Lovely professional University

Assignment of: Mercantile Law

Teacher: Maneet Kour

Submitted By: Tasmeer Un Nazir

Class: BBA Ist Year
Roll No.: B49
Section: T1006

Case1: A agrees to sell to B “a hundred tons of oil” and B agrees to purchase the same. Is this a valid
contract? Give reasons.

ANSWER:-
No it is not a valid contract because the article of trade is not certain (sec. 29).
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Case2: On 1st June, A agreed to sell his car to B for Rs.40, 000. It was agreed that the car was to be
delivered on 15th June after making full payment. But on 10th June, the car was destroyed in an accidental
fire. Can B sue A for the non performance of the contract? Give reasons.
ANSWER:-
The contract between the 2 parties is void, Held B cant sue A for the non-performance of contract
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Case3: A draft agreement relating to supply of coal was sent to the manager of a railway company for his
acceptance. The manager wrote the word “Approved” and put the draft in the drawer of his table intending it
to send it to the company’s solicitor for a formal contract to be drawn up. By some oversight the document
remained in the drawer? What will be the consequences of the case?
ANSWER:-
There will be no contract because the acceptance is not conveyed to the offeror.
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Case4: A Proposes, by a letter, to sell a house to B at a certain price. The letter is posted 10th July. It
reaches B on 12th July. B accepts A’s Proposal, by a letter sent by post on 13th instant. The letter reaches
on 15th instant. When will the communication of offer and acceptance be complete?
ANSWER:-
The offer is completed as soon as it reaches or is communicated to the offeree (here it is completed
on 12th july); the acceptance is completed as soon as it reaches or is communicated to the
offeror(here it is completed on 15th July)

Case5: S sent his servant, L to trace his missing nephew. He then announced that anybody who traced his
nephew would be entitled to a certain reward. L traced the boy in ignorance of this announcement.
Subsequently when he came to know of the reward, he claimed it. Is S liable and why?
ANSWER:-
No L the servant can not claim the reward because according to the essentials of acceptance
OFFER SHOULD BE COMMUNICATED TO THE OFFEREE, but here the servant was unaware of the
offer and thus held he (L) cannot claim the reward.

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Case6: A company offered by advertisement a reward of $100 to any person who would contract influenza
after having used their medicines three times daily for two weeks according to the printed directions. A lady
used that medicine according to the directions of the company but contracted influenza. Can this lady claim
the reward?
ANSWER:-
This is a leading case Carlill v. Carbolic Smoke Ball Co.;1893… in this case it was held that the lady
can claim the amount as by using the medicines, she had accepted the offer.
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Case7: A promised to pay money to a police officer to investigate into a crime. The agreement was held to
be invalid. Why? Justify…
ANSWER:-
Because it is the job of the police officer to investigate into crimes and is paid by the
employer(government) for that.

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Part-II
Case8: A lends Rs.50,000 to B on C’s standing surety, the condition of the loan being that B will repay at
the end of three months. Just before the expiry of the period, B requested A for further three months time
and A grants it without C knowing it. At the end of the fourth month, B becomes insolvent and A demands
payment from C. What will be the decision of court and why?
ANSWER:-
Here the standing surety of C is the consideration of the contract between A and B which is only
valid upto three months- here C does not take guarantee of B’s returning the money after 3 months,
also the extension of time by A is not in the awareness of C. Hence A cannot demand money from
C.
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Case9: A enters into a contract with B for buying B’s motor car as agent of C and without C’s authority. B
repudiated the contract before C comes to know of it. C subsequently ratified the contract and sued to
enforce it. Was B bound by the contract? Decide...
ANSWER:-
No there is bounding by contract on B because there is no legal contract...
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Case10: A, a merchant, entrusts B, his agent, with a bill of lading relating to certain goods and instructs him
not to sell goods for less than a certain price and not to give credit to D. B sells the goods to D for less
than that price and gives D three month’s credit. Is A bound by the contract with D? Give reasons and
consequences.
ANSWER:-
Yes, A is bound by the contract with D, as the agent of A has entered into the contract with D, which
means that A has entered the contract with D.
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Case11: S guaranteed the honesty of a servant in the employment of C. The servant was guilty of
dishonesty in the course of his service, but C continued to employ him and did not inform the defendant of
what had occurred. Subsequently the servant committed further acts of dishonesty. What will be the
consequence?
ANSWER:-
Here Servant cant be sued by C at anytime, because C knew that he was dishonest. Neither can C
sue S for this because C has entered the contract even after knowing about the dishonesty of his
servant.
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Case12: A gave a piece of cloth to B, a tailor, to be stitched into a suit. B retained the cloth for a period
longer than was necessary and neglected to return it, even on A’s persistent demand. Subsequently a fire
broke out in B’s shop and the cloth was destroyed. Is B liable for the loss?
ANSWER:-
Yes B is liable for the compensation because B had kept the cloth with him on his own will and for
much longer time than required and even after it was demanded by A continuosly, B did not return
it.
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Case13: Suresh contracts with Ramesh to buy a necklace, believing it to be made of very costly rare
pearls, while in reality, the pearls are only an imitation having very little value. Ramesh knows that Suresh
is mistaken but does not disclose the fact.
Q1: Is Suresh bound by the act?
Q2: What will be the remedy to Suresh?
ANSWER:-
Q1: Yes, Suresh is bound by the act, as it is a clear act of fraud by Ramesh (intentional
misrepresentation, hence Suresh can sue Ramesh for the fraud.
Q2: The remedy to Suresh is that he must be either returned the money or be given the particular
necklace of required pearls.
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Case14: A, advances a sum of money to his son, B during his minority. When B becomes major, A by mis-
using his parental influence, gets a bond from B, of an amount more than the amount due. B refuses to give
the amount stated in the bond. Is B bound by the bond?
ANSWER:-
Yes, B can refuse the giving of amount to A, because it is a clear case of COERCION by A on B,
also A can be sued by A for this.
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Case15: A gives some cattle belonging to him, to B. Without any negligence on the part of B, the cattle
were stolen. B did not inform the owner or the police because he thought it would be useless to do so. Is B
liable to A for loss and why?
ANSWER:-
In this case there is no intention of creating a legal contract between A and B.
also A has given the cattle to B as a present or gift, without any consideration, which is not a legal
contract. Held A cant demand compensation from B nor can A sue B.

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Date: Sign. of Faculty member

Remarks by HOD (Mandatory)

Sig. of HOD with date

Remarks by HOS (Mandatory)

Sig. of HOS with date