UP PCS-J Substantive Civil Law Syllabus

What remedies are available to an aggrieved party for breach of contract?

(1) Rescission of the contract; (2) Damages (s.73); (3) Quantum meruit; (4) Specific performance (under the Specific Relief Act); (5) Injunction.

State the rule in Hadley v. Baxendale as embodied in Section 73 of the Contract Act.

Compensation is recoverable for loss/damage that naturally arose in the usual course of things from the breach (general damages), and for loss the parties knew at the time of contracting was likely to result (special damages). Remote and indirect losses are not recoverable.

What is the rule on liquidated damages and penalty under Section 74 of the Contract Act?

Where a sum is named or a penalty stipulated in the contract for breach, the aggrieved party is entitled to reasonable compensation not exceeding that sum, whether or not actual loss is proved. Indian law does not distinguish penalty from liquidated damages; only reasonable compensation is allowed.

Name the principal 'special contracts' dealt with under the Indian Contract Act.

Indemnity and guarantee (ss.124-147), bailment and pledge (ss.148-181), and agency (ss.182-238).

Distinguish a contract of indemnity from a contract of guarantee.

Indemnity (s.124): two parties; promisor saves the other from loss caused by the promisor's or another's conduct. Guarantee (s.126): three parties (principal debtor, creditor, surety); surety promises to perform/discharge the debtor's liability on default. There is an existing debt and the surety has a right of subrogation.

Define bailment and pledge under the Contract Act.

Bailment (s.148): delivery of goods by one (bailor) to another (bailee) for a purpose, on a contract to return or dispose of them per directions when the purpose is accomplished. Pledge (s.172): bailment of goods as security for payment of a debt or performance of a promise; the bailor is the pawnor and bailee the pawnee.

What is the surety's right of subrogation under Section 140 of the Contract Act?

On paying the guaranteed debt or performing the obligation, the surety steps into the shoes of the creditor and is invested with all the rights the creditor had against the principal debtor.

What is the general principle of transfer of property under Section 5 of the Transfer of Property Act, 1882?

'Transfer of property' means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself and others. 'Living person' includes a company, association or body of individuals.

What kinds of property cannot be transferred under Section 6 of the Transfer of Property Act?

Spes successionis (mere chance of an heir), right of re-entry, easement apart from dominant heritage, restricted personal interest, a mere right to sue, public office/salary, pensions, and transfers opposed to the nature of interest or for unlawful object (among others listed in s.6).

Who is competent to transfer property under Section 7 of the Transfer of Property Act?

Every person competent to contract (major and of sound mind) and entitled to the transferable property, or authorised to dispose of transferable property not his own, may transfer it wholly or in part.

What is the rule against the condition restraining alienation under Section 10 of the Transfer of Property Act?

A condition absolutely restraining the transferee from parting with or disposing of his interest is void. Exceptions: a lease for the lessor's benefit, and a transfer/condition for the benefit of a married woman (not a Hindu/Muslim/Buddhist). Partial restraints are valid.

State the rule against perpetuity under Section 14 of the Transfer of Property Act.

No transfer can create an interest that takes effect after the lifetime of one or more persons living at the date of the transfer plus the minority of an unborn person, who must be in existence at the expiry of that period. (Maximum period = lives in being + 18 years.)

How is a transfer for the benefit of an unborn person made (Section 13, TP Act)?

Property cannot be transferred directly to an unborn person; it must be made through a prior interest in favour of a living person, and the whole remaining interest must be conveyed to the unborn person (no limited estate to the unborn). The unborn must come into existence before the prior estate ends.

What is the doctrine of election under Section 35 of the Transfer of Property Act?

When a person professes to transfer property he has no right to transfer, and as part of the same transaction confers a benefit on the owner of that property, the owner must elect either to confirm the transfer (and accept the benefit) or to dissent (and forfeit the benefit).

Explain the doctrine of part performance under Section 53A of the Transfer of Property Act.

Where a transferee, under a written contract of transfer of immovable property for consideration, has taken possession and performed/is willing to perform his part, the transferor is debarred from enforcing any right against the transferee inconsistent with the contract, even though the transfer was not completed/registered. It is a defensive (shield) right only.

What is the doctrine of lis pendens under Section 52 of the Transfer of Property Act?

During the pendency of a suit in which any right to immovable property is directly and specifically in question, the property cannot be transferred by any party so as to affect the rights of any other party under the decree. (Pendente lite nihil innovetur.)

State the doctrine of feeding the grant by estoppel under Section 43 of the Transfer of Property Act.

Where a person fraudulently or erroneously represents that he is authorised to transfer certain immovable property and transfers it for consideration, then later acquires an interest in that property, the transferee may, at his option, require the transfer to operate on that subsequently acquired interest.

Define a 'sale' of immovable property under Section 54 of the Transfer of Property Act, including how it is effected.

Sale is a transfer of ownership in exchange for a price paid/promised. Tangible immovable property worth Rs.100 or more, and reversions/intangibles, require a registered instrument; tangible property worth under Rs.100 may be transferred by registered instrument or by delivery of possession.

Distinguish a mortgage from a charge under the Transfer of Property Act.

Mortgage (s.58): transfer of an interest in specific immovable property to secure a loan; creates a right in rem. Charge (s.100): security on property for payment of money without transfer of any interest; arises by act of parties or operation of law and is generally a right in personam (enforceable against a transferee with notice).

Name the types of mortgages recognised under Section 58 of the Transfer of Property Act.

(1) Simple mortgage, (2) Mortgage by conditional sale, (3) Usufructuary mortgage, (4) English mortgage, (5) Mortgage by deposit of title deeds (equitable mortgage), and (6) Anomalous mortgage.

How is a 'partnership' defined under Section 4 of the Indian Partnership Act, 1932?

Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Persons are individually 'partners' and collectively a 'firm'.

What is the conclusive test of partnership, and what does Section 6 provide on determining its existence?

The real/true test is the existence of mutual agency - each partner is both agent and principal of the others. Sharing of profits is strong evidence but not conclusive (s.6); the relation is determined from the real relation shown by all relevant facts.

What are the main consequences of non-registration of a firm under Section 69 of the Partnership Act?

An unregistered firm/partner cannot sue the firm or co-partners to enforce a right from the partnership contract, and cannot sue a third party to enforce a contractual right. Exceptions: suit for dissolution/accounts of a dissolved firm, realising property of a dissolved firm, and suits up to Rs.100 etc. (Registration is not compulsory but its absence disables suits.)

State the general duties of partners under Sections 9 and 10 of the Partnership Act.

Partners must carry on the business to the greatest common advantage, be just and faithful to each other, render true accounts and full information (s.9), and indemnify the firm for loss caused by fraud (s.10). It is a relation of utmost good faith (uberrima fides).

What are the modes of dissolution of a partnership firm under the Partnership Act?

By agreement (s.40); compulsory dissolution on insolvency of all but one partner or business becoming unlawful (s.41); on happening of contingencies like expiry of term, completion of venture, death or insolvency of a partner (s.42); by notice in a partnership at will (s.43); and by court order (s.44).

On what grounds may a court order dissolution of a firm under Section 44 of the Partnership Act?

Partner's unsound mind, permanent incapacity, conduct prejudicial to business, persistent breach of agreement, unauthorised transfer of interest, business carried on only at a loss, or any other just and equitable ground.

Distinguish a 'sale' from an 'agreement to sell' under Section 4 of the Sale of Goods Act, 1930.

In a sale, property in the goods is transferred from seller to buyer at once (executed contract; risk passes to buyer). In an agreement to sell, transfer takes place at a future time or subject to a condition (executory; property and risk remain with the seller until conditions are met).

Distinguish a 'condition' from a 'warranty' under Sections 12 and 13 of the Sale of Goods Act.

Condition (s.12(2)): a stipulation essential to the main purpose; breach gives the right to repudiate the contract and claim damages. Warranty (s.12(3)): collateral to the main purpose; breach gives only a right to claim damages, not to reject the goods. A breach of condition may be treated as a breach of warranty (s.13).

Explain the doctrine of caveat emptor and its exceptions under Section 16 of the Sale of Goods Act.

Caveat emptor ('let the buyer beware'): the buyer must satisfy himself of quality/fitness; no implied condition as to quality. Exceptions: fitness for a known particular purpose where buyer relies on seller's skill, merchantable quality in sales by description, sale by sample, usage of trade, and consent obtained by fraud/concealment.

Who is an 'unpaid seller' and what rights does he have under the Sale of Goods Act?

An unpaid seller (s.45) is one to whom the whole price has not been paid/tendered. Against the goods he has: (1) a right of lien (s.47), (2) right of stoppage in transit (s.50), and (3) right of resale (s.54). He also has rights against the buyer personally: suit for price (s.55) and damages (ss.56-57).