Q.1

Only 60% attempted this question scoring on average less than 2 marks out of 6. Since this area is not tested frequently it is evident that most students had not touched this part (legal system) of the syllabus.

Q.2

The main obligations are mentioned in Section 37 and 38 of Contract Act 1872. The students quoted a few of the obligations but very few could mention all of them.

Q.3

In part (a) common mistakes were as follows:

(i)

Many failed to mention that specific performance and injunction are remedies available to the aggrieved party in case of breach of contract.

(ii)

Injunction was not properly defined. Examples of specific performance and injunction failed to make sense.

Part (b) was well attempted by majority of the students.

Q.4

Majority arrived at the right conclusion that P had no right against S but failed to mention the reason i.e. because A was acting as the mercantile agent of P and the buyer had acted in good faith.

Q.5

(a)

Majority answered well. Some failed to mention that revocation applied to future transactions only.

(b)

Many confused circumstances of invalid guarantee with those of discharge of surety.

(c)

Many correctly replied that sureties are liable to contribute equally subject to the maximum amount guaranteed by them. Some gave correct theoretical explanation of co-sureties’ liabilities but gave incorrect division of Rs.65,000/- among sureties.

Q.6

(a)

Most of the candidates scored well. However only a few mentioned atleast eight valid points which were required to obtain full marks.

(b)

Many students incorrectly stated that bank has liability towards the holder. In fact the bank is liable to the customer and not the holder.

(c)

(i)

Students failed to describe the complete procedure as to how Arif should proceed to stop payment of the cheque, i.e. he should give notice to the bank in writing giving full particulars of the cheque including cheque no., date, amount and name of the payee.

(ii)

Many students were not aware that bank could recover payment from Zahid having paid the cheque under mistake of fact.

Q.7

Sale of Goods Act 1930: The four parts under this question were very poorly answered with only one sixth of the students obtaining pass marks.

(a)

According to section 64A, if custom duty, excise or sales tax is imposed after the contract of sale, then these are recoverable from the buyer in the absence of a contrary agreement and seller can sue the buyer for the same. Very few candidates provided a clear-cut answer.

(b)

Most students correctly mentioned that generally risk passes at the time of transfer of ownership. However, very few could mention the exceptions which include:

(i)

In case  both the parties have agreed otherwise.

(ii)

In case the delivery of goods is delayed due to the fault of one of the parties.

(c)

The question was mostly answered well by the students.

(d)

The Act regards non-delivery of goods on time as breach of condition and non-payment on time as breach of warranty. In the former, the buyer is entitled to repudiate the contract and sue for damages. For non-payment of price, the seller may claim damages or as an unpaid seller, exercise any of the option available to an unpaid seller.

Q.8

Although a simple and straightforward question, many students failed to give some basic responsibilities of the carrier such as ship seaworthiness, issuing bill of lading etc.

Q.9

(a)

This question was well answered but a number of candidates wrongly gave the impression that partnership and firm are separate entities and stated that subsequent to C becoming insane, the firm would be dissolved but the partnership would continue.

(b)

Although most candidates secured good marks but many missed the point that the firm is also responsible for the acts of retired and expelled partners if it fails to issue a public notice of their retirement.

(c)

Most students answered that an unregistered firm can not file a suit. They failed to realize that the firm was dissolved and the suit was filed by R and not the firm.

Q.10

(a)

The shortcoming in the answers were as follows:

Good faith: Students failed to mention that if all material facts were not disclosed, the other party may avoid the contract.

Insurable interest: Most students said that it was necessary that the insured has an insurable interest but did not define what insurable interest was.

Mitigation of loss: Majority failed to state that in the event of loss, the insured must try his best to mitigate the loss in the same way as if he was uninsured.

(b)

From the students’ answers, one got the impression that the concept of actual total and constructive total loss applies only to marine insurance, although they may well apply to other types of insurances. Many students explained that in constructive total loss, the subject matter is so destroyed that repair expenses would exceed the cost of the subject matter. A more correct definition would have been that although the subject matter is not destroyed but is treated as destroyed because the damage is so serious that the goods are no longer of any use for the purpose for which they were originally intended.

Q.11

Disabilities of a trustee: Majority were able to write 3 to 4 correct points instead of atleast 6 required to secure full marks.