REVISION SERIES 2 FOR CA FOUNDATION BUSINESS LAW

•     REVISION SERIES 2
PROBLEM IN CASES
CA FOUNDATION BUSINESS LAW

•     PROBLEM 1

•      A PROMISE TO CONTRIBUTE RS 5000 FOR REPAIRS OF TEMPLE. THE TRUSTEE OF  TEMPLE RELYING ON A ‘S PROMISE INCUR CERTAIN LIABILITIES. A LATER ON DOES NOT PAY THE AMOUNT CAN TRUSTEE TAKE ACTION AGAINST HIM.

•     ANSWER : A PROMISE TO SUBSCRIBE TO A PUBLIC OR A CHARITABLE OBJECT IS UNENFORCEABLE BECAUSE THERE IS NO BENEFIT TO THE PROMISOR

•    BUT WHERE THE OTHER PARTY HAS UNDERTAKEN A LIABILITY ON THE FAITH OF THE PROMISE MADE BY  THE PROMISOR,IT IS ENFORCEABLE

•    IN THIS CASE TRUSTEE CAN TAKE ACTION AGAINST A

•     RELEVANT CASE
KEDAR NATH V GORI MOHAMMAD

1.       D HAD AGREED TO SUBSCRIBE RS 100 TOWARDS THE CONSTRUCTION OF A TOWN HILL AT HOWARH

2.       P THE SECRETARY OF THE COMMITTEE ON THE FAITH OF THE PROMISE CALLED FOR PLANS AND ENTRUSTED THE WORK TO THE CONTRACTORS AND UNDERTOOK THE LIABILITY TO PAY THEM

3.       D REFUSED TO PAY THE PROMISED AMOUNT AND P BROUGHT A SUIT AGAINST HIM

4.       HELD THAT THOUGH THE PROMISE WAS TO SUBSCRIBE TO A CHARITABLE INSTITUTION AND THERE WAS NO BENEFIT TO D ,YET IT WAS SUPPORTED BY CONSIDERATION IN THAT P THE PROMISOR SUFFERED A DETRIMENT IN HAVING UNDERTAKEN THE LIABILITY TO THE CONTRACTOR ON THE FAITH OF THE PROMISE MADE  BY D

•     RELEVANT CASE

•      BUT WHERE NOTHING HAS BEEN DONE IN FURTHERANCE OF THE OBJECT OF THE FUND RAISED A PROMISES SUBSCRIPTION IS NOT LEGALLY RECOVERABLE

•     ABDUL AZIZZ V MAZUM ALI

1.       DD PROMISED RS 500 TO A FUND FOR P REBUILDING A MOSQUE

2.       NOTHING HAD BEEN DONE TO CARRY OUT REPAIRS AND RECONSTRUCTION

3.       THE SECRETARY OF THE MOSQUE FILED A SUIT FOR THE RECOVERY OF RS 500

4.       IT WAS HELD THAT THE PROMISE WAS NOT ENFORCEABLE BECAUSE D WHO MADE THE PROMISE GAINED NOTHING IN RETURN FOR THE PROMISE MADE

5.       THE SECRETARY OF THE COMMITTEE TO WHOM THE PROMISE WAS MADE SUFFERED HAD BEEN DONE TO CARRY OUT THE REPAIRS.

•     PROBLEM 2

•     AFTER THE VAKIL HAD ACCEPTED THE CASE AND SIGNED THE VAKALATNAMA,THE CLIENT SAYS,” IF YOU DO YOUR ALMOST TO WIN THE CASE. I WILL GIVE YOU RUPEES 1000 MORE. THE CASE IS WON.CAN THE VAKIL CLAIMS RS 1000

•     ANSWER :  A PROMISE TO DO WHAT ONE IS ALREADY BOUND TO DO EITHER BY GENERAL LAW OR UNDERTAKE AN EXISTING CONTRACT IS NOT A GOOD CONSIDERATION FOR NEW PROMISE. THERE WILL BE NO DETRIMENT TO THE PROMISEE OR BENEFIT TO THE PROMISOR OVER ABOVE THEIR EXISTING RIGHTS OF OBLIGATIONS.

•     HERE THE VAKIL CAN NOT CLAIM RS 1000. THE VAKIL HAVING ACCEPTED THE VAKALATNAMA IS UNDER A DUTY TO RENDER THE BEST SERVICE AS AN ADVOCATE

•     REL EVANT CASE
COLLINS V GODFREY

1.       A PROMISE TO PAY MONEY TO A POLICE OFFICER TO INVESTIGATE INTO A CRIME.

2.       THE AGREEMENT WAS HELD TO BE INVALID BECAUSE THE OFFICER IS ALREADY UNDER THE DUTY TO DO SO BY LAW

BUT WHERE A PERSON AGREES TO DO MORE THAN HIS OFFICIAL DUTY,THIS WILL BE A GOOD CONSIDERATION FOR THE PROMISE.

•     PROBLEM 3

1.       A IS AN ILLITERATE OLD MAN OF ABOUT 90 YEARS PHYSICALLY INFIRM AND MENTALLY IN DISTRESS

2.       HE MADE A GIFT OF HIS ENTIRE PROPERTY IN FAVOUR OF B HIS NEAREST RELATIVE WHO WAS LOOKING AFTER HIM ( A) AND HIS BUSINESS

3.       CAN A SUBSEQUENTLY AVOID THE CONTRACT OF GIFT? IF SO ON WHAT GROUND

•     SOLUTION TO PROBLEM 3

YES ,A CAN AVOID THE CONTRACT OF GIFT ON THE PLEA OF UNDUE INFLUENCE 16(2)

UNDER 16 OF THE INDIAN CONTRACT ACCOUNT PROVIDES THAT A CONTRACT IS SAID TO BE INDUCED BY UNDUE INFLUENCE WHERE THE RELATIONS SUBSISTING BETWEEN THE PARTIES ARE SUCH THAT ONE OF THE PARTIES IS IN POSITION TO DOMINATE THE WILL OF THE OTHER AND USES THE POSITION TO OBTAIN AN UNFAIR ADVANTAGE OVER THE OTHER.

WHEN CONSENT TO AN AGREEMENT IS CAUSED BY THE INFLUENCE , THE AGREEMENT IS A CONTRACT VOIDABLE

SUCH A CONTRACT MAY BE SET ASIDE EITHER ABSOLUTELY OR SUBJECT THE RESTITUTION OF HE BENEFIT THEREUNDER OR UPON SUCH CONDITIONS AS THE COURT MAY DEEM JUST

•     RELEVANT CASES

•      RANEE ANNAPURNI V SWAMINATHA,” A POOR HINDU WIDOW WAS IN DIRE NEED OF THE MONEY WAS FORCED BY THE MONEY LENDER TO AGREE TO PAY 100% RATE OF INTEREST. HELD TO BE A CASE OF EXERTING UNDER INFLUENCE UPON A PERSON IN MENTAL DISTRESS

•     MOODY AND COX ,” A SOLICITOR SOLD CERTAIN PROPERTY TO ONE OF HIS CLIENTS

•     THE CLIENT SUBSEQUENTLY ALLEGED THAT PROPERTY WAS OVERVALUED AND HIS CONSENT WAS CAUSED BY UNDUE INFLUENCE. THE COURT HELD THAT SINCE THE RELATIONSHIP OF THE SOLICITOR AND CLIENT IS FIDUCIARY NATURE,THE EXISTENCE OF UNDUE INFLUENCE CAN BE PERSUMED TO EXIST

•     PROBLEM 4

•      X SELLS A HORSE TO Y FOR RS 1200 BUT UNKNOWN TO BOTH THE PARTIES AT THE TIME OF THE  TRANSACTION THE HORSE WAS DEAD. DISCUSS THE RIGHTS AND LIABILITIES OF BOTH THE PARTIES

•     SOLUTION TO PROBLEM AT 4

•     A MISTAKE OF THE FACT IN THE MIND OF THE BOTH THE PARTIES NEGATIVE CONSENT AND THE CONTRACT BECOMES VOID

•     SECTION 20 PROVIDES  WHERE BOTH THE PARTIES TO AN AGREEMENT ARE UNDER A MISTAKE AS TO A MATTER OF FACT ESSENTIAL TO THE AGREEMENT THE AGREEMENT IS VOID.

•     THE PARTY MAY BE MISTAKEN AS TO SUBJECT MATTER OF THE CONTRACT AT THE DATE OF THE CONTRACT AND THE CONTRACT IS VOID.

•     PROBLEM 5

1.       X A DOCTOR IN JALANDHAR ENGAGES Y AS HIS ASSISTANT  FOR A PERIOD OF THREE YEARS ON THE CONDITION THAT AFTER THE EXPIRY OF THREE YEARS

2.       Y IS NOT TO PRACTICE IN JALANDHAR ON HIS OWN FOR A PERIOD OF 5 YEARS

3.       AFTER THE FIRST THREE YEARS HAD EXPIRED AND Y IN BREACH  OF HIS AGREEMENTS STARTS PRACTICING IN JALANDHAR

4.       CAN X RESTRAIN Y FROM PRACTISING

•     SOLUTION TO PROBLEM 5

1.       NO X CANNOT RESTRAIN Y FROM PRACTICING IN CHANDIGARH BECAUSE IT IS  IN RESTRAINT OF LAWFUL PROFESSION AND HENCE VOID

2.       SINCE AGREEMENTS OFTEN CONTAIN A CLAUSE PROHIBITING EMPLOYEES FROM ENGAGING IN OTHER EMPLOYMENT OR BUSINESS DURING THE TENURE OF SERVICE

3.       SUCH AGREEMENT ARE NOT CONSIDERED AGREEMENTS FROM SUCH ACTIVITIES EVEN AFTER TERMINATION OF EMPLOYMENT ARE CONSIDERED VOID.

•     RELEVANT CASE

•      CHARLES V MACDONALD

1.        A AGREED TO BECOME ASSISTANT FOR THREE YEARS TO B WHO WAS A DOCTOR PRACTICING AT THE ZANZIBAR . IT  WAS AGREED THAT DURING THE TERM OF AGREEMENTS A WAS NOT TO PRACTICE ON HIS OWN ACCOUNT IN ZANZIBAR

2.       AT THE END OF ONE YEAR, A CEASED TO ACT AS B’S ASSISTANT AND BEGAN TO PRACTICE ON HIS OWN ACCOUNT

3.       HELD THAT AGREEMENT WAS VALID AND A COULD BE RESTRAINED BY AN INJUNCTION FROM DOING SO.