Professional Documents
Culture Documents
Contract of indemnity
Meaning of indemnity
Distinction between English and Indian law
Right of indemnity holder
Inabilities of indemnifier
Rights of indemnifier
Indemnity in English law means a promise to save a person harmless from the consequence of an act,
the promise may be expressed or implied in the circumstances of the case.
Contract of indemnity-(sec 124) A contract by one person to make good for any loss or damage to
another party while acting at his request or for his benefit. Eg- An contract of insurance.
Adamson v. Jarvis, (1827) cattle and auction
Ainstructed B to sell the cattle in an auction. After the sale of the cattle C claims the money of the
sale of the cattle saying that he was the owner. Then B askes A for the loss caused, but A said that he
wasnt in any indemnity contract
Tt
Indemnity holder
English law on Indemnity
A promise to save another harmless form loss caused as a result of a transaction entered into at the
instance of the promisor
Halsburys law of England:
Loss or damage = any loss even if not made from the direction of the party
2- All costs which he may be compelled to pay in any such suit, if in bringing of defending it ,
he did not contravene the orders of the promisor, and acted as it would have been prudent for
him to act in the absence of any contract of indemnity, or if the promisor authorized him to
bring or defend the suit
3- An compromise
Provided he acted prudently and at the authority of the indemnifier
GajanMoreshwar vs Moreshwar madan 1942 BOM 302
A contracts B to build on a long lease land, B buys raw material from C and when C asks money
from B, B refuses to pay. So C takes it up with the A. A gives his land on mortgage to C. Refers
(sec 124 and 125)
Judicial precedent created: I
Even before the indemnity holder incurs damage, he can sue for enforcement for specific
performance provided he shows that an absolute liability has been incurred and it is covered by
the indemnity contract.
Charter reinsurance co td vs. Fagan, 1996, CA
The sum actually paid by the insurers in settlement of loss or liability
Interpretations:
Sum of money paid only when the company occur any loss and;
When the actual sum of money has been paid.
Liability of indemnifier
Osman Iamal and sons ltd vs Gopal Purushttam, 1929, Cal HC\
Rights of indemnifier
Contract of Guarantee
A guarantee is an undertaking to indemnify, if some other person doesnt fulfill his promise.
Sec 126:
Contract of guarantee:
A contract of guarantee is a contract to perform the promise, or discharge the liability, of a third
person in case of his default.
Three parts of a contract of guarantee
Birkmyr vs Darnell, 91 ER 27
If two come to shop and one buys and the other to him credit, promises the seller, if he does not pay
you I will pay you.
Contract of guarantee
Let him have the goods, I will be your paymaster or I will see you paid.
Principle
debtor
Surety
creditor
Principle debtor: primary liability
Surety: secondary liability
Independent promise
Sec 142: guarantee obtained by misrepresentation, invalid: any guarantee which has been obtained by
means of misrepresentation made by the creditor, or with his knowledge and assent, concerning a
material part of the transaction, is invalid.
Barclays Banks plc v. OBrien, 1994, CA
Matrimonial property was set as a guarantee. There is a contract between the wife and the creditor.
This guarantee was given by coercion and misrepresentation. This way the contract is invalid
Sec 143: guarantee obtained by concealment, invalid. Any guarantee which the creditor has obtained
by means of keeping silence as to material circumstances is invalid.
Concealment (Sec:143)
any guarantee which the creditor has obtained by means of keeping silence as to a material
circumstances, invalid
Consideration
Sec.127
Anything done, or any promise made, for the benefit of the principle debtor, may be a sufficient
consideration to the surety for giving the guarantee.
Consideration for surety can be form creditor or PD, only necessity is that it should be good.
It can be for past consideration provided there is an clear understanding of the same.
A guarantee for forbearance (abstain from doing a particular act) is also good consideration.
o Madanlalsobev. Rajasthan State industrial Development and investment corp.
LTD , 2006
Past consideration
M. Ghulam Husain Khan v. M. Faiyazali Khan. 1940 oudh HC
I.
Conditional guarantee
Keeping a condition for the performance
1. A promise of some security
2. A promise of co- surety (more than one surety)
Guarantee for performance of promise independent performance unless specified in case of bank
exception: fraud
-
Performance Bond
Guarantee contract at the instance of seller u/ contract of sale that surety will pay on first instance
without any condition/ demand of proof
Mostly used in international traders, absolute performance.
Edward Owen Engg ltd v. Barclays Bank Intl Ltd, 1978, CA
An English company selling green houses had entered into a contract with the Libyan company. The
Libyan company used to pay the English company using a letter of credit. As time passed they started
using document of credit.The English hadnt accepted the document of credit.
Performance bond is like a promissory note which is payable on demand.
Contract of fidelity
-
Bank Guarantee
-
Its for series of transaction which can be for a limited period of time.
Only because the contract says its continuing, there is no contract of guarantee, intention of
parties is important.
Kay v. groves, 1829,
I hereby agree to be answerable to k for the amount of five sacks of flour to be delivered to T,
payable in one month.
LIABALIATIES OF SURETY (Sec. 128)
-
Co-extensive with the principal debtor. not a penny more, not a penny less- Jeffery archer.
The surety is not liable for more or for a little less
Unless agreed to contrary.
Condition precedent
Implied or explicit condition = Enforceability example (S.144)
National Provincial Bank of England v. Brackenbury, 1906
Discharge of Surety
Guarantee imposes irrevocable liability, only if, consideration to the same be divisible, its possible
Consideration is divisible Payment of rent and contract of fidelity
Revocation (sec:130)
Continuing guarantee
Offord v Davis, 1862
In this case Davis and co is a debtor had to pay Mr.P some money. D the guarantee had come in to the
contract saying that if there is a discount done within 12 months he would be the guarantee. Later he
had revoked the contract.
Sec 131BY Death of Surety
A guarantee is revoked by death when it might have been revoked by the guarantor himself of any
moment during his life.
A surety will not be released in joint and several liabilities in continuing guarantee. Legal heirs- to
extend of their shares.
Sec 133: Discharge by Variance in terms
-
Any change in the contract between the principle debtor and creditor without the consent of
the surety. Boner vs McDonalds house of lords- illustration
Material variation
Alteration is not self-evident of being unsubstantial or it is only detrimental to the surety
Discharges the surety as well as his/her property
If seller gives more goods than required under the sale contract does it discharge the surety?
o The surety is liable only things that he / she assured for.
M.S. Anirudhan v. Thomcos Bank Ltd, 1963, SC
The surety stood for the principle debtor for a loan for Rs.25000 but later the bank had said that they
would give the Rs. 20000. The principle debtor agreed to this contract and did not inform the surety.
Sathish Chandra Jain v. National Small Scale Industries, 2003, SC
Release of PD
Act/ Omission of creditor which release PD
A is an railway transporter, sending goods to B. but A had realized that b doesnt have the railway
receipt so A had canceled the whole contract and made a new one with C with a railway receipt. Later
when A had realized that B had the railway receipt beforehand. B had filed a case against A to get all
the cash that he spent on the goods. Later A had filed a case against C but the court held that
Right of sureties
1. Right of principle debtor
a. Right of subrogation (s.140) putting yourself into someone elses shoes. When the
PD is done paying all the money to the creditor, the surety becomes the creditor for
the principle debtor. All the rights of the creditor would apply for the surety also. 3
people turning into 2 in a particular contract.
b. Right of Indemnity (s.145)- in a contract of indemnity while the surety pays for the
guarantee, the money would be given back by the principle debtor to the surety while
the contract is done. It is not for the sum of money that are paid wrongfully
2. Rights against creditor
a. Right to securities (sec. 141)-security: all the right a creditor has against the
property. Creditor had to protect it even if surety was not aware of any security
State of MP v kaluram ,1967, SC
In this case the principle debtor bought timber from the government, but in return the
principle debtor had to pay to in 4 installments. The PD had only paid one installment
and still timber from the good down of the government. The government had filed a
case on the surety saying that he had to pay for the timber taken. The surety said tha
he was not liable because it was the creditors fault of not taking care of the timber
and he didnt have any rights because he had taken the timer without the consent of
the creditor. And the court held the same.
Failure to preserve the security by creditor and enforce his right would discharge the
surety to the extent of loss
b. Right to share reduction
Insolvent when a surety guarantee for a payment of rupees 5000 from a debtor and
the debtor could only give a sum of Rs.2000 then the surety would pay him the rest of
the money that is Rs.3000. , ,
.
S.146: Two or more surety owing to the same debt, would have to share their debt equally or
their portion of their money that they owe to the debt. The left of money would be taken by
the PD or another surety.
Chronology- sequence of payment or events
Unit II BAILMENT AND PLEDGE
Sec. 148:
A bailment is the delivery of goods by one person to another for some purpose, upon a contract that
shall when the purpose is accomplished, be returned or otherwise disposed of according to the
direction of the person delivering them.
A the people who are involved in the contract of bailment are bailor and bailee
Bailor the person delivering goods
Bailee the person to whom they are delivered to
kaliaperumal vs visalakshi
Duties of Bailee
1. Duty of reasonable care. Sec. 151 and Sec. 152
a. UOL vs. Amar Singh, 1960, SC : Negligence
b. Contradiction as to disclaimer- Bailee would be liable only to a little part of the
contract.
c. Rampal v. Gourishankar, 1952, Nag HC
a person had been liable to take care of jewellery, he had put in the first floor and
locked it and put the key in the same room. The jewellery was stolen and the court
held that the person was liable due to his negligence of keeping it in the first floor and
also the key in the same room, which would make it easy for a thief to steal. Hence
held liable.
d. UCO Bank v. Hemachandra, 1990, SC.
2. Duty not to make unauthorised use (Sec:154)
a. Alias vs E.M. Patil: A car was given to a garage for repair. But the Bailee had given
the to an unlicensed person, who and after met with an accident. The Bailee was held
liable.
3. Duty not to mix (Sec: 155-157)
a. Bailor consents
b. Accident, mistake the mixture could be separation or a division equal among each
other.
c.
Reward:right to lien( right to posses the bailment goods even after the contract is over)
S.169
Goods of sale
Right to sell
Perishable / loss of greater part of value eg:-tomatoes it is peripheral and as day pass the value
for the tomatoes would decrease.
Purpose of bailment
Lost: Once the possession is lost , but the right to recover the expenses of preservation
persists.
Example: a delivers an rough diamond to b, a jeweller, to be cut and polished, which is done
accordingly done. B is entitled to retain the stone until he is been paid for the services that he has
rendered.
E.C. Eduljee v. Caf John bros, 1943, Nag HC.
An refrigerator sold to one mr.p with some money on due. P took the delivery. Later the seller agreed
for repairing the some gratuitously.but was trying to impose right of lien over the same for the
pervious payment. Court held its not possible as possession is lost
Hutton v. Car Maintenance co, 1915,CH
An owner had give a motor car for maintenance or three year and also made a fixed annual
payment. Amount of maintenance became due. Claimed for lien over the same.
2. General Lien (sec:171) when the bailee can retain any kind of goods as an
security
Applicable in special 5 cases:
Bankers
Factors
Wharfingers
Attorney at HC
Policy brokers
Except these cases the other cases should expressed or implied and an customary action or a part of a
general trade.
Retain for labour employed/expenses only for a charge
Particular lien : retain property of another for a general balance of accounts
Bankers lien
The general lien of the bankers, as judicially recognised and default under s.171 attached to all the
goods and securities deposited with them as brokers by a customer or by a third person on a
customers account, provided there is no contract, expressed/implied
Only condition : the goods to be in lieu of bailment and not any deposited/otherwise
Illustration: Mercantile bank of India ltd v. Rochaldas gidumal & co, 1926, Sind HC
FD made to bank- debtor creditor no lien
Factors lien
Factors: agents entrusted with the possession of goods for the purpose of sale
Right to lien: for remuneration, advanced, loss/liabilities eg in course of his capacity as factor
Possession:actual/ constructive
Wharfingers lien
Wharfinger: owner/ occupier of wharf, who, for hire, receives merchandise on his wharf either for the
purpose of forwarding or delivery to consigned on such wharf
General lie over the goods for his charges of usage of wharf
Attorneys at the high court
Attorney is entitled to general lien over the document/goods of the client unless the fee for
professional services or other costs paid.
Right extend to proceeds of an action funds deposited in court, paper entrusted, etc
Policy brokers
An insurance agent employed to effect policy of marine insurance is called policy broker.
Lien: over any balance on any insurance account due to the person for whom he is acting
Owners right is not affected due to any temporary outstanding interest of the bailee
Rights of bailor
1. Right to take back the goods (sec.148 & 159)
2. Right to terminate the bailment ( sec.153)
3. Right to claim accretions (sec 163)
4. Right to claim damages for mixing up/proportionate shares (sec.155-157)
5. Right to sue (sec.180 & 181)
Termination of bailment
1. Termination by inconsistent acts (sec.153)
2. Termination by death (sec.162)
3. Termination by return of goods/finishing purpose of bailment (sec160)
4. Other reasons: destruction of subject matter
Pledge
(S.172)
Its a bailment of the goods in purpose of a security, for a payment and performance of a
promise then it is a pledge
Bailor = pawnor
Bailee = pawnee
Delivery of possession
Property- bundle of rights over a particular thing that you posses.
When you pledge something then you have some special property right over the particular
property.
Pledge: bailment so duty to take care exists
Goods same as bailment
Delivery of possession : necessary
Constructive of/actual
To check constructive possession: check upon who has dominance over the goods and
under whose authority it's done.
Morvi mercantile bank vs Union of India, 1965, SC
Railway receipts are a symbol of goods, so pledges bank has the right to recover the
full value of the goods that has been loss.
Pledge by hypothecation
Pawnor keeps the custody of goods/securities for some special purpose
No loss of the right pledge
Any fraud/conversation was made by the pawnor in such cases, the pledge/Pawnee
doesn't lose any right
Reference is give to the Pawnee rights
Hypothecation
Pledge
Goods as securities for debts without actual Pledge is bailment of goods as securities
transfer of property/possession to the creditor
Pawnee
No delivery
Delivery is necessary
Since special property right is transferred, it is said that pledgees plea is preferred over other
creditor.
Right to sell
Pawnor cannot insist to sell the property and realise the amounts. It's choice of Pawnee
Notice:
Notice mandate
No implied notice
Sale is intended sale, so no requirement of the date place or time nor money
If given the notice, there is no necessary to sell it in reasonable period , it's pawnees
discretion
Sale proceeds
Unto theorised sale : right to redemption/ suit for conversion and damages
Consent: consent of owner to agent even if obtained by any other manner- implied.
Includes bill of landing, dock warrant, warehouses keepers certificate, etc document used
to prove the possession/ control of goods / authorising the same by delivery/endorsement or
delivery the possessed of the document to transfer/ receive goods
Good faith
General
clauses Act, 1897- s.3(20) says good faith means a thing is to be deemed done in good faith
where it is in fact done honestly, irrespective of weather it is done negligently.
Method of rescinding: notice/ any other method of the party is unable tone contacted
Unit III
Agency
S.182
An agent- a person employed to do any act for another/ to represent another dealing
with third person
The person for whom such act us done, or who is so represented is called principal
The relationship between the principal and the agent is called agency
Statutory requirement
Merely calling each other principal and agent does not create agency
relationship.
Whether the person is purporting to enter into transaction on behalf of the principal i.e., to
create, modify or terminate the contractual obligation between the principal.
Kuchwar lime and stone co v. Dehra Rohtas railways co. Ltd 1969, SC
The lime and stone company had asked the coal commissioner for coal. The coal
commissioner had issued an notice to the colliery to delivery the coal. But the railway
company had delivered a lower quality of coal hence the company had rejected the coal
therefore the railway had sold the coal in it to be delivered.The demurrage cost( a step taken
to save the goods from damage).the colliery is as the agent of the defendant because the
defendant company asked for the amount, quality and the way that they want The railway had
asked the defendants company for the loss that the railway had incurred. The court held that
since they were acting as the agent of the decedent company they will have the right to get
the cost they had incurred.
Shree Didvijay Cement co ltd v. State trading corporation of India ltd. 2006, Del HC
Agent and Bailee
SERVANT
i. Estate agents
d. Del cerdere agent
3. General
Consideration ( s.185)
No consideration is required
Mere fact of employment as an agent and its credit
Giving your powers to an gent in itself is a consideration
Creation of agency
1. Expressed (oral or written)- power of attorney
2. Implied- Harshad shah v LIC, 1997, SC
3. Ratification signing an agreement
4. Estoppel / hounding out
a. An agent to perform certain tasks
b. But exceeds the authority
c. The 3rd part believes in such an authority
d. Principal is estopped from denying any authority
5. Necessity
a. Out of emergency situation
b. Condition for such agency
i. Inability to communicate with the principal
ii. Reasonably necessary- all material circumstances
iii. Bonafide interest
Husband and Wife
W implied agents of h for household necessity
H no agent unless provided by w thr expressed/implied /necessities
Condition to bind for credit purchases:
1. Live together
6.
a.
If A w/o knowledge of P
b.
In business of agency
c.
d.
Any other benefits/ interest out of the bribe or secret commission- to be returned
Right of an Agent
1. Right to remuneration-sec 219
a. Only upon completion of the work
b. No special contracts
c. Retain the money for partial sale of goods
Continental and eastern agencies v. Coal India Ltd,2003, delHC
L(principal) refused
Held: C is not entitled to remuneration on the ground that in the absence of express terms A
takes the risk of P not willing to conclude a bargain with his nominee
Business means the same businesswom so no retainer right if A retains for a previous
business
Secretaries and treasure of a Ltd. Co. Lien over the goods, paper and other property
moveable and immovable of the co
Held: loans here upon these properties are not specifically made upon them , so lien over the
same
Any authorised work of A is bingeing upon the P as if has himself entered into the obligation
if the p is known
Authority means the sum total of the acts that the Principle and agent have agreed
Types of principal:
Unnamed agency- matter of agency is revealed but the principal is not revealed
Undisclosed- no one know is the agency and the agent.
Disclosed- knowing the principal.
Undisclosed Principal and liabilities: s.231
S.232
If P is undisclosed
Subject to right of 3rd party from the contract of A and 3rd party
A cannot enforce any contract entered into him for P/ personally bound
Foreign P
Undisclosed P
P cannot be sued
S.205 : compensation for all the acts done/ to be done- agency was a period
A/P knowledge
2.
s.209
Agency terminated
Protection of interest
2.
1.
Agreement
2.
Business
3.
Share profit
4.
Mutual agency
a.
Creates and defines the firm and relation between the partner
b.
c.
Business
a.
4.
Sharing of profits
a.
b.
c.
Mutual agency
a.
b.
Partners have implied authority of binding the decision of each other by usual course of
business
Hindu undivided family and partnership S.5 relation of partnership arises from contract and not status, member of HUF Burmese Buddhist Hand W
carrying on business are not partner
CIT v. Nandlal Gandalal, 1960, Agarwal and co v. CIT, 1970, SC HUF is neither any partnership nor can
they join any partnership.
Partnership
HUI
Mutual agent
Death dissolves
right
Partnership
Registered companies
Partner =co-owner
/guarantee
No partnership:
1.
2.
3.
4.
5.
Seller of goodwill
There should not be any expenses/ implied clause to indicate the opposite
Clause in agreement not it determine even the death/retirement of parties and mutual consent necessary for
dissolution
Sec-8 Particular partnership
-
Types of partners
1.
Active partner
2.
Dormant/ sleeping
3.
Nominal
4.
Minor
5.
6.
Salaried Partner
Whatever property is bought for the working of the firm, hence it is the property of the firms
Miles v. Clarke, 1953, WLR , a professional photographer who leased a studio and equipment were the
the property of the leaser . Goods were bought in for the betterment of the studio, a question arises
whose property was these goods. the court held that these goods were the firms property not the
partners
Philip things exp,1849- goods were bought using the firms money form his own use, the court he,d
that it's the firms property
Borrow money
Make/ endorsement
Higgins vs beauchamp
B and m are two partner who has a business of cinematographic theatre professional. B is the sleeping
partner and m was managing or active partner, m had borrowed money from Higgins. The court held
that a the act one partner wouldn't make the whole firm liable. According to sec 19 a non trading
business as individual partner can't ask money only a firm can.
Tomlimson vs broadsmith
A trading business partner had bought goods on credit, but fails to pay and the creditor had filed a suit
against the partner, the partner fails the suit and asked to pay for the damages. The partner asks money
from the firm the firm says that weren't liable, but the court held that since it is a trading business the
firm is liable.
S19(2)-Provison doesn't apply to entertainment tax matter
Sec26
Wrongful act
Impliend authority
Firm misapplies
Sec27(2)
He should be knowing allowing his name to be used in the firm so as to hold him as partner by
holding out.
Notice of retirement
Retired partner need to give public notice otherwise they are bound by holding out
II) death is itself a notice, hence no need to give notice for the same and hence legal rep are not held liable
Right to share the profits of the partners as the firm gives him no right to seek accounts
On dissolution transferring partner ceasing to be member he can seek for the assets of that
partner
S.30
Share profit and firms property
No personal liability only joint liability on property/ profits
Right to access, inspect and copy A/c
6 months after attaining majority/ knowledge of partnership, whichever later, public notice as to his
willingness/ not. If agreed for same liabilities wil
He can seek for a/c or profits only when he wants to break the partnership, his/ her profits calculates as
per s.48
CIT v. Dwarkadas khetan and co, 1961, SC
Within 6 months of option, if any suit is instituted, minor will not be personally liable
If the minor accepts to be partner, then his liability retrospectively from date of his admission to
benefit of firm
English position: opposite
Goode v. Harrison, 1821
S.31- Incoming partner
Retrospective- only if agreed and btw partners alone and not the creditors unless he opts for the new
firm
2 condition:
o
1.
Insanity
2.
3.
Misconduct of any partner apart from the one suing- it includes those act eve not related to the business
4.
5.
6.
Perpetual losses
7.
Realisation of the assets and pay off creditors, surplus amount to be shared equally.
Partners lien : right to seek for realisation on surplus of assets and not on any particular item of
partnership.
The liabilities of the partners continue even after dissolution for unfinished business unless any
one declared insolvent and not represented as partner even after the fact of insolvency(s.47)
Assets of ten firm, a) joint debts of 3rd party b) advances apart from capital c)each
partners entitlement d) any residue, divided as share of profits
Firms names
Duration of firm
f)
S. 59
If registration is satisfied, recorded the entry of some
JC Gupta v. Wazir Chand Vir bhan, 1967, Pub HC in
4 partner trade name Chawla cloth house
4+3 partner
S.69 - non registration of firm
No suit can be filed by a partner for enforcing a right in the deed against the firm and other partner
No firm can be filed a suit aga its then 3rd party for enforcing right in the deed
1 and 2 applicable even to set off claim/ other proceeding from contracts
Not applicable to the dissolution/ accounts/ realise the property
Not applicable to official receivers/ assigner in insolvency acts 1909 and 1920
Not applicable to firm not governed in this act
Set off claims < 100 under previous insolvency acts of 1909- and 1920
Ananda Rao vs raja Rao , 1976, AP HC
One of many partner had passed away. The son of the partner wanted to continue in the firm. The change in the
cosntitution of the firm was not informed to the registrar of partner.the partner transferred the interest of the des
eased partner to a 3rd party. Express provision in the agreement that any partner transferring his interest must be
transferred within the partner son filed a wit. The court did not entertain the suit because the firm didn't register
the firms with the ROP
Liability: Firm- extend of assets, partners: agreed limit, misconduct: no other partner liable, defraud
creditor: unlimited liabilities of the firm.
Mini.2 1 to be Indian resident( a person residing in Indian for more that 182 days) , mini.2 designed
partner similar to the directors
Arrangement/ compromise
Definitions
S.2(1)(n) limited liability partnership means a partnership formed and registered under this act
S.2(1)(o) limited liability partnership agreement means any written agreement between the partners of the
limited liability partnership or between the limited liability partnerships
Business includes every trade, profession service and occupation.
Designated partner means any partner designated as such pursuant to s.7
Entity means any body corporate and includes, for the purpose of a firm set-up under the IPA, 1932. Foreign
limited to
LLP
Firm
No separate existence
No perpetual secession
LLP
Company
AOA
S.5 partner
1 should be IR
They are responsible for statutory compliance and personally liable for non compliance
Name of LLP
Business
Effect of registration s. 14
1.
2.
3.
Common seal
4.
S. 24 cession of partner
Such person eligible to receive their capital contribution and share of profit after the settlement of
losses
Firm liable for acts of partner within authority only (s. 27)
s. 30 unlimited liability
S.31 waiver of penalty for whistle blowing by any partner for convincing the LLP u/ the Act
S.32&33. Right to contribute in LLP which is accounted
ROP has power to Obtain information form any DP/ other partner failure: fine of rs. 10000-25000 s.
38
Right to share profit and losses transferable no dissolution-also such transferee are not partners ( s.42)
Tribunal orders
Court order
Direct at
An inspector can keep the books and papers only for 30 days
He has power to siege the properties and book on belief of destruction of any evidence not for 6
months continuously
Dissolution (s.63)
Voluntarily / by tribunal
It decides
Marshall v. Green
Animals
Broadband
Actionable claim
S.3 TPA, 1882
It means chose in action/ thing in action
No enjoyment but right to recover through suit/ actions like debts not secured, beneficial interest.
Lottery
Deliverable state
Goods are said to be in deliverable state when they are such the buyer would under the contract be bound to
take delivery of them
S.2(10)- price money consideration for a sale of goods
S.2(11)- property
Means general property in the goods and merely special property
Contract of sale and agreement to sell s.4
Transfers/ agrees to transfer property in the goods
Agreement to sell
2.
Passing of title
3.
Delivery of goods
4.
Features:
1.
2.
An agreement
a.
b.
Money consideration
a.
b.
A person wanted to buy 52 bullocks at 6 pounds each in exchange of 100 quarters of barley
of 2 pounds each. And the rest paid in money. Hence the court held that since there some
exchange of money and goods.
Instalment supply ltd. Vs sto ahamadebad and ors,1974 SC
Contract of sale
Agreement to sell
Agreeing to sell
Contract of sale
Sale of goods
Contract of work
Held: thesale was for specific number of goods, if the contract is not there, the contract can be
repudiated
Contaminated with sewage water through can be used for making spirits
S.8 goods perishing after the agreement to sell but before the sale
In ordinary COS, time is prima facie essence w.r.t delivery rules for assuring punctual transaction
Language
Conduct of parties
Expressed condition
o
Expressed
Express warranties
o
For condition a such that if not fulfilled the contract can be repudiated / me collateral contract
Waiver by buyer
Acceptance s.42
Nagardas v. Velmahomed, 1930, BOM HC
Konda rice case
Goods it answering the description
1.
Remedy one :
a.
b. Refund price
c.
2.
Remedy two:
a.
Bankes LJ:
did the buyer specify the trade name is such a way as to indicate that he is satisfied right/ wrong, that it will
answer his purpose, and that he is not relying in the skill or judgement of seller, however great the skill or
judgement may be?
Baldry v. Marshall, 1925, KB
Bugatti cars
Implied condition as to merchantability- s.16(2)
1.
Sale by description
2.
3.
Merchantability quality
4.
Undefined term
Suitable for one/ more purpose for which they might be bought without abatement of price though not
usable for all the purpose for which it is bought
Reasonable fitness for ordinary purpose for which goods are intended, designed and sold
Frost v. Aylasbary dairy and co. 1905 , KB milk contaminated by typhoid virus.
Morelli v. Fitch and gibbons, 1928, KB- stones original ginger wine. While a person was taking due
care- taking
No reasonable custom
For selling Carnary seeds with impurities - buyers gets rebate in prince and not reject the goods custom of
trade
S.16(4)- express condition/ warranties can override/ super add to implied condition unless not
reasonable.
Good free from defect rendering them unmerchantable which is not apparent on reasonable
examination
Godley v. Perry,1960
Implied warranties
1.
Mason v. Burningham, 1949, KB-women bought a type writer, spent money to repair the type writer, later the
real owner came back and stated it was his type writer. Hence there was an hinderence in the title of the type
writer.
2.
3.
Exclusion of implied terms s. 62, buyer and seeker can get into a contract on what warranty should
and shouldn't be there.
2.
3.
Passing of risk
If goods needs to be measured, weighed or severed, then it doesn't pass unless the same is done