CASE-1

In this case mother by deed of gift, made over certain landed property to the daughter,
Ramayya . As per the terms of the deed it was stipulated that an annuity of Rs 653 should be
paid every year to the Plaintiff, who was the mother's sister Chinnaya. The defendant
Ramayya on the same day executed in plaintiff's favor an agreement promising to give effect
to the stipulation but Ramayya later on did not pay an annuity. So, Chinnaya sued to recover
it from Ramayya. The defendant, Ramayya tried to defend herself on the ground that the
promise had furnished no consideration.

Does the case have essentials of a Valid contract?

CASE-2
Case study on capacity to contract
Margaret owned an antique store that specialized in rare porcelain dolls. When she opened
the business in 1989, it was at a shop in an eastern suburb of Melbourne. In 1999 she started
to advertise on the Internet and by 2006 the business had grown to the point where she
needed help to keep the business going. After a family discussion one night at the kitchen
table in July 2006, it was agreed that Margaret would probably keep the business going for
another couple of years and then retire. Emily, her youngest daughter and aged 16, would
work in the shop as long as was needed and in return, she would receive any unsold dolls.
When Margaret retired at the end of 2009, she decided that she would give the unsold stock
to charity and they could auction it and keep the proceeds.

Advice to Emily-
• At the time of entering into agreement Emily was a minor i.e. under the age of 18
years. According to the Law, a contract with a Minor can be valid, void or voidable at
the option of the minor. [Business Law Ppt, 2009] hence at first instance, it seems that
the agreement between Margret and Emily is not binding but a minor has a right to
repudiate contract after attaining the age of majority and escape from the liability or
can reaffirm that.
• The Question here arises is that whether Emily can confirm the contract after
attaining the age of majority?
• Ratification may consist of any word or conduct of minor showing the interest of the
minor to be bound by the contract. [US Legal, 2010].
• Here in this case, Emily continues working for her mother even after becoming major;
this shows that she had the intent to continue with her agreement.  The contract
entered by the minor for the benefits of service paid by him is a valid contract.  Here,
Margaret agreed to give Emily the unsold stocks against the service provided by her
but at the time of retirement she announces to give the unsold stocks in charity. 
Emily can make Margret to comply with the terms of agreement as it was a legally
enforceable agreement. It is only Emily who can make the contract void after
attaining the age of majority.  But this option can be exercised by her only during her
minority once she attained the age of majority. Once she does nothing during her
minority to repudiate the contract, she cannot make it void after that.
• Here, Margaret agreed to give Emily the unsold stocks against the service provided by
her but at the time of retirement she announces to give the unsold stocks in charity. 
• Emily can make Margret to comply with the terms of agreement as it was a legally
enforceable agreement.
• It is only Emily who can make the contract void after attaining the age of majority. 
But this option can be exercised by her only during her minority once she attained the
age of majority.
• Once she does nothing during her minority to repudiate the contract, she cannot make
it void after that.
• If a minor continues to enjoy the valuable Consideration of its contractual transaction
even after attainment of 18 years of age, then it is implied that he is affirming or
ratifying the contract and then he or she will be bound by the contract.

Conclusion
The discussion of legal provisions above leads to the conclusion that, although
agreement of Emily and Margret was made when Emily was a minor, became legally
binding after the affirmation by Emily. The affirmation of Contract by Emily is
obvious by her conduct, she continued working in the store of Margret and also
enjoying the consideration for her contract. Hence Emily has all the rights as a party
to the contract and she can bring a suit in the court of Law against Margret for her
consideration also, stopping her from giving all the unsold Dolls in charity.

CASE-3
K. K. Legume, Incorporated is a reputable and popular sweater manufacturer. Based
upon Legume’s reputation and popularity, Arrow Stores, L. L. C. enters into a
contract with Legume. The contract is a “requirements” contract, stipulating that
Arrow will purchase whatever number of “Arctic Ice” brand 100% wool sweaters it
needs for a one-year period, at a “per-unit” price of $12.00. Two developments result
in litigation between Legume and Arrow. First, due to an unanticipated sheep
shortage, with substantially fewer sheep to shear, the price of wool skyrockets 1,000
percent. Second, due to an unexpected “cold snap,” consumer demand for wool
sweaters increases dramatically, resulting in a 500% increase in Arrow’s wool sweater
orders to Legume, compared to order averages over the previous ten years (the parties
have a long-standing business relationship.) Legume implores Arrow to increase its
per-unit purchase price to $36.00, but Arrow refuses to modify the price term
stipulated in the contract. When Arrow refuses to pay a higher price for the sweaters,
Legume ceases delivery, claiming that it would be bankrupted by continuing to fill
 Arrow orders; further, Legume claims that based upon the longstanding business
relationship between the parties, Arrow has at least an ethical obligation to pay a
higher price.

Who wins?

• Arrow Stores, L. L. C. enters into a contract with K. K. Legume. The contract is a

“requirements” contract, stipulating that:
• Arrow will purchase whatever number of “Arctic Ice” brand 100% wool sweaters it
needs for a one-year period, at a “per-unit” price of $12.00, from K.K. Legume.
• But due to an unanticipated sheep shortage and an unexpected “cold snap,”means
demand for wool sweaters increases. It is Anticipatory repudiation. Anticipatory
repudiation often occurs when market conditions change and one party realizes it will
not be profitable to fulfill the terms of the contract, once the contract is anticipatorily
repudiated, the non-breaching party is discharged from his or her obligations under
the contract, and can sue immediately for breach of contract.
• Legume implores Arrow to increase its per-unit purchase price to $36.00, but Arrow
refuses to modify the price term stipulated in the contract. 
• When Arrow refuses to pay a higher price for the sweaters, Legume ceases delivery,
claiming that it would be bankrupted by continuing to fill Arrow orders; further,
•  Legume claims that based upon the longstanding business relationship between the
parties, Arrow has at least an ethical obligation to pay a higher price.

Does Arrow have an ethical obligation to pay a higher price, based upon such an
unanticipated change in circumstances?

• Arrow does not have an ethical obligation to pay a higher price, based upon such an
unanticipated change in circumstances. Because as per the contract rules Legume is
complete the contract obligations which are not performed by him and were agreed in
the contract, and Arrow is need to pay only $12.00, per unit only as per the contract
with Legume. Arrow also have rights to get Compensatory damages are designed to
put the plaintiff in the position he or she would have been in had the contract been
fully performed.
• Arrow has the duty to mitigate damages to use reasonable efforts to minimize
damages resulting from the defendant’s breach of contract.

CASE-4
Can a person’s silence be considered acceptance?

In this case, the petitioner, Mr. Paul Felthouse wanted to purchase a horse from his
nephew, but the price he offered to pay for the horse was less than that his nephew
was willing to sell it for.  The horse, therefore, was still in his possession. The Uncle
communicated his offer through a letter, saying, “If I hear no more about him, I
consider the horse mine at £30.15s” The nephew could not respond to the letter
because he was busy with an auction on his farm. Though he asked the auctioneer,
 Mr. Bindley, not to auction the horses, he accidentally did. Mr. Felthouse then sued
the defendant for conversion of his property. The defendant argued that the horse was
not actually Mr. Felthouse’s property, as there existed no contract between him and
his nephew at the time of the auction because Mr. Felthouse’s offer was not accepted
by his nephew.

Can a person’s silence be considered acceptance?

• The court ruled that Felthouse did not have ownership of the horse as there was no
acceptance of the contract.
• Acceptance must be communicated clearly and cannot be imposed due to silence of
one of the parties.
• The uncle had no right to impose a sale through silence whereby the contract would
only fail by repudiation.
• Though the nephew expressed interest in completing the sale there was no
communication of that intention until after the horse was sold at auction on 25
February.
• The nephew's letter of 27 February which was submitted as evidence by Felthouse
was judged to be the first instance of communication where the acceptance was
communicated to the offeror(Felthouse).
• And by this time, the horse had already been sold. Accordingly Felthouse had no
interest in the property.

CASE-5
In this case, a company carried out advertisements about their product, carbolic smoke
balls, that claimed that any person who took the smoke balls in the prescribed manner
(i.e., three times daily for two weeks) will not catch influenza. In case someone does,
the company promised to pay 100£ to them immediately. To show their sincerity
regarding this offer, the company deposited a sum of 1000£ in a public bank. Now,
the plaintiff, Carlill bought the smoke balls and used them as prescribed in the
advertisement, but still ended up catching the flu. She filed a suit for the recovery of
100£ as promised in the advertisement. The company denied the payment saying there
existed no contract between them and the plaintiff.

The Carbolic Smoke Ball Company, represented by H. H. Asquith, lost its argument
at the Queen's Bench. It appealed straight away. The Court of Appeal unanimously
rejected the company's arguments and held that there was a fully binding contract for
£100 with Carlill. Among the reasons given by the three judges were (1) that the
advertisement was not a unilateral offer to all the world but an offer restricted to those
who acted upon the terms contained in the advertisement (2) that satisfying conditions
for using the smoke ball constituted acceptance of the offer (3) that purchasing or
merely using the smoke ball constituted good consideration, because it was a distinct
detriment incurred at the behest of the company and, furthermore, more people buying
 smoke balls by relying on the advertisement was a clear benefit to Carbolic (4) that
the company's claim that £1000 was deposited at the Alliance Bank showed the
serious intention to be legally bound. The judgments of the court were as follows.

Case-6
Offer and Counter Offers

In this case, Wrench, the defendant offered to sell his farm to the petitioner, Hyde for £1000.
The petitioner declined the offer. The defendant again reinstated his offer for selling the farm
at £1000 to the petitioner’s agent stating that it is the final offer from their side. The
petitioner, through a letter, offered to buy the farm for £950. The defendant refused to sell the
farm at that price. The petitioner, several days later, offered to buy the farm at the initial price
of £1000. The defendant did not send any agreement to that and refused to sell the farm,
because of which the petitioner sued for breach of contract.

Decide on who is right and give your explanations

• After considering the arguments presented and the evidence produced, it was held that
to constitute a valid agreement there must be an unequivocal acceptance. Plaintiff
rejected the offer of sale for 1000 Pounds on 6th June and made a counter-proposal.
Which was later rejected by the defendant via letter dated 27th June, and no counter or
new proposal was made by the defendant in that letter. Therefore, there was no offer
for the plaintiff to accept.
• It can be concluded that a counter-offer can negate, supersede or destroy the original
offer. For a contract to be legally valid, the acceptance must absolute and qualified.

CASE-7
In this case, Mr. and Mrs. Balfour, who used to live together as a married couple in
Sri Lanka, went for a vacation to England. During this time, Mrs. Balfour developed
rheumatic arthritis. The doctor advised Mrs. Balfour to stay back in England as,
according to him, Sri Lankan climate would worsen her health. Before Mr. Balfour
returned to Sri Lanka, he promised to send £30 to her per month. During their stay
away, the parties drifted apart and separated.

Decide on who is right and give your explanations

The parties had no intention to create legal relations while making the agreement. So
the burden of proof lies on the plaintiff to prove that there exists a valid contract
which refute the presumption. Hence the presumption was not refuted by Mrs. Balfour
and Mr. Balfour’s appeal was allowed.
 CASE-8
In this case, the defendant’s nephew went missing and the petitioner, who was a
servant under the defendants was sent out in his search to Hardwar. After sending the
petitioner, the defendant carried out an offer to the general public offering Rs. 501 to
whomsoever finds the missing boy. The Plaintiff found the boy and helped return him
back to his home. He had been paid the money he spent in going to search for the boy,
i.e., his travel expenses. When he returned, he continued working for the defendants
for about six months. After six months, he sued the defendants for paying him the
prize money that was offered earlier.

Decide on who is right and give your explanations

knowledge and assent about a proposal is must in order to convert a

proposal into enforceable agreement and in the present case plaintiff was
neither aware nor has assent about the particular act
It was also said by the Honorable Judge that plaintiff was merely
fulfilling his obligations at the time when he was tracing the boy.

So, the appeal was dismissed and it was held that plaintiff was not
entitled to claim reward for finding the missing boy.

If the person gives his assent and then performs the condition of proposal
than only he is entitled to claim rewards associated with such proposal.

Conclusion:

It can be concluded that through this case it was clearly established that
firstly, acceptance or assent is a must for converting a proposal into
enforceable contract. Secondly, parties must have knowledge about the
proposal and without knowledge of the proposal it cannot converted into
agreement even if condition associated with such proposal is fulfilled.
 CASE-9

Minor’s Capacity to Contract

Is a minor’s agreement void ab initio?

In this case, the defendant, Darmodar Ghose, as a minor was the sole owner
of his property. His mother was his legally appointed guardian. One Mr.
Brahmo Dutt who was a moneylender, through his agent Kedar Nath, lent
Damodar Ghose a sum of Rs 20,000 at 12% interest per year. The loan was
taken by way of mortgaging the property. The same day this deal was made,
Damodar Ghose’s mother notified the appellant that Damodar was a minor,
and anybody who would get into an agreement with him would do so at his
own risk. Kedar Nath claimed that Damodar Ghose had lied about his age on
the date of the execution of this deed, which turned out to be untrue.

Decide on who is right and give your explanations?

According to he verdict of Trial Court, such mortgage deed or contract that was
commenced between the plaintiff and the defendant was void as it was
accomplished by the person who was an infant at the time of execution of mortgage.
v When Brahmo Dutta was not satisfied with the verdict of Trial Court he filled an
appeal in the Calcutta High Court.
v According to the decision of Calcutta High Court, they agreed with the verdict that
was given by Trial Court and it dismissed the appeal of Brahmo Dutta.
v Then he later went to Privy Council for the appeal and later the Privy Council also
dismissed the appeal of Brahmo Dutta and held that there cannot be any sought of
contract between a minor and a major person.
v The final decision that was passed by the Council were :-
1.Any sought of contract with a minor or infant is void/ void ab-initio (void from
beginning).
2.Since minor was incompetent to make such mortgage hence the contact such
made or commenced shall also be void and id not valid in the eyes of law.
3.The minor i.e. Dahrmodas Gosh cannot be forced to give back the amount of
money that was advanced to him, because he was not bound by the promise that
was executed in a contract.
Case: 10

Doctrine of Frustration

In this case, the defendant agreed to rent a flat of the plaintiff to watch
the coronation of King Edward VII from its balcony. The plaintiff had
promised that the view from the flat’s balcony will be satisfying since the
procession will be perfectly visible from the room. The parties
corresponded through letters and agreed on a price of £75 for two days.
Nowhere in their written correspondence did the parties mention the
coronation ceremony. The coronation did not take place on the days the
flat was booked for, as the king fell ill. The defendant refused to pay the
whole sum of money that the parties had agreed upon, for this reason.
CASE-11

The remoteness of Damage

In this case, the plaintiffs were operators of a mill, that they had to shut
down temporarily when the crankshafts of the mill broke. Plaintiffs then
contacted the manufacturers of the engine to make a new engine on a
similar pattern. A servant of the defendants was then sent to the carriers to
transport the crankshaft to the engine manufacturers. The servant told the
Defendants that the mill is shut down, so the crankshafts must be sent
immediately. The defendants informed that whenever the old crankshaft is
given to them, the new one will be delivered by 12 o’clock its next day. Due
to the delay of the defendants, the delivery got delayed and the mill had to
stay shut for several days.

Decide on who is right and give your explanations.

When two parties enter a contract that one of them breaches, the damages
that the other party should receive should be those that can fairly and
reasonably be considered either arising naturally, i.e., in the ordinary course
of things, from the breach of contract itself or those that can reasonably be
assumed to have been in the contemplation of the parties at the time they
entered the contract. Losing profits, in this case, cannot be considered a
consequence of the breach of contract in how both parties could have
reasonably expected when they made the contract.

The Court ruled in favor of the defendant, holding that a party could only
successfully sue for losses caused by a breach of contract if the loss is
reasonably viewed to have resulted naturally from the breach, or if the fact
that such losses would occur should have been reasonably expected by the
parties when the contract was formed. Baxendale was not liable for the mill’s
lost profits because he had not reasonably foreseen the consequences of
delay and Hadley had not informed him of them.

CASE-12

Case:Imitation Pearls

Ranjani bought pearls from a shop called, ’Aesthetics: A woman’s Shop’,

thinking that they were natural pearls. The pearls had been hung in the shop
on stand with prices written ion them and customers could pick up whatever
they wanted, pay at the cash counter and take away the purchase. Later,
Ranjani came to know that the pearls that the pearls were not natural pearls
but were artificial ones. She tried to return them and claim her money. The
shop keeper refused.

Decide on who is right and give your explanations