Legal Aspects of Business June 2026 Solved Assignments

Description

NMIMS

LEGAL ASPECTS OF BUSINESS

APPLICABLE FOR SEM1 (JUNE 2026 EXAMINATION)

Q1. A startup electronics retailer has recently signed a large contract to supply custom- branded smartwatches to a nationwide fitness chain. The contract specifies exact features and performance standards. However, after initial delivery, the client discovers that a significant percentage of the watches do not match the agreed-upon technical specifications. The client is dissatisfied, threatening legal action and withdrawal from the contract. The retailer’s leadership team must decide how to respond, considering the essential elements of the contract and the remedies available under the Sale of Goods Act, 1930.Apply the legal principles governing conditions and warranties in sales contracts to this scenario. How should the retailer distinguish between a breach of condition and a breach of warranty, and what actions can it take to address the client’s complaints while minimizing legal liability and preserving business relationships? (10 Marks)

Ans.1

Introduction

The dispute between the startup electronics retailer and its client, a nationwide fitness chain, poses critical issues under the Sale of Goods Act, 1930, particularly in relation to the distinction between conditions and warranties in a contract of sale. The technical features and performance standards for custom-branded timepieces are explicitly defined in the contract, rendering compliance mandatory. The identification of a significant portion of the delivered products that does not satisfy these specifications is indicative of a potential breach. The retailer must meticulously evaluate whether this violation pertains to a condition or a warranty, as this classification dictates the buyer’s remedies and the seller’s legal liability.

Q2(A). A multinational supplier entered into a year-long exclusive distribution contract with an Indian retail chain. Six months into the agreement, the supplier alleges undue influence by senior executives of the retailer at the time of signing, claiming threats were made during negotiations. The retailer insists the contract was signed with free consent and all terms were clear. Both parties now contest the validity of the contract, with the business at risk of supply chain disruption and reputational loss. Assess the competing claims regarding the enforceability of this contract by analyzing the concept of ‘free consent’ and the doctrine of undue influence as per the Indian Contract Act, 1872. Critique the strengths and weaknesses of each party’s position, and recommend how the dispute should be resolved for optimal commercial and ethical outcomes. (5 Marks)

Answer 2a 

Introduction

The validity of assent under the Indian Contract Act, 1872, is the central issue in the dispute between the multinational supplier and the Indian retail chain. A contract is only enforceable if it is entered into with “free consent,” which refers to an agreement that is not the result of coercion, undue influence, fraud, misrepresentation, or error. The retailer maintains that the contract was executed voluntarily and transparently, while the supplier’s allegation of undue 

Q2(B)A large logistics company mistakenly credits a sum of Rs.1,00,000 to a vendor’s account instead of the intended recipient. The vendor, aware of the extra funds, uses the money for business operations. Later, the error is discovered, and the company requests the vendor to return the sum. The vendor claims he accepted the payment in good faith and is unwilling to return it without compensation for the operational improvements made. Evaluate the legal obligations of the vendor under Section 72 of the Indian Contract Act, 1872, considering the principles of quasi-contract and unjust enrichment. Critically assess whether the vendor is entitled to retain the benefit and suggest the most equitable resolution in this situation. Justify your position by analyzing both parties’ perspectives. (5 Marks)

Answer 2b 

Introduction

Important issues under the Indian Contract Act, 1872, particularly Section 72, which addresses payments made by error, are raised by the logistics company’s erroneous transmission of ₹1,00,000 to the vendor. The law acknowledges obligations under quasi-contracts to prevent unjust enrichment, even in the absence of a formal contract. The primary inquiry is whether the vendor has the legal right to retain the benefit or refuse repayment without compensation after having knowingly used the excess funds.

The Principle of Quasi-Contract and Section 72: