Friday 8 February 2013
Case:
A scrap tender was announced by the government for the period of a 6 months
term. The market rate of scrap was 43 per kg. Many parties offered their rates. Mr.
Nadeem, a scrap dealer amongst other dealers, offers the best price for the tender,
which was 41 per kg, which was accepted by the government.
The agreement was well managed for the period of 3 months, but due to some
uncertain disputes of government, the stock market goes down and the price of
scrap is reduced to Rs.35 per kg from Rs.41 per kg,due to which the dealer has to
bear some loss and it was not acceptable for the dealer. So, as a result, he stopped
purchasing more scrap from the government.
Both the parties, later on decided to sit together and make another agreement to
solve this problem so that both parties get benefitand no one bears any loss. They
came out with the solution that Government officials shall reduce the rate of scrap
to Rs.37 per kg. The reason due to which Governmentofficials were bearing loss
was that there was no other party to make the deal even at Rs.36 per kg. Thus, in
order to minimize the loss, the Government Officials agreed with the Mr. Nadeem
at Rs.37 per kg. Now, in this situation, both the parties shall not bear too much
loss and the agreement will be completed in the specified period of time.
Requirements:
a. Being a student of Business and labor law, explain why Mr. Nadeem
did not accept the price. In addition, briefly explain why Government
Officials agreed upon the deal with Mr. Nadeem?
Marks 10
b. Mention those essential elements of the sale of good contract that you
may find in this particular scenario? Elaborate each element with
reference to the above case.
Marks10
Full Solution
