vivekananda law school moot court society€¦ · team [cite your source here.] 3rd arguendo moot...

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[Cite your source here.]

3

rd Arguendo Moot Court Competition

1 Memorial on behalf of the Plaintiff

Team Code: P7

Vivekananda Law School Moot Court Society

3rd

Arguendo Moot Court Competition.

Before

The District Court of Senior Civil Judge , Delhi.

R . D Parmanandka Pvt. Ltd.

(Plaintiff)

V.

Sapatrangi Pvt. Ltd.

(Defendant)

Case concerning with breach of contract and related issues.

Submitted in the Registry of the District Court.

Memorial for the plaintiff.

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TABLE OF CONTENT

INDEX OF AUTHORITIES...............................................................

STATEMENT OF JURISDICTION...................................................

STATEMENT OF FACTS..................................................................

ISSUES RAISED.................................................................................

SUMMARY OF ARGUEMENTS.......................................................

ARGUEMENTS ADVANCED...........................................................

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LIST OF ABBREVIATIONS

1. Hon‟ble – honorable

2. i.e. – that is

3. SC – Supreme Court

4. Dtd.- dated

5. CISG- Contracts of the International Sale of Goods

6. ICA-Indian Contract Act 1872

7. SLG-Sale of Goods Act 1930

8. u/s-under section

9. s/d-signed.

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INDEX OF AUTHORITIES

PRECEDENTS:-

1. Mam Trading Co. Ltd. v. Adamjee Jute Mills Ltd. 24 BLD (HCD ) 2004

2. Chitranji Lal Ram Partnership firm v. Chandgi Ram Kundan Lal and Co. AIR 1967

del 158

3. Bengal Corporation Pvt. Ltd. v. The Comissioners for the port of Calcutta AIR 1971

Cal 357.

4. Zodiac Clothing Company Ltd. v. Trimurthi Plastics 2013 SCC online Kar 6595

5. Kwality Manufacturing Corporation v. Central Warehousing Corporation 2009 5 SCC

142

6. Oil Natural Gas Ltd. v. Offshore Enterprise Ltd. (2011) 14 SCC 147

7. Karsandas H. Thacker v. Saran Engg. Co. Ltd. AIR 1965 SC 1981

8. Shanti Devi v. Bhojpur Rohtas Gramin Bank, AIR 2007 DOC 102 (NCC).

9. Hadley v. Baxendale (1843-60) All ER Rep 461.

BOOKS :-

1. Avtar Singh – Sale of Goods Act

2. Partnership Act & Sale of Goods Act – Dr. S.K. Kapoor

3. R.K Bangia – Business Law

4. Avtar Singh – Contract and Specific Relief

5. Contracts of International Sale of Goods.

STATUTES:-

1. The Indian Contract Act 1872

2. The Sale of Goods Act 1930

WEBSITES:-

1. Indiankanoon.org

2. Legalcrystal.com

3. Scconline.com

4. Lawctopus.com

5. Manupatra.com

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STATEMENT OF JURISDICTION

The Plaintiff humbly submits this memorandum for the suit filed before this Honourable

Court. The suit concerning “breach of contract and related issues” is filed in the Court of the

Senior Civil Judge in accordance with the Section 6, Section 9 and Section 20 of the Civil

Procedural Code , the Court has the jurisdiction to decide all the matters referred to it for

decision. Both the parties shall accept the Court‟s decision as final and binding and execute in

good faith.

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STATEMENT OF FACTS

1. A Company “R D” in the name of R D Parmanandka Pvt. Ltd operates in ladies

ware . It earned huge profits over the years and eventually decided to expand its

business by introducing a number of varieties in kids wear.

2. In order to achieve the above objective , they approached the Sapatrangi Pvt. Ltd ., a

large manufacturer of garments in kids wear garments. “R D” entered into a contract

for the purchase of kids wear garments . The contract price was Rs.6,00,000 / and

both the parties agreed upon a payment schedule . R D Parmanandka Pvt. Ltd agreed

to pay Rs.4,00,000/ partially upon the delivery of kids wear clothes on 1st January

2017 and a full and final payment of Rs.2,00,000 on 1st March 2017 .

3. Sapatrangi Pvt. Ltd delivered the garments to R D Parmanandka Pvt. Ltd on the

agreed date i.e. 1st January 2017 as per the contract. However , shortly after taking

the delivery of the clothes , R D Parmanandka Pvt. Ltd looses a profitable contract

with its large booking agents which resulted in a significant down in the demand for

their kids wear garments. Sapatrangi Pvt. Ltd , was also suffering from financial

difficulties due to a number of legal actions brought against it.

4. It was realised by Sapatrangi Pvt. Ltd that R D Parmanandka Pvt. Ltd would be

unable to pay the remaining amount of Rs.2,00,000 on 1st March 2017 , Sapatrangi

Pvt. Ltd agreed to accept Rs. 50,000 in full satisfaction of the debt. R.D Parmanandka

Pvt. Ltd duly paid such amount on 1st March 2017.

5. On 3rd

March 2017 Sapatrangi Pvt. Ltd delivered the rest of the clothes to R.D

Parmanandka Pvt. Ltd.

6. On delivery it was found that the clothes were of poor quality . On 4th

March a notice

was sent to the to Sapatrangi Pvt. Ltd., to exchange the clothes .the notice was

acknowledged and accepted by Sapatrangi Pvt. Ltd. However , no exchange took

place . On 20th

march second notice was sent which was neither acknowledged nor

replied.

7. Hence R.D Parmanandka Pvt. Ltd filed a suit against Sapatrangi Pvt. Ltd and claims

Rs. 1,50,000 for breach of contract . Sapatrangi Pvt. Ltd contended that it was not

bound to pay the amount claimed in the suit because the clothes were of good

qualities.

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STATEMENT OF ISSUES

Whether the acceptance of a sum different than that in the contract was valid and if it

was then what was the effect of it on the original contract.

Whether there was any breach of contract by Sapatrangi Pvt. Ltd.

Whether losses were accrued to the plaintiff due to the breach.

Whether the losses accrued to the plaintiff amounted to Rs. 1,50,000.

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SUMMARY OF ARGUEMENTS

1) Whether the acceptance of a sum different than that in the contract was valid and if

it was then what was the effect of it on the original contract:-

R D Parmanandka Pvt. Ltd had entered into a valid contract to purchase kids wear

garments from Sapatrangi Pvt. Ltd for the ascertained price of Rs. 6,00,000. Under

Section 16 of the Sale of Goods Act 1930 it was a valid agreement to sell. Both had

agreed on a schedule of payment . After sometime , Sapatrangi Pvt. Ltd realised that R D

Parmanandka Pvt. Ltd might not able to pay the sum due so Sapatrangi Pvt. Ltd., agreed

to accept Rs.50,000 instead of Rs.2,00,000 as decided per the original contract. This was

a part remission of the contract by Sapatrangi Pvt. Ltd under section 63 of The Indian

Contract Act , 1872 .

2) Whether there was any breach of contract by Sapatrangi Pvt. Ltd.

According to the paying schedule in the contract R D Parmanandka Pvt. Ltd were

supposed to pay Rs.4,00,000 on taking the delivery of the clothes on 1st January 2017 and

had to pay the rest of the amount Rs.2,00,000 as full and final settlement on 1st March

2017 but the full delivery of clothes was not received on 1st January , only a part delivery

was received and the rest was received on 3rd

March 2017, which is a breach of contract

under Section 47 of The Indian Contract Act 1872.

The quality of the rest of the clothes delivered on 3rd

March 2017 was poor and regardless

of the notices sent to the Sapatrangi Pvt. Ltd., out of which one was acknowledged and

accepted and the other was ignored the goods were not exchanged. The supply of poor

quality of clothes is a breach of contract under Section 16(1) of „Sale of Goods Act 1930.

This was a breach of contract under Section 39 of the Indian Contracts 1872.

3) Whether losses were accrued to the plaintiff due to the breach.

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The plaintiff accrued losses on various grounds by the breach of contract by Sapatrangi

Pvt. Ltd., firstly , all the goods were not delivered on the date mutually decided(1st

January 2017) by the parties as per the contract, instead the full delivery was received 2

months later on 3rd

March 2017, due to this delay the plaintiff suffered a loss in sale and

business for 3 months . When the remaining clothes were delivered to the plaintiff were

found out to be of poor quality which could not be sold by the plaintiff and they were not

even exchanged by the defendants despite two notices sent to them expressing the

foresaid contention.

4) Whether the losses accrued to the plaintiff amounted to Rs. 1,50,000

The plaintiff suffered loss of sale and business for three months due to the late delivery

of all the goods by the defendant. Besides that , the rest of the goods when provided were

found to be of poor quality and could not be sold which amounted to a loss equal to the

amount paid for the poor quality products as that amount could not be recovered through

sales. All these losses amounted to Rs.1,50,000. Also the poor quality products occupied

unnecessary space as they were not exchanged despite the notices sent.

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ARGUEMENTS ADVANCED

1) Whether the acceptance of a sum different than that in the contract was valid

and if it was then what was the effect of it on the original contract:-

The plaintiff R D Parmanandka Pvt. Ltd had entered into an agreement with a

Sapatrangi Pvt. Ltd for the delivery of kids wear garments under Section 4 of the Sale

of Goods Act 1930. According to the Section 16 of the Sale of Goods Act 1930 , in

case of transfer of property of goods is to take place at a furniture time or to some

conditions to be fulfilled after , the contract is called an agreement to sell. It becomes

a sale when the time elapses and the conditions are fulfilled subject to which the

property in the goods to be transferred 1.

The defendant was supposed to give the full delivery of the garments on 1st January

2017 and the plaintiff Pvt. Ltd were supposed to pay Rs.4,00,000 in exchange of the

full delivery and the full and final payment of Rs.2,00,000 was to be payed on 1st

March 2017 2. Accordingly R D Parmanandka Pvt. Ltd payed Rs.4,00,000 on 1

st

January though the full payment was recieved .

After sometime when both the parties were facing financial challenges , the defendant

realised that the plaintiff might not be able to pay the final payment due of

Rs.2,00,000 , hence the plaintiff agreed to accept Rs.50,000 instead of Rs.2,00,000

due to be payed by the plaintiff. This a part remission of the contract by the defendant

according to the Section 63 of The Indian Contract Act 1872 3. According to Section

63 of the Indian Contract Act 1872 that every promisee may dispe1nse with or remit ,

wholly or in part , the performance of the promise made to him , may extend the time

of performance or may accept instead of it any satisfaction which he thinks fit. Here

in the case the promisee on his accord agreed to accept an amount of Rs.50,000

instead of Rs.2,00,000 which he thought he was fit. Hence this was a valid remission

to the contract and no other changes were agreed upon to be made in the

1Part 2 of section 16 of the Sale Of Goods Act 1930.

2second point in summary of facts .

3section 63 of contract act :- promise to dispense with or remit peformance of promise.

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contract by the parties and the rest of the contract was supposed to be performed in

the same way it was decided to be and the defendants were still obliged to pay the

remaining clothes which were supposed to be delivered on 1st January 2017.

2) Whether there was any breach of contract by Sapatrangi Pvt. Ltd.

According to the facts of the case the plaintiff entered into a contract with the

defendant for the delivery of kids wear clothes for a consideration of Rs.6,00,000 and

a payment schedule was agreed upon according to which a payment of Rs.4,00,000

was to be made by the palintiff on the delivery of goods on 1st January and the whole

2delivery should have been made on that date. According to the facts of the case it is

mentioned that a payment schedule was agreed upon by the parties and not a schedule

for deliveries , the payments were to be made in parts but nowhere in the contract was

it mentioned that part goods will be delivered. It was clearly mentioned in facts that “

R.D Parmanandka Pvt. Ltd agreed to pay Rs.4,00,000/ partially on the delivery of the

kids wear garments on 1st January 2017 and a final payment of Rs.2,00,000/ on 1

st

March 2017.

It was never ever mentioned anywhere in the contract that the full and final settlement

was to be paid on recieving the part delivery of the clothes. The defendant was

supposed to deliver the whole on 1st January but a part of it was delivered in 3

rd

March which in inconsistent with the contract and is therefore a breach of contract

according to Section 52 of The Indian Contract Act 1872 4. Accoding to this section

52 in a contract when the order in which the reciprocal promises are to be performed

in that order ; and where the order is not expressly fixed by the contract , they shall be

performed in that order , in this case the order was clearly expressed in the form of a

payment schedule the defendant was supposed to deliver the whole before taking the

full and final payment but it did not deliver the whole on 1st January 2017 as required

by the contract but on 3rd

March 2017.

According to Section 55 of The Indian Contracts Act5 , when a party to a contract

promises to do a certain thing at or before a specified time , fails to do any such thing

4section 52 of contract act – order of performance of promises .

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at or before the specified time , the contract , so much it has not been performed ,

becomes voidable at the option of the person it was promised to.

Also if the seller delivers only a part of the goods and the goods delivered are in

3conformity of the contract Articles 46 and 50 of the CISG

6 the buyer still might

avoid the contract if there is a fundamental breach.

Also under article 49(2) of the act the buyer loses the right to delclare the contract

void if the seller has delivered the goods unless he or she does it in respect to late

delivery which is fundamenatl breach and it should be done within reasonable time

after he has been made aware of the delivery.

As to the dispute over the delivery of the low quality goods on 3rd

March 2017, the

remaining products which were delivered after the full and final payment of

Rs.50,000 were of poor quality which is again a breach of the contract. According to

Section 16(1) of the Sale of Goods Act 1930 where the buyer , expressly or by

implication , makes known to the seller the particular purpose for which the goods are

required , so as to show that the buyer relies on the seller‟s skill or judgement , there

is an impied condition that the goods shall be reasonably fit for such purpose .

According to te facts of the case the defendant agreed to pay a lesser amount because

he knew that the plaintiff had suffered heavy losses in business and if he knew that

the plaintiff suffered losses in bussiness that implies that the defendant knew what

business the plaintiff was in.

The court shall not entertain the contention of the defendants that the goods were not

of poor quality beacuase if that had been the case , then when a notice to exhange the

poor quality products was sent to the defendant it should have been expressed by them

that the goods were not of poor quality but that was not done but instead the

defendant acknowledged and accepted the notice but no exchange took place and the

second notice was not even replied to.

5section 55 – effect of failure to perform at the fixed time

6CISG- Contract for International Sale Of Goods.

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In the case KWALITY MANUFACTURING CORPORATION v. CENTRAL

WAREHOUSING CORPORATION7 in the contract for 32 lakh bamboo mats when

the bamboo mats of poor quality were delivered to the applicant damages were

awarded to the applicant for the breach of contract in pursuance to Section 16 of The

Sale of Goods Act 1930.

3) Whether losses were accrued to the plaintiff due to the breach.

Accoding to the foresaid contract the full delivery of the contract goods was not

recieved by the plaintiff on the date agreed upon. Without any doubt that led to loss of

sale and business , loss of goodwill and reputation of the plaintiff party .

In the case Shanti Devi v. Bhojpur Rohtas Gramin Bank8 , it was held that when a

promise has to be performed before a certain or on a specific day then it must be

performed before the lapse of that time.

Even when the rest of the goods due to be delivered were delivered on 3rd

March 2017

they were found to be of poor quality which could not be sold , traded and performed

business and the consideration for that was paid to the defendant by the plaintiff on

time . Also according to the facts the defendant very well knew that the plaintiff was

suffering heavy losses in business and would be affected greatly by loss of sale and

business that the delivery of poor quality of products would result in.

So the plaintiff accrued losses due to the partial and late delivery of the goods and

also due to the poor quality of the products delivered .

4) Whether the losses accrued to the plaintiff amounted to Rs. 1,50,000

According to the case Karsandas H. Thacker v. Saraan Engg . Co. Ltd9., Damages

are to be awarded as compensation for any loss or damage arsing naturally in the

usual course of things from the breach of contract.

4Also in the case Hadley v. Baxendale

10 certain principles were laid down ,

7 AIR 1965 SCC 1981

8 AIR 2007 DOC 102 (NCC)

9 AIR 1965 SCC 1981

10 All Er Rep 1846.

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In this case plaintiff was an extensive business miller , their mill was stopped by a

breakage of the crankshaft by which the mill worked. The defendants, a firm of

carriers were engaged to carry the shaft to the manufacturers and patent for a new one.

The plaintiff‟s servant told the defebdants that the mill was stopped and the new shaft

must be sent immediately , but due to the neglect of the defendant the delivery was

delayed and the plaintiff did not recieve the new shaft for several days after the after

they would have otherwise done. The action was bought for loss of profits they would

have made in the time delayed.

In this beacause the complete delivery was not recieved on the agreed date , it led to

loss of consignments and sales to the plaintiff which ultimately transforms into loss of

profits even after the delivery of the remaining products they were of poor quality and

they could not be sold at all which again resulted into loss of sales and profits and also

the price paid for the goods which could not have be recovered .

According too the rules laid down t5his case only general damages can be recovered

and not special damages and for a business of garments the loss of profits and sales is

what takes place in usual course if the delivery is on time or the quality and it is not

any special damage. Also the defendant was aware of the conditions of the plaintiff

which were financially canstrained.

So the damages accrued by the plaintiff includes :- loss of sale and profits due to the partial

delayed delivery of the goods for the two months + loss in godwill and reputation + loss for

sale and profits of poor quality + loss of compensation for the clothes which could not be

recovered .

For the breach ofcontract on the part of the defendant under Section 3911

of the Indian

Contract Act 1872, the plaintiff claims damages under Section 73 of the Act12

.

Hence the plantiff is entitled to Rs.1,50,000 as damages for the breach of contract by the

defendant.

11

section 39 – breach of contract 12

section 73 – claim for damages

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PRAYER

Therefore in the light of facts stated , issues raised , arguments advanced and authorities

cited, it is most humbly prayed and implored before the Hon‟ble District Court of Senior

Civil Judge , Delhi , that it may be graciously pleased to adjudge and declare.

THAT THE PLAINTIFF IS ENTITLED Rs.1,50,000 AS DAMAGES FOR

BREACH OF CONTRACT.

The court may be pleased to pass any other decree , which the court may deem fit in the light

of justice, equity and good conscience.

All of which is most humbly and respectfully submitted.

COUNSELS FOR PLAINTIFF

vivekananda law school moot court society€¦ · team [cite your source here.] 3rd arguendo moot...

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