AILET entrance exam Question Bank Solutions for Legal Reasoning

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

Legal Principles:
1. A contract comes into being from the acceptance of an offer, When the person to whom the offer is made signifies his assent thereto, the proposal is said to be accepted and the parties are at consensus and idem regarding the terms of the agreement.
2. Consideration is something that moves from the promise 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.
3. Contractual rights and liabilities are exclusive to the parties to contract.
4. There are few exceptions to the doctrine of privity of contracts like agency, trust, assignment, and third party beneficiary.
5. A quasi-contract is a contract that is created by the court when no such official contract exists between the parties to prevent a party from being unjustly enriched, or from benefitting from the situation when he/she does not deserve to do so.

Facts: Goodtyre is a tyre manufacturer who agreed with their dealer to not sell the tyres below a recommended retail price (RRP). As part of the agreement, Goodtyre also required their dealers to gain the same agreement with their retailers, who in this instance was Bestmotors. The agreement held that if tyres were sold below the RRP, they would be required to pay ₹ 500 per tyre in damages to Good tyre. This was agreed between the dealer and Bestmotors, which effectively made Goodtyre a third party to that agreement. Sometime after this, Bestmotor sold the tyres below the agreed price and Goodtyre sued for damages and an injunction to prevent them from continuing this activity. Bestmotors is arguing that Goodtyre could not enforce the contract as it was not part of the contract between the dealer and Bestmotors. The court decided that Goodtyre had no right to access damages. Which of the following is the correct reasons?

I. The good tyre could not claim for damages as only a  party to a contract can claim damages under it.  

II. The good tyre had not given any consideration to  Bestmotors and therefore there could be no binding contract between the parties.  

III. The good tyre was not listed as an agent within the contract and could therefore not be included as a  valid third-party who had rights to claim on the contract. 

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

Legal Principles:
1. A contract comes into being from the acceptance of an offer, When the person to whom the offer is made signifies his assent thereto, the proposal is said to be accepted and the parties are at consensus and idem regarding the terms of the agreement.
2. Consideration is something that moves from the promise 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.
3. Contractual rights and liabilities are exclusive to the parties to contract.
4. There are few exceptions to the doctrine of privity of contracts like agency, trust, assignment, and third party beneficiary.
5. A quasi-contract is a contract that is created by the court when no such official contract exists between the parties to prevent a party from being unjustly enriched, or from benefitting from the situation when he/she does not deserve to do so.

Facts: Nandini, by deed of gift, made over the certain landed property to Reena, her daughter. By the terms of the deed, which was registered, it was stipulated that an annuity of ₹ 3,000 should be paid every year to Subhashini, sister of Nandini. Reena executed in Subhashini’s favour an agreement promising to give effect to stipulation. The annuity was, however, not paid and Subhashini sued to recover it. Reena is defending herself by claiming that there is no valid contract with Subhashini. Which of the following can be ground/s for the court’s decision? 

I. A promise is enforceable if there is some consideration for it and it is quite immaterial whether it moves from the promise or any other person.
II Only a person who is a party to a contract may demand the execution of that contract from other parties. But if there is a third-party beneficiary to the contract then it is enforced to the extent of his\her benefit.
III. The agreement is valid as both Reena and Subhashini agreed to it on the same thing in the same sense.
IV. There is no privity of contract as Subhashini has furnished no consideration. Reena had promised to Subhashini but consideration was furnished by Nandini.

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

Legal Principles:
1. A contract comes into being from the acceptance of an offer, When the person to whom the offer is made signifies his assent thereto, the proposal is said to be accepted and the parties are at consensus and idem regarding the terms of the agreement.
2. Consideration is something that moves from the promise 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.
3. Contractual rights and liabilities are exclusive to the parties to contract.
4. There are few exceptions to the doctrine of privity of contracts like agency, trust, assignment, and third party beneficiary.
5. A quasi-contract is a contract that is created by the court when no such official contract exists between the parties to prevent a party from being unjustly enriched, or from benefitting from the situation when he/she does not deserve to do so.

Facts: Tanu’s brother, Ishan, tries to talk her into building a greenhouse in her large back-yard. She declines, but lshan is convinced that, if she were surprised by a lovely greenhouse, she would love it. Knowing that Tanu makes good money, and could easily afford the greenhouse, Ishan contacts greenhouse builder Aditya and arranges to have him erect the structure while his sister is at work one day. 
Tanu is not happy with her brother’s initiative, but the deed is done. Ishan has directed Aditya to bill his sister for the greenhouse, and that turns out to be the biggest surprise for her. She declines to pay, and Ishan tells Aditya he cannot afford it. Aditya is now out, not only for payment for his many hours of hard work but cash for the materials he used. He files a civil suit to claim against both Tanu and Ishan. Decide.

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