INDIAN CONTRACT ACT-1872

CARLILL VS. CARBOLIC SMOKE BALL COMPANY

FACTS OF THE CASE:

THE PLAINTIFF BOUGHT A MEDICAL PREPARATION CALLED CARBOLIC SMOKE BALL AND USED IT AS DIRECTED BY THE DEFENDANTS THREE TIMES A DAY, FROM NOVEMBER 20, 1891 TO JANUARY 17, 1892.

The plaintiff bought carbolic smoke ball in reference to the advertisement by the defendants that they would pay 100 to any person who contracted influenza after using the smoke ball in the prescribed manner and for a specified period. The defendants to show their sincerity had deposited 1000 with the Alliance Bank. The plaintiffs sued defendants for the 100
ISSUES OF LAW:

This case is an instance of general offer. The general offer is that offer which is sent to all people (or the world at large) and not to any specific party. This offer may be accepted by any person who fulfills the necessary conditions.

COURTS OBSERVATIONS

According to the first Judge Hawkins J, the offer was not made in favour of any particular person. But it turns into an acceptance as soon as a person performs the condition. So, when the offer is accepted it is necessary to perform all the promises. According to the second judge, Justice Bowen, LJI, it was an offer only made to the public. Who accepts this offer enters into a contract. Thus Mrs. Carlill has accepted the offer by performing the condition. According to the third Judge, A. L. Smith, L. J. it was an offer intended to be acted upon, and, when it was acted upon by performing the conditions, a promise to pay was constituted.

MOHORI BIBEE vs. DHARMADAS GHOSE

FACTS OF THE CASE:

In this case a minor executed a mortgage for Rs20000 and received Rs8000 from the mortgagee. He sued for setting aside the mortgage. The mortgagee wanted refund of the sum which he had actually paid that is Rs8000.

COURTS OBSERVATION:

An agreement not enforceable by law is said to be void. Here, the contract has been done with a minor and the law says that All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration, and with a lawful object, and are not hereby expressly declared to be void.

INDIAN CONTRACT ACT

A loads his broken machine on B s vehicle who is a transporter. However, A at the time of loading did not state that the machinery was essential for running his business. For some reasons breach of contract occurs on part of B in delivering the machine which B accepts. Explain by giving reasons : a. Whether A can file suit for damages against B? b. Identify the statutory provision and state the rule under Indian Contract Act, for compensating the losses or damages. Hadley Vs. Baxendale

STRANGER TO CONTRACT-FINDER OF LOST GOODS

A finds a gold ornament on the road. He hands it over to the police department, asking them to restore it to the true owner. In spite of giving advertisements, the police are unable to find the true owner. A claims the gold ornament from the police. However, the police refuse to hand over the ornament to A. Advise A.

CONTRACT OF GUARANTEE
A Ltd appointed X as Chief Cashier based on the good character certificate given by S who also extended and stood as surety for X. . After one month of appointment, X misappropriated cash of Rs.50000/- and the company warned X and no information was given to S. After 3 months, X forged Companys cheque and encashed Rs.100000/-. The company filed a criminal case on X and he was not traceable. The company called S to fulfill the surety performance. When S declined, a suit was filed invoking his surety given on behalf of X. Decide.

INDIAN CONTRACT ACT-BREACH OF CONTRACT

XYZ Ltd agreed to supply 100000 bags of cement to Quality Builders Limited at a pre determined agreed rate of Rs.200/- per bag. After supply of 30000 bags, Chennai Cements Ltd expressed its difficulty to supply @ Rs.200/- as the cost of production itself was Rs.250/- per bag. The Builder filed a case for breach of agreement against the supplier for specific performance. Decide

CASE ON BANK GUARANTEE

Bangalore Municipal Corporation wants to construct a huge flyover for the improvement of the traffic situation in the city. The cost of the flyover is estimated to be Rs. 500 crore. Bangalore Municipal Corporation (BMC) calls for tenders. XYZ Ltd. submits its tender and is selected. Since the amount involved is huge, BMC advances an amount of 200 crore to XYZ Ltd. The questions that arise in this scenario are as follows: What assurance does BMC have that XYZ Ltd. will carry out their obligations under the contract? What assurance does BMC have that XYZ Ltd. will not misappropriate the amount? What assurance does BMC have that XYZ Ltd will use the amount given for the project? What assurance does BMC have that the amount sanctioned will not be 'held up' in disputes?

INTERNATIONAL COMMERCIAL AGREEMENTS

Mr. A an Indian importer and Mr. B an exporter enter into a contract for the supply of goods. 'A' gives a letter of credit to 'B'. The terms of the letter of credit guarantee A's creditworthiness and his due compliance with the terms of the contract. 'A' defaults in his commitments. 'B' makes an attempt to en cash the letter of credit. 'A' files a suit, seeking an injunction restraining B from invoking the letter of credit. The injunction is granted. Now 'B', in order to obtain the amount for the goods supplied, files a suit in the civil court with the possibility that it may take up to ten years, which excludes the time for appeal. This scenario too gives rise to a number of questions which are as follows: Should 'A' wait for an inordinately long time to get what is due to him? Should not this burden be on Party 'A'? Can an injunction of this nature be allowed to affect international trade and commerce intermittently

COMPANY LAW
Jubilee Cotton Mills Ltd vs. Lewis On 6th Jan,Documents were submitted for registration, on 8th Jan, Registrar issued COI dated 6th Jan. Some shares were allotted to Lewis before COI. Whether the allotment of shares issued to Lewis before COI is valid or not ? Judgment : Derry vs. Peek A company has the right to use steam in it tramways , but fail to do so since the directors refuse to give consent for the same. Sir Henry Peek subscribed on the faith of the prospectus. Whether directors are liable for misstatement under general law. Judgment :

COMPANY LAW
Mr.A and Mr.B promoted a Private Limited Co. called Excel software P. Ltd at Bangalore. They, as the only members, also named themselves as 1st Directors and commenced business. Mr.A, who is also the MD used to travel on business thro the month. So he wanted to bring Mr.M, his cousin as a Director to give him substantial powers in the business but B was not willing. Can M be inducted into the board forcibly?

COMPANY LAW
A cannot forcibly bring M into BOD unless: He serves a notice of his intention to other member 7 days before the meeting B is agreeing that M can be an additional director ( such that extensive powers of co are not passed on but acts for only A) The Co. is based on the mutual respect and trust of the 2 directors. If they do not agree on an issue, the decision has to be dropped or alternate proposal be considered

CASE LAWS
National Thermal Power Corporation Ltd Vs. M/s Flow more Pvt Ltd Bajaj Auto Ltd an VijayaTraders State Bank of India Vs. M/s Simco Engg Works Solomon Vs. Solmon & Co.Ltd TISCO Vs. State of Bihar