Page 73 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes 6.6 Review Questions

1. A sold some land to B. At the time of sale both parties believed in good faith that the area
of the land sold wa hectares. It, however, turned out that the area was 7 hectares only. How
is the contract of sale affected? Give reasons.

[Hint: The agreement is void (Sec. 20)].
2. A agreed to sell B a specific cargo of corn per 5.5. Malwa supposed to be on its way from

London to Mumbai turned out that before the day of the bargain the ship had been cast
away, and the goods lost. Discuss the rights of A.
[Hint: The agreement is void (Couturier v. Hastie).]
3. L, the owner of a gold mine in West Africa, sold the Mine to M. During the preliminary
discussion L had certain statements about the Mine which were incorrect, though L
honestly believed them to be true. After having the mine for six months M discovered the
true position. What remedies, if any, will M have?
[Hint: M can only claim damages. The contract cannot be rescinded because the parties
cannot be restored to the original position [Lagunas Nitrate Co. v. Lagunas Syndicate, (1899)
2 Ch. 392.]
4. C offers to sell to D a painting which C knows is a good copy of a well-known masterpiece.
D thinking that painting is an original one and that C must be unaware of this, immediately
accepts D’s offer. Does this result in a contract?
[Hint: Yes. The doctrine of Coueot Emptor (Get the buyer beware) will apply.]
5. A and B, being traders, enter into a contract. A has private information of a change in prices
which would affect willingness to proceed with the contract. Is A bound to inform B ?
6. What are the different modes of discharge of contracts? Explain the discharge of contract
by performance or tender.

7. (i) Explain the concept of “subsequent impossibility” as a mode of discharge of
contract.
(ii) “Impossibility of performance is, as a rule, not an excuse for non-performance of a
contract”. Discuss.
8. Discuss the consequences of non-performance of a valid contract.
9. When does a contract discharge by operation of law?

Answers: Self Assessment

1. ‘Performance’ 2. Section 42 3. liability

4. Reciprocal promises 5. Section 57 6. Appropriation of payments
7. discharge of a contract 8. promisor 9. Commercial impossibility
10. anticipatory breach

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