UNIT-4

Q1. State with reasons whether the following statement is Correct or Incorrect:
(a) A promise under a contract can be performed only by the promisor himself.
(b) When persons reciprocally promise, first to do certain legal acts and secondly to do
certain illegal acts, the whole agreement is void.
(c) “When the promisee does not accept the offer of performance, the promisor is not
responsible for non-performance.”
(d) Payments made by a debtor are always appropriated in a chronological order.
(e) Cancellation of a contract by mutual consent of the parties is called waiver
(f) If the promisees are joint, the right to claim performance is joint and not joint and
several.
(g) “A promise to pay a time barred debt is not enforceable”.
(h) “Reciprocal promises to do certain things legal and other illegal, make such promises
void”
(i) “The original contract between the parties must be performed even when the parties
agree to substitute it with a new contract”

Q2. “The basic rule is that the promisor must perform exactly what he has promised to
perform”. Explain stating the obligation of parties to contracts.

Q3. What do you mean by Appropriation of Payment?

Q4. X, Y and Z jointly borrowed ₹ 50,000 from A. The whole amount was repaid to A by Y.
Decide in the light of the Indian Contract Act, 1872 whether:
(i) Y can recover the contribution from X and Z,
(ii) Legal representatives of X are liable in case of death of X,
(iii) Y can recover the contribution from the assets, in case Z becomes insolvent.

Q5. Mr. Rich aspired to get a self-portrait made by an artist. He went to the workshop of
Mr. C an artist and asked whether he could sketch the former’s portrait on oil painting
canvass. Mr. C agreed to the offer and asked for Rs. 50,000 as full advance payment for
the above creative work. Mr. C clarified that the painting shall be completed in 10
sittings and shall take 3 months.

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 On reaching to the workshop for the 6th sitting, Mr. Rich was informed that Mr. C
became paralyzed and would not be able to paint for near future. Mr. C had a son Mr. K
who was still pursuing his studies and had not taken up his father’s profession yet?
Discuss in light of the Indian Contract Act, 1872?
(i) Can Mr. Rich ask Mr. K to complete the artistic work in lieu of his father?
(ii) Could Mr. Rich ask Mr. K for refund of money paid in advance to his father?
OR
Mr. S promises Mr. M to paint a family picture for ₹ 20,000 and assures to complete his
assignment by 15th March, 2023. Unfortunately, Mr. S died in a road accident on 1 st
March, 2023 and his assignment remains undone. Can Mr. M bind the legal
representative of Mr. S for the promise made by Mr. S? Suppose Mr. S had promised to
deliver some photographs to Mr. M on 15th March, 2023 against a payment of ₹ 10,000
but he dies before that [Link] his representative be bound to deliver the photographs
in this situation? Decide as per the provisions of the Indian Contract Act, 1872.

Q6. Reciprocal promises are to be performed simultaneously .Comment?

Q7. Mr. JHUTH entered into an agreement with Mr. SUCH to purchase his (Mr. SUCH’s)
motor car for Rs. 5, 00,000/- within a period of three months. A security amount of Rs.
20,000/- was also paid by Mr. JHUTH to Mr. SUCH in terms of the agreement. After
completion of three months of entering into the agreement, Mr. SUCH tried to contract
Mr. JHUTH to purchase the car in terms of the agreement. Even after lapse of another
three month period, Mr. JHUTH neither responded to Mr. SUCH, nor to his phone calls.
After lapse of another period of six months. Mr. JHUTH contracted Mr. SUCH and
denied to purchase the motor car. He also demanded back the security amount of Rs.
20,000/- from Mr. SUCH.
Referring to the provisions of the Indian Contract Act, 1872, state whether Mr. SUCH
is required to refund the security amount to Mr. JHUTH. Also examine the validity of
the claim made by Mr. JHUTH, if the motor car would have destroyed by an accident
within the three month’s agreement period.

Q8. Briefly explain the distinguish between Succession and Assignment

Q9. Briefly explain the distinguish between Recession and Alteration.

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Q10 Mr. Murari owes payment of 3 bills to Mr. Girdhari as on 31st March, 2020.
(i) Rs. 12,120 which was due in May 2016.
(ii) Rs. 5,650 which was due in August 2018
(iii) Rs. 9,680 which was due in May 2019. Mr. Murari made payment on 1st April 2020
as below without any notice of how to appropriate them:
(i) A cheque of Rs. 9,680
(ii) A cheque of Rs. 15,000
Advice under the provisions of the Indian Contract Act, 1872.

Q11 Is it required that parties to the contract must perform the contract personally?

Q12 What will be rights with the promisor in following cases? Explain with reasons:
(a) Mr. X promised to bring back Mr. Y to life again.
(b) A agreed to sell 50 kgs of apple to B. The loaded truck left for delivery on 15th
March but due to riots in between reached A on 19th March.
(c) An artist promised to paint on the fixed date for a fixed amount of remuneration
but met with an accident and lost his both hands.
(d) Abhishek entered into contract of import of toys from China. But due to
disturbance in the relation of both the countries, the imports from China were
banned.
Q13 Explain the rules under the law of contract as regards to time and place for the
performance of the promise.

Q14 State the circumstances under which an agreement may be void, since it is impossible to
carry it out.

Q15 Explain the principles of Novation, Rescission, Alteration and Remission where contracts
need not be performed.

Q16 X, Y and Z are partners in a firm. They jointly promised to pay Rs 3,00,000 to D. Y
become insolvent and his private assets are sufficient to pay 1/5 of his share of debts.
X is compelled to pay the whole amount to D. Examining the provisions of the Indian
Contract Act, 1872, decide the extent to which X can recover the amount from Z.
OR

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 Krish, Kamya and Ketan are partners in a firm. They jointly promised to pay Rs. 6,00,000
to Dia. Kamya become insolvent and her private assets are sufficient to pay 1/5 of her
share of debts. Krish is compelled to pay the whole amount to Dia. Examining the
provisions of the Indian Contract Act, 1872, decide the extent to which Krish can
recover the amount from Ketan.

Q17 Mr. X and Mr. Y entered into a contract on 1st August, 2018, by which Mr. X had to
supply 50 tons of sugar to Mr. Y at a certain price strictly within a period of 10 days of
the contract. Mr. Y also paid an amount of Rs. 50,000 towards advance as per the terms
of the above contract.
The mode of transportation available between their places is roadway only. Severe flood
came on 2nd August, 2018 and the only road connecting their places was damaged and
could not be repaired within fifteen days. Mr. X offered to supply sugar on 20th
August, 2018 for which Mr. Y did not agree. On 15 September, 2018, Mr. X claimed
compensation of Rs. 10,000 from Mr. Y for refusing to accept the supply of sugar, which
was not there within the purview of the contract. On the other hand, Mr. Y claimed for
refund of Rs. 50,000, which he had paid as advance in terms of the contract. Analyses
the above situation in terms of the provisions of the Indian Contract Act, 1872 and
decide on Y's contention.

Q18 Mr. Sonumal a wealthy individual provided a loan of Rs. 80,000 to Mr. Datumal on
26.02.2019. The borrower Mr. Datumal asked for a further loan of Rs. 1, 50,000. Mr.
Sonumal agreed but provided the loan in parts at different dates. He provided Rs. 1,
00,000 on 28.02.2019 and remaining Rs. 50,000 on 03.03.2019. On 10.03.2019 Mr.
Datumal while paying off part Rs. 75,000 to Mr. Sonumal insisted that the lender should
adjusted Rs. 50,000 towards the loan taken on 03.03.2019 and balance as against the
loan on 26.02.2019. Mr. Sonumal objected to this arrangement and asked the borrower
to adjust in the order of data of borrower of funds Now you decide:
(i) Whether the contention of Mr. Datumal correct or otherwise as per the provisions
of the Indian Contract Act, 1872?
(ii) What would be the answer in case the borrower does not insist on such order of
adjustment of repayment?
(iii) What would the mode of adjustment/appropriation of such part payment in case
neither Mr. Sonumal nor Mr. Datumal insist any order of adjustment on their part?

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Q19 In light of provisions of the Indian Contract Act, 1872 answer the following:
(i) Mr. S and Mr. R made contract wherein Mr. S agreed to deliver paper cup manufacture
machine to Mr. R and to receive payment on delivery. On the delivery date Mr. R didn't
pay the agreed price. Decide whether Mr. S is bound to fulfill his promise at the time of
delivery?
(ii) Mr. Y given loan to Mr. G of INR Rs. 30, 00,000. Mr. G defaulted the loan on due date
and debt became time barred. After the time barred debt. Mr. G agreed to settle the
full amount to Mr. Y. Whether acceptance of time barred debt Contract is enforceable
in law?
(iii) A & B entered into a contract to supply unique item, alternate of which is not available
in the market. A refused to supply the agreed unique itemtoB. What directions could be
given by the court for breach of such contract?

Q20 A, B, C and D are the four partners in a firm. They jointly promised to pay ₹ 6,00,000 to
F. B and C have become insolvent. B was unable to pay any amount and C could pay only ₹
50,000. A is compelled to pay the whole amount to F. Decide the extent to which A can
recover the amount from D with reference to the provisions of the Indian Contract Act,
1872.

Q21 Explain any five circumstances under which contracts need not be performed with the
consent of both the parties.

Q22 Differentiate between Novation and Alteration as per the Indian Contract Act, 1872.

Q23 A received certain goods from B promising to pay ₹ 1,00,000. Later on, A expressed his
inability to make payment. C, who is known to A, pays ₹ 60,000 to B on behalf of A.
However, A was not aware of the payment.
Now B is intending to sue A for the amount of ₹ 1,00,000. Discuss whether the
contention of B is right?
OR
X received certain goods from Y and promised to pay ₹ 60,000. Later on, X expressed
his inability to make payment. Z, who is known to X, pays ₹ 40,000 to Y on behalf of X.
however, X was not aware of the payment.
Now Y is intending to sue X for the amount of₹ 60,000. Can Y do so? Advise.

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Q24 Mr. X was a Disk Jockey at a five star hotel bar. As per the contract, he is supposed to
perform every weekend (i.e. twice a week). Mr. X will be paid ₹ 1500 per day. However,
after a month, Mr. X willfully absents himself from the performance.
(i) Does the hotel have the right to end the contract?
(ii) If the hotel sends out a mail to X that they are interested to continue the
contract and X accepts, can the hotel rescind the contract after a month on this
ground subsequently?
(iii) In which of the cases – (termination of contract or continuance of contract) can
the hotel claim damages that it has suffered as a result of this breach?

Q25 Mr. Singhania entered into a contract with Mr. Sonu to sing in his hotel for six weeks on
every Saturday and Sunday. Mr. Singhania promised to pay ₹ 20,000 for every
performance. Mr. Sonu performed for two weeks but on third week his health condition
was very bad, so he did not come to sing. Mr. Singhania terminated the contract. State
in the light of provisionsof the Indian Contract Act, 1872:-
(a) Can Mr. Singhania terminate the contract with Mr. Sonu?
(b) What would be your answer in case Mr. Sonu turns up in fourth week and Mr.
Singhania allows him to perform without saying anything?
(c) What would be your answer in case Mr. Sonu sends Mr. Mika on his place in third
week and Mr. Singhania allows him to perform without saying anything?

Q26 State the grounds upon which a contract may be discharged under the provisions of the
Indian Contract Act, 1872. (7 Marks) (MTP April 2019)

Q27 ‘X’ entered into a contract with ‘Y’ to supply him 1,000 water bottles @ Rs. 5.00 per
water bottle, to be delivered at a specified time. Thereafter, ‘X’ contracts with ‘Z’ for
the purchase of 1,000 water bottles @ Rs. 4.50 per water bottle, and at the same time
told ‘Z’ that he did so for the purpose of performing his contract entered into with ‘Y’.
‘Z’ failed to perform his contract in due course and market price of each water bottle
on that day was Rs. 5.25 per water bottle. Consequently, ‘X’ could not procure any water
bottle and ‘Y’ rescinded the contract.
Calculate the amount of damages which ‘X’ could claim from ‘Z’ in the circumstances?
What would be your answer if ‘Z’ had not informed about the ‘Y’s contract?
Explain with reference to the provisions of the Indian Contract Act, 1872.