1.Carlill v. Carbolic Smoke Ball Co.

[1891-4] All ER 127

(Intention to create a legal relationship, general offer, executed

consideration, wagering agreement)

Facts- The defendant advertised their product Carbolic Smoker Ball , a

preventive remedy against influenza . In the advertisement they offered to pay
some of 100 dollar with the alliance bank to show their sincerity in the matter.
Carlill is the plaintiff who relied on the given chemist remedy and applied the
given said but still caught influenza. She sued the defendant to claim the reward
of 100 dollar advertised by them It was held that this being a general offer
addressed to whole of the world which ultimately ripened into a contract with
the plaintiff by her act of performance of the required condition and thus
accepting the offer. She was still entitled to claim the reward.

The following observation and reasoning of Bowen LJ., may be noted -: “It is
an offer made to whole of the world and why should an offer should not be
made whole to the world, the contract is made with that limited portion of the
public who come forward and perform the condition on the faith of the
advertisement”and “one cannot doubt that an ordinary rule of law , an
acceptance of an offer ought to be notified to the person who makes the offer
that the two minds be may come together unless that is done the two minds may
be apart and that is not consensus which is necessary according to the rule of
English law to make a contract. There is no clear gloss to made gloss upon the
doctorine that as notification of the acceptance is required for the benefit of the
person who makes the offer, may dispense with the notice to himself if he
thinks desirable to do so and I suppose there can be no doubt where a person in
an offer made by him to another intimates a particular method of acceptance
sufficient to make the bargain binding it is only necessary for the person to
whom the offer is made to follow the indicated mode of acceptance and if the
person making an offer intimates to the offer that will be sufficient to act on the
proposal without communicating acceptance of it to himself, performance of the
condition is sufficient acceptance without any notification.

In the wagering agreement; Hawkins said in the following manner:- A wagering

contract is the one by which two persons professing to the opposite views
touching the issues of a future uncertain event , mutually agree that depends
upon the determination of that event, one shall win from the other , and the
other shall pay or hand over to him, a sum of money or any stake, neither of the
contracting parties have interest in that contract than the some of money will
win or lose, there being no real consideration for making of such contract

It also may be noted here that unless the person performing those conditions has
got the knowledge of the offer , there is no question of his act amounting to
acceptance.

(Intention to create a legal relationship) – In order to create an offer after

acceptance can result in a valid contract it is necessary that the offer should be
made with an intention to create a legal relationship. Promise in the case of
social engagement is generally without an intention to create a legal
relationship, so such an agreement cannot be created without any consideration.

Hence an agreement to enforce someone or to go for a walk, dinner, movie, play

some game, or entertain someone with the dinner cannot be enforced in a court
of law. Sometimes the parties may expressly say that it is not formal or a legal
agreement whereas in other cases it can be presumed that it’s there from the
agreement. Test to know the intention of the parties is objective and not
subjective merely because the promisor contends that there was no intention to
create a legal obligation would not exempt him from the liability.
2. Lalman Shukla v. Gauri Datt (1913) XL ALJR 489 (Communication of
an offer when complete is given in section - 4 of the Indian Contract Act)

Section(4) It’s only applicable when it comes to the knowledge of the person
to whom it was made.

Facts – The defendant’s nephew absconded from the home. The plaintiff who
was defendant servant was sent to search for the missing boy, after the plaintiff
went for the search a handbill of Rs 501 was made who so ever finds it. The
plaintiff who was ignorant of the reward was successful in searching the boy.
When he came to know of the reward it was too late and he was held not liable
for getting the amount.

If the person has the knowledge of the offer, his acting in accordance with terms
thereof amounts to acceptance of the same. In such cases it’s immaterial that at
the time of accepting the offer, the acceptor does not intend to claim the reward
mentioned in the offer.

3.Bhagwandas Goverdhandas Kedia v. M/s. Girdharilal Parshottamdas &

Co. A.I.R.1966 SC 543

Section-2, when the person to whom the proposal is made signifies his
assent thereto the proposal is said to be accepted. A proposal when
accepted becomes a promise.

As soon his proposal is accepted that is known as promise whereby both

the parties become bound. When the promise or proposal is made to an
offeree, its upto the whim of the offeree.

The acceptance must be communicated when the person to whom the proposal
is made signifies his assent thereto, the proposal is said to be accepted. The
communication of acceptance is deemed to be made by an act or omission of the
party accepting by which he intends to communicate such acceptance or which
has the effect of communicating it. When the parties are face to face, the
communication could be oral or when they are distant place, communication
could be made by post, by telegram or by message on phone or through a
messenger or in any reasonable manner.

Section-4 and 5 which makes the provisions about communication, acceptance

and revocation thereof, do not make any sought of mention whether these relate
to the communication made with the help of telephone or telex. Supreme court
said that the rule of face to face applies and it does’nt have any sought of
implication viz. rule of contract to post is applicable so the telephonic
conversation is all about in the given said.

Facts – In this case, the plaintiff made an offer on telephone from Ahmedabad
for the purchase of cotton seed cake from the defendant. The defendant
accepted this offer on the phone at Khamgaon. The defendant had failed to
supply the cake were sued by the plaintiff to pay the compensation amounting
to 31150 for the breach of contract. The suit filed at Ahmedabad court had no
jurisdiction because the contract was complete by the acceptance of offer on
Telephone, at Khamagaon. When the acceptance was heard at Ahmedabad
where the acceptance was made. Held that the contract was made at Ahmedabad
only.

The apex court observed that “in the case of telephonic conversation, in a sense
of each other :each party is able to hear each other and each and everyone is
able to listen one another. There is instantaneous communication of messages
from a distance does not alter the nature of the conversation so as to make
analgous to that of an offer and acceptance through the post or by telegraph.
The contract becomes complete as soon as the acceptance is made by offeree
and unless otherwise agreed expressly or by necessary implication by the
adoption of a special method of intimation, when the acceptancde of offer is
intimated to the offeror. The bargain is said to be struck and the contract is
completed when the contract is put into transmission by the offeree by posting a
letter or dispatching

4. Felthouse v. Bindley (1862) - Similarly in this case the intention was not
clear of the nephew to accept the offer of his uncle or the communication to the
auctioneer was not enough to create the contract and in addition to this offeror
has no duty to reply, therefore cannot say that the failure to reply will be
deemed to be acceptance of an offer and he has no right to say the acceptance of
the offer within the prescribed period as the case may be. Mere silence cannot
be said to be acceptance.

5.Harvey v. Facey (Invitation and offer to treat distinguished)

It is the simple quotation of the price which cannot be assumed to be an offer.

The judicial committee held that the exchange of the telegrams had resulted into
a contract. Here an exchange of telegram would not amount to acceptance and
there was no binding contracts between the parties.

6. Union of India v. Maddala Thathaiah AIR 1966 SC 1724

(Continuing offer)

Continuing offer – Here the dominion of India as the owner of the railway
invited the tender for the supply of maunds of cane jiggery to the railway grain
shop. Although the supplies were to be made had been mentioned, yet the
orders for the supply were made from time to time. One condition stipulated in
the tender form was “railways reserve the rights to cancel the contract at any
stage during the tenure of the contract. It was held that the stipulation whereby
the the appellant could cancel the agreement as regards the supply of jaggery
about which no formal order was placed was a valid one and the appellant were
bound only for the supply of such quantities for the specific orders had already
been placed.

7. Indian Airlines Corporation v. Madhuri Chowdhuri AIR 1965 Cal. 252

(Standard form of contracts)

8. Kedarnath Bhattacharji v. Gorie Mahomed (1886) 7 I.D. 64 Cal.

(Subscription for a charitable purpose) and section 2(d)- when any person
does or abstains from doing anything at the desire of the promisor,
promisee to do or from doing.

It means that if nothing is done in exchangwe of promise viz where there is no

act, abstinence or promise there is no consideration.

Facts – The defendant was a subscriber of a charitable trust whereby he

promised to pay Rupees 100 for the construction of building to a plaintiff and
due to this reason a contractor was also engaged. Later he denied to pay the
amount.

Petheram C.J. – It is clear that there are great many subscription that cannot be
recovered. A man somewhere or the other puts his name down for a
subscription to some charitable object for instance the amount cannot be
recovered as there was no consideration. But in this case the state of thing was
the consideration was already given on faith of the construction and here the
liability has been incurred to pay as it completes all the essentials of a contract.
The English decisions are similar to that of Indian
9. Abdul Aziz v. Masum Ali AIR 1914 All. 22

(Subscription for a charitable purpose) and section 2(d)

Facts- Here the defendant paid certain sum of money inorder to built a mosque
but no action was taken to construct the same and hence there was no
consideration for the same and the defendant was held not liable to pay the
amount.

10. Doraiswami Iyer v. Arunachala Ayyar (section 15 of the specific

performance) any party to the contract may obtain the specific performance of
that contract. A contract is an agreement enforceable by law. Obviously its the
parties to the contract who can enforce the contract against each other. Rather
the general rule under the contract is the parties to the contract can only sue.
Primarly the parties to the contract may obtain the specific performance of the
same. Section 37 of the act states that the parties to the contract under the rule
are to perform the their respective promises and therefore specific performances
may be obtained by any party to contract, only the parties to the contract can be
made parties to the suit.

In contract of agency in the absence of any contract only the principle can sue
on the contracts and the agent can neither personally enforce the contracts
entered into by him on behalf of the principle nor personally bound by them.

So there should be a legal representative can be in any of the interest includes

any assignee, executor, administrator after the death of the principle

A legal representative may sue provided that the contracts is not dependent on
the personal skill of the parties or qualities of the promisee . if the contract can
be of painting a picture or write a book, the duty under the contract ends by the
death, legal representative cannot claim any specific performance, similarly a
contracts depends upon the certain other features as well such as contract to
marry gets dissolved on the death of any of the party. Case of the assignment,
the party to a contract himself so desire and therefore the assignee of a contract
may obtain the the specific performance of the contract. If however the contract
depends upon any of the personal quality of the assignor or the contract bars any
of the assignmentor the assignor having only the personal interest in the
contract.

12. Nawab Khwaja Muhammad Khan v. Nawab Husaini Begam

(privity of contract and an exception to the persons for or against whom

the contract may be specifically enforced section-15)

There was an agreement between the father’s boy and the girl’s father that after
getting married to the defendants boy they will incur all amount of expenses and
this was all about the karchaa-i-paidaan (beetle money) or pin money of the
plaintiff, it was said that certain property has been set aside by the defendant. In
an action by the plaintiff inorder to claim the allowances, in an action claimed
by the plaintiff ; the defendant contended that it was a privity of contract and
hence it can be said that the specific performance under the beneficiary can be
settled but this case is an exception to it. Here the plaintiff the girl was assumed
to be the plaintiff, thus she cannot sue for the same.

Provision for the maintenaince under a family arrangement, Here also I would
like to comment that the family arrangement where a contract is intended to
arrangement to secure a benefit to a third party he may sue his own rights as a
beneficiary such an action would be allowed to the beneficiary, many action
were taken wherby a family property has been partitioned. Again the reasoning
given by the judge here was in the following manner:-

“A person not a party to a contract cannot sue on the contract unless the cases
comes within the recognised exceptions. One such an agreement can where a
person creates a trust in favour of a stranger. Person not parties to a trust in
favour of a trust in order to make a transanction is a benefit conferred”

13. Twedle v Atkinson, (privity of contract)

The facts are in the following manner which debars an action by a stranger to
the contract and should be applicable so in this case the basis of the plaintiff
claim being a specific charge on immovable property, the beneficiary asked for
the funds and the goods which were being extracted here but the common law
principle is not applicable to facts and the circumstances on the present case.
The reasoning given by the judge was in the following manner:-

“Here the agreement executed by the defendant specifically charges on the

immovable property for the allowances which here she actually can abstract for
the same and but the deed here says that she is no party to the contract. She can
easily proceed to the court of equity to enforce the claim”. Privy Council
allowing the action was thyat in India and among the communities
circumstanced as Muhammedan, among whom the marriage is being contracted
for the minors by parents and the guardians it may amount serious injustice if
the common law doctorine is applied to the given agreement entered in nexus to
this contract.

14. Mohori Bibee v. Dharmodas Ghose (no estoppels against the minor)

Section-11 (every person is competent to contract who is of the age of majority

according to the law to which he is subject to and who is of sound mind and is
not disqualified from the contracting to any law to which he is subject to)

1. A person who has not attained the age of majority viz who is the minor.
2. Person who is of unsound mind
3. A person who has been disqualified from contracting by some law.

A person who does not attains the age of majority is a minor.

 Section-3 provides the age of majority act, a person who has attained the age
of majority when he completes the age of 18 except those person whose the
guardian or property has been appointed by the court in which case the age
of majority is 21 years by the ward and its immaterial when the guardian dies
or is removed and otherwise ceases to act, In England the age of majority is
18. This act is being amended but yet we need an assent of the president.

The case here says that an agreement made by a minor is void.

Facts:- The above said case is there in the following manner, the plaintiff
Dharmodas was a minor who mortgaged his property to the defendant and
the attorney acted on behalf of the defendant (moneylender).

The minor believed that no contract has been concluded at that moment he
was not a major. Therefore the mortgage was inoperative and thus void, the
same should be cancelled.

The plea made by the learned counsel of the the moneylender was that
1)should have’nt be heard and the point of matter is that here we would be
regard this the matter of promissory estoppel would be applied against him.
In other words he should not be allowed to plead that at the time of
transaction he was a minor and therefore no relief should be given to the
minor.

2)The minor asks to refund the loan if mortgaged property is cancelled

Defendants contention was rejected and the minors agreement was held to be
void and it was held that minor cannot be asked to repay the loan taken by
him.

(1)Absolved the matter on the defendant’s contention that the minor was
misrepresenting himself and the promissory estopple must apply and not
allowed that he was a minor. Privy counsel rejected this contention and the
minor was allowed to plead that he was minor at time of making the agreement,
thus making the agreement void and can be said the defendant’s agent. Section
115 (Indian evidence act) was not applicable to it. The statement made here was
made to the person who knew the facts and was not misled by the untrue
statement. It was said that “there can be no estoppels where the truth of the
matter is known to the parties and there lordships holds that a false
representation made to a person who knows it to be a false is not a false as such
as to take away the prevelege of the infancy”

Section 64 and 65.

(2) Another contention was for the cancellation of the mortgage is allowed, the
minor should be asked to refund the loan taken by him, under section 64 and 65

Sec-64 – when a person at whose option the contract is voidable rescinds it to

the other party thereto need not perform the promise therein contained of which
he is a promisor. The party rescinding a voidable contractshall if he has received
any gain from the other party to such a contract, restore such benefit thereunder
from another party to such contract restore such gains so far as may be to the
person from whom it was received.

Minors agreement being void and section 64 was not applicable to the case and
therefore could not be asked to pay the amount under this section.

Application of section 65 indian contract act to the present case was also
considered . Section 65 is as follows:-

“when an agreement is discovered to be void or when a contract becomes void

any person who has received any gain under such an agreement or contract is
bound to restore it or to make compensation for it to the person from it is
received it”
As regards to this application of this section to the present case , section 64
applicable in the case of competent parties and has no application to the present
case where there can be never ever be a contract. And even uner the head of
section 65 also the minor cannot be asked to pay.

Law commission of india reinterpreted the provision that has been there of
section 65 under the privy council, this covers the case of a minor who makes
false representation that he is a major and such minor should be asked to pay for
it.

By giving the opinion as follows “we feel that the judicial committee had not
correctly interpreted the same and we are of an opinion that it is thus void or is
discovered to be void even though the validity arise by reason of incompetency
of a party to a contract. We recommend that an explianation be added to section
65 to indicate that section should be applicable where a minor enters into the
agreement on the false pretext.”

The moneylender claimed the refund the of the mortgage money under another
provision also i.e. section 41, specific relief act 1877

“on adjudging the cancellation of an instrument the court may require the party
to whom such relief is granted to make any compensation to other is required”

As regards this section it was held that this section gives discretion to the court
to under the compensation but under the circumstances of this case, justice did
not require the return of the money advanced to the minor as the money has
been advanced with the full knowledge of the infancy of the plaintiff. The claim
under the specific relief act was therefore disallowed.

Section 115 “where one person has by its declaration made act or omission
intentionally caused or permitted another person to believe a thing to be true
and to act upon such belief neither he nor his representation shall be allowed in
any suit or proceeding between himself and such person or his representatives to
deny the truth of that thing.” Section 70 of the Indian contract act 1872
recognises quasi contract liability to compensate a person at whose cost some
benefit has been enjoyed. According to that the provision where a cperson
lawfully does anything for another person or delivers anything to him not
intending to do so gratuitously and such other persons enjoys the benefit thereof
the latter is bound to make the compensation to the former in respect of or to
restore the thing done or delivered. Section 70 cannot be invoked against a
minor.

In this context it has been observed that the minor is excluded from the
operation of section 70 for the reason that his case has been specifically
provided for by the section 68...besides all this the voluntarily acceptance of
the benefit of the work done or thing delivered which is the foundation of the
claim under section 70 would not be present so on the principle that section
cannot be invioked by the minor. It is submitted that the above stated
interpretation is neither logical nor in consonance with the provision
contained in section 70. Section 70 deals with the every person which could
not include a minor and there is nothing in the Indian contract act which
prevents the case of a minor being covered both under section 68 and section
70 of the act.

15. Khan Gul v. Lakha Singh -

16. Ajudhia Prasad v. Chandan Lal AIR 1937 All. 610

17) Raj Rani v Prem Adib, (contarct of service/apprenticeship)

The facts of the case are as follows the father of Raja rani who was a minor
entered into a contract on her behalf with Prem Adib, film producer according
to this raja rani was to be acted as a film actress in the defendant’s studio on
payment of a certain amount. Raja rani was not given any work. She sued the
producer Prem Adib for the breach of contract. It was held that teh plaintiff
being the minor the contract was void. It was observed that the contract of
service was entered into by the father on behalf of his minor daughter was void
for another reason also that is the same was without any consideration because
the consideration moving from the third party who is minor is no consideration.

Reasoning “the contarct of apprenticeship entered into by the guardian is

protected by the apprentice act provided the case falls within terms of that act
but no as such case of exception is made in the case of contract of service. I
realize that as a result of this judgement minor may lose the benefit of the
contract of service. I realise that as a result of this judgement minor may lose
the benefit of the service which has been considered so beneficial to them as to
put under category of necessaries. I am not be considered with the policy of the
legislature under which all contracts of minors were made void therefore
unenfoceably or against the minor”

18)SUBHAS CHANDRA v. GANGA PRASAD – (undue influence)

if the consent of the parties has been induced by undue influence where the
relations subsiting between the parties are of a such nature if consent has been
taken or caused by undue influence, the contract is voidable at the option of the
party whose consent has been so obtained,

section 16- defines the nature Definition- “a contract is said to be induced by

undue influence where relations subsisting between the parties are such of a
nature where one of the parties are in a position to dominate the will of other
and uses that positions to obtain the an unfair advantage over the other.

In particular and without the prejudice to the generality of the foregoing

principle, a person is deemed to be in an unfair position over the other and uses
that position to dominate the will of another
1. Where he holds the real or apparent authority or in fiduciary relation
2. Where the person making the contract with a person whose mental
capacity is temporarily or permanently effected by the reason of age,
illness or mental or bodily distress.
3. Where a person who is in a position to dominate the will of the another
enters into a contract with him and then the transaction appears on the
face of it or on the evidence adduced to be unconsciounable the burden of
proving such contract with him and the transaction appears on the face of
it.
4. The doctorine of undue influence was evolved by the court of equity in
England and same has been explained by the ashburner in the following
way
Reasoning “in a court of equity if A obtains any benefit from B whether
under a contract or as a gift exerting an influence over B which in the
opinion of the court prevents B from excercising an independent
judgement in the matter in question, B can set aside the contract or
recover the gift. Moreover in many of the cases the realtion in between A
and B may be such that A has peculiar opportunities of excercising
influence over B. Under such circumstances A enters into a contract with
B, or receives a gift from B a court of equity imposes upon A the burden
if he wishes to maintain the contract or gift of proving that in fact he
exerted no influence for the purpose of obtaining it.”

Section 16 says that the adoption english law in the india by the verdict of
the supreme court- “the doctorine of undue influence under the common
law was evolved by the courts in England for granting protection against
the transaction procured by the excercise of insidious forms of influence
spiritual and temporal. The acts of bounty as well as to other transaction
in which one party by excercising his positions of dominance obtains an
unfair advantage over another. The Indian contract substantially based on
the English common law”

Altogether two things only;-

1)it manifest that both the conditions have ordinarily to be established by
the person seeking to avoid the transaction was in a position to dominate
the will of the other and the other has obtained unfair advantage. Apart
from the sells consideration was reasonable and adequate it was held that
the agreement was not vitiated by fraud or undue influence.

1. Real or Apparent authority- income tax or judicial officer over the

assesee or police officer over the accused or the licensing authority
over the licenscee
2. Fiduciary relation- relation means a confidence and the trust, where a
person reposes the confidence on the other it’s expected that he will
not betray and if any case the person betrays the confidence and the
trust reposed in him and gains the advantage over the other in any
contract. The principle applies to every case where influence is
acquired and abused where confidence is reposed and betrayed
Examples- fiduciary relations are solicitor and the client, trustee and
the beneficiary, spiritual advisor and the devotee and the medical
attendant and the patient, parent and the child, husband-wife, master
and the servant, creditor and the debtor, principle and the agent,
landlord and the tenant, lover and the beloved and the guardian and
the ward. The fiduciary is non exhaustible due to some of the well
known patterns.
Any relationship in which one party enjoys the active confidence over
the other and the person can lean or be dependent over him an dis
 inclined to repose the implicit confidence in him is enough to
approximate to the kind of relationship.

Section 111 of the Indian evidence act says the thing that “where there is a
question as to be good faith of a transaction between the parties one whom
stands to the other in a position of active confidence, the burden of prove lies
with the party who’s in the position of active confidence and the position of
active confidence”

It can be anything such as giving deeds to the spiritual person for the benefits
which can be gained in the next world the condition is hypothetical but the
consolidating the fact that if such person wants to have that item by applying
section 39 of specific relief- act its upto the discretion of the judge and the
absurdity given by the person inorder to revoke the deed or gift and in view of
the section 111 indian evidence act the defendant must prove the absence of
undue influence. Since he has can have the cancellation of the deed.

19)Lakshmi Amma v. Talengalanarayana Bhatta (Mistake section 19)

When the consent of the parties to the contract is caused by mistake its not the
free consent which is needed for the validity of a contract. One or both the
parties may be working under some misunderstanding or misapprehension of
some facts relating to the agreement. If such a misunderstanding were not there
probable they would have to enter into the agreement. Such contracts are said to
be caused by mistake. There is no as such agreements as there mistake in the
minds of the parties (there was genuine deal or authencity). There is no as such
consensus ad idem i.e. the meeting of the two minds viz there may be absence
of the consent as defined in the section 13.

(1)The offer and the acceptance may not coincide and thus no genuine
agreement is constituted between the parties.
(2)there may be genuine agreement but there may be mistake as to matter of fact
relating to that agreement.

20) Tarsem Singh v. Sukhminder Singh

(section 20 mistake, when there is no consensus ad idem or there is absence

of consent and mistake)

The parties to the agreement for the sale of land were not ad idem with respect
to the units of measuring land, the case was held to have been covered by
section 20. In this the seller intended to purchase it in terms of “bighas”. It was
held to be mistake relating to a matter essential to the agreement. The agrrement
was held void.

21)Balfour v. Balfour (intention to create a legal relationship)

An intention not to create a legal relationship may be implied from the

circumstances of the cases. The defendant who was employed on a govt job in
Ceylon went to England with his wife on leave. For healthcare reason she
was’nt able to accompany the husband again in Ceylon. The husband promised
to pay for the remuneration thus husband failing to pay this amount, was sued
by the wife as the maintainance for the period she had live apart. The husband
failed to do so and was sued by the wife for the same. It was held that there was
legal relationship in between them, thus the husband was not liable.

Lord Atkin “it is necessary to remember that there are agreements between the
parties which do not result in contracts within the meaning of the term in our
law. The ordinary example is where two parties agree to walk together or where
there is an offer and acceptance of an hospitality. No body would suggest the in
ordinary circumstances that those agreement results in that what we know as a
contract, one of the most usual forms of agreement which does not constitutes a
contract appears to me to be the arrangement which are made in between the
husband and the wife to my mind many of these agreements or many of them do
not results in contracts at al, even though there may be what as would be as in
between the parties constituting they are not contracts because the parties are
did not in tend that they should be attended by legal consequences”

22) Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd

(Rule of privity not applicable in India) – this rule was reaffirmed by the
house of lords by having the following words:-

“in the law of England certain principles are fundamental. One that only a
person who is a party to a contract can sue on it. Our law knows nothing of a jus
quaestum tertio arising by way of contract. Such right may be enforced by way
of property, as for example under a trust but cannot be conferred on a stranger
to a contract as a right to enforce the contract of personam”

Held that the Dunlop cannot sue against the selfridge and co because there was
no contract taken that dew and co were acting as agents for Dunlop the latter
still cannot be maintain an action as there was no consideration between Dunlop
and selfridge and co since whole of the price was paid the former (Dunlop)

23)Gherulal Parakh v. Mahadeodas Maiya

(illegal agreements/opposed to the public policy)

There are certain agreement which are illegal in the sense that the law forbids
the very act the doing of which contemplated by the agreement. For example an
agreement to commit a crime or by the agreement. For example an agreement to
commit crime or a tort or an agreement which tends to corrupt public life or an
agreement to defraud public revenue is illegal. Such an agreement to commit is
patently opposed to the public policy. The law forbids making of such an
agreement.
Whether an agreement can be termed as illegal or not may be depended upon
the degree to which the it opposed to the public policy. For an example an
agreement in restrain of trade is void but we may not term it as an illegal
agreement as we do when its an agreement to commit a crime.

This is sought to be opposed to the public policy, the agreement is void, public
policy is not having any precise definition. Policy of the law as stated time, an
act which is injurious to the interest of society is against the policy of the public.

On the other hand persons right freedom of contractual matter must be

maintained. On the other hand if the contract is against the public policy the law
must not allow to be enforced, its the concept of the courts to expound the
concept or the basis. This is much of a significance and therefore it would be
unjust if the courts are given freedom to interfere the with the contracts on their
own notions on public policy, hence the courts new head to public policy has
been doubted, its the part of work of the judge to “expound the law not expand”
the law. In the opinion of the Burrough J “an uruly horse and when you get
astride to it you never know where it will carry you”

The courts will interprete the rule of law whether the agreement is in
consonance with the recognised public policy or not. The decision will depend
upon the recognised notions of the interest of the community at a time.
Chrisitianity being the part of law was said to be the English based common law
lets assume hiring the hall was assumed to be astheism in 1917 and against in
1857. With the changing time the public policy demanded due protection to the
weaker party

In the case Central inland vs Brojo Nath Ganguly, the question which the
court asked is within the parameters fixed therefore by long standing authorities
or precedents as having recourse to the preamble of the constitution and the
principles underlying the rights of the directive principles in our constitution.
24)Central Inland Water Transport Corporation Limited v. Brojo Nath
(reasonable agreement, standard form of contract and opposed to the
public policy even undue influence)

“One of the clause in the agreement was that the employer can be terminate the
service of a permanent employee by giving the three months notice and the
salary. Supreme court said that it dealt with the gross inequality of having the
bargaining power was wholly unreasonable and against the public policy and
was therefore void under section 23. Therefore it must be struck down wholly or
partially as it only had the inconsistencey. In the result of great disparity in the
economic strength of the contracting parties. It will also apply where a man has
no choice or rather meaningful choice but to give as an assent to a contract or to
sign on the dotted line in prescribed form of rules as a part of the contract
however unreasonable, unfair, unconsciounable a clause in that contract may be
where a business or commercial transaction takes place. The court must judge
each fact and circumstances.” There was no accord and the satisfaction of the
debt.

25) Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co.

(Accepting performance from a third party and the section 63)

(PAYMENT LESSSER THAN AMOUNT DUE)

26) M/S Gujarat Bottling Co.Ltd. & Ors. v. The Coca Cola Co. & Ors.

27) Superintendence Company Of India v Krishan Murgai

28)Bharat Sanchar Nigam Ltd.& Anr vs Motorola India Pvt.Ltd

29)Bhagwandas Goverdhandas Kedia v. M/s. Girdharilal Parshottamdas &

30) Percept D 'Mark (India) Pvt. Ltd . v. Zaheer. Khan&Anr,.

31) P.R. Transport Agency v. Union of India, (similar to that of gherulal)

32)Forst v Knight (effect of anticipatory breach and election to rescind, or
keep the contract alive section- 39) Effect of the refusal of the party wholly
and the section 23 and the section 56 becomes void

Facts- defendant promised the plaintiff that he’ll marry her after the death of his
father. But the father was still alive and the matter here was that he boke off all
the engagements and the the plaintiff’s did not wait till the defendant’s fathers
death and she sued him for the breach of contract. She was successful in doing
so.

Anticipatory breach of contract by one party does not automatically put an end
to the contract. It has already been noted above that on the anticipatory breach
by one of the contract, the other party can excercise the option either to treat the
contract at thye end or still alive and subsisting until the due date of the
performance comes.

This provision has been abolished in the case of England but added as an
anticipatory breach to be valid

Reasoning “When the contract has been kept alive by the same promise, the
promisor may perform the same in spite of the fact that he had earlier been
repudiated it and if the promisor has failed to perform the same then in that case
the promise will sue.”

“The promise may treat the notice of intention as inoperative and await the time
when the contract has to be executed and then hold the other party responsible
for all the non performance. But in that case he keeps the contract alive for the
gain of the other party as well, at his own. He will be under the obligations and
liabilities under it, and enable the other party not only the other party to contract
complete if so advised inspite of anything of the previous repudiation of it, but
also the to take the advantage of any supervening circumstances which would
justify the decline in completing the contract.
Similarly the contract of Punj Sons Pvt. Ltd. v. Union of India where section
23 and the section 56 is applicable accordingly saying about the impossible act
which ultimately having an effect of getting void things which are unlawful and
the illegal. (Initial impossibility and the subsequent possibility)

Impossibility does not mean the mere commercial difficulty but also leaves an
impact of not only physical but legally as well

Facts – Ms Punj Sons entered into a contract with the union for the supply of
milk containers who were to be delivered by having the tin ingots and also this
was in consonance with the Director General’s permission and inspite of the
efforts of the petioner the given conditions were not complied with it. The
performance of the contract was not made with the non availability of the tin
ingots and the contract becomes void with it, so the promisor cannot be made
liable for the same.

It was said that the expected price would not have been earned, because the
procurement of amount or goods becomes really difficult due to strike in the
mill or there is a rise in the profits.

33) Satyabrata Ghose v. Mugneeram Bangur & Co (the doct of frustration

and no frus as such likely to delay in performance)

When the performance of a contract becomes impossible ,the purpose for which
the parties have in mind gets frustrated due to circumventing or supervening
events, the promisor is excused from the performance of a contract. English
based case law the reasoning given by the Mukherjee J in the following manner

“the idea upon which the doct is based is the impossibility of the performance of
the contract often impossibility and the frustration are used interchangeably, the
circumstances are often makes the contract impossible and the the parties are
absolved from the further performance of it as they did not promise to perform
the an impossibility the law is really an aspect or a part of it by reason of
supervening impossibility or the illegality of the act or agreed to be done or
hence comes within the purview of section 56”

Andhra high court said that “The four limbs of the section 56 were squarely
attracted therefore doct rendered was a subject matter assumed by the partiesto
continure to exist is destroyed or a state of thing assumed to be the foundation
of the contracts fails or where it has be catered personally, person gets disabled
and the contract stands discharged”

Facts- the defendant company had started a construction of a land to turn them
into the house and drains but before doing so purchaser was asked to do the
conveyance by the payment of the balance of the consideration of money before
the stated development could have taken place there was 2nd world war and the
land acquisition took place for the military purpose.

Held that no time limit was fixed under which the roads and drains would have
been made. The convienience of the defendant was temporary and not that of a
contract which can be said to be frustrated

Taylor vs Caldwell similar provisons and the reasoning

35)M/s. Alopi Parshad and Sons Ltd. v. Union of India (Quantum meruit)

Reasoning “In order to avail of the remedy under the quantum meruit the
original contract must have been discharged by the defendant in such a way as
to entitle the plaintiff to regard himself as discharged from any further
performance and he must have elected to do so. The remedy must be noticed
must not be available to whom it breaks the contract even though he may have
partially performed the part of obligation. This must be restitutory, that it’s a
recompose for the value of the work done by the plaintiff inorder to restore him
to the position which he had been in if the contract was never been entered into.
With this regard it is different to claim for the damages which is compensatory
remedy aimed at placing the injured party as near as may be in the position
which he would have been in the other paty performed the contract.

1. One of the party makes a breach of contract or prevents the performance

of it by the other side.
2. The party injured by the breach of the contract who has already
performed a part of it elects to be discharged from the further
performance of the contract and brings the action for the recompense for
the value of the work done he has already been done.
3. For instance a delivery has to be made where wheat has to be given A
delivered 100 kg out of the 500 kg and then remaining has not been
discharged ,here a remuneration has to be given for bags delivered.

36)Hadley v. Baxendale – Section 74 and section 73 (sufferance of damage

and the remoteness of damage)

Facts - The plaintiff’s mill stopped working and the defendant who was a carrier
took the shaft inorder to repair the following item and the article need to be
carried as soon as possible inorder to earn the profits made.

The miller brought a suit against the carrier as the shaft was not carried to the
third party and it was said held that that

“it could not be contemplated that the mill would be stopped in the usual course
of things, by sending the shaft as the millers might have another shaft in the
reserve by the time, moreover special circumstances were not communicated by
the plaintiffs to the defendants. The plaintiff were, therefore not entitled to
recover the loss”
Reasoning “ it is obvious that in great multitudes of cases of millers sending off
the broken shaft to the third parties by a carrier under ordinary circumstances
such consequences will not in all probability have occurred these special
circumstances were never communicated by the plaintiff to the defendant. It
follows that the loss of profit never here cannot be reasonably be considered
such as consequences of the breach of contract as could have been fairly and
reasonably contemplated by both the parties when they made this contract. For
such loss would have either flowed naturally from the from such breach of
contract in the great multitude of such cases occurring under ordinary
circumstances nor were there special circumstances which perhaps would have
been made it a reasonable and natural consequences of such breach of contract,
communicated to or known by the defendants.”

Another reasoning “it was deemed to be within the contemplation of the parties
when the defendant referred his advice about the title of the property”

Another saying of the Harman “these items were not in my judgement within
the reasonable contemplation of the parties when the defendant assumed the
duty of advising the plaintiff. The change of the place of the plaintiff’s
employment was not one of the chances that could have known to either of
them. It was voluntarily act of the plaintiff not as a result of any contract
existing when the bargain was made. The plaintiff chose a new job in
Lancashire he might as well have selected one remote in Kamschatke or less
remote in Hampshire. The defendant cannot be responsible for the expense. The
plaintiff might have brought or rented accommodation suitable to his new
employement, and there is no evidence that his defendant knew that his
financial position might render this impracticable. Still less can defendant be
called upon to pay for the telephonic calls, a luxury no doubt exemplary yet
luxurious.
 Alderson B says whether the parties are said to incur proximate or the
remote of consequences “where the two parties have made a contract which
one of them has broken, the damages which the other parties ought to receive
in respect of such breach of contract should be such as fairly and the
reasonably be considered either arising naturally i.e. according to the usual
course of things from such breach of contract on itself or such as that can be
envisaged supposed to be in contemplation of both the parties at the time of
making the contract as the probable result of the breach it”

The provison contained in section-73 similar to the rule contained in the

above stated judgement in Hadley vs Baxendale consists of the two parts ,
on the breach of such contract such damages can be recovered

1)As may be fairly and reasonably be considered arising naturally that is

according to the usual course of things

2)Reasonably be supposed to have been done in contemplation of both the

parties at the time they made contract. The liability of the party depends
upon the knownledge imputed, or actual of the loss likely to arise in case of a
breach of contract.

The parties here must know the likelyhood of the event of the contingency and
the recovery of the more losses which results in the special circumstances
when the court said that the merely dispensed with the proof of “actual loss or
damage” but it did not justify the award of compensation when as a breach ,
when as a consequences of breach of contract no legal injury has been caused.
This was provided by the court said because of the compensation for breach of
contract was awarded to make the good only the loss or damage which arose in
the natural couse of things and not otherwise.

38)Ghaziabad Development Authority v. Union of India

(compensation for the mental anguish) - It was held by the supreme court that
it was mental anguish cannot be a head of damages for the breach of ordinary
commercial contract. The Ghaziabad development authority announced through
advertisements schemes for the allotement of plots. There was unreasonable
delay by the authorities in completing the schemes.

Held- the purchaser could claim the loss of profits which occurred due to delay
by the vendors of the plots. It was held that the buyer cannot claim any
compensation for the mental anguish caused by the delay in the in the
performance of the contract.

39)Maula Bux v. Union of India- a three judge bench of the supreme court
said that while making the distinction between the earnest money and the
amount deposited for the due performance of the contract. The party
complaining the breach of contract was not required to prove the actual loss or
damage suffered by him and the court was competent to award reasonable
compensation even if the actual even if no actual damgage was proved and not
otherwise.

The court referred to the decision of the division bench of the supreme court.

40)Saying in the “Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd.”

Where the rule that the jurisdiction of the court to award compensation in
case of breach of contract was unqualified except the fact that it has been
reasonable and not above the amount mentioned under the contract whether
there was actually a loss or not was proved to have been caused by such a
breach as in some of the cases the court said was impossible for the court to
assess the compensation arising from such breach. Holding that neither
section-74 of the contract nor any ruling of the apex court cited above
dispensed with the precondition with the actual loss being suffered for
 awarding compensation and what was dispensed with the proof of amount of
actual loss.

41)State of West Bengal v. B.K. Mondal and Sons (Quasi contract)

(appl of section 70 against the govt)- Obligation of person enjoying the benefit
of non gratitutous act where some person does something for another person,
delivers anything to him the not intending to do so gratuitously and such
another person enjoys the benefit thereof the latter is bound to make
compensation to the former in respect or to restore the thing so done or
delivered.

Facts- The respondent constructed kutcha houses and the other things at the
request of the govt officials then after the respondent asked for the sum in return
of the work binding the govt of (appellant) India act 1935. The govt accepted
the benfits of the structures constructed for it was liable under section 70 to pay
for the same.

Permitting the claim against the govt under section 70 would almost be
nullifying the effect of section 175(3) of the GOI by such action ,it was held that
not acting accordance or pertaining to the section 70 against the govt would lead
to extremely unreasonable consequences and may hamper the efficiency of
govt.

42)PC Wadhwa vs State of Punjab (section 70 enjoyment of the benefit is

necessary and standard form agreement) – Decision given by the Punjab and
Haryana high court, in this case the appellant got selected in the service of the
forest department of the respondent state. He was given a practical training and
education in the forest department of the respondent state. He was under a
training program of the Indian forest college, Dehradun for about 10 months
and then he got selected in the IPS and left the forest service in between without
sanctioning of govt of Punjab. The plea taken here is that PC Wadhwa have not
taken any kind of gain from the training. This contention was rejected and
purview of section 70 was taken into the account. Mr Wadhwa was made
accountable to pay for the service which has been rendered by the state of
Punjab.

 Karsandas H. Thacker v. M/S. The Saran Engineering Co. Ltd. AIR 1965 SC
1981

 Gurmukh Singh v. Amar Singh (1991) 3 SCC 79 286

 Shri Hanuman Cotton Mills v. Tata Air Craft Limited 1969 (3) SCC 522

 Trimex International v. Vedanta Aluminium Limited , 2010 (SC)

 Banyan Tree Holdings (P) Ltd v. A Murali Krishna Reddy Del(DB), 2009

 Dhurandhar Prasad Singh v. Jai Prakash University AIR 2001 SC 2552

 InterGlobe Aviation Ltd. v. N. Satchidanand, (2011) 7 SCC 463

 Vennangot Anuradha Samir .....Petitioner versus Vennangot Mohandas

Samir, 2015(SC)

 Desiccant Rotors International v Bappaditya Sarkar & Anr, 2009 (Delhi

 Mahati Mahati v Joseph Mary, 2015 (SC)

 Raghunath Prasad v. Sarju Prasad (1923) 51 I.A. 101

30)World Wrestling entertainment v. Reshma Collections, Del(DB) 2014

11. Venkata Chinnaya Rau v. Venkataramaya Garu