All India Bar Examination (AIBE) 2-II Previous Year Question Papers with Answers

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28.

On December, 2010, Company A enters into a contract with Company B to supply Company B with thousand shirts specially designed for sale on Republic Day. No time for delivery is mentioned in the contract and it is not stated whether time is the essence of the contract. Company A delivers the shirts after the Republic Day celebrations in 2011 are over. Has the contract been validly performed?



Principle : Time is presumed to be of the essence in the case of commercial contracts. Parties may indicate clearly whether or not time is of the essence in a contract, and this intention would determine whether time is of the essence.

If no time for performance is specified, contract must be a performed within a reasonable time.
A: The contract was validly performed as the contract did not expressly State a date for delivery.
B: The contract was not validly performed as time was clearly the essence of this commercial contract and it is reasonable to expect Company A to have delivered the shirts before Republic Day celebrations in 2011.
C: The contract was validly performed as it was not expressly stated that time was of the essence here.
D: The contract was not validly performed because Company A did not inform Company B that it would be delivering the shirts after Republic Day celebrations in 2011.
E: The contract was validly performed because this was not a commercial contract, and hence, time was not of the essence.

The answer is: B

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Explanation

The correct option is:

B: The contract was not validly performed as time was clearly the essence of this commercial contract, and it is reasonable to expect Company A to have delivered the shirts before Republic Day celebrations in 2011.

Explanation:

In commercial contracts, time is presumed to be of the essence unless explicitly stated otherwise in the contract. In this case, the contract involves the supply of shirts specially designed for sale on Republic Day, which indicates a clear time-sensitive nature of the contract. Since the contract is for a specific event, Republic Day celebrations in this case, it is reasonable to infer that timely delivery before the event is essential for the contract's purpose.

Even though the contract does not expressly state that time is of the essence, the circumstances and the nature of the contract make it clear that timely delivery before Republic Day celebrations in 2011 was crucial. Company A's delivery of the shirts after the Republic Day celebrations in 2011 means that they did not perform the contract in accordance with its implied time-sensitive nature.

Therefore, option B is the correct choice because Company A did not validly perform the contract due to the delay in delivery, which was not in line with the reasonable expectations of the parties involved in a commercial contract of this nature.