51827187 business law completed

7/31/2019 51827187 Business Law Completed

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MeaningandNatureofLawWhatisLaw?Lawmeansthoserulesandregulationswhicharebindingonusandthereisasanctionifwedonotobeylaw.Lawisthoserulesofconductrecognisedbythestateandenforcedonthepeople.CharacteristicsofLawa)Itisabodyofrules.b)Itismadebythestate.c)Itisenforced.d)Itregulateshumanconducts.e)Itisimposed.f)Contentoflawisnotstaticbutdynamic


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MeaningandNatureofLawObjectsofLawa)Tomaintainorderb)Toestablishsocio-economicjusticesc)Vehicleofsocialchanged)Harbingerofsocialjustice.e)Toregulatehumanconductf)Toregulatebusinessrelations.g)Promoteawelfarestate.


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MeaningandNatureofLawNeedforknowledgeofLawIgnorantiajurisnonexcusat(ignoranceoflawisnoexcuse)BasicfoundationsofLaw1.NooneisaboveLaw2.Allareequalbeforelaw3.Lawisnotstatic,itisdynamic


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BusinessLawLawislikeatreewhichhasseveralbranches.CivilLaw,CriminalLaw,IndustrialConstitutionalLaw,TaxLaw,BusinessMercantileLaw/CommercialLaw.Law,Law/

BusinessLawconsistsofthoseruleswhichareconnectedwithtrade,industryandcommerce.Itisthatlawwhichdealswithmercantiletransactions,contractualrelationsandthemutualrightsandobligationsarisingoutofmercantiletransactionsbetweenmercantilepersons.


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SourcesofMercantileLaw1)EnglishMercantileLaw.a.Commonlawb.Equityc.Statutelawd.Lexmercatoria/LawMerchante.RomanLawf.CaseLaw2)Customsandusages3)Judicialdecisions/precedents4)Legislation.


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NATUREOFCONTRACTDEFINITIONOFCONTRACTAcontractisanagreementmadebetweentwoormorepartieswhichthelawwillenforce.AccordingtoSec.2(h),acontractisanagreementenforceablebylaw.Anagreementcomesintoexistencebytheprocessofofferbyonepartyanditsunqualifiedacceptancebytheotherparty.Thepartieswhoenterintoanagreementmustagreeuponthesubjectmatterinthesamesenseandatthesametime,i.e.,theremustbeconsensusadidem.Anagreementmaybeasocialagreementoralegalagreement.Asocialagreementisthatwhichdoesnotgiverisetolegalconsequences.IncaseofitsbreachthepartiescannotgototheLawCourttoenforcearight.AlegalagreementisthatwhichgivesrisetolegalconsequencesandremediesintheLawCourtincaseofitsbreach.


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ESSENTIALSOFCONTRACT1.Theremustbeanagreement.Thisinvolvestwoparties,onepartymakingtheofferandtheotherpartyacceptingit.2.Thepartiesmustintendtocreatelegalrelationship.3.Thepartiesmustbecapableofenteringintoanagreementasregardsageandunderstanding.4.Theagreementmustbesupportedbyconsiderationonbothsides.5.Theconsentofthepartiesmustbefreeandgenuine.6.Theobjectoftheagreementmustbelawful.7.Thetermsoftheagreementmustbecertainandcapableofperformance.8.Theagreementmustnothavebeenexpresslydeclaredasvoid.


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CLASSIFICATIONOFCONTRACTVoidagreementanagreementnotenforceablebylaw[Sec.2(g)]Voidcontractacontractwhichceasestobeenforceablebylaw[Sec.2(f)]VoidableContractacontractwhichisenforceablebylawattheoptionofonepartythereto,butnotattheoptionoftheother[Sec.2(i)]IllegalAgreementanagreementwhichinvolvesthetransgressionofsomeruleofbasicpublicpolicyandiscriminalinnatureorimmoral.Itisnotonlyvoidasbetweentheimmediatepartiesbutitalsotaintsthecollateraltransactionswithillegality.Expresscontractacontractiswhichthetermsarestatedinwords(writtenorspoken)bytheparties.Impliedcontractacontractwhichisinferredfromthecircumstancesofthecaseorfromtheconductoftheparties.Contd


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CLASSIFICATIONOFCONTRACT(Cont.d)Quasi-contractanobligationcreatedbylaw,regardlessofagreement.Executedcontractacontractwhichiswhollyperformedbyboththeparties.Executorycontractacontractinwhichthepromisesofboththepartieshaveyettobeperformed.Partlyexecutory,partlyexecutedacontractinwhichonepartyhasperformedhisobligation,buttheotherpartyhasyettoperformhisobligation.Unilateralcontractacontractinwhichonlyonepartyhasyettoperformhisobligation.Bilateralcontractacontractinwhichboththepartieshaveyettoperformtheirobligations.


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OFFER&ACCEPTANCEOFFERAnofferisanundertakingbytheofferortobecontractuallyboundintheeventofaproperacceptanceoftheofferbytheoferee.Itmaybemadebyexpresswordsspokenorwritten,oritmaybeimpliedwhenitisinferredfromtheconductoftheofferororfromthecircumstancesofthecase.Itisspecificwhenitismadetoaparticularperson,andgeneralwhenitismadetotheworldatlarge.Intheformercase,itiscalledaspecificoffer;inthelattercase,itiscalledageneraloffer.


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LegalRulesastoOffer1.Itmustbeintendedtocreatelegalrelations.2.Itmustbecertain.3.Itmustbedistinguishedfroma)Adeclarationofintention,andb)andinvitationtomakeoffer.4.Itmustbecommunicatedtotheofferee.5.Itmustbemadewithaviewtoobtainingtheassentoftheofferee.6.Itmustnotcontainatermthenon-complianceofwhichwouldamounttoacceptance.7.Astatementofpriceisnotanoffer.


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LapseofOfferAnofferlapsesorcomestoanend1.Bycommunicationofnoticeofterminationofoffertotheofferee.2.Bylapseofthespecifiedorreasonabletime.3.Bydeathorinsanityoftheofferor.4.Byacounter-offer.offer.Counter-offerisanoffertotheoriginal

5.Bynotbeingacceptedaccordingtotheprescribedorusualmode.6.Bynon-fulfillmentofaconditionprecedent.


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CommunicationofOffer,AcceptanceandRevocationThecommunicationofaproposal(offer)iscompletewhenitcomestotheknowledgeofthepersontowhomitismade.Thecommunicationofanacceptanceiscompleteasagainstthepurposerwhenitisputintoacourseoftransmissiontohim,soastobeoutofthepoweroftheacceptor;asagainsttheacceptor,whenitcomestotheknowledgeoftheproposer.Thecommunicationofarevocationiscompleteasagainstthepersonwhomakesit,whenitisputintoacourseoftransmissiontothepersontowhomitismadesoastobeoutofthepowerofthepersonwhomakesit;asagainstthepersontowhomitismade,whenitcomestohisknowledge(Sec.4).


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Specialtermsofoffer.Thesemustbebroughttothenoticeoftheotherpartybeforetheacceptanceoftheoffer,otherwisetheacceptorwillnotbeboundbysuchterms.Wheretheacceptorknowsthattherearesomespecialterms,andhisattentionisdrawntothem,heisboundbythemifheacceptstheoffer.ContractbyTelephoneorTelexIthasthesameeffectasanoralagreemententeredintobetweenthepartieswhentheyarefacetoface.


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OFFER&ACCEPTANCEACCEPTANCELegalRulesastoAcceptance1.Itmustbeabsoluteandunqualified.2.Itmustbecommunicatedtotheofferor.3.Itmustbeaccordingtotheprescribedorusualmode.4.Itmustbegivenwithintheprescribedorreasonabletime.5.Itmustbegivenbythespecificpersontowhomtheofferismade.Iftheofferisgeneral,itmaybeacceptedbyanyperson.6.Itmustshowanintentiontofulfilthepromise.7.Itcannotprecedeanoffer.8.Itmustbegivenbeforetheofferlapses.9.Mentalacceptanceisnoacceptance.


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EffectofsilenceonacceptanceTheacceptanceofanoffercannotbeimpliedfromthesilenceoftheoffereeunlesstheoffereehasbyhispreviousconductindicatedthathissilencemeansthatheaccepts.AcceptancesubjecttocontractAnacceptancesubjecttocontractmeansthatthepartiesdonotintendtobebounduntilaformalcontractispreparedandsignedbythem.AgreementtoagreeinfutureIfthepartieshavenotagreeduponthetermsoftheiragreementbuthaveagreedtoagreeinfuture,thereisnocontract.


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CONSIDERATIONConsiderationmeanssomethinginreturn.Itisthepriceforwhichthepromiseoftheotherisbought.Itmustresultinabenefittothepromisorand/oradetrimenttothepromiseeorboth.Sec.2(d)definesitasfollows:Whenatthedesireofthepromisor,thepromiseeoranyotherpersonhasdoneorabstainedfromdoing,ordoesorabstainsfromdoingsomething,suchactorabstinenceorpromiseiscalledaconsiderationforthepromise.


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LegalrulesastoconsiderationItisessentialtosupporteverycontract.Itmustmoveatthedesireofthepromisor.Itmaymovefromthepromiseeoranyotherperson.Itmaybepast,presentorfuture.Itneednotbeadequate.Itmustberealandnotillusory.Itmustnotbesomethingwhichthepromisorisalreadylegallyorcontractuallyboundtodo.Itmustnotbeillegal,immoraloropposedtopublicpolicy.


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StrangertocontractThegeneralruleisthatastrangertoacontractcannotsue.Buthemaysuewhere1.atrustorchargeiscreatedinsomespecificimmovablepropertyinfavourofhim;2.aprovisionismadeinamarriagesettlement,partitionorfamilyarrangementforhisbenefit;3.thereisanacknowledgementofaliabilitybythepromisororthepromisorconstituteshimselfasagent;4.heistheassigneeofrightsandbenefitsunderinvolvingpersonalskill;5.heentersintoacontractthroughanagent;and6.therearecovenantsrunningwiththeland.


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Anagreementmadewithoutconsiderationisvoid[Sec.25]Thefollowingaretheexceptionstothisrule,i.e.,noconsiderationisrequiredincaseof1.Awrittenandregisteredagreementbasedonnaturalloveandaffectionbetweenpartiesstandinginanearrelationtoeachother[Sec.25(1)];2.Apromisetocompensate,whollyorapart,apersonwhohasalreadyvoluntarilydonesomethingforthepromisor[Sec.25(2)];3.Apromisebyadebtortopayatime-barreddebtifitismadeinwritingandissignedbythedebtororbyhisagent[Sec.25(3)];4.Anagency[Sec.185];5.Acompletegift[Expl.1toSec.25]


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CAPACITYTOCONTRACTEverypersoniscompetenttocontractwhoisoftheageofmajorityaccordingtothelawtowhichheissubject,andwhoisofsoundmind,andisnotdisqualifiedfromcontractingbyanylawtowhichheissubject(Sec.11)1.MinorAminorisapersonwhohasnotcompletedeighteenyearsofage.ButwhereaguardianhasbeenappointedtoaminorundertheGuardiansandWardsActorwhereaminorisundertheguardianshipoftheCourtofWards,heattainsmajorityattheageoftwenty-one.Thepositionsasregardshisagreementsisasfollows:Contd


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1)Hisagreementisaltogethervoidandinoperative.2)Hecanbeapromiseeorabeneficiaryinacontract.3)Hisestateisliableforthenecessarygoodssuppliedornecessaryservicesrenderedtohimortoanyonewhomheislegallyboundtosupportorformoneylenttohimtobuynecessaries.4)Hemayenterintocontractsofapprenticeship,service,educationandinstructionprovidedthesearebeneficialtohim.5)Hecanbeanagent.

Contd


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6)Hecannotbeapartner.Buthecanbeadmittedtothebenefitsofanalreadyexistingpartnershipwiththeconsentoftheotherpartners.7)Ifhehasreceivedanybenefitunderavoidagreement,hecannotbeaskedtocompensateorpayforit.8)Thecourtneverordersspecificperformanceofhisagreements.9)Hecanalwayspleadminorityandisnotestoppedfromdoingsoevenwhenheentersintoanagreementbyfalselymisrepresentinghisage.10)Hecannotbeadjudgedinsolvent.


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2.PersonsofunsoundmindLunatics.Alunaticcanenterintoacontractwhenheisofsoundmind.Idiots.Anagreementofanidiotlikethatofaminorisaltogethervoid.DrunkenorIntoxicatedpersons.Theirpositionissimilartothatoflunatics.Thesepersons,likeaminor,areliablefornecessariessuppliedtothemortheirminordependants.

3.Otherpersons.Altenenemies.DuringthewaranIndiancitizencannotenterintoacontractwithaalienenemy.Contractsmadebeforethewarareeithersuspendedordissolved.


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Foreignsovereignsandaccreditedrepresentativesofaforeignstate.TheycanenterintocontractsandenforcethesecontractsinourCourts.ButtheycannotbesuedinourCourtswithoutthepriorsanctionoftheCentralGovernment.Corporations.ThecontractualcapacityofastatutorycorporationislimitedbytheStatutegoverningit.AsregardsacompanyregisteredundertheCompaniesAct,1956,itscontractualcapacityisregulatedbyitsMemorandumofAssociationandtheCompaniesAct,1956.Insolvents.Whenadebtorisadjudgedinsolventheisdeprivedofhispowertodealinhispropertydivisibleamonghiscreditors.Convicts.AConvictwhenundergoingimprisonmentisincapableofenteringintoacontract.


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FREECONSENTAllagreementsarecontractsiftheyaremadebythefreeconsentoftheparties.Twoormorepersonsaresaidtoconsentwhentheyagreeuponthesamethinginthesamesense[Sec.13.]Consentissaidtobefreewhenitisnotcausedby(i)Coercion,or(ii)Undueinfluence,or(iii)Fraud,or(iv)Misrepresentation,or(v)Mistake,subjecttotheprovisionsofSecs.20,21and22.


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Effectofagreementwithoutfreeconsent.Whenconsenttoanagreementiscausedbycoercion,fraud,misrepresentation,orundueinfluence,theagreementisacontractvoidableattheoptionofthepartywhoseconsentwassocaused[Secs.19and19-A]COERCIONCoercionisthecommittingorthreateningtocommitanyactformiddenbytheIndianPenalCode,1860ortheunlawfuldeaining,orthreateningtodetain,anyproperty,totheprejudiceofanypersonwhatever,withtheintentionofcausinganypersontoenterintoanagreement(Sec.15).Athreattocommitsuicideamountstocoercion.


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UNDUEINFLUENCEAcontractissaidtobeinducedbyundueinfluencewheretherelationssubsistingbetweenthepartiesaresuchthatoneofthepartiesisinapositiontodominatethewilloftheother,andusesthatpositiontoobtainanunfairadvantageovertheother.Apersonisdeemedtobeinapositiontodominatethewillofanotherwherehe

Contd


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(a)Holdsrealorapparentauthorityovertheother,or(b)Standsinafiduciaryrelationtotheother;or(c)Makesacontractwithapersonwhosementalcapacityistemporarilyorpermanentlyaffectedbyreasonofage,illnessormentalorbodilydistress.Whereapersonwhoisinapositiontodominatethewillofanother,entersintoacontractwithhim,andthetransactionappearstobeunconscionable,theburdenofprovidingthatsuchcontractwasnotinducedbyundueinfluenceliesuponthepersoninapositiontodominatethewilloftheother(Sec.16).


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Relationshipswhichraisepresumptionofundueinfluence:ParentandChilteeandBeneficiary.ReligiousGuruandDisciple.GuardianandWard.SolicitorandClientDoctorandPatient.FianceandFiancee.

Nopresumptionsofundueinfluenceinthefollowingcases:1.HusbandandWife.2.LandlordandTenant.3.CreditorandDebtor.


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MISREPRESENTATIONANDFRAUDMisrepresentationisamis-statementofamaterialfactmadeinnocentlywithahonestbeliefastoitstruthornon-disclosureofamaterialfact,withoutanyintenttodeceivetheotherparty.Fraudexistswhenitisshownthatafalserepresentationhasbeenmade.Knowingly,orWithoutbeliefinitstruth,orrecklessly,notcaringwhetheritistrueorfalse,andthemakerintendstheotherpartytoactuponit.Italsoexistswhenthereisaconcealmentofamaterialfact.


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MISTAKEMistakeiserroneousbeliefaboutsomething.Itmaybea(1)MistakeofLaw,or(2)Mistakeoffact.MistakeofLaw,Itmaybeaa)Mistakeoflawofthecountry,orb)Mistakeoflawofaforeigncountry.Thegeneralruleasregardsmistakeoflawofthecountryisthatignoranceoflawisnoexcuse.Mistakeoflawofaforeigncountryisregardedasamistakeoffact.


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2.MistakeofFact,Itmaybea(1)Bilateralmistake.Whereboththepartiestoanagreementareunderamistakeastoamatteroffactessentialtotheagreement,theagreementisvoid[Sec.20].MistakeofFact(bilateralmistake)mayrelateto:a)Subject-matter.Mistakeoffactregardingsubjectmattermayrelatetoi.Existenceofthesubject-matter;ii.Priceofthesubject-matter;iii.Quantityofthesubject-matter;iv.Identityofthesubject-matter.v.Qualityofthesubject-matter,orvi.Titletothesubject-matter.Contd


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b)Possibilityofperformance.Mistakeoffactmayalsorelatetoi.Physical,orii.Legal,impossibilityofperformance.Inboththesecases,theagreementisvoid.


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2.MistakeofFact(Cont.d)(2)Unilateralmistake.Whereonlyoneofthepartiesisunderamistakeastoamatteroffact,thecontractisnotvoidable[Sec.22].Therearehowevertwoexceptionstothisrule.(i)Identityofthepersoncontractedwith.IfAintendstoenterintoacontractwithB.Ccannotgivehimselfanyrightinrespectofthecontractbyacceptingtheoffer.Insuchacasethecontractisvoid.(ii)Natureofcontract.Whereapersonismadetoenterintoacontractthroughtheinducementofanotherbutthroughnofaultofhisown,thereisamistakeastothenatureofthecontract,andthecontractisvoid.


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LEGALITYOFOBJECTAnagreementisacontractifitismadeforalawfulconsiderationandwithalawfulobject.[Sec.10].Everyagreementofwhichtheobjectorconsiderationisunlawfulisvoid.Theconsiderationorobjectofanagreementisunlawfulifitisforbiddenbylaw;oritisfraudulent;orinvolvesorimpliesinjurytothepersonorpropertyofanother;ortheCourtregardsitasimmoral,oropposedtopublicpolicy(Sec.23).


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Effectsofillegality.Noactionisallowedonanillegalagreement.Thisruleisbasedonthefollowingtwomaxims:(1)Noactionarisesfromabasecause.(2)Wherethereisequalguilt,thedefendantisinabetterposition.Theeffectofillegalityaresummedupasfollows:(1)Thecollateraltransactionstoanillegalagreementalsobecometaintedwithillegality.(2)Noactioncanbetakenforthea)Recoveryofmoneypaidorpropertytransferredunderanillegalagreement,andb)Breachofanillegalagreement.


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AGREEMENTSOPPOSEDTOPUBLICPOLICYAnAgreementissaidtobeopposedtopublicpolicywhenitisinjurioustothewelfareofthesocietyoritstendstobeharmfultothepublicinterest.Thefollowingagreementsare,orhavebeenheldtobe,opposedtopublicpolicy:1.AgreementsofTradingwithenemy.2.Agreementtocommitacrime.3.Agreementsinterferingwithadministrationofjustice.Theseincludea)Agreementsforstiflingprosecution,andb)Agreementswhichinterferewiththecourseofjustice.

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AGREEMENTSOPPOSEDTOPUBLICPOLICY

4.Agreementsinrestraintoflegalproceedings.Theseincludea)AgreementstooustthejurisdictionofCourts,andb)Agreementstovaryperiodsoflimitation.5.Agreementsforthesaleofpublicoffices.6.7.8.9.Agreementstendingtocreateinterestopposedtoduty.Agreementsinrestraintofparentalrights.Agreementsrestrictingpersonalliberty.Agreementsinrestraintofmarriage.

10.Marriagebrokerageagreements.

Cont..d


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AGREEMENTSOPPOSEDTOPUBLICPOLICY11.Agreementsinterferingwithmaritalduties.12.Agreementsinfraudofcreditorsorrevenueauthorities.13.Agreementsinrestraintoftrade.Anagreementinrestraintoftradeisonewhichrestraintsapersonfromfreelyexercisinghistrade,businessorprofession.Everyagreement,bywhichanyoneisrestrainedfromexercisingalawfulprofession,tradeorbusinessofanykindis,tothatextent,void[Sec.27].Exceptionsaremadeincaseofagreementsforsaleofgoodwillandpartnersagreementsprovidedtherestraintisreasonable.


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VOIDAGREEMENTSAvoidagreementisonewhichisnotenforceablebylaw[Sec.2(g)]Thefollowingagreementshavebeenexpresslydeclaredtobevoid:1.Agreementsmadebyincompetentpersons[Sec.11].2.Agreementsmadeunderamutualmistakeoffact[Sec.20].3.Agreementstheconsiderationorobjectofwhichisunlawful[Sec.23].4.Agreementstheconsiderationorobjectofwhichunlawfulinpart[Sec.24].5.Agreementsmadewithoutconsideration[Sec.25].6.Agreementsinrestraintofmarriage[Sec.26].7.Agreementsinrestraintoftrade[Sec.27].Cont..d


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8.Agreementsinrestraintoflegalproceedings[Sec.28].9.Agreementsthemeaningofwhichisuncertain[Sec.29].10.Agreementsbywayofwager[Sec.30].11.Agreementscontingentonimpossibleevents[Sec.36].12.Agreementstodoimpossibleacts[Sec.56].Wageringagreements.Awageringagreementisanagreementtopaymoneyormoneysworthonthehappeningornon-happeningofaspecifieduncertainevent.WageringagreementsarevoidinIndia.IntheStatesofMaharashtraandGujarat,however,theyhavebeendeclaredtobeillegal.ThecollateraltransactionstosuchwageringagreementsintheStatesofMaharashtraandGujaratalsobecomeillegal.IntherestofIndia,collateraltransactionsarevalid.


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UncertainagreementsAgreementsthemeaningofwhichisnotcertain,orcapableofbeingmadecertain,arevoid.

RestitutionItmeansreturnofthebenefitreceivedfromtheplaintiffunderavoidcontract.Theprincipleofrestitutionisthatthedefendantwhohasbeenunjustlyenrichedattheexpenseoftheplaintiffisrequiredtomakerestitutiontotheplaintiff.


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CONTINGENTCONTRACTSAcontingentcontractisacontracttodoornottodosomething,ifsomeevent,collateraltosuchcontract,doesordoesnothappen.Characteristicsofcontingentcontract.1.Itsperformancedependsuponthehappeningornon-happeninginfutureofsomeevent.2.Theeventmustbeuncertain.3.Theuncertainfutureeventmustbecollateraltothecontract.


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Rulesregardingcontingentcontracts.1.Ifacontingentcontractistobeperformedifanuncertainfutureeventhappens,itcannotbeenforceduntiltheeventhashappened.Ifitistobeperformedifaparticulareventdoesnothappen,itsperformancecanbeenforcediftheeventbecomesimpossible.2.Ifacontingentcontractdependsforitsperformanceondoingofanactbythepromisor,thecontractbecomesvoidwherethepromisormakestheperformanceimpossible.

Contd


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Rulesregardingcontingentcontracts.3.Ifacontingentcontractcontemplatesdoingofathingifaspecifiedeventhappenswithinafixedtime,itbecomesvoidiftheeventdoesnothappenwithinthattime.4.Ifacontingentcontractcontemplatestodoanythingifanimpossibleeventhappens,itisvoid.


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PERFORMANCEOFCONTRACTThepartiestoacontractmusteitherperformoroffertoperformtheirrespectivepromises.Attemptedperformanceortender.Attemptedperformanceortenderisanofferofperformancebypromisorinaccordancewiththetermsofthecontract.Ifpromiseedoesnotacceptperformance,thepromisorisresponsiblefornon-performance,nordoeshetherebyloserightsunderthecontract.Thusatenderisequivalenttoactualperformance.Thetender,inordertohavethiseffect,mustbeunconditional,ofthewholequantitycontractedfor,atthepropertime,placeandinthemannerspecified;and,wherethesearenotspecified,itmustbemadeinareasonablemanner.thethenothis


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Reciprocalpromises.Promiseswhichformtheconsiderationorpartoftheconsiderationforeachotherarecalled'reciprocalpromises'.Rulesregardingperformanceofreciprocalpromises.1.Whenreciprocalpromiseshavetobesimultaneouslyperformedthepromisorisnotboundtoperform,unlessthepromiseeisreadyandwillingtoperformhispromise.2.Thereciprocalpromisesmustbeperformedintheorderfixedbythecontract.3.Wherethenatureofreciprocalpromisesissuchthatonecannotbeperformedunlesstheotherpartyperformshispromiseinthefirstplace.Thenifthelatterfailstoperformhecannotclaimperformancefromtheother,butmustmakecompensationtothefirstpartyforhisloss.


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Bywhommustcontractbeperformed.1.Bypromisorhimself-Ifthatwastheintentionoftheparties.i.e.wherepersonalconsiderationisthefoundationofthecontract.2.Byagent-wherepersonalconsiderationisnotthefoundationofthecontract.3.Bylegalrepresentatives-incaseofdeathofthepromisor.4.Byjointpromisors-whentwoormorepersons/havemadeajointpromise,thenunlessacontraryintentionappearsfromthecontract.allsuchpersonsmustjointlyfulfillthepromise.Ifanyofthemdies,hislegalrepresentativemust,jointlywiththesurvivingpromisors,fulfillthepromise.Ifallthepromisorsdie,thelegalrepresentativesofallofthemmustfulfillthepromisejointly.


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Whocandemandperformance?Itisonlythepromisee,andincaseofhisdeath,hislegalrepresentatives.whocandemandperformance.Whenapersonhasmadeapromisetoseveralpersons,then,unlessacontraryintentionappearsfromthecontract,therighttoclaimperformancerestswithallofthem.Whenoneofthepromiseesdies,itrestswithhislegalrepresentativesjointlywiththesurvivingpromisees.Whenallthepromiseesdie,itrestswiththeirlegalrepresentativesjointly.Timeandplaceofperformance.Timeandplaceofperformanceofacontractarematterstobedeterminedbyagreementbetweenthepartiesthemselves.Wherenotimeforperformanceisspecified,thepromisormustperformthepromisewithinareasonabletime.Ifnotimeandplaceisfixedfortheperformanceofthepromise,thepromisormustapplytothepromiseetofixthedayandtimeforperformance.


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Timeastheessenceofcontract.Timefortheperformanceofacontractmaybefixedinthecontractitself.Inthatcasethecontractmustbeperformedwithinthattimewhentimeisoftheessenceofthecontract.Thegeneralruleisthatincommercialcontractstimeisoftheessenceofcontract.Inothercontractsstipulationsastotimeare,intheabsenceofanexpressorimpliedevidencetothecontrary,presumednottobeoftheessenceofthecontract.


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Appropriationofpayments.Thedebtorhas,atthetimeofpayment,rightofchoiceofappropriatingthepayment;indefaultofthedebtor,thecreditorhastherighttoappropriate;indefaultofeither,thelawwillallowappropriationofdebtsinorderoftime.RuleofClaytonsCase.Wherethepartieshaveacurrentaccountbetweenthem,appropriationimpliedlytakesplaceintheorderinwhichthereceiptsandpaymentstakeplaceandareenteredintheaccount.Thefirstitemonthedebitsideoftheaccountisdischargedorreducedbythefirstitemonthecreditside.


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Assignmentofcontract.Assignmentofacontractmeanstransferofcontractualrightsandliabilitiesunderthecontracttoathirdparty.Itmaytakeplaceby1.Actoftheparties.Thisissubjecttothefollowingrules:(1)Contractsinvolvingpersonalskillorabilityorotherpersonalqualificationscannotbeassigned.(2)Apromisorcannotassignhisliabilitiesorobligationsunderacontract.(3)Therightsandbenefitsunderacontractmaybeassignediftheobligationunderthecontractisnotofapersonalnature.(4)Anactionableclaimcanalwaysbeassignedbuttheassignmenttobecompleteandeffectualmustbeeffectedbyaninstrumentinwriting.Noticeofsuchassignmentmustalsobegiventothedebtor.2.Operationoflaw.Thistakesplaceincaseofdeathorinsolvencyofapartytothecontract.


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DISCHARGEOFCONTRACTAcontractissaidtobedischargedwhentheobligationscreatedbyitcometoanend.Thevariousmodesofdischargeofacontractareasfollows:1.Dischargebyperformance.Dischargeofacontractbyperformancetakesplacewhenthepartiestothecontractfulfilltheirobligationsarisingunderthecontractwithinthetimeandinthemannerprescribed.Theperformancemaybe(i)actualperformance,or(ii)attemptedperformance


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2.Dischargebyagreementorconsent.Acontractrestsontheagreementoftheparties.Asitisagreementwhichbindsthem,sobytheiragreementorconsenttheymaybedischarged.Thedischargebyconsentmaybeexpressorimplied.Dischargebyimpliedconsenttakesplaceby


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(a)Novation,i.e.,whenanewcontractissubstitutedforanexistingone,eitherbetweenthesamepartiesorbetweenoneofthepartiesandathirdparty.(b)Alteration,i.e.,whenoneormoreofthetermsofthecontractis/arealteredbythemutualconsentofthepartiestothecontract.(c)Rescission,i.e.,whenallorsomeofthetermsofthecontractarecancelled.(d)Remission,i.e.,acceptanceofalesserfulfillmentofthepromisemade.(e)Waiverwhichmeansintentionalrelinquishmentorgivingupofarightbyapartyentitledtheretounderacontract.(f)Merger,i.e.,whenaninferiorrightaccruingtoapartyunderacontractmergesintoasuperiorrightaccruingtothesamepartyunderanewcontract.


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3.Dischargebyimpossibility.ImpossibilityofperformancemaybeInitialimpossibility.Anagreementtodoanactimpossibleinitselfisvoid.Superveningimpossibility.Impossibilitywhicharisessubsequenttotheformationofacontract(whichcouldbeperformedatthetimewhenthecontractwasenteredinto)iscalledsubsequentorsuperveningimpossibility.Thecasescoveredbysuperveningimpossibilityinclude;(a)Destructionofsubject-matterofcontract;(b)Non-existenceornon-occurrenceofaparticularstateofthings:(c)Deathorincapacityforpersonalservice;(d)Changeoflaworsteppinginofapersonwithstatutoryauthority;(e)Outbreakofwar.Thecontractisdischargedinthesecases.


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Thefollowingcasesarenotcoveredbysuperveningimpossibility:(a)Difficultyofperformance;(b)Commercialimpossibility;(c)Failureofathirdpersononwhoseworkthepromisorrelied;(d)Strikes,lock-outsandcivildisturbances;(e)Failureofoneoftheobjects.Thecontractisnotdischargedinthesecases.


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4.Dischargebylapseoftime.IfacontractisnotperformedwithintheperiodoflimitationandifnoactionistakenbythepromiseeinaLawCourt,thecontractisdischarged.5.Dischargebyoperationoflaw.Thisincludesdischargeby(a)death,(b)merger,(c)insolvency,(d)unauthorisedalterationofthetermsofawrittenagreement,and(e)rightsandliabilitiesbecomingvestedinthesameperson.


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6.Dischargebybreachofcontract.Ifapartybreakshisobligationwhichthecontractimposes,theretakesplacebreachofcontract.Breachofcontractmaybe[1]Actualbreach,or[2]Anticipatorybreach.

[1]Actualbreachofcontractmayoccur(a)Atthetimewhentheperformanceisdue,or(b)Duringtheperformanceofthecontract.[2]Anticipatorybreachofcontractoccurswhenapartyrepudiateshisliabilityorobligationunderthecontractbeforethetimeforperformancearrives.


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REMEDIESFORBREACHOFCONTRACTIncaseofbreachofacontract,theinjuredpartyhasoneormoreofthefollowingremedies:1.Rescission.Whenthereisbreachofacontractbyaparty,theinjuredpartymaysuetotreatthecontractasrescinded.Heisalsoabsolvedofalltheobligationsunderthecontract.2.Damages.DamagesaremonetarycompensationawardedtotheinjuredpartybyCourtforthelossorinjurysufferedbyhim.Thefoundationofmodernlawofdamages,bothinIndiaandEngland,istobefoundinthejudgmentinthecaseofHadleyv.Baxendale.Sec.73oftheIndianContractActwhichdealswithcompensationforlossordamagecausedbybreachofcontractisbasedonthejudgmentinthecaseofHadleyv.Baxendale.Damagesmaybeoffourtypes:

Cont..d


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1)Ordinarydamages.Thesearedamageswhichactuallyariseintheusualcourseofthingsfromthebreachofacontract.2)Specialdamages.Damageswhichmayreasonablybesupposedtohavebeeninthecontemplationofboththepartiesatthetimewhentheymadethecontractastheprobableresultofthebreachofit,areknownasspecialdamagesandmayberecovered.3)Vindictiveorexemplarydamages.Thesedamagesareallowedincaseofthebreachofacontracttomarryordishonourofachequebyabankerwrongfully.4)Normaldamages.Wheretheinjuredpartyhasnotsufferedanylossbyreasonofthebreachofacontract,thecourtmayawardaverynominalsumasdamages.


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Liquidateddamagesandpenalty.Liquidateddamagesrepresentasum,fixedorascertainedbythepartiesinthecontract,whichisafairandgenuinepre-estimateoftheprobablelossthatmightensueasaresultofthebreach.Apenaltyisasumnamedinthecontractatthetimeofitsformation,whichisdisproportionatetothedamagelikelytoaccrueasaresultofthebreach.TheCourtsinIndiaallowonlyreasonablecompensation.3.QuantumMeruit.Arighttosueonaquantummeruit(asmuchasearned)ariseswhereacontract,partlyperformedbyoneparty,hasbecomedischargedbythebreachofthecontractbytheotherparty.Thisrightisfoundedonanimpliedpromisebytheotherpartyarisingfromtheacceptanceofabenefitbythatparty.


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4.Specificperformance.IncertaincasestheCourtmaydirectthepartyinbreachofacontracttoactuallycarryoutthepromise,exactlyaccordingtothetermsofthecontract.Thisiscalledspecificperformanceofthecontract.5.Injunction.Itisamodeofsecuringthespecificperformanceofthenegativetermsofacontract.


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QUASICONTRACTSIncertaincasesthelawimposesanobligationandallowsanactiontobebroughtonitasifitaroseoutofanagreement,thoughnonewaspresentinfact.Suchcases,strictlyspeaking,arenotcontracts,butthelawrecognisesthemascertainrelationsresemblingthosecreatedbycontracts.InEnglishLaw,suchrelationsarecalledquasi-contracts.Quasicontractsrestonthegroundofequitythatapersonshallnotbeallowedtoenrichhimselfunjustlyattheexpenseofanother.


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Secs.68to72dealwiththefollowingquasi-contracts:[1]Claimfornecessariessuppliedtoapersonincapableofcontractingoronhisaccount.[Sec.68].[2]Reimbursementofapersonpayingmoneyduebyanotherinpaymentofwhichheisinterested[Sec.69].[3]Obligationofapersonenjoyingbenefitofanon-gratuitousact[Sec.70].[4]Responsibilityoffinderofgoods[Sec.71].[5]Liabilityofpersontowhommoneyispaidorthingdeliveredbymistakeorundercoercion[Sec.72].


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SALEOFGOODSContractofsale.Acontractofsaleofgoodsisacontractwherebythesellertransfersoragreestotransferthepropertyingoodstothebuyerforaprice[Sec.4].Saleandagreementtosell.Whereunderacontractofsalethepropertyinthegoodsistransferredfromthesellertothebuyer,thecontractiscalledasale,butwherethetransferofthepropertyinthegoodsistotakeplaceatafuturetimeorsubjecttosomeconditionthereaftertobefulfilledthecontractiscalledanagreementtosell.Anagreementtosellbecomesasalewhenthetimeelapsesortheconditionsarefulfilledsubjecttowhichthepropertyinthegoodsistobetransferred.


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Contractofsalehowmade.Acontractofsaleismadebyanoffertobuyorsellgoodsforapriceandtheacceptanceofsuchoffer.Itmayprovidefortheimmediatedeliveryofthegoodsorimmediatepaymentofthepriceorboth,orforthedeliveryorpaymentbyinstallmentsorthatthedeliveryorpaymentorbothshallbepostponed.Itmaybemadeinwritingorbywordofmouthorpartlyinwritingandpartlybywordofmouth,ormaybeimpliedfromtheconductoftheparties[Sec.5].Subject-matterofsale.Goodsformthesubjectofacontractofsale.Theymeaneverykindofmovablepropertyotherthanactionableclaimsandmoney,andincludestockandshares,growingcrops,grassandthingsattachedtoorformingpartofthelandwhichareagreedtobeseveredbeforesaleorunderthecontractofsale[Sec.2(7)].Cont..d


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Goodsmaybe:1.Existinggoods,i.e.goodswhichareownedandpossessedbytheselleratthetimeofsale.Thesegoodsmaybespecificascertainedorunascertained.2.Futuregoods,i.e.,goodswhichthesellerdoesnotpossessatthetimeofthecontractandwhichwillbeacquired,manufacturedorproducedbyhimatsomefuturedate.3.Contingentgoods,i.e.goodstheacquisitionofwhichbythesellerdependsuponacontingencywhichmayormaynothappen.Price.Thepriceinacontractofsalemustbeexpressedinmoney.It[1]Maybefixedbythecontractitself,or[2]maybelefttobefixedinanagreedmanner,or[3]maybedeterminedfromthecourseofdealingbetweentheparties.Wherethepriceisnotdeterminedinaccordancewiththeseprovisions,thebuyermustpaythesellerareasonableprice[Sec.9].


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CONDITIONSANDWARRANTIESAstipulationinacontractofsalewithreferencetogoodswhicharethesubjectthereofmaybeaconditionorawarranty[Sec.12(1)].Aconditionisastipulationessentialtothemainpurposeofthecontract.Itsbreachgivesarighttothebuyertotreatthecontractasrepudiated[Sec.12(2)].Awarrantyisastipulationcollateraltothemainpurposeofthecontract.Itsbreachgivesrisetoaclaimfordamagesbutnotarighttorejectthegoodsandtreatthecontractasrepudiated[Sec.12(3)].ExpressandImpliedconditionsandwarrantiesInacontractofsale,conditionsandwarrantiesmaybeexpressorimplied.Expressconditionsandwarrantiesarethosewhichareagreeduponbetweenthepartiesatthetimeofthecontract.Impliedconditionsandwarrantiesarethosewhichareimpliedbylawunlessthepartiesstipulatetothecontrary.


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ImpliedConditions.1.Conditionastotitle.Inacontractofsalethereisanimpliedconditiononthepartofthesellerthata)Inthecaseofasale,hehasarighttosellthegoods,andb)Inthecaseofanagreementtosell,hewillhavearighttosellthegoodsatthetimewhenthepropertyistopass[Sec.14(1)].2.Salebydescription.Wherethereisacontractforthesaleofgoodsbydescription,thereisanimpliedconditionthatthegoodsshallcorrespondwiththedescription.Ifthesaleisbysampleaswellasbydescription,thegoodsshallcorrespondbothwiththesampleandthedescription[Sec.15].


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3.Conditionastoqualityorfitness.Theconditionastoqualityorfitnessisimpliedwherea)Thegoodssoldaresuchasthesellerdealsintheordinarycourseofhisbusiness;a)Thebuyerreliesonthesellersskillorjudgmentastothefitnessofthegoodsforanyparticularpurpose;andb)Thebuyerexpresslyorimpliedlymakesknowntothesellerthathewantsthegoodsforthatparticularpurpose[Sec.16(1)].4.Conditionastomerchantability.Wheregoodsareboughtbydescriptionfromasellerwhodealsingoodsofthatdescription(whetherheisthemanufacturerorproducerornot),thereisanimpliedconditionthatthegoodsshallbeofmerchantablequality[Sec.16(2)].


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5.Conditionimpliedbycustom.Animpliedconditionastoqualityorfitnessforaparticularpurposemaybeannexedbytheusageoftrade[Sec.16(3)].6.Salebysample.Inthecaseofacontractforsalebysamplethereisanimpliedconditiona.Thatthebulkshallcorrespondwiththesampleinquality;b.Thatthebuyershallhaveareasonableopportunityofcomparingthebulkwiththesample;andc.Thatthegoodsshallbefreefromanydefect,renderingthemunmerchantable,whichwouldnotbeapparentonareasonableexaminationofthesample[Sec.17].7.Conditionastowholesomeness.Incaseofeatablesandprovisions,thereisanimpliedconditionthatthegoodsshallbewholesomeandfitforhumanconsumption.


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ImpliedWarranties.Inacontractofsale,unlessthereisacontraryintention,thereisanimpliedwarrantythat[1]thebuyershallhaveandenjoyquietpossessionofthegoods[Sec.14(b)].[2]thegoodsarefreefromanychargeorencumbranceinfavourofanythirdparty[Sec.14(c)].CaveatEmptor.Thismeansletthebuyerbeware.Thedoctrineofcaveatemptordoesnotapply[1]Incaseofimpliedconditionsandwarranties;[2]Whenthebuyerintimatesthepurposetheselleranddependsuponhisskillorjudgment;[3]Whenthereisausageoftrade;[4]Whenthereisafraudbytheseller.


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TRANSFEROFPROPERTYItisimportanttoknowtheprecisemomentoftimeatwhichthepropertyingoodspassesfromthesellertothebuyerforthefollowingreasons:1.Riskfollowsownershipwhetherdeliveryhasbeennotandwhetherpricehasbeenpaidornot.Thisis,subjecttoagreementbetweentheparties.2.Whenthegoodsaredamagedordestroyedbythethethirdparties,itistheownerofthegoodswhoactionagainstthem.madeorhowever,actionofcantake

Cont..d


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3.Intheeventofinsolvencyofeitherthesellerorthebuyer,thequestionwhethertheOfficialReceiverorAssigneecantakeoverthegoodsornotdependsonwhetherthepropertyinthegoodshaspassedfromthesellertothebuyer.4.Thesellercansuefortheprice,unlessotherwiseagreed,onlyifthegoodshavebecomethepropertyofthebuyer.


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TRANSFEROFPROPERTYTheprimaryrulesforascertainingwhenthepropertyingoodspassestothebuyerareasfollows:[1]Wherethereisacontractforthesaleofunascertainedgoods,nopropertyinthegoodsistransferredtothebuyerunlessanduntilthegoodsareascertained[Sec.18].[2]Wherethereisacontractforthesaleofspecificorascertainedgoods,thepropertyinthemistransferredtothebuyeratsuchtimeasthepartiestothecontractintendittobetransferred.Forthepurposeofascertainingtheintentionoftheparties,regardshallbehadtothetermsofthecontract,theconductofthepartiesandthecircumstancesofthecase[Sec.19].Wheretheintentionofthepartiescannotbeascertained,thefollowingrulesshallapply:

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1.Specificgoods.Incaseofacontractforthesaleofspecificgoodsa)Inadeliverablestate,ifthecontractisunconditional,propertypassesassoonasthecontractisenteredinto[Sec.20].b)Ifthesellerhastodosomethingtoputtheminadeliverablestate,propertypassesonlywhensuchthingisdoneandnoticethereofisgiventothebuyer[Sec.21].c)Inadeliverablestateifthesellerhastodosomethingforthepurposeofascertainingtheprice,propertywillpassonlywhensuchactisdoneandnoticethereofisgiventothebuyer[Sec.22].

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2.Unascertainedgoods.Incaseofunascertainedorfuturegoodssoldbydescription,propertypassesonlywhengoodsaccordingtothedescriptionareunconditionallyappropriatedtothecontractandthebuyerisgivenanoticethereof.Deliverytoacarrier(thesellernotreservingrightofdisposal,Sec.25)amountstoanunconditionalappropriation[Sec.23].3.Goodssentonapproval.Incaseofgoodsdeliveredtoabuyeronapprovaloronsaleorreturnpropertypasseswhenhesignifieshisapprovaloracceptanceorwhenhedoessomeactadoptingthetransaction.Ifheretainsthegoodswithoutgivingnoticeofrejection,propertypasseswhenthetimeagreedforreturningthegoodsexpiresoralterareasonabletimehasexpired[Sec.24].


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SALEBYNON-OWNERSThegeneralruleoflawisthatonlytheownerofthegoodsoranypersonspecificallyauthorisedbyhimcansellthegoods.Ifanyotherpersonsellsthem,thetitleofthebuyerwillnotbebetterthanthatoftheseller.Exceptions.Thefollowingaretheexceptionstotheaboverule:1.Salebyamercantileagent.2.Saleundertheimpliedauthorityofownerortitlebyestoppel.3.Salebyoneofseveraljointowners.4.Salebyapersoninpossessionofgoodsunderavoidablecontract.5.Salebyasellerinpossessionaftersale.6.Salebyabuyerinpossessionafterhavingboughtoragreedtobuy.7.Salebyanunpaidseller.Inallthesecases,thepersonsellingthegoodsmustbeinpossessionofthegoodswiththeconsentofthesellerandthebuyermustactbonafide.


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PERFORMANCEOFCONTRACTItisthedutyofthesellertodeliverthegoodsandofthebuyertoacceptandpayfortheminaccordancewiththetermsofthecontractofsale.Deliveryofgoods.Deliverymeansvoluntarytransferofpossessionofgoodsfromthesellertothebuyer.Itmaybe(i)Actual,(ii)Symbolic,or(iii)ConstructiveButitmustbeaccordingtotherulesasgivenbelow:Cont..d


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Rulesastodelivery.1.Unlessotherwiseagreed,deliveryofthegoodsandpaymentofthepriceareconcurrentconditions.2.Adeliveryofpartofthegoods,inprogress,ofthedeliveryofwhole,amountsto,forthepurposeofpassingthepropertyinsuchgoods,asadeliveryofthewhole.3.Apartfromanyexpresscontract,thesellerofgoodsisnotboundtodeliverthemuntilthebuyerappliesfordelivery.

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Rulesastodelivery.4.Theplaceofdeliveryistheplaceatwhichtheyareatthetimeofthesale.5.Ifthegoodsareinpossessionofathirdparty,thereisnodeliveryuntilsuchthirdpartyacknowledgestothebuyerthatheholdsthegoodsonhisbehalf.6.Wherethesellerisboundtosendthegoodstothebuyerbutnotimeforsendingthemisfixed,theymustbesentwithinareasonabletime.

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Rulesastodelivery.7.Expensesofmakingdeliveryarebornebythesellerandexpensesofobtainingdeliverybythebuyer.8.Ifthesellersendstothebuyeralargerorasmallerquantityofgoodsthanheordered,thebuyermaya)Rejectthewhole,orb)Acceptthewhole,orc)Acceptthequantityheorderedandrejecttherest.9.Ifthesellerdelivers,withthegoodsordered,goodsofawrongdescription,thebuyermayacceptthegoodsorderedandrejecttherestorrejectthewhole.10.Unlessotherwiseagreed,thegoodsarenottobedeliveredbyinstallments.


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RIGHTSOFANUNPAIDSELLERAsellerofgoodsisdeemedtobeanunpaidseller[1]whenthewholeofthepricehasnotbeenpaidortendered;[2]whenabillofexchangeorothernegotiableinstrumenthasbeenreceivedasaconditionalpayment,andtheconditiononwhichitwasreceivedhasnotbeenfulfilledbyreasonofthedishonouroftheinstrument,orotherwise[Sec.45].Anunpaidsellerhastherights1.Asagainstthegoods.(1)Rightoflien.Itisavailabletotheunpaidsellerwhena)Thegoodshavebeensoldwithoutanystipulationastocredit;b)Thegoodshavebeensoldoncredit,butthetermofthecredithasexpired;c)Thebuyerbecomesinsolvent[Sec.47].Cont..d


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(2)Rightofstoppageintransit.whenthebuyerofgoodsbecomesinsolventtheunpaidsellerwhohaspartedwiththepossessionofthegoodshastherightofstoppingthemintransit.Thesellermayresumepossessionofthegoods,aslongastheyareinthecourseoftransitandmayretainthemuntilpaymentortenderoftheprice[Sec.50].Theunpaidsellermayexercisethisrightofstoppageintransiteitherbytakingactualpossessionofthegoods,orbygivingnoticeofhisclaimtothecarrierorotherbaileeinwhosepossessionthegoodsare.

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3)Rightofre-sale.Theunpaidsellercanre-sellthegoods(i)Wherethegoodsareofaperishablenature;(ii)Wherehewasexercisedhisrightoflienorstoppageintransitandgivennoticetothebuyerofhisintentiontoresellthegoodsandwherethebuyerhasnotwithinareasonabletimepaidtheprice;and(iii)Wherethesellerexpresslyreservesarightofre-saleincasethebuyershouldmakedefault[Sec.54].


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Rightofwithholdingdelivery.Wherethepropertyingoodshasnotpassedtothebuyer,theunpaidsellerhas,inadditiontohisotherremedies,arightofwithholdingdeliverysimilartoandco-extensivewithhisrightstolienandstoppageintransitwherethepropertyhaspassedtothebuyer[Sec.46(2)].2.Asagainstthebuyerpersonally.1)Suitforprice.Whereunderacontractofsalethepropertyinthegoodshaspassedtothebuyerandthebuyerwrongfullyneglectsorrefusestopayforthegoodsaccordingtothetermsofthecontract,thesellermaysuehimforthepriceofthegoods[Sec.55].2)Damagesfornon-acceptance.Wherethe

buyerwrongfullyneglectsorrefusestopayforthegoods,thesellermaysuehimfordamagesfornon-acceptance[Sec.56].Cont..d


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3)Repudiationofcontractbeforeduedate.Wherethebuyerinacontractofsalerepudiatesthecontractbeforethedateofdelivery,thesellermayeithertreatthecontractassubsistingandwaittillthedateofdelivery,orhemaytreatthecontractasrescindedandsuefordamagesforthebreach[Sec.60].4)Suitforinterest.Thesellercanrecoverinterestonpricefrom

thedateonwhichthepaymentbecamedue,ifthereisaspecialagreementtothateffect.AUCTIONSALE

Asalebyauctionisapublicsalewheredifferentintendingbuyerstrytooutbideachother.Thegoodsareultimatelysoldtothehighestbidder.ThelawonauctionsalesiscontainedinSec.64oftheSaleofGoodsAct.


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