Instructions:

Read the statement carefully, answer the every question according to the chapter as we have discussed in the classroom (face to face) and through online classes, your answers should be (i.e.)

Q.1:

a)Reference: This case study is related to the Contract Act 1872, Free Consent, Capacity of parties or Mode of Discharge of contract and so on......

b)Decisions: Valid, void, Illegal, Type of offer or Kind of Contract

c)Reasons: A brief summary as to justify to your supposed answer

Q.1: (a) Mr Shabeer while dinning in a hotel noticed that meal contains the meat of the donkey. He called food inspector and the matter is taken to the court, where it has been proved the aforesaid statement. The persons have been punished accordingly. Now the high court wants to enforce the same procedure in the lower courts and future cases. Please discuss what high court has authority to bind as precedent and what they cannot buy. Elaborate briefly. (02)

(b) Keeping in mind the above statement the court orders the food inspector to carry out the process and submit the report accordingly to be reviewed by the high court, in the mean time police has detained an innocent person(Kamran) without lodgment of FIR for more than three days with the allegation of supplying donkey's meat. His son is worried. Please advise him also mention the proper terms used in above two cases. (03)

Q.2: (a) Under the provisions of the Contract Act, 1872 'Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject'.

Describe the circumstances in which a person may not be able to enter into a contract, despite meeting the above conditions (1.5)

(b) Sarya Traders (ST) agreed to supply building materials to Khawaja Contractors (KC) on 10 September 2020 for the construction of a charitable hospital in District Malir. However, on due date, ST failed to fulfill their obligation.

Under the provisions of the Contract Act, 1872 explain the rights available to KC under the above situation. Assume time was the essence of the contract.(1.5)

(c) What would be your answer in (b) above if KC had to procure building material from another supplier at a price higher than the price agreed with ST and also had to pay a penalty of Rs 50,000 to the owner of the hospital for construction delay? (01)

Q.3: (a) Lakhani Traders agreed to supply cotton yarn to Faraz Textile Limited at a fixed price for one year. Three months after the formation of the contract the price of yarn increased sharply, making it commercially unviable for Lakhani Traders to continue the supply at the agreed price. Therefore, they terminated the contract on the ground of difficulty/impossibility of performance.

Under the provisions of the Contract Act, 1872 briefly describe:

i.Whether the contract would be discharged under the above circumstances. (01)

ii.What would be your decision if Lakhani Traders were importing yarn and Government has imposed a ban on its import?(01)

(b) A wrote to B offering to sell him 800 tons of rice at Rs.70 per ton. On the same day B wrote A to purchase 800 ton at Rs.70 per ton.Identify the type of offer, also mentioned that contract between them will be formed or not with reason (01)

Q.4: Under certain special conditions, obligations resembling those created by a contract are imposed by law although the parties have never entered into a contract, in view of the provisions of the Contract Act, 1872 describe the conditions which must be fulfilled for claiming the amount in each of the following cases:

i.Baqir supplied a jacket to Sultan in order to save him from cold weather, Sultan who was a minor agreed to pay Rs, 2000 for the jacket although its market price was Rs, 1500. What amount he can charge and from whom?

ii.Rohit, a.tenat, who paid the previous electricity bill of Shoukat without being asked, is now demanding payment from Shoukat. Can Rohit claim the money or not? Justify with reason.

iii.Naeem was a treasury manager in Raheel Associates (RA). Naeem robbed Rs 100,000 cash from the business. Raheel, the owner of the business, instituted legal proceedings against Naeem. Naeem agreed to return the cash and Raheel agreed to withdraw the proceedings against him. Naeem fulfilled his part of promise.

Under the provisions of the Contract Act, 1872 explain whether Raheel is bound to withdraw the proceedings against Naeem.(04)

Q.5: (a) X sells by auction to Y a horse which X knows to be unsound. The horse appears to be sound but X knows about the unsoundness of the horse. Is this contract a valid in each of the following alternative cases.

i.X says nothing about the unsoundness of the horse to Y(01)

ii.If y says to X 'if you do not deny it, I shall assume that the horse is sound' X says nothing (01)

(b) X buys a painting believing it to be worth Rs 100000 while in fact it is worth only Rs 10000. Is it valid contract?(0.5)

(c) Ghazala, the wife of Naseer is ready to sue her husband for maintenance allowance, naseer agreed to pay her a monthly allowance and Ghazala forebears to sue him, also mention if naseer says that the said amount will be paid by naseer sister (zarganoon) and her wife agreed, and what option will be available to Ghazala if the Zarganoon's cheque way dishonoured