
Legal Aspect of Business December 2026 Solved Assignment
Description
Legal Aspect of Business
Q1 ABC Electronics, a national retailer, enters into a contract to buy 2,000 smart refrigerators from a manufacturer, with delivery scheduled in two installments over three months. The contract includes an express warranty stating all refrigerators will have a 3-year repair warranty, and meet a minimum energy efficiency standard. When the first installment arrives, 400 units are found to be less energy efficient than promised, but fully functional. Despite this, ABC decides to keep and sell the refrigerators, then seeks damages from the manufacturer for the shortfall in efficiency.Applying the concept of ‘warranty’ under section 12(3) of the Sale of Goods Act, 1930, and the distinction between condition and warranty, how should ABC Electronics proceed to claim its commercial rights? What legal remedies are available to ABC, and why can it not repudiate the entire contract in this scenario?
(10 Marks)
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Q2 (A) An e-commerce marketplace inadvertently processes a double payment from a customer for a single order due to a technical glitch. The customer requests a refund, but the seller refuses, believing no contract covered the second payment. The marketplace itself is unsure whether it is required to intervene or if a contractual or quasi-contractual remedy should apply. Stakeholders aim to resolve the dispute with fairness and legal correctness.Evaluate whether the remedy in this scenario lies under a quasi-contract or a traditional contract within the framework of the Indian Contract Act, 1872. Justify your position by weighing the legal obligations of all three entities—customer, seller, and marketplace—and recommend a fair course of action.
(5 Marks)
Q2 (B) In India, a mid-sized manufacturer seeks to secure a substantial loan for expansion. The lender demands a contract of guarantee, and the manufacturer’s director offers to act as surety. Subsequently, the lender and borrower amend the terms without consulting the surety, leading to borrower’s default. The director contests his liability, citing changes to the agreement. Both sides refer to the Indian Contract Act’s provisions on guarantee and discharge of surety’s liability.Assess the legal and ethical implications of enforcing liability against a surety when key contract terms have been modified without their knowledge. Drawing on statutory and practical considerations, argue how courts should balance creditor protection and fair treatment of guarantors in such situations.
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