agreement: A mutual promise between two or more parties (e.g., friends planning a
trip).
 Contract: An agreement enforceable by law.
 Legal enforceability makes a contract.
 Example: A social agreement is not a contract, but a business deal with consideration
and lawful object is.
 Hence, every contract starts as an agreement, but only those with legal binding
force become contracts.

Q3) Attempt any One [10 Marks]

a) Negotiable Instruments – Meaning, Characteristics, and Types:

 Meaning: A negotiable instrument is a written document guaranteeing payment of a

certain sum of money either on demand or at a future date.

Characteristics:

1. Freely transferable
2. Presumption of consideration
3. Holder in due course gets better title
4. Payable to order or bearer
5. Unconditional promise/order to pay

Types:

 Promissory Note
 Bill of Exchange
 Cheque

OR
b) Case: Mr. B & Mr. A – Specific Performance

 Mr. A’s acceptance of Rs. 94,500 is not acceptance, it’s a counter-offer.

 Mr. B rejected it.
 Mr. A’s later agreement to Rs. 95,000 is a new offer, which Mr. B did not accept.
 Legal Rule: There must be offer and unconditional acceptance for a valid contract.
 Conclusion: Mr. A cannot sue for specific performance as no valid contract was
formed.

Q4) Attempt any One [10 Marks]

a) Composition and Powers of District Forum:

Composition:

 President (retired District Judge)

 Two members (one must be a woman)

Jurisdiction:

 Monetary limit: Up to ₹50 lakhs

 Territorial: Within the district

Powers:

 Entertain consumer complaints

 Call for documents, examine evidence
 Order compensation, replacement, or refund
 Enforce orders like a civil court

OR

b) Object Clause in Memorandum of Association (MOA):

 Significance:
o Defines the scope of business activities.
o Protects shareholders and creditors.
o Activities beyond it are ultra vires and void.
 Alteration Process:
o Pass a special resolution.
o File Form MGT-14 with Registrar.
o Publish in newspapers (if required).
o Approval by ROC.
Q5) Attempt any One [10 Marks]

a) Performance of Contract & Buyer’s Rights under Sale of Goods Act:

 Performance of Contract:
Fulfilment of contractual obligations by both parties as per the agreed terms.

Buyer's Rights:

1. Right to receive goods as per description.

2. Right to inspect goods.
3. Right to reject defective goods.
4. Right to claim damages.
5. Right to specific performance in some cases.

Duties of Buyer:

 Accept delivery
 Pay agreed price
 Take delivery within time

OR

b) Conditions vs Warranties & When Conditions Become Warranties

Definitions:

 Condition: Essential term of the contract – breach allows repudiation.

 Warranty: Secondary term – breach allows for damages only.

When Conditions Become Warranties:

1. Voluntary Waiver by buyer

2. Acceptance of goods despite breach
3. Inseparable terms treated by buyer as minor