General:

Poor English and selective study continue to mar the performance of the students. In practical questions, the students do not quote the point of law i.e. the reason behind the opinion they are giving. By merely giving opinion without reasoning, many students lose most of the marks.

Q.1

(a)

Students should have answered this question in terms of whether time was of essence to the performance of the contract or not. Most students failed to do so and answered haphazardly. Many did not mention the effect of accepting performance beyond specified time when time was essential to the performance of the contract.

(b)

Most of the students just gave the calculations although the question specifically required them to discuss the obligations i.e. to explain as to how and on what basis the amounts will be calculated.

Q.2

A large number of students discussed the essentials of a valid offer and acceptance rather then the essentials of a valid offer of performance of a contract as given in section 38 of the Contract Act 1872. The students are once again advised to read the questions very carefully.

Q.3

This question on quasi contract was the best attempted question with 67% obtaining pass marks. Those students who could not perform well in the question are advised to study Section 68 to 72 of Contract Act 1872.

Q.4

(a)

This question was also well-attempted except that Life Insurance was cited as an example of contract of indemnity by many students.

(b)

Many students failed to mention that a surety’s death revokes a continuing guarantee as to future transactions unless it has been expressly agreed otherwise in the contract.

(c)

Very few knew that an unauthorized act which has the effect of subjecting a third person to harm/damages cannot be ratified. (Refer Section 200 of Contract Act 1872).

Q.5

(a)

An analysis of Section 9 of the Negotiable Instruments Act 1881 reveals that the holder of a negotiable instrument becomes a holder in due course if four conditions are met. Most students were able to quote three of them. The condition that in case of an instrument payable to order, only the payee or the endorsee can be the holder in due course was mentioned by very few candidates.

(b)

This question was very poorly answered. Many examinees quoted the essentials of a valid bill of exchange instead of mentioning the essentials of a valid acceptance. It required a short answer that acceptance is valid if it is written on the bill, signed by the drawee or his agent and delivered to the holder.

(c)

This question based on Section 20 of the Negotiable Instruments Act, 1881 was fairly answered. But again, many students didn’t give any reason for their opinions and lost most of the marks which were allocated for proper reasoning.

Q.6

(a)

The first two conditions implied in a contract of sale as mentioned in Section 17(2) of Sales of Goods Act, 1930 were correctly mentioned by most candidates whereas very few could mention the third condition.

(b)

Most students did not clearly mention that an unpaid seller could exercise his right of lien irrespective of the fact that he held the goods as a bailee.

(c)

Most students gave answers based on their general understanding and it was evident that they had not studied the rules relating to “sale by auction” as given in Section 64 of the Sales of Goods Act 1930.

Q.7

This was an eight mark question on implied warranties in a contract of affreighment. Students did not do justice to the question as explained below:

• They mentioned sea-worthiness as one of the implied warranties but did not explain as to what it meant.
• They mentioned that the ship cannot deviate from the agreed route but did not give the exceptions to this rule.

Many examinees mentioned implied warranties in a contract of sale and could not secure any mark.

Q.8

(a)

Sub-parts (i), (ii) and (iii) related to Section 30, 33 and 34 respectively of the Partnership Act, 1932. Very few were able to mention all the important points to get full marks.

(b)

Most candidates were able to state that partner D is also liable to repay the loan taken by the firm irrespective of whether or not C knew that D was a partner, at the time the contract was entered into. However very few of them could mention the conditions which were necessary to make D liable for the loan. The conditions are: 

• loan has been taken in the normal course of business;
• loan has been taken in the name of the firm;
• partners A & B had express or implied authority to execute the loan agreement.

Q.9

Very few students could explain all the clauses relating to fire insurance policy. Being an easy question, the only reason for such performance was selective study.

Q.10

(a)

It was again a simple question based on Section 77 of the Trust Act 1882. Performance was again poor, most probably due to selective study.

(b)

Students could not clearly mention that part of Section 27 that says that if a co-trustee by his neglect enables the other co-trustee to commit a breach of trust, each is liable to the beneficiary for the whole of the loss occasioned by such breach.