EXAMINATION OF ARTICLE CLERKS

PAPER V

COMMERCIAL LAWS

Thursday 2nd May, 2019

TIME : 3 HOURS [1-00 P.M. TO 4-00 P.M.]

TOTAL MARKS-100

General Instructions:

(1) Please answer all questions to the point.

(2) Answers should be reasoned and where possible supported by case law.

SECTION -1

THE INDIAN CONTRACT ACT, 1872

1. Indian Railways entered into a contract with Hindustan Ispat Ltd. for purchase 6 Marks
of 5 Lakh rails and 15 Lakh railroad ties. The Contract limited liquidated
damages to the amount of 12% of the purchase value in the case of a breach.
Hindustan Ispat Ltd. failed to discharge its obligations under the contract by
reason of which Indian Railways suffered damage. Indian Railways, owing to
it claim for damages deducted monies from the Invoices raised by Hindustan
Ispat Ltd. in excess of 12% of the purchase value. Indian Railways state that
they are entitled to deduct the monies in excess of 12% under quantum
meriut. Hindustan Ispat Ltd. come to you for your opinion. What advice would
you give them.

2. A shopkeeper displayed a drone in the window of the shop with words 'Latest 2 Marks
Artificial Intelligence Drones'. The Shopkeeper was charged with offering for
sale a drone prohibited under the Drone Policy. Is the Shopkeeper guilty?
Why?

3. Worldwide, Inc. a MNC assigns its registered intellectual property rights in 3 Marks
India to its Indian subsidiary, Desi Pvt. Ltd., for a consideration of Rs. 100/-. Is
this a valid consideration? Give reasons.

4. Mr. A is desirous of entering into a manufacturing and distribution Agreement 2 Marks

with Mr. B. As Mr. B is going to be travelling during the month of May, he gives
his in principle approval to Mr. A subject to the formal manufacturing
agreement being drawn up on his return in June. Do Mr. A and Mr. B have a
concluded contract?Give reasons.
 2

5. Write short notes on any three of the following: 12 Marks

i. Voidable contracts.

ii. Anticipatory Breach versus. Actual Breach

iii. Effect of Agency on contracts with third persons.

iv. Discharge of Surety.

SECTION-II

THE INDIAN PARTNERSHIP ACT, 1932

6. Critically examine the following: 10 Marks

i. Does an Arbitrator have the jurisdiction to decide the dissolution of

a firm under Section 44(g) of the Act?

ii. Does Section 69(2) of the Act bar the filing of a Suit based on the

dishonour of a cheque?

7. Tom, Dick and Harry are the partners of M/s. TDH a firm registered in the 3 Marks
year 2010. In the year 2015Tom passes away. Thereafter, in the year

2017 Dick and Harry induct Richard as a Partner. The changes in the

constitution of the firm have not been brought on record with The Registrar

of Firms. M/s. TDH now want to sue Mr. A. Can they do so? Give reasons.

THE LIMITED LIABILITY PARTNERSHIP ACT, 2008

8. Write short notes on any three of the following: 12 Marks

i. Designated Partners.

ii. Cessation of a partnership interest.

iii. Extent of liability of a LLP and its partners.

iv. Dissolution of a LLP.

 3

SECTION-III

THE NEGOTIABLE INSTRUMENTS ACT, 1881

9. Which of the following are valid Promissory Notes? Provide reasons for your 3 Marks

answers in one bullet point.

i. "I promise to pay B Rs.25,000/- and all other sums which shall be due

to him".

ii. Mr. A promises to pay Mr. B, his partner, a sum of Rs.10,000 in the

event of Mr. B's retirement from partnership firm.

iii. Mr. C promises to pay Ms. D, a sum of Rs.5,000, fifteen days after

the death of Mr. E.

10. Mr. F signs, as maker, a blank stamped paper and gives it to Mr. G, and 2 Marks

authorises him to fill it as a note for Rs. 50,000/- to secure an advance which

Mr. H is to make to Mr. G. Mr. G fraudulently fills it up as a note for

Rs.2,00,000/-, payable to Mr. H, who has in good faith advanced Rs.

2,00,000/. Can Mr. H enforce the Instrument and if so, up to what extent?

11. Which of the following alterations of a negotiable instrument will render the

instrument void? Provide reasons for your answers in one bullet point. 5 Marks

i. The holder of a bill alters the date of the instrument to accelerate or

postpone the time of payment.

ii. The drawer of a negotiable instrument draws a bill but forgets to write

the words 'or order'. Subsequently, the holder of the instrument inserts these

words.

iii. A bill payable three months after date is altered into a bill payable

three months after sight.

iv. A bill was dated 2018 instead of 2019 and' subsequently the agent of

the drawer corrected the mistake.

v. A bill is accepted payable at the Union Bank, and the holder,

 4

vi. without the consent of the acceptor, scores out the name of Central

Bank of India and inserts that of Union Bank.

12. Write short notes on any three of the following" 15 Marks

i. Person competent to file complaint under Section 142.

ii. Protest.

iii. Discharge from Liability.

iv. Effect of cheque returned for structural defect.

SECTION - IV

SALE OF GOODS ACT, 1930

13. Differentiate between Condition and Warranty. When can a breach of 5 Marks

condition be treated as a breach of warranty?

14. Explain the rules of Auction under the Act. 5 Marks

15. What is meant by the term "delivery[3?Explain the rules regarding valid 8 Marks

delivery of goods.

16. Pestkill Pvt. Ltd. sold a certain number of fogging machines used for killing 7 Marks

mosquitoes to the Municipal Corporation of Greater Mumbai (MCGM)

payment for which had to be made within one week of delivery. The MCGM

Respondents did not pay within one week and in fact did not communicate

with Pestkill Pvt. Ltd. After 6 months of using the machine, the MCGM

communicated with Pestkill Pvt. Ltd., but only to complain about the fogging

machines' inefficiency. They claimed that the machines were defective and

intended to return the machines. What advice would you give Pestkill Pvt.

Ltd.
 EXAMINATION OF ARTICLE CLERKS

PAPER V

COMMERCIAL LAWS

Thursday 16th October, 2019

TIME : 3 HOURS [1-00 P.M. TO 4-00 P.M.]

TOTAL MARKS-100

General Instructions:

(1) Please answer all questions to the point.

(2) Answers should be reasoned and where possible supported by case law.

SECTION-I

THE INDIAN CONTRACT ACT, 1872

1. Would an Agreement with an outgoing partner not to carry on a competing 3 Marks

business for a period of 2 years amount to an agreement in restraint of trade?

2. Would the non-disclosure of a previous insurance policy, though mandated, be 4 Marks

a valid ground for repudiation of the claim even though there is no prohibition in
law from a person holding any number of life insurance policies from different
insurers? Would the non-disclosure amount to fraud?

3. Would a settlement Agreement, entered into pursuant to disputes having arisen 3 Marks
in a Works Contract, be deemed to super cede the Works Contract for all
purposes?

4. Write short notes on any three of the following:

i. Termination of agency.

ii. Frustration of contract.

iii. Pawnee's rights.

iv. Quasi Contracts.

15 Marks
 2

SECTION-II

THE INDIAN PARTNERSHIP ACT, 1932

5. Mr. X files an application for appointment of Arbitrator against Mr. V. The 5 Marks

application is founded on the allegations inter alia that there was a

partnership between the Mr. X. and Mr. Y. However, disputes arose

between the partners of this firm, which resulted in its dissolution. Clause 11

of the Partnership Deed provides for resolution of disputes arising out of the

partnership between the parties by an Arbitrator. Mr. X, therefore, prayed

that an Arbitrator be appointed in terms of Clause 11 of the Partnership

Deed for deciding the disputes which have arisen between the parties

relating to the partnership. Mr. Y has raised a preliminary objection

contending therein that since the partnership in question on which the

application is founded was an "unregistered partnership", therefore, in the

light of the bar contained Under Section 69(3) of the Partnership Act, the

application filed by the Respondent is not maintainable, therefore, it is liable

to be dismissed. Is Mr. Y's contention correct? Give reasons.

6. Does the filing of a suit for dissolution, where the partnership is at will,

amount to giving of a notice of dissolution within the meaning of Section 43

of the Partnership Act. 5 Marks

7. Write short notes on any three of the following: 15 Marks

i. Duties of a Partner.

ii. Difference between an LLP and a Company.

iii. The rights of a buyer and seller of goodwill of a partnership firm.

iv. Can a Partner in an LLP transfer his economic rights?

 3

SECTION-III

THE NEGOTIABLE INSTRUMENTS ACT, 1881

8. Mr. X was carrying on business of dealing in building materials. Mr. Y, a 5 Marks

Principal in an educational institution came in contact with Mr. X through

common friends. Mr. X allowed Mr. Y to purchase building materials worth of

Rs. 1,65,400/- for the repairs of the School. Thereafter, there was no

response from Mr. Y for payment of cost of building material. On Mr. X

insisting on payment, Mr. Y issued a cheque of Rs. 1,65,400/- in favour of

Mr. X which was dishonoured for lack of funds. The statutory notice was

issued but there was no response from Mr. Y. Mr. X initiated penal action

against Mr. Y under Section 138 the Act. The learned Magistrate issued

process against respondent-accused. The learned Magistrate recorded the

particulars of offence by explaining the accusation to the accused and the

matter was kept for adducing the evidence on behalf of complainant. On 3

occasions Applications were made for adjournment of the proceedings by

Advocate for the Complainant. However, there was no progress into the

matter for evidence on behalf of the complainant. Eventually, the Magistrate

to dismissed the complaint for want of prosecution. Mr. X now comes to you

and states that his earlier lawyer was negligent and wants you to file an

appeal. What advice would you give Mr. X?

9. Discuss whether an action under Section 138 of the Act can fail if the

Accused is able to raise a probable defence which creates doubts about the

existence of a legally enforceable debt or liability. 5 Marks

10. Write short notes on any three of the following: 15 Marks

i. Classification of Instruments.

ii. Presumptions as to Negotiable Instruments.

iii. Holder and Holder in due course.

iv. Inchoate stamped Instruments.

 4

SECTION-IV

SALE OF GOODS ACT, 1930

11. Mr. X places an order for delivery of 5000 cases (each case having 20 5 Marks

packets of 500 gm) of butter from Mumbai Maska Co. The butter is to be

delivered to Mr. X's warehouse in Pune within a week. Mr. X pays in advance

the entire cost of the 5000 cases. The air conditioning unit on the truck

delivering the butter fails in transit as a result 2000 cases of butter are

delivered in a deteriorated condition. What advice would you give Mr. X?

Answer in True or False. Give one bullet point reason for your answer.

12. 5 Marks
i. A contract of sale may be implied by the conduct of parties.

ii. Where a price has not been fixed in a contract, the buyer shall

pay the seller a price the buyer deems reasonable.

iii. Stipulations as to time of payment are deemed to be the essence

of a contract of sale.

iv. The buyer is deemed to have accepted the goods when -tbe-

goods are delivered to him.

v. An unpaid seller of goods has the right of resuming possession of

goods in transit if he so desires.

Write short notes on any 3 of the following:

i. Conditions and warranties.

ii. Reservation of right of disposal.

13. 15 Marks
iii. Rights of an unpaid seller.

iv. Duties of the seller.

v. Remedy for breach of warranty.

 EXAMINATION OF ARTICLE CLERKS

PAPER V

COMMERCIAL LAWS

Thursday 6th October, 2021

TIME : 3 HOURS [1-00 P.M. TO 4-00 P.M.]

TOTAL MARKS - 100

General Instructions:

(1) Please answer all questions to the point.

(2) Answers should be reasoned and where possible supported by provisions of law and case
law.

SECTION -1

THE INDIAN CONTRACT ACT, 1872

1. Mr. A offered to buy Mr. B's house on 25-11-2020 for Rs. 5 Crore. On 10-12- 3 Marks
2021 Mr. B made an offer of not less than Rs. 5.5 Crore. This offer was
refused by Mr. A on 15-12-2020. On 20-12-2021 Mr. A wrote to Mr. B that he
was now prepared to pay Rs. 5.5 Crore. Mr. B refused to sell the house. Mr. A
wants to file a suit against Mr. B for breach of contract. What advice would you
give Mr. A?

2. Distinguish between undue influence and coercion. 4 Marks

3. Mr. A promises Ms. X to marry her in the event of his wife, Mrs. B's 3 Marks death. 4 years
later Mrs. B dies. On Mr. A's refusal to marry Ms. X, she sues Mr. A for damage for breach
of promise to marry her. How would you decide the case?.

4. Write short notes on any three of the following: 15 Marks

i. Agent's duties to the Principal.

ii. What is a Pledge? How is it different from a Bailment?

iii. Remedies for breach of contract.

iv. Novation.

v. Rights of indemnity holder.

 2

SECTION - II

THE INDIAN PARTNERSHIP ACT, 1932

The Limited Liability Partnership Act 2008

5. Discuss the key differences between a Partnership under the 1932 Act and a 5 Marks
Limited Liability Partnership.

6. Can a HUF be a partner of a LLP? 3 Marks

7. Is an Agreement between the partners of the LLP mandatory for the 2 Marks
incorporation of the LLP?

8. Write short notes on any three of the following: 15 Marks

i. Implied authority of a Partner.

ii. Dissolution of a Firm.

iii. Doctrine of Holding Out.

iv. Consequences of not registering the firm,

v. Foreign Limited Liability Partnership.

SECTION-III

THE NEGOTIABLE INSTRUMENTS ACT, 1881

9. What is meant by negotiation of a negotiable instrument?

2 Marks

10. Mr. A requires Rs. 1 Lakh but fails to obtain a loan from the bank as
3 Marks
his credit rating is not high enough. Mr. B whose credit is good, accomodates Mr. A by

giving him a pronote made out in favour of Mr. C, though Mr. B owes no money to Mr. C.

Mr. C endorses the pronote to Mr. D for value received. Mr. D who is a holder in due

course, demands payment from Mr. B. Can Mr. B refuse to pay relying on the arrangement

between him and Mr. A?

 3

11. Write a short note on presumptions as to negotiable instruments. 5 Marks

12. Write short notes on any three of the following" 15 Marks

i. Noting.

ii. Holder in due course.

iii. Rules as to compensation.

iv. Foreign Instruments.

v. Applicability of mens rea to the dishonour of cheques.

SECTION - IV

SALE OF GOODS ACT, 1930

13. Distinguish an Agreement to Sell from and Agreement of Sale. 5 Marks

14. Explain the rules of Auction under the Act. 5 Marks

15. Write short notes on any three of the following: 15 Marks

i. Stoppage in transit.

ii. Sale of unascertained goods.

iii. Rules relating to delivery.

iv. Seller's lien and termination of the lien.

v. Sale by sample.
 EXAMINATION OF ARTICLE CLERKS

PAPER V

COMMERCIAL LAWS

Saturday 9th April, 2022

TIME : 3 HOURS [1-00 P.M. TO 4-00 P.M.]

TOTAL MARKS - 100

Note: Answers should be reasoned and where possible supported by provisions of law and
case law.

SECTION -1
THE INDIAN CONTRACT ACT, 1872
1. Write a brief note on the doctrine of '’Privity of Contract’ and the 5 Marks
exceptions to the doctrine.

2. Write short notes on any three of the following: 12 Marks

i. Rules regarding contingent contracts.
ii. Restitution.
iii. Difference between an Indemnity and a Guarantee iv. Duties of a Bailee
v. Creation of an Agency

3. The Royal Western India Turf Club was to host the Derby from 10th to 5 Marks 12th
October, 2021. As they were expecting higher than usual footfall, RWITC contracted
with Parking Solutions LLP to build a new car park which entailed resurfacing
widening of the access road leading to the area allotted for the new car park. The
new car park was to be completed by 1st October 2015. A deposit of Rs. 15,00,000/-
was payable by RWITC on Sth August, 2021 and the balance of Rs. 27,00,000/ was
payable on 1st October 2021. Due to torrential rains in the 3rd week of September,
2021, a sinkhole formed in the area allotted for the new car park causing damage to
the machinery of Parking Solutions LLP. The area is no longer suitable for any
development. As the racecourse was also damaged, the Derby was canceled and will
not be rescheduled. Parking Solutions are claiming the balance of the monies
incurred towards labour and work done amounting to Rs. 18,00,000/- and an
additional Rs. 6,00,000/- towards their machinery which was damaged. Explain the
relevant law to RWITC and advise them as to their liability to Parking Solutions LLP.

4. Jignesh joins the Back2Basics movement based in Shangri-La who 5 Marks believe
in living without the negative influences of technology. Jignesh decides to move to
Shangri-La and places the following advertisement in the local new bulletin for his
Honda Civic car.
‘FOR SALE’- Honda Civic in pristine condition will be sold to the first person who
sends notice in writing that they wish to buy
 2

it for Rs. 3.00,000/- to the following address: Rajkiran Mansion, Altamount Road.
Mumbai.
On Saturday evening, Ramesh, a newly qualified driver, posts a letter stating that he
wants to buy Jignesh’s car on Wednesday morning. On Monday morning, Suresh a
friend of Jignesh sends him an email stating that he is willing to pay Rs. 3,00,000/- for
the car. Jignesh never receives the email, since as a member of the Back2Basics
movement he no longer uses computers or mobile phones. On Tuesday evening
Jignesh meets his friend Hitesh for dinner and over the course of the meal, Jignesh
promises to sell the car to Hitesh for Rs. 2,50,000/-.
Advise Jignesh as to whether he is contractually bound to Ramesh, Suresh or Hitesh.

SECTION-II
THE INDIAN PARTNERSHIP ACT, 1932
THE LIMITED LIABILITY PARTNERSHIP ACT, 2008
5. Sunny and Azhar decide to start a cricket coaching academy. They 5 Marks come to
you for advice on whether it would be preferable to form a Partnership under the 1932
Act or a Limited Liability Partnership.
What advise would you give them.

6. Sita and Geeta enter into a partnership. They agree that that if any one 3 Marks of
them died, the firm would not be dissolved but the eldest child of the deceased partner
would be taken as partner in the firm. Sita died in the year 2020. Her daughter Rita
was taken on as a partner. The Income Tax authorities refuse assess the income as
that of a partnership firm on the ground that on the death of Sita, firm was dissolved
and Rita and Geeta cannot be treated as partners and the Income would be liable in
the hands of Geeta as a Sole Proprietor.
What advise would you give to Geeta and Rita?

7. Amar, Akbar and Anthony are partners in the Firm. Amar retires from 3 Marks the Firm
and the retirement agreement provides that all the assets and liabilities of the Firm will
belong to Akbar and Anthony. Mocambo, a creditor of the Firm sues Amar, Akbar and
Anthony. Amar denies any liability relying on the Retirement Agreement. Advise
Mocambo.

8. Write short notes on any three of the following: 15 Marks

i. Designated Partner.
ii. Winding-up and Dissolution of a Limited Liability
Partnership.
iii. Relation of Partners to third parties.
iv. Dissolution of a partnership firm.
v. Duties of a Partner.
 3

SECTION-III
THE NEGOTIABLE INSTRUMENTS ACT, 1881
9. Comment on the maxim ‘Once a bearer instruments always a bearer 4 Marks
instrument'.

10. Ram signs, as maker, a blank stamped paper and gives it to Laxman, 3 Marks
and authorises him to fill it as a note for Rs. 50,00/- to secure an
advance which Bharat is to make to Laxman. Laxman fraudulently fills
it up as a note for Rs.2,00.000/- payable to Bharat who has in good
faith advanced Rs. 2.00,000/-. Is Bharat entitled to recover the
amount, and if so, up to what extent?

11. Write a short note on Notice of Dishonour. 5 Marks

12. Write short notes on any three of the following: 12 Marks

i. Incohate stamped Instruments.
ii. Capacity to make negotiableinstruments.
iii. Presentation for payment.
iv. Dishonour of cheques.
v. Noting and Protest.

SECTION - IV
SALE OF GOODS ACT, 1930
13. Bheem was shopping in the super market, he picked up a bottle of a
3 Marks
an aerated drink from a shelf with the intention to buy it. While he has
examining it, the bottle exploded in his hand and injured him. Bheem
sued both the management of super market and the company which
had bottled the drink to recover damages for breach of condition
arising from the sale of good. Will he succeed?

14. Write a brief note on breach of contract under the sale of goods Act.
5 Marks

15. Write short notes on any three of the following:

i. Time an essence of a contract of sale. 15 Marks
ii. Implied conditions and warranties.
iii. Caveat Emptor.
iv. Rules as to sale by auction.
v. Difference between sale and bailment.
 EXAMINATION OF ARTICLE CLERKS

PAPER V

COMMERCIAL LAWS

Wednesday 16th November, 2022

TIME : 3 HOURS [1-00 P.M. TO 4-00 P.M.]

TOTAL MARKS - 100

General Instructions:

Answers should be reasoned and where possible supported by provisions of law and case law.

SECTION -1
THE INDIAN CONTRACT ACT, 1872
1. Write a brief note on the doctrine of ‘supervening impossibility' and 5 Marks
the exceptions to the doctrine.

2. Write short notes on any three of the following: 12 Marks

i. Distinction between fraud and misrepresentation.

ii. Difference between Coercion and Undue influence.
iii. Consequences of absence of consent and free consent.
iv. Rights and liabilities of an undisclosed principal of an agent.

3. Mr. X is a Master Craftsman in Colaba, Mumbai. He takes on Mr. Y as 4 Marks his

apprentice for a period of 3 years. The apprenticeship agreement provides, inter alia, that
Mr. Y shall not after leaving the employ of Mr.
X, work in Mumbai for a period of 3 years. The Agreement also provides that Mr. Y shall
not use the trade secrets of Mr. X including the proprietary processes of Mr. X and the
unique raw materials sourced Mr. X from his dealers. Mr. Y after completion of his
internship joins the employ of ABC Ltd., a furniture company based out of Dadar, Mumbai.
Mr. X is informed by his dealer that Mr Y had approached him in respect of similar
materials as ordered by Mr. X. On making inquiries, Mr. X learns that ABC Ltd. have
started manufacturing furniture using his secret and proprietary processes. What are the
remedies available to Mr. X, if any.

4. Mr. A receives a parcel containing diwali sweets from Wefast by 4 Marks mistake. Mr. A not
realising that the sweets were not meant for him eats the sweets thinking that a well
wisher has sent him a diwali gift.
State the remedy(s) available to the true owner of the sweets.
 2

SECTION-II
THE INDIAN PARTNERSHIP ACT, 1932
THE LIMITED LIABILITY PARTNERSHIP ACT, 2008
5. Rohit is a partner of M/s. Fully Funda. He borrows money from Virat and
5 Marks
executes a promissory note in the name of the Firm without any authority.
What remedy does Virat have if Rohit fails to return his money? What action
can the Firm take against Rohit?

6. Answer in Yes or No. Give one bullet point in support of your answer, i. Can 5 Marks
a partner be required to retire on the ground of his or her age? ii. Is a partner

entitled to parental leave?

iii. Is a 'salaried partner' a partner in the legal sense?

iv. Will a new partner be liable for the existing debts of the partnership? v.
Are all the partners equally entitled to participate in decisions concerning the
Firm?

7. M/s. Speciality Chemicals deals in the procurement and selling of a 3 Marks

particular chemical known to have carcinogenic properties. A new law bans
the trading of that particular chemical. Advise the partners of M/s. Speciality
Chemicals.

8. Write short notes on any three of the following: 12 Marks

i. Partner by estoppel.
ii. Consequences on the dissolution of a LLP.
iii. Legal consequences of admission or retirement of a partner.
iv. True test of Partnership.
v. Duties of a Designated Partner.

SECTION-III
THE NEGOTIABLE INSTRUMENTS ACT, 1881

Answer whether True or False. Give one bullet point in support of your
9. 5 Marks
answer.

i. A Bill of Exchange is a conditional promise to pay.

ii. Currency notes are not considered as Negotiable Instruments under the
act.

iii. A bill of exchange drawn on a specified banker, and not expressed to be

payable otherwise than on demand is called a promissory note.
 3

iv. If a Minor draws, indorses, delivers and negotiates a Negotiable

Instruments, it binds the minor and the drawee.

v. In case of an accepted bill, the liability of drawee is primary and

unconditional.

10. Ram files a suit a civil suit against Laxman for declaration that Laxman was 3 Marks
not entitled to receive any amount from him in respect of an instrument
drawn by him. Ram prays to the court to issue an interlocutory injunction
restraining Laxman as as the drawee of the instrument from proceeding
under Section 138. Can the court grant such an injunction?

11. Write a short note on the procedure to be followed on the dishonour of a

cheque. 5 Marks

12. Write short notes on any three of the following"

i. Delivery. 12 Marks
ii. Summary trial.
iii. Effect of death of complainant during trial.
iv. Effect of subsequent payment.

SECTION-IV
SALE OF GOODS ACT, 1930
13. Can the following be the subject matter of sale under the Act?

i. Electricity. 3 Marks

ii. Actionable claim

iii. Standing timber.

14. Discuss the statement 'once a condition is always condition’. How does
condition differ from warranty under the Act?
4 Marks

15. Nifty Cars was entrusted with a car by Mr. X to sell the same for a price of
Rs. 5 Lakh. Nifty Cars sold the car to Mr. ¥ for Rs. 4 Lakh and
misappropriated the remaining proceeds. Does Mr. Y acquire good title of
3 Marks
the car under the Act? Why?
 4

16. Write short notes on any three of the following: 15 Marks

i. Doctrine of‘Nemo dat quod non habef.
ii. Condition as to title.
iii. Caveat Emptor.
iv. Rules relating to the passing of property of unspecific goods.
v. Distinction between lien and stoppage in transit.
 EXAMINATION OF ARTICLE CLERKS

PAPER V

COMMERCIAL LAWS

Wednesday 26th April, 20232

TIME : 3 HOURS [1-00 P.M. TO 4-00 P.M.]

TOTAL MARKS - 100

General Instructions:

Answers should be reasoned and where possible supported by provisions of law and case
law.

SECTION-I
THE INDIAN CONTRACT ACT, 1872

1. Mr. A hired a room in Fancy Stays, a 3 star hotel and paid a week’s rent 4 Marks in advance.
After registering, he went up to occupy the room. In the welcome letter it was mentioned
that “The hotel shall not be liable for any articles misplaced, lost or stolen unless handed
over to the manager for safe keeping.” On the third day of his stay Mr. A finds that his
money and watch have been stolen. Is the hotel liable for the loss caused to Mr. A?

2. Write short notes on any three of the following: 12 Marks

i. No consideration No contract.
ii. Privity of contract.
iii. Diffrentiateate between a void contract and a voidable contract.
iv. Uberrimae fidei.

3. Discuss the essential elements of a valid e-contract?

5 Marks

4. Mr. A, an agent, has authority from his principal Mr. B to sell goods 4 Marks on credit. Mr. A
sells goods on credit to Mr. C. At the time of sale, Mr.
C was insolvent. Is Mr. A liable to compensate Mr. B? Why?

SECTION - II
THE INDIAN PARTNERSHIP ACT, 1932
THE LIMITED LIABILITY PARTNERSHIP ACT, 2008

5. Mr. A and Mr. B. partners of M/s. AB & Co. deal trade in textile piece 4 Marks
goods. Mr. B separately starts the manufacturing of textile piece goods.
What advice would you give Mr. A.
 2

6. Mr. A, Mr. B and Mr. C are partners. Mr. C is a sleeping partner and is not
4 Marks
known to be a partner of the firm. C retires without giving the public notice of
his retirement. Is C liable for subsequent debts incurred by the firm?

7. Discuss the grounds on which a partnership firm may be dissolved by an order

of the court.
5 Marks

8. Write short notes on any three of the following:

i. Implied authority. 12 Marks
ii. Winding-up of a LLP.
iii. Designated Partner.
iv. Holding Out.

SECTION-III
THE NEGOTIABLE INSTRUMENTS ACT, 1881

9. Write a brief note on the different kinds of endorsements.

4 Marks
10. A is the holder of a Bill of Exchange. He transfers it to B without consideration
who transfers it to C without consideration. Mr. C transfers it to Mr. D for
consideration. Mr. D transfers it to Mr. E without consideration. From whom
4 Marks
can Mr. E recover the amount on such instrument. Give reasons.

11. Describe the different modes of discharge of liability of parties with regards to
a negotiable instruement.

5 Marks
12. Write short notes on any three of the follow ing”

i. Distinguish between a Bill of Exchange and a cheque.

ii. Ambiguous Instruments.
iii. Incohate Instrument. 12 Marks
iv. Drawee in case of need.

SECTION-IV
SALE OF GOODS ACT, 1930
13. What are the implied conditions ‘as to title’ and ‘as to sample’ in a contract for
sale of specific goods?

5 Marks
 3
14. When does property in goods pass from a seller to a buyer in a contract for sale of
ascertained and unascertained goods.
5 Marks

15. Mr. A, Mr. B and Mr. C jointly own a Truck which is kept in the possession of
Mr. A. Mr. A sells the truck to Mr. D without informing him that Mr. B and Mr.
C are the joint owners. Is the sale between Mr. A and Mr. D valid? Why 3 Marks

16. Write short notes on any threeof the following:

i. Distinguish between Future Goods and Contingent Goods.
ii. Essentials of a contract for sale.
iii. When does a condition becomes a warranty? 12 Marks
iv. Risk prima facie passes with ownership.
 EXAMINATION OF ARTICLE CLERKS

PAPER V

COMMERCIAL LAWS

Wednesday 8th November, 2023

Time : 3 Hours [1-00 P.M. TO 4-00 P.M.]

Total Marks -100

Note: Answers should be in brief however properly reasoned and wherever

possible supported by relevant provisions of law and case laws.

Question Question Marks

No.
SECTION I
THE INDIAN CONTRACT ACT, 1872

1. What are the various situations when contracts need 5 Marks

not be performed by parties?

2. Write short notes on any three of the following: 12 Marks

i. Essentials of a Contract of Guarantee, ii. Quasi contracts.

iii. Contracts against public policy.
iv. Discharge of surety.
v. Agreements without consideration and its exceptions

3. Mr. John, a foreigner and the owner of an immovable 5 Marks

property in India, gifted it to Mr. Sam without obtaining previous permission
of the Reserve Bank of India under Section 31 of the Foreign Exchange
Regulation Act, 1973. Discuss whether a transaction entered into in
contravention of Section 31 of Foreign Exchange Regulation Act, 1973 is
void or is only voidable at one of the party’ instance? How can the present
gift be enforced to effectuate the transfer? Explain with the help of recent
case laws if any.
 2

4. A firm consisting of two partners Mr. Chela and Mr. 3 Marks

Albela owes a sum of Rs. 1,00,000/- to Mr. Akela.
Mr. Akela filed a suit to recover the sum against Mr. Chela only and obtained
a decree. The decree remains unsatisfied. Mr. Akela now wants to file suit
against Mr. Albela to recover the same amount. Can he do so? Explain with
reference to relevant provisions of Indian Contract Act, 1872.

SECTION II
THE INDIAN PARTNERSHIP ACT, 1932
THE LIMITED LIABILITY PARTNERSHIP ACT, 2008

5. What are the various modes of dissolution of a 5 Marks

partnership firm? Are they all applicable for dissolution of a Limited Liability
partnership firm?

6. Write short notes on any f4 of the following: 16 Marks

i. Liability of holding out with reference to liability of pretended agent under

Indian Contract Act
ii. Duties and liabilities of a partner
iii. Expulsion of a partner
iv. Effect of non-registration of partnership
v. Minor as a partner
vi. Dissolution of Limited Liability of Partnership

7. Tim, Tom and Tammy, carrying on business in 4 Marks

partnership enter into a contract with Jerry for sale of 200 tires and other
accessories. By reason of their failure to perform the contract, they become
liable to pay Rs. 1 crore to Jerry as damages for the breach.
Tim dies and as a consequence partnership gets dissolved. Tom who is
friends with Jerry pays him 20 lakhs and gets assurance from Jerry that he
will not be held liable for the balance. Consider whether the estate of Tim
and whether Tammy are liable to Jerry and if so to what extent and whether
there is any liability whatsoever outstanding so far as Tom is concerned.
 3

SECTION III
THE NEGOTIABLE INSTRUMENTS ACT, 1881

8. Write short notes on 3 of the following: 15 Marks

i. Protection given by the Act to the bankers ii. Requisites of a

Bill of Exchange
iii. Indorsement and essentials of a valid indorsement
iv. Noting and protest
v. Notice of dishonour

9. Discuss the discharge of parties from liability of a negotiable 5 Marks

instrument.

10. What are the various presumptions as to negotiable 5 Marks

instruments?

SECTION IV
SALE OF GOODS ACT, 1930

11. Write short notes on any 3 of the following: 15 Marks

i. Conditions and Warranties

ii. Rights of an unpaid seller
iii. Auction sales and implied warranties
iv. Nemo dat quod non habet
v. Destruction of goods and its effect on sale

12. 10 Marks
What do you mean by ‘delivery’? How it is effected? Explain in
brief the rules as to delivery of goods.
OR
What do you mean by ‘sale’? What are the essentials of a valid
sale? Explain in brief sale by sample and sale by auction.