SALE OF GOODS COMPREHENIVE BOARD QUESTIONS WITH ANSWER
Table of Contents
COMPREHENSIVE ANSWER QUESTIONS
5. 2022 Fall Q. No. 18
Read the case situation given below and answer the questions that follows:
Case: Alpha Inc. is a company that specializes in the manufacture and sale of high tech products.Beta Inc. is a company that sells these products to its customers. Alpha Inc. and Beta Inc. entered into a contract of sales on Janurary 1, 2022, for the sale of 100 units of a new product that Alpha Inc. had a recently developed. The contract specified that Beta Inc. would pay $100 per unit and the goods would be delivered within 60 days. The contract also included a warranty of 12 months for any defects in the product.
On March 1, 2022, Alpha Inc. delievered the 100 units to Beta Inc. as specified in the contract. Beta Inc. immediately discovered that 20 of the 100 units were defective and informed Alpha Inc. about the defects. Beta Inc. demanded the Alpha Inc. replace the defective units. Alpha Inc. refused to replace the defective units, claiming that the warranty period has expired.
Beta Inc. decided to take legal action against Alpha Inc. for breach of contract, Beta Inc. claimed that Alpha Inc. claimed that Alpha Inc. was in breach of contract because it failed to deliver goods of merchantable quality, as required under the Uniform Commercial Code (UCC). Beta Inc. also claimed that Alpha Inc. breached the warrantly provisions included in the contract of sales.
Questions:
a. Was a valid contract of sales formed between Alpha Inc. and Beta Inc. ? Give reason to the answer.
b. Did Beta Inc. accept the offer made by Alpha Inc. in the contract of sales?
c. Did both Alpha Inc. and Beta Inc. have the capacity to enter into a contract of sales?
d. Did Alpha Inc. fulfill its obligations under the contract of sales by delivering the goods within the specified time frame?
e. Did Beta Inc. breach the contract of sales by demanding replacement of the defective units after the expiration of the warranty period?
f. What is the priniciple of performance of the contract in the context of this case?
g. How does the principle of offer and acceptance apply in this case involving a contract of sales?
h. What is the remedy for a breach of contract of sales in this case?
i. Can Beta Inc. claim damages form Alpha Inc. for the defective units? How?
j. How will the court determine whether Alpha Inc. is in breach of contract in this case?
6. 2020 Spring Q. No. 18
Read the case situation given below and answer the questions that follows.
Bina Garments Export Pvt. Ltd. is a well established Nepali Company operating in Germany to make banana fiber ladies sweaters specially avilable in Nepalese villages in the Terai region. Bina Garments into a contract with Volker for an export of 2000 pieces of sweaters on March 1, 2018. The Contract deadline for the supply of the goods was May 31, 2018. The export price per sweater agreed between the parties was Nrs. 3000.
Accordingly, Bina Garment entered into contract with Janakpur Handicraft Pvt. Ltd which is widely known for production of banana fiber sweaters and other products. Janakpur Handicraft agreed to complete the production of 2000 sweaters by April 28, 2018 so that Bina Garment will supply the goods to Volker on time. It takes 20-30 days for the shipment of the goods to Germany. However, Janakpur Handicraft failed to finish the goods for Bina Garments by April 28. Accordingly, Bina Garments missed the deadline for the delivery of goods to Volker. Volker cancelled the contract with Bina Garments and claimed Nrs. 1 million as stated in the contract as compensation.
As a result of which Bina Garments sued Janakpur Handicraft for the breach of contract. Bina Garments claimed Nrs 1.2 million as a loss of profit and Nrs. 1 million which Bina Garments is required to pay as damage to Volker under the contract entered for export.
However, Janakpur Handicraft was not at all informed by Bina Garments about the Nrs. 1 Million, the damage required to be paid to volker in case of Janakpur Handicraft agreed to pay 1.2 million as damage for the loss of profit but refused to pay another 1 million as claimed by Bina Garments arguing that it was not informed prior to the making of the contract. Based on the case, answer the following questions:
Questions:
a. Who are the contracting parties in two contracts mentioned in the case above? Identity separately.
b. As referred in the case, what does damage in the contract law? State the names.
c. How many types of damage are there in the contract law? State the names.
d. What kind of damage is the loss of profit which Janakpur Handicraft agreed to pay to Bina Garments? Explain.
e. Janakpur Handicraft is right in refusing to pay 1 million to Bina Garments which Volker has claimed from Bina Garments as compensation for the failure to deliever the goods on time.
i. What kind of damages is this? Explain.
ii. Why is Janakpur Handicraft right in refusing to pay the amount to Bina Garments? Give reasons.
7. [2019 Spring Q. No. 18]:
Read the case situation given below and answer the questions that follow:
Sonali was getting married and needed a wedding dress. So she visited a boutique in Kathmandu for a wedding dress. She looked around many dresses but could not find one of her size. However, there was one red dress which she liked very much, but the size was a little big. The price of the dress was quoted Rs 50,000. However, Mamata, the boutique owner, assured her that the dress could be re-stitched to her required size.
Accordingly, Mamata, the boutique owner, after consultation with the tailor, agreed to re-stitch the dress to her satisfaction and deliver it within three days. So Sonali claimed the dress and paid one-third of the price in advance on the condition that the dress will be re-stitched to her size given by her. On the agreed day, Sonali reached the boutique. To her surprise, she was informed that the dress could not be re-stitched. Moreover, Mamata asked her to pay the remaining price, stating that the dress has not been delivered to her. Based on these facts, answer the following:
Questions:
a. Define contract of sale of goods.
b. State the differences between sale and agreement to sell in context of the case.
c. Who do you think has the ownership over the dress?
d. Is Sonali bound to pay the remaining price for the lost dress? Give reasons for your answer.
e. Can Sonali claim back the advance amount paid to the boutique owner, Mamata? Give reasons for your answer.
8. [2019 Fall Q. No. 18]:
Read the case situation given below and answer the questions that follow:
‘D’ a carrier, discovered that a consignment of tomatoes owned by ‘E’ has deteriorated badly before the destination has been reached. He, therefore, sold the tomatoes. ‘E’ now sued ‘D’, the carrier, for recovering damages, but ‘D’ claimed that he was an agent by necessity.
Questions:
i. Is the claim made by ‘D’ valid under the principle of agency of contract?
ii. Whether ‘E’ is entitled to bring action against the carrier ‘D’?
b. Kajol, a singer, enters into a contract with Ajay, a theater manager, to perform twice a week for two months in his theater. Ajay promised to pay Rs 15,000 per performance. Kajol, after the sixth performance remained absent willingly.
a. Explain the nature of breach of contract in this case.
b. What remedies are available to Ajay in the given situation?
9. Mr. Deep, a supplier of machines, contracts with Mr. Sandesh to deliver a grinding machine for Rs 10,000 on January 1, 2016. Mr. Deep fails to supply the machine as promised on that date. In consequence of this, Mr. Sandesh had to buy another grinding machine at a higher cost of Rs 12,000. On the basis of given facts, answer the following:
Questions:
a. What is breach of contract?
b. State the types of remedies for breach of contract?
c. What type of damage is this?
d. What do you understand by damage under the remedy for breach of contract?
e. How much damage Mr. Sandesh can claim from Mr. Deep?
10. A trading company named STAR FASHION, dealing in readymade garments, entered into a contract for the purchase of 1000 pieces of cotton shirts from a garment manufacturing industry named “GUNIU APPAREL.” Star Fashion as per the contract paid an advance of Rs 1,00,000 to Guniu Apparel to be delivered within a week. The date of delivery, quality, and other terms and conditions were stated in the contract. The goods were not delivered within the time stated due to a short circuit of electricity and all the goods in the factory were destroyed. Guniu Apparel, then after, sued Star Fashion for compensation for the loss caused to the shirts because of the fire.
Questions:
a. Is this contract for sale or agreement to sale?
b. Identify seller and buyer.
c. Who has ownership over the shirts which are being stitched in the industry?
d. Is the claim for compensation made by Guniu Apparel valid? Give reasons for your answer.
11. Sushma went to the nearby vegetable market to buy some vegetables. She selected tomato, potato, onion, and ginger of her choice and asked the shopkeeper to weigh them and put them in separate polythene bags. The shopkeeper, as directed, weighed the items and put them in separate poly bags containing potato and tomato which were lost. She refused to pay the price for the lost items to the shopkeeper on the ground that the sale is not yet completed as she has not paid the amount. Based on this case, answer the following questions:
Questions:
a. What is sale? Define.
b. Why is transfer of ownership important in sale? Give reasons.
c. Is Sushma right in refusing to pay the price of the vegetable items which were lost? Give reasons for your answer.