TRIMESTER I

Title of the subject: Law of Contract-I

Subject code: LLB127A Credits: 4

Rationale:
Law of contract is a law which plays a crucial role in everyone’s life knowingly or
unknowingly. Every person everyday enters into so many express or implied contracts.
Indian Contract Act, 1872 provides a statutory recognition to the same. This branch of
law deals with the formation, performance and enforceability of the agreements. Indian
Contract Act, 1872 is not the comprehensive law and it is read with several legislations
e.g. The Sale of Goods Act, 1930, The Partnership Act, 1932, The Transfer of Property
Act, 1872 which provide purpose to this legislation. This part of the course deals with
formation of contract.

Objectives:
1. To study in detail the evolution of contract legislation along with role of equity
courts played in the progression of contract law
2. To provide complete knowledge to the students about formation, capacity and
enforcement of agreements
3. To expose students to the role of contract in the era of globalization and
privatization

Intended learning Outcome:

1. The students will be accustomed with the historical development of 'Contract'
2. The student will be able of differentiate between the contract which are legally
enforceable from those which are not enforceable
3. The students will have a comprehensive knowledge of different types of contracts
4. The students will be acquinted with the procedural rules that have to be satisfied
before a contract is formed or enforced or to the consequences of legal
enforceability 5. To keep the students abreast with expanded role of contract in an
era of privatization

Module I
Formation of Contract
Evolution of Law of Contract in Common Law
Evolution of Law of Contract in India
Definition and Kinds of Agreement
Void Agreements
Illegal Agreements
Definitions and kinds of Contract.
Valid Contract
Void Contract Voidable
Contract Unenforceable
Contract
Illegal/Unlawful Contract
E- Contracts
Essential elements of Contract.
Offer and Acceptance
Intention to establish legal relationship
Lawful Consideration
Capacity of Parties
Free Consent
Lawful Object
Writing and
Registration Certainty
of Performance
Possibility of
Performance
Agreement not expressly declared to be void
Essentials of a Valid Offer
It may be express or implied
It must be definite and clear
It must create legal relation
It must be different from invitation to offer
It may be specific or general
It should not contain negative condition
It must be communicated to the offeree
It may be subject to any terms and conditions
Essentials of Acceptance
Acceptance must be absolute and unconditional
Acceptance must be given by the person to whom the offer is made
Acceptance must be given only when the offeree has the knowledge of the offer
Acceptance must be given within the specified or reasonable time
Acceptance must be communicated
Acceptance must be in the prescribed manner
Acceptance must be in some usual and reasonable manner
Acceptance may be express or implied
Acceptance shall not be presumed from silence
Kinds of Offer
Express Offer
Implied Offer
General Offer
Specific Offer
Counter Offer
Cross Offer
 Standing Offer
Communication of Offer
Communication of Acceptance
Acceptance by post/telegram
Acceptance by telephone
Acceptance by Telex/Fax/Email
Revocation of Offer & Acceptance
Distinction between Offer and Invitation to Offer.

Case Laws:
1. Harris Vs. Nickerson (1872) L.R 8 Q.B
2. Lalman Shukla vs. Gauri Dutt (1913) 11 All LJ 489
3. Carlill vs. Carbolic Smoke Ball Co (1893) 1 QB 256
4. Felthouse Vs. Bindley (1863) 7 L.T. 835
5. Rajendra Kumar Verma Vs. State of Madhya Pradesh A.I.R 1972 M.P 131

6. Pharmaceutical Society of Great Britain Vs. Boots Cash Chemists (1952) 2 Q.B.
795
7. Harvey Vs. Facey (1893) A.C. 552
8. Mac Pherson Vs. Appanna A.I.R. 1951 S.C. 184
9. State Bank of Patiala Vs. Ramesh Chandra Kanoji A.I.R. 2004 S.C. 2016
10. I.B.P. Co. Ltd. vs. Ramashish Prasad Singh A.I.R. 2006 Pat. 91
11. Jones Vs. Padavatton (1969) All E.R. 616
12. Meritt Vs. Meritt (1970) 2 All E.R. 760
13. Mudaliar Vs. Rajababu A.I.R. 1995 SC 1607
14. Haji Mohd. Ishaq vs. Mohd. Iqbal (1978) 2 S.C.C. 493
15. Upton Rural District Council Vs. Powell (1942) 1 All ER 220
16. Williams vs. Carwardine (1833) 4 B. &Ad. 621
17. Tinn Vs. Hoffmann (1873) 29 L.T.271
18. Suraj Besan and Rice Mills Vs. Food Corporation of India A.I.R. 1988 Delhi 224
19. Rajendra Kumar Verma Vs. State of M.P. A.I.R. 1972 M.P.131
20. New Golden Bus Service, Bhatinda Vs. State of Punjab A.I.R. 2006 P&H 141
21. D.R.S.A. Vs. M/s Bindal Agro Chemicals Ltd. A.I.R. 2006 S.C. 871
22. Karan Singh Vs. The Collector, Chhatarpur A.I.R 1980 M.P. 89
23. L.I.C. of India Vs. R. Vasireddy A.I.R 1984 S.C. 1014
24. Dunlop Vs. Higgins (1848) 1 H.L.C. 381
25. Bhagwandas Vs. Girdharilal A.I.R 1966 S.C. 543
26. Babu Ram Jain Vs. L.I.C A.I.R 1990 M.P 351
27. Wallis Vs. Pratt (1911) A.C. 394
28. Davies Vs. Collins (1945) 1 All E.R. 247
29. P.C. Wadhwa Vs. State of Punjab A.I.R 1987 P.&H. 117
30. White Vs. John Warrick and Co. Ltd. (1953) 1 W.L.R. 1285
Module II
Consideration & Capacity to Contract
Definition and Essentials of Consideration
Consideration only at the desire of the Promisor
Consideration by Promisee or any other person
It may be past, present or future
There should be some act, abstinence or promise by the promisee
Privity of Contract & its Exceptions
Trust of contractual rights or beneficiary under a contract
Conduct, acknowledgement or admission
Provision under family agreement
Exceptions to the Rule that ‘Agreement without Consideration is Void’
Capac
ity to Contract Age
of Majority
Soundness of mind
Not disqualified by law
Nature & Ratification of Minor’s Agreement
Minor’s liability for
Necessaries Case Laws:
1. Durga Prasad vs. Baldeo (1880) 3 All. 221
2. Dunlop Pneumatic Tyre Co. Ltd. Vs. Selfridge & Co. Ltd. (1915) A.C 847

3. Mohoribibi vs. Dharmodas Ghose

4. Jagon Ram Vs. Mahadeo Prasad Sahu (1909) I.L.R 36 Cal. 768, at p. 777
5. Chacko Vs. Mahadevan A.I.R 2007 S.C 2967
6. Jamna Das Vs. Ram Avtar (1911) 30 I.A 7
7. Narayani Devi Vs. Tagore Commercial Corporation Ltd. A.I.R 1973 Cal. 401
8. Veramma Vs. Appayya A.I.R 1957 A.P 965
9. Andhra Bank Vs. Ananatnath Goel A.I.R 1991 A.P. 245
10. Abdul Aziz vs. Masum Ali A.I.R 1914 All. 22
11. Kedar Nath Vs. Gorie Mahomed I.L.R (1887) 14 Cal. 64
12. Collins vs. Godefroy (1831) 1 B. & AD. 950
13. Alliance Bank Ltd. Vs. Broom (1864) 2 Dr. & Sm. 289
14. Tulsabai vs. Narayan A.I.R 1974 Bom. 72
15. Rajlucky Dabee Vs. Bhootnath Mookherjee (1900) 4 C.W.N. 488
16. Arumugan Vs. DuraisingaI.L.R (1914) 37 Mad. 38
17. Govinda Nair Vs. Achutan Nair A.I.R 1940 Mad. 678
18. Debi Prasad vs. Bhagwati Prasad A.I.R 1943 All. 63
19. State Bank of India Vs. Dilip Chandra Singh Deo A.I.R 1998 Orissa 129
20. Advertising Bureau Vs. C.T. Devaraj A.I.R. 1995 S.C. 2251
21. Suraj Narain vs. Sukhu Aheer A.I.R 1928 All. 440
22. Khan Gul Vs. Lakha Singh A.I.R 1928 Lahore 609
23. Lakhwinder Singh Vs. Paramjit Kaur A.I.R 2004 P.&H 6
24. Ajudhia Prasaad vs. Chandan Lal A.I.R 1937 All. 610
25. Clyde Cycle Co. Vs. Hargreaves (1898) 78 L.T. 296
26. Sham Charan Mal. Vs. Chowdhury Debya Singh I.L.R (1894) 21 Cal. 872
27. Raghava Chariar Vs. Srinivasa A.I.R 1917 Mad. 63

Module – III
Free Consent and Unlawful Agreements, Void Agreements & Contingent Contract
Free consent
Coercion
Undue Influence
Fraud
Misrepresentation
Mistake
Void agreements
Agreement of which the consideration or object is not lawful
Agreement without consideration
Agreements in Restraint of Marriage
Agreements in Restraint of Trade
Agreements in Restraint of Judicial Proceedings
Agreement by Way of Wager
Agreement to do an impossible act
Agreement which is ambiguous and uncertain
Contingent Contracts
Case Laws
1. Ranganayakamma Vs. Alwar Setti (1889) I.L.R 13 Mad. 214
2. Mannu Singh Vs. Umadat Pande (1890) 12 All. 523
3. Derry Vs. Peek (1889) 14 A.C. 337
4. Long Vs. Lloyd (1958) 1 W.L.R. 753
5. Dularia Devi Vs. Janardan Singh A.I.R. (1990) S.C. 1173
6. Chikkan Ammiraju Vs. Chikkam Seshama I.L.R (1918) 41 Mad. 33
7. Workmen of Appin Tea Estate Vs. Industrial Tribunal A.I.R 1966 Assam. 115
8. Andhra Sugars Ltd. State of A.P. A.I.R 1968 S.C 599
9. Mannu Singh Vs. Umadat Pande (1890) 12 All. 523
10. Philip Lukka Vs. Franciscan Association A.I.R 1987 Ker. 204
11. Niko Devi Vs. Kripa A.I.R 1989 H.P 51
12. Wajid Khan Vs. Raja EwazAli Khan I.L.R (1891) 18 I.A 144
13. Lakshmi Amma Vs. Telengala Narayana Bhatta A.I.R 1970 S.C 1367
14. Vinayakappa Vs. Dullichand A.I.R 1986 Bom. 193
15. Rukmini Vs. C.V. Krishnan Nair A.I.R 1985 NOC 101
16. Keates Vs. Lord Cadogan (1851) 10 C.B. 591
17. Shri Krishnan Vs. Kurukshetra University (1851) 10 C.B 591
 18. Derry Vs. Peek (1889) 14 A.C. 337
19. Car and Universal Finance Co. Ltd Vs. Caldwell (1961) 1 Q.B 525
20. Tarsem Singh Vs Sukhminder Singh (1864) 2 H & C 906
21. Courturier Vs. Hastie (1856) 5 H.L.C 673
22. Sheikh Brothers Ltd. Vs. Ochsner (1957) A.C 136
23. Cooper Vs. Phibbs (1867) L.R 2 H.L 149
24. Boulton Vs. Jones (1857) 2 H.& N. 564 115
25. Bell Vs. Lever Brothers Ltd. (1932) A.C 161
26. Universal Plast Ltd. Vs. Santosh Kumar A.I.R 1985 Delhi 383
27. Sundara Gownder Vs. Balachandran A.I.R 1990 Ker. 324
28. Jamila Khatoon Vs. Abdul Rashid A.I.R 1939 Lahore 165
29. Manni Ram Vs. purushottam Lal A.I.R 1930 All. 732
30. Bai Vijli Vs. Nansa Nagar (1885) 10 Bom. 152
31. Lowe Vs. Peers (1768) 4 Burr. 2225
32. Nordenfelt Vs. Maxim Nordenfelt Guns and Ammunition Co. Ltd. (1894) A.C. 535
33. Tapash Majumdar Vs. Pranab Dasgupta A.I.R (2006) Cal. 55
34. Babasaheb Vs. Rajaram A.I.R. (1931) Bom. 264
35. Brahm Dutt Sharma Vs. Life Insurance Corporation of India A.I.R. (1966) All. 474
36. Gujarat Bottling Co. Ltd Vs. Coca Cola Company A.I.R 1995 S.C 2372
37. V.V Sivaram Vs. FOSECO India Ltd. A.I.R 2006 NOC 143
38. Delhi Bottling Co. Ltd Vs. Times Guaranty Financials Ltd. A.I.R 2003 NOC 7
39. United India Ins. Co. Ltd. Vs. Associated Transport Corpn. Ltd. A.I.R 1988 Ker. 36
40. Dilip Kumar Ray Vs. Tata Finance Ltd. A.I.R 2002 Orissa 29

Module IV
Discharge and Breach of Contract
Discharge of
Contract By
Performance
By Breach of Contract
By Impossibility of Performance
By Agreement and Novation
Types of breach of contract
Actual Breach

Anticipatory Breach
Doctrine of Frustration
Remedies for Breach of Contract.
Damages
Ordinary Damage
Special Damage
Vindictive Damage
Nominal Damage
 Damages for loss of reputation
Quantum Merit
Specific performance and
Injunction Case Laws:
1. Sooltan Chand Vs. Schiller (1879) I.L.R 4 Cal. 252
2. Satyabrata Ghose Vs. Mugneeram A.I.R. (1954) S.C. 47
3. Robinson Vs. Davison (1871) L.R. Ex. 269
4. Taylor Vs. Caldwell (1863) 3 B&S 826
5. Sushila Devi Vs. Hari Singh A.I.R 1971 S.C. 1756
6. West Bengal Financial Corporation Vs. Gluco Series A.I.R 1973 Cal. 268
7. Avery Vs. Bowden (1885) 5 E & B 711
8. Krell Vs. Henry (1903) 2 K.B. 740

Statutory Reading:
Indian Contract Act, 1872; Specific Relief Act, 1963; Indian Majority Act, 1875
Text books
1. Avtar Singh, Contract Law, Eastern Book Company, 2019
2. Chandiramani Nilima, Law of Contracts, Avinash Publications Bombay (2003)
3. D.S. Chopra, Cases and Materials on Contract Law & Specific Relief, Thomson
Reuters, 2018
4. Iyer T. S. Venkatesa, Krishnamachari V. and GogiaSurender K, Law of Contracts
and Tenders, S. Gogia& Co., Hyderabad (2014)
5. Joshua Aston, MCQ on Contract Law, Eastern Book Company,2018
6. M. J. Aslam, Law of Contract, Thomson Reuters, 2017 (2nd Edition)
7. Narender Kumar,Indian Contract Act, 1872, 1st Edn, Allahabad Law Agency (2015)
8. Rai Kailash, Contract – 1, General Principles of Contract (Sec 1 – 75) & Specific
Relief Act, Central Law Publications, Allahabad (2011) Suggested Readings:
1. An Introduction to Mercantile Laws: By N.D. Kapoor, (Edition 2018)
2. Anson, Law of Contract , Oxford University Press, (Edition 2016)
3. Cheshire and Fifoot, Law of Contract, Lexis Nexis, (Edition 2010)
4. Dutt, Contract- The Indian Contract Act, 1872, Eastern Law House, (11th Edition, 2013)
5. MLJ, Law of Contract and Specific Relief, Lexis Nexis, (Edition 2009)
6. Pollock & Mulla, Indian Contract and Specific Relief Act, Lexis Nexis, (2013 14thEdn)

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