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LL.B.

III Term

Special Contracts
(Partnership and Sale of Goods)
LB - 304

Cases Selected and edited by

Gunjan Gupta
Sanjivini Raina
C.K.Negi Bisht
Shikha Kamboj
Akash Anand
Ashutosh Acharya
Kislay Soni
Ezekial Jarain

FACULTY OF LAW
UNIVERSITY OF DELHI, DELHI- 110 007
July, 2020

(Executively for Private Circulation)


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LL. B. III Term


Paper – LB – 304 – Special Contracts
(Partnership and Sale of Goods)

Objectives of the Study


The law recognizes various Special Contracts among other are (i) Partnership and (ii) Sale of
Goods. Special Contracts is a logical and imperative extension of the Law of Contracts
paper of the 1st Term which dealt with the general principles of contract. since the
commercial activities are ever increasing, the present paper aids in understanding the
application of the general principles of contract in specific circumstances which are the
footholds for business associations and commercial transactions. It will familiarize
students with the evolution of business associations. The first part of paper deals with
partnerships as a business association which covers types, formation, registration,
rights of partners and their liabilities, rights of third parties, reconstitution and
dissolution. Here the students will be introduced to Limited Liability Partnership as
well. The later part of this paper is sale of goods which is a special commercial
transaction affecting not only daily lives but also major part of small, medium and large
scale transactions in the business relations and associations. The topic Sale of goods
deals with the components of sale, point of sale, passing of property, right and liabilities
of seller and buyer, goods and its classes such as ascertained goods, specific goods and
appropriated goods..

The present course is aimed at a study of the Law relating to Agency particularly the
provisions of sections 182-238 of the Indian Contract Act, 1872, the Indian Partnership Act,
1932, Limited Liability Partnership Act, 2008 and Sale of Goods Act, 1930 in the light of
judicial pronouncements. A student of Law will be advantaged with the study of this
paper as it will provide an in-depth study of principles and concepts on which
commercial transaction are based , the workings of business associations and how such
transaction are different from a company and LLP
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Prescribed Legislations:
1. The Indian Partnership Act, 1932
2. The Limited Liability Partnership Act, 2008 (6 of 2009)
3. The Indian Contract Act, 1872
4. The Sale of Goods Act, 1930

Prescribed Books:
1. G.C ., Bharuka, The Indian Partnership Act
2. Avtar Singh, Law of Partnership
3. V.P. Verma (Rev.), S. D. Singh and J.P. Gupta, Law of Partnership in India
4. R.G. Padia (ed.), Pollock & Mulla, Indian Contract and Specific Relief Acts
5. Banks, Roderick I’Anson, Lindley and Banks on Partnership
5. Sanjiv Agarwal and Rohini Agarwal, Limited Liability Partnership: Law and Practice.
6. K. Ramamoorthy, Pollock & Mulla The Sale of Goods Act
7. V. Krishnamachari and Surender K. Gogia, T.S. Venkatesa Iyer’s Sale of Goods Act,
1930

Topic 1 – Concept of Agency and The Nature of Partnership


‘Agent’ and ‘Principal’ defined; Who may employ an agent; who may be appointed as agent;
Rights, duties and liabilities of principal and agent, scope and limitation, ratification and
revocation of authority; appointment of sub-agent (The Indian Contract Act, 1872). Definition
of “partnership”, “partner”, “firm” and “firm name” (section 4); partnership not created by
status (section 5); Mode of determining existence of partnership (section 6); partnership at will
(section 7); Particular partnership (section 8), Concept and nature of Unlimited Liability
Partnerships; Distinction between a partnership, a limited liability partnership and a company;
Narandas Morardas Gajiwala v. SPAM Papammal, AIR 1967 SC 333
Kuchwar Lime and Stone Co. v. Dehri Rohtas Light Rly. & Co. Ltd.,
AIR 1969 SC 193
Lakshminarayan Ram Gopal v. Govt. of Hyderabad, AIR 1954 SC 367
Snow White Indl. Corpn. v. Collector of Central Excise,
AIR 1989 SC 1555
1. K.D. Kamath & Co. v. CIT (1971) 2 SCC 873 01
2. Cox v. Hickman (1860) 8 H.L.C. 268 10
3. Mollwo, March & Co. v. The Court of Wards (1872) L.R. 4 P.C. 419 16
Topic 2 - Relations of Partners to One Another and to the Third Parties
General duties of partners (section 9); duty to indemnify for loss caused by fraud (section 10);
determination of rights and duties of partners by contract between the partners (section 11); the
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conduct of the business (section 12); Mutual rights and liabilities (section 13); The property of
the firm (section 14); Application of the property of the firm (section 15); Personal profits
earned by partners (section 16); Rights and duties of the partners (section 17). Partners to be
agent of the firm (section 18); Implied authority of partner as agent of the firm (section 19);
Extension and restriction of partner’s implied authority (section 20); Partner’s authority in an
emergency (section 21); Mode of doing act to bind firm (section 22 Holding out (section 28);
Right of transferee or a partner’s interest (section 30); Minors admitted to the benefits of
partnership.
4. Miles v. Clarke (1953) 1 All ER 779 22
5. Trimble v. Goldberg (1906) AC 494 (PC) 26
6. Holme v. Hammond (1872) L.R. 7 Ex. 218 : 41 L.J. Ex. 157 31
7. Rhodes v. Moules (1895) 1 Ch. 236 (CA) 35
8. Hamlyn v. Houston & Co. (1903) 1 K.B. 81 39
9. Tower Cabinet Co., Ltd v. Ingram (1949) 1 KBD 1032 41
Snow White Food Products Ltd. v. Sohan Lal, AIR 1964 Cal. 239
Scarf v. Jardine (1882) 7 A.C. 345
10. Shivgouda Ravji Patil v. Chandrakant Neelkanth Sadalge,
AIR 1965 SC 212 46

Topic 3 - Incoming and Outgoing Partners and Registration of a Firm


Introduction of a partner (section 31); Retirement of a partner (section 32); expulsion of partners
(section 33); Insolvency of a partner liability of estate of deceased partner (section 35); rights
of outgoing partner to carry on competing business (section 36)
Application for registration (section 58); Registration (section 59); Disabilities attach with non-
registration (section 69)
11. CIT v. Jaylakshmi Rice & Oil Mills Contractor Co., AIR 1971 SC 1015 49
12. Jagdish Chandra Gupta v. Kajaria Traders (India) Ltd., 52
AIR 1964 SC 1882
13. Haldiram Bhujiawala v. Anand Kumar Deepak Kumar 56
(2000) 3 SCC 250
14. M/S Umesh Goel v. Himachal Pradesh Cooperative Housing Society Ltd, 64
(2016) 11 SCC 313

Topic 4 - Dissolution of a Firm


Dissolution of a firm (section 39); Dissolution by agreement (section 40); Compulsory
dissolution (section 41); Dissolution on the happening of certain contingencies (section 42);
Dissolution by notice of partnership at will (section 43); Dissolution by the Court (section 44);
Liability for acts of partners done after dissolution (section 45); Right of partners to have
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business wound up after dissolution (section 46); Continuing authority of partners for purpose
of winding up (section 47); Mode of settlement of accounts between partners (section 48).

15. Saligram Ruplal Khanna v. Kanwar Rajnath, AIR 1974 SC 1094 77


16. M/s. Juggilal Kamlapat v. M/s. Sew Chand Bagree, AIR 1960 Cal. 463 88
17. Sharad Vasant Kotak v. Ramniklal Mohanlal Chawda (1998) 2 SCC 171 91
18. S.V. Chandra Pandian v. S.V. Sivalinga Nadar (1993) 1 SCC 589 99

Topic 5 - General : Formation of Contracts of Sale

The Sale of Goods Act, 1930 (sections 1-10)

(a) Concept of ‘Goods’


19. R.D. Saxena v. Balaram Prasad Sharma, AIR 2000 SC 2912 109
20. Commr. of Sales Tax, M.P. v M.P. Electricity Board, Jabalpur,
AIR 1970 SC 732 : (1969) 1 SCC 200 116
(b) ‘Sale’ and ‘Agreement to sell’
21. State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd.,
1959 SCR 379 120

(c) Statutory Transactions


22. Vishnu Agencies (P) Ltd. v. Commercial Tax Officer,
AIR 1978 SC 449 : (1978) 1 SCC 520 132
23. Coffee Board, Karnataka v. Commr. of Commercial Taxes,
AIR 1988 SC 1487 140
(d) Contract for ‘Works’/ ‘Labour’(Pre and Post 46th Constitutional Amendment)
24. Commr. of Commercial Taxes v. Hindustan Aeronautics Ltd., 154
AIR 1972 SC 744 : (1972) 1 SCC 395
25. Sentinel Rolling Shutters & Engg. Co. (P) Ltd. v. CST, 157
AIR 1978 SC 545 : (1978) 4 SCC 260
26. Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi 164
(1978) 4 SCC 36 & (1980) 2 SCR 650
27. State of Karnataka v. Udipikrishna Bhawan (1981) 3 SCC 76 167
28. Larsen & Toubro Ltd. v. State of Karnataka, (2014) 1 SCC 708 168
29 Kone Elevators v. State of Tamil Nadu (2014) 7 SCC 1 191
30 State of Karnataka and Ors. v. Pro Lab and Ors. AIR 2015 SC 210
1098

Topic 6 : Conditions and Warranties


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Stipulations as to time; Implied Conditions and Warranties – as to title, quality, fitness, etc.,
Sale by Description and by Sample; Treating conditions as warranties
The Sale of Goods Act, 1930 (sections 11-17, 62, 63)

Priest v. Last (1903) 2 KB 148


31. British Paints (India) Ltd. v. Union of India, AIR 1971 Cal. 223
393
Niblett v. Confectioners Material Co. Ltd. (1921) 3 KB 387
Wallis v. Patt (1911)AC 394
Baldry v. Marshall (1925) 1 KB 260 (CA)
Doctrine of Caveat Emptor
32 Jones v. Just (1868) 3 Q.B. 197 228
33 Richard Thorold Grant v. Australian Knitting Mill, Ltd.
AIR 1936 PC 34 234
Bristal Tramways v. Fiat Motors Ltd. (1910) 2 KB 831

Topic 7 : Effects of the Contract of Sale

Transfer of property; Doctrine of Nemo dat quod non habet – sale by a person other than the
owner, sale by joint owner, sale by mercantile agent, sale under voidable contract, sale by seller
or buyer in possession after sale; sale in Market Overt
The Sale of Goods Act, 1930 (sections 18-30)

34. CIT v. Mysore Chromite Ltd. (1955) 1 SCR 849 :


AIR 1955 SC 98 245
35. P.S.N.S. Ambalavana Chettiar v. Express Newspapers Ltd.
(1968) 2 SCR 239 : AIR 1968 SC 741 250
36. Agricultural Market Committee v. Shalimar Chemical Works
Ltd. (1997) 5 SCC 516 : AIR 1997 SC 2502 254
37. Pearson v. Rose & Young, Ltd. (1950) 2 Ch. D. 1027 258
Topic 8 : Rights of Unpaid Seller

Who is an un-paid seller ? Un-paid Seller’s Rights – Right of lien, Right of stoppage in
transit; Transfer of goods by buyer and seller
The Sale of Goods Act, 1930 (sections 45-54)

38. Mysore Sugar Co. Ltd., Bangalore v. Manohar Metal


Industries, Chikpet, BangaloreAIR 1982 Kant. 283 265

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