PROBLEMS (PAGE 18)

1. A invites B to go out for dinner together. B accepts the offer. A hires a taxi
but B does not turn up. A has to give the driver some compensation. Can A recover
it from B?

[Hint: No, A cannot, because, theirs was only a social agreement and not a
contract.]

2. Is there any contract in the following cases?

D boards a public transport bus which stopped at a bus stop [Hint: Yes.]

(b) A husband and wife agree to go for morning walk everyday [Hint:
No, it is a family or a social arrangement.]

(c) A agrees to marry B [Him: Yes, it is a contract.]

(d) A husband agrees to give to his wife Rs 3,000 every month in return for the
investment of her money in the business of the husband [Hint: Yes, it is an ordinary
financial deal].

3 X hires Y to murder Z in return of Rs. 1,00,000. Y borrows the amount from

W by telling him the purpose of the loan. Can W recover this money'?

[Hint: No, because, collateral transactions to illegal agreements are void.]

4. C pays Rs. 20,000 to 0 under a known void agreement. 0 refuses to honour

the agreement. Is C entitled to take his money back from D?

[Hint: No, there is no restitution in an agreement void ab initio.]

PRACTICAL PROBLEMS ( PAGE 37)
A man one day found that his son was missing. He sent his manager in search. In
the meantime, he announced a reward of Rs.5,000 for the person who brought back
the son. The manager traced the missing boy. Explain his rights giving reasons.

[Hint: He cannot recover the reward as communication of offer was not there].

PRACTICAL PROBLEMS (page 54)

1. A, as a minor, took a loan from B and executed a promissory note in favour

of B. A issued another note in favour of B after he attained the age of majority. B
brings a suit against A under the second note. Will he succeed?

[Hint: No, since the second note was a ratification of the first one. It was void being
without consideration.]

2. S, a minor, by misrepresenting himself to be of 19 years, obtains a loan of

Rs.1,000 from R. R, without making any further enquiry, lent the amount to S. Can
R recover the amount from S?
[Hint: R can recover his money only to the extent it is traceable from S under this
agreement.]

PRACTICAL PROBLEMS (page 86)

P offered to Q to sell his vehicle after concealing a defect in its body temporarily. Q
agreed to buy the vehicle without any inspection. Later, on discovering the defect
"he sought to cancel the contract. Is Q allowed to do that?
[Hint: No, because, P's fraud did not cause Q's consent].

A woman went 10 a jeweller, falsely represented herself to be the wife of a well-

known industrialist and took with her a ring on the pretext of getting the approval of
her husband. She pledged the ring with someone else. Can the jeweller recover the
ring from the pawnee?
[Hint: Yes, because, the identity of the lady became important and there was a
mistake of identity on the part of the jeweller making the agreement void.
Consequently, the pledge was also void.]

The labour union leader in a factory threatened to commit self-immolation if the

management did not concede their demands. After this the management agreed to
accept their demands. The owner of the factory later on alleged coercion by the
leader and wanted to cancel the contract. I~ he entitled to do so?
[Hint: No, because, the threat of the labour leader to commit suicide was not
coercion in this case.]
PRACTICAL PROBLEMS (page 109)

1. A promises to donate Rs.15,000 towards construction of a place of worship

planned by a trust. The trust starts the construction work and incurs an expenditure
of Rs.7,000. Can the trust recover any amount from A?

[Hint: Yes, up to Rs.7,000, because this expenditure is done at A's desire.]

A and B are friends. B treats A during A's illness. B does not accept payment from
A for the treatment. Then, A promises to B's son S to pay him Rs.l,000. A, being in
poor circumstances, is unable to pay. S sues A for the money. Can S recover?

[Hint: No, S cannot recover the money from A. This is a case of promise to pay for
past voluntary services. B's services to A do not become consideration for A's
promise. Also, Sec.25(2) does not apply because, A's promise is not given to the
doer of the act.]

PRACTICAL PROBLEMS (page 124)

1. M has to file a case against N to enforce his claim for Rs.75000. P promises
to help M financially for this in return of M's promise to give to him one third
of the proceeds recovered from N. M wins the case against N but refuses to
give any amount to P. Decide.

[Hint: P can recover if the share of one-third in the proceeds is found

reasonable by court in this champertuous agreement.]
PRACTICAL PROBLEMS (141)

A agreed to sell his motorbike to B for Rs.25,000 if India loses a

particular cricket match but for Rs.5,000 if India won the match. India
won the match. Is A liable to sell the motorbike for Rs.5,000?
[Hint: No, because, the agreement is a kind of wager].
E and F make a ,bet in Mumbai and deposit Rs. 6,000 each with G in
Delhi as a stakeholder. E wins the bet. Can he recover any amount
from G?
[Hint: No, because, the deposit with G is a collateral transaction to
the illegal wager of E and F. So, E can't recover even his own deposit
from G.]
U and W make a bet in Delhi and deposit Rs. 5,000 each with V in
Gujarat. U wins the bet. Can U recover any amount from V?
[Hint: Yes, because, the wager of U and W is only void not illegal.]
J and P make a wager with C in Bangalore with the term that if they
lose the bet, each will contribute Rs.II000 to pay to C. They lose the
bet and J makes total payment of R s.22O O Oto C. Can he recover any
money from P?
[Hint: Yes, because, this wager- is only void not illegal and
the c
transaction is valid.]

A agrees to sell B tons of coal Is the agreement valid? [Hint :

No, the agreement is void for uncertainty.]
J bets with K that if horse 'H' wins in the race, K will give him Rs.
15000 otherwise J will give Rs. 2,500 to K. Is it an enforceable
agreement
[Hint: No, it is wager, as it is not co~ by the exception to
Sec. 3
Sand T having failed to arrive at a bargain agree to make a contract in
future. T later refuses to make any contract. Can S hold him liable for
breech of contract?
[Hint: No, because, an agreement to make a contract in
future is void due to uncertainty].
8. A boxing match between X and Y is organised. The winner is to
60,000 out of the gate- money. If a boxer absents himself from the
he gives Rs. 25,000 to the other. Is it a wager ?
[Hint : No, the features of wager are missing.]
PRACTICAL PROBLEMS (190)

I. X agrees with Y to let out the house still under construction and
obtain! an advance for the purpose. The house is requisitioned by
Government am therefore, X is unable to honour his promise. What
are the rights of '1 against X ?
[Hillt: Y can take back the advance. The contract becomes
void on accounl of 'supervening impossibility'.]
2. W agreed to marry Y. Later, W refused to marry Y. Y however
decided to wait for change of mind by W. Later, because of the
change in law, it became illegal for W to marry Y. Y sued W for
breach of contract. Decide.
[Hillt: Y cannot succeed because, after the anticipatory
breach was ignored by Y, contract became discharged by
supervening impossibility.]
3. D owes Rs 16,000 to H. After delaying the payment, D offers to pay
Rs 13,000 if H agrees to settle the account with this. H agrees. Later,
H demands Rs 16,000 on the ground that his promise to give a
discount was without consideration. Is he entitled to demand Rs
16,000?
[Hillt: No, because, by giving the promise of concession,
he is bound by this remission under Sec.63].
4. 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.
(eA PE 11, May 2004)
[Hillt: No, because, the strike by workers does not amount
to a supervening impossibility. ]

PRACTICAL PROBLEMS (209)

C was employed as managing director by a company. Subsequently it

was found that the appointment was invalid because the directors who
appointed iIim were not qualified. Can C recover his salary for
whatever time he has
.·orked? .
"lHint: Yes, he is entitled to remuneration for the services rendered on
lfIlalltum meruit basis.]
l A contracted to sell ISO Kg of wheat to B at Rs.15 per Kg on a certain
date. in anticipation A contracted to purchase from C the same quantity
at Rs. !! per Kg. C does not deliver the wheat to A. A suffers a loss of
Rs. 7 per Kg. Can he recover this loss from C?
 [Irmt: No. This loss would amount to a special loss which A and Chad
l1Iot contemplated in their contract.]
D agreed to sell his house to E for Rs.I 0,15,000, with the provision that
in case of breach by a party, that P~l1ty will pay Rs. 1,00,000 as
damages to m eother. E broke the contract and D resold the house on the
same day 10 F for Rs. 10,00,000. D sued E and claimed Rs. 1,00,000.
Will D succeed?
[Hint: No, D will get only Rs. 15,000, the actual loss suffered.]
l X had to pay Rs. 60,000 to Y on II th September. He failed to do that.
Y claimed that this default by X had ruined him completely. He wanted
to be compensated for that. Would he be allowed?
[Hint: No, because, only direct losses will be compensated,
which, in the case, may be an amount of interest on Rs. 60,000.]
5. A sailor was employed by the captain of the ship for a
lumpsum to be paid after theth completion of voyage. The sailor
abandoned after about 3/4 of the voyage. He claimed payment
for this service rendered. Is he entitled to do that?
[Hint: Yes, he will claim under quantum meruit for doing a
substantial part of the work]

6. W took a loan at 15% per annum for one year. The loan deed
provided that in case, the loan was not returned on the due date,
interest at the rate of 75% was to be payable from the date of
default. Is W liable to pay the same?
[Hint: No, this exorbitant rate of interest amounts to penalty,
which will be reduced by court].

7. J made a contract with a government department for the

construction of wall in some area. The government paid him Rs.
2 lakhs as advance. J did not complete the construction work in
time and the government terminated the contract on this ground.
The contract was later found to be itself null and void ab intio as
it was not in conformity with the provisions of the laws of the
state. The government demanded the return of the advance
payment. Will it succeed? Explain.
[Hint: No, because, J will be entitled to get payment for the work
actually done under an agreement discovered to be void on the
basis of the doctrine of quantum meruit].

PRACTICAL PROBLEMS (232-233)

1. A defaulted in returning the loan amount to B. The debt became till

barred. Later, A verbally promised to pay the amount to B. This
time! guaranteed the promise. A defaulted again. Can B recover the
money fil X.
[Hillt: No, because, guarantee is invalid if given for an
unenforce3lil obligation.]
2. H took a loan of Rs. 75,000 from P. V gave guarantee for the loan
up1 Rs. 40,000. H paid Rs. 12,000. V offered to pay Rs. 28,000 as
his maxiIllll liability. Is he right?
[Hillt: No, V has to pay Rs. 40,000) .
. 3. C took a loan of Rs. 35,000 from a bank. The loan was guaranteed by
 1 The bank also had a security by way of m011gage on C's land,
which 'Iii worth Rs. 20,000. However, the bank cancelled the
mortgage. C defaul~ Is D liable for Rs. 35,000?
[Hillt: No, D is liable for only Rs. 15,000.)
4. A contracts to indemnify B for any loss resulting out of C's litigatia
against B. C obtains a court decree against B. Before paying to C, B
sue A to get the promised amount. Will B succeed?
[Hillt: Yes, the liability of the indemnifier commences as
soon as th liability of the indemnified becomes absolute.)

Can the guarantee by Z be revoked in the following cases? la)

M lends N Rs. 15,000 under Z's guarantee.
f b) D, a dealer, supplies certain goods to F in separate lots regularly. Z
guarantees payment by F up to Rs. 50,000 for goods supplied
from time to time.
"Hillt: a) No, because it is a specific guarantee. b) Yes,
because it is a .:ontinuing guarantee.]
S gave guarantee for loan taken by D from C. D became
insolvent. Aftef" he obtained discharge certificate from court, S
paid the default amount to C. Can S recover it from D?
[Hillt: No, because, with the discharge cel1ificate, D is
discharged from all obligations.]
A became surety before B for payment of rent by C under a lease.
Subsequently, without A's consent, C agreed to pay higher rent to
B. W hatis the position of A ?
[Hint: A is discharged in respect to arrears of rent
subsequent to such variance. ]
J lets out his house to H on a monthly rent of Rs 4,000 for a
period of five years. G guarantees regular payment by H. H
defaults repeatedly. G revokes the guarantee for future. Can he do
so?
[Hillt: No, because, it is not continuing guarantee as
there is only one transaction between J and H.]
A, Band C give guarantees for the loan of Rs.80000 taken by D
from R to the extent of Rs.36000, Rs.24000 and Rs.12000
respectively. D pays only Rs.38000 to R. How much will be the
respective share of A, Band C in the liability towards R?
[Hillt: C shares Rs.12000 and A and B share the
remaining default amount equally, i.e. Rs.l5000 each.]
On the default by a debtor D ; the surety S is called upon by the
creditor C to make the payment of the default amount of
Rs.30000 to him. S issues in favour of C a promissory note. Can
he recover this amount from D?
[Hint: No, because surety's right of indemnification arises
only after actual payment by him.]

PAGE 257

When X entered a restaurant, his coat was taken by a waiter and hung on
a hook behind X. The coat was stolen from there. Can X sue the hotel
owner for damages?
[Hillt: Yes, because, by the act of the waiter, the hotel owner had taken
possession of the coat and become bailee.]

8. M had taken a bike from K for use for three days. M keeps it for 10
d lIJThen, in spite of his utmost care, the bike is damaged. Is M liable.
damages to K?
[Hint: Yes, under Sec.161. when bailee fails to return in time, he is
liallfor any loss to the goods]
9. J has donated an x-ray machine to a hospital to improve its facilities.
11 hospital . staff keeps it carelessly which leads to its
malfunctioning. J fl' a case against the hospital for lack of care
of the machine. Can he succa in getting damages?
[Hint: No, because, there was no bailment from him and he has no
riglllof bailor.]

PAGE 257

M agrees to work as agent of P without remuneration. Later, M refuses to

work. Can P hold him guilty of breach of contract?
[Hint: No, because, agreement was without consideration. However, if M
had actually acted, he would have acted as valid agent.]
C, without any authority from K, acts as K's agent and makes a contract
with M appointing M as K's manager. M repudiates the contract""before
K ratifies it. Later K ratifies the contract and sues M for breach. What are
M's rights?
[Hint: M is bound by the contract.]
A authorises B to buy 500 sheep for him. B buys 500 sheep and 200
lambs for one sum of Rs. 6,000. Is A bound to accept sheep?
[Hint: No, A may repudiate the whole transaction where an agent does
more than he is authorised to do and the authorised portion is not
divisible. The principal is not bound by the transaction. (Sec. 228)]
D engaged E, an auctioneer, to sell some property for a commission of
Rs. 15,000. E however, received secretly Rs. 1,500 also as commission
from the purchaser. Discuss the rights of D and E.
[Hint: D is entitled to recover both the amounts from E.]
X, without N's authority, lends N's money to Z. Later N accepts interest
on money from Z. Discuss the rights of N.
[Hint: Loan contract is valid. Acceptance of interest by N amounts to
implied ratification.]
F enters into a contract with G on behalf of a company being formed. The
company, after incorporation, ratified the contract. Subsequently, the
company went into liquidation. Can G sue the company?
[Hint: No, there is no contract between G and the company because
ratification was invalid; however, if the contract made by F was within
the objects clause of the company, then under the provisions of Specific
Relief Act, the ratification would become valid.]
E instructed F, an engineer, to buy a ship for him. F employed a ship
surveyor of good repute to choose a ship for E. The surveyor made the
choice negligently and the ship turned out to be unseaworthy and was
lost. Who is liable for the loss?
[Hint: F is not liable. He was not negligent in suggesting the substituted
agent. However the surveyor will be responsible for negligently
performing his duty as agent.]
A, who owes B Rs. 10,000, appoints B to sell his landed property at
Bhubneshwar, and instructs him that after paying to himself his claim, i.e.
Rs~ 10,000, he should hand over the balance to A. Can A revoke his
authority delegated to B?
[Hint: No, it is an agency coupled with interest, which is irrevocable.]

PRACTICAL PROBLEMS (PAGE 148)

1. C agrees to construct a building for B for Rs. 7 lakhs on the

condition that payment will be made on completion of building.
Is it a contingent contract?
[Hint: No, it is not a contingent contract, because the uncertain
event (i.e. C’s completing the work) is not a collateral to the
contract, but is the main part of the consideration in the contract]

2. Y promises to sell his car to Z for Rs. 1,50,000 if he feels like

selling it after having a new car. Is it a contingent contract?
[Hint: No, it is a void agreement because it is an uncertain
agreement?

PRACTICAL PROBLEMS (PAGE 156-157)

1. A merchant supplied goods for the marriage function of the

sister of a minor, who is the sole male number of his family.
Can he recover payment for the same?
[Hint: Yes, minor’s property is liable for the necessaries
supplied]

2. D found a bag in a cinema hall. He deposited the bag with the

manager of the hall so that the true owner can claim it back.
However, no one claimed the bag. D wants the bag back. Can
he succeed?
[Hint: Yes, finder’s right of possession is superior to all except
the true owner. The manager was holding it as finder’s agent]

3. X pays arrears of rent of this friend Y to his landlord just to

avoid tension for this friend. Can he recovers this amount from
Y?
[Hint: No, Sec. 69, Applies only when such a payment is made
in which the person is interested]
 4. A helps his neighbour B in rescuing his belongings from his
house which was on fire, In the process he got injured also. Can
he proceed against B for compensation?
[Hint: No, because A had done a gratuitous act.]

5. A agrees to sell his land to D. Before completion of sale, this

land is attached by A’s creditor. D deposits the amount in the
court to save the land. Can D recover the amount from A?
[Hint: Yes, because, by agreeing to purchase, D had developed
sufficient interest in the land in his mind as required by Sec.
69,]

6. M had to pay property tax to the government. To save M’s

property from being seized by the government. M’s friend J
paid the tax to the government in M’s presence. Can J recover
the money from M?

[Hint: Yes, under Sec. 70]

PRACTICAL PROBLEMS (PAGE 317-318)

1. K Contracts to sell 300 units out of the stock in his storehouse

to B the next day. That very night the entire stock got destroyed
by fire. K wants to burden B with the loss of 300 units out the
total loss. Can B deny that? Also, can B compel K to sell him
the goods?
[Hint: B has no liability since the goods were unascertained and
B did not become the owner; further, since the specific stock
out of which k was to sell the goods is lost, the contract
becomes void]

2. X contracted to sell to his friend Y his car. They did not discuss
the question of price at all. X later refused to sell on the ground
that the agreement was void being uncertain about price. Can Y
demand the car?
[Hint: Yes, because, contract is valid and Y shall pay a
reasonable price]

3. M and P make a contract for the sale of two machines. The

price for the each is to be determined by K. M delivers one
 machine to P and P accepts it. Later, K refuses to fix the price.
Then P offers to pay a reasonable price for both the machines
and M wants to take back the delivered machine Decide.
[Hint: Contract becomes void on amount of K’s refusal to fix
the price. However, according to Sec. 10, since goods have been
partly delivered to the buyer and buyer has appropriated them.
He will pay a reasonable price for them. But, M cannot be
compelled to sell the second machine]

4. Three persons A, B and C are partners in a firm dealing in

garments, The same persons have formed another firm as
partners and it deals in the electrical goods. The second firm
supplies fans to the first firms for Rs. 13000. Is this a sale?
[Hint: No, because the fans have been given to persons who
were already their joint owners.]

5. T obtains possession of a machine from R under a hire purchase

contrast. He makes a contract of sale of the machine p who
purchases it in good faith. Would P get any title over the
machine.
[Hint: No, because T as a hire – purchaser, cannot transfer a
title better than his own.]

PRACTICAL PROBLEMS (PAGE 333-334)

1. S, a shopkeeper, showed certain mechanical toys to a customer.

When the customer examined the toy given by the shopkeeper,
it, because of a malfunctioning, caused injury to the customer.
The customer sought damages under a breach of warranty.
Shopkeeper refuses to pay on the ground that a contract had not
yet been made,
[Hint: Shopkeeper will be liable because even if contract of sale
was not there, a bailment was there.]

2. A demands from a seller B a certain appliance which B knows

will not serve with A’s purpose. B does not disclose his
 opinion. A, without any discussion with B, purchases the
particular appliance. Later A finds, it does not serve his
purpose. Is B liable to take the item back?
[Hint: No, because B is not guilty of any breach of condition
and the rules of Caveat Emptor will apply]

3. The contract of “sale by description and sample” between A and

B. The goods finally sold are in accordance with the sample but
not the description. Can B return the goods?
[Hint: Yes, the goods must be in accordance with both, the
sample and also the description]

4. Two sisters C and D purchased garments of the same make and

quality from ready – made garments dealers. C developed a skin
problem after wearing the garment, but D did not . C had not
disclosed to the shopkeeper that she had some allergy for a
certain type of fiber. Can C hold the merchant guilty of
violation of a condition that the goods must be merchantable?
[Hint: No, because, there is no general defect in the goods]

5. G contracted to supply to P a certain quantity of timber of half-

inch thickness. G supplied timber which varied in thickness
between 1/3 inch and 5/8 inch. The timber was merchantable
and suited the purpose of P. P.
[Hint: Yes, because, the timber supplied is not according to the
description]

6. For the purpose of making uniforms the employees, Bansi bought

dark blue coloured cloth from Vivek but did not disclose to the
seller the purpose of said purchase. When uniforms were prepared
and used by the employees, the cloth was fit for caps, boots and
carriage lining. Advise Bansi whether he is entitled to have any
remedy under the Sale of Goods Act, 1930? (PE II, May 2004).
[Hint: No, the buyer has no remedy as the particular purpose was
not revealed; the goods are fit for general purpose.]

PRACTICAL PROBLEMS (PAGE 349-350)

1. Some trader T contracts to purchase the entire wheat lying in a

heap belonging to a farmer F. T tells F not to sell it to anyone
 else and promises to come in an hours time with a truck. In the
meantime the heap is destroyed in fire. F says that T was the
owner and he should bear the loss. Is he right?
[Hint: Yes, because their intention clearly was to make T the
owner as soon as contract was made.]

2. M places an order for a book with a bookseller of a distant city and

asks him to send the book by courier, Payment was to be made
by cheque. The seller sends the book by courier. The book is
lost in the way. The seller says that buyer has to bear the loss. Is
he right?
[Hint: Yes, because there was unconditional appropriation of
goods when seller delivered them to the courier]

3. X contracts to sell Y 200 bales of cotton. Y comes to the

storehouse of X and with his permission, starts taking out the
cotton. When he had taken out of 120 bales, there is a fire
accident. The entire cotton is destroyed including the 120 bales
separated. Who bears the loss of 120 bales?
[Hint: Buyer bears the loss of 120 bales because he had become
their owner after appropriation with the consent of seller]

4. A horse was delivered to M by R on “sale or return” within

eight days. The horse died on the sixth day. Who bears the loss?
[Hint: The seller bears the loss because buyers express or
implied approval had not come by that time]

5. A,B and C jointly own a machine. A and B give it to C so that C

may pledge it and take a loan. C sells it. Is the sale valid?
[Hint: Yes, if the buyer purchased in good faith]

6. A delivers a jewellery item to B under “Sale on approval” basis

without mention of a time limit for B to convey the approval. B
gives no response for a month. Then, there is a burglary in B’s
house and the item is also stolen. A sues B for the price . Can be
succeed?
[Hint: Yes, because by not giving a response for a month, B
had indirectly accepted the item.]

7. K delivered a car to S, a mercantile agent, to sell it for a price

above Rs. 60,000. S sold it to P for Rs. 50,000. Can K take the
car back from P claiming the sale to be invalid?
 [Hint: No, if P has no knowledge of the instruction of K.]
8. In a contract for the sale of some leather items, the goods were
to be sent through a transport company and the buyer was to get
delivery after payment. The buyer paid the amount and got the
delivery order. But, the goods had got destroyed before the
payment was made. Would the buyer bear the loss?
[Hint: No, because, at the time of loss of goods, the buyer had
not become the owner.]

9. 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 is compelled to sell the said articles to
Smt. Prakash.
[Hint: No, because buyer had not become owner as there was
no unconditional appropriation of goods ]

PRACTICAL PROBLEMS (PAGE 360)

1. B took delivery of goods from his seller R without any

inspection. He sold some of them to his customer. The customer
complained of some defect in the goods. B sought to return the
goods to R. Can he do that?
[Hint: No, because he had accepted them and become their
owner]

2. P and C contract fro the sale of twelve hundred units of a

commodity in twelve equal installments. Each installment was
to be separately paid for. C finds, when a hundred units of the
sixth installment are received, that the goods are not of proper
quality. C wants to cancel the entire contract. P insists on
continuing with the remaining contract by giving damages for
improper goods supplied. Who is right?
[Hint: P is right]

3. S contracts to sell some goods to R to be delivered four months

later, i.e. in October 1994. After some time, S insists on
delivering them in September 1994. Can R refuse to accept
them?
 [Hint: Yes, because, in commercial contracts, time is of essence
and must be complied with either way].

4. F contracted to sell some appliances to G. F delivers them to an

employee of G. The goods remain with the employee of the
month. Have the goods becomes the property of G?
[Hint: Yes, because he kept them for a long time without
raising any objection. That showed that he had accepted the
goods]

5. J, under the instruction of the buyer R, delivers the goods to a

carrier. The goods are lost on the way. J wants to recover the
price. Decide.
[Hint: Yes, J can recover the price under Sec. 39]

PRACTICAL PROBLEMS (PAGE 373)

1. A person “B” purchased goods for Rs. 65000 from the seller
“S”. B paid Rs. 60000 and demanded the goods. S insisted on
his lien unless remaining Rs. 5000 was not paid. Can S have
line?
[Hint: Yes, because, S is still an unpaid seller]

2. A was to deliver hundred units of a commodity of Rs. 30000. B

paid Rs. 20000 and A started delivering the goods. He had
unloaded only 60 units from his truck when he decided to
exercise line on the remaining 40 units. Can he do that?
[Hint: No, because the 60 units have been delivered as part of
delivery of the entire lot. So, the entire lot is presumed to be
delivered]

3. X delivered goods to a carrier to be taken to buyer Y. X sent the

documents of title to Y. on the basis of the documents of title; Y
sold the goods to Z. In the meantime, Y became insolvent. X
sought to stop the goods in transit. Can he do that?
[Hint: No, because Y’s sale to Z on the basis of documents of
title will defect X’s rights against the goods].
4. In a contract of sale of goods, M promises to pay the price on
10th February, 1998 and R promises to deliver the goods on 18th
May, 1998. M refuses to pay in February pleading that he has
not yet become the owner. Decide.
[Hint: No, because, Y’s sale to Z on the basis of documents of
title will defeat X’s rights against the goods]
5. X agrees to deliver goods to Y in two days time and Y is to pay
after 15 days. The period of 15 days expired, but neither
delivery takes place nor the payment. Then X refuses to deliver
the goods in exercise of lien. Can he do that?
[Hint: Yes, because once payment becomes due, seller becomes
unpaid seller; if he possess goods at that time, he can exercise
lien.]

6. In an auction sale, B is the highest bidder and his bid is

accepted. Then, it is decided between the seller and buyer that
buyer shall become owner only after making the total payment.
Buyer issues a cheque in favour of the seller. In the meantime,
the goods are destroyed. Who bears the loss?
[Hint: The seller bears the loss, because he had continued to be
the owner, Buyer does not become the owner by the fall of the
hammer]

7. J sold a machine to K. K gave a cheque in payment. The cheque

was dishonored. J handed over a delivery order to K. K sold the
goods to R on the basis of the delivery order. J seeks to exercise
lien on the goods. Can R demand the delivery?
[Hint: Yes, the sale by K on the basis of the delivery order
defeats of the lien of the seller]