Secured Transaction

any loan or credit in which property is pledged as security in the event payment is not made

Scienter

Latin for "having knowledge." In criminal law, it refers to knowledge by a defendant that his/her acts were illegal or his/her statements were lies and thus fraudulent.

Practical Problems_Contract Act_79

Mr.Ramamurty invited Alisa to his house for dinner which she accepted. When Alisa went to Mr.Ramamurty’s house at the appointed time leaving all her work involving Rs.10 lakhs, she found Mr.Ramamurty’s house locked and none was there. Alisa claimed compensation from Mr.Ramamurty who on the other hand contended that there was no contract. Advise.

Practical Problems_Contract Act_78

F promised to pay his son S a sum of Rs. 1 lakh if S passed C.A. exams in the first attempt. S passed the exam in the first attempt, but F failed to pay the amount as promised. S files a suit for recovery of the amount. State whether S can recover the amount under the Indian Contract Act, 1872.

Practical Problems_Contract Act_77

One of the clauses in an agreement was- “This agreement shall not be legally enforceable, but binding in honour only”. Is agreement binding and enforceable ? Why ?

Companies Act_Practical Problems_11

The Board of Directors of M/s Greenfield Projects Limited, a company whose shares are listed on the Delhi Stock Exchange, propose to give loans to a sister company in excess of the limit prescribed under section 372A(1) of the Companies Act, 1956. The next annual general meeting of the company is due only after six months. Since the board is anxious to complete the formalities quickly without waiting for the date of next annual general meeting, advice the Board about the steps to be taken to comply with the legal requirements under the Companies Act, 1956.

Implied Terms_Contract Act

A term which has not been mentioned by either party will nonetheless be ‘included’ in the contract, often because the contract doesn’t make commercial sense without that term. Terms like this are called implied terms, and there are two main types:

Terms implied by statute: the Sale of Goods Act 1979. The key provisions are:

Section 12: the person selling the goods has to have the legal right to sell them.

Section 13: if you’re selling goods by description, e.g. from a catalogue or newspaper advert, then the actual goods have to correspond to that description.

Section 14: the goods must be of “satisfactory quality” – that is, they should meet the standard that a reasonable person would regard as “satisfactory”. Also, if the buyer says they’re buying the goods for a particular purpose, there’s an implied term that the goods are fit for that purpose.

Section 15: if you’re selling the goods by sample – you show the customer one bag of flour and they order 50 bags – then the bulk order has to be of the same quality as the sample.

Terms implied by the courts…

As a matter of fact. Something that’s so obviously included that it didn’t need to be mentioned in the contract. If I agree to pay you £50 for a lawnmower, it probably wouldn’t occur to us to write down that we mean fifty pounds sterling, as opposed to any other sort of pound. That’s obvious to both of us. (Beware of this point – it has to have been obvious to both parties – it’s not enough to show that one party thought it was included, or that the contract would have been more reasonable with the added term.)

As a matter of law. This is about general considerations of public policy – the courts are laying down, as a matter of law, how the parties to certain types of contract ought to behave. For example, in one case, the courts held that landlords of blocks of flats ought to keep the communal areas (lifts, stairs etc) in a reasonable state of repair – so that term was implied into the rental contract.

Customary terms.

Some terms are generally known to be included in contracts in a particular trade or locality. Amongst bakers, “one dozen” means thirteen – they don’t have to include terms in every contract specifying that.