QP CODE: 22103140

B.COM DEGREE (CBCS) REGULAR / IMPROVEMENT / REAPPEARANCE

EXAMINATIONS, OCTOBER 2022
Second Semester
Core Course - CO2CRT05 - BUSINESS REGULATORY FRAMEWORK
SCHEME OF VALUATION
Time: 3 Hours Max. Marks : 80
SECTION I
Part A
Answer any ten questions. Each question carries 2 marks
1. Distinguish between agreement and contract.
a. Every promise and every set of promises forming consideration for each other is
agreement. A contract is an agreement enforceable at law.
b. Offer + acceptance is an agreement. Agreement + enforceability at law is contract
c. All agreements are not contracts. But all contracts are agreements.
d. Agreements may not create any legal obligation. A contract necessarily creates a
legal obligation.
e. An agreement is a genus. A contract is a species of an agreement.
f. Agreement is not a binding contract. A contract is concluding and binding.

2. Explain the term restitution.

Restitution means giving back. When a minor has obtained any property by making
false representation that he is a major, then the minor can on principles of equity be
compelled to restore the said property to the original owner provided it is identifiable and
is still in his possession.

3. What is exemplary damage?

In certain situations, the court may award damages with an intention to punish the
wrong doer for the injury caused. The situations are (a) breach of a promise to marry, and
(b) dishonour of a cheque by a banker wrongfully when he possesses sufficient funds to
the credit of the customer.

4. What is pledge?
Pledge is a special kind of bailment. The bailment of goods as security for payment of
a debt or performance of a promise is called pledge.

5. Who are the persons entitled to general lien?

A general lien is available bankers, factors, wharfingers, attorneys of High Courts and
policy brokers.

6. Who is a promiser?
The person making the proposal is called the proposer or offeror. After the proposal is
accepted by the offeree the person who makes the proposal is termed as promisor.
7. Who is Principal?
An agent is a person employed to do any act for another or to represent another in
dealings with third persons. A person for whom such act is done, or who is so represented
is called the principal.

8. What is Agency by necessity?

Sometimes extraordinary circumstances require that a person who is not really an
agent should act as an agent of another. In such a case, though there might not have been
an express or implied authority to do an act, the law implies such an authority in favour of
that person. This is called agency by necessity.

9. Who is a sub agent?

A sub agent is a person employed by and acting under the control of the original agent
in the business of agency. The sub agent is an agent appointed by an agent.

10. What is meant by 'caveat emptor'?

It means ‘let the buyer beware’. It means that it is not the duty of the seller to see that
the goods he sells to the buyer are suitable to the buyer.

11. Explain the meaning of the maxim 'nemodat quod non habet.
It means that no one can transfer rights which he himself does not have. Where goods
are sold by a person who is not the owner thereof and who does not sell them under the
authority or with the consent of the owner, the buyer acquires no better title to the goods
than the seller had.

12. Explain the expression ‘dumping’.

This is a practice intended to prevent and intending purchaser from bidding or raising
the price at the sale. It is done by pointing the defects in the goods or by taking away the
bidder from the place of auction.

Part B
Answer any six questions. Each question carries 5 marks.
13. When does an offer come to an end?
a. By notice of revocation
b. By lapse of time
c. By failure to fulfil a condition precedent
d. By death or insanity of the proposer
e. Rejection by counter offer
f. By non-acceptance of the offer in the prescribed mode

14. What are the exceptions to the rule privity of contract?

a. When a trust is created
b. Contracts through an agent
c. Where a charge is created on a specific movable property in favour of a person
d. In the case of family arrangements for maintenance or marriage expenses
e. Where the promisor has by his conduct created privity of contract
15. Write a note on 'time as the essence of the contract'.
In a contract, where intention of the parties is clear that time is the essence of the
contract and if the promisor fails to perform the obligation in the time fixed, the
contract becomes voidable at the option of the promisee, and he can avoid the contract.
Where the promisee accepts the performance of the promise at any time other than that
agreed, the promisee cannot claim compensation for any loss caused by the non-
performance of the promise unless at the time of acceptance he gives notice to the
promisor of his intention to do so. In commercial contract, time is the essence of the
contract because in commercial contracts prices of goods fluctuate very rapidly and
hence punctuality in the time of delivery of goods must be observed.

16. Discuss the rights and obligations of a finder of goods.

a. Rights of finder of goods:
i. Right of lien
ii. Right to sue reward
iii. Right to sell
b. Obligation of finder of goods:
i. To take reasonable care of goods
ii. Not to use goods for his own use
iii. Not to mix goods with his own goods
iv. To find out the true owner of the goods

17. Distinguish between indemnity and guarantee.

Difference Indemnity Guarantee
No: of parties Two parties Three parties
No: of contracts One contract Three contracts
Nature of liability Liability of indemnifier is Liability of surety is secondary
primary and independent or collateral
Request Indemnifier need not acts at the Surety acts at the request of the
request of indemnified principal debtor
Commencement Liability of indemnifier is Liability of surety is subsisting
of liability contingent
Rights against Indemnifier cannot sue against Surety can sue principal debtor
third parties third parties in his name in his own right
Purpose For reimbursement of loss Provides surety to creditor
Types Oral or written Oral or written as per Indian
law, but written as per English
law

18. Explain the scope and extent of agent's authority.

a. Authority of an agent may be expressed or implied
b. An agent having an authority to do an act has authority to do every lawful thing
which is necessary in order to do such act.
c. An agent has authority in in an emergency to do all such acts for the purpose of
protecting his principal from loss as would be done by a person of ordinary
prudence in his own case under similar circumstances.
19. Explain the duties of principal.
a. Duty to pay remuneration
b. Duty to indemnify against consequences of lawful acts
c. Duty to indemnify against consequences of acts done in good faith.
d. Duty to compensate

20. When an agency can be terminated by act of parties?

a. By agreement
b. By revocation by the principal
c. By renunciation of agency

21. How does sale differ from agreement to sell?

Difference Sale Agreement to sell
Transfer of property Immediate effect of The property is to pass at a
transferring property future time
Risk Risk prima facie passes to the Risk remains with the seller
buyer
Breach by the buyer The seller may sue price The seller may sue damages
Nature of contract Executed contract Executory contract
Breach by the seller The buyer may sue for delivery Buyer can sue for damages
of goods by specific
performance
When goods The buyer has to bear the loss The seller has to bear the loss
destroyed
Insolvency of the The seller must deliver the The seller can refuse to
buyer goods to the official receiver deliver the goods unless the
and claim only rateable price is paid for
dividend for the price due
Insolvency of the The buyer can recover the The buyer can claim the
seller goods from the official receiver rateable dividend if he has
paid the price.
General and It creates rights in rem It creates rights in personam
particular property
Right of resale Ownership is with the buyer Ownership is with the seller

Part C
Answer any two questions. Each question carries 15 marks

22. What are the essentials and legal rules for a valid coercion? (value liberally)
a. Committing an act forbidden by the Indian Penal Code
b. Threatening to commit any act forbidden by the Indian Penal Code
c. Detention of property of another to enter into an agreement
d. Threatening to detain any property of another person

23. What are the rights and duties of a bailor and a bailee?
a. Rights of bailor
i. Entitled to get back the goods
ii. Entitled to claim any increase in value r profits
 iii. Right of termination
iv. Right to recall goods at any time in a gratuitous bailment
v. To enforce the duties of bailee
vi. Right to file a suit against third person
b. Duties of bailor
i. Duty to disclose known defects
ii. Duty to bear extraordinary expenses of bailment
iii. Duty to indemnify bailee
iv. Duty to receive back the goods
v. Duty to bear the risks
c. Rights of bailee
i. Right to enforce the duties of bailor
ii. Right to reimbursement
iii. Right to remuneration
iv. Right to compensation
v. Right of lien
vi. Right to deliver goods to o of the joint owners
vii. Right to sue
d. Duties of bailee
i. To take reasonable care of the goods bailed
ii. Not to mix the goods bailed with his own goods
iii. Not to make any unauthorised use
iv. Not to set up adverse title
v. To return the goods
vi. Return additions or profit

24. Explain the liabilities of a surety.

a. The liability of a surety is secondary- the surety’s liability arises only on the
default of the principal debtor to perform his part of promise.
b. The liability of the surety is co-extensive with that of the principal debtor- the
liability of the surety will be neither more nor less than that of the principal
debtor.
c. Commencement of surety’s liability- the liability of the surety arises immediately
on the default of the debtor.

25. Explain the rights and duties of agent.

a. Rights of an agent
i. Right to remuneration
ii. Right of retainer
iii. Right of lien
iv. Right to be indemnified against the consequences of lawful acts
v. Right to be indemnified against the consequences of acts done in good
faith
vi. Right of compensation
b. Duties of an agent
i. Duty to follow directions given
 ii. Duty of reasonable care and skill
iii. Duty to render accounts
iv. Duty to communicate in case of difficulty
v. Duty to pay overall monies
vi. Duty not to set up adverse title
vii. Duty to pass the information to the principal
viii. Duty not to delegate his authority
ix. Duty not to disclose confidential information
x. Duty to protect the interest of the principal
xi. Duty not to make any secret profit from agency

SECTION II

1. B – Agreement
2. B – Agreement
3. C – Parties
4. B – No, as the intention was not to create legal relation
5. A – Simple Contract
6. D – Announcement of reward to the public
7. C – Definite
8. D – All of the above
9. B – Possessor
10. D – None of the above
11. A – Bailment for the sole benefits of the bailee
12. D – All of the above
13. B – Deposit
14. B – Duty to take commission
15. C – Sub agent
16. C – Insolvency
17. B – Conditions
18. B – Price of the goods
19. A- Unpaid seller lien revives
20. D - Creditor