Previous Year Questions and Answers (As per midterm paper pattern)

Analyse and answer for each of the cases given below.

1) Shyamal, a singer enters into a contract with Banwarilal, a theatre manager to sing at the theatre
two nights at the theatre every week for the next six months. For each performance, a
remuneration of Rs 2000 is decided between Shyamal and Banwarilal. On the eighth night
Shyamal wilfully absents himself from the theatre.

i. Can Banwarilal end the contract with Shyamal? Decide. (03 marks)
ii. What is Discharge of Contract? State the mode of discharge of Contract? (02 marks)

Answer-

i. Banwarilal has the right to rescind the contract and is also entitled to compensation for any
damage he has sustained through non-fulfilment of contract. But he also has to pay the
singer for the nights he has performed as per the doctrine of Quantum Meruit.
ii. A contract is discharged when the obligations created by it come to an end. In the above
case, the mode of discharge by contract is by breach of contract.

2) Rajan & Ravi entered into a contract for the buying and selling of furniture items such as Dining
table, Sofa sets, Coffee tables etc. Rajan customised the stated goods as per Ravi’s requirements.
His carpenters started making the furniture. The goods were to be delivered to Rajan on two
occasions. The first lot was delivered without any payment a month ago and the last lot was to
be delivered on the date of the final payment. On the date of delivery Ravi said to Rajan that he
would pay him the next day to which the latter agreed &delivered goods to Ravi. The next day
Rajan followed up for the payment & did so continuously for a week. Advise Rajan what he can
do? Explain the rights of an unpaid seller against goods. (5 marks)

Answer-

i. Rights of an unpaid seller against goods-

a) Rights of lien: It is the right to retain the possession of the goods and refusal to
deliver them to the buyer until the price due in respect of them is paid or tendered.
The lien can be exercised as long as the seller remains in possession of the goods.
b) Right to stoppage in transit: When the unpaid seller has parted with the goods to a
carrier and the buyer has become insolvent, he can exercise this right of asking the
carrier to return the goods back, or not to deliver the goods to the buyer.
ii. Since in the above case, Rajan has already parted with the goods and delivered it to Ravi, he
cannot exercise his rights against the goods. But he can exercise his rights against the buyer.
Rajan can-
a) Sue Ravi for the price of goods (Section 55)
b) Sue Ravi for damages for non-acceptance (Section 56)
c) Sue Ravi for interest, given that there is no specific agreement between them
regarding interest on the price of goods from the date on which the payment
becomes due. (Section 61)
3)

Answer-

i. Since the cheque given by Dexter was dishonoured, Simon has become an unpaid seller.
ii. Since the goods have not been received by the buyer yet, he can exercise his right to
stoppage of goods in transit by asking the carrier to not deliver the goods to Dexter.
iii. In addition to his rights against the goods, he can also exercise his rights against the buyer by
way of-
a) Suit for damages for non-acceptance (Section 56)
b) Repudiation of contract before due date (Section 60)
c) Suit for interest (Section 61)