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Contract I Course Manual (Danish Sheikh)
Contract I Course Manual (Danish Sheikh)
LAW OF CONTRACT I
Course Instructors
(Semester B -- 2019)
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Course Manual for Law of Contract - I
The following information contains the official record of the details of the course.
PartI
Course Code:
Course Duration: One
Semester
No. of Credit Units: 4 credits
Level: B.A. LL.B/ B.B.A. LL.B
Medium of Instruction: English
Pre-requisites: Nil
Pre-cursors: Nil
Equivalent Courses: Nil
Exclusive Courses: Nil
The above information shall form part of the University database and may be uploaded
to Dspace into the KOHA Library system and catalogued and may be distributed
amongst students.
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PART II
A. Course Description
For most of you this is your first introduction to the world of contracts. Accordingly, you will
study the elements of a standard contract, how it is formed, its terms, the manner of
performance, and the various legal challenges to the enforcement or performance of any
agreement. This subject-matter will hold you in good stead throughout your law career and
beyond, as contracts permeate our personal, professional and commercial lives. As and
when appropriate, the course will also attempt to weave in readings from a literary,
historical, philosophical and economic perspective to allow us to get a more holistic sense of
the theories behind contract law.
B. Course Aims
(i) Demonstrate knowledge (i) Reading of relevant cases, Students’ ability to grasp
statutes, and other legal and critically evaluate
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and understanding of the 40% materials: the topics/issues
relevant aspects of contract discussed in the syllabus
law; state relevant rules and Students are expected to read will be tested in the
sources of law and be able to the wide range of materials following ways:
discuss their effect included in the Course Manual
(i) End-semester
or in handouts.
examination (50%).
D. Grading of Student
Achievement
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Students will be assessed based on a common final examination, as well internal
assessment modes, determined by each instructor individually. The common final
examination will constitute 50% of your overall grade. The remaining 50% will be based
upon the internal assessment, as determined by your course instructor.
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E. A Word of Caution on Online Readings
Students are encouraged to access online resources for research and preparation for
next class. However, online sources can be classified into reliable, unreliable and
outright bogus, and students are cautioned from depending on unreliable and bogus
materials. Internet is an open domain in which all can create web pages and indulge in
propaganda, falsification or misrepresentation of events. The few sources that can help
you with basic information and which are fairly unbiased are: websites of
established newspapers, magazines and journals.
Student should always consult with the instructor about the veracity and authenticity of
a particular website and its suitability for researching topics covered in this syllabus.
F. P lagiarism
Any idea, sentence or paragraph you cull from a web source must be credited with the
original source. If you paraphrase or directly quote from a web source in the exam,
presentation or essays, the source must be explicitly mentioned. You should not feel free
to plagiarize content, be it from scholarly sources (i.e. books and journal articles) or from
the internet. This is an issue of academic integrity on which no compromise
will be made, especially as students have already been trained in the perils of lifting
sentences or paragraphs from others and claiming authorship of them.
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Part III
A. Readings:
Faculty members may assign readings from any of the following secondary sources:
3. EWAN MCKENDRICK, CONTRACT LAW: TEXT, CASES & MATERIALS ( 5TH EDN,
OXFORD UNIVERSITY PRESS, 2012)[ENGLISH CASE DECISIONS]
8. POLLOCK AND MULLA LAW OF CONTRACT (2ND ED. 1909) Note: this is the
second edition of 1909. Pdf file will be provided.
The students should familiarize with the following legislations during the progress of this
Course.
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B. Class Format
The class will cover between one and two topics each week as per the lecture
program. The instructor will tell students at least a week before how far ahead to
read in the required readings for the next week, and if there are any changes in the
readings. Students are expected to attend all classes and to complete all the required
readings and case laws. If you are unable to attend a class you should contact the
course instructor in advance.
The class format will combine lecture and discussion along with on the spot Q&A
sessions. Students are expected to prepare for and participate in class discussion on a
regular basis.
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PART IV
The following information is subject to modifications as per the progress of the course.
Teaching Plan
Week Topic
3 Acceptance
9 Illegality
10 Contingent Contract
11 Discharge
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OFFER
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Compulsory Readings:
Statutory Provisions:
Cases:
Pharmaceutical Society of Great Britain v. Boots Cash Chemists (Southern) Ltd., [1952]
2 QB 795
McPherson v. Appana, AIR 1951 SC 184
Revocation of Offer
Advertisements as Offers
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Carlill v. Carbolic Smoke Ball Co., [1893] 1 QB 256
Leonard v. Pepsico, 88 F. Supp. 2d (1999)
Articles:
Extracts from Patricia Williams, Alchemical Notes, 22 Harv. C.R.-C.L. L. Rev. 401
(1987).
Sandhoo Lal Motilal v. State of Madhya Pradesh, AIR 1972 All 137 (Revocation of
Offer)
ACCEPTANCE
After an offeror communicates her offer to the offeree, the offeree may accept the offer,
reject the offer, or propose a counteroffer. Once an offeree accepts the offer, a contract is
born.
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Compulsory Readings:
Statutory Provisions:
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Cases:
Acceptance
How to accept
Butler Machine Tool Co. Ltd. v. Ex-Cell-O Corpn (England) Ltd., (1979) 1 WLR 401 CA
Communication of Acceptance:
Entores v. Miles Far East Corporation, [1955] 2 QB
Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas & Co., AIR 1966 SC
543
Articles:
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Adams v Lindsell, (1818) 1 B & Ald. 681 [Communication of Acceptance]
Felthouse v Bindley, (1862) 11 CBNS 869 [Mode of Acceptance]
Errington v Errington, [1952] 1 KB 290 [How to Accept: Acceptance by Performance]
Felthouse V Bindley (1862) 11 CB (NS) 869 [Silence not acceptance]
Perala Krishnayyam Chettiar v. G. Paimanathan Chettiar, AIR 1917 Mad 63
Haridwar Singh v. Bagum Sambrui, AIR 1972 SC 1242
Brodgen v Metropolitan Railway [1877] 2 App Cas 666
Frederick Lipman, ‘On Winning the Battle of the Forms: An Analysis of Section 2-207 of
the Uniform Commercial Code’, Vol. 24 The Business Lawyer (1969)
CONSIDERATION
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Compulsory Readings:
Statutory Provisions:
Cases:
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Definitional problem?
The standard definition of consideration in English Law uses the language of benefit and
detriment. The Indian Contract Act doesn’t use those words. How far from the English
position does this really take the Indian law? Is there tension between the discussion of
consideration in Ss.2, 10 , 23, 24 and 25?
See Pollock v. Stokes Debate in Pollock and Mulla Law of Contract (2nd ed. 1909) Pp.25.
Courts and academics alike have held that the Indian Contract Act reproduces the
consideration requirement of English law. But is there any warrant for this assumption?
Could it be argued instead that although the Indian Contract Act uses the term
consideration, it means something completely different from the English law?
Illusory consideration
General
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Stilk v Myrick (1809)2 Camp 317
Ramchandra Chintaman v. Kalu Raju (1878) ILR 2 Bom 362
General Proposition
Central London Property Trust V High Trees House Ltd [1957] 1 KB 130
M.P. Sugar Mills v. State of U.P., AIR 1979 SC 621[Promissory Estoppel]
Articles:
Chapter 2: Consideration, in Scott J. Burnham, Drafting and Analyzing Contracts: A
Guide to the Practical Application of the Principles of Contract Law, Lexis Nexis, 2003
The test of intention to create legal relations is a test the law uses to mark out agreements
which it thinks are serious enough to be enforced from those which are not so. Given this
role, its function overlaps partly with that of the doctrine of consideration. It would also be
useful to study how exactly the idea of ‘intention to create legal relations’ is related to
Consideration. While reading the materials pertaining to intention to create legal relations,
students should persistently keep in the forefront the question of whether this doctrine is
merely a reincarnation of consideration without the language of value/ benefit/ detriment
or whether it is a free-standing principle. The contract law of Europe does quite happily
without consideration and all agreements which are made with the intention of creating
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legal relations are treated as binding contracts. The theme here has a relevant connection
with the rules relating to ‘offer’. So, it is useful to revisit some cases relating to offer here
while discussing intention to create legal relations.
Compulsory Readings:
Cases:
Kleinwort Benson V Malaysia Mining Corporation [1989] 1 All ER 785 (involving the
legal status of comfort letters)
Singh 16-17
The doctrine of privity of contract states that a contract is a private affair between two
parties consequent upon which third parties neither have rights nor duties. However, the
destiny of the privity rule is tied closely to the doctrine of consideration (See Dunlop
Pnuematic and Tweddle v Atkinson ) . Now, given that the definition of consideration
under the Indian law is much wider than English law does it still make sense to stick to
the English rules of privity?
Compulsory Readings:
17
S. Swaminathan, ‘The Great Indian Privity Trick: Hundred Years of Misunderstanding
Nineteenth Century English Law’ 2016 (16) Oxford University Commonwealth Law
Journal 160-182
Cases:
Tweddle v Atkinson, [1861] 1 B & S 393 [Privity of Consideration]
CAPACITY
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Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Statutory Provisions:
Cases:
General Rule
Gadigappa Bhimappa v. Balangowda, AIR 1931 Bom. 561 (FB) [Application of rule of
estoppel to minors contracts]
Ajudhia Prasad v. Chandan Lal, AIR 1937 All. 610
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CONSENT
For a contract to come into existence, the contracting parties must consent to the
contract. But, there might be occasions in which the consent of a party to the
contract has been obtained in a questionable manner.
In this unit, we will discuss the ways in which the Contract Act seeks to intervene
when the fact of consent to a contract might have been influenced by (i) coercion, (ii)
undue influence, (iii) fraud, (iv) misrepresentation, and (v) mistake.
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
(1) What is consent? And under what circumstances is such content vitiated?
(2) How are coercion, undue influence, misrepresentation, fraud and mistake
defined, and what is their effect on a contract?
(3) What is the difference between coercion and undue influence?
(4) What is the difference between misrepresentation and fraud?
(5) What is the effect of a mistake of fact and a mistake of law?
Compulsory Readings:
Statutory Provisions:
Cases:
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Kishen Lal Kalra v. NDMC, AIR 2001 Del 402
Economic Duress
Undue Influence
Unconscionability
Central Inland Water Transportation Ltd. v. Brojo Nath Ganguly, AIR 1986 SC
1571
Fraud
Misrepresentation
Mistake
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Suggested Additional Readings:
LEGALITY
A contract must be based not only upon the mutual assent of competent parties, but
must also have a lawful object and lawful consideration. If the object of an agreement,
or the consideration of an agreement, is not lawful, the agreement is unenforceable.
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
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(4) What is the difference between an unlawful agreement and an illegal agreement?
(5) What is the difference between an absolute restraint and a partial restraint?
Compulsory Readings:
Statutory Provisions:
Cases:
Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co. Ltd., AIR 1967
SC 1098
Percept D’Markr v. Zaheer Khan, (2006) 4 SCC 277
Other Readings:
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CONTINGENT CONTRACTS
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Statutory Provisions:
Cases:
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DISCHARGE OF CONTRACT
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
(1) What is the difference between actual performance and attempted performance?
(2) What are the various ways in which contracts are discharged by way of agreement?
(3) What is the doctrine of frustration?
(4) What are the different grounds for impossibility of performance?
(5) What is the difference between actual breach and anticipatory breach?
Compulsory Readings:
Attempted performance
Impossibility of performance
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Satyabrata Ghose v. Mugneeram Bangur, 1954 SCR 310
Ram Khilona & Ors. v. Sardar & Ors., AIR 2002 SC 2548
Kapur Chand Godha vs. Mir Nawab Himayatali Khan, (1963 AIR 250/ 1963 SCR (2)
168)
Discharge by breach
Murlidhar Chatterjee v. International Film Co., AIR 1943 PC 34
Anticipatory breach
Krishna and Co. v. The Government of A.P. & Ors., AIR 1993 AP 1 (Frustration of
Object)
Re Moore & Co. Ltd v. Landauer & Co., [1921] 2 KB 519 (Actual Performance)
Shipton, Anderson & Co v Weil Bros & Co., [1912] I KB 574 (Actual Performance)
Ralli Bros. v. Compania Nautera, (1920) 2 K.B. 287 (Impossibility of Performance)
Rash Behary Shaha v. Nrittya Gopal Nundy, (1906) ILR 33 Cal 477 (Anticipatory
Breach)
V.L. Narasu v. Iyer, ILR [1953] Mad. 831 (Self-induced Frustration)
Wasoo Enterprises v. J.J. Oil Mills, AIR 1968 Guj. 57 (Time of Performance)
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REMEDIES
A contract when breached gives rise to damages that could be claimed by the injured
party, and in certain instances a right to demand specific performance of the contract.
“Damages”, means compensation in terms of money for the loss suffered by the injured
party. Every action for damages raises two problems. The first is the problem of
“remoteness of damage” and the second that of “measure of damages”.
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
(1) What are the various remedies available to the aggrieved party?
(2) What are direct versus indirect damages? And what are the several ways that courts
measure the amount of damages owed?
(3) What is the difference between a liquidated damages provision and one that imposes
an impermissible penalty?
(4) When can a party require specific performance of a contract?
Compulsory Readings:
Statutory Provisions:
Cases:
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Liquidated Damages
Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd, (1915) AC 79 (Lord
Dunedin’s opinion)
Cavendish Square Holdings v Talal El Makdessi [2015] UKSC 67
Fatehchand v Balkishan Das [1964] 1 SCR 515
Maula Bux v Union of India [1969] 2 SCC 554
ONGC v. Saw Pipes [2003] 5 SCC 705
Duty to Mitigate
Jamaal v. Moola Dawood, (1916) ILR 43 Cal 493
Specific Relief
Articles:
Chapter 13: Damages, in Scott J. Burnham, Drafting and Analyzing Contracts: A Guide
to the Practical
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Sylvia Shipping Co Limited v Progress Bulk Carriers Limited [2010] EWHC 542
Kailash Nath Associates v Delhi Development Authority [2015] 4 SCC 136
QUASI-CONTRACTS
There are also many situations in which law and justice require that a certain person
be required to conform to an obligation, although he has neither broken any contract
nor committed any tort. Such obligations are generally described as quasi-contractual
obligations. In this chapter we will under the theory of “Un-just Enrichment” and
theory of “Implied-in-fact” Contract.
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Statutory Provisions:
Cases:
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