![GU Business Law Solved Question Paper 2023 [Gauhati University BCom 3rd Sem NEP FYUGP]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhO3WPpdapwQtbOn47uuZyt8JD_p2A108fMwBfmYf7OWg7EylIxsqZ5qIhQH3XIL7lzQCKj66cCyORYwXDvYf64Y2LskaY6RzO3K1q2Wl5ExLB5Qw8Ritpzfn_ibqSxhdg4oHpZdrvP5wiFJfvJfPe6_EAwPG4hFWQoPIa62BeuNrqrMzLVjYTMzMDXba9R/s16000-rw/GU%20Business%20Law%20Solved%20Question%20Paper%202023%20%5BGauhati%20University%20BCom%203rd%20Sem%20NEP%20FYUGP%5D.webp "GU Business Law Solved Question Paper 2023 [Gauhati University BCom 3rd Sem NEP FYUGP]")
Gauhati University BCom FYUGP 3rd Semester
Business Law solved question paper 2023
Full Marks: 80, Time: 3 hours
The figures in the margin indicate full marks for the questions.
1. (A) Choose the correct option from the following: 1x4=4
(a) Where no mode of acceptance is prescribed, acceptance
(i) need not be communicated in writing
(ii) must be communicated by registered post
(iii) must be communicated by telegram
(iv) may be expressed in some usual and reasonable manner.
(b) An agency can be created by:
(i) Express Agreement
(ii) Implied Agreement
(iii) Operation of law
(iv) All of the above
(c) The term goods under the sale of goods act, 1930 does not include:
(i) Harvested crop
(ii) Actionable claim (Other than actionable claims and money)
(c) Grass
(d) Stock and Share
(d) The Agreement of Limited liability partnership should be
(i) Written only
(ii) Oral only
(iii) Either written or oral
(iv) None of the above
(B) State whether the following statement are correct or incorrect: 1x4=4
(a) A minor can become a member of a partnership firm through agreement. True
(b) No consideration is necessary to create an agency. True
(c) Sale is an executed contract. True
(d) Collecting banker collects both open and crossed cheque. False, Crossed cheque
(C) Fill in the blanks with appropriate word: 1x2=2
(a) Every limited liability partnership shall have at least two designated partners.
(b) Chief Information Commissioner shall hold office upto the age of five (5) years.
2. Answer the following questions: (any five) 2x5=10
(a) What do you mean by performance of Contract?
Ans: When the parties to a contract fulfill their obligations arising under the contract within the time and in the manner prescribed, it is called performance contract. Performance may be actual performance or attempted performance.
(b) A sells to B 10 bags of rice which are locked up in a godown. A gives B the key of the godown. Does it constitute delivery of the goods?
Ans: Section 33 provides that the delivery of goods sold may be made
a) By doing anything which the parties agree; or
b) Which has the effect of putting the goods in the possession of the buyer or of any person authorized to hold them on his behalf;
In the given question, after giving the key to B goods are in the possession of the buyer. So, it constitute delivery of the goods.
(c) What is a partnership deed?
Ans: A partnership is formed by an agreement. This agreement may be oral or in writing. Though the law does not expressly require that the partnership agreement should be in writing, it is desirable to have it in writing. A written agreement, which contains the terms of partnership, as agreed to by the partners is called ‘Partnership Deed.’
(d) Define the term ‘holder in due course?
Holder in due course means any person who, for consideration, become the possessor of a promissory note, bill of exchange or cheque, if payable to bearer, or the payee or endorsee thereof if payable to order, before the amount mentioned, in it became payable and without having sufficient course to believe that defect existed in the title of the person from whom he derived his title.
(e) Define the term ‘Limited Liability Partnership’.
Ans: LLP is simply a combination of Partnership and Company form of business organisation. It is a corporate business vehicle that enables profession expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner. It provides an alternative to the traditional partnership firm with unlimited liability.
(f) What is meant by Information under Right to Information Act, 2005?
Ans: According to Sec 2(f) of the RTI Act’ 2005,” "information" means any material in any form, including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force.”
3. Answer any four of the following question: 5x4=20
(a) Write when the consent to a contract is said to be not free.
Ans: Section 14 defines ‘Free Consent’ as – Consent is said to be not free in the following cases:
(i) Coercion, as defined in Section 15, or
(ii) Undue influence, as defined in Section 16, or
(iii) Fraud as defined in Section 17, or
(iv) Misrepresentation as defined in Section 18, or
(b) Distinguish between contract of indemnity and contract of guarantee.
Ans: The contract of indemnity differs from the contract of guarantee in the aspects shown in the following table:
(c) Briefly explain the term ‘Caveat Emptor’.
Ans: The term ‘Caveat Emptor’ means ‘Let the buyer beware’ i.e. in sale of goods, the seller is under no duty to reveal unflattering truths about the goods sold. Therefore, when a buyer buys some goods, he must examine them thoroughly. If the goods turn out to be defective or do not suit his purpose, or if he depends upon his own skill and judgment and makes a bad selection, he cannot blame anybody excepting himself.
(d) What test would you apply to determine the existence of partnership?
Ans: In order to determine the existence of partnership between groups of persons, agreement between persons must be taken into consideration. If the agreement is to share the profits of a business, and the business is carried on by all or any of them acting for all, there is partnership otherwise not.
(e) Mention five liabilities of a partner in a limited liability partnership.
Ans: Liabilities of partners of an LLP:
1. Section 28 provides that a partner is not personally liable solely by reason of being a partner of LLP. But he will be personally liable for his own wrongful act or omission. But he shall not be personally liable for the wrongful act or omission of any other partner of the LLP.
2. Section 29 provides that any person, who by words spoken or written or by conduct represents himself, or knowingly permits himself to be represented to be a partner in a LLP is liable to any person, who has on the faith of any such representation given credit to the LLP, whether the person representing himself or represented to be a partner does or does not know that the representatives has reached the person so giving credit.
3. Unlimited liability: Section 30 provides that any act with intent to defraud creditors of the LLP or any other person, the liability of LLP and partners shall be unlimited for all or any of the debts or other liabilities of the LLP. If such act is carried out by a partner, the LLP is liable to the same extent as the partner unless it is established by the LLP that such act was without the knowledge or the authority of the LLP.
Section 30(2) provides that where any business is carried on with such intent to defraud the creditors of LLP, every person who was knowingly a party to the carrying on the business shall be punishable with imprisonment for a term which may extend to 2 years and with fine which shall not be less than 50000/- but which may extend to `5 lakhs.
In such cases the LLP or any partner or designated partner or employee shall be liable to pay compensation to any person who has suffered any loss or damage by reason of such conduct. Section 31 provides for reduction of penalty awarded under Section 30(2). According to Section 31 the Court or Tribunal may reduce or waive any penalty imposed on any partner or employee of a LLP, if it satisfied that:
a) such partner or employee of a LLP has provided useful information during investigation of such LLP; or
b) when any information given by any partner or employee leads to LLP or any partner or employee of such LLP being convicted under this Act or any other Act.
No partner or employee of any LLP may discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against the terms and conditions of his LLP or employment merely because of his providing information or causing information to be provided by him.
(f) How is Central Information Commission constituted under Right to Information Act, 2005?4.
Answer any four of the following questions: 10x4=40
(a) Define the term ‘offer’. Explain the legal rules regarding a valid offer under the Indian Contract Act, 1872.
Ans: Offer and Rules relating to offer
The term ‘proposal’ is otherwise called as ‘offer’. An offer is a proposal by one person, whereby he expresses his willingness to enter into a contractual obligation in return for promise, act or forbearance. Section 2(a) of the Act defines ‘proposal’ or offer as when one person signifies to another his willingness to do or abstain from doing anything with a view to obtaining the assent of that other to such act or abstinence. The person making the proposal is called as ‘offeror’ or proposer’ and the person the proposal is made is called as ‘Offeree’.
Rules as to Offer:
1. Intention to create legal relationship: The Offeror while making the offer must do it with the intention to create legal relations. Offeror must be conscious that a contract will arise, if the Offeree accepts the same.
2. Certain or Unambiguous: The terms of the Offer to be valid must be certain, clear and unambiguous. For e.g. A offers to sell B, ten tones of oil. A is a dealer of various oil. Here the offer is ambiguous as the offer does not specify the type of oil. However, if A was a dealer only in Parachute Coconut oil then the offer is unambiguous.
3. Offer must be distinguished from:
(i) A declaration of intention: A declaration by a person that he intends to do something gives right of action to another. Such a declaration only means that an offer will be made or invited in future and not that an offer is made now.
(ii) An invitation to make an offer or do business: Display of goods by a shopkeeper in his window, with prices marked on them, is not an offer but merely an invitation to the public to make an offer to buy the goods at the marked prices. A buyer, in case the prices of the goods are marked, cannot force the seller to sell the goods at those prices. He can, at the most, ask the seller to sell the goods to him, in which case he is making an offer to the seller and it is up to the seller to accept the offer or not. Likewise, quotations, menu card, catalogues, prospectus issued y a company for subscribing to shares are all example of an invitation to make an offer.
4. Offer must be to a definite person: The words of an Offer must apply to definite persons or class of persons to create a legal relationship.
5. Offer must be communicated: An offer, to be complete, must be communicated to the person to whom it is made. Unless an offer is communicated, there can be no acceptance of it.
6. Offer must be made with a view to obtaining the assent: The offer to do or not to do something must be made with a view to obtaining the assent of the other party addressed and not merely with a view to disclosing the intention of making an offer.
7. Special Terms to be made clear in the Offer: The offer may be conditional but the conditions or special terms must be clearly communicated in the offer. Whenever an offer has special terms attached to it, these special terms and conditions must be effectively communicated to the Offeree to bind him.
8. Offer should not contain a term, the non-compliance of which may be assumed to amount to acceptance: A person cannot say that if acceptance is not communicated within a certain time, the offer would be considered as accepted.
(b) Distinguish between: 5+5=10
(i) Void agreement and void contract
(ii) Sale and agreement to sell.
Ans: Difference between ‘Sale’ and ‘agreement to sell’:
(c) Define Bailment and briefly state the rights and duties of bailor under Indian Contract Act, 1872. 2+4+4=10
Ans: Bailment: Bailment is a kind of activity in which the property of one person temporarily goes into the possession of another. The ownership of the property remains with the giver, while only the possession goes to another. Several situations in day to day life such as giving a vehicle for repair, or parking a scooter in a parking lot, giving a cloth to a tailor for stitching, are examples of bailment.
Section 148 of Indian Contract Act 1872, defines bailment as follows: “A bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them.”
Rights and Duties of Bailer
Rights of bailer
1. Right to take back: As the purpose completes, the bailer has right to get back the property bailed and if any damage is caused to the property, he is entitled for compensation from the bailee.
2. Right in case of unauthorized use: If the bailee uses property in unauthorized manner, the bailer can terminate the bailment as well as can claim for compensation also.
3. Right to gratuitous bailer: The bailer has right to terminate the contract of gratuitous bailment at any time even before the specified time, subject to the limitations that where such termination of bailment causes loss in excess of benefit, the bailer must compensate the bailee.
4. Right to get benefit/profit: If the bailed property has been accredited, the bailer has right to the benefit/profit.
Duties of Bailer
1. Duty to dispose faults: Bailer should disclose faults present in goods at the time of making delivery. Faults are of two types namely; Known faults and Un-known faults. On the other hand bailments also are of two types namely Gratuitous bailment and Non-Gratuitous bailment. In case of gratuitous bailment, bailer is liable to compensate for bailee injuries arising out of known faults. In Gratuitous bailment, bailer is not answerable to un-known faults. In case of Non-Gratuitous bailment, bailer is answerable to both known faults and Un-known faults.
2. Duty to contribute for expenses: Bailer should contribute for expenses incurred by bailee. In case of Gratuitous bailment, bailer need not contribute for ordinary expenses and extra ordinary expenses or to the contributed by bailer. In case of Non-Gratuitous bailment, bailer should contribute for both ordinary expenses and extra ordinary expenses.
3. Duty with regard to defective title: In case where bailer has delivered the goods with defective title, the bailee may come across suffering from the side of true owner due to bailer’s defective title. In such a case bailer with defective title should compensate bailee.
4. Duty to Indemnify: Principal of indemnity operates between bailer and bailee, where bailer becomes implied indemnifier and bailee becomes implied indemnity holder. So bailer has duty to indemnify bailee.
5. Duty to take the Goods back: After fulfillment of purpose bailee returns the goods to bailer. Then bailer should take them back. If bailer refuses to take the goods back, bailer has to compensate bailee.
(d) Define the term condition and warranty in a contract of sale. When condition can be treated as warranty? Briefly explain two implied conditions in a contract of sale. 2+2+2+4=10
Ans: ‘Condition’ and ‘Warranty’
In a contract of sale, the subject matter is ‘goods’. There are millions of sale transactions which occur in the normal course, all around the world. There are certain provisions which need to be fulfilled because it is demanded by the contract. These prerequisites can either be a condition and warranty. The condition is the fundamental stipulation of the contract of sale whereas Warranty is an additional stipulation.
Condition: Section 12(2) states that a condition is a stipulation which is essential to the main purpose of the contract. The breach of a condition gives rise to a right to treat the contract as repudiated or broken. So according the above definition it is clear that condition is very essential for the performance of a contract. The breach of condition will be regarded as the breach of the whole contract.
Example: A buys from B hair oil advertised as pure coconut oil. The oil turns out to be mixed with herbs. A can return the oil and claim the refund of price.
Warranty: Section 12(3) states that a warranty is a stipulation which is collateral to the main purpose of the contract. The breach of a warranty gives rise to a claim for damages but not a right to reject the goods and treat the contract as repudiated. The above definition shows that for the implementation of a contract warranty is not essential. For the breach of warranty only damages can be claimed.
Example: A while selling his car to B, stated the car gives a mileage of 12 kms per litre of petrol. The car gives only 10 kms per litre. B cannot reject the car. It is breach of warranty. He can only claim damages for the loss due to extra consumption of petrol.
When condition to be treated as warranty.
a) Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition or elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the contract as repudiated.
b) Where a contract of sale is not severable and the buyer has accepted the goods or part thereof, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is a term of the contract, express or implied, to that effect.
c) Nothing in this section shall affect the case of any condition or warranty fulfillment of which is excused by law by reason of impossibility or otherwise.
Implied Conditions:
1. Condition as to title: In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is an implied condition on the part of the seller that –
(a) In the case of a sale, he has a right to sell the goods and
(b) In the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass.
2. Sale by description: Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description (Section 15). If you contract to sell peas, you cannot oblige a party to take beans.
(e) (i) How a partnership firm can be registered under Indian Partnership Act, 1932? 5
Ans: Registration of Firms: The registration of a partnership is not compulsory but to avoid future problems it is necessary for a firm to get itself registered under the Indian Partnership Act, 1932. Sec. 58 of the Indian Partnership Act lays down the provisions relating to the registration of a firm. If partners want to get their firm registered, they have to file statement in the prescribed form. The statement can be send by post or delivered to the registrar of the area in which the place of business is situated. The following points must be stated in the statement of registration:
a) The firm’s name
b) The principal place of business of the firm
c) The names of any other places of business
d) The date when each partner joined the firm
e) The name and address of the firm
f) The duration of the firm
The statement of registration shall be signed by the partners or their authorised agents. When the registrar is satisfied that the provisions of Sec. 58 have been duly complied with, he shall record an entry of this statement in the register of firms and shall file the statement.
(ii) State five advantages of forming a limited liability partnership. 5
Ans: Advantages of LLP: An LLP has the following advantages:
a) Easy formation: The process of formation is very simple as compared to companies and does not involve too much formality.
b) Separate Legal Entity: It has separate legal entity distinct from its members. LLP is known by its name and not by the name of its partners.
c) Perpetual Existence: It has perpetual existence irrespective of change in partners. The LLP shall continue to exist till it is wound up in accordance with the provisions of the relevant law.
d) Limited restrictions: In LLPs, there is no requirement of minimum capital contribution, no restrictions as to maximum number of partners.
e) No need to maintain statutory record: There is no requirement to maintain statutory record except books of accounts and return which is required to be submitted with ROC.
(f) What is general and special endorsement? Mention five reasons for bouncing of cheque. 5+5=10
Ans: Blank or General Endorsement: An endorsement is said to be blank or general, if the endorser sings on the back or on the face of the instrument without specifying the name of any endorsee. The effect of his endorsement makes the instrument payment to bearer even though originally it was payable to order. For example, a cheque payable to Mr. X or order and Mr. X endorse the cheque to Mr. Y by simply affixing his signature. The effect of this endorsement makes the instrument payable to bearer even though originally it was payable to order.
Full or Special Endorsement: If an endorser signs his name and adds a direction to pay the amount mentioned in the instrument to or to the order of a specified persons, such an endorsement is said to be a full or special endorsement. For example, “Pay to Mr. X or order” S/d Mr. Y is an example of full endorsement. Here Mr. Y is the endorser and he has mentioned the name of the endorsee – Mr. X.
Conditions where a Banker dishonour a cheque
The bank may dishonour a cheque for the following cases.
a) When the cheque is post dated and it is presented for payment before the date it bears.
b) When there are insufficient funds to the credit of the drawer.
c) When the cheque is presented for payment at branch where the drawer of the cheque has no account.
d) When a cheque is not duly, presented, as for example a cheque presented outside banking hours.
e) When the cheque is ambiguous, mutilated, materially altered or irregular.
f) When the cheque has become stale, that is it is not presented within six months of the issue of the cheque.
(g) (i) Explain the salient features of ‘Right to Information Act, 2000’.
Ans:
(ii) Distinguish between sale and bailment.
Ans: Difference between Bailment and Pledge
(h) Explain in short the following terms:
(i) Consideration
Ans: Consideration: Section 2 (d) of Indian Contract Act, 1872, defines consideration as “When at the desire of the promisor the promise or any other person has done or abstained from doing or does or abstains from doing something, such act abstinence or promise is called a consideration for the promisor.”
Consideration is based on the term ‘quid-pro-quo’ which means ‘something in return’. When a person makes a promise to other, he does so with an intention to get some benefit from him. This act to do or to refrain from doing something is known as consideration.
Consideration is an advantage or benefit which moves from one party to another. It is the essence of bargain. It is the reciprocal promise i.e. to do something or abstain from doing something in return of a promise. It is necessary for an agreement to be enforceable by law. In consideration both the parties give something & get something in return. It may be in cash or kind.
(ii) Contingent contract
Ans: Contingent Contract: According to the Contract Act a contingent contract is one whose performance us uncertain. The performance of the contract which comes under this category depends on the happening or non- happening of certain uncertain-events. On the other hand, an ordinary or absolute contract is such where performance is certain or absolute in itself and not dependent on the happening or non-happening of an event. A contingent contract is defined as a contract to do or not to do something, if some event, collateral to such contract, does or does not happen (sec. 31).
Example
(A) A contracts to pay Rs. 50,000 if B’s house is destroyed by five. This is a contingent contract as the performance depends on the happening of an event.
(B) A asks B to give loan to M and promises that he (A) will repay the loan if M does not return it in time.
Characteristics of a Contingent Contract: A Contingent Contract must have three essential characteristics. There are:
(1) The performance of the contract depends on the happening or non-happening of a certain event in future. This dependence on a probable future event distinguishes a contingent contract from an ordinary contract.
(2) This event must be uncertain, that means happening or non-happening of the future event is not certain, i.e., it may or may not happen. If the event is hundred percent sure to happen, and the contract in that case has to be performed any way, such a contract is not called a contingent contract.
(3) The event must be collateral or incident to the contract. Therefore, contracts of indemnity, guarantee and insurance are the most common instances of a contingent contract.
(iii) Quasi contract
Ans: Quasi Contract: It means a contract which lacks one or more of the essentials of a contract. In a contract, a promisor voluntarily undertakes an obligation in favour of the promisee. When a similar obligation is imposed by law upon a person for the benefit of another even in the absence of a contract. Such contracts are the quasi-contracts. Quasi contract are declared by law as valid contracts on the basis of principles of equity i.e. no person shall be allowed to enrich himself at the expense of another the legal obligations of parties remains same.
Nature of Quasi contracts:
a) A quasi contract does not arise from any formal agreement but is imposed by law.
b) Every quasi contract based upon the principle of equity and good conscience.
c) A quasi contract is always a right to money and generally though not always to a liquidated sum of money.
d) A suit for its breach may be filed in the same way as in case of a complete contract.
e) The right grouted to a party under a quasi contract is not available to him against the whole world but against particular person(s) only.
(iv) Unpaid seller
Ans: Section 45 define an unpaid seller as “One who has not been paid or tendered the whole of the price or one who receives a bill of exchange or other negotiable instrument as conditional payment and the condition on which it was received has not been fulfilled by reason of dishonour of the instrument or otherwise.” The following conditions must be fulfilled before a seller can be deemed to be an unpaid seller:
(i) He must be unpaid and the price must be due.
(ii) He must have an immediate right of action for the price.
(iii) A bill of exchange or other negotiable instrument was received but the same has been dishonoured.
Rights of an Unpaid Seller against the Goods
According to Section 46, an unpaid seller’s rights against the goods are:
(a) A lien or right of retention
(b) The right of stoppage in transit.
(c) The right of resale.
(d) The right to withhold delivery
(v) Promissory Note
Ans: Promissory Note, in the law of negotiable instruments, is a written instrument containing an unconditional promise by a party, called the maker, who signs the instrument, to pay to another, called the payee, a definite sum of money either on demand or at a specified or ascertainable future date. The note may be made payable to the bearer, to a party named in the note, or to the order of the party named in the note.
According to the Section 4 of the Negotiable Instrument Act, 1881 “A Promissory Note is an instrument in writing not being a bank note or a current note containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or do the order of, a certain person, or to the bearer of the instrument.”
In other words, we can say that a promissory note is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand to the payee, or at fixed or determinable future time, certain in money, to order or to bearer.
There are two parties to a Promissory Note:
a) Maker: It is the debtor, who promises to make the payment. It must be signed by its maker.
b) Payee: The person who receives the payment of the promissory note is the payee.
A signs instruments in the following terms:
(a) "I promise to Pay B or order Rs.500".
(b) "I acknowledge myself to be indebted to B in Rs.1, 000, to be paid on demand, for value received”.
(c) “I promise to pay B Rs.500/- on 01-10-2005. etc are promissory notes”.
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