business law answers for 75 questions

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Amity Global Business School MBA II Sem: Legal Aspects of Business--Caselets 1.Mr A agreed to install a plant for B & Company by 31 st March 2012. The contract also provided that A should pay a penalty of Rs20000/- for every month of delay. Mr A installed the plant on 30 th June 2012. However, the actual loss on account of the delay was Rs1.50 lakhs. B & Company claims this loss of Rs1.5 lakhs. How do you decide? Ans: Whatever penalty was agreed that only is enforceable. Otherwise notice regarding legal steps should have been taken the moment delay is observed. 2) Mr M had purchased a half kg sache of milk of a famous brand from a retailer. The milk contained some toxicants and M’s child died after consuming it. Mr M wants to claim damages of Rs50 lakhs from the retailer and the milk company. Will Mr M succeed? Ans: YES: Consumer has a right under Consumer Protection Act 1986. However, the amount of compensation will be decided by the court. Consumer has also right to proceed in the civil court without going to the consumer court. 3. Mr X purchased a brand smart-phone along with the new simcard from the same dealer for Rs28000/- by producing KYC requirements. He gave the telephone number to his clients. Within a week the Smart phone stopped working owing to some technical snag. One of his clients who was to confirm a commercial order cancelled the order after he repeatedly got a voice message “this number does not exist”. The loss of profit on the contract was Rs25 lakhs. Discuss the various remedies available to Mr X in Consumer Court considering the following aspects: a)Is Mr X entitled for replacing the smart phone instrument? b) Is Mr X entitled for claiming compensation of rs25,28,000 (Loss of profit on the contract and the cost of the smartphone) c) Can Mr X file a suit against his client for not accepting a genuine cause? d) Is this a case to be fought only in civil court or can it be filed in the State Consumer Commission?

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Amity Global Business School

MBA II Sem: Legal Aspects of Business--Caselets

1.Mr A agreed to install a plant for B & Company by 31st March 2012. The contract also

provided that A should pay a penalty of Rs20000/- for every month of delay. Mr A

installed the plant on 30th June 2012. However, the actual loss on account of the delay

was Rs1.50 lakhs. B & Company claims this loss of Rs1.5 lakhs. How do you decide?

Ans: Whatever penalty was agreed that only is enforceable. Otherwise notice regarding

legal steps should have been taken the moment delay is observed.

2) Mr M had purchased a half kg sache of milk of a famous brand from a retailer. The

milk contained some toxicants and M’s child died after consuming it. Mr M wants to

claim damages of Rs50 lakhs from the retailer and the milk company. Will Mr M

succeed?

Ans: YES: Consumer has a right under Consumer Protection Act 1986. However, the

amount of compensation will be decided by the court. Consumer has also right to

proceed in the civil court without going to the consumer court.

3. Mr X purchased a brand smart-phone along with the new simcard from the same

dealer for Rs28000/- by producing KYC requirements. He gave the telephone number to

his clients. Within a week the Smart phone stopped working owing to some technical

snag. One of his clients who was to confirm a commercial order cancelled the order

after he repeatedly got a voice message “this number does not exist”. The loss of profit

on the contract was Rs25 lakhs.

Discuss the various remedies available to Mr X in Consumer Court considering the

following aspects:

a)Is Mr X entitled for replacing the smart phone instrument?

b) Is Mr X entitled for claiming compensation of rs25,28,000 (Loss of profit on the

contract and the cost of the smartphone)

c) Can Mr X file a suit against his client for not accepting a genuine cause?

d) Is this a case to be fought only in civil court or can it be filed in the State Consumer

Commission?

Ans: a) YES

b) Yes. Proximate Causes and remote causes both are eligible for compensation. But if

the contract could have been secured by proper immediate communication and if the

other party agreed or if there was sufficient time, then case does not exist for remote

causes

c)No it is Mr X’s problem. It is the prerogative of the client. He may or may not accept

Mr X’s version

c) Yes. Either in the civil court or in the consumer court.

4. Mr A from India agreed to supply 1million pieces of assorted readymade garments to

Mr X in Japan. Before Mr A could dispatch the goods, there was a natural calamity in

Japan because of which the Japanese Government imposed an embargo on all imports.

Can X proceed against A in India for non-delivery of the goods?

Ans: Impossibility of performance. X cannot proceed against India

5. Ms Prachi Dutt has hired 100 laptops for her office @Rs30000 per laptop

(Rs3000000) for a monthly rent of Rs1 lakh. The stipulation is that if Ms Prachi pays the

rent regularly for 20 months, she is entitled to either exercise the option of purchasing

all the laptops or return the laptops immediately after 20 months. However, if purchase

option is exercised, the instalment facility would continue. She decides to exercise the

purchase option. Is this a valid contract?

(Ans: Yes. It is a hire purchase contract)

6. Mr Sukumar as an Agent of Ringfish Airlines entered into an agreement with Mr

Parashuram chartering a Ringfish aircraft, which Mr Parashuram badly needed for

holding an international conference in Singapore along with 100 delegates from India.

From the day of the agreement, all the Ringfish Aircrafts were grounded on account of

pilot strike. Both Mr Sukumar and Mr Parashuram were not aware of this state of affairs

of the airlines. Is the contract valid?

Ans: No. It is a void contract—mutual mistake or impossibility of the contract

7. Mr Pruthvi Raj Chavan of Bangalore entered into contract for selling 10000 kgs of

grapes in his garden in Kolar with Mr Menezes of Goa, a fruit merchant. The grapes

were destroyed before the date of the agreement though Mr Pruthvi Raj Chavan was

not aware of the same. The grapes could, however, be used for preparing wine. Mr

Pruthvi Raj Chavan compels Mr Menezes to purchase the same. Is the contract valid?

Ans: No. Goods no longer answered the description of fruits.

8. Mr Shivakumar, a wholesaler of Textiles holds the Railway Receipt for two wagons of

Textile goods transported from Surat to Bangalore. He endorses the same in favour of

his retail buyer for a consideration of Rs 75 lakh. Is this a valid contract.

Ans: Yes. Transfer through document of title is a valid transfer of sale.

9.Jagadeesh a Dealer in two wheelers sells a brand new ACCESS 125 for a

downpayment of Rs25000/- and the balance in instalments of Rs2000/- per month for

50 months. Is this is a contract of sale of goods?

Ans: YES. Price is stipulated to be in instalments (not a hire purchase contract)

10.Mr Jigar Dhuvad agrees to sell his second hand Maruthi Omni Van to Mr Katta for a

price to be determined by Mr Dutta. Mr Katta took delivery of the Vehicle. Mr Dutta

refuses to fix the price. Mr Jigar Dhuvad wants the vehicle back. What is the position?

Ans: No. Mr Jigar has to accept a reasonable amount and Mr Katta has to pay a

reasonable amount. Mr Jigar cannot call back the goods.

11.Mr A from Vizianagaram in Andhra sold 100 quintals of Andhra rice (with necessary

permit) to Mr B in Bangalore but yet to be delivered. Before the delivery, the Karnataka

Government has banned interstate movement of rice.

Ans: Contract becomes void because of supervening impossibility of performance.

12.Mr X who has taken a Machinery from Mr Y on hire purchase basis for 20 months.

The option was to be exercised at the end of 10 months. Before exercising the option,

he sold the machinery to Mr A who takes without knowledge of the previous hire. Will A

gets a good title?

Ans: No. The Hire purchaser has no title to the goods. He cannot pass on the title to

others

13.Mr A sold his old Air conditioner to Mr B stating that it is just one year old. Mr B took

it depending on A’s statement. Later Mr B learns that the Air conditioner is three years

old. Can Mr B return the Air conditioner and get back his amount? Will your answer

differ if the AC was working when A delivered and now it has stopped working.

Ans: Yes. B can return the goods. No change in the status of Mr B

14. Mr A sold his Home Theatre to Mr B on a condition that Mr B shall check the status

through a qualified electronic engineer. Mr B has taken the Home Theatre after his

engineer verified and estimated the price. However, Mr A demanded Rs 2000/- more

than what the engineer fixed. Mr B agreed and took delivery. The Home Theatre has

broken down within one month. Can B return the goods.

Ans: No. Where the seller has provided reasonable opportunities to the buyer to verify

the condition/status of the goods, buyer is taking his risk.

15.Mr X had sold a Car to Mr Y. In fact, the Car belongs to Mr A and later on it is learnt

that the RC book was forged and made in the name of Mr X. Mr Y having paid the price,

wants to have the car and refuses to return the same to Mr A.

Ans: Mr Y should return the car to Mr A but he can recover the amount from Mr X

16.M from Kashmir Sold to Mr N of Singapore 500 tons of Apple packed in wooden

cases each containing 30 tonnes. M delivered a substantial portion of goods (say 350

tonnes) packed in carton boxes with proper cushions. Can Mr N reject the whole goods

and rescind the contract.

Ans: Yes. Packing does not conform to the contract.

17. A purchased 5 old lorries (trucks) from Mr B mentioning that he required lorries to

transport the cows from the shandy market to the villages. As the lorries had completed

the life of 15 years, the fitness was not given. Without indicating this, B had sold the

vehicles. Within 15 days of purchase, two lorries broke down and 6 animals were dead

for want of food. What are the remedies for Mr A.

Ans: Breach of condition of Fitness. A has full claim for damages.

18. Mr A has purchased 500 grams(ml) of Ghee of a particular brand from a nearby

retail store. On consuming the ghee, A’s wife was to be hospitalised and she died. What

is the remedy?

Ans: Mr A can sue the Company for the damages for the death of his wife as the goods

were not merchantable

19.Mr A sold a tin of cleaning acid to Mrs B. Mr A knew that it was likely to be

dangerous to Mrs B if she does not exercise caution and special care while opening the

lid. Mrs B opened the tin in the normal course and her face was defaced by sprinkles of

acid. Can she file a case against Mr A

Ans: For all dangerous goods, the seller is bound to inform the buyers all the dangers

inherent and the precautions to be taken. Mr A is liable for the damages.

20. Mr A has sold to Mr B his assembled computer (desktop) on a condition “as is

where is”. Mr B starts the desktop at his house and to his dismay the monitor has gone.

Ans: B loses as there is already an implied warranty—as is where is basis.

21. Ms Pooja goes to a beauty saloon. She asks for a facial and a hairdo. She does not

disclose any allergies to the beautician. The beautician applied some hair dye without

asking anything about the possible allergies. Ms Pooja developed dermatitis. Is the

beautician liable?

Ans: No. Fitness of the dye to extends to that of a normal person. If a client has specific

allergies, the client is bound to disclose the same.

22. Mr A, a farmer, who wants to go abroad for a year has requested Mr B to look after

his 4 cows for a period of one year for a consideration (payment of service charges).

When A returned he found that 2 cows had given birth to calves. Mr B returned only the

four cows and refused to hand over the calves.

Ans: All accretions ( the calves in this case) should be returned to the bailor. His fees

automatically covered the maintenance of calves as well. (contract of bailement)

23.An unpaid seller Mr X has given notice to the transport company exercising his right

of stoppage in transit. Mr Y who is the buyer is also due to the transport company on

some other obligation. The Transport Company wants to exercise their lien on the

goods superceding the unpaid seller’s right of stoppage in transit.

Ans: Carrier is first the agent of the unpaid seller. Transport company has to follow the

instructions of the unpaid seller

24.Mr A sells certain goods to Mr B, the delivery date being 1st July 2011 but the

payment was to be made on or before 1st April 2011. B refuses to pay on 1st April 2011

stating that the delivery of goods should be made before the payment is made and that

the property in the goods has not passed. Can A sue B for the price before the delivery

of the goods.

Ans: Yes. Terms and conditions were clearly drafted. A can definitely sue Mr B

25.. A, who owns two houses one in J C Nagar, and another in J P Nagar is selling his house in J C Nagar to B. Mr B thinks that he is purchasing A’s house at J P Nagar. (Ans: There is no consensus-ad idem and hence no contract) 26. Your father agrees to pay a pocket money of Rs6000/- per month till you study MBA in JP Nagar, Bangalore. After sending the pocket money of Rs6000/- for 3 months, he reduces the pocket money to Rs2000/ per month. Can you legally recover the amount from your father? (Ans: No. Domestic agreements create only social obligations and not legal obligations) 27. A husband promised to pay Rs5000/ a month to his totally dependent wife (housewife) for her exclusive use. After six months the couple got separated and the husband fails to pay. The wife goes to a court of law for enforcing the claim. Ans: No. The agreement is outside the purview of contracts.

28. A clause in an agency agreement was “…..this agreement is not entered into as a formal or legal agreement but this agreement stands.” Is the agreement a contract? Ans: No. There is no legal binding and no legal jurisdiction 29. A agrees to sell 100 bottles of perfumes. Whether the agreement is enforceable? Ans: No. Which kind of perfume is not mentioned. Hence, not enforceable. It is vague. 30. A company agreed with you to consider your application for a job after the expiration of 6 months. Is the agreement is enforceable? Ans: No. The company is not bound to give you a job 31. A agrees to sell his jeep on hire purchase terms and the hire purchase price to be paid over two years. Is the agreeement enforceable? Ans: No. The price and the interest is not clear and hence ambiguous. The contract is not enforceable because of ambiguity 32. A makes a WILL bequeathing all his property in favour of a hospital. On A’s death his wife files an injunction against passing on the property to the hospital. The WILL is the last one duly registered with the registrar of assurances. Will the hospital authorities succeed? Ans: YES. The WILL has satisfied all the legal requirements 33. A was threatened to sell his car(which is worth 15 lakh) for Rs 50,000 to B. What is the position of the contract of sale. Ans: Voidable at the option of A 34. A took a loan of Rs2 lakh from Mr B on 22-07-2003 with an agreement to pay Rs10000 a month. A has repaid Rs20,000 and defaulted further instalments. Can B recover the amount now i.e, on 25-07-2007. A has agreed to sign an acceptance letter that he had taken loan on 22-07-2003. Alternatively, A has paid Rs10000 on 23-06-2003 in addition to Rs20000 already paid by him. This payment of Rs10000/- was paid by Mr A by way of a crossed cheque along with a cover letter duly signed by him. Whether B has got the right to recover the balance amount? Ans: YES. The crossed cheque with the covering letter saves limitation

35. Municipal authorities have permitted you to cut an infested tree in front of your house. You have requested the municipal authorities themselves to arrange for cutting the tree. The municipal authorities cut the tree and sends you a bill of Rs2800/-. Are you bound to pay? Ans: YES. It is an implied or tacit contract 36. You found a gold chain and a dollar in front of your college. On enquiring with all the students in the college you get no claim. Can you keep the chain for yourself? Ans: No. A person is not permitted to enrich himself unjustly at the expense of another. This is a quasi contract. You need to find the true owner by different means and if not found, hand over the ornaments to the police station to trace the true owner. 37. Your brother’s marriage is fixed on 25-07-2007 and you have invited a long time friend. Your brother’s marriage on 25-07-07 gets deferred on account of certain unfortunate events at your house. Your friend on 25-07-07 did come to the marriage hall by flight from the other city and by engaging citi taxi. He now claims a compensation for the undue expenses incurred by him. Is his claim enforceable? Ans: No. 38. A invites his friend B to share the booty of an extortion. A is not available at the appointed time. Further a refused to share the amount. Can B enforce the promise Ans: No it is illegal. 39. A stranger comes and cleans the dirt and dust in front of your house. You chose to be a silent spectator and not prevent him from doing the work. Are you liable for the work done by the stranger. Ans: YES. You are bound to pay a reasonable amount. 40. Mr Lokesh finds a purse belonging to Ms Meenakshi. Ms Meenakshi promises to give Rs25,000/- to Mr Lokesh. Is this promise enforceable? Ans: YES. 41. Mr Lokanath took a loan from Vijaya Bank on 1st July 2002 and has become a defaulter. He has today executed a promissory note promising to pay the bank loan taken by him 5 years ago even though he had not renewed the loan documents. Is the promise note enforceable? Ans: YES. A promise to pay a time-barred debt is enforceable provided it is in writing. ( Sec 25(3)

42. Mr Kaushik promises to pay Rs10,000 to the Prime Minister’s Relief Fund. He does not pay. Can the promise be enforced. Ans: No. Abdul Aziz Vs Masum Ali—No consideration 43. Mr A promises to pay Rs1 lakh on or before Sep 2006 for repairs of an old temple. The trustee of the temple believes Mr A who is a long time devotee and commences the work in August 2006. Later Mr backs out. Can the trustee recover the money. Ans: Yes. Consideration is found as the trustee has depended on the promise and commenced the work 44. While Mr Rajaneesh has gone on a personal tour, the roof of house partly collapsed on account of heavy rains. Mr Siddarth, his neighbour spent some amount for repairs which were immediately necessary. Mr Rajaneesh on his return promises MR Siddarth Rs25000/-. Can Mr Siddarth recover the money? Ans: Yes 45. Mr Abhijit Jain is in bad need of money and sells his motor cycle to John Prem for Rs500/-. Later on, Abhijit jain seeks to set aside the contract of sale of vehicle and even promises to pay back Rs2000/- to Mr John Prem. Is John Prem bound to oblige Mr Abhijit? Ans: No. Abhijit cannot set aside the contract. Inadequacy of consideration is not a reason to set aside a contract 46. Mr Prasad, a minor obtained Rs50,000/- from a money lender against the mortgage of his property. Subsequently on attaining the majority the minor sued the money lender for setting aside the mortgage stating that he was underaged. Could Mr Prasad succed? Ans: Yes. Minor has no capacity to contract (Mohiri bibi Vs Dharmodas Ghose) 47. Mr Partha, a minor shopkeeper sold some goods on credit to Mr Nagaraja, a major. Nagaraja refuses to pay the money. Can Partha sue Mr Nagaraja in a court of law and recover the money? Ans: Minor can be a beneficiary. He can file a case and win the case

48. Mr Kapil Dev agreed to be a cricket coach to Mr Rajesh, a minor who agreed to pay Rs1 lakh. Mr Kapil Dev devoted time and energy and trained Mr Rajesh. Is Mr Rajesh liable? Ans: Yes. The minor’s liability for supply of necessities extend to education, teaching, instruction, coaching, employment, training for a trade, medical advice, legal expenses etc. However, minor’s liability is from his estate and not a personal liability 49. Mr Kurshid, a minor falsely representing to be a major, enters into an agreement to sell his property to Mr Habib for Rs10 lakhs and receives an advance of Rs3 lakhs. He purchases a second hand car for Rs2.50lakh from this advance amount and spends Rs50,000 on a pleasure trip. Mr Habib forces Mr Kurshid on 25th July 2007, two days after Mr Kurshid attaining the majority to execute the sale of the property. Could Mr habib succeed? Ans: No. Minor’s original agreement is void ab-initio. 50. Mr Sharukh threatens his parents that he would commit suicide if his parents does not give him Rs2 lakh. The parents agree to pay Rs2 lakh within 10 days. Is the promise enforceable Ans: No. It is both coercion and undue influence. 51. Mr Pramod Pujari induced his devotee to gift him the whole of his property in return of a promise of a salvation of the devotee. Is the devotee bound to gift. Ans: No. the promise to gift was influenced by undue influence 52. Mr A says to B: If you say that the title documents are correct, I shall accept. Mr B remains silent but takes advance for selling his house. It turns out that the documents are fake which A was aware of. Ans: Silence is in itself equivalent to speech. It is a fraud. It does not mean that the sellers should disclose everything. However, when asked for certain clarification, he needs to clarify. Otherwise, silence amount becomes a fraud 53. Mr Ajay kumar had agreed to hire a room for witnessing the Sahitya Sammelan between 1st July to 30 th July 2007. The Sahitya Sammelan gets cancelled. What is the position? Ans: Physical impossibility of performance.

54. Ms Sharada fraudulently claims that he is the wife of a State minister and obtains two gold ornaments on credit on the pretext that she would buy them. She sold those ornaments to Mr X, a third person. State whether the jeweller recover the ornaments from that third person? Ans: Yes. (Cundy Vs Lindsay) 55. Mr Sanjay threatens to commit suicide if his wife would not take a PF Loan for Rs80,000/- and give it to him. Is his wife bound to give the money? Ans: No. Undue influence. 56. Mr Abhayaram promises to pay Rs15lakh to his wife to enable her to obtain divorce. Is the agreement enforceable if the wife applies for divorce and gives her consent? Ans: No. The consideration of separation is immoral and unlawful. 57. Mr Bhagwan agreed to pay Rs5 lakh to Ms Bhagya if he married anyone else. Mr Bhagwan later married Bhavya. Can Bhagya recover the money? Ans: No. The agreement was in restraint of marriage. 58. A agrees to pay B Rs2 lakh if Mr Sachin comes back to cricket. Sachin comes to play but A refuses to pay. Is A in order? Ans: Yes. B cannot recover the amount. 59. A promises to pay Rs 4 lakh to B if B marries Z. Z dies before marrying B. B claims the amount from A. Can he succeed? Ans: No. This is a contingent contract 60 Miss Aishwarya who is 17 years old and Mr Abhishek Kumar shukla who is 28 years

old agree to marry each other. Is the contract of marriage valid?

Answer: No

61. Mr Allwyn engages Mr Pratap for cleaning the surroundings of his house and agree

to pay such remuneration as is fixed by a third party Mr Sridhar. Is this a valid contract if

Mr Sridhar fixed the remuneration? Does your answer differ if Mr Sridhar does not fix

the remuneration?

Answer: YES

62. Ms Sharanya mows Pranesh’s lawn without being asked by Pranesh. Pranesh

watches the mowing but does not stop her. Is Mr Pranesh bound to pay a reasonable

remuneration?

Answer YES

63. Mr Kandaswamy promises to pay Rs1 lakh to Mr Narayanan to hit Mr Kumar by his

vehicle. Mr Narayanan hits Mr Kumar. Kandaswamy fails to pay stating that the original

contract itself is illegal. Can Mr Narayanan succeed if he files a case in a court of law?

Answer No

64. Trendz Cars Company displays 50 used cars of different brands in its used car

show room. The company also releases an advertisement re: special discount to those

who purchase the car within the next 7 days. Is this an offer?

Ans: No—it is only an invitation to offer

65. Mr Prasad advertises in a newspaper dated 25-10-2008 that he would pay Rs1lakh

to the first person who starts a bicycle race from Bangalore to Mysore on 1st November

and reaches back Bangalore by the same bicycle on 3rd November. Mr Pratik who sees

this advertisement starts off on 1st November. Mr Prasad releases a second

advertisement on 2nd November 2008 stating that the offer of the prize is withdrawn. Mr

Pratik reaches Bangalore on 3rd November as per the original terms. Can Mr Pratik

recover the prize money from Mr Prasad.

Ans: YES

66. Mr Rajiv applied for a job in a software company. The Assistant HR Manager Mr

Avanish has privately informed that Mr Rajiv is selected. However, Mr Rajiv receives a

regret letter from the company on its letterhead. Can Rajiv succeed in getting a job?

Ans: No—private information is not a business communication

67. Mr Santosh with the help of a few persons puts down a fire in the house of Mr

Ramoji who was away on an international tour. Mr Santosh had to break open the lock

of the house. Mr Santosh spent about Rs5000/- on the job. Mr Ramoji instead of paying

the amount of Rs5000/- accuses Mr Santosh of breaking his house lock. Is Mr Ramoji

bound to pay Rs5000/-.

Answer YES

68. Mr Rajaram is due Rs50,000 to Mr Raghuram . The amount was borrowed in the

year 2003. Now on 26-11-2008, he executes a promissory note for Rs25000/- in lieu of

the old debt of Rs 50000/-. Can Mr Raghuram recover Rs50,000/-

Answer: No

69. Ms Sreekala fraudulently represented to Akash Jewellers that she was the wife of

Lions Club President Sriram and thus obtained two golden necklaces worth Rs2.50lakh

on credit. She sold those necklaces to Ms Ravikala. Can Akash Jewellers recover the

necklaces from RAvikala.

Ans: The original transaction itself is induced by misrepresentation and also fraud

70. Mr Rajiv, a Project Leader in an IT Company was persuaded by a foreign Bank to

take a personal loan of Rs5lakh @20% p.a. rate of interest. The Bank was explaining to

Rajiv that the bank offers him the loan even in an economic downturn. Rajiv accepts the

personal loan on this rate of interest. Within one month the ROI on the personal loans

came down to 17% p.a. even in the said bank. Rajiv pleads undue influence. Will Rajiv

succeed?

Ans No. It is purely a business contract in the ordinary course of business and not the

one induced by undue influence

71. Mr Mohandas, a chartered accountant who was practicing represented to Mr

Ramdas that his practice was worth Rs1crore a year. Four months later when Ramdas

bought the firm he came to know that the practice has considerably gone down on

account of the prolonged illness of Mohandas and Mr Mohandas could not complete the

tax formalities of the top 15 clients. Mr Mohandas did not disclose this fact. Can Mr

Ramdas avoid the contract?

Ans: YES. (Concealment of fact)

72. Mr Bhojaraj let out the ground floor of his house to Mr Prithviraj who used a part of

the ground floor for residential purpose and partly for storing RDX and other explosives.

Mr Prithviraj never allowed Mr Bhojaraj to enter the house after he took possession.

After investigating into the reasons for not allowing him inside the house, Mr Bhojaraj

came to know the illegal purpose. He remained silent for one more year. The tenant

stopped paying rent. Will Mr Bhojaraj recover the arrears of rent.

Ans: No: The object of renting is unlawful though initially he was unaware. The moment

he came to know the unlawful object, he should have asked the tenant to vacate.

73. Mr Chandraj gives money to Ms Sukhala to enable to get divorce from her husband

and then marry him (i.e, Mr Chanraj). Ms Sukhala divorces her husband using the

money but marries somebody else and Mr Chanraj. Can Mr Chanraj force Sukhala to

repay the money or claim damages as she has already married another person?

Ans: No. the original agreement of giving money to obtain divorce and getting married to

the promissory is itself is immoral

74. Mr Rajaram promised to Mr Raghuram a medical seat in consideration of payment

of Rs10 lakh. Mr Raghuram paid an advance of Rs5 lakh and obtains a medical seat.

ON obtaining he refuses to pay the balance. Can Mr Rajaram recover the money?

Ans: No: The object of the contract is opposed to public policy

75. Mr X a gold medalist in Architecture joined a firm of Architects (as an employee)

which imposed a condition that for the next two years he should not practice on his own

within a radius of 10 kms from the firm. Within 2 months Mr X started practicing in his

residence which is just 2 kms from the firm. The Firm of Architects filed a case claiming

damages of Rs 50 lakhs. Will the firm succeed?

Ans YES. The firm of Architects can claim damages. The same is applicable to

employment contracts where the employment is relatively a middle level or senior level

position. Rights are available even for the entry level position but no company bothers.