B law

Unit 1
Long
1 ans
The Indian Contract Act lays out all the provisions for the
performance of a contract. It also contains the provisions in case
of breach of contract by either party. Let us take a detailed look at
the available remedies for breach of contract.
Remedies for Breach of Contract
When a promise or agreement is broken by any of the parties we
call it a breach of contract. So when either of the parties does not
keep their end of the agreement or does not fulfil their obligation
as per the terms of the contract, it is a breach of contract. There
are a few remedies for breach of contract available to the wronged
party. Let us take a look.

1] Recession of Contract
When one of the parties to a contract does not fulfil his
obligations, then the other party can rescind the contract and
refuse the performance 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 75 states that the party that rescinds
the contract is entitled to receive damages and/or compensation
for such a recession.

2] Sue for Damages

Section 73 clearly states that the party who has suffered, since the
other party has broken promises, can claim compensation for loss
or damages 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. There are two
types of damages according to the Act,

 Liquidated Damages: Sometimes the parties to a contract

will agree to the amount payable in case of a breach. This
is known as liquidated damages.
 Unliquidated Damages: Here the amount payable due to
the breach of contract is assessed by the courts or any
appropriate authorities.
3] Sue for Specific Performance
This means the party in breach will actually have to 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 contract, the court may
order them to do so. This is a decree of specific performance and
is granted instead of damages.

For example, A decided to buy a parcel of land from B. B then

refuses to sell. The courts can order B to perform his duties under
the contract and sell the land to A.

4] Injunction
An injunction is basically like a decree for specific performance
but for a negative contract. An injunction is a court order
restraining a person from doing a particular act.
So a court may grant an injunction to stop a party of a contract
from doing something he promised not to do. In a prohibitory
injunction, the court stops the commission of an act and in a
mandatory injunction, it will stop the continuance of an act that is
unlawful.

5] Quantum Meruit
Quantum meruit literally translates to “as much is earned”. At
times when one party of the contract is prevented from finishing
his performance of the contract by the other party, he can claim
quantum meruit.

So he must be paid a reasonable remuneration for the part of the

contract he has already performed. This could be the remuneration
of the services he has provided or the value of the work he has
already done.

Short

1 ans

“What is an offer in law of contract?” is something you need to

know if you are planning to enter into a contract. An offer refers
to a promise that one party makes in exchange for another party's
performance. In other words, it is an invitation to enter into a
contract on certain terms. It can be expressed in many different
ways, from a short and simple oral statement to a long and
detailed written statement. However, you have to make sure that
your offer is clearly communicated and reasonable in order to
convince the other party that you are actually making an offer.
Essentials of a Valid Offer
There are two types of offer: general offer and specific offer. A
general offer is made to a group of people, while a specific offer
is specifically made to one person. In order for an offer to be
considered valid, it must meet the following requirements:
 Must be communicated
 Must be made with the purpose of obtaining the assent of
the other party
 Must be capable of establishing legal relation, meaning that
consideration must be a two-way process
 Must contain language that is certain and no element of
uncertainty
2 ans
The Indian Contract Act 1872 defines acceptance in Section 2 (b)
as “When the person to whom the proposal has been made
signifies his assent thereto, the offer is said to be accepted. Thus
the proposal when accepted becomes a promise.”

So as the definition states, when the offeree to whom

the proposal is made, unconditionally accepts the offer it will
amount to acceptance. After such an offer is accepted the offer
becomes a promise.

Say for example A offers to buy B’s car for rupees two lacs and B
accepts such an offer. Now, this has become a promise.

When the proposal is accepted and it becomes a proposal it also

becomes irrevocable. An offer does not create any legal
obligations, but after the offer is accepted it becomes a promise.
And a promise is irrevocable because it creates legal obligations
between parties. An offer can be revoked before it is accepted.
But once acceptance is communicated it cannot be revoked or
withdrawn.

Unit 2
Long
1 ans
BAILMENT
The word ‘Bailment’ is derived from the French word ‘Bailer’
which means to deliver. The etymological meaning of bailment
is “handing over” or “change of possession of goods”. In legal
sense, it involves change of possession of goods from one person
to another for some specific purpose.

Bailment is a delivery of goods on condition that the recipient

shall ultimately restore them to the Bailor or dispose of them
according to the direction of the Bailee or dispose of them
according to the direction of the Bailor.

PLEDGE
A pledge is only a special kind of bailment, and chief basis of
distinction is the object of the contract. Where the object of the
delivery of goods is to provide a security for a loan or for the
fulfilment of an obligation, that kind of bailment is pledge.

ACCORDING TO SECTION 172 OF INDIAN CONTRACT

ACT, 1872

The bailment of goods as security for payment of a debt or

performance of a promise is called “pledge”. The bailor is in this
case called the “Pawnor”. The Bailee is called the “Pawnee”.
 DIFFERENCE BETWEEN PLEDGE AND BAILMENT
BASIS BAILMENT PLEDGE

It’s a contract
where goods are It’s a peculiar kind of
entrusted upon bailment in which the
by the bailor to pawnor delivers his
the bailee for the goods to pawnee as
1. Meaning fulfilment of security for a debt
certain objective owed to that person
after which the or performance of a
good/s is contract owned to
returned to the that person.
owner.

In this case,
there are two
In this case, there are
parties; Bailor-
two parties; Pawnor-
who gives the
who gives his good as
2. Parties goods for a
security for debt &
certain purpose
pawnee-who receives
& Bailee- who
the good.
is the receiver of
the good.

It’s defined It’s defined under

3. Sections under section section 172 of the
148 of the Act. Act.
 But, in this case,
In the contract
since the whole
of bailment,
concept of the pledge
consideration
is that it’s a security
may be involved
4. for a debt so the
or may be
Considerations involvement of
missing. It
consideration is
depends upon
important or else
the contractual
there will be no
terms.
contract of pledge.

In this case, the

good/s is In this case, since the
entrusted to the good entrusted upon
bailee for a works as a
specific use, so security/assurance for
in this case, the the debt so in case the
5. Right to sell
bailee has no debt is not paid then
the good
right to sell the pawnee can sell the
good but has the good as he has been
duty to return it given this right so
after the that he can satisfy his
fulfilment of the debt
purpose.

6. Purpose The main The main purpose of

purpose of undertaking this
undertaking a contract is for
bailment ensuring security
contract is for against the payment
 the main
safekeeping of
of the debt.
goods or for the
repair.

In this case, the

In this case, the pawnee can never use
bailee can use the good/s for any
the goods to the purpose. He doesn’t
7. Use of
extent allowed have the right to do it,
goods
by the bailor for only has the right to
the specified keep the good/s until
purpose only. the repayment of debt
is made.

Bailee can use Pledgee also

the lien over the exercises the lien
8. Lien good/s but only over the goods but for
for labour and the non-payment of
service the interest.

9. Rights of the I. Right to I. Right to retainer

pawnee & bailee compensation [section 173-174]
[section 164] II. Right to
II. Right to extraordinary
expenses expenses [section
[section 158] 175] III. Right to
III. Right to sell [section 176]
lien [section
170-171] IV.
Right to sue
 [section 180-
181]

I.
Mercantile agent
There is as such
[section 178]
no bar or special
II. Pawnee can
provisions
further pledge the
10. Who can provided
goods to subsequent
undertake specifically
Pawnee provided he
pledge/bailment mentioning who
shall have the right to
can or cannot
do so as per his
enter into
interest on the
bailment.
property [section
179].

Short

1 ans

General Cheque Crossing

In general crossing, the cheque bears across its face an addition of
two parallel transverse lines and/or the addition of words ‘and
Co.’ or ‘not negotiable’ between them.

In the case of general crossing on the cheque, the paying banker

will pay money to any banker. For the purpose of general crossing
two transverse parallel lines at the corner of the cheque are
necessary.
Thus, in this case, the holder of the cheque or the payee will
receive the payment only through a bank account and not over the
counter. The words ‘and Co.’ have no significance as such.

But, the words ‘not negotiable’ are significant as they restrict the
negotiability and thus, in the case of transfer, the transferee will
not give a title better than that of a transferor.

2 ans

Special Cheque Crossing

In special crossing, the cheque bears across its face an addition of
the banker’s name, with or without the words ‘not negotiable’.

In this case, the paying banker will pay the amount of cheque only
to the banker whose name appears in the crossing or to his
collecting agent.

Thus, the paying banker will honor the cheque only when it is
ordered through the bank mentioned in the crossing or its agent
bank.

However, in special crossing two parallel transverse lines are not

essential but the name of the banker is most important.