BANK OF INDIA
INDIAN CONTRACT ACT
LU 3- CASE STUDIES
1. Shambhu Dayal started “self service” system in his shop. Smt. Prakash entered
the shop, took a basket and after taking articles of her choice into the basket
reached the cashier for payments. The cashier refuses to accept the price. Can
Shambhu Dayal be compelled to sell the said articles to Smt. Prakash? Decide.
2. Father promised to pay his son a sum of Rs. 1 lakh if the son passed C.A.
examination in the first attempt. The son passed the examination in the first
attempt, but father failed to pay the amount as promised. Son files a suit for
recovery of the amount. State along with reasons whether son can recover the
amount under the Indian Contract Act, 1872.
3. Ramaswami proposed to sell his house to Ramanathan. Ramanathan sent his
acceptance by post. Next day, Ramanathan sends a telegram withdrawing his
acceptance. Examine the validity of the acceptance in the light of the following:
a. the telegram of revocation of acceptance was received by
Ramaswami before the le er of acceptance.
b. The telegram of revocation and letter of acceptance both reached together.
4. Mr. X, a minor was studying in M. Com. in a college. On 1st July, 2005 he took a
loan of Rs.10,000 from B for payment of his college fees and to purchase books and
agreed to repay by 31st December, 2005. X possesses assets worth Rs. 2 lakhs. On
due date X fails to pay back the loan to B. B. now wants to recover the loan from X
out of his (X’s) assets. Referring to the provisions of the Indian Contract Act, 1872
decide whether B would succeed.
5. Sohan induced Suraj to buy his motorcycle saying that it was in a very good
condition. After taking the motorcycle, Suraj complained that there were many
defects in the motorcycle. Sohan proposed to get it repaired and promised to pay
40% cost of repairs. After a few days, the motorcycle did not work at all. Now Suraj
wants to rescind the contract. Decide giving reasons.
6. Miss X, a film actress agreed to work exclusively for a period of two years, for a film
production company. However, during the said period she enters into a contract to
work for another film producer. Discuss the rights of the aggrieved film production
company under the Indian Contract Act, 1872.
7. Akhilesh entered into an agreement with Shekhar to deliver him (Shekhar) 5,000
bags to be manufactured in his factory. The bags could not be manufactured
because of strike by the workers and Akhilesh failed to supply the said bags to
Shekhar. Decide whether Akhilesh can be exempted from liability under the
provisions of the Indian Contract Act, 1872.
8. Mr. Seth an industrialist has been fighting a long drawn litigation with Mr. Raman
another industrialist. To support his legal campaign Mr. Seth enlists the services of
Mr. X, a legal expert stating that an amount of Rs.5 lakhs would be paid, if Mr. X
does not take up the brief of Mr. Raman. Mr. X agrees, but at the end ofthe litigation
Mr. Seth refuses to pay. Decide whether Mr. X can recover the amount promised by
Mr. Seth under the provisions of the Indian Contract Act, 1872.
9. JM Ltd. contracts with Shanti with Shanti Traders to make and deliver certain
machinery to them by 30.6.2019 for Rs. 11.50 lakhs. Due to labour strike, M Ltd
could not manufacture and deliver the machinery to Shanti Traders. Later, Shanti
Traders procured the machinery from another manufacturer for Rs. 12.75 lakhs.
Shanti Traders was also prevented from performing a contract which it had made
with Zenith Traders at the time of their contract with M Ltd. and were compelled to
pay compensation for breach of contract. Advise Shanti Traders the amount of
compensation which it can claim from M Ltd. referring to the legal provisions of the
Indian Contract Act
10. Mr. Ankur of Chennai placed an order with Mr. Shah of Ahmadabad for supply of
Urid Dhall on or before 10.03.2019 at a contracted price of Rs.40 per kg. The order
was for the supply of 10 tonnes within a month's time viz. before 09.04.2019. On
01.04.2019 Mr. Shah wrote a letter to Mr. Ramashwwamy stating that the price of
Urid Dhall was sky rocketing to Rs.50 per. kg. and he would not be able to supply as
per original contract. The price of Urid Dhall rose to Rs.53 on 09.12.19 Advise Mr.
Ramaswamy about the legal position.
11. Mr. Amar, Mr. Akbar and Mr.Antony are partners in the firm, M/s Amar, Akbar
Anthony Bros. They jointly promise to pay Rs.1,50,000 to Mr. Pinto. Mr. Antony
became insolvent and his private assets are sufficient to pay only 1/5 of his share of
debts. Mr. Amar is compelled to pay the whole amount to Mr. Pinto. Examining the
provisions of the Indian Contract Act, 1872, decide the extent to which Mr. Amar can
recover the amount from Mr.Akbar.
12. Miss Pashmina is an ardent lover of Arts and buys a painting from Mr. Vivek
believing it to be worth Rs.1,00,000. However, she realises that this painting is in
fact worth only Rs.10,000. Whether the contract signed by Pashmina with Vivek is
a valid contract?
13. Mr. Sushil is employed with M/s Sravani and Co for more than 10 years. Sushil
was aware that M/s Sravani & Co was a reputed customer of M/s Anuj & Co., and
placed an order with M/s Anuj & Co. for supplying 500 bales of cotton. Mr. Sushil
imitated the signature of M/s Sravani & Co. and sold the goods to M/s Trident
Spinning Mills Ltd, who was an innocent buyer. A suit was filed by M/s Anuj & Co.
against M/s Trident Spinning Mills Ltd for recovery of goods. Discuss the legal
position keeping in view the provision under Indian Contract Act 1872.
14. Ms. Vaishali went to M/s Mehra Jewellers, New Delhi and falsely misrepresented
herself to be wife of Mr. Hari, well-known Baron (a millionaire). The Jewellers shop
trusted Vaishali and gave two pearl necklaces on the pretext of showing the same to
her husband before buying. On the way she pledged them with a broker, who in
good faith paid her Rs.1,00,000. A suit was filed by M/s Mehra Jewellers against the
broker. Discuss the legal position in terms of the Indian Contract Act 1872.
15. M/s Amandeep & Co, a ship owner, contracts with Mrs. Priya to convey her from
Kolkata to Sydney in the company’s ship, sailing on 13.07.19. Mrs. Priya pays to the
shipping company, by way of deposit, one-half of her passage-money. The ship does
not sail on the appointed date and Mrs Priya is stranded at Kolkata for some time,
and thereby put to some expense. Latter Mrs. Priya proceeds to Sydney in another
vessel and in consequence arrives too late in Sydney. In this delay she also loses a
huge sum of money. Mrs. Priya Singh aggrieved by this action of the shipping
company sues them for compensation. Is M/s Amandeep & Co liable to pay anything
to Mrs. Priya?
