1. Define Bailment.

Section 148 of ICA defines bailment as:

A "bailment" is the delivery of goods by one person to another for some purpose, upon a contract
that they shall, when the purpose is accomplished, be returned or otherwise disposed of according
to the directions of the person delivering them.

2. What do you mean by bailment for reward?

Bailment for reward means; the delivery of goods are made for the mutual benefit of bailer and
bailee, but not the gratuitously.

For example, A hands over his goods to B for transporting them to Delhi. A has the benefit of
transportation and B gets transportation charges. Thus, both of them are benefitted.

3. What do you mean by Pledge?

Section 172 of ICA defines pledge as:

The bailment of goods as security for payment of a debt or performance of a promise is called
pledge.

A pledge can also be defined as , Pledge is the transfer by one person to another of the possession of
certain goods to be held by the latter as security for the performance by the former of some
obligation to pay or perform, which being performed, the pledge must be restored.

4. Define Condition.

Sub-clause 2 of section 12, sales of goods act define condition as:

A condition is a stipulation essential to the main purpose of the contract, the breach of which gives
rise to a right to treat the contract as repudiated.

5. What do you mean by Sale by description?

Sale by description means; when a buyer intends to buy goods by description, the goods
must correspond with the description given by the buyer at the time of formation of the
contract, failure in which the buyer can refuse to accept the goods.
6. Define Caveat Emptor.

The Latin phrase “Caveat Emptor”, which means; let the buyer be aware. It simply means; its
buyer’s duty to check the purpose or quality of a product, seller can’t be held responsible if
buyer fails in his duty.

7. Define agency by ratification.

If principal subsequently ratify any act of his agent, which is done without his authority, knowledge
or permission, a relationship of the agency will come into existence, and follow the same effect, as
the act was done with the proper authority, (Section 196). The ratification can be express or implied
both, (Section 197).
 8. What do you mean by continuing Guarantee?

It is defined under section 129 of ICA as:

A guarantee which extends to a series of transactions, is called a ‘continuing guarantee’.

(Illustration: A, in consideration that B will employ C in collecting the rents of B’s zamindari, promises
B to be responsible, to the amount of 5,000 rupees, for the due collection and payment by C of those
rents. This is a continuing guarantee.

9. Explain del credere agent.

When the agent acts not only as a salesperson, or broker, for the principal, but also as a
guarantor of credit extended to the buyer, he can be called as Del Credere agent.

10. Define indemnity.

Section 124 of ICA states as:

A contract by which one party promises to save the other from loss caused to him by the conduct of
the promisor himself, or by the conduct of any other person, is called a “contract of indemnity.”

11. "Risk Prima facie passes with the property.” Explain.

Section 26 of sales of goods act, 1930 provides that subject to the contract to the contrary, the any
sort of risk also passes with the transfer of ownership of the property. Provided that when the
delivery in delay cause due to fault of any of the parties, that party shall be liable for the loss, if any
occurs.

12. Who is a unpaid seller?

Section 45 of ICA defines unpaid seller as:

A seller to whom:

A. the whole of the price has not been paid or tendered;

B. When Bills of Exchange or other negotiable instrument has been received as conditional
payment, and the pre-requisite condition has not been fulfilled by reason of the dishonour
of the instrument or otherwise.”

13. Whether the Registration of Partnership firm compulsory?

No, the registration of partnership firm is not necessary, though it has its own consequences.

14. Define Partnership?

Section 4 of partnership act define relevant term as:
—’’Partnership” is the relation between persons who have agreed to share the profits of a business
carried on by all or any of them acting for all.

15. "Let the buyers be aware". Explain in brief.

The expression “Let the buyer be aware” is the translation of ‘Caveat Emptor’. It simply means; its
buyer’s duty to check the purpose or quality of a product, seller can’t be held responsible if buyer
fails in his duty.

16. What is the consequence of non - Performance of contract?

In case of non-performance of contract, the other party becomes entitled for:

I. Compensation for loss or damage caused by breach, Section 73 of ICA,

II. Compensation for breach of contract where penalty is stipulated, section 74.
III. Specific performance of the contract.

17. What is Contract of Guarantee?

Section 126 of the Indian Contract Act, 1872 defines the Contract of
guarantee as:
A "contract of guarantee” is a contract to perform the promise, or
discharge the liability, of a third person in case of his default.
18. Who is Principal Debtor?

The person in respect of whose default the guarantee is given is called the ‘’Principal Debtor’’.

19. What is Particular lien?

Section 170 of ICA deals with particular lean. It states as:

Where the bailee has, in accordance with the purpose of the bailment, rendered any service
involving the exercise of labour or skill in respect of the goods bailed, he has, in the absence of a
contract to the contrary, a right to retain such goods until he receives due remuneration for the
services he has rendered in respect of them.

20. What is Partnership at will?

Section 7 of partnership act provides for partnership at will.

There are two conditions to be fulfilled for a partnership to be a partnership at will. These are

• There is no agreement about a fixed period for the existence of a partnership.

• No provision with regards to the determination of a partnership.

21. Who is Pawnor?

Section 172 provides as:

The bailment of goods as security for payment of a debt or performance of a promise is called
‘pledge’. So, in this particular situation, the bailer is called Pawnor.

22. What is gratuitous bailment?

23. Define holding out partner.

A partner by holding out means a person who is not a member of
firm but allows himself/herself to be represented as a
partner. Section 28 of partnership act contains the provisions
regarding the same.
24. What do you mean by ' Auction sale?
An auction sale is the sale of goods through a bidding
process, where highest bidder will get the goods bided.
Section 64 of partnership act contains provisions regarding
the same.
25. Quote the difference between Indian Law and English Law
about contract of indemnity in relation to Act of God.

In India, indemnity has a limited scope since indemnity holder is

only compensated in case loss occurred due to human agency. It does
not include any other event or accident for the same i.e. act of
god, whereas, the situation is not the same in English law. English
law covers act of god in the scope of indemnity.

26. What is the conclusive test of partnership?

The conclusive test of partnership is based on mutual agency,
as given under section 6 of partnership act. Mutual agency
means; Business of the firm may be carried on by all or any of
the partners acting for all. This means that a partner is both
an agent and a principal in a partnership firm.
27. What is future goods?
In Sec 2(6) of the Act, future goods have been defined as the
goods that will either be manufactured or produced or acquired
by the seller at the time the contract of sale is made. The
contract for the sale of future goods will never have the
actual sale in it, it will always be an agreement to sell.
28. What is the consideration for creating an agency?

Section 185 of ICA states, no consideration is require to form an

agency.

29. State the implied condition when sale by sample takes

place?

In a contract of sale by sample, there is an implied condition that:

A. The bulk shall correspond with the sample in the quality;

 B. The buyer shall have or shall be given a reasonable
opportunity of comparing the bulk with the sample, and
C. The goods shall be free from any defect, should be of
merchantable quality.

30. What is the role of dormant partner in a partnership firm?

A dormant partner is also known as a sleeping partner. He does not
participate in the day-to-day functioning activities of the partnership
firm. However, he is bound by all the acts of the other partners.
31. Define the following
(a) Surety.
Section 126 of Indian Contract Act defines Contract of guarantee. It
defines a contract of guarantees a contract to perform the promise
or discharge the liability of a third person in case of his default.
The person who gives the guarantee is called “surety”.
(b) Continuing guarantee.
Section 129 defines the term continuing guarantee as:
A guarantee which extends to a series of transactions, is called a
‘continuing guarantee’.
32. What is the punishment for furnishing false particular
regarding registration?

Section 70 of partnership act provides that any person who publish the false particulars
regarding registration, shall be punished with the:

A. Imprisonment, which may extend to three months, or

B. With fine, or
C. With both.