In this CLAT preparation series, we publish detailed answers to old CLAT exam questions well supported with statutory provisions, supporting judgments and easy illustrations.
Legal Aptitude: The section contains 50 questions. Each question contains legal principles based on statutory enactments and facts related to the same. These propositions may not be the true ones. The student has to presume that it is true for reaching the conclusion to the given problem. Four answer choices are given in each question from which the student has to select the most appropriate and reasonable conclusion based on the given principle. The section is aimed to test one’s ability in legal aptitude, awareness of the law, research aptitude and problem-solving ability. It may be noted that the most reasonable conclusion may be absurd or unacceptable for any reason, yet the student must adhere to the principle given to arrive at the same in the question.
Question 115. Principle: An agreement may be entered into orally, in writing, or by conduct.
Facts: A went to the shop of B and picked a toothbrush and gave a cheque of Rupees twenty to B and left the shop.
(A) A entered into an agreement with B.
(B) A did not enter into an agreement with B.
(C) Payment of toothbrush cannot be made through a cheque.
(D) A should have carried a currency note of Rupees twenty to make the payment.
Section 2(e) of the Indian Contract Act (hereinafter referred to as “ICA”) defines the term “agreement”. It says that “every promise and every set of promises, forming the consideration for each other, is an agreement”.
Illustration: A wants to sell his pen to B. A tells B that he will sell his pen for Rs.100. B agrees to the same. A’s promise to B to sell his pen if he gets Rs.100 from B and B’s promise to A to give Rs.100 to get his pen is a consideration for each other. For a deep understanding please see Section 2(d) of ICA which defines the term “consideration”. As per the section “when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise”.
Here the principle is that an agreement may be entered into orally, in writing, or by conduct. In ICA, however, it is not expressly stated to have a written agreement. In Section 10 of the ICA, you will find these terms: “Nothing herein contained shall affect any law in force in India, and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents.” Thus, it is clear that an agreement can be made either orally or in writing or by the conduct of parties. Some legislations like the Transfer of Property Act stipulates a written agreement to be valid in the eyes of law.
In the present question, we are supposed to rely on the principle as correct and it is correct as per the law also. The fact says that B is running a shop where A visited and picked a toothbrush and paid him Rs.20 by way of cheque. Now we can analyze the answers to choose the correct one.
Option A: A entered into an agreement with B.
Since it is clear that there can be an agreement by way of conduct, we can undoubtedly say that the above conduct of A can form an agreement. Now for an agreement to be valid, there must be effective consideration on both sides as stated in 2(e) and (d) of ICA noted above. Here, B has a shop in which he has displayed a toothbrush which surely had a price labeled on it. This is an invitation to offer as per the law by B to the general public. Anyone can visit B’s shop and offer to pay the displayed price or a negotiated price to buy the toothbrush. Here A visited the shop and took the toothbrush and saw the price. Now, it is upon A to offer the price to B. A offered to pay the price of Rs.20 to B to buy the toothbrush. B can either deny to accept the offer if it is a reduced price other than displayed, or sell it at the offered price to A. In this case, A took the brush and left the shop and it clearly denotes that B has accepted the price offered by A.
So the real question is whether the conduct by the parties form an agreement, particularly when A has given a cheque for Rs.20 being the price of the toothbrush to B. In fact, there is no stipulation in law to put a minimum standard amount to transact vide a cheque. What we can infer from the fact is that A has given the cheque and left the shop without any obstruction from B and this means that B has clearly accepted the offer of A.
Since the law acknowledges such conduct by the parties as an agreement, our answer choice should be Option A ie. A entered into an agreement with B.
Option B: A did not enter into an agreement with B.
A has offered the price as displayed on the toothbrush and gave a cheque for it and left the shop without any problem and that means there is an agreement between the two. Law also favors such an agreement by conduct. There is also a consideration in the form of a cheque and since Rs.20 can be transacted vide a cheque the consideration is also a lawful one. Thus A entered into an agreement with B and this Option is incorrect.
Option C: Payment of toothbrush cannot be made through a cheque.
There is no such law that stipulates such a statement. The principle says that an agreement can be made through writing or conduct. Clearly, A has entered into an agreement with B and payment through cheque forms a lawful consideration. Thus this option is incorrect.
Option D: A should have carried a currency note of Rupees twenty to make the payment.
As per the principle, A has made an agreement with B. Payment vide cheque forms a lawful consideration for the agreement. Since there is no stipulation of law to tender payment through a currency note only, A’s act of giving the cheque and leaving the shop undisturbed clearly means that there is no need for giving currency notes to complete the payment. So this answer choice is terribly wrong.
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