Given Below is a Statement of Legal Principle Followed by a Factual Situation. Apply the Principle to the Facts and Select the Most Appropriate Answer. Principle: When the Parties to an Agreement - Legal Reasoning


Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts and select the most appropriate answer.

Principle: When the parties to an agreement agree on the same thing in the same sense, there arises legally binding obligations between them.

Facts: Zaverilals antique shop was a well-known shop in the locality. Taradevi, a socialite of the locality, went to the shop and she was attracted by an earthen jar on display. Zaverilal explained to her that the jar belonged to the Hoysaia period; and despite its earthern composition, it was very strong and almost unbreakable. Taradevi replied to him that she was so captivated by the jar that it was immaterial to her as to which period, it belonged. She bought the jar and came home. She placed the jar in a prominent place in her drawing-room. One of her friends, an art critique, who happened to visit her, told her that the jar was not at all an Antique, but Taradevi did not bother about it. One day, it accidentally fell down and broke into pieces. Taradevi took up the matter with Zaverilal that his both statements were wrong and therefore, he should pay damages to her


  • Zaverilal must compensate her since both the statements concerning jar were wrong

  • Zaverilal need not compensate, since, Taradevi was  not concerned with its antique value at all 

  • Zaverilal must compensate because he carelessly made the statements 

  • None of the above



None of the above

Zaverilal should compensate as he said that the article was strong and almost unbreakable. The fact that the article broke will hold Zaverilal liable. None of the options given explore this possibility. Hence it's none of the above.

Concept: Contract Law
  Is there an error in this question or solution?


The Contract Act came into force

When the contract is perfectly valid but cannot be enforced because of certain technical defects. This is called

A lease agreement is a form of

The frustration of contract implies 

A and B Hindu couples were married to each other. Owing to differences between them they decided to get divorced. They entered into a contract laying down the conditions that both parties had to adhere to. One of the terms of the contract was that their children would not be entitled to claim the ancestral property of A, the husband.

Apply the legal principles to the facts given below and select the most appropriate answer.
Legal Principles:

1. Consideration is something that moves from the promisee to the promisor, at the implied or express request of the latter, in return for his promise. The item that moves can be a right, interest, profit, loss, responsibility given or suffered, forbearance, or a benefit which is of some value in the eyes of law.

2. An offer may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterward.

Factual Situation: MXM Co. is a building contractor who entered into an agreement with Star Heights Housing Association to refurbish a block of 27 flats. This contract was subject to a liquidated damages clause if they did not complete the contract on time. The MXM Co. engaged Hasan to do the carpentry work for an agreed price of Rs. 20,000. After six months of commencing the work, Hasan realized he had priced the job too low and would be unable to complete at the originally agreed price. He approached MXM Co. who recognized that the price was particularly low and was concerned about completing the contract on time. MXM Co. agreed to make additional payments to Hasan in return for his promise to carry out his existing obligations.
MXM Co. agreed to pay Hasan an additional f 575 per flat. Hasan continued work on the flats for a further period of 6 weeks but only received an additional f 5,000. He then ran out of money and refused to continue unless payment was made. MXM Co. engaged another carpenter to complete the contract and refused to pay Hasan any further sums. Hasan sued for payment under the original agreement and the subsequent agreement. MXM Co. argued that the agreement to make additional payments was unenforceable as Hasan has not provided any consideration to make this agreement a valid contract. Decide.

A void agreement means

In the year 2002, the Competition Act was enacted replacing

No one can be convicted twice for the same offense. This doctrine is called

Mark the incorrect answer
The main purpose of the Law of Contract is

In Ram v/s Shyam, Ram cannot be a

Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts and select the most appropriate answer.

Principle: An agreement becomes a contract when it is entered into between two or more people with each other's free consent. Two or more people are said to consent when they agree to the same thing in the same sense. Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation, or mistake.

Factual Situation: A went to a doctor to get himself treated. The doctor asked him to sign a "consent form" and said that unless he signs it, he will not examine him. A signed the form waiving his right to sue the doctor.

Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts and select the most appropriate answer.

Principle: The object of an agreement is lawful unless it is forbidden by law; is of such a nature that, if permitted, it would defeat the provisions of any law; is fraudulent; involves or implies injury to the person or property of another person; the court regards it as immoral; it is opposed to public policy.

Factual Situation: A was arrested by the police for committing an offence and was subsequently granted bail by the Court. One of the conditions imposed by the Court for granting bail was that A arranges for a surety for 50,000. A approached B to be a surety. B agreed but insisted that they enter into a contract whereby A would deposit 50, 000 into B's account, which would be returned to A by B after the case was over.

Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts and select the most appropriate answer.

Principle: When there is a breach of contract, the resulting damages will have to be paid by the party breaching the contract to the aggrieved party. However, the parties are free to agree as to damages payable in advance in case there is a breach of contract.

Facts: Mr. Ramesh entered into a contract with Mr. Ramakrishna for selling his green Alto Car for Rs. 3 lakhs. Mr. Ramakrishna was to pay Rs. 3 lakhs on or before 25th April 2005 and take possession of the car. The party failing to honour the contract has to pay Rs. 40,000/- as damages to the other party. Mr. Ramakrishna has not performed his part of the contract. Mr. Ramesh is claiming Rs. 40,000/-

Principle: Trade dispute means any dispute between employers and workmen or between workmen and workmen or between employers and employers which is connected with the employment or non-employment or the terms of employment or the conditions of labour, of any person. Disputes connected with the non-employment must be understood to include a dispute connected with a dismissal, discharge, removal, or retrenchment of a workman.

Facts: 'X', an employee in a sugar factory, raised a dispute against 'Y', the employer, through trade union regarding certain matters connected with his suspension from the employment.  

Principle A proposal (offer) should be made with an intention that after its valid acceptance, a legally binding promise or agreement will be created. The test for the determination of such intention is not subjective, rather it is objective. The intention of the parties is to be ascertained from the terms of the agreement and the surrounding circumstances under which such an agreement is entered into. 
As a general rule, in the case of arrangements regulating social relations, it follows as a matter of course that the parties do not intend legal consequences to follow. On the contrary, as a general rule, in the case of arrangements regulating business affairs, it follows as a matter of course that the parties intend legal consequences to follow. However, the above rules are just presumptive in nature and hence can be rebutted.

Facts: One morning while having breakfast, 'X', the father, says to 'Y' (X's son), in a casual manner, 'I shall buy a motorbike for you if you get through the CLAT.'

Which of the following derivations is correct?

LEGAL PRINCIPLES: A contract is an agreement enforceable by law.
FACTUAL SITUATION: Amita invited Bina to her house for dinner. Bina accepted the invitation but later did not go. On Bina's failure to attend, Amita filed a suit against Bina for the price of non-consumed food. Will the law enforce this agreement? 

The following question consists of two statements, one labelled as. 'Assertion' and the other as 'Reason'. Read both the statements carefully and answer using the codes given below.

Assertion (A): The entries in the three legislative lists are not always set out with scientific precision.
Reason (R): The entries are not powers but are only fields of legislation.

Consists of legal proposition(s)/  principle(s) (hereinafter referred to as 'principle') and facts. Such principles may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this Section. In other words, in answering these questions, you must not rely on any principle except the principles that are given herein below for every question.  
Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest in the study of law, research aptitude, and problem-solving ability, even if the 'most reasonable conclusion' arrived at may be absurd or unacceptable for any other reason. It is not the objective of this section to test your knowledge of the law.  
Therefore, to answer a question, the principle is to be applied to the given facts and to choose the most appropriate option. 

Principle: Every agreement, of which the object or consideration is opposed to public policy, is void. An agreement that has the tendency to injure public interest or public welfare is one against public policy. What constitutes an injury to the public interest or public welfare would depend upon the times and the circumstances.
Facts: 'A' promises to obtain for 'B' employment in the public service, and 'B' promises to pay rupees 5,00,000/- to 'A'.

Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.

Legal Principle: Contract is an agreement freely entered into between the parties. But when consent to an agreement is obtained to undue influence, the contract is voidable at the option of the party whose consent was so obtained. 

Factual Situation: The Pragya had been worked for a businessman Anurag since the age of 18, working for a range of Anurag's businesses. In 2000, (aged 21) Pragya purchased a flat. In 2005,  Mr. Anurag's business was facing financial difficulties, and he asked Pragya to offer up her flat as a financial security against an overdraft facility for the business. In July of that year, the bank's solicitors wrote to Pragya, advising that she should take  Independent legal advice before putting her property up as a  security for the debt. The bank also notified Pragya that the guarantee was unlimited in both time and financial amount. Having discussed the arrangement with Anurag, Pragya was unaware of the extent of the borrowing but was assured that her mortgage would not be called upon and that his own properties which were also used as security would be looked at first. A charge was executed over the Pragya's property in August 2005. In 2009, Mr.  Anurag's business went into liquidation and the bank formally demanded ` 60,24,912 from Pragya. Pragya raised the defense of undue influence – stating that Mr. Anurag had induced her to enter into the agreement, and the bank had full knowledge/notice of this undue influence which should set aside the bank's right to enforce the debt recovery against Pragya. The bank is contending that there is no undue influence.

Assume it is a case of undue influence. Decide whether the bank has done enough to allay concerns of undue influence?  


      Forgot password?
Use app×