Law.

Question 1

A. 245 Intro

Answer 1

A. 245 defines the ambit of territorial limits of the legislative powers vested in Parliament and the State Legislatures;

Question 2

A. 246

Answer 2

A. 246 defines the respective jurisdictions of the Union and the State Legislatures as regards subjects or topics of legislation.

Question 3

UPSC 2023 Contract Law Q.

Answer 3

‘A minor’s contract being void, ordinarily it should be wholly devoid of all effects. If there is no contract, there should, indeed, be no contractual obligation on either side’. Explain with case laws. 15m.

Question 4

Law of Contracts and Mercantile Law
Syllabus

Answer 4

1. Nature and formation of contract/E-contract.
2. Factors vitiating free consent.
3. Void, voidable, illegal and unenforceable agreements.
4. Performance and discharge of contracts.
5. Quasi-contracts.
6. Consequences of breach of contract.
7. Contract of indemnity, guarantee and insurance.
8. Contract of agency.
9. Sale of goods and hire purchase.
10. Formation and dissolution of partnership.
11. Negotiable Instruments Act, 1881.
12. Arbitration and Conciliation Act, 1996.
13. Standard form contracts.

Question 5

Nature and formation of contract/E-contract.

Question 6

Void, voidable, illegal and unenforceable agreements.

Question 7

Factors vitiating free consent. PYQS

Answer 7

1. An action to avoid a contract on the ground of undue influence, the plaintiff has to prove two points. Explain those points and different kinds of relations leading to presumption of undue influence which vitiates free consent. 10m 2018.
2. ‘There can be a mistake of identity only when a person bearing a particular identity exists within the knowledge of the plaintiff, and the plaintiff intends to deal with him only. If the name assumed by the swindler is factious, there will be no mistake of identity. ‘ Examine the statement with leading cases. 20m 2016.
3. ‘Undue influence is said to be a subtle species of fraud whereby mastery is obtained over the mind of the victim by insidious approach and seductive artifices’. Explain. 12m 2012.

Question 8

Factors vitiating free consent.

Answer 8

1. Coercion
2. Mistake
3. Undue influence
4. Misrepresentation
5. Fraud

Question 9

Undue Influence Intro.

Question 10

Standard Form Contracts

Answer 10

1. The law of contract has in recent times to face a problem which is assuming new and wide dimensions.
2. The problem has arisen out of the modern ‘large scale and widespread’ practice of concluding contracts in standardised forms.
3. Organisations like LIC and Railways have to make innumerable contracts on a daily basis. It is very difficult for such large- scale organisations to draw up a separate contract with every individual. They, therefore, keep printed forms of contracts.
4. Such standardised contracts contain a large number of terms and conditions in “fine print” which restrict and often exclude liability under the contract.
5. The individual can hardly bargain with the massive organisations and, therefore, his only function is to accept the offer whether he likes its terms or not.

Question 11

Standard Form Contracts Part 2

Answer 11

1. This gives a unique opportunity to the giant company to exploit the weakness of the individual by imposing upon him terms which often look like a kind of private legislation and which may go to the extent of exempting the
   company from all liability under the contract.
2. The courts have found it very difficult to come to the
   rescue of the weaker party particularly where he has signed the document.
3. In such cases the courts have been constrained to hold that he will be bound by the document even if he never acquainted himself with its terms. This has
   come to be known as the rule inL’ Estrange v F. Graucob Ltd.

Question 12

‘Contracts of Adhesion’

Answer 12

1. Such contracts have been variously described. “Contracts of Adhesion”, which means that the individual has no choice “but to accept; he does not negotiate, but merely adheres’
2. “compulsory contracts”, they being a kind of imposition; and
3. “private legislation”, they being a kind of code of bye-laws on the basis of which the individual can enjoy the services offered

Question 13

Standard form Contracts UPSC PYQs 2018

Answer 13

The Courts have found it very
difficult to come to the rescue of
the weaker party to a standard
form contract and thus evolved
certain modes to protect such
weaker party against the
possibility of exploitation in such
contracts. Explain the modes of
protection available to weaker
party in a standard form contract. 20m 2018

Question 14

Standard form Contracts UPSC PYQs 2015

Answer 14

“The individual deserves to be
protected against the possibility
of exploitation inherent in ‘Standard Form of Contract’. Explain. 15m 2015.

Question 15

Standard form Contracts UPSC PYQs 2012

Answer 15

“An irrational distrust of all
standard form contracts would
be as dangerous as a facile
acceptance and enforcement of
these contracts”. Discuss. 30m

Question 16

Standard form Contracts UPSC PYQs 2008

Answer 16

“In a ‘standard form contract’, it
is likely that the party having
stronger bargaining power may
insert such exemption clauses in
the contract that his duty to
perform the main contractual
obligation is thereby negatived.”
Explain, and discuss the various
rules which have been evolved to
protect the weaker party.

Question 17

Protective Devices.

Answer 17

Intro - Std form of Contracts.
The individual needs to be protected against the possibility of exploitation inherent in such contracts. Following are some of the modes of protection which have been evolved by the Court.
1. Reasonable Notice.
2. Notice should be contemporaneous with Contract.
3. Theory of Fundamental Breach
4. Strict Contruction (Purposive Interpretation).
5. Liability in Tort.
6. Exclude Unreasonable Terms from the Contract.
7. Exemption clauses and Third Parties.

Question 18

Protective Devices - 1. Reasonable Notice.

Question 19

Standard Forms of Contract Intro.

Answer 19

1. A standard form contract is a uniform set of conditions fixed in advance by a party to
   an agreement
2. It is open to acceptance by anyone and can be used as a template for contracting
   with innumerable persons, which eliminates the infeasibility of drafting a separate contract for
   every new transaction
3. Nowadays, the practice of transacting through a standard form contract has become prevalent and pervasive

Question 20

Issue with Standard Form of Contracts

Answer 20

1. It is of a modern origin and
   here, business organisations are generally transacting with consumers who have comparatively lesser bargaining power or no negotiating power and have no option but to sign across the dotted line, howsoever, unreasonable or unconscionable the terms of the contract may be.
2. The resultant contract binds the parties
   to the terms even if they have not read them, or are ignorant of their precise legal effect

Question 21

Delhi Transport Corporation v. DTC Mazdoor Congress, 1991

Answer 21

In the words of the Supreme Court of India, ‘[t]he ‘standard form’ contract is the rule.
[One] must either accept the terms of [the] contract or go without. Since it is not feasible to
deprive oneself of such necessary services, the individual consumer is compelled to accept
those terms. In view of this fact, it is quite clear that freedom of contract is now largely an
illusion.’

Question 22

Gurshinder Singh v. Shriram General Insurance Company Limited, Civil Appeal No. 653 of 2020, 2020

Answer 22

There is no gainsaying that in a contract, the bargaining power is usually at equal footing. In this regard, the joint intention of the parties is taken into consideration for interpretation of a contract. However, in most standard form contracts, that is not so. In
this regard, the Court in such circumstances would consider the application of the rule
of contra [proferentem], when ambiguity exists and an interpretation of the contract is
preferred which favours the party with lesser bargaining power

Question 23

Reading down of Exemption Clause.

Answer 23

An exemption clause deserves a special rule of construction because it is often
ungenerous, very wide in its coverage46 and may be seen as unfair in its application.47

It may
absolve the liability of the parties absolutely and therefore, the Supreme Court of India has
ruled that a wide exemption clause can be read down if found inconsistent with the main
purpose, or the object of the contract. (Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, (1987))

Question 24

Pachgopalan Barna v Umesh Chandra Goswami (1997)

Answer 24

Under A. 245(1) only Parliament or the State Legislature, as the case may be, determines the territorial application of the law.
The Courts cannot order Parliament or a State Legislature, as the case may be, the application or non application of law to any territory or part of it.

Question 25

A. 245(2) Exp

Answer 25

Clause (2) makes it clear that a law passed by Parliament shall not be deemed to be invalid on the ground that it has extra territorial operation i.e. is effective outside the territory of India.
Ex. A citizen of India goes to France and marries a French woman while his first wife is alive. He can be prosecuted in India for the offence of bigamy committed in France. This act cannot be challenged on the ground of extra - territorial operation.

Question 26

Extra territorial Operation Summary

Answer 26

1. A. 245(2)
2. Example Ind Man in France
3. Kania CJ in AH Wadia v CIT.
4. Electronic Corp. of India v CIT.

Question 27

A.H Wadia v CIT (Wadia)

Answer 27

“ln the case of a sovereign Legislature,” said Kania CJ in AH Wadia v CIT. “questions of extraterritoriality of
any enactment can never be raised in the municipal courts as a ground for challenging its validity.
The legislation may offend the rules of international law, may not be recognised by foreign courts, or there may be practical difficulties in enforcing it but
these are questions of policy with which the domestic tribunals are not concerned.

Question 28

Electronics Corp. of India v CIT (1989)

Answer 28

SC has however, clarified, that the sovereign power of Parliament to make laws with extra territorial operation must respect the sovereignty of other States also and, therefore, provocation for the law must be found within India itself.
Such a law may have extra territorial operation in order to subserve an object, and that must be related to something in India.

Question 29

Territorial Nexus - Intro (4pts)/

Answer 29

The power to make a law having extra territorial operation is conferred only on Parliament and not on the State Legislature.
Hencem an act of the State Legislature, if it gives extra territorial operation to its provisions, can successfully be challenged in the court, unless the extraterritorial operation can be sustained on the ground of territorial nexus.
This means that a state law is not invalid so long as there is a suffecient nexus or connection between the State and the subject matter of the law.
In other words, although the object to which the law applies may not be physically be located within the territorial limits of a state, yet the state law will be valid if there exists a connection or nexus between the State and that object.

Question 30

State of Bombay v RMD Chamarbangwala (1957)

Answer 30

Sufficieny of the territorial connection involves consideration of two elements, namely -
1. the connection must be real and not illusory.
2. the liability sought to be imposed must be pertinent to that connection.