3.c)What do you mean by bailment? State the duty and rights of bailer and bailee.

Bailment describes a legal relationship in common law where physical possession of personal property, or a
chattel, is transferred from one person (the "bailor") to another person (the "bailee") who subsequently
has possession of the property. It arises when a person gives property to someone else for safekeeping, and is a
cause of action independent of contract or tort.

Duty of bailer are:-

Duty to dispose faults: Bailer should disclose faults present in goods at the time of making delivery. Faults
are of two types namely ; Known faults and Un-known faults. On the other hand bailments also are of two
types namely Gratuitous bailment and Non-Gratuitous bailment. In case of gratuitous bailment, bailer is
liable to compensate for bailee injuries arising out of known faults. In Gratuitous bailment, bailer is not
answerable to un-known faults. In case of Non-Gratuitous bailment, bailer is answerable to both known
faults and Un-known faults.
Duty to contribute for expenses: Bailer should Contribute for expenses incurred by bailee. In case of
Gratuitous bailment, bailer need not contribute for ordinary expenses and extra ordinary expenses or to the
contributed by bailer. In case of Non-Gratuitous bailment, bailer should contribute for both ordinary
expenses and extra ordinary expenses.
Duty with regard to defective title: In case where bailer has delivered the goods with defective title, the
bailee may come across suffering from the side of true owner due to bailers defective title. In such a case
bailer with defective title should compensate bailee.
Duty to Indemnify: Principal of indemnity operates between bailer and bailee, where bailer becomes implied
indemnifier and bailee becomes implied indemnity holder. So bailer has duty to indemnify bailee.
Duty to take the Goods back: After fulfillment of purpose bailee returns the goods to bailer. Then bailer
should take them back. If bailer refuses to take the goods back, bailer has to compensate bailee.
Rights of bailer are :-

If bailee does not take care and destruction of goods takes place, bailer can claim compensation.
If bailee uses the goods for un-authorized purposes, bailer has the right to claim compensation.
Bailer has the right to claim return of goods.
Bailer has right to claim not only delivered goods but also accruals on goods if any.
In case where bailee has mixed the goods and they are of sufferable nature, bailer can claim cost of
separation from bailee.
In case where the goods are of insufferable nature, bailer has right to claim compensation.
Bailer has right to repudiate the Contract of bailment whenever he wants but, by doing so, if bailee comes
across any suffering, bailer has to compensate.

Duty of bailee:-

Bailee should take reasonable care on goods.

Bailee should not use the goods for an unauthorized purpose.
Bailee should not setup adverse title.
Bailee should return the goods after fulfillment of purpose.
Bailee should return not only delivered goods, but also additions.
Bailee should not mix up the goods with his own goods or others goods. If bailee has mixed the goods and
the goods are of sufferable nature, bailee has to face the cost of separation. If the goods are of insufferable
nature, bailee has to compensate bailer.
Rights of bailee:-
 Bailee has right to claim compensation for injuries arising out of faults present in goods, If it is gratuitous
bailment, bailee can make bailer answerable with regard to known faults only. But not to un-known faults. In
case of Non-gratuitous bailment bailee can make bailer answerable to known as well as un-known faults.
Bailee has right to claim contribution for expenses. If it is Gratuitous bailment, bailee can claim only
extraordinary expenses. But in case of Non-Gratuitous bailment, bailee can claim both ordinary and ordinary
expenses.
In case where bailer has given goods with defective title and bailee, therefore, comes across suffering, then
such bailee has right to get compensated by defective titled bailer.
Bailee has right of indemnity, for making involvement in bailment Contract, bailer can make bailee
answerable.
Bailee has right of lien. It is only particular lien. That means he can exercise right of lien against those goods
only on which amount is due.
Bailee can return the goods to any one of the joint owners.
In times of need Bailee has right to approach Court of law.

b)State and explain the essential of valid offer and acceptance.

Essentials of Valid Offer

It may be express or implied

It must create legal relations

It must be definite and clear

It is different from invitation to offer

It may be specific or general

It must be communicate to offeree

It should not contain negative condition

It may be subject to any terms and conditions

It must not contain cross offers

Essentials of Valid Acceptance

Acceptance should be made in the method specified by offerer: When offer is made, acceptance should
be made in the method specified by offerer. For Example: Mr. A has made an offer and adds that if any
person wants to give any acceptance he has to raise his hand. Now, to give acceptance that method only is to
be adopted.

Acceptance given to revoked offer is not valid: When an Offer is revoked, the acceptance given to
revoked offer is not valid. Offer must be revoked before acceptance.

Acceptance given to renewed offer is Valid: It might have been revoked previously. It is sufficient if
offer is in force at the time of acceptance.
 Acceptance must be absolute: That means acceptance should be given to entire offer. Partial acceptance
is not Valid. It can be analyzed that partial acceptance is nothing but conditional acceptance and therefore
Counter offer.

Acceptance must be communicated in the method specified by offerer: When an offer is made for the
same, acceptance must be communicated in the method specified by offerer. For example: an offerer has
suggested to communicate acceptance by means of registered post then such channel only should be
adopted.

Acceptance is Irrevocable: When once acceptance is given. It cannot be taken back under any
circumstances. Soon after acceptance contract comes into force and binds over the parties. So, revocation of
acceptance is nothing but breach of contract. Thus it is aptly said that acceptance is like a lighted match stick
to a train of gun powder.

2.a)Define an agent and a principal.

Agent
An agent is under the control (is obligated to) the principal, and (when acting within the scope of authority
delegated by the principal) binds the principal with his or her acts. Additional powers are assigned to agent
under the legal concept of 'apparent authority.' The agent, however, does not have title to the principal's
goods in his or her possession, except where agent's lien is applicable. In general, advertising agencies do
not fall under this definition of an agent, because they act as principals for the services they buy on behalf of
their clients.

Principal
In commercial law, a principal is a person, legal or natural, who authorizes an agent to act to create one or
more legal relationships with a third party

b)What do you mean by surety?How surety is different than an indemnifer?

A surety contract is a legally binding agreement that the signee will accept responsibility for another
individual's contractual obligations, usually the payment of a loan if the principal borrower falls behind or
defaults. The person who signs this type of contract is more commonly referred to as a cosigner.
Indemnifer promises to carry some of the obligations but he is not bound to perform the promise as surety.In
this way they different.

c)Define non gratuitous bailment.

Gratuitous bailment is a type of bailment in which the bailee receives no compensation. For example,
borrowing a friend's car. A gratuitous bailee is liable for loss of the property only if the loss is caused by the
bailee's gross negligence.

d)State the rules of contract of agency.

1. There should be an agreement between the principal and the agent :Agreement may be: Express or
implied

2. The agent must act in the representative capacity.

3. The principal must be competent to contract.

4. The agent need not be competent to contract. Why? But in the interest of the principal?

5. The consideration is not necessary.

e)What is auction sale?

A sale by auction is a public sale where various intending buyers offer bids for the goods and try to outbid
each other. Ultimately, the goods are sold to the highest bidder. An auction sale is complete when the
auctioneer announces its completion by the fall of the hammer or in other customary manner.