This project has been submitted by:-

Name: Jacob Abraham

ID No: 218119
Section: B
For:-
CONTRACTS -1
MONSOON SEMESTER

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 PROBLEM -6
A makes an offer that whosoever finds his dog will be given a reward of Rs. 10000/-. In the
meanwhile, B, who is employed at A’s factory, is asked by A to find his lost dog. C comes to
know about the reward and puts in effort to find A’s lost dog. However, it is B who is successful
in finding the lost dog. B decides to claim the reward from A. On the other hand, C who has
devoted time and energy in finding A’s dog, also wants to sue A on the basis of disappointed
adventure. Give your opinion as to the relevant issues and decide the case.

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 Index

Topic Page number

Issues raised 4
Introduction 5
Argument for A 6-7
Arguments for B and C 7-8
Judgement 9
Bibliography 10

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 Issues raised
 Whether A was liable to pay compensation to B?

 Whether A was liable to pay compensation to C?

 Whether a contract existed between A and B?

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 Introduction
The statute in India governing contracts is The Indian Contracts Act, 1872.It gives an
insight on offer, acceptance and revocation under Sections 3, 4, 5. The fact states that
A’s dog goes missing and B his employee is sent to find the dog. Later on a reward is
put out and B completes the performance and finds the dog and another party C doesn’t
complete the conditions but nevertheless tries to claim the reward. The issues to be
resolved here are whether A needs to pay compensation to B and C.

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 ARGUMENTS FOR A
Arguments against B
It is submitted that no contract existed between A and B. §4 of The Indian Contracts Act, 18721
(hereafter referred to as The Act) states that “the communication of knowledge is complete
when it comes to the knowledge of the person to who it is made”. The facts here state, a reward
was put out, which means that the offer was a general offer .In this scenario, we find the case
of Lalman Shukla v. Gauri Datt2 has similar facts respectively. Here, a question arises, whether
a contract could be formed if there was no acceptance of offer. In the case 3 the learned judge
laid down that, “In order to constitute a contract, there must be an acceptance of the offer and
there can be no acceptance unless there is a knowledge of the offer. Motive is not essential but
knowledge and intention are4.” The essential elements of a valid contract are offer, acceptance
and consideration.5 Reading together the given part of the statute with the reasoning of the
case and the facts, we find that the offer of reward was never conveyed to Therefore, B has no
knowledge about the offer.
Also the act of finding the dog was done during the course of employment and it was the duty
of the employee to fulfil the master’s purpose for which he was being remunerated.6
We see that in the present case applying the reasoning stated above and statute that the
requirements of a valid contract was not met .Therefore the counsel pleads that a contract did
not exist , and B should not be compensated by A.

Arguments against C
The issue addressed here is whether A was liable to pay compensation to C. It is submitted
that A wasn’t liable to do so because, §8 of The Act states that performance of the conditions
of a proposal can result in the acceptance of the proposal.7 In Carlill v.Carbolic Smoke Ball
Co.8 the actions laid down in the advertisement was performed, and it was absolute and
satisfied the conditions of the advertisement. We draw a parallel here with our facts and that
of the case stated above as both the offers were general offer but in the case of Carlill
v.Carbolic Smoke Ball Co.9, we find that the performance of the conditions was done
satisfactorily as specified in the advertisement and that caused for the plaintiff in the carbolic
smoke ball case being awarded the damages. According to the set of facts, it is stated that the
finder of the dog will be entitled to the reward. It is stated that C did not find the dog and only
put an effort for the same. §7 of The Act, states, “acceptance must be absolute and
unqualified.10” Therefore, we find that the performance required to accept the offer is not
absolute. Absolute acceptance in this case would be finding the dog, but C has not done that.

1
The Indian Contracts Act, 1872, §4, communication as when complete.
2
Lalman Shukla v. Gauri Datt, SCC 1913 All LJ 489
3
Supra, Note 2
4
Supra , Note 2
5
The Indian Contracts Act, 1872,§3, communication and acceptance of proposals
6
Ram Chandra Chintaman v. Kalu Raju (1878) 2 ILR Bom 362
7
The Indian Contracts Act, 1872 , §8, acceptance by performing conditions
8
Carlill v.Carbolic Smoke Ball Co. (1893) 1 Q.B. 256
9
Supra , Note 8
10
The Indian Contracts Act, 1872,§7, acceptance must be absolute

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Therefore a contract never existed in the first place and accordingly A need not be directed to
pay compensation to C.

ARGUMENTS FOR B
The issue here is as to whether B can claim compensation from A. The cases of William v.
Carwardine11 and Gibbons v. Procto12r state that the simple performance of the act is enough
to entitle the person to claim the reward and knowledge of the offer is not necessary.
In the case of William v. Carwardine13, a reward for information about a murder was
circulated, a woman gave information stating that her husband was the murderer, but her
intention there was based upon her hatred for her husband and not on securing the reward for
herself. The judge in that case held that, if the person knew what he had to perform and if he
undertook the performance then that was enough to claim the reward and whatever
consequences may follow was immaterial. In our case we see that B found the dog which was
the specified condition to accept the offer, which B successfully performed.
In the case of Gibbons v. Procto14r, a police officer gave information which entitled him to a
reward. The police officer was made aware of this fact later and came forward to claim the
reward. The judge in that case held up the same principle and stated that he was entitled to the
reward, even though it was performed during the course of his employment.
The reasoning of the above cases show that knowledge is not necessary to accept an offer.
Therefore, B should be allowed to claim compensation from A.

ARGUMENTS FOR C
The issue here is whether C is entitled to the reward offered by A. In Carlil v.Carbolic Smoke
Ball Co.15 the judges felt that it was a general offer made to the world at large. Anyone who
performs the conditions of the offer accepts the offer and will be entitled to the reward. The
court went on to say that if the conditions of the offer are performed before the offer is redacted
then the offeror is liable to the offeree. The offer was indeed made to the world at large but
only a certain faction of the public came out and actually performed it accordingly based on
faith on reward. In case of a general offer, the acceptance need not be communicated to the
offeror in specific, who comes forward to perform.
In this case we see that C acted upon the offer based on faith in the advertisement. In the case
of Bhagwandas Goverdhandas Kedia v Girdharilal Parshottamdas and Co16., the Supreme
Court held that if an offer is made to the whole world based upon performing a condition to

11
Williams v Carwardine, [1833] 4B, &A., 621
12
Gibbons v Proctor, [1891] 64 L.T 594
13
Supra, Note 11
14
Supra, Note 12
15
Supra, Note 8
16
Bhagwandas Goverdhandas Kedia v Girdharilal Parshottamdas and Co., 1966 AIR 543

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Claim reward and unless it is specifically stated that the acceptance must be notified in a
specific manner, then acceptance need not be necessarily notified before undertaking the
performance.
Therefore, establishing the fact that C accepted the offer and the said acceptance was valid and
he acted upon the offer, therefore the counsel request that C be entitled to claim the reward
from A as he had performed the condition.

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 JUDGEMENT
In this case B and C are claiming reward from A. B for performing the actions stated to claim
the reward and C for basic performance of the conditions without success.
It could be said that B was not entitled to the reward because B had no knowledge of the offer
on which the reward was based upon. This means that B never accepted the offer, therefore
there did not exist an offer between A and B. Hence A is under no obligation to compensate B
for his actions.
In the case of compensation to C, the judges agree with the counsel of A and believe it is absurd
to remunerate C because the condition was to find the dog, all that C did was search for the
dog. This was not what was intended by A, if every such person constituted as part of the
general public was to act upon such a claim and if it is allowed to succeed it would open a
floodgate as suggested by Atkin LJ in Balfour v. Balfour17. Hence such a claim for C should
not be entertained. Therefore C should not be entitled to any compensation. The authorities
quoted by C in the Carbolic Smoke Ball case is that of a standing offer. In this situation that is
not true and therefore inapplicable. Therefore, A does not have to pay any compensation to
neither B nor C.

17
Balfour v. Balfour, [1919] 2 KB 571

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 BIBLIOGRAPHY
PRIMARY SOURCES
STATUTES:
• The Indian Contracts Act, 1872

CASES:
• Lalman Shukla v. Gauri Datt, SCC 1913 All LJ 489
• Ram Chandra Chintaman v. Kalu Raju (1878) 2 ILR Bom 362
• Carlill v.Carbolic Smoke Ball Co. (1893) 1 Q.B. 256
• Williams v Carwardine, [1833] 4B, &A., 621
• Gibbons v Proctor, [1891] 64 L.T 594
• Bhagwandas Goverdhandas Kedia v Girdharilal Parshottamdas and Co., 1966 AIR 543
• Balfour v. Balfour, [1919] 2 KB 571

ONLINE RESOURCES:
• Manupatra
• SCC Online
• Westlaw

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