General:

(I)

The writing skills of the majority of the candidates need improvement. Candidates failed to demonstrate their command over the subject due to their poor expressing power and grammatical and spelling mistakes; also the vocabulary used was below acceptable level.

(II)

Overall the paper could be termed as a balanced paper which helped those students to secure passing marks who had made a reasonable coverage of the syllabus. While going through the copies, it appeared that some students, despite having knowledge of the law, do not properly apply the same while answering practical questions.

Question-wise comments are as under:

Q.1

This was a straightforward question but was badly attempted. Most students were unable to write meanings of the terms. It indicates poor grasp and the general know-how of the subject. Only 4% obtained pass marks.

Q.2

(a)

This was well attempted by majority. However, many candidates wrongly opined that since ordinary oral contracts are difficult to prove, they are not binding. Similarly, examples of contracts required to be in writing were quoted by few.

(b)

This was answered correctly by a vast majority.

(c)

Part (i) was well attempted. In part (ii), hardly any student mentioned P’s right to rescind the contract if the agent had retained the goods. Even when the agent had resold the goods, P had the right to recover Rs. 500 as well as to dismiss the agent without paying the agreed commission.

In part (iii) majority answered wrong by stating that presenting of a gift to A by X is a matter which has nothing to do with P, whereas A in fact cannot obtain a benefit from his position without P’s knowledge and approval.

Q.3

Most of the candidates could not correctly state the rules regarding the time and place for the performance of a contract described in sections 146-150 of the Contract Act, 1872. Therefore, barring a few, the candidates ended up with very low marks.

Q.4

Almost everybody answered affirmative regarding enforceability of a promise to pay time-barred debts. However, their answer was based on the fact that a contract without consideration is void but time-barred debt is an exception. The other conditions of enforceability like promise to be in writing, agreement to be signed, whether full or partial payment etc. were not mentioned.

Q.5

(a)

Many candidates were of the view that where a creditor did not take action for recovery / sue the debtor, this inaction discharged the surety. However mere forbearance by the creditor does not absolve the surety of his obligation, unless contrary provision exists in the guarantee. Very few candidates mentioned this fact.            

(c)

This was answered correctly by almost all the candidates. However, very few could mention the fact that variance in original guarantee discharged the surety Kashif for transactions entered subsequent to variance but he was still responsible as surety for past transactions. Consequently they lost marks for this omission.

Q.6

(a)

This was well answered.

(b)

In answering this part a few gave answers with yes or no without giving reasons for which they lost marks.

(c)

Majority of the students replied that B has no remedy against any party due to the fact that he received the cheque without consideration, whereas he could in fact sue Z,Y & X but not A.

Q.7

(a)

This part was well answered by majority but few mentioned the rule of delivery in case of mixed delivery as well as of the fact that delivery rules are subject to usage of trade, special agreement or course of dealing between the parties which play an important part in determining the liability arising out of delivery.

(b)

Few students were able to give all the provisions regarding fixation of price by third party.

(c)

Generally this part was answered satisfactorily.

Q.8

This question was answered correctly by almost all the candidates.

Q.9

Except first part, this question was reasonably attempted. Though the first part was basic, students generally failed to make a proper approach towards answering the question. The order in which losses are to be paid and assets utilised was not properly maintained in the answer, which in fact was a key to the answer.

In part (c) also, many students failed to mention the point that knowledge of third parties regarding a person being a partner or otherwise  was a key distinction for determining the partner’s responsibility or otherwise for not giving the notice of retirement.

Q.10

This was a well attempted question and helped students gain good marks.

Q.11

In this question most of the students failed to make a distinction between reimbursement and indemnification and tried to link both of them with the reimbursement of expenses only.

Secondly, some of the students instead of covering the requirement of the question went on to discuss rights of the trustees.