ASSIGNMENT

MBA 302-LEGAL ASPECTS OF

BUSINESS
 ASSIGNMENT (SET-1)

Ques.1 What is fiduciary relationship in a contract of guarantee? Explain the

kinds of guarantees.

Ans. Fiduciary Realtionship is a relationship where one person places

complete confidence in another in regard to a particular transaction or one's
general affairs or business. The relationship is not necessarily formally or
legally established as in a declaration of trust, but can be one of moral or
personal responsibility, due to the superior knowledge and training of the
fiduciary as compared to the one whose affairs the fiduciary is handling.

There are four types of guarantee:

-Oral or written guarantee: A contract of guarantee may either be oral or in

writing, though a creditor should always prefer to put it in writing to avoid any
dispute regarding the terms, etc. In case of an oral agreement, the existence of
the agreement itself is very difficult to prove.

-Specific guarantee:

A specific guarantee is given in respect of a single debt or transaction. For

example, A asks B to give a loan of Rs.500 to C promising to pay the amount on
the failure of C to pay the amount.

-Continuing guarantee:

Where the guarantee extends to a number of transactions, it is called

continuing guarantee. Even a fidelity guarantee is also a continuing guarantee
as it continues for a period of time. Example: A asks a shop-keeper to sell
goods on credit to B up to a limit of Rs.1,000 during the next month, promising
to pay the amount on B's default. This is a continuing guarantee and A is liable
up to Rs. 1,000 on default of B.
-Bank guarantee: A bank guarantee is a promise from a bank or other lending
institution that if a particular borrower defaults on a loan, the bank will cover
the loss. Note that a bank guarantee is not the same as a letter of credit.

-Guarantee for a limited amount: Difficult questions in case of gurantee for a

limited amount because there is an important distinction between a guarantee
for only a part of the whole debt and guarantee for the whole debt subject to a
limit. Example: if X owes Y Rs. 50,000 and A is the surely for Rs.30,000, the
question may arise whether A has guaranteed Rs.30,000 out of Rs.50,000 or
whether he/she has guaranteed the entire Rs.50,000 subject to a limit of
Rs.30,000.

QUES.2 (i) Do you think contract with a minor is valid? Narrate with the help
of the facts and judgement in the case: Mohori Bibee v. DharmodasGhose.

(ii) Explain the rules and remedies for discharge of contract by breach.

ANS.

QUES.3 (i) Narrate the facts and judgement in the case Howell vs. Coupland.
(ii) Who is an unpaid seller? What are the rights enjoyed by an unpaid seller
under the extant provisions of law?

ANS.
 ASSIGNMENT (SET-2)

QUES.1 The Banking Regulation Act, 1949, provides various methods of

regulation of the banking business. Elaborate the key areas of regulation.

ANS.

QUES.2 Explain the nature and scope of complaints under the Consumer
Protection Act?

ANS.

QUES.3 (a) Differentiate between a holder and a holder in due course.

(b) Explain the privileges enjoyed by a holder in due course

ANS.