Question

Principle: Master is liable for the acts of his servant done in the course of his duties.
Facts: X hired an employee Y in his construction business. Y was the property in-charge who received construction material and gave receipts for the material received by him. Z claimed payment for cement supplied to X which was duly received by Y. X denied the payment on the ground that he has only received half of the material and the balance was misutilized by the employee Y.
This question consists of legal principle(s) (hereinafter referred to as ‘principle‘) and facts. Such proposition may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this section. Principles have to be applied to the given facts to arrive at the most reasonable conclusion. Only one of the alternatives, i.e., (A), (B), (C), or (D) is the most reasonable conclusion. In other words, in answering the following questions, you must not rely on any principle except the principles that are given herein below for every question. Further you must not assume any facts other than those stated in the question. The objective of this section is to test your ability in legal aptitude, study of law, research aptitude and problem solving ability even if the ’most reasonable conclusion‘ arrived at may be absurd or unacceptable for any other reason.

• A. X is liable for the entire amount
• B. X is liable for the part amount only i.e. for payment of the cost of half of the material
• C. X is not liable for the misconduct/embezzlement of his employee
• D. Z can claim the balance payment only from Y

Answer 1

The Correct Option is A

The correct option is (A): X is liable for the entire amount.

Answer 2

The principle makes a master liable for whatever his servant does in the course of his duties. Y was employed by X specifically as the property in-charge, meaning receiving construction material and issuing receipts for it was part of his assigned job. Let's evaluate each option against this principle:

1. X is liable for the entire amount: since Y received the cement and gave a receipt for it while acting squarely within his authorised duties as property in-charge, that act is treated in law as X's own act, so X owes Z the full price of the cement supplied and receipted.
2. X is liable for the part amount only: a partial reduction would only be justified if Z had knowingly supplied and been paid for just half the material, but the facts state Z supplied the full quantity and received a receipt for it from X's authorised employee, so there is no basis to halve the claim.
3. X is not liable for the misconduct of his employee: this misreads the principle; the master's liability towards an outside party like Z does not depend on whether the servant later behaved honestly with the goods, it depends only on whether the servant was acting within the course of his duties when he dealt with Z, which he was.
4. Z can claim the balance only from Y: Z never dealt with Y personally, Z dealt with X's business through Y as X's representative, so Z's right to payment runs against X; any recovery X wants from Y for the missing material is a separate, internal matter between X and Y.

Since Y's acceptance of the cement and issuance of the receipt fell within the course of his duties, the principle of vicarious liability fixes the entire obligation on X.

Therefore, the correct answer is X is liable for the entire amount.

Answer 3

The principle of vicarious liability can also be tested through the three conditions it actually requires: first, that a master-servant relationship exists between X and Y; second, that the act in question falls within the course of duties Y was engaged to perform; and third, that the outside party dealing with Y did so in reliance on Y's authority to act for X. Applying these three conditions to each option shows which conclusion follows:

1. X is liable for the entire amount: all three conditions are met here, X employed Y, receiving material and issuing receipts was precisely the job Y was hired for, and Z supplied and had the cement receipted by Y in that capacity, so the full liability falls on X.
2. X is liable for the part amount only: for this to hold, the three conditions would have to apply to only half the transaction, but Y's authority to receive material and issue a receipt did not come with any built-in ceiling of half the quantity, so there is no basis to split the claim this way.
3. X is not liable for the misconduct of his employee: this treats the third condition, Z's reliance on Y's authority, as if it were erased by Y's subsequent dishonesty, but Y's later misuse of the material has no bearing on whether the earlier act of receiving and receipting fell within his duties, which it did.
4. Z can claim the balance only from Y: this fails the first condition altogether, Z never contracted with Y personally, Z supplied cement to X's business and Y merely acted as X's authorised representative in receiving it, so any claim runs against X, not Y.

All three conditions of the principle point to the same outcome, X answers to Z for the material Y received and receipted as part of his job.

Therefore, the correct answer is X is liable for the entire amount.