AILET entrance exam Question Bank Solutions for Legal Reasoning

A and B enter into a contract to marry each other. Before the time fixed for the marriage, A goes mad. The contract becomes

LEGAL PRINCIPLE When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach. or which the parties knew, when they made the contract to be likely to result from the breach of it. Such compensation is not given for any remote or indirect loss or damage sustained by reason of the breach. Decide, whether and to what extent B is entitled to damages in the following situation. 

FACTUAL SITUATION A contracts with B to sell him 1000 tonnes of iron at ₹ 100 per tonne. B tells A that he needs the iron for export purposes, and that he would be selling the iron at ₹ 200 per tonne. A breaks the contract. When the question comes about damages, A says he will pay only ₹ 5000 as damages because the same variety of iron was available in the market at ₹ 105 per tonne. B however contends that he should be given ₹ 100000 because that was the profit which )he would have made had A fulfilled tbe contract B had actually bought the iron at ₹ 110 and had exported it. B is

LEGAL PRINCIPLE The contract after the death of one party can be continued if it is ratified by the surviving party.

FACTUAL SITUATION Vishal, a famous artist was requested by Arun, an industrialist to draw the portrait of his deceased wife and paid ₹ 20,000/- in advance and agreed to pay when the work was completed, a sum of ₹2 lakhs·. When the portrait was half drawn, Vishal died due to a heart attack. His son also a fine artist completed his father's work and. demanded the money from Arun. Aron refused to pay and to accept the portrait drawn by Vishal's son and also demanded the advance to be returned. 

A lease agreement is a form of

The frustration of contract implies 

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

LEGAL PRINCIPLE: An agreement, the meaning of which is not certain, or capable of being made certain, is void.

FACTUAL SITUATION: A and B, who were brothers, entered into an agreement which stated that A would sell his entire share of the ancestral property to B. The agreement did not mention the specific details (like survey number) of the property.

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 is void to the extent that it restricts absolutely a party from enforcing his contractual rights by usual proceedings in any ordinary court.

FACTUAL SITUATION: A and B entered into a transaction in Delhi for sale of goods based in Delhi. The contract stated that in case of a dispute, only civil courts in Chennai would have jurisdiction. Neither A nor B resided or carried on business in Chennai.

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: The BCCI decided to hold an auction to sell IPL teams. 12 bidders registered for the auction. Unknown to the BCCI, these 12 bidders had entered into a contract that they would not bid more than a certain amount.

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: The defendant, Mr. Dhawan, wrote to the complainant, Mr. Chaman, with an offer to sell his house to him for Rs. 8,00,000. He promised that he would keep this offer open to him until Friday. However, on a Thursday Mr. Dhawan accepted an offer from a third party and sold his house. According to Mr. Chaman, he was going to accept this offer but had not said anything to Mr. Dhawan because he understood that he had time until Friday. Mr. Dhawan communicated to Mr. Chaman that the offer had been withdrawn, through a friend to the complainant. After hearing this, Mr. Chaman went to find the defendant, informing of his acceptance of the offer. Thereafter, the complainant brought an action for specific performance and breach of contract against the defendant. Whether the defendant's promise to keep the offer open until Friday morning was a binding contract between the parties and whether he was allowed to revoke this offer and sell to a third party?

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.

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

PRINCIPLE Every agreement by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, to that extent is void.

FACTUAL SITUATION A company entered into a contract with Coca Cola Ltd. to bottle soft drinks produced by Coca Cola. One of the terms of the contract was that the company would not bottle soft drinks for any other competitor of Coca Cola during the pendency of the contract.

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.

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: Bournville ran a sales promotion whereby if persons sent in 3 chocolate bar wrappers and a postal order for f 100 they would be sent a record. Big Beats owned the copyright in one of the records offered and disputed the right of Bournville to offer the records and sought an injunction to prevent the sale of the records which normally retailed at f 1,000. Under the Copyright Act, retailers are protected from breach of copyright if they gave notice to the copyright holders of the ordinary retail selling price and paid them 6.25% of this. Bournville gave notice stating the ordinary selling price was f 100 and three chocolate bar wrappers. The issue is whether the chocolate bar wrappers formed part of the consideration?

PRINCIPLE The object of an agreement is lawful unless it is forbidden by law; is of such nurture 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 and B entered into a contract, whereby A agreed to get married to B if her parents paid A ₹ 100000 before the wedding. B's parents failed to pay the promised amount. A sues B and her parents.

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

1. Offer is a proposal made by one person to another to do any act or abstain from doing it. The person who makes the offer is known as the promisor or offeror and the person to whom an offer is made is known as the promisee or the offeree.
2. A contract comes into being by the acceptance of an offer. When the person to whom the offer is made signifies his consent thereto, the proposal is said to be accepted and the parties are at consensus ad idem regarding the terms of the agreement.

Factual Situation: Tejas drove his car to a car park named Super Car Park (SCP).Outside the car park, the prices were displayed and a notice stated cars were parked at the owner's risk. An automatic ticket vending machine provided a ticket, a barrier was raised and Tejas parked his car. In small print on the ticket, it was stated that the ticket is issued subject to conditions displayed on the premises. On a pillar opposite to the machine was a notice stating the owners would not be liable for any injuries occurring on their premises. Tejas met with an accident and sought damages from SCP. SCP denied any liability on the basis of the exclusion clause which was mentioned in the notice on the pillar. Whether there are an offer and acceptance of the exclusion clause?

A contract enforceable at the instance of one Party is known as

A void agreement means

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

1. Offer is a proposal made by one person to another to do any act or abstain from doing it. The person who makes the offer is known as the promisor or offeror and the person to whom an offer is made is known as the promisee or the offeree. 
2. A contract comes into being by the acceptance of an offer. When the person to whom the offer is made signifies his consent thereto, the proposal is said to be accepted and the parties are at consensus ad idem regarding the terms of the agreement.

Factual Situation: The plaintiffs offered to provide delivery of a machine tool for a price of ₹75,535. The delivery of the tool was set for 10 months, with the condition that orders only qualified as accepted once the terms in the quotation were met and prevailed over any of the buyer's terms. The buyer responded to the offer with their own terms and conditions, which did not include the 'price variation clause' listed in the seller's terms. This included a response section that required a signature and is returned in order to accept the order. The sellers returned this response slip with a cover letter signaling that delivery would be in accordance with their original quotation. The tool was ready for delivery but the buyers could not accept delivery, for which the sellers increased the price which was in line with their initial terms. This was denied by the buyer and an action was brought by the seller to claim the cost of delay and interest. Was a contract made with or without a price variation clause?

The question consists of legal propositions/principles (hereinafter referred to as 'principle') and facts. These principles have to be applied to the given facts to arrive at the most reasonable conclusion. Such principles may or may not be true in the real sense, yet you have to conclusively assume them to be true. In other words, in answering the following question, you must not rely on any principles except the principle that is given herein below for the 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.

PRINCIPLE Generally, an agreement without consideration is not valid. Therefore in order to make a valid agreement some consideration which may have some value in the eyes of law, is essentially required.

FACTS William has an old car of which he makes seldom uses. He voluntarily enters into an agreement with Smith to sell this car for rupees ten thousand. Thereafter one Anson approaches William and offers to buy that car for rupees one lac as the car was one which Anson has been searching for long. Now William wants to cancel his agreement with Smith and refuses to deliver the car to him saying that consideration (price) for the car promised by Smith is negligible and, therefore, agreement with him cannot be said to be the valid one.

The question consists of legal propositions/principles (hereinafter referred to as 'principle') and facts. These principles have to be applied to the given facts to arrive at the most reasonable conclusion. Such principles may or may not be true in the real sense, yet you have to conclusively assume them to be true. In other words, in answering the following question, you must not rely on any principles except the principle that is given herein below for the 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.

PRINCIPLE A contract cannot be enforced by or against a person who is not a party to it. However, where some benefit is conferred on the third party by the contract itself, their third party can be allowed to enforce that contract to get such benefit.

FACTS Dinesh is liable to pay ₹50000 to Suresh. In order to discharge this liability, Dinesh enters into a contract with Ramesh by which Dinesh sells his car to Ramesh for ₹1 lac. Ramesh takes the delivery of the car and promises/assures to pay its price at the earliest. Dinesh separately informs Suresh about this contract for his satisfaction. Ramesh fails to pay the car's price. Suresh wants to join Dinesh in filing suit against Ramesh for the recovery of the price of the car. Whether Suresh is entitled to do so?