Case laws and important examples in Indian contract act 1872

Kabita Jha

Offer and acceptance

• X says to y will you buy my car for one lakh?• X writes a letter to y , Will you buy my house

for 20 lakh?• X gives an advertisement in the newspaper

that I will pay 10 thousand ,whoever traces my missing nephew.

• X writes a letter to y, I offer to sell my car for one lakh if I do not receive your reply by Monday I will assume you have accepted the offer.

Carlil vs. smoke ball co

• A co advertised that it would pay $100 to anyone who contracts influenza after using the smoke balls of the company according to the printed directions. Mrs. Carlil used as per given directions but she contracted influenza. she filed a suit for money announced .

Decision of the case

• It was a general offer (means an offer made to public) so anyone could have accepted it

• She used the medicine as per given directions .

• She can sue the company for promised reward and co was held liable.

Lalman shukla vs. Gauridutt

• Gauridutt sent his servant lalman to find his lost nephew. when the servant had left, Gauridutt announced reward to anyone, who will trace the boy. Lalman found the boy and brought him home .when lalman came to know he claimed for reward.

Decision in this case

• Lalman’s plea was cancelled on the grounds that he can not accept the offer unless he is not aware of it.

FREE CONSENT

• X Threatens to kill Y if he refuses to sell his house to him .

• A devotee gifted her property to spiritual guru to secure benefits to her soul in next world.

Lawful object and consideration

• A ,B and C enter into contract to share profits, to be acquired by fraud.

• X pays 1000 Rs to Y to beat Z. Y does not. X can not recover his money back.

• X promises to pay Y Rs 50000 if he secures employment for him in govt sector.

• X who knows that Y has committed a murder, receives Rs 7 lakh from y in consideration of not exposing.

Agreement in restraint to trade

• X a seller of imitation jewellary in England sold his business to Y and agreed not to deal for two years

-in imitation jewellary-in real jewellary in certain foreign

countries• X after selling the goodwill of his

business to Y promises not to carry the similar business anywhere in the world.

Agreement to do impossible act

• A agrees to give Rs 10000 to B ,if he marries C (a Hindu) who is already married to D.

• A ,a singer contracts with B the manager of a theatre to sing for two nights every week for next two months. A on sixth night, willfully absents herself and B rescinds the contract.

Agreements made by incompetent parties (minor)

• Case law –Nash vs. Inman Inman an undergraduate in Cambridge bought eleven fancy waistcoats from Nash. the co claimed for their money

DECISION

• The court held waistcoats were not part of necessary things so the price could not be recovered

Auction of airline tickets

• There are several internet sites which provide the service of auction of goods and services. To participate in the auction one has to become the member by opening an account online by filling in a form. the form requires to furnish name , address, occupation, phone no and email address for communication.

• The access to the sight and participation in the auction is free. Domestic airlines have found this method to be a good source of auction of their tickets.

• Each airlines have their own page on the site. The arrangement is that an intending passenger will first mention his/ her credit card no and authorize for debiting in the event of the person being highest bidder.

Continue…..

• Thereafter the person can fill in the details of the flight, destination and the date and put a bid amount. If another person puts the higher bid , the person will be informed that his bid has been exceeded. the site will settle down the winner of the bid and close the bid.

• After the auction closes, the internet site will debit the credit card and generate a PNR no for the ticket. The winner has to take PNR no ,an identity proof and collect the ticket.

case

• Savita bid for a Mumbai- Bangalore ticket for nov 7 for Rs 3700 . She received an email from the internet site announcing that she is the highest bidder .PNR no was generated and her credit card was charged with the amount.

• she was going to Bang lore to attend her job interview. The co postponed the interview

• She immediately informed the internet site and airlines through mail, phone and fax that she would not be able to go for the interview .so her money should be credited back. Decide

Performance of contract u/s 37

• A contract creates an obligation which continues till the contract has not been discharged.

• It means when both the parties to contract fulfill their respective legal obligation within time and the manner prescribed.

• It means the contract comes to a happy ending.

Performance of contract ..

Actual performance

Attempted performance or tender of performance

Actual performance

• When both the parties have performed their respective promises the contract is said to be actually performed. in case of death of the promisor ,the legal representatives are bound to perform the contract

Attempted performance u/s 38

Sometimes if the promisor offers to perform

his obligation on proper time and place but the promisee does not accept it is called attempted performance.

Essentials of a valid tender

It must be unconditional

It must be at proper time and place

It must be in the proper form

It must be made to the proper person

The tender must be for the whole not in parts

Reasonable opportunity to inspecting the goods

It must be by the person who is in position and willing to perform

Contracts which need not be performed

• If the parties to contract agree to NOVATION OR ALTERATION. The original contract disappears.(u/s 62)

• If the parties agree for REMISSION. It means parties agree to remit performance either wholly or in part.(u/s 63)

• If the party on whose option the contract is voidable rescinds it ,the other party need not to perform.(u/s 64).

• If the failure is caused by promisee's neglects or refusal .(u/s 67).

By whom the contract must be performed ?

• By the promisor himself- e.g. painting a picture, singing in a theatre.

• By the agent-A had to give some money to B on his behalf A ‘s agent can also give money to B.

• By the legal representative- in the above case if A dies ,the burden comes on legal representatives.

• By third person-if a promisee accepts performance from third party. he can not enforce promisor to