(i) Rahul is manufacturer of jute bags. He contracted with Sonia to purchase raw jute for the purpose of making bags. Rahul informed Sonia that…

CA Foundation · Business Laws · MTP · September 2025
(i) Rahul is manufacturer of jute bags. He contracted with Sonia to purchase raw jute for the purpose of making bags. Rahul informed Sonia that production process of jute bags would start from 27.06.2025 but Sonia must supply raw jute till 25.06.2025 so that quality verifications can be done in next two days. Sonia supplied the jute on 27.06.2025 and informed Rahul that she couldn’t supply on 25.06.2025 due to some unavoidable reasons and she also assured that quality measures were not anyway compromised in supplies. But Rahul wanted to avoid the contract as he was not given opportunity to examine the goods. In light of provisions of the Indian Contract Act 1872, whether Rahul can avoid the contract? (4 Marks) (ii) Kajal, wife of Ajay, is lunatic. She purchased a Diamond set of 15 Lakhs from a famous Jewellers on credit. The Jewellers demanded the payment from her husband, Ajay. The Jewellers filed suit against Ajay for recovery of price of Diamond set. Referring to the provisions of the Indian Contract Act, 1872, decide whether the Jewellers is entitled to claim the price from Ajay? (3 Marks)

Suggested Answer and Working Notes:

(i) Performance of Contract: “Performance of Contract” means fulfilment of obligations to the contract. According to Section 37 of the Indian Contract Act, 1872, the parties to a contract must either perform, or offer to perform, their respective promises unless such performance is dispensed with or excused under the provisions of the Contract Act or of any other law. Further, the promisee should have a reasonable opportunity to see that the things offered is the things contracted for otherwise performance cannot considered as valid performance. In the instant case, Rahul, a manufacturer of jute bags entered in a contract with Sonia to purchase raw jute with the instructions that his production process would start from 27.06.2025 but he needs raw jute till 25.06.2025 so that quality verifications can be done in next two days. But Sonia supplied the jute on 27.06.2025 with the information that she couldn’t supply on 25.06.2025 due to some unavoidable reasons but quality measures were assured by her. Now Rahul wanted to avoid the contract as he was not given opportunity to examine the goods. On the basis of facts of the case, Rahul was not given a proper opportunity to examine the goods at the time of performance. This cannot be considered as valid performance by Sonia. Hence, Rahul can avoid the contract entered with Sonia. (ii) Necessaries supplied to a person incapable of contracting: By virtue of provisions of Section 68 of the Indian Contract Act, 1872, if a person, incapable of entering into a contract, or anyone whom he is legally bound to support, is supplied by another person with necessaries suited to his condition in life, the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person. In other words, supplies of necessaries to a lunatic can be recovered from property belonging to lunatic. In the instant case, Kajal, a lunatic, purchased a Diamond set of 15Lakhs from a famous Jewellers on credit. The Jewellers demanded the payment from her husband, Ajay. Here, Diamond set purchased by Kajal is not necessaries generally. Hence, the Jewellers cannot recover the amount of 15Lakhs from Ajay.

Topics: The Indian Contract Act, 1872

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic