CLAT 2022 || New Pattern Legal Reasoning Quiz || 20.01.2022

Direction: Read the passage carefully and answer the given questions:

Under a claim for damages, the Contract Act only permits seeking compensation for any loss ‘which the parties knew, when they made the contract, to be likely to result from the breach of it’ at the time of entering into the contract which is commonly termed as the principle of contemplation of damages between the parties. Reasonable foreseeability is construed as the serious possibility of occurrence of loss and is often the test used for damages. Further, the damages claimed must be reasonable and hence damages may not be sustainable for loss of profit or opportunity costs ordinarily. Section 73 specifically states that “Compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.” Hence, it specifically excludes any claim for remote or indirect losses.

No such restriction applies to an indemnity claim. Section 124 of the Contract Act defines a contract of indemnity as “a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.” A claim for damages is subject to the ordinary rules of remoteness discussed whereas a claim for indemnity is not subject to the same rules. Thus, consequential, remote, indirect, and third party losses can all be claimed by the indemnified party unless specifically excluded in the indemnity clause.

Similarly, unlike a claim for damages, where a clear connection and sufficient nexus has to be demonstrated between the breach of contract event and the damage suffered, the threshold to establish is much lower in case of an indemnity and there is no onus to prove actual loss before claiming indemnity. There is no direct case law on this point, however, this inference is drawn from the fact that an indemnity holder in India is entitled to sue the indemnifier even before incurring any actual damage or loss and that an indemnity is not necessarily given by repayment after payment.

Direction: Read the passage carefully and answer the given questions:

Under a claim for damages, the Contract Act only permits seeking compensation for any loss ‘which the parties knew, when they made the contract, to be likely to result from the breach of it’ at the time of entering into the contract which is commonly termed as the principle of contemplation of damages between the parties. Reasonable foreseeability is construed as the serious possibility of occurrence of loss and is often the test used for damages. Further, the damages claimed must be reasonable and hence damages may not be sustainable for loss of profit or opportunity costs ordinarily. Section 73 specifically states that “Compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.” Hence, it specifically excludes any claim for remote or indirect losses.

No such restriction applies to an indemnity claim. Section 124 of the Contract Act defines a contract of indemnity as “a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.” A claim for damages is subject to the ordinary rules of remoteness discussed whereas a claim for indemnity is not subject to the same rules. Thus, consequential, remote, indirect, and third party losses can all be claimed by the indemnified party unless specifically excluded in the indemnity clause.

Similarly, unlike a claim for damages, where a clear connection and sufficient nexus has to be demonstrated between the breach of contract event and the damage suffered, the threshold to establish is much lower in case of an indemnity and there is no onus to prove actual loss before claiming indemnity. There is no direct case law on this point, however, this inference is drawn from the fact that an indemnity holder in India is entitled to sue the indemnifier even before incurring any actual damage or loss and that an indemnity is not necessarily given by repayment after payment.

Direction: Read the passage carefully and answer the given questions:

Under a claim for damages, the Contract Act only permits seeking compensation for any loss ‘which the parties knew, when they made the contract, to be likely to result from the breach of it’ at the time of entering into the contract which is commonly termed as the principle of contemplation of damages between the parties. Reasonable foreseeability is construed as the serious possibility of occurrence of loss and is often the test used for damages. Further, the damages claimed must be reasonable and hence damages may not be sustainable for loss of profit or opportunity costs ordinarily. Section 73 specifically states that “Compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.” Hence, it specifically excludes any claim for remote or indirect losses.

No such restriction applies to an indemnity claim. Section 124 of the Contract Act defines a contract of indemnity as “a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.” A claim for damages is subject to the ordinary rules of remoteness discussed whereas a claim for indemnity is not subject to the same rules. Thus, consequential, remote, indirect, and third party losses can all be claimed by the indemnified party unless specifically excluded in the indemnity clause.

Similarly, unlike a claim for damages, where a clear connection and sufficient nexus has to be demonstrated between the breach of contract event and the damage suffered, the threshold to establish is much lower in case of an indemnity and there is no onus to prove actual loss before claiming indemnity. There is no direct case law on this point, however, this inference is drawn from the fact that an indemnity holder in India is entitled to sue the indemnifier even before incurring any actual damage or loss and that an indemnity is not necessarily given by repayment after payment.

Direction: Read the passage carefully and answer the given questions:

Under a claim for damages, the Contract Act only permits seeking compensation for any loss ‘which the parties knew, when they made the contract, to be likely to result from the breach of it’ at the time of entering into the contract which is commonly termed as the principle of contemplation of damages between the parties. Reasonable foreseeability is construed as the serious possibility of occurrence of loss and is often the test used for damages. Further, the damages claimed must be reasonable and hence damages may not be sustainable for loss of profit or opportunity costs ordinarily. Section 73 specifically states that “Compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.” Hence, it specifically excludes any claim for remote or indirect losses.

No such restriction applies to an indemnity claim. Section 124 of the Contract Act defines a contract of indemnity as “a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.” A claim for damages is subject to the ordinary rules of remoteness discussed whereas a claim for indemnity is not subject to the same rules. Thus, consequential, remote, indirect, and third party losses can all be claimed by the indemnified party unless specifically excluded in the indemnity clause.

Similarly, unlike a claim for damages, where a clear connection and sufficient nexus has to be demonstrated between the breach of contract event and the damage suffered, the threshold to establish is much lower in case of an indemnity and there is no onus to prove actual loss before claiming indemnity. There is no direct case law on this point, however, this inference is drawn from the fact that an indemnity holder in India is entitled to sue the indemnifier even before incurring any actual damage or loss and that an indemnity is not necessarily given by repayment after payment.

Direction: Read the passage carefully and answer the given questions:

Under a claim for damages, the Contract Act only permits seeking compensation for any loss ‘which the parties knew, when they made the contract, to be likely to result from the breach of it’ at the time of entering into the contract which is commonly termed as the principle of contemplation of damages between the parties. Reasonable foreseeability is construed as the serious possibility of occurrence of loss and is often the test used for damages. Further, the damages claimed must be reasonable and hence damages may not be sustainable for loss of profit or opportunity costs ordinarily. Section 73 specifically states that “Compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.” Hence, it specifically excludes any claim for remote or indirect losses.

No such restriction applies to an indemnity claim. Section 124 of the Contract Act defines a contract of indemnity as “a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.” A claim for damages is subject to the ordinary rules of remoteness discussed whereas a claim for indemnity is not subject to the same rules. Thus, consequential, remote, indirect, and third party losses can all be claimed by the indemnified party unless specifically excluded in the indemnity clause.

Similarly, unlike a claim for damages, where a clear connection and sufficient nexus has to be demonstrated between the breach of contract event and the damage suffered, the threshold to establish is much lower in case of an indemnity and there is no onus to prove actual loss before claiming indemnity. There is no direct case law on this point, however, this inference is drawn from the fact that an indemnity holder in India is entitled to sue the indemnifier even before incurring any actual damage or loss and that an indemnity is not necessarily given by repayment after payment.

Direction: Read the passage carefully and answer the given questions

PASSAGE

The Code on Social Security 2020 (Code), which received the Presidential Assent on 28 September 2020, subsumes nine regulations relating to social security, retirement and employee benefits. The Code has widened coverage by including the unorganised sector, fixed term employees and gig workers, platform workers, inter-state migrant workers etc., in addition to contract employees. Aggregators, meaning “digital intermediaries or a market place for a buyers or users of a service to connect with the seller or the service provider”, are specifically required to contribute to the social security fund. It is, therefore, important for establishments to assess the implications and revisit the compliance requirements under the Code. Uniformity in determining wages for the purpose of social security benefits is another highlight. Given the ambiguity in the current regulations, especially in respect of Provident Fund where clarity was received only after the Supreme Court Ruling on 28 February 2019, this is definitely a welcome move. the Code provides for an enhanced role of inspector-cum-facilitator whereby employers can look for support and advice to enhance compliances. To enable that demand for human resources is met and to monitor employment information, career centres will be established. Employers have to report vacancies to career centres before filling up the same. Digitisation is the new buzzword and covers almost all sectors; the Code is not an exception. As per the Act, all records and returns have to be maintained electronically. Digitisation of data will help in exchange of information among various stakeholders / funds set up by the Government, will ensure compliance and also facilitate governance.

The strength of implementing a legislation lies in the ease of compliances as well as in the penalties that deter non-compliance. The Code captures it all. Any failure to deposit employees’ contributions not only attracts a penalty of Rs 100,000, but also imprisonment of one to three years. In case of repeat offence, the penalties and prosecution are severe, and no compounding is permitted for repeated offences.

Direction: Read the passage carefully and answer the given questions

PASSAGE

The Code on Social Security 2020 (Code), which received the Presidential Assent on 28 September 2020, subsumes nine regulations relating to social security, retirement and employee benefits. The Code has widened coverage by including the unorganised sector, fixed term employees and gig workers, platform workers, inter-state migrant workers etc., in addition to contract employees. Aggregators, meaning “digital intermediaries or a market place for a buyers or users of a service to connect with the seller or the service provider”, are specifically required to contribute to the social security fund. It is, therefore, important for establishments to assess the implications and revisit the compliance requirements under the Code. Uniformity in determining wages for the purpose of social security benefits is another highlight. Given the ambiguity in the current regulations, especially in respect of Provident Fund where clarity was received only after the Supreme Court Ruling on 28 February 2019, this is definitely a welcome move. the Code provides for an enhanced role of inspector-cum-facilitator whereby employers can look for support and advice to enhance compliances. To enable that demand for human resources is met and to monitor employment information, career centres will be established. Employers have to report vacancies to career centres before filling up the same. Digitisation is the new buzzword and covers almost all sectors; the Code is not an exception. As per the Act, all records and returns have to be maintained electronically. Digitisation of data will help in exchange of information among various stakeholders / funds set up by the Government, will ensure compliance and also facilitate governance.

The strength of implementing a legislation lies in the ease of compliances as well as in the penalties that deter non-compliance. The Code captures it all. Any failure to deposit employees’ contributions not only attracts a penalty of Rs 100,000, but also imprisonment of one to three years. In case of repeat offence, the penalties and prosecution are severe, and no compounding is permitted for repeated offences.

Direction: Read the passage carefully and answer the given questions

PASSAGE

The Code on Social Security 2020 (Code), which received the Presidential Assent on 28 September 2020, subsumes nine regulations relating to social security, retirement and employee benefits. The Code has widened coverage by including the unorganised sector, fixed term employees and gig workers, platform workers, inter-state migrant workers etc., in addition to contract employees. Aggregators, meaning “digital intermediaries or a market place for a buyers or users of a service to connect with the seller or the service provider”, are specifically required to contribute to the social security fund. It is, therefore, important for establishments to assess the implications and revisit the compliance requirements under the Code. Uniformity in determining wages for the purpose of social security benefits is another highlight. Given the ambiguity in the current regulations, especially in respect of Provident Fund where clarity was received only after the Supreme Court Ruling on 28 February 2019, this is definitely a welcome move. the Code provides for an enhanced role of inspector-cum-facilitator whereby employers can look for support and advice to enhance compliances. To enable that demand for human resources is met and to monitor employment information, career centres will be established. Employers have to report vacancies to career centres before filling up the same. Digitisation is the new buzzword and covers almost all sectors; the Code is not an exception. As per the Act, all records and returns have to be maintained electronically. Digitisation of data will help in exchange of information among various stakeholders / funds set up by the Government, will ensure compliance and also facilitate governance.

The strength of implementing a legislation lies in the ease of compliances as well as in the penalties that deter non-compliance. The Code captures it all. Any failure to deposit employees’ contributions not only attracts a penalty of Rs 100,000, but also imprisonment of one to three years. In case of repeat offence, the penalties and prosecution are severe, and no compounding is permitted for repeated offences.

Direction: Read the passage carefully and answer the given questions

PASSAGE

The Code on Social Security 2020 (Code), which received the Presidential Assent on 28 September 2020, subsumes nine regulations relating to social security, retirement and employee benefits. The Code has widened coverage by including the unorganised sector, fixed term employees and gig workers, platform workers, inter-state migrant workers etc., in addition to contract employees. Aggregators, meaning “digital intermediaries or a market place for a buyers or users of a service to connect with the seller or the service provider”, are specifically required to contribute to the social security fund. It is, therefore, important for establishments to assess the implications and revisit the compliance requirements under the Code. Uniformity in determining wages for the purpose of social security benefits is another highlight. Given the ambiguity in the current regulations, especially in respect of Provident Fund where clarity was received only after the Supreme Court Ruling on 28 February 2019, this is definitely a welcome move. the Code provides for an enhanced role of inspector-cum-facilitator whereby employers can look for support and advice to enhance compliances. To enable that demand for human resources is met and to monitor employment information, career centres will be established. Employers have to report vacancies to career centres before filling up the same. Digitisation is the new buzzword and covers almost all sectors; the Code is not an exception. As per the Act, all records and returns have to be maintained electronically. Digitisation of data will help in exchange of information among various stakeholders / funds set up by the Government, will ensure compliance and also facilitate governance.

The strength of implementing a legislation lies in the ease of compliances as well as in the penalties that deter non-compliance. The Code captures it all. Any failure to deposit employees’ contributions not only attracts a penalty of Rs 100,000, but also imprisonment of one to three years. In case of repeat offence, the penalties and prosecution are severe, and no compounding is permitted for repeated offences.

Direction: Read the passage carefully and answer the given questions

PASSAGE

The Code on Social Security 2020 (Code), which received the Presidential Assent on 28 September 2020, subsumes nine regulations relating to social security, retirement and employee benefits. The Code has widened coverage by including the unorganised sector, fixed term employees and gig workers, platform workers, inter-state migrant workers etc., in addition to contract employees. Aggregators, meaning “digital intermediaries or a market place for a buyers or users of a service to connect with the seller or the service provider”, are specifically required to contribute to the social security fund. It is, therefore, important for establishments to assess the implications and revisit the compliance requirements under the Code. Uniformity in determining wages for the purpose of social security benefits is another highlight. Given the ambiguity in the current regulations, especially in respect of Provident Fund where clarity was received only after the Supreme Court Ruling on 28 February 2019, this is definitely a welcome move. the Code provides for an enhanced role of inspector-cum-facilitator whereby employers can look for support and advice to enhance compliances. To enable that demand for human resources is met and to monitor employment information, career centres will be established. Employers have to report vacancies to career centres before filling up the same. Digitisation is the new buzzword and covers almost all sectors; the Code is not an exception. As per the Act, all records and returns have to be maintained electronically. Digitisation of data will help in exchange of information among various stakeholders / funds set up by the Government, will ensure compliance and also facilitate governance.

The strength of implementing a legislation lies in the ease of compliances as well as in the penalties that deter non-compliance. The Code captures it all. Any failure to deposit employees’ contributions not only attracts a penalty of Rs 100,000, but also imprisonment of one to three years. In case of repeat offence, the penalties and prosecution are severe, and no compounding is permitted for repeated offences.