Contract Law: Short Question and Answers: Part 3

Hello friends. In this blog I am sharing some short question and answers regarding Indian Contract Law.


Image Credit: giphy.com
========
Q. 1. Define "ab initio"
A. Ab initio is a Latin term meaning "from the beginning" and is derived from the Latin ab ("from") + initio, ("beginning").

Q 2. What is "void ab initio".
A. The term "void ab initio" means "to be treated as invalid from the outset." E.g., in many jurisdictions, if a person signs a contract under duress, that contract is treated as being "void ab initio".

Q 3. For which type of contracts a minor is bound?
A. A minor is bound for the beneficial contract. 

Q 4 What is a beneficial contract?
A. The beneficial contracts are those contracts which are for the benefit of minor.
Q 5 Which was first case of beneficial contract?
A. S. Subramanyam v/s Subha Roy-1948

Q 6 Enlist the various beneficial contracts?
A. Following are the beneficial contracts for a minor:

• Contract of Insurance
• Contract to purchase of the immoveable property 
• Contract of service
• Contract of apprentice ship
• Contract of Marriage
• Contract of Necessities 

Q 7 Which section describes the contract of necessities?
A. Section 68 of ICA, 1872 describes the contract of necessities.

Q 8 Is minor liable to compensate for the contract of necessities? When?
A. The minor is liable to compensate for the contract of necessities when he attains majority.

Q 9. Define the majority.
A. In India a person attains his or her majority at the age of 18 years.

Thanks for reading till the end. Please share this blog with all law students.
==========

Majority Act, 1875 alongwith Guardians & Wards Act, 1890

Indian BareActs(Indian Law)

==========

Indian Contract Act: Short Q and A: Part 2

Hello friends. This is one more article on short question and answer on contract law in India. Please read this blog for study purpose only.


Image Credit: contractlawjl.weebly.com
=========

Q 1. How it can be proved that the agent is having apparent authority or not?
A. If the agent is acting outside the course of authority given to him in front of third party in presence of his principal and for such acts of the agent the principal remains silent then it is deemed that the agent is having apparent authority.

Q 2. How actual authority and apparent authority of an agent can be distinguished?
A. If there is some act or some knowing omission on the part of the principal then acts of agent can be deemed as outside the course of actual authorities delegated to agent by his principal. If agent acts outside his actual authority in presence of his principal and principal do not dissuade such acts by saying nothing or by remaining silent then the third party will understand that the agent is having apparent authority on behalf of his principal.

Q 3. What is lingering apparent authority?
A. Apparent authority can also occur where a principal terminates the authority of an agent, but does not inform third parties of this termination. This is called lingering apparent authority.

Q 4. How liability can be avoided in case of lingering apparent authority ?
A. Business owners can avoid being liable by giving public notice of the termination of authority, and by contacting any individual third parties who would have had reason to know of such authority.

Q 5. Which sections of Indian Contract Act, 1872 describe about contracts of indemnity and contracts of guarantee?
A. Section 124 to 147 of Indian Contract Act, 1872.

Q 6 Define the contract of indemnity as per Section 124 of ICA, 1872.
A. A contract of indemnity is a contract by which one party promises to save other party from loss caused to him by the conduct of the promisor himself or by conduct of any other person.

Q. 7 Who is indemnifier?
A. The person who promises to make good the loss or to indemnify is called indemnifier.

Q 8 Who is indemnified or indemnity holder?
A. The person whose loss is made good is called indemnified or indemnity holder.

Q 9 A mistake of law always leads to a valid contract. True or False?

Ans: The statement is False. A mistake of India law if is regarded as a valid contract since ignorance of the law is not a good enough excuse. But a mistake of foreign law is considered as a mistake of fact, and if such a mistake is bilateral it will lead to a void contract.

Q 10. Define Expressly void agreements.

A. There are certain agreements which are declared void by law, such agreements are called expressly void agreements.

Thanks for reading till the end. Please share this blog with your friends and family.

=========

INDIAN CONTRACT ACT

ICA - Indian Contract Act 1872

=========

Short questions on Indian Contract Law 1

Hello my reader friends. In this blog I am sharing short answer questions on Indian Contract Act, 1872.


Image Credit: www.clipart.email
Q 1. Which Section of the Indian Contract Act describes about the persons competent to make contract?
A. Section 11.

Q 2 Define Indemnity.
A. The term indemnity means to make good the loss or to compensate the party who had suffered the loss.

Q 3 State any two specific contracts.
A. Contract of guarantee and contract of indemnity.

Q 4 Who can ratify an unathorised agreement entered into by an agent?
A. Principal.

Q 5 What is ratification?
A. Ratification is the explicit or implicit action of the principal in agreeing to the act of the agent after the unauthorised act.

Q 6 When third party will be bound to the unathorised agreement created by an agent?
A. The unathorised agreement created by an agent will be binding to third party if it is ratified by the principal.

Q 7 Which section describes about the principle of ostensible authority or apparent authority?
A. Section 237

Q 8 On what basis a person becomes liable as principal?
A. A person may be liable as a principal because of his conduct, on the basis of the law of estoppel.

Q 9 Explain the rule of ostensible authority.
A. When principal by his words or conduct makes an impression on third party that the agent is having an authority to enter into a contract on his behalf, and evidences show the same facts about the authority of an agent, then in such case agent is having ostensible or apparent authority for his principal.

Q 10 Define ostensible authority or apparent authority.
A. Ostensible authority (or apparent authority or agency) can be defined as “A relationship between two parties that reasonably leads a third party to believe that one is the agent of the other”

========

Thanks for reading. Kindly share this blog with all law students.

========

Pollock & Mulla -The Indian Contract Act, 1872

Indian Contract Act,1872

========

DIFFERENCE BETWEEN FRAUD & MISREPRESENTATION

FRAUD	MISREPRESENTATION
1. Fraud contains the intention to deceive.	1. It does not contain any such intention.
2. The facts are altered with the Intention to deceive the other Person.	2. No such thing in misrepresentation. Any is presented as such presented as such whereas it does not came out to be true
3. The guilty person has the knowledge of truth.	3. The guilty person has no knowledge of truth.
4. Fraud is a type of tort and so punishable.	4. It does not come under tort.
5. Contract by fraud can be rescinded to demand compensation.	5. Contract by misrepresentation can only be rescinded not demand compensation
6. The guilty person can not take the defence that the victim person as plaintiff could have find out the truth.	6. Such defence could be availed.
7. A deceptive act done intentionally by one party in order to influence the other party to enter into the contract is known as Fraud.	7. The representation of a misstatement, made innocently, which persuades other party to enter into the contract, is known as misrepresentation.
8. Section (17) of the Indian Contract Act, 1872	8. Section (18) of the Indian Contract Act, 1872
9. The aggrieved party, has the right to claim for damages.	9. The aggrieved party has no right to sue the other party for damages.
10. The contract is voidable even if the truth can be discovered in normal diligence.	The contract is not voidable if the truth can be discovered in normal diligence.

Thanks for reading this article till the end. Share this article with all law students.

Section 238 - Effect, on agreement, of misrepresentation or fraud by agent

Section 238 - Effect, on agreement, of misrepresentation or fraud by agent

Misrepresentations made, or frauds committed, by agents acting in the course of their business for their principals, have the same effect on agreements made by such agents as if such misrepresentations or frauds had been made or committed by the principals; but misrepresentations made, or frauds committed, by agents, in matters which do not fall within their authority, do not affect their principals.

Illustration

(a) A, being B's agent for the sale of goods, induces C to buy them by a misrepresentation, which he was not authorized by B to make. The contract is voidable, as between B and C, at the option of C.

(b) A, the captain of B's ship, signs bills of lading without having received on board the goods mentioned therein. The bills of lading are void as between B and the pretended consignor.

=======
The Section 238 is all about Agent guilty of Fraud. Where an Agent is guilty of fraud or misrepresentation in matters that are outside the scope of his authority, he is personally liable, and do not affect his Principal.
Thus According to Section 238, The Principal is liable for any fraud or misrepresentation made by his agent during the course of his business, as if the fraud or misrepresentation was done by the Principal himself.
The liability of the principal is based on the rule ‘Qui facit per alium facit per se’, which means the act of the agent is the act of the principal.

In fact if an agent commits a tort or other wrong (e.g. misrepresentation, fraud, etc.) during his agency whilst acting within the scope of his actual or apparent authority, the principal is liable. But the agent is also personally liable and he may be sued also. The principal is liable even if the tort is committed exclusively for the benefit of the agent and against the interests of principal. 

Under section 238 of the Act misrepresentation or fraud committed by an Agent may be classified into two categories:-

i) Under his actual or ostensible authority. the principal is liable for the acts which fall under actual or ostensible authority.

ii) Which is not covered within his authority, the principal is not liable for the acts which do not fall under actual or ostensible authority. Where an Agent is guilty of fraud or misrepresentation in matters that are outside the scope of his authority, he is personally liable, and do not affect his Principal.

Depending upon the acts of an agent, the fraud or misrepresentation done by agent following are the variations: -
Agent exceeds authority & act not ratified: Where an Agent acts either without any authority or exceeds his authority, he shall be held personally liable when the principal does not ratify his acts.

Agent receives or pays money: Where an Agent receives or pays money by mistake or fraud to a third party, he shall be personally liable to such third party. Also he can personally sue the third party if the fraud or mistake is accountable to such third party.

Personal liability of an agent to third party: - 

An agent is personally liable in following cases:

a) where agent has agreed to be personally liable to the third party.

b) where an agent acts for a principal residing abroad.

c) when an agent signs a negotiable instrument in his own name without making it clear that he is signing it only as agent.

d) when an agent acts for a principal who cannot be sued (e.g. minor principal).

e) an agent is liable for a breach of warranty of authority. Where a person contracts as agent without any authority, there is breach of warranty of authority. He is liable to the person who has relied on the warranty of authority and has suffered loss.

f) Where authority is one coupled with interest or where trade, usage or custom makes the agent personally liable, he will be liable to the third party.

g) he is also liable for the torts committed in the course of agency.

Case Laws:

1) A leading case on this subject is of Lloyds v/s Grace Smith in which it was held that a principal is liable for the fraud of his agent within the scope of his authority whether the fraud is committed for the benefit of the Principal or for the benefit of Agent.
2) National Bank of Lahore v. Sohan Lal: - the manager of a bank, tampered with the locks of the lockers in which plaintiffs’ valuables were kept, the bank was held vicariously liable for the loss which has been caused to a customer due to the theft of their valuables from the lockers.

============

Thanks for reading till the end. 
Note: -
1) This blog is for study purpose only.
2) The highlighted part is same as it is in the bare act of Indian Contract Act, 1872.
Please share this blog with each law student you know.

============

Index of Indian Contract Act, 1872.

Other blogs related to Contract law.

==========

You can read following book for more knowledge.

===========

You can download this app for more knowledge.


==========