KSLU Solved Question Papers
Contract I
Previous Year Question Paper with Solution
B.A. LL.B. (Five Years) · Sem 4
2013 Jun Examination
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Mumbai
B.A. LL.B. (Five Years) Sem 4 Contract I 2013 Jun Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2013 Jun examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2013 Jun examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2013 Jun examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 20 questions answered
Instructions printed on the paper
- N.B. (1) Answer all 5 questions. (2) One essay type and one short note question or problem from each Unit have to be attempted, which is referred as Part (a) and (b) in all the Units. (3) Figures to the right indicate marks. (4) Answer should be written either in English or in Kannada completely.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
Unit I
(a)A stranger to consideration may sue on the contract but not a stranger to the contract. Discuss.[15]
Answer
For full marks, cover: the two halves of the statement and the two different "strangers" it speaks of; the first half: in India a person who gave no consideration may still sue, because section 2(d) lets consideration move from "the promisee or any other person" (Chinnaya v. Ramayya), unlike the English rule (Tweddle v. Atkinson); the second half: a person who is not a party to the contract cannot sue on it (Dunlop Pneumatic Tyre v. Selfridge; in India M.C. Chacko v. State Bank of Travancore); the reasons for each rule; the recognised cases in which even a stranger to the contract may sue (trusts and charges; marriage settlements and family arrangements, Khwaja Muhammad Khan v. Husaini Begum; acknowledgment; agency; assignment); worked examples; a table; an evaluation; a conclusion.
Two different strangers
The statement uses the word "stranger" twice, in two senses.
- A stranger to the consideration is a person who is a party to the contract but did not himself give the price for the promise. Someone else gave it.
- A stranger to the contract is a person who is not a party to the agreement at all. He remains a stranger even if the contract was meant to benefit him.
The statement says that Indian law allows the first to sue but not the second. Both halves are correct as general rules.
First half: a stranger to the consideration may sue
Section 2(d) of the Indian Contract Act 1872 says consideration is an act, abstinence or promise done "at the desire of the promisor" by "the promisee or any other person". The words "or any other person" mean the consideration need not come from the person to whom the promise is made.
Chinnaya v. Ramayya, (1882) ILR 4 Mad 137. An old woman made a gift of her land to her daughter. In return, the daughter was to pay a yearly sum to the old woman's siblings, and the daughter agreed with the siblings to do so. When the payments stopped, the siblings sued. The daughter argued that they had given her nothing in return. The Madras High Court rejected the argument. The consideration, the land, had come from the mother, and section 2(d) permits that. The siblings were parties to the daughter's promise, so they could enforce it although they were strangers to the consideration.
English law took the opposite view. Tweddle v. Atkinson, (1861) 1 B & S 393. The fathers of a married couple each agreed in writing to pay the husband a sum. One father died without paying, and the husband sued his executor. The Court of Queen's Bench held that the husband could not sue. He had given no consideration, and he was not a party to the fathers' agreement. Section 2(d) frees Indian law from the first of these objections.
Second half: a stranger to the contract may not sue
The doctrine of privity of contract says that a contract binds and benefits only its parties. A person outside the agreement has no right to enforce it, however much it was meant to help him.
Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge and Co. Ltd., [1915] AC 847. Dunlop sold tyres to a dealer, who agreed not to sell below list price and to obtain a similar promise from its own buyers. Selfridge bought from the dealer and promised the dealer to pay Dunlop five pounds for every tyre sold below list price. Selfridge sold below list, and Dunlop sued. The House of Lords held that Dunlop could not sue. It was not a party to the contract with Selfridge, the dealer was not its agent, and it had given Selfridge no consideration. Lord Haldane stated that only a person who is a party to a contract can sue on it.
The Supreme Court applies the same rule in India. M.C. Chacko v. State Bank of Travancore, AIR 1970 SC 504. A father had guaranteed his son's overdraft with a bank. Later he made a family deed distributing his properties. It provided that any sum he had to pay under the guarantee should be met by the son from the property given to him. The bank sued and claimed a charge on that property under the deed. The Supreme Court held that the bank, not being a party to the family deed, could not enforce it, subject to the recognised exceptions. The recitals created no charge in the bank's favour.
Why the two rules differ
- Consideration is about whether a promise was bargained for. Once the promisor received the price he asked for, it does not matter who paid it. So section 2(d) lets anyone supply it.
- Privity is about who may hold the promisor to his promise. Only those to whom he chose to bind himself may do so. Otherwise, any person who might gain from a contract could sue on it, and the parties could not vary or cancel their own bargain freely.
Where a stranger to the contract may sue
The courts recognise several situations where a person outside the agreement may enforce it.
- A trust or a charge. If the contract creates a trust for the third person, or a charge on property in his favour, he may enforce it as beneficiary.
- Marriage settlements and family arrangements.
Khwaja Muhammad Khan v. Husaini Begum, (1910) LR 37 IA 152. On the marriage of two minors, the bridegroom's father agreed with the bride's father to pay the bride a monthly allowance, charged on property. When the payments stopped, the bride sued. The Privy Council held that she could recover, though she was not a party to the agreement. The rule in Tweddle v. Atkinson was not applied to such a provision in India.
The Specific Relief Act 1963 now builds this in. Under section 15(c), where a contract is "a settlement on marriage, or a compromise of doubtful rights between members of the same family", specific performance may be obtained by "any person beneficially entitled thereunder". A bride or a family member who is not a party may therefore enforce such a settlement.
- Acknowledgment. If a party holding money tells a third person that he holds it for him, he cannot later deny the third person's right to it.
- Agency. A principal may sue on a contract his agent made on his behalf.
- Assignment. A person to whom the benefit of a contract, such as a debt, has been assigned may sue on it.
Worked examples
- A promises B to pay C Rs 10,000, and C's uncle pays A the price for that promise. C is a party to A's promise but gave nothing. C may sue A, as in Chinnaya.
- A and B agree that A will pay C Rs 10,000. C is told of it but is not a party, and no trust is created. C cannot sue, as in M.C. Chacko.
- On a daughter's marriage, her father-in-law agrees with her father to pay her a monthly allowance charged on his land. The daughter may sue, as in Khwaja Muhammad Khan.
| Point | Stranger to the consideration | Stranger to the contract |
|---|---|---|
| Who he is | a party to the promise who gave no consideration | a person outside the agreement |
| Can he sue in India? | yes (section 2(d); Chinnaya) | no, unless an exception applies (M.C. Chacko) |
| Point | Stranger to the consideration | Stranger to the contract |
|---|---|---|
| English position | no (Tweddle v. Atkinson) | no (the Dunlop case) |
| Exceptions | not needed | trusts and charges, family arrangements, acknowledgment, agency, assignment |
An evaluation
The first half of the rule is practical and fair. It lets family members and others make arrangements for each other's benefit without technical objections about who paid. The second half protects the parties' freedom to manage their own bargain. Its harshness falls on intended beneficiaries who are left without a remedy, which is why the exceptions have grown. A third person who wants to be safe should be made a party to the contract. Otherwise a trust or charge should be created for him.
Conclusion. The statement correctly states Indian law. Under section 2(d), consideration may move from "any other person", so a party to a promise may sue even if someone else paid the price, as Chinnaya v. Ramayya holds. But a person who is not a party to the contract cannot enforce it, as the Dunlop case and M.C. Chacko establish. The exceptions are narrow: trusts and charges, family arrangements as in Khwaja Muhammad Khan, acknowledgment, agency and assignment.
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