Name Dattatray Vilas Devkar

Subject – Contract 2
Previous year two mark questions with answers

Que1- Bailment – Section 148 – bailment is the delivery of goods by one person or some
perpose upon a contract that they shall, when the purpose is accomplised be returned or
otherwise disposed of according to the directions of person delivering them . The person
delivering the goods called the bailor. The person whom they are delivered is called the
bailee.

Que 2- Act of firm – Section 2(a) – Means any act or omission by all the partners or by any
partner or agent of the firm which give rise to right enforceable by or against the firm.

Que 3 -Partnership at will-Section 7 – Where no provision is made by contract between the

partners for the duration of their partnership or for the determination of their partnership is a
partnership at will.

Que 4-Partnership authority in an emergency-Section 21- A partner has authority in an

emergency to do all such acts for the purpose of protecting the firm form loss as would be
dine be a person of ordinary prudence, in his own case, acting under similar circumstances,
and such acts bind the firm.

Que 5-Contract of guarantee-Section 126- A contract of guarantee is contract to perform the

promise, or discharge the liability of third person in case of his default. The person gives the
guarantee is called surety. The person in respect whose default guarantee is given is called
principal debtor. And person to whom guarantee is given is called creditor.

Que 6-Define Lien. And types of lien.

Ans- section 47(1) -Lien is the right of the seller to hold on to the goods until the payment for
those goods has been made by the buyer. T
Types of lien – stoppage in transit, resale,

Que 7-What is agreement to sell provided under SOGA?

Ans- Section 4 (3) – Where the transfer of the property in the goods is to take place at a
future time or subject to some condition thereafter to be fulfilled, the contract is called an
agreement to sell.

Que 8- Define Pawnee, when does Pawnee have a right to retainer.

Ans- Section 172- Pledge – The bailment of goods as security of payments of a debt or
performance of a promise is called pledge.
Pawnor- The bailor is called Pawnor.
Pawnee- The bailee is called Pawnee.
Section 173- Pawnees right of retainer- The pawnee may retain the goods pledged, not only
for payment of the debt or the performance of the promise, but for the interest of the debt, and
all necessary expenses incurred by him in respect of the possession or for the preservation of
the goods pledged.
Que 9-What is the position when there is delivery of wrong quantity of goods?

Ans- Section 37- 1) Where the seller delivers to the buyer a quantity of goods less than he
contracted to sell, the buyer may reject them, but if he accepts the goods so delivered he shall
pay for them at the contract rate.

2) Where the seller deliver to the buyer a quantity of goods larger than he contracted to sell,
the buyer may accept the goods included in the contract and reject the rest, or he may reject
the whole. If buyer accepts the whole of goods so delivered, he shall pay for them at the
contract rate.

3) Where the seller delivers to the buyer the goods he contracted to sell mixed with the goods
of different description not included in the contract , the buyer may accept the goods which
are in accordance with contract and reject the rest, or may reject the whole.

Que10-Any two Rights of surety against creditor?

Ans- 1- Right of subrogate

2) Right to securities

Que 11 – Who can exercise general lien ?

Ans- The right of general lien is particularly given by law to bankers, solicitors, brokers,
wharfingers and warehouse-keepers.

Que 12- State any four kinds of Bailment.

Ans- 1) express bailment

2) Implied bailment
3) Gratuitous bailment
4) non gratuitous bailment

Que 13- State any two grounds on which firm can be dissolution by court.

Ans-Section 44-1) If all partner other than suing become unsound mind.
2) If all partner other than suing has permanently incapable form discharging his duty.
3) If partner acted in manner which prejudice to the business of the firm.
4) If any partner consistently commits breach of agreement.

Que 14- Future Goods under Soga?

Ans- Section 2(6)- Means goods to be manufactured or produced or aquired by the seller after
making contract of sale.
Que 15- Merchantile agent under Soga?

Ans – Section 2(9)- merchantile agent having in the customary course of business as such
agent authority either to sell goods, or to consign goods for the purposes of sale, or to buy
goods, or to raise money on the security of goods.

Que 16- State the circumstances under which guarantee is invalid?

Ans- Section 142- Guarentee obtained by misrepresentation.

Section 143- Guarentee obtained by Concealment.

Que 17-What is gratuitous bailment?

Ans- A gratuitous bailment is a bailment without any consideration where the bailor or bailee
is not entitled to any reward. It may be created for the exclusive benefit for either the bailor
or bailee.

Que 18- What are four situation require public notice as per section 72(1) of Indian
partnership act?

Ans- 1) retirement of partner

2) expulsion of partner
3) dissolution of registered firm.
4) A person attaining a majority who has admitted to the benefits of partnership.

Que 18- Define holding out partner.

Ans- Section 28-Anyone who by words spoken written or by conduct represents himself, or
knowingly permits himself to be represented, to be a partner in a firm, is liable as a partner in
that firm to anyone who has on the faith of any such representation to be a partner does or
does not know that the representation has reached the person so giving credit.

Que 19- What do you mean by auction sale?

Ans- section 64- An auction sale is the sale of goods through a bidding process and is
covered under the Sale of Goods Act, 1930. The process of sale by auction involves the
selling of any goods and property of value, in a public gathering where buyers make a bid for
the purchase and the sale is made to the highest bidder.

Que 20- Define price

Ans- S2(10) Meana consideration for sale of goods.

Que 21- What is agency by ratification?

Ans – Section 196 - says that when an act is done by one person on behalf of another without
his knowledge or authority, the person on whose behalf such act is done may ratify the act.
Que 22- Diff between pledge and hypothecation

Ans-Pledge means bailment of goods as security against the loan. Hypothecation is creation
of charge on movable property without delivering them to the lender.

Que 23- Explain universal agent?

Ans- A Universal agent is one who is authorised to do all the acts which the Principal can
lawfully do and can delegate.

Que 24- Define goods under Soga?

Ans- S(7) Means every kind of movable property other than actionable claims and money and
includes stock and shares, growing crops, grass, and things attached to and forming part of
land which are agreed to severed before sale or under the contract of sale.

Que 25- Who is Indemnifier and Indemnity holder.

Ans- Indemnifier: Someone who protects against or compensates for the loss of the damage
received. Indemnified/Indemnity-holder: The other party who is compensated against the loss
suffered.

Que 26- Symbolic delivery

Ans- Symbolic delivery: This kind of delivery involves the delivery of a thing in token of a
transfer of some other thing. For example, the key of the godowns with the goods in it, when
handed over to the buyer will constitute a symbolic delivery.

Que 27 – Agent definition

Ans- Section 182- Agent is person employed to do any act for another, or to represent another
in dealing with third person.

Principal- The person for whom such act is done, or who is so represented, is called the
principal.

Que 28- Document of title of goods

Ans- include dock warrant , railway receipt, warehouse certificate, Bill of lading , warrant or
the order for the delivery of the goods.

Que 29-Contract of sale

Ans – S(4) A contract of sale of goods is a contract whereby seller transfer or agrees to
transfer the property in goods to the buyer.
Que30- What is contract of Indemnity ?

Ans- Section 124- 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.

Que31- Diff between indeminity and guarantee ?

Ans- Section 124 -An indemnity is a contract by one party to keep the other harmless against
loss, but a contract of guarantee is a contract to answer for the debt, default or miscarriage of
another who is to be primarily liable to the promisee .

Guarentee-The Contract of Guarantee is defined under section 126 of Indian Contract Act,
1872. Section 126 states: A contract of guarantee is a contract to perform the promise or
discharge the liability, of a third person in case of his default.

Que 32- diff between general lien and particular lien

Ans- General lien alludes to the right to keep possession of goods belonging to other against
general balance of account. Particular lien implies a right of the bailee to retain specific goods
bailed for non-payment of amount.

Particular lien-Particular lien implies a right of the bailee to retain specific goods bailed for
non-payment of amount

Que 33- Diff between pledge and lien

Ans- A pledge arises where there is a delivery of goods to a creditor for the purpose of
securing a debt due to him by their owner.

A lien is a right to retain goods to secure payment. Both a pledge and lien involve a bailment.

Que 34-Diff between partnership and HUF?

Ans- A partnership firm is controlled by two or more persons called 'Partners'. In Joint Hindu
Family 'Firm, the Joint Hindu Family conducts business according to Hindu Laws. A
minimum of two members are needed for starting a business.

Que 35- Diff between sale and agreement to sell.

Ans -Sale is the transfer of ownership from a seller to the buyer for a determined price.

Agreement to sell is also a transfer of ownership, but at a future date or when specified
conditions are met.

Que 36- What is the mode of determining the existence of partnership.

Ans- An arrangement should be drawn up between the parties. (agreement) The primary goal
of the business is to make a profit and distribute between the partners. (share profit) [evidence
of partnership]
Que 37- Special lien

Ans - Lien is the right of the seller to hold on to the goods until the payment for those goods
has been made by the buyer. The right of lien meaning as per Section 47 (1) of the Sale of
Goods Act, 1930 is that an unpaid seller in possession of the goods can retain their possession
until payment is made by the buyer.

Que 38-Who del credere agent under ICA?

Ans-A del credere agency is a type of principal-agent relationship wherein the agent acts not
only as a salesperson, or broker, for the principal, but also as a guarantor of credit extended to
the buyer.

Que 39- Undisclosed agent

Ans-Undisclosed principals arise when a third party has no notice that the principal exists,
but the undisclosed principal has authorized an agent to act on the principal's behalf. The
agent does not represent that they are forming the contract on a principal's behalf to the third
party.

Que 40 -Define sub-agent and substituted agent.

Ans-Sub-agent- S191- Is a person employed by and actng under the control of the original
agent in the business of agency.

Substituted agent- S 194 of the Indian Contract Act, 1872 defines a substituted agent as the
person nominated by the original agent with the knowledge and consent of the principal to
work in the business of the agency for some particular part of the business.

Que 41-Continuing Guarentee

Ans- Section 129- A Guarentee which extends to a series of transactions is called a

continuing guarantee.

Que42-What is F. O. B contract

Ans - applies to the sale of goods and indicates that purchased property will be placed on
board a vessel for shipment at a designated place without expense to the buyer for packing,
potage, cartage, etc.

Que 43- What do you mean by ascertainment of goods

Ans-Goods that have been individually recognized and approved at the time of the selling
contract are referred to as ascertained goods.

Que 44-When gratuitous bailment is terminated?

Ans-A gratuitous bailment is terminated by the death either of the bailor or of the bailee.
Que 45- Insolvent as per sales of goods act

A person who ceased to pay his debts in the ordinary course of business, or cannot pay his
debts as they become due, whether he has commited an act of insolvency or not.

Que46-Insolvent partner under Indian Partnership act

Section 34- Where a partner in a firm is adjudicated Insolvent he ceases to be a partner on the
date on which the order of adjudication is made, whether or not the firm is there by dissolved.

Que47-What is meant by knock out agreement?

Ans-knock-out agreement. an agreement between bidders at an auction or sale not to bid

against each other.

Que48-What is consideration under contract of guarantee?

Ans-The consideration in such contract is nothing but anything done or the promise to do
something for the benefit of the principal debtor.

Que49-Any four duties of partners?

Ans – 1) Duty to be just and faithful to each other.

2) duty to carry on business of a firm.
3) Duty to communuicate
4) duty to use the property of the firm for business of the firm.
5. Duty not to carry on competing business.

5) Duty to indemnify firm if any loss is caused due to fraud of the partner.

Que50- Give various types of partners.

Ans- 1) Active partner

2) Dormant partner.
3) Minor partner.
4) Partner in profits only
5) partner by holding out
6) Nominal partner.