IGNOU| MERCANTILE LAW (ECO - 05)| SOLVED PAPER – (DEC - 2022)| (BDP)| ENGLISH MEDIUM
BACHELOR'S DEGREE PROGRAMME
(BDP)
Term-End Examination
December - 2022
ECO-05
MERCANTILE LAW
Time: 2 Hours
Maximum Marks: 50
Note: Answer five questions. All questions carry
equal marks.
1. Define the term offer. Explain the legal rules regarding a valid offer. 2, 8
Ans:- In business law, an offer is an offer made by
one party to another to enter into a binding contract. An offer is one of the
three important components of a legal contract.
The word
“offer” has been defined in Section 2(a) of the Indian Contract Act, 1872 as
follows:-
"When one
person indicates to another his willingness to do or refrain from doing
anything with a view to obtaining the consent of the other to such act or abstinence,
he is said to make an offer".
A proposal
should be:-
(i) specific
(ii) complete
(iii) capable
of accepting
(iv) Made with
the intention of being bound by the acceptance
An offer may be
rescinded, terminated, or negotiated. The offeror generally cannot withdraw the
offer once it has been accepted by the other party.
Other types
of offers include:- tender offers, conditional offers, open offers, subject
offers, qualified offers.
An offer is a
conditional offer made by a buyer or seller to buy or sell an asset, which
becomes legally binding if accepted. An offer is also defined as the act of
offering something for sale or submitting a bid to buy something.
A valid offer
must satisfy the following criteria:-
(i)
Communicate: The proposal should be communicated clearly and compellingly.
This may involve actions, oral communication or writing.
(ii) Definite
and definite: The proposal should not be definite, definite and vague. This
must be communicated in an understandable manner to all parties involved.
(iii) Creates
legal liability: The offer should create legal liability.
(iv) Made for
the purpose of obtaining the consent of the offeree: The offer must be made
for the purpose of obtaining the consent of the other party.
(v) Separate
the offer from the invitation: The offer should be separated from the
invitation.
(vi) No
negative condition: There cannot be any negative condition in the offer.
For example, he cannot say that if notice of acceptance is not given by a
certain time it will be deemed accepted.
An offer may be
express or implied, general or specific, and may be made to a group, an
individual or the public at large.
An offer is not
valid until the offeror has accepted it. It can be withdrawn before acceptance,
but cannot be cancelled. The Indian Contract Act, 1872 defines the conditions
of offer and acceptance. Section 2(a) of the Act states that an offer is a
definite and authentic expression of willingness to contract on specific terms.
2. "A stranger to a contract cannot sue."
Discuss. Are there any exceptions to this rule? Explain. 4, 6
Ans:- A "stranger to the contract" is a
person who is not a party to the contract. A person who is ignorant of a
contract cannot sue on the contract, even if the contract is made for his
benefit. This is because a contract cannot confer rights or impose obligations
on anyone other than its parties.
Even a person
ignorant of the contract cannot enjoy the benefits arising from the contract.
This is similar to the principle of consideration, which says that a person who
is not a party to the consideration has no right to sue on the contract.
However, if a
party to a contract is a stranger to the consideration, it does not affect his
legal rights under the contract. For example, a promise for past consideration
is enforceable only if the promisee has received some benefit from that
consideration.
A person who is
ignorant of a contract cannot enjoy benefits arising from the contract and he
cannot sue on the contract. This is similar to the principle of consideration
which states that a person, who is not a party to the consideration, has no
right to sue on the contract.
In general case,
a person ignorant of the contract cannot file a suit in case of breach of
contract. Strangers to the contract means all persons who are not parties to
the contract.
The following
are important exceptions to the general rule that a stranger cannot sue for a
contract:-
(i) Trust:
In case of trust, the beneficiary can file a case against the trustee in case
of breach of contract. Here, the stranger to the contract (the beneficiary) can
sue in the contract.
(ii) Where
the marriage agreement provides: In some cases, an agreement will be made
between the father of the groom and the father of the bride, whereby it is
agreed that in consideration of the marriage, the father of the groom will pay
a certain sum of money to the daughter-in-law. Will pay. , the don
daughter-in-law can sue the groom's father (beyond the contract) if he violates
the contract.
(iii)
Contract made through an agent: In a contract of agency, the principal will
appoint a person as agent to represent him in various contracts. The principal
can sue on the contract which was entered into between his agent and a third
party.
(iv) An
assignee can sue in a contract of assignment: A contract of assignment is
an agreement made between two parties in which one party (the assignor) agrees
to transfer his rights to the other party called the assignee . An assignee can
sue the principal debtor if there is a breach of contract.
(v) Where
provision is made for partition of family property or maintenance of female
members: When in the case of HUF (Hindu Undivided Family) the agreement is
made with respect to partition of family property or maintenance expenses of
female members If so, the female member can do it. Sue the male member for
breach of contract, even if he is a stranger to the contract.
3. Distinguish between the following: 5, 5
(a) Coercion
and undue influence
Ans:- Difference
between coercion and undue influence:-
Key points
of difference between coercion and undue influence Let us take a look at some
quick points of similarity and difference between the two:-
(i) Coercion
refers to using physical force or threat to make someone do something against
his will, while undue influence refers to persuasion or manipulation to obtain
undue advantage.
(ii) Coercion is
generally considered a criminal act, whereas undue influence may be civil,
social or political.
(iii) Coercion
is usually physical in nature, whereas undue influence is psychological or
emotional.
(iv) Coercion
involves the use of physical force or threat of physical harm, while undue
influence is exerted by using emotional manipulation or persuasion.
(v) Coercion is
often used by strangers or criminals, while undue influence is often used by
people in positions of trust or authority.
(vi) Coercion is
often used in situations of immediate threat, while undue influence is used in
ongoing relationships where the dependent person is in an inferior position to
the manipulator.
(vii) Coercion
is often illegal and punishable by law, while undue influence is not always
illegal, but may be grounds for legal action if it causes clear indications of
harm.
(viii) Coercion
usually leaves the victim in a state of immediate fear and distress, whereas
undue influence may not be immediately recognized by the victim.
(ix) Coercion
may be directed towards a specific act, while undue influence may be directed
at a person's overall behavior or decision making process.
(b)
Misrepresentation and fraud
Ans:- Fraud:
Fraud can be defined as intentionally presenting false information to deceive
another party and induce them to enter into a contract.
Fraud occurs
when a person actively conceals a fact or set of facts from another party,
despite knowing that those facts are true and current. To prove fraud, you must
show that an act was done intentionally to cause harm. Let's look at an example
to understand the term "fraud" better.
Misrepresentation:
Misrepresentation can be defined as the unintentional act of providing false
information to another party.
Misrepresentation
occurs when a party who believes some fact or information to be true sends the
same information to another party without any ulterior motive. The other party
relies on the statement or information and enters into the contract. But, later
it was found that the information given or told was false.
It is important
to remember that in misrepresentation, both parties are unaware that the information
is false and enter into the contract believing that it is true. Let us look at
an example to better understand the term “misrepresentation”.
Difference
between fraud and misrepresentation:-
Some of the
major differences between fraud and misrepresentation are:-
(i) The Indian
Contract Act of 1872 defines fraud in Section 17 and misrepresentation in
Section 18.
(ii)
Misrepresentation is not intended to deceive the other party, whereas fraud is
intended to deceive the other party.
(iii) In case
of fraud, the injured party can sue for compensation. However, in case of
misrepresentation, the injured party cannot sue for compensation.
(iv) In fraud,
the party making the representation is aware of the truth, but in
misrepresentation, the party is ignorant of the truth.
(v) Fraud can
be defined as knowingly and knowingly presenting false information to another
party to deceive and induce them to enter into a contract. Whereas
misrepresentation can be defined as the unintentional act of providing false
information.
Conclusion:
The primary
difference between fraud and misrepresentation is the party's intention. In
fraud, one party makes a false statement to deceive another contracting party.
In misrepresentation, the party makes a false statement believing it to be
true, with no intention to deceive the other contracting party.
4. Discuss in detail the doctrine of supervening
impossibility. 10
[COMING SOON]
***
MERCANTILE LAW SOLVED PAPERS PAGE LINK - Click here
IGNOU PAGE LINK - CLICK HERE
Also Read: