PAPER – 2: BUSINESS LAWS
Question 1
(a) Examine the validity of the following agreements under the provisions of
the Indian Contract Act, 1872 and justify your answer:
(i) Bharat agrees with John to sell his white bull. Unknown to both the
parties, the bull was dead at the time of agreement. (3 Marks)
(ii) A property worth ` 2,00,000 was agreed to be sold for just ` 25,000 by a
person of unsound mind. (2 Marks)
(b) A minor admitted to the benefits of a partnership firm is entitled to certain
rights and may also have liabilities to third parties for the acts of the firm.
Discuss the rights and liabilities (before attaining majority only) of the minor
under the Indian Partnership Act, 1932. (5 Marks)
Question 2
(a) Explain in brief with reference to the provisions of the Indian Contract Act,
1872, what are the rights enjoyed by Surety against the Creditor, the
Principal Debtor and Co-Sureties? (5 Marks)
(b) Mr. A. Mr. B and Mr. C were partners in a partnership firm M/s ABC & Co.,
which is engaged in the business of trading of branded furniture. The name of
the partners was clearly written along with the firm name in front of the head
office of the firm as well as on letter-head of the firm. On 1st October, 2018.
Mr. C passed away. His name was neither removed from the list of partners as
stated in front of the head office nor from the letter-heads of the firm. As per
the terms of partnership, the firm continued its operations with Mr. A and Mr.
B as partners. The accounts of the firm were settled and the amount due to
the legal heirs of Mr. C was also determined on 10th October, 2018. But the
same was not paid to the legal heirs of Mr. C. On 16th October, 2018, Mr. X, a
supplier supplied furniture worth 20,00,000 to M/s ABC & Co. M/s ABC & Co,
could not repay the amount due to heavy losses. Mr. X wants to recover the
amount not only from M/s ABC & Co., but also from the legal heirs of Mr. C.
Analyses the above situation in terms of the provisions of the Indian
Partnership Act, 1932 and decide whether the legal heirs of Mr. C can also be
held liable for the dues towards Mr. X. (5 Marks)
Question 3
(a) P, Q and R, are partners in a construction firm, PQR Associates. P buys
cement on behalf of the firm from D. The cement is used in the ordinary
course of the firm's business. P uses the cement for his personal purposes.
The supplier D, who is unaware of the private use of cement by P, claims the
price from the firm. The firm refuses to pay for the price, on the ground that
the cement was never received by it. Referring to the provisions of the Indian
Partnership Act, 1932, answer the followings:
(i) Whether the Firm's contention is tenable?
(ii) What would be your answer if a part of the cement so purchased by P
was delivered to the firm by him, and the rest of the cement was used by
him for his private use, about which neither the firm nor the supplier
were aware? (5 Marks)
(b) What are the agreements which are held to be opposed to public policy
under the Indian Contract Act, 1872. Explain any 4 such agreements. (5 Marks)
Question 5
(a) A, B and C jointly promised to pay D a sum of ` 6,000. Examine, considering
the provisions of the Indian Contract Act, 1872 –
(i) Can D compel any of three parties A, Band C to pay him ` 6,000?
(ii) C is compelled to pay the whole of the amount to D. Can he recover
anything from A and B, when –
(1) Both A and B were solvents.
(2) A is not in a position to pay anything. (5 Marks)
(b) "Dissolution of a partnership firm may occur by mutual agreement with the
consent of the majority of partners, while compulsory dissolution requires an
order from the court." Discuss this statement with reference to the relevant
provisions of the Indian Partnership Act, 1932. (5 Marks)
Question 6
(a) Explain with reference to the Indian Contract Act, 1872:
(i) When a contract is said to be induced by "undue influence". (5 Marks)
(ii) When a party is deemed to be in a position to dominate the will of another.
(5 Marks)
