Indicative Answer Question 1 a) Offer An offer sets out the terms upon which an individual is willing to enter into

a binding contractual relationship with anotherperson. It is a promise to be bound on particular terms, which is capable of acceptance. The essential factor to emphasiseabout an offer is that it may, through acceptance by the offeree, result in a legally enforceable contract. The person who makesthe offer is the offeror; the person who receives the offer is the offeree. Offers, once accepted, may be legally enforced but not all statements will amount to an offer. It is important, therefore, to beable to distinguish what the law will treat as an offer from other statements which will not form the basis of an enforceablecontract. An offer must be capable of acceptance. It must therefore not be too vague (Scammel v Ouston (1941)). In Carlillv Carbolic Smoke Ball Co (1893) it was held that an offer could be made to the whole world and could be accepted andmade binding through the conduct of the offeree. In addition an offer should be distinguished, from the following: (i) A mere statement of intention Such a statement cannot form the basis of a contract even although the party to whomit was made acts on it (Re Fickus (1900)). (ii) A mere supply of information As in Harvey v Facey (1893) where it was held that the defendants telegram, in whichhe stated a minimum price he would accept for property, was simply a statement of information, and was not an offercapable of being accepted by the plaintiff. b)Invitation to treat Invitations to treat are distinct from offers in that rather than being offers to others, they are in fact invitations to others tomake offers. The person to whom the invitation to treat is made becomes the actual offeror, and the maker of the invitationbecomes the offeree. An essential consequence of this distinction is that, in line with the ordinary rules of offer andacceptance, the person extending the invitation to treat is not bound to accept any offers subsequently made to them. The following are examples of common situations involving invitations to treat: (i) the display of goods in a shop window The classic case in this area is Fisher v Bell (1961) in which a shopkeeperwas prosecuted for offering offensive weapons for sale, by having flick-knives on display in his window. It was held thatthe shopkeeper was not guilty as the display in the shop window was not an offer for sale but only an invitation to treat. (ii) the display of goods on the shelf of a self-service shop In this instance the exemplary case is Pharmaceutical Societyof Great Britain v Boots Cash Chemists (1953). The defendants were charged with breaking a law which provided thatcertain drugs could only be sold under the supervision of a qualified pharmacist. They had placed the drugs on opendisplay in their self-service store and, although a qualified person was stationed at the cash desk, it was alleged that thecontract of sale had been formed when the customer removed the goods from the shelf. It was held that Boots were notguilty. The display of goods on the shelf was only an invitation to treat. In law, the customer offered to buy the goods atthe cash desk where the pharmacist was stationed. (iii) a public advertisement Once again this does not amount to an offer. This can be seen from Partridge v Crittenden(1968) in which a person was charged with offering a wild bird for sale contrary to the Protection of Birds Act 1954,after he had placed an advert r elating to the sale of such birds in a magazine. It was held that he could not be guilty ofoffering the bird for sale as the advert amounted to no more than an invitation to treat. (iv) a share prospectus Contrary to common understanding such a document is not an offer. It is merely an invitation totreat, inviting people to make offers to subscribe for shares in a company.

c) The posting rule (or mailbox rule in the United States, also known as the "postal rule" or "deposited acceptance rule") is an exception to the general rule of contract law in common law countries that acceptance takes place when communicated. By contrast, the posting rule states that acceptance takes effect when a letter is posted (that is, dropped in a post box or handed to a postal worker). One rationale given for the rule is that the offeror nominates the post office as implied agent and thus receipt of the acceptance by the post office is regarded as that of the offeree. The main effect of the posting rule is that the risk of acceptance being delivered late or lost in the post is placed upon the offeror. If the offeror is reluctant to accept this risk, he can always expressly require actual receipt as a condition before being legally bound by his offer. However, if the offeree mails a rejection and then sends an acceptance (or otherwise changes his mind), whichever communication is received by the offeror first controls. The rule was established by a series of 19th century cases, starting with Adams v Lindsell (1818) B &Ald 681, which was later confirmed and expanded in Dunlop v Higgins (1848) 1 HL Cas 381, Household Fire Insurance Company v Grant (1879) 4 Ex D 216 and Henthorn v Fraser [1892] 2 Ch 27. The posting rule applies only to acceptance. Other contractual letters (such as one revoking the offer) do not take effect until the letter is delivered, as in Stevenson, Jacques & Co v McLean (1880) 5 QBD 346. The implication of this is that it is possible for a letter of acceptance to be posted after a letter of revocation of the offer has been posted but before it is delivered, and acceptance will be complete at the time that the letter of acceptance was postedthe offeror's revocation would be inoperative. Under the posting rule, performance is a means of acceptance. If A orders 1000 blue coathangers and B ships them out, that shipment is considered to be a conveyance of acceptance of A's offer to buy the coathangers. Defective performance is also an acceptance, unless accompanied by an explanation. For example, if A orders 1000 blue coathangers, and B mistakenly ships 1000 red coathangers, this is still an acceptance of the contract. However, if B ships the red coathangers with a note that they sent these because they had run out of blue coathangers, this is not an acceptance, but rather an accommodation, which is a form of counter-offer. An interesting implication of the operation of the posting rule is that an acceptance is complete once the letter of acceptance is posted; it makes no difference whether the offeror actually receives the letter. This was demonstrated in Byrne v Van Tienhoven (1880) 5 CPD 344. If a letter of acceptance were to be lost, acceptance has still taken place. An exception to this would be if the offeree knows or has reason to know that the letter of acceptance never reached the offeror. For example, if A brings a letter of acceptance to the local post office and A sees the post office burn down a moment later, there is no acceptance. Further the posting rule does not apply to instantaneous forms of communications. For example in Entores Ltd v Miles Far East Corporation [1955] 2 QB 327, the Court held that the posting rule did not apply to an acceptance by telex as the Court regarded it as an instantaneous form of communication. The general principle that acceptance takes place when communicated applies to instantaneous forms of communication. Courts have similarly held that the posting rule does not apply to acceptances by telephone or fax. The courts are yet to decide whether e-mail should be regarded as an instantaneous form of communication. If the offeree were to convey acceptance by commercially unreasonable means - by cross-country pony express, for example - the acceptance would not be effective until it had actually been received. A letter is regarded as "posted" only when it is in the possession of the Post Office; this was established in the case of Re London & Northern Bank [1900] 1 Ch 220. A letter of acceptance is not considered "posted" if it is handed to an agent to deliver, such as a courier. This is not the case under the Uniform Commercial Code.

Q.2 a)The case of Donoghue v. Stevenson [1932] illustrates the law of negligence, laying the foundations of the fault principle around the Commonwealth. The Pursuer, Donoghue, drank ginger beer given to her by a friend, who bought it from a shop. The beer was supplied by a manufacturer, a certain Stevenson in Scotland. While drinking the drink, Donoghue discovered the remains of an allegedly decomposed slug. She then sued Stevenson, though there was no relationship of contract, as the friend had made the payment. As there was no contract the doctrine of privity prevented a direct action against the manufacturer, Andrew Smith. In his ruling, justice Lord MacMillan defined a new category of delict (the Scots law nearest equivalent of tort), (which is really not based on negligence but on what is now known as the "implied warranty of fitness of a product" in a completely different category of tort--"products liability") because it was analogous to previous cases about people hurting each other. Lord Atkin interpreted the biblical passages to 'love thy neighbour,' as the legal requirement to 'not harm thy neighbour.' He then went on to define neighbour as "persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions that are called in question." Reasonably foreseeable harm must be compensated. This is the first principle of negligence. In England the more recent case of Caparo v. Dickman [1990] introduced a 'threefold test' for a duty of care. Harm must be (1) reasonably foreseeable (2) there must be a relationship of proximity between the plaintiff and defendant and (3) it must be 'fair, just and reasonable' to impose liability. However, these act as guidelines for the courts in establishing a duty of care; much of the principle is still at the discretion of judges. b) Once it is established that the defendant owed a duty to the plaintiff/claimant, the matter of whether or not that duty was breached must be settled. The test is both subjective and objective. The defendant who knowingly (subjective) exposes the plaintiff/claimant to a substantial risk of loss, breaches that duty. The defendant who fails to realize the substantial risk of loss to the plaintiff/claimant, which any reasonable person [objective] in the same situation would clearly have realized, also breaches that duty. Breach of duty is not limited to professionals or persons under written or oral contract; all members of society have a duty to exercise reasonable care toward others and their property. A person who engages in activities that pose an unreasonable risk toward others and their property that actually results in harm, breaches their duty of reasonable care. An example is shown in the facts of Bolton v. Stone,[5] a 1951 legal case decided by the House of Lords which established that a defendant is not negligent if the damage to the plaintiff was not a reasonably foreseeable consequence of his conduct. In the case, a Miss Stone was struck on the head by a cricket ball while standing outside her house. Cricket balls were not normally hit a far enough distance to pose a danger to people standing as far away as was Miss Stone. Although she was injured, the court held that she did not have a legitimate claim because the danger was not sufficiently foreseeable. As stated in the opinion, 'Reasonable risk' cannot be judged with the benefit of hindsight. As Lord Denning said in Roe v. Minister of Health,[6] the past should not be viewed through rose coloured spectacles. Therefore, there was no negligence on the part of the medical professionals in a case faulting them for using contaminated medical jars because the scientific standards of the time indicated a low possibility of medical jar contamination. Even if some were harmed, the professionals took reasonable care for risk to their patients. c)Damages place a monetary value on the harm done, following the principle of restitutio in integrum (Latin for "restoration to the original condition"). Thus, for most purposes connected with the quantification of damages, the degree of culpability in the breach of the duty of care is irrelevant. Once the breach of the duty is established, the only requirement is to compensate the victim. One of the main tests that is posed when deliberating whether a claimant is entitled to compensation for a tort, is the "reasonable person". The test is self-explanatory: would a reasonable person (as determined by a judge or jury) be damaged by the breach of duty. Simple as the "reasonable person" test sounds, it is very complicated. It is a risky test because it involves the opinion of either the judge or the jury that can be based on limited facts. However, as vague as the "reasonable person" test seems, it is extremely important in deciding whether or not a plaintiff is entitled to compensation for a negligence tort. Damages are compensatory in nature. Compensatory damages addresses a plaintiff/claimant's losses (in cases involving physical or mental injury the amount awarded also compensates for pain and suffering). The award should make the plaintiff whole, sufficient to put the plaintiff back in the position he or she was before Defendant's negligent act. Anything more would unlawfully permit a plaintiff to profit from the tort.

Q3 a)An agent owes the principal a number of duties. These include: a duty to undertake the task or tasks specified by the terms of the agency (that is, the agent must not do things that he has not been authorized by the principal to do); a duty to discharge his duties with care and due diligence; and a duty to avoid conflict of interest between the interests of the principal and his own (that is, the agent cannot engage in conduct where stands to gain a benefit for himself to the detriment of the principal). An agent must not accept any new obligations that are inconsistent with the duties owed to the principal. An agent can represent the interests of more than one principal, conflicting or potentially conflicting, only after full disclosure and consent of the principal. An agent also must not engage in self-dealing, or otherwise unduly enrich himself from the agency. An agent must not usurp an opportunity from the principal by taking it for himself or passing it on to a third party. In return, the principal must make a full disclosure of all information relevant to the transactions that the agent is authorized to negotiate and pay the agent either a prearranged commission, or a reasonable fee established after the fact. b)An agency may be created in any of the following ways: 1. Express agency: An express agency may be created orally by words of mouth or in writing (Sec. 187). The most common form of written agency, you might have often heard of, is power of attorney, under seal, popularly called P.O. A. Under such authority, an agent is authorized to bind his principal by any contract under seal, i.e., a written and stamped document. 2. Implied agency: An agency is said to be implied when it is to be inferred from the circum-stances of the case. An implied agency does not arise out of a contract, but is implied from the acts of the parties, or the ordinary course of dealing, usage or custom of the trade, etc. The agent is deemed to be acting on behalf of the principal. Example: A owns a shop in Meerut and he himself lives in Delhi. A visits his shop occasionally. The shop is managed by B who is in the habit of ordering goods from C in the name of A for the purpose of the shop, and of paying for them out of A's funds and with A's knowledge. B has an implied authority from A to order goods in the name of A for the purpose of the shop.

The implied agency includes agency by estoppel, agency by holding out and agency by necessity. (i) Agency by estoppel: Where a person, by his conduct or words spoken or written, willfully leads another to believe that a certain person is acting as his agenct, he is estopped later on from denying the truth of the fact that such a person is dealing as his agent. Example: A tells B in the presence and within the hearing of C that he (A) is C's agent. C does not object to this statement and keeps quiet. Later on B enters into a transaction with A bona fide believing that A is C's agent. C is bound by this transaction and will be estopped from denying that A was his agent, even though A was not in reality his agent. It will be noticed from the above example that C by his conduct has willfully led B to believe that A is C's agent. Now C will be estopped from denying the truth of the statement that A is C's agent. Hence C is liable although in reality, A is not C's agent.

(ii) Agency by holding out: It is a corollary of the first rule. In the case of agency by estoppel, the role of the principal is passive while is the case of agency by holding out, the role of the principal is rather active and somewhat affirmative or positive. Example: A allows his servant habitually to buy goods on credit from local dealer and pays for them. One day he terminated the services of his servant without any notice to the dealer. The servant purchased goods worth Rs. 100 on credit, as usual, after his termination. A is liable for the purchase made by his servant. (iii) Agency by necessity: Necessity in certain cases forces a person to act as an agent of the other, even without his consent (i.e., consent of the other person). In such a case, the law implies agency by necessity. The law confers authority upon a person to act as an agent of the other in times of necessity or emergency to save his property, etc. where it is impossible to get the formal consent of the principal. In that case, the law implies the consent of the principal.

Example: A sent 10 tons of fish by a truck to Agra. On the Way, the truck met with an accident. The fish were in danger of perishing so the truck driver sold the fish. The truck driver has become A's agent by necessity. Ratification Relates back to date of Contract : Ratification relates back to the date of the original transaction or ratification is tantamount to prior authority. In simple words, ratification would mean as if the agent had authority to enter into transaction at the time of making the contract (Sec. 196). In other words the transaction would be valid not from the date of ratification but from the date the transaction was made. Example: The managing director of a company, without its authority accepted an offer by L. L withdrew his offer later on. But the company ratified the acceptance. Held, L was bound by the ratification as it related back to the time of acceptance and, therefore revocation by L was not valid [Bottom Partners v. Lambert]