| GyanCentral - The hub for engineering and law students - IIT-JEE, AIEEE, BITSAT, CLAT, AILET - 2012: Legal Reasoning Test CLAT 2013 Oct 8th 2012, 10:37 | GyanCentral - The hub for engineering and law students - IIT-JEE, AIEEE, BITSAT, CLAT, AILET - 2012 | | The most comprehensive career education and test preparation forums in india. | | | Legal Reasoning Test CLAT 2013 Oct 8th 2012, 09:42 1. Principle: (1) A breach of contract exists when a party fails to fulfill his obligations under a contract. (2) Time is an essence of a contract where a delayed delivery defeats purpose of the contract. Facts: A agreed to sell to B twenty tons of rice. A and B had a commercial relationship for a long time and A knew B used to sell rice to retailers. Given the perishable nature of rice, it is imperative that rice is sold as quickly as possible. A was having problems with his suppliers, and was late in dispatching the shipment. As a result, the shipments which were supposed to arrive every two weeks were delayed and the shipment came after 18 days. B cancelled the contract and refused to take delivery. A claimed that time was never an essence as it was not mentioned in the contract. a. B may avoid the contract. Here time was as essence by implication as A knew B needed prompt delivery. b. B may not avoid the contract, as the contract never provided for time as an essence. c. B may not avoid the contract, as B could have explained the delay to his customers. d. B may avoid the contract. Delayed delivery is unacceptable. 2.An offer may be made to the world at large and accepted by anyone. Facts: Robert, in a newspaper, advertisers for the services of a carpenter and set out the terms and conditions. Jeff,a carpenter meets Robert and contracts to do the work. Another carpenter, by name Matt also expresses his willingness to do the work. Robert says he has already given the deal to Jeff and cannot contract with Matt. Matt however says that he has already accepted Robert's offer and he must be given the work. Does a contract exist between Robert and Matt? a. A contract exists. When an offer is made to the world at large, anyone, including Matt, may accept it. b. A contract exists. Matt has accepted Robert's offer. c. No contract exists. Matt has accepted Robert's offer and after that Robert's offer has come to an end. d. No contract exists. Robert had no intent to create legal obligations with everyone. 3. Principle: Acceptance must be communicated in the manner specified or in a reasonable manner and within the specified time. Facts: X sends a contract for the sale of goods to Y. Under the contract, Y was required to communicate his acceptance ONLY by email by a specified date. Y however, sends his acceptance by sending a letter by post. X does not get the acceptance by the date he set for the email and sells the goods to a third party. Y's letter reaches the next day and Y demands that the goods be sold to him. a. A contract exists. Y has communicated acceptance on the specified date by a reasonable means. X should have waited for a reasonable period of time. b. No contract exists, as the acceptance was sent in a different mode, which was received after the stipulated date c. A contract exists. Post is an accepted mode of communication. The mode of communication cannot be specified. d. None of the above. 4. Principle: Acceptance is complete as against the acceptor when he puts his acceptance in course of communication. In the case of direct communication, acceptance is complete when the acceptance comes to the knowledge of the offeror. Facts: A and B were negotiating a contract across a board room table. As A communicated his acceptance to B, an aircraft flying overhead drowned out A's voice. B did not hear A's acceptance, but B's secretary, sitting next to A heard it. B asked A to repeat it. A, by this time, reconsidered his decision and said that he did not accept the contractual terms. B's secretary stood up and said that A had communicated his acceptance and A must be bound by it. a. No contract exists. The acceptance must come to the knowledge of the offeror in direct communication. b. A contract exists. The acceptor has communicated the acceptance. c. No contract exists. The acceptor knew that the offeror had not received acceptance and can withdraw it. d. A contract exists. B's secretary heard of the acceptance. 5. Principle: An offer is effective only when it is communicated to the offeree. Doing anything in ignorance of the offer is cannot be treated as acceptance. Facts: A was looking for a gardener and put an advertisement for a gardener who was to be paid $ 50. He waited a few days and then put another advertisement, this time offering $ 100. After this, X turned up and finished the work. A paid him $ 50. X left A's house and after that he came across the advertisement offering $ 100 for the work. X came back and demanded his $ 100 from A. a. A need not pay $ 100. X was stupid enough to leave with $ 50. b. A need not pay $ 100. The work does not deserve $ 100. c. A need not pay $ 100. X accepted the offer for $ 50 and was unaware of the offer of $ 100. d. A must pay $ 100. He had changed the offer to $ 100 so irrespective of what X believes, he is bound to pay $ 100. 6. Principle: Fraud exists when a party knowingly and willfully makes an active concealment of a fact to induce someone to enter into an agreement. A contract may be set aside when the fraud exists as to a vital fact. Facts: X goes to buy health insurance. One question in the policy was whether X suffers from any pre- existing illness. X knows that if he admits he has a heart problem his premium will be higher so decides to write "no". Later he suffers a heart- attack. The insurance company comes to discover that at the time the policy was made X knew about his pre existing condition and chose to conceal it. a. No contract exists. There is clear active concealment on part of X. b. A contract exists. There is no fraud as to a vital fact. c. A contract exists. A honestly believed that he had no illness. d. No contract exists. A cheated the company. 7. Principle: A contract with an unlawful object is void. Facts: A goes to B and agrees to not file charges for theft if B pays him $ 1000. An agreement is made but after that B refuses to pay. a. No contract exists, as the agreement is not in writing. b. A contract exists. A contract may be made prior to criminal proceedings. c. A contract exists. B believed A. d. No contract exists. A contract cannot defeat a criminal proceeding. 8. Principle: An agreement in restraint of trade is void. However, if restraint is the ancillary effect of a positive covenant, it is valid. Facts: Cherry-Cola entered into an agreement with Lola's Company where Lola's Company was supposed to manufacture only Cherry-Cola. Lola's Company started manufacturing Campa-Cola, the competitor of Cherry-Cola alongside. Cherry-Cola sued Lola's Company. Lola's Company pleaded restraint of trade. a. A contract exists. The restraint was the effect of the positive covenant to only manufacture Cherry-Cola. b. No contract exists. This is restraint of trade. c. No contract exists. This is explicit restraint of trade. d. A contract exists. It was freely entered into. 9. Principle: An agreement absolutely restraining legal proceedings is void. Facts: X made an agreement with Y where X agreed not to sue Y for any breach of contract. The contract was for sale of goods and Y failed his obligations under the contract by delivering damaged goods. X sued Y. a. X cannot sue Y. X agreed to the terms. b. X can sue Y. This is an agreement restraining legal proceedings. c. X can sue Y. Right to sue is inherent. d. X cannot sue Y. A has waived the right to sue. 10. Principle: A stranger to the contract cannot sue for the enforcement of the contract. Facts: Mary was to be married to the son of Gerald and in consideration for the intended marriage Gerald entered into a written agreement with Mary's father where each would pay Mary a sum of money. Gerald failed to pay and Mary sued her executors of the agreement for enforcing it. A. Mary cannot sue to get the money as she is stranger to the contract. B. Mary can sue for the enforcement of the contract as it was intended for her benefit. C. Mary can sue for the enforcement of the contract as it is her right to get the money promised. D. Mary cannot sue as she did not intend for legal consequences | | | |  | |
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