Section A :-

1) What is a general offer?

An offer made to all shareholders of a company for the purchase of their shares. The purchase price could be in
cash or in shares of a predator company or a combination of both.

2) When is a person said to be of unsound mind?

3) What is Misrepresentation?
Misrepresentation is a contract law concept. It means a false statement of fact made by one party to another
party, which has the effect of inducing that party into the contract. For example, under certain circumstances,
false statements or promises made by a seller of goods regarding the quality or nature of the product that the
seller has may constitute misrepresentation. A finding of misrepresentation allows for a remedy of rescission
and sometimes damages depending on the type of misrepresentation.

4) Is past consideration valid in Indian Law?

When the consideration of one party was given before the date of promise, it is called past consideration.
Suppose X does a work for Y (without expecting any payment) in the month of January. However, in February, Y
promises to pay some money. Here, the consideration of X is past consideration.
Under Indian Law, past consideration is good consideration because the definition of consideration is section
2(d) includes the words “has done or abstained from doing”.

5) Define a contract of Insurance?

An insurance contract is a "contract under which one party (the insurer) accepts significant insurance risk from
another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future
event (the insured event) adversely affects the policyholder."

6) What is Negotiable Instrument?

A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on
demand, or at a set time. According to the Negotiable Instruments Act, 1881 in India there are just three types
of negotiable instruments i.e., promissory note, bill of exchange and cheque.

7) Define the term “goods”.

Goods are the articles, creations, properties that are made purchased or otherwise possessed for the purpose of
transferring them for a price or consideration in the course of business.

8) Under what circumstances the rule of Caveat Emptor is applicable?

Caveat Emptor (Let the buyer beware) is a warning that notifies a buyer that the goods he or she is buying are
"as is," or subject to all defects. When a sale is subject to this warning the purchaser assumes the risk that the
product might be either defective or unsuitable to his or her needs. This rule is not designed to shield sellers
who engage in Fraud or bad faith dealing by making false or misleading representations about the quality or
condition of a particular product. It merely summarizes the concept that a purchaser must examine, judge, and
test a product considered for purchase himself or herself.

9) Explain the term Property in Goods.

The property in the goods is said, to be transferred from the seller to the buyer when the latter acquires the
proprietary rights over the goods and the obligations linked thereto. 'Property in Goods' which means the
ownership of goods, is different from ' possession of goods' which means the physical custody or control of the
goods.
 10) When are goods deemed to be in transit?
Goods in transit refers to merchandise and other inventory items that have been shipped by the seller, but have
not yet been received by the purchaser.

11) Who is a private carrier?

Private Carrier is one who provides transportation or delivery of goods for money, just for the particular
instance, and not as a regular business.

12) What is a “Bill of Lading”?

A bill of lading (BL - sometimes referred to as BOL or B/L) is a document issued by a carrier to a shipper,
acknowledging that specified goods have been received on board as cargo for conveyance to a named place for
delivery to the consignee who is usually identified.

13) Define “Corporate Veil”.

Legal concept that separates the personality of a corporation from the personalities of its stockholders
(shareholders), and protects them from being personally liable for the firm's debts and other obligations.

14) Distinguish between Public and Private Company.

Public Company Private Company

15) What is the difference b/w Direct and Indirect Taxes?

Direct Taxes Indirect Taxes

Section B:-

‘Consideration is essential and necessary element of binding contract’. Discuss

It means, both parties in under a contract must receive something. If only one side gets "consideration" then its not a
valid contract. Example, I want to buy your car for $500. So, I get $500 and I get a car. This is mutual consideration. On
the flip side, if I get the money and I don’t get the car for whatever reason, then there is NO mutual consideration as I
am paying the money but I am getting nothing for it. This is not a valid contract.

Fraud and its effect on the validity of contract.

"Fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by
his agents, with intent to deceive another party thereto his agent, or to induce him to enter into the contract;
 (1) the suggestion as a fact, of that which is not true, by one who does not believe it to be true;
 (2) the active concealment of a fact by one having knowledge or belief of the fact;
 (3) a promise made without any intention of performing it;
 (4) any other act fitted to deceive;
 (5) any such act or omission as the law specially declares to be fraudulent.
A contract is voidable on the grounds of Fraud.

Remedies in case of breach of contract.

(1) Compensatory Damages - money to reimburse you for costs to compensate for your loss.
(2) Consequential and Incidental Damages - money for losses caused by the breach that were foreseeable. Foreseeable
damages means that each side reasonably knew that, at the time of the contract, there would be potential losses if
there was a breach.
(3) Attorney fees and Costs - only recoverable if expressly provided for in the contract.
(4) Liquidated Damages - these are damages specified in the contract that would be payable if there is a fraud.
(5) Specific Performance - a court order requiring performance exactly as specified in the contract. This remedy is rare,
except in real estate transactions and other unique property, as the courts do not want to get involved with monitoring
performance.
(6) Punitive Damages - this is money given to punish a person who acted in an offensive and egregious manner in an
effort to deter the person and others from repeated occurrences of the wrongdoing. You generally cannot collect
punitive damages in contract cases.
(7) Rescission - the contract is canceled and both sides are excused from further performance and any money advanced
is returned.
(8) Reformation - the terms of the contract are changed to reflect what the parties actually intended.

Is contract of Insurance a wager? Explain.

Wagering and gambling have historically been condemned by organized religions as a challenge to pre-destination as
ordained by the divine. Insurance, the act of mitigating the risk of total disaster, is seen as good. Yet it is possible for
speculators to gamble with insurance by investing money in mutual insurance funds in the hope of a greater return.
Differences in Intent
Gamblers take unnecessary risks. Insurers are seeking to prevent catastrophic losses when probable events like fires and
earthquakes occur. Wagering is an attempt to earn money. Insurance only pays to repair or replace destroyed property.
There is no profit motive in insurance.
Differences in Legal Enforcement
Wagers are not enforceable in court. You cannot sue for the unpaid gambling debt. Insurance contracts are legally
enforceable in court. The only restrictions are that premiums were paid and that the damage is covered by the insurance
contract. If so, the insured party can sue for payment.
Differences in Events
Insurance covers losses in case of specific events. For example, flood insurance only pays when property in a flood plain
is damaged in a flood. The risk is known, only the timing is unknown. Wagers cover arbitrary events like dog races or
lotteries. The outcome is unknown, though the time the outcome is revealed is listed on a schedule.

Define Promissory note. Distinguish from Bill of Exchange.

A promissory note is a written, dated and signed two-party instrument containing an unconditional promise by the
maker to pay a definite sum of money to a payee on demand or at a specified future date.

Bill Of Exchange Promissory Note

There are three parties namely drawer, drawee and payee There are only two parties viz maker and payee

The drawer and payee may be the same person Maker cannot be the payee

There is an unconditional order to drawee to pay according to Contains an unconditional promise by the maker to pay
the drawer’s direction to the payee or to his order

Payable after sight must be accepted by the drawee or someone Presented for payment without any prior acceptance by
else on his behalf before it can be presented for payment the maker

Liability of a maker of promissory note is primary and

The liability of the drawer is secondary and conditional
absolute.

Rules determining the amount of compensation payable in case of dishonor of instrument.

Rules as to compensation (sec.117)
The liable party should compensate all the charges like noting and protesting etc.,
-Compensation to holder of the instrument
-Re-exchange in case foreign holder of instrument
-Compensation to endorser (with 18% interest)
-Re-draft
Penalties for dishonored cheques by insufficiency of funds (sec.138)
-imprisonment which may extend to 2 years or fine twice the amount or both
Contract of Sale. Difference b/w Sale and Agreement to Sell.
A contract of sale is a legal contract of an exchange of goods, services or property to be exchanged from seller (or
vendor) to buyer (or purchaser) for an agreed upon value in money (or money equivalent) paid or the promise to pay
same. It is a specific type of legal contract.

Sale Agreement to sell

Sale is an executed contract
In sale property transfers immediately at the time of sale
A sale creates jus-in-ram (right against the whole world).
case of sale risk passes along with the property
In sale seller has no right to resale the goods because
ownership has been passed
On insolvency of buyer, the official receiver can claim
delivery of goods from the seller in case of sale
On insolvency of seller in sale the buyer can compel official
receiver to deliver the goods to him.
Agreement to sell is an executory contract
In agreement to sell property is transferred after
sometime.
Agreement to sell creates jus-in-personam (right against an
individual)
In case of agreement to sell as the property is not
transferred, risk is also not transferred.
In agreement to sell, the seller can resale the goods.  The
original buyer can only claim damages for breach of
contract.
In agreement to sell; if buyer becomes insolvent the seller
can refuse to deliver the goods unless he is paid in full.
 In agreement to sell, the buyer cannot compel the seller.