Source: 2)a)7m,MDTP8,9, 2)a)7m,MTP2,Jan2025, 2)a)7m,June20247 Marks
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Question Scenario

Sony, a friend of Priya wanted to buy her two-wheeler. Priya agreed to sell her two-wheeler to Sony and it was decided that price of her two-wheeler will be fixed by Priya's father, who is an auto dealer. Priya immediately handed over the keys to Sony. However, Priya's father refused to fix the price as he did not want Priya to sell her vehicle. Priya expressed her inability to sell the two-wheeler to Sony and asked for return, but Sony refused to return the same. Explain-\n(i) Can Priya take-back the vehicle from Sony?\n(ii) Will your answer be different, if Priya had not handed over the vehicle to Sony?

Estimated Writing Time: 12 mins Try in Practice Mode

Suggested Answer

Ascertainment of price (Section 9 of the Sale of Goods Act, 1930): \nBy virtue of Section 9, the price in a contract of sale may be-\n(1) fixed by the contract, or \n(2) agreed to be fixed in a manner provided by the contract, e.g., by a valuer, or \n(3) determined by the course of dealing between the parties.\nAgreement to sell at valuation (Section 10):\nSection 10 provides for the determination of price by a third party. \n1. Where there is an agreement to sell goods on the terms that price is to be fixed by the valuation of a third party and that third party either does not or cannot make such valuation, the agreement is thereby avoided. However, a buyer who has received and appropriated the goods, must pay a reasonable price for them.\n2. In case the third party is prevented from making the valuation by the default of either party, the party not at fault may maintain a suit for damages against the party in fault. \n(i) In the instant case, Priya handed over the keys of her two wheeler to Sony and it was decided between them that price of the vehicle will be fixed by Priya’s father. However, Priya’s father refused to fix the price as he did not want Priya to sell her vehicle. As the keys have already been handed over to Sony, Priya cannot take back the keys from Sony and Sony shall pay reasonable price to Priya for the two-wheeler.\n(ii) If Priya had not handed over the vehicle to Sony, the contract could have been avoided as Priya’s father refused to fix the price of the vehicle.

Exam Strategy Tip

When answering law questions in the CA Foundation exam, follow the "Provision -> Facts -> Conclusion" structure for maximum marks. Ensure to state the relevant sections where applicable to earn bonus marks from the evaluator.

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