IGNOU| MERCANTILE LAW (ECO - 05)| SOLVED PAPER – (DEC - 2023)| (BDP)| ENGLISH MEDIUM
BACHELOR'S DEGREE PROGRAMME
Term-End Examination
December - 2023
ELECTIVE COURSE: COMMERCE
ECO-05
MERCANTILE LAW
Time: 2 hours
Maximum Marks: 50
Note: Answer any five questions. All questions carry equal marks.
हिंदी माध्यम: यहां क्लिक करें
1. (a) “An invitation to offer is not an offer.”
Comment. 4
Ans:-
Within the scope of business law an invitation to offer is a different concept
from an actual offer. From a legal point of view, an invitation to offer is not
a binding offer, but rather serves as a preliminary step to begin negotiations.
This distinction is important because it makes it clear that the party making
the invitation is not bound to accept any subsequent offer. For example, when a
shopkeeper displays goods with a price tag, it is an invitation to customers to
make an offer, not a fixed offer.
In short, an
invitation to offer sets the stage for a potential business transaction by
indicating a willingness to engage in negotiations without creating a legal
obligation. This principle protects parties from unknowingly entering into a
contract before mutually agreeing to the terms.
(b) Explain
briefly the legal rules for a valid acceptance. 6
Ans:- Here is
a brief explanation of the legal rules for valid acceptance in contract law:-
For an
acceptance to be valid and form a binding contract, it must satisfy the
following requirements:-
(i) Acceptance
must be made by the offeree to whom the offer was made. The offeror cannot
assign the acceptance to any third party.
(ii)
Acceptance should be complete and unconditional. It cannot add any new
terms or materially change the offer ("mirror image rule"). However,
under the UCC, a different acceptance from the offer is still valid without
changes, becoming an offer for a new agreement.
(iii)
Intimation of acceptance must be given to the proposer. Silence is generally
not acceptance, unless the offeree takes advantage of the offer or the
circumstances clearly indicate acceptance by silence.
(iv) The
acceptance must be made within the time specified in the offer or, if no
time is specified, within a reasonable time. If it takes too long for the
offeror to accept, the offer expires.
(v) Acceptance
should be made in the manner specified by the offeror. If no method is
specified, any reasonable method of communication is valid.
(vi) If the
offer is made by mail, acceptance is valid upon transmission (“Mailbox
Rule”). However, revocation of the offer is effective only when received by the
offeror.
In short, for
a valid acceptance, the offeree must clearly agree to all the material terms of
the offer, inform the offeree of the acceptance within a reasonable time and in
the manner specified, and not materially alter the offer. should do. The UCC
provides some exceptions to the traditional "mirror image" rule.
2. Who is a minor? Examine the legal position of minor as
(a) an agent (b) a promisee (c) a partner and (d) a shareholder. 2, 8
Ans:- A minor is a person who has not attained the
age of majority, which is 18 years of age in most jurisdictions.
In India, a
minor is one who is under the age of 18, as defined by the Indian Majority Act
of 1857. According to the Indian Contract Act of 1872, the capacity of a minor
to contract depends on three factors:
(a) Age:
If a person is below 18 years of age then he is considered a minor.
(b) Soundness
of mind: A person is considered to be of sound mind if he can understand
the contract and its effect on his interests.
The legal
status of a minor in various capacities is as follows:-
(a) Minor
as an agent: A minor cannot be an agent, because the agency is created by a
contract between the principal and the agent. Since minors lack the capacity to
contract, they cannot become agents.
(b) Minor
as promisee: A minor may be a promisee in a contract, but not the promisee.
If a minor has performed his promise in a contract, he can enforce the contract
against the other party, even if the contract is voidable against the minor.
(c) Minor
as a partner: A minor cannot be a partner, because the partnership is
created by a contract between the partners. Since minors lack the capacity to
contract, they cannot become partners. However, a minor may be included in the
profits of the partnership with the consent of all partners.
(d) Minor
as shareholder: A minor can be a shareholder in a company. However, the
shares of the minor will remain with his guardian, who will exercise voting
rights on behalf of the minor. The minor cannot directly exercise his rights as
a shareholder until he attains majority.
In conclusion,
while in most cases a minor lacks the capacity to contract, they can still be a
promisor in a contract, a shareholder in the company, and share in the profits
of the partnership. However, they cannot be agents, promisors or participants
in a contract.
3. What is ‘quantum meruit’? Explain the circumstances
when the claim for quantum meruit arises. 2, 8
Ans:- Quantum meruit is a legal claim to the
defendant for payment of a fair amount for services rendered, even if there was
no contract or the contract was invalid. The Latin phrase quantum meruit means
"what one has earned" or "the amount one is entitled to".
A claim for
quantum meruit may arise in the following circumstances:-
(i) The
parties have not agreed to a contract
(ii) is a
quasi-contract
(iii) The work
done is beyond the scope of the original contract
(iv) The
parties have not fixed any price for the services supplied
(v) There is
an agreement between the parties to pay a reasonable amount for the services
supplied
(vi) The
contract outlines the scope of work but does not include the exact price
(vii) Customer
requests work outside the contracted contract
(viii) any
agreement is found to be invalid or becomes void
(ix) A party
does some work or provides services without intending to do so 'for free'.
(x) There is a
contract to provide services (express or implied) but there is no mention of
remuneration
Quantum meruit
is a separate type of remedy from a lawsuit that can be filed for breach of
contract. It is an agreement to pay a fair amount for the labor and materials
provided.
4. What is consideration? Explain the circumstances under which a
contract without consideration is valid. 2, 8
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