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Contract Law: Key Problem Solutions

The document outlines various legal principles related to guarantees, indemnities, and contracts under the Indian Contract Act. Key points include the liability of sureties, the responsibilities of bailors and bailees, and the implications of agency and partnership agreements. It also addresses issues related to the sale of goods, including the rights of buyers in cases of non-conformity and breaches of condition.

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Lavanya Lavanya
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24 views2 pages

Contract Law: Key Problem Solutions

The document outlines various legal principles related to guarantees, indemnities, and contracts under the Indian Contract Act. Key points include the liability of sureties, the responsibilities of bailors and bailees, and the implications of agency and partnership agreements. It also addresses issues related to the sale of goods, including the rights of buyers in cases of non-conformity and breaches of condition.

Uploaded by

Lavanya Lavanya
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Contract II – Solved Problem Questions

UNIT I – Guarantee & Indemnity: Creditor delaying suit against


principal debtor
Mere delay by the creditor in suing the principal debtor does not discharge the surety (Section 137,
Indian Contract Act). Therefore, the surety remains liable.

Minor as Principal Debtor – Surety’s Liability


Even though the contract with a minor is void, the surety’s liability is independent (Sec.128 ICA).
The creditor can recover the amount from the surety.

Continuing Guarantee – Limited Transaction


If the guarantee was only for a specific transaction (five sacks), the surety is not liable for later
supplies.

Finder of Goods Selling Them


A finder has rights of a bailee but cannot sell the goods except in special circumstances. The true
owner can recover the goods from the buyer.

Bailor Unaware of Defect – Injury to Bailee


A bailor is only responsible for defects he knows. If unaware, he is not liable for injury.

Finder Spending Money on Goods


A finder cannot sue the owner for expenses but has a right of lien and may retain the goods until
reimbursed.

Radio Given for Repair – Relationship


This is bailment for reward. Owner is bailor, repairer is bailee.

Authority Coupled with Interest


An agency coupled with interest cannot be revoked if revocation would prejudice the agent’s
interest (Sec.202 ICA).
Agent Negligent About Buyer’s Solvency
An agent must act with reasonable skill and diligence. Failure makes the agent liable to
compensate the principal.

Agent Claiming Remuneration Despite Negligence


An agent guilty of misconduct is not entitled to remuneration (Sec.220 ICA).

Minor Admitted to Partnership


A minor may share profits but is not personally liable. On attaining majority, he must elect to
become partner.

Retiring Partner Without Public Notice


A retiring partner remains liable to third parties until public notice of retirement is given.

Partner Excluded from Loss by Agreement


Such agreement is valid between partners but not against third parties. The partner is still liable to
outsiders.

Seller Resells Goods Left in His Possession


A seller in possession can pass good title to a bona fide buyer (Sec.30 SOGA). The original buyer
can sue the seller, not the third party.

Goods Not Matching Sample


The buyer can reject goods for breach of condition when goods do not match the sample.

Excess Quantity Supplied


The buyer may accept the contracted quantity and reject the excess or reject all.

Food Containing Poison


There is a breach of implied condition of wholesomeness. The buyer can claim damages.

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