Legal Question in Business Law in India

subject: liability of nominee.

In an agreement between A & B it was stated that party A or his nominee will make payment to B for purchase of resturant & its equipment. Nominee made payment at time of signing of the agreement by A & B and received the resturant equipment.A made part payment of balance due but not the total amount. B has now filed case against nominee for balance due.

What is the liability of the nominee and is he liable to make the balance payment?

The agreement was signed by A & B and not by the nominee. Is there a privity of contract between B and nominee?


Asked on 3/04/04, 8:32 am

2 Answers from Attorneys
Kasim Master Master&Master

Re: subject: liability of nominee.

The Agreement was signed by A and B and not signed by the Nominee. The Nominee, however, made part payment of the amount payable to B by A and even received the restaurant equipment. It would, therefore, appear from the facts as set out, that the Nominee was aware of the Agreement and even acted upon it by making the initial part payment and receiving the equipment. B would therefore be able to rely on these facts to support his suit against the nominee for recovery of the balance amount. It would however be appropriate for the Nominee to contend that A should be made a party to the suit too and that B should attempt to recover the balance from A prior to looking to the nominee for the balance.

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Answered on 3/05/04, 1:09 am
Anil Kumar Tandale T.Anil Kumar

Re: subject: liability of nominee.

There is no liability of nominee because there is no privity between B and the nominee.

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Answered on 3/05/04, 5:25 am


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