Discuss meaning and types of endorsements with the help of suitable Explain the essentials of a valid contract in detail

examples?
A valid contract is a legally binding agreement between two or more parties that is enforceable
Endorsements refer to acts of giving public approval or support to someone or by law. For a contract to be considered valid, it must meet certain essential elements. These
something. In various contexts, endorsements can be a powerful tool for influencing elements ensure that the contract is clear, fair, and legally enforceable. Here are the essentials
opinions, behaviors, and decisions. They are commonly used in marketing, politics, and of a valid contract in detail:
professional settings to lend credibility and authority to a product, service, or individual.

Blank Endorsement: A blank endorsement occurs when the endorser signs the back of a 1. Offer and Acceptance
negotiable instrument, such as a check, without specifying a particular endorsee. This
type of endorsement converts the instrument into a bearer instrument, meaning it can
be transferred from one person to another by mere delivery. Originally, the instrument Offer: One party must present an offer to another party. The offer must be clear, definite, and
might have been payable to a specific person or to their order. For example, if a check communicated to the offeree.
is made payable to "Shanky" or order, and Shanky signs the back without specifying any Acceptance: The offer must be accepted in its exact terms without any modifications.
new payee, it becomes a bearer instrument, allowing anyone who possesses it to claim Acceptance must be communicated clearly to the offeror. If the acceptance modifies the terms
the funds. of the offer, it is considered a counteroffer, not an acceptance.

2. Full Endorsement: In a full endorsement, the endorser not only signs the back of the
instrument but also specifies the name of the new endorsee to whom the instrument is 2. Intention to Create Legal Relations Both parties must intend for their agreement to be legally
to be payable. This endorsement restricts further negotiation to the specified endorsee binding. Social and domestic agreements typically do not have this intention, whereas
or to subsequent parties through that endorsee. For instance, if David endorses a check commercial agreements usually do. This intention is assessed objectively by looking at the
payable to him by adding "Pay to Ronit" and signs it, the check can now only be claimed circumstances surrounding the agreement.
by Ronit or those to whom Ronit further endorses it.

3. Consideration Consideration is something of value exchanged between the parties. Each party
3. Partial Endorsement: A partial endorsement occurs when an endorser attempts to must provide consideration for the contract to be valid. Consideration can be a promise to do
transfer only a portion of the amount mentioned on the instrument. According to something, a promise to refrain from doing something, or the actual performance of an action.
Section 56 of the Negotiable Instruments Act, such endorsements are invalid because
negotiable instruments must be endorsed for their entire amount unless otherwise
specified. For example, if a bill for $100 is partially endorsed for $50, this endorsement
would be considered invalid. Instead, any partial payment made on a bill should be 4. Capacity to Contract Parties entering into a contract must have the legal capacity to do so. This
noted separately on the instrument. means they must be of legal age (usually 18 or older) and of sound mind. Certain individuals,
such as minors, intoxicated persons, and mentally incapacitated individuals, may lack the
capacity to contract.
4. Restrictive Endorsement: A restrictive endorsement limits or prohibits further
negotiation of the instrument. It may specify conditions under which the instrument
can be transferred or received. This type of endorsement is often used to ensure that 5. Free Consent The consent of the parties must be free and voluntary. Consent is not considered
the instrument is used for a specific purpose or that its transfer is restricted to a
particular person or entity. For instance, endorsing a check with "For deposit only" free if it is obtained through coercion, undue influence, fraud, misrepresentation, or mistake.
restricts its use to deposit into a specific account, preventing its cashing or further Any agreement made under these circumstances is voidable at the option of the party whose
negotiation. consent was not freely given.

5. Conditional Endorsement: A conditional endorsement includes conditions imposed by 6. Lawful Object The object of the contract must be lawful. Contracts formed for illegal purposes
the endorser on their liability or the transfer of the instrument, contingent upon the or against public policy are void. This means the contract’s purpose must not violate any laws or
occurrence of a specified event. Section 52 of the Negotiable Instruments Act allows for public policy considerations.
such conditions, though their validity and enforceability may vary based on the nature
of the conditions. For example, an endorsement stating "Pay to Ronit only upon
delivery of goods" conditions payment based on the delivery of goods, which may or
may not occur. 7. Certainty and Possibility of Performance The terms of the contract must be certain and
unambiguous. If the terms are vague or unclear, the contract may be deemed void for
uncertainty. Additionally, the contract must be possible to perform. If the performance of the
What is an offer? Explain the legal rules of a valid offer? contract is impossible, it is considered void.

When one person signifies to another his willingness to do or to abstain from doing
8. Legal Formalities Certain contracts must be in writing to be enforceable. Examples include
anything, with a view to obtaining the assent of that other to such act or abstinence, he contracts for the sale of land, contracts that cannot be performed within one year, and contracts
is said to make a proposal. for the sale of goods over a certain value. Additionally, some contracts may require registration
or attestation to be valid.
Essential Of Valid Offer: 1) Offer may be expressed or implied – An offer may be expressed
or may be implied from the conduct of the parties or circumstances of the case.

2) Offer may be specific or general – a) A specific offer is one which is made to a particular What is Consideration? Discuss the legal rules to a valid Consideration.
person. It can be accepted by the person to whom it has been made, no one else can
accept such an offer. b) b) A general offer is an offer made to the public at large When at the desire of the promisor, the promisee or any other person had done or abstained
from doing, or does or abstains from doing, or promises to do or to abstain from doing,
3) Offer must create Legal Relations – An offer to be valid must create legal relationship something, such act or abstinence or promise is called a consideration for the promise
between the parties. Say for example a dinner invitation extended by A to B is not a valid
offer. Essentials Of Valid Consideration: 1) Consideration must move at the desire of the promisor – a)
Consideration must move at the desire of the promisor. b) whatever is done must have been
4) Offer must be Clear, not Vague – The terms of an offer should not be vague (not clear / done at the desire of the promisor and not voluntarily or not at the desire of a third party.
confusing) For e.g. - A offers to sell B fruits worth Rs 5000/-. This is not a valid offer since 2.Promisee or Another Person: The consideration may move from the promisee or any other
what kinds of fruits or their specific quantities are not mentioned. person. In other words, it doesn't have to flow directly from the promisee; a third party can
provide the consideration.
5) Offer must be Communicated to the Offeree – No offeree can accept the proposal
without knowledge of the offer. 3.Act, Abstinence, or Promise: Consideration can take various forms. It can be an act performed,
something abstained from doing, or a promise to do or not do something in the future. The key is
6) A statement of price is not an offer. that it must have value in the eyes of the law.

7) Offer cannot contain a Negative Condition – The non-compliance of any terms of the 4. Must Be Lawful: The consideration must be lawful. It should not involve any illegal activities or
offer cannot lead to automatic acceptance of the offer Example: A offers to sell his cow be against public policy. If the consideration is unlawful, the contract may be void.
to B for 5000/-. If the offer is not rejected by Monday it will be considered as accepted.
This is not a valid offer. 5. Must Be Real: The consideration must have some real value in the eyes of the law. It cannot be
an illusionary or nominal consideration. It should represent a genuine exchange of something
8) A mere statement of intention is not an offer. Thus, a person who attended the with value.
advertised place of auction could not sue for breach of contract if the auction was
cancelled. 6. It may be past, present or future which the promisor is already not bound to do – a) According
to Indian Law Consideration may be past, present or future. b) But under English Law
Consideration may be present or future. Past consideration is no consideration according to
English Law
Discuss the role of State Commission in Consumer Dispute settlement DIFFERENCE BETWEEN HOLDER AND HOLDER IN DUE COURSE
in detail.
The State government establishes a State commission, under section 42(1) of the
Act, in the state through the notification. It can also establish regional branches, if it Aspect Holder Holder in Due Course
seems fit. Definition A person in A person who obtains a
Composition: possession of a negotiable instrument
negotiable instrument for value, in good faith,
i. one President; which is payable and without notice of
ii. no less than four members and a maximum of as many members as is required. either to bearer or to any defect in the title of
Jurisdiction the person in the person from whom it
possession. was obtained.
According to section 47, the State Commission has the jurisdiction to entertain the
complaints where the value of the goods or services paid as consideration, exceeds Consideration May or may not have Must have provided
rupees one crore but does not exceed rupees ten crores. However, where the provided consideration for the
Central Government deems it necessary, it may prescribe such other value, as it
deems fit. Further the state commission shall entertain the complaints against consideration. instrument.
unfair contracts, where the value of goods or services paid as consideration does Title May have a defective Holds the instrument
not exceed ten crore rupees. Also, it may provide a solution to the applicants
appealing against the orders of any District Commission within the State. title. with a good title, even if
the previous title was
Apart from that, it also has the jurisdiction to call for the records and pass defective.
appropriate orders in any consumer dispute which is pending before or has been
decided by any District Commission within the State, where it appears to the State Rights Does not necessarily Has better rights than
Commission that such District Commission has exercised a jurisdiction not vested in have better rights the transferor and can
it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of
its jurisdiction illegally or with material irregularity. A bench of the State than the transferor. enforce payment in full.
Commission must consist of a President and one member or more if the president Protection Not protected from Protected from many
deems it fit. Power of State Commission It is provided under section 48, that the
State Commission has the power to shift proceedings from one district commission from Defenses prior party defenses; defenses that could be
to another. State Commission disposes of the case in the exact same method as the subject to all defenses raised against previous
District Commission and also holds the power to review its own cases. and claims against the holders; only subject to
If aggrieved by the decision, the aggrieved party may prefer an appeal to the instrument. real defenses such as
National Commission within 30 days of receiving the order from the state forgery, fraud in
commission. If sufficient reason is shown then the national commission can also
entertain the plea after the thirty days. The national commission shall not listen to execution, etc.
an appeal if the person who has to pay a particular amount from the order of the Burden of The burden of proving The burden of proving
state commission, has not paid at least 50% of the amount ordered to be paid.The Proof holder status lies with the status of holder in
appeal must be dealt with expeditiously and endeavors must be made to dispose of
the appeal within 90 days fromits date of admission the person claiming to due course lies with the
be a holder. claimant.
Notice of May have notice of Must not have notice of
What is meant by the term ‘Trademark’? Discuss the procedure for its registration Defect defect or may not any defect in the
have. instrument at the time of
A trademark is a word, phrase, design or symbol, or combination thereof, that acquisition.
identifies the source of the goods of one party and distinguishes those goods from
the goods of others. Definitions under Trade Marks Act 1999 Section 2 (zb) of the TM
Act defines Trade mark to be as a mark capable of being represented graphically and
which is capable of distinguishing the goods or services of one person from those of
others and may include shape of goods, their packaging and combination of colors. What is meant by the term ‘Copyright’? Discuss the procedure for its
Section 2(1)(m) states that “Mark” includes a device, brand, heading, label, ticket,
name, signature, word, letter, numeral, shape of goods, packaging or combination of registration
colours or any combination thereof”.
It is a legal term used to describe the rights that creators have over their
Under Section 2(1)(zg) of the Trade Marks Act, 1999 “well-known trade mark”, in literary and artistic works. Works covered by copyright range from books,
relation to any goods or services, means a mark which has become so to the music, paintings, sculpture, and films, to computer programs, databases,
substantial segment of the public which uses such goods or receives such services advertisements, maps, and technical drawings.It is a form of intellectual
that the use of such mark in relation to other goods or services would be likely to be property protection granted under Indian law to the creators of original
taken as indicating a connection in the course of trade or rendering of services works of authorship such as literary works (including computer programs,
between those goods or services and a person using the mark in relation to the first-
mentioned goods or services. The current law of trademarks is contained in the tables and compilations including computer databases which may be
Trademarks Act, 1999 and is in harmony with two major international treaties on the expressed in words, codes, schemes or in any other form, including a
subject, namely, The Paris Convention for Protection of Industrial Property and TRIPS machine readable medium), dramatic, musical and artistic works,
Agreement, to both of which India is a signatory. “The object of trademark law is to cinematographic films and sound recordings. It is important to note that
protect the rights of persons who manufacture and sell goods with distinct Copyright law protects expressions of ideas rather than the ideas
trademarks against invasion by other persons passing off their goods fraudulently and themselves.
with counterfeit trademarks as those of the manufacturers. Normally, the remedy for
such infringement will be by action in Civil Courts but in view of the delay which is
incidental to civil proceedings and the great injustice which might result if the rights Copyright Registration Process The person applying for copyright has to
of manufacturers are not promptly protected, the law gives them the right to take follow the following steps: The person has to file the application along with
the matter before the Criminal Courts, and prosecute the offenders, so as to enable the fee either in the form of DD/ IPO Then the diary number will be issued.
them to effectively and speedilyvindicate their rights”. The person has to compulsorily wait for 30 days for objections. If in case no
objection is filed then, the Application will be accepted. It will go to the
Registration of Trademark Under Section 3 of the Trade Marks Act, 1999, the Central examiner for scrutinization. If in case there is no discrepancy found, the
Government appoints Controller-General of Patents, Designs, and Trade Marks, as application will be sent for approval. If discrepancies are found then the
the Registrar of Trade Marks for the purposes of the Trade Marks Act 1999. Other discrepancy letter will be issued to the applicant. The applicant will have a
officers may also be appointed by the Central Government under Section 3(2) for the
purpose of discharging such functions of the Registrar as he may authorize them to right to reply which will be heard by the registrar. In case the registrar is
discharge under his superintendence and direction. The registration procedure in satisfied by the reply he may approve the application and send extracts from
India is based on the ‘first to file’ system. It is therefore important that the rights the register to the applicant. However, if not satisfied then he may reject the
holder applies for the registration of its mark as soon as possible. The registration of a application and send the rejection letter to the applicant. If in case objection
trade mark confers on the registered proprietor of the trade mark the exclusive right is filed: The letter will be sent to both parties i.e., party filing objections and
to use the trade mark in relation to the goods or services in respect of which the the party against whom the objection is filed. Reply will be awaited from
trade mark is registered. While registration of a trade mark is not compulsory, it both the parties. Reply by both the parties will be heard by the registrars. If
offers better legal protection for an action for Infringement the renewable . It is
pertinent to note that the letter "R" in a circle i.e. ® with a trademark can only be in case objections are rejected the application will be accepted and if
used after the registration of the trademark under the TM Act. rm of registration of a objection will be accepted, then the application will be rejected. This
trademark as 10 years. procedure applies in the case of both the published or unpublished work.
 Discuss the remedies for breach of contract
What is meant by the term ‘Performance of a Contract?’ Discuss the types Following are the remedies for the breach of contract –
and who may demand a performance of a Contract?
A) Rescission of Contract: When one of the parties to a contract does not fulfil his
Every contract has certain obligations (duties) which are to be performed by the obligations, then the other party can rescind the contract and refuse the performance
parties to the contract. of his obligations. As per section 65 of the Indian Contract Act, the party that rescinds
the contract must restore any benefits he got under the said agreement. And section
Types of Performance: Three types of performance could occur in your contract: 75 states that the party that rescinds the contract is entitled to receive damages
actual, substantial, and perfect. and/or compensation for such a recession
1.Actual Performance: An actual performance is one where both parties have B) Sue for Damages : Section 73 clearly states that the party who has suffered, since
fulfilled their obligations as set out in the contract. It usually occurs when goods or the other party has broken promises, can claim compensation for loss or damages
services are delivered following the terms agreed upon. caused to them in the normal course of business. Such damages will not be payable if
the loss is abnormal in nature, i.e. not in the ordinary course of business.
For example, A agrees to deliver 10 bags of cement at B’s factory and B promises to
pay the price on delivery. A delivers the cement on the due date and B makes the C) Sue for Specific Performance: This means the party in breach will actually have to
payment. This is actual performance. carry out his duties according to the contract. In certain cases, the courts may insist
that the party carry out the agreement. So if any of the parties fails to perform the
2.Substantial Performance: A substantial performance is one where only some of the contract, the court may order them to do so. This is a decree of specific performance
obligations under a contract have been met. For example, if a contractor completes and is granted instead of damages. For example, A decided to buy a parcel of land
most of the work but does not finish, this would be considered a substantial from B. B then refuses to sell. The courts can order B to perform his duties under the
performance. The court then orders that the money must be paid, but deducts the contract and sell the land to A
amount needed to correct minor existing defect.
D) Injunction: An injunction is basically like a decree for specific performance but for a
Example of Substantial Performance: Imagine a construction contract where a negative contract. An injunction is a court order restraining a person from doing a
contractor is hired to build a house according to certain specifications. If the particular act. So, a court may grant an injunction to stop a party of a contract from
contractor completes the construction in a manner that generally conforms to the doing something he promised not to do. In a prohibitory injunction, the court stops
agreed-upon plans, but there are some minor defects or unfinished details that do the commission of an act and in a mandatory injunction, it will stop the continuance of
not substantially impact the functionality or overall purpose of the house, it may be an act that is unlawful.
considered substantial performance
E) Quantum Meruit: Quantum meruit literally translates to “as much is earned”. At
3.Partial Performance: Partial performance occurs when one party to a contract has times when one party of the contract is prevented from finishing his performance of
fulfilled only a portion of their obligations under the contract, leaving some aspects the contract by the other party, he can claim quantum meruit. So he must be paid a
incomplete. In such cases, the performing party may be entitled to compensation for reasonable remuneration for the part of the contract he has already performed. This
the part of the performance that has been completed, but they may still be liable for could be the remuneration of the services he has provided or the value of the work he
the incomplete portion unless there is a valid excuse for non-performance. has already done

Example of Partial Performance: Consider a scenario where a supplier is contracted

to deliver 100 units of a certain product to a buyer. If the supplier delivers only 80 Differentiating between a Contract of Guarantee and a Contract of Indemnity:
units, that would constitute partial performance. The buyer may be entitled to the
delivered units and can seek compensation for them, but the supplier is still
obligated to deliver the remaining 20 units as per the contract terms
Aspect Contract of Guarantee Contract of Indemnity
Definition A contract where one party A contract where one party
(surety) promises to answer (indemnifier) promises to
Discuss the various types of Guarantee in detail for the debt or default of compensate the other
another (principal debtor) to (indemnified) for any loss or
Types of Guarantee a third party (creditor). damage incurred.
Parties Three parties: Creditor, Two parties: Indemnifier and
1. Simple or Specific Guarantee: It is one in which guarantee is given for a single Involved Principal Debtor, and Surety. Indemnified.
specific debt (or) transaction. It comes to an end as soon as the liability under that
transaction ends. A specific guarantee once given is irrevocable. Liability The surety's liability is The indemnifier's liability is
secondary and arises only if primary and arises upon the
2. Continuing Guarantee (Section 129): A guarantee which extends to a series of the principal debtor defaults. occurrence of the specified
transactions is called a “continuing guarantee”. The essence of continuing guarantee loss or damage.
is that it applies not to a specific number of transactions but to any number of Nature of Contingent liability: The Absolute liability: The
transactions and makes the surety liable for the unpaid balance at the end of the
guarantee. Obligation surety is liable only if the indemnifier is liable for
principal debtor fails to fulfill compensating the loss or
Example: A guarantees payment to B of the price of five sacks of flour to be delivered their obligations. damage as agreed.
by B to C and to be paid for in a month. B delivers five sacks to C. C pays for them. Right to Sue The creditor can sue both the The indemnified party can sue
Afterwards B delivers four sacks to C, which C does not pay for. The guarantee given
by A was not a continuing guarantee, and accordingly he is not liable for the price of principal debtor and the only the indemnifier for the
the four sacks surety upon default. agreed compensation.
Scope Generally specific to a Can cover a wide range of
3. Guarantee for performance of a promise :When a person enters in to with another particular debt or obligation. losses or damages as specified
to do something but the promise gets doubt about the capacity of promisor to
perform, he can ask him to bring a guarantor. In such cases the surety becomes liable in the contract.
to do the work if the principal debtorfails. It is called "Guarantee for performance of a Example A loan guarantee where a An insurance policy where the
promise" surety guarantees repayment insurer promises to indemnify
if the borrower defaults. the insured for specified
4. Guarantee for discharge of liability: When a person lends a loan to another but gets losses.
doubt about the intention of the borrower to repay the debt in time, he can ask for a
surety. In such cases the surety should repay the loan amount with interest if the Existence of There must be an existing or There is no need for an
principal debtor fails. It is called a guarantee for discharge of a liability. Principal future debt or obligation of existing debt; the contract is
Debt the principal debtor to the based on indemnifying against
5. Guarantee for honesty of employee: Sometimes an employer may get a doubt creditor. potential losses.
about the employee he had employed as to his honesty and take a guarantor. Such
surety becomes liable to compensate the employer for any loss or damage caused by Rights after The surety, after paying the The indemnifier does not have
the employee on account of his dishonesty. It is called a fidelity guarantee. Payment debt, has the right to recover the right to recover the
the amount from the amount paid from the
6. Prospective guarantee: The guarantee given for a present transaction is called a principal debtor. indemnified party.
prospective guarantee Generally all guarantees will be prospective.
Purpose To provide assurance to the To provide protection to the
7. Retrospective guarantee: A guarantee given in respect of a past transaction is called creditor that the debt or indemnified party against
retrospective guarantee. Such guarantees are taken when the original surety dies or obligation will be fulfilled. losses or damages.
becomes insane or insolvent
Difference between conditions and warranties Explain the concept of doctrine of caveat emptor along with its exception
DOCTRINE OF CAVEAT EMPTOR: Caveat Emptor is a fundamental principle of
the law of sale of goods.
Aspect Condition Warranty
Definition A fundamental term A less crucial term • It means “Caution Buyer”, i.e. “Let the buyer beware”. " It is a principle in
essential to the core purpose ancillary to the main contract law and sales transactions that places the responsibility on the buyer
of the contract. purpose of the contract. to thoroughly examine and assess the quality and condition of the goods or
property before making a purchase. In other words, it suggests that buyers
Importance Critical to the agreement. Important but not should exercise caution and diligence when entering into agreements to
Without it, the contract essential to the purchase goods or property.”
would not exist in its current contract's core purpose.
form. 1.Seller's Limited Duty: The seller is generally not obligated to disclose all
defects or issues with the goods or property to the buyer. Instead, the seller's
Breach - Terminate the - Claim damages for primary responsibility is to deliver the goods or property as described and
Consequences contract<br>- Claim losses suffered<br>- agreed upon in the contract.
damages for losses suffered Cannot terminate the
contract solely based on 2.Buyer's Duty to Inspect: The buyer is expected to inspect the goods or
property thoroughly before completing the purchase. This includes examining
this breach the quality, condition, and any other relevant factors that may affect the value
Legal - Right to repudiate the - Right to sue for or suitability of the goods or property for their intended use.
Remedies contract<br>- Right to sue damages only
for damages Risk of Loss: Once the sale is completed, the risk of any defects or issues with
the goods or property typically falls on the buyer. This means that if the buyer
Nature of Term Core to the contract's Secondary, supporting discovers any defects or problems after the sale, they may not have legal
existence and performance the main terms of the recourse against the seller unless there was fraud or misrepresentation
contract involved.
Impact on Breach impacts the entire Breach impacts only the Exceptions to the doctrine of Caveat Emptor[sec.16]:
Contract contract, allowing the specific term, leaving the
aggrieved party to consider rest of the contract • In case of any misrepresentation by the seller..
the contract void. intact.
• In case of concealment of latent defects by the sellers.
Examples - Goods must meet specified - Goods must be
quality standards.<br>- packaged in a certain • In case of sale by description and sample[sec.15].
Services must be completed way.<br>- Service
by a certain date. provider must follow • Conditions as to merchantability.
certain procedures.
• Conditions as to quality of fitness for buyers purpose.
Party's Rights - Right to end the contract - Right to claim
and refuse further compensation for •Conditions of wholesomeness.
performance<br>- Right to losses<br>- No right to
claim compensation for end the contract
losses

differences between a sale and an agreement to sell:

What is a Negotiable Instrument. Discuss the features of a Negotiable

Aspect Sale Agreement to Sell
Instrument Definition Immediate transfer of Transfer of ownership
ownership of goods from of goods to take place
This Act is enacted to define and amend laws relating to promissory note, bills seller to buyer for a price. at a future date or upon
of exchange and cheque. This Act is applicable to whole of India including fulfillment of certain
Jammu and Kashmir. This act came into force on 1st March 1882. conditions.
A negotiable instrument is actually a written document and is transferrable. Transfer of Ownership is transferred Ownership is
This document specifies payment to a specific person or the bearer of the Ownership immediately to the buyer. transferred in the future
instrument at a specific date. Act does not define ‘Negotiable instruments’ or upon meeting
specified conditions.
however section 13 provides for 3 kind of negotiable instrument viz.
Nature of Executed contract Executory contract (to
promissory note, bills of exchange and cheque. (performed). be performed).
Contract
Risk of Loss Risk passes to the buyer Risk remains with the
Features of Negotiable Instruments –
immediately upon the sale. seller until ownership is
transferred.
1) It should be in writing
Remedies Seller can sue for the price Seller can sue for
for Breach if the buyer defaults; buyer damages if the buyer
2) Freely transferable.
can sue for damages and defaults; buyer can sue
proprietary remedies if the for damages if the seller
3) It should create a right of a person to receive money and a corresponding
seller defaults. defaults.
liability of a person to pay money. Goods Specific and existing Existing or future
Involved goods. goods.
4) Holder's title free from defects – a) A holder in due course acquires a good Title and often possession Title and possession
Title and
title irrespective of any defect in a previous holder's title. Possession pass to the buyer. remain with the seller
until the agreement is
b) A holder in due course is one who receives the instrument: • for fulfilled.
consideration; • without notice as to the defect in the title of the transferor;
i.e. in good faith and before maturity

5) Transferability – A negotiable instrument can be transferred infinitum, i.e.,

can be transferred any number of times, till its payment.
Differentiating between a Contract and a Quasi-Contract: Discuss the rights and duties of a Bailee in detail

Duties Of Bailee
Aspect Contract Quasi-Contract
1. Take reasonable Care of the goods (Section 151 & 152): In all cases of bailment, the bailee
Definition A legally binding An obligation imposed by is bound to take as much care of the goods bailed to him as a man of ordinary prudence
agreement between law to prevent unjust would, under similar circumstances, take of his own goods of the same bulk, quality and
two or more parties enrichment, even though value as the goods bailed.
with specific terms and there is no agreement
conditions. between the parties. 2. Not to make inconsistent use of goods (section 153 & 154): As per Section 154, if the
Formation Formed by mutual Imposed by law regardless bailee makes any use of the goods bailed, which is not according to the conditions of the
consent of the parties of the parties' consent. bailment, he is liable to make compensation to the bailor for any damage arising to the
involved. goods from or during such use of them.
Basis Based on the free will Based on principles of 3. Not to mix the goods (Section 155, 156 and 157): Bailee is not entitled to mix up the goods
and agreement of the equity, fairness, and justice. bailed with his own goods except with the consent of the bailor. i) If he, with the consent
parties. of the bailor, mixes the goods bailed with his own goods, both the parties shall have an
Intent Parties intend to create No intention to create legal interest in proportion to their respective shares in the mixture thus produced (Sec. 155). ii)
legal obligations. obligations; imposed by law. If the bailee, without the consent of the bailor, mixes the goods bailed with his own goods
Nature Voluntary and explicit. Involuntary and implied by and the goods can be separated or divided, the property in the goods remains in the parties
respectively bailee is bound to bear the expenses of separation and division and any
law. damage arising from the mixture (Sec. 156)
Consideration Must have Consideration is not
consideration to be required. 4. Return the goods (Section 160 & 161): It is the duty of bailee to return, or deliver
enforceable. according to the bailor’s directions, the goods bailed without demand, as soon as the time
Purpose To fulfill the agreed- To prevent unjust for which they were bailed, has expired, or the purpo.se for which they were bailed has
upon terms and enrichment of one party at been accomplished. [Section 160] If, by the default of the bailee, the goods are not
conditions. the expense of another. returned, delivered or tendered at the proper time, he is responsible to the bailor for any
loss, destruction or deterioration of the goods from that time. [Section 161]
Example A sales contract where A situation where one party
one party agrees to sell mistakenly pays money to 5. Return an accretion from the Goods [Section 163]: In the absence of any contract to the
goods and the other another, and the law contrary, the bailee is bound to deliver to the bailor, or according to his directions, any
agrees to pay for them. requires repayment. increase or profit which may have accrued from the goods bailed.
Enforcement Enforced as per the Enforced by courts to ensure
terms agreed upon by fairness and prevent unjust 6. Not to setup Adverse Title: Bailee must not set up a title adverse to that of the bailor. He
the parties. enrichment. must hold the goods on behalf of and for the bailor. He cannot deny the title of the bailor.
Remedies Remedies for breach Remedy typically involves
include damages, restitution or Rights of bailee: As a matter of fact, all the duties of the bailor are the rights of the bailee.
specific performance, reimbursement to prevent In addition to that, the bailee has the following other rights also. Right to claim
compensation in case of faulty goods (Sec. 150) Right to claim extraordinary expenses (Sec.
and injunctions. unjust enrichment. 158) Right of indemnification in case of gratuitous bailment [Section 159] Right of
Rights and Rights and obligations Rights and obligations are indemnification in case of defective title [Section 164] Right to Deliver the Goods to any
Obligations are clearly defined by determined by law. one of the Joint Bailors [Section 165] Right to deliver the goods to the bailor in good faith
the parties. (Sec. 166) Right to Apply to Court to Decide the Title to the Goods/Interplead[Section 167]
Legal Provision Governed by the terms Governed by principles of Right to claim damages in case of bailor’s refusal to receive back the goods Right of lien for
of the contract and equity and specific statutory payment of services [Section 170] Suit by bailor & bailee against wrong doers [Section 180]
Apportionment of relief or compensation obtained by such suits [Section181]
contract law. provisions.
Breach Breach of contract leads No breach, as there is no
to legal consequences contract; rather, failure to
as per contract terms. fulfill the quasi-contractual
obligation leads to Discuss the essentials of a valid contract of sales in detail
restitution.
ESSENTIALS OF A CONTRACT OF SALE: Indeed, the essentials of a contract of sale
encompass several key elements, ensuring the validity and clarity of the transaction
between the buyer and the seller

: 1. Two Parties - Buyer and Seller: A contract of sale must involve at least two parties:
the buyer, who agrees to purchase the goods, and the seller, who agrees to transfer
Write a detailed note on creation of Agency. ownership of the goods to the buyer in exchange for consideration (usually money).
1. Agency by express agreement: A contract of agency may be made by express words,
whether written or oral. 2.Goods: The subject matter of the contract must be goods. Goods can include tangible,
movable items such as products, commodities, merchandise, or any other physical items
2. Agency by implied agreement: ‘‘An authority is said to be implied when it is to be that are capable of being bought and sold.
inferred from the circumstances of the case. (a) Agency by estoppels : When a principal
by his conduct or act cause a third person to believe that a certain person is his 3.Transfer of Property: There must be an intention to transfer ownership (property) of
authorized agent the agency is aid to be an agency by estoppels the goods from the seller to the buyer. The transfer of property may occur immediately
(in the case of a sale) or at a future time (in the case of an agreement to sell), depending
(b) Agency by necessity : It mean the agency which comes into existence when certain
circumstances compel a person to act as an agent for an other without his express on the terms of the contract.
authority. (c) Agency by holding out : When a principal by his active conduct or act and
without any objection permits another to act as his agent, the agency is the result of 4.All Essential Elements of a Valid Contract Must Be Fulfilled: The contract of sale must
principal’s conduct as to the agent. satisfy all the essential elements required for the formation of a valid contract, including
offer, acceptance, consideration, intention to create legal relations, capacity, and legality
d. Agency by ratification : Ratification means confirmation of an act which has already
of purpose.
been done. Sometimes, an act is done by a person on behalf of another person but
without another person’s knowledge and authority. If he accepts and confirm the act, he
is said to have ratified it. 5.Price: There must be a consideration (price) agreed upon by the parties. The price can
be in the form of money, other goods, or any valuable consideration. The amount and
e. Agency by operation of law : In certain circumstances the law treats a person as an method of payment should be clearly specified in the contract.
agent of another person.
6. Include Both Sale and Agreement to Sale: A contract of sale can take two forms: a
For example, (a) when a partnership is formed, every partner automatically becomes
sale, where the property in the goods is transferred from the seller to the buyer
agent of another partner. (b) when a company is formed its promoters are treated as its
agents by operation of law. immediately, and an agreement to sell, where the transfer of property is to take place at
a future date or subject to certain conditions being fulfilled.