Tender System Of Purchase

Question 1

for conclusion of contracts have to fulfill the provision of certain basic laws of the country. The principal laws are :-

Answer 1

i) Law of Contract
ii) The Law relating of Sale of Good and
iii) Where contracts provide for settlement of disputes by arbitration. The law
relating to Arbitration.

Question 2

A lawful offer is one which:

Answer 2

i) Discloser an intention to create legal relations and is capable of creating such relations.
ii) Is framed in definite and clear terms and is not vague.
iii) May be general or specific, express or implied, positive or negative.
iv) Is distinct and different from a answer to a question or an invitation to an offer
or a statement of intention.
v) Is made with a view to obtaining the consent of the other party to contract
abstinence there from which the offerer is willing to do.
vi) Is properly communicated including special conditions, if any attachment
thereto.

Question 3

CHARACTERISTICS OF LAWFUL ACCEPTANCE

Answer 3

i) It can be given only by the person to whom the offer has been made
ii) It can be expressed or implied
iii) It must be absolute and unqualified in relation to the offer
iv) It is in respect of an offer duly communicated to the offeree
v) It has been properly communicated within the stipulated time or with a reasonable time where is there is no such stipulation

Question 4

LAWFUL CONSIDERATION AND LEGAL OBJECTIVE

Answer 4

The parties to the agreement will be mutually benefited. One party will give something and other get something.

For ex- in a purchase contract the Seller supplies goods or services and is reciprocated by payment by payment. This is called consideration.

Question 5

CAPACITY

In case of agreement between Govt. Deptt. and other non Govt. parties? Which article mentions?

Answer 5

The parties to an agreement must be legally capable of entering into an agreement.

the president of India is the Govt. party and hence all contractual documents have to be signed for an on behalf of the president by officers who specifically authorized in pursuance of Article 299 of the Indian Constitution, to do so.

Question 6

WRITING AND REGISTRATION

Answer 6

A contract must be in writing and/or must be duly registered wherever so required by some status.

Contracts for Purchase/Sale should be writing, but need not be registered.

Imp-

All the elements mentioned above must be present in an agreement, otherwise it will not lead to a contract.

Question 7

Communication of a proposal or offer is complete

Answer 7

when it comes to the knowledge of the person/party to whom it is made.

Question 8

communication of acceptance proposer or offer is complete when

Answer 8

its acceptance comes to the knowledge of the proposer/offerer.

Question 9

agent of the offerer.

Answer 9

An offer may be made by post. An offer may also be accepted by post unless any other mode of communication is specifically prescribed by the offerer. When an offer is made through post,

the Post Office becomes the agent of the offerer.

Therefore, a letter of acceptance duly addressed and posted is sufficient acceptance even though the letter does not actually reach the offer. The letter must, however, be correctly addressed. The letter must be actually posted.

Question 10

Other acceptance source or methods

Answer 10

Oral or telephone communication of an offer and its acceptance may be legally valid, but complication may arise in proving that communication was clear and complete.

Question 11

An offer may be revoked

Answer 11

anytime before acceptance, but not afterwards.

Question 12

Promise

Agreement

Contract

Answer 12

2 (d) Acceptance of an offer leads to promise

2 (e) Every promise and every set of promises, forming the consideration for each other, is an agreement;

An agreement enforceable by law is a contract;

Question 13

VOID AGREEMENT

Answer 13

An agreement is void when it fails to generate legal right and obligations between the parties due to any flow in its content or the process through which it has been arrived.
An initially valid agreement may become void subsequently due to developments which renders its performance impossible or illegal.

Question 14

VOIDABLE AGREEMENT

Answer 14

A voidable contract is one which can be avoided by one party (but not the other contracts brought about the coercion, undue inflacon, misrepresentation etc. come under this category)- ask its meaning

Voidable=avoidable

Question 15

Illegal contracts/agreements

Answer 15

which offend some law and these are not only themselves voided, but also nullify other agreements which are incidental collateral to it.

Question 16

Performance meaning

Breach

Answer 16

the fulfillment of the respective obligations generated by the contract by the parties to the contract.

Non Performance or non-fulfillment of contractual obligations either in part or full will cause breach of contract and given rise to aright of the arrived party to claim damage or other remedies

Question 17

REMEDIES FOR BREACH OF CONTRACT

Answer 17

Names are very important and what they do in general terms at least.

RECESSION OF THE CONTRACT: The aggrieved party is freed from all his obligations under the contract

SPECIFIC PERFORMANCE: aggrieved party may seek judicial order directing the defaulting party to perform when they promised to perform.
Specific performance is not, however, allowed in cases where monetary compensation is in adequate relief.

INJUNCTION: aggrieved party may secure from Court a negative injuction, i.e. an order prohibiting the defaulting party from doing something. For cases where financial compensation is not relevant or adequate, particularly for cases of anticipatory breach of contract.

QUANTUM MERUIT: When a contract has been partly performed the aggrieved party can, under certain circumstances, file a suit for the services performed before breach of contract.

DAMAGES: This is usual remedy against breach of contract, specially the contracts for sale/purchase. dames are given on the basis of the difference between the contract price and the market price precooling at the time of breach. Law will endeavour so far as money can do it, to place the injured party in the same position as if the contract has been performed.

Question 18

TYPE OF DAMAGES

Answer 18

Ordinary or general Damages:
The loss or damage should arise naturally in the usual courses of things.
breach Compensation will not be awarded.

Special Damages:
The court may allow remote damages i.e. damages not arising naturally from the breach, if such damages may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract

quantum of compensation in the event of breach is pre- determined and stipulated. This quantum, though agreed upon between the parties.
Sec.74 of the contract Act lays down that if the parties have fixed what the damages will be, the Court will never allow more. But the court may allow less.

Question 19

Termination of contract

Answer 19

BY PERFORMANCE : when all parties fulfill the respective obligations, the contract is terminated by performance.

BY MUTUAL AGREEMENT: Section 62 of the Contract Act which read ‘if this parties to a contract agree to substitute a new contract for or rescind or alter it, the original contract need not be performed’.

BY LAPSE OF TIME: This is the obligation mainly is a civil suit where obligation and liabilities in a contract may be barred by limitation, according to a vision in the Limitation Act.

BY OPERRATION OF LAW: A contract is terminated by operation of law in case of death, insolvency and merger.

TERMINATION BY MATERIAL ALTERATION: If the document containing the terms of a contract is materially altered by a party to a contract, with the consent of other party (parties) the contract is discharged and cannot be enforced any more.

TERMINATION BY BREACH OF CONTRACT: When a contract is broken by one party, other party(s) are left from obligation under the contract, in addition to being entitled for damages or other remedies arising from breach.

TERMINATION BY SUBSEQUENT OR SUPERVENING IMPOSSIBILITY: As per Section 56 of the Contract Act – “a contract to do an act are which, after the contract is made, becomes impossible, or by reason some event which the promisor cannot prevent, became unlawful becomes void when the act becomes impossible or unlawful.

DOCTRINE OF FRUSTRATION: This may occur in many ways, some of which are destruction of the subject matter of the contract, death of the promisor, outbreak of war, change of law and failure of precondition etc.
This doctrine does not, however, normally, cover(a) difficulty in performance, (b) impossibility caused by the behaviour of a third person and (c) partial impossibility. Strike, lockout and civil disturbances are also normally outside the scope of the concept of supervening impossibility.

Question 20

Force Majore(majeure) Clause

Answer 20

In the purchase contract, however, some of the contingencies mentioned in DOCTRINE OF FRUSTRATION which render performance of the contract impossible either totally or over a period, are generally provided for in the shape of a ‘Force Majore Clause’.

majeure meaning unforeseeable circumstances that prevent someone from fulfilling a contract.

Question 21

ESSENTIAL ELEMENTS OF A CONTRACT OF SALE OF GOODS

Answer 21

(i) MOVABLE GOODS FOR MONEY: Movable Goods are supplied by Seller to the Buyer against Payment. An exchange of goods for goods is not a sale.
(ii) TWO PARTIES: The contract is between the seller and the buyer. A sale is thus a bilateral contract.
iii) FORMATION OF CONTRACT OF SALE: A contract of sale is made by an offer to buy or sell goods for a price and acceptance of such offer.
(iv) TERMS OF THE CONTRACT: The parties may agree upon any terms concerning the time lapse and mode of delivery.
(v) OTHER ESSENTIAL ELEMENTS: A contract for Sale of Goods must satisfy all the essential elements necessary for information of a valid contract as discussed in connection with the Contract Act.

Question 22

CONDITION AND WARRANTY:

Definition, meaning and relationship with damage

Answer 22

Condition is a term which is essential to the main purpose of contract.

Warranty is only a collateral term. It is subsidiary to the main purpose of the contract.

The breach of a condition gives the aggrieved party a right to repudiat a contract. It also creates a right to get damages.

The breach of warranty entitles the aggrieved party to claim damages only.

A breach of condition may under certain

Question 23

IMPLIED CONDITIONS:

Answer 23

(i) CONDITIONS AS TO TITLE : There is an implied condition on the part of the seller that he has acquired a right to sell the goods involved in the transaction.

ii) SALE BY DESCRIPTION: Where there is a contract for sale of goods by description, there is an implied condition that the goods shall confirm to the description.

iii) SALE BY SAMPLE

Question 24

SALE BY SAMPLE :

Answer 24

When goods are to be supplied according to a agreed sample, the following conditions are applied –

a) The bulk shall conform to sample with regard to quality,

b) The buyer shall have a reasonable opportunity to compare goods with the sample,

c)The goods shall be free form any defect rendering them merchantable which would not be apparent on reasonable examination of the sample.

d) Sale by sample as well as by description

e)Condition as to fitness or quality

Question 25

IMPLIED WARRANTY

Answer 25

1. The buyer must get quite possession. This is an extension of the principle mentioned earlier that the buyer must have a clear right to sell goods involved in the transaction.
2. The goods must be free from encumbrances. There is an implied warranty that the goods shall be free from any charge or encumbrances in favour of a third party not declared or known to the buyer or at the time when the contract is made.
3. Fitness of goods required for a purpose may be warranty by usage of trade. A warranty as to fitness for a particular purpose may be annexed to a contract of sale by a custom or usage of trade.