Case laws and important

examples in Indian contract act

1872

Kabita Jha
 Offer and acceptance
• X says to y will you buy my car for one lakh?
• X writes a letter to y , Will you buy my house
for 20 lakh?
• X gives an advertisement in the newspaper
that I will pay 10 thousand ,whoever traces
my missing nephew.
• X writes a letter to y, I offer to sell my car for
one lakh if I do not receive your reply by
Monday I will assume you have accepted the
offer.
 Carlil vs. smoke ball co
• A co advertised that it would pay $100 to
anyone who contracts influenza after using
the smoke balls of the company according
to the printed directions. Mrs. Carlil used
as per given directions but she contracted
influenza. she filed a suit for money
announced .
 Decision of the case
• It was a general offer (means an offer
made to public) so anyone could have
accepted it
• She used the medicine as per given
directions .
• She can sue the company for promised
reward and co was held liable.
 Lalman shukla vs. Gauridutt
• Gauridutt sent his servant lalman to find
his lost nephew. when the servant had left,
Gauridutt announced reward to anyone,
who will trace the boy. Lalman found the
boy and brought him home .when lalman
came to know he claimed for reward.
 Decision in this case
• Lalman’s plea was cancelled on the
grounds that he can not accept the offer
unless he is not aware of it.
 FREE CONSENT
• X Threatens to kill Y if he refuses to sell
his house to him .
• A devotee gifted her property to spiritual
guru to secure benefits to her soul in next
world.
Lawful object and consideration
• A ,B and C enter into contract to share
profits, to be acquired by fraud.
• X pays 1000 Rs to Y to beat Z. Y does not. X
can not recover his money back.
• X promises to pay Y Rs 50000 if he secures
employment for him in govt sector.
• X who knows that Y has committed a murder,
receives Rs 7 lakh from y in consideration of
not exposing.
 Agreement in restraint to trade
• X a seller of imitation jewellary in England
sold his business to Y and agreed not to
deal for two years
-in imitation jewellary
-in real jewellary in certain foreign countries
• X after selling the goodwill of his business
to Y promises not to carry the similar
business anywhere in the world.
Agreement to do impossible act
• A agrees to give Rs 10000 to B ,if he
marries C (a Hindu) who is already
married to D.
• A ,a singer contracts with B the manager of
a theatre to sing for two nights every week
for next two months. A on sixth night,
willfully absents herself and B rescinds the
contract.
 Agreements made by incompetent
parties (minor)
• Case law –Nash vs. Inman
Inman an undergraduate in Cambridge
bought eleven fancy waistcoats from Nash.
the co claimed for their money
 DECISION

• The court held waistcoats were not part of

necessary things so the price could not be
recovered
 Auction of airline tickets
• There are several internet sites which provide the
service of auction of goods and services. To participate
in the auction one has to become the member by
opening an account online by filling in a form. the
form requires to furnish name , address, occupation,
phone no and email address for communication.
• The access to the sight and participation in the auction
is free. Domestic airlines have found this method to be
a good source of auction of their tickets.
• Each airlines have their own page on the site. The
arrangement is that an intending passenger will first
mention his/ her credit card no and authorize for
debiting in the event of the person being highest
bidder.
 Continue…..
• Thereafter the person can fill in the details of
the flight, destination and the date and put a
bid amount. If another person puts the higher
bid , the person will be informed that his bid
has been exceeded. the site will settle down
the winner of the bid and close the bid.
• After the auction closes, the internet site will
debit the credit card and generate a PNR no
for the ticket. The winner has to take PNR no
,an identity proof and collect the ticket.
 case
• Savita bid for a Mumbai- Bangalore ticket for nov
7 for Rs 3700 . She received an email from the
internet site announcing that she is the highest
bidder .PNR no was generated and her credit card
was charged with the amount.
• she was going to Bang lore to attend her job
interview. The co postponed the interview
• She immediately informed the internet site and
airlines through mail, phone and fax that she
would not be able to go for the interview .so her
money should be credited back. Decide
 Performance of contract u/s 37
• A contract creates an obligation which
continues till the contract has not been
discharged.
• It means when both the parties to contract
fulfill their respective legal obligation
within time and the manner prescribed.
• It means the contract comes to a happy
ending.
 Performance of contract ..

Actual performance

Attempted performance
or tender of performance
 Actual performance
• When both the parties have performed
their respective promises the contract is
said to be actually performed. in case of
death of the promisor ,the legal
representatives are bound to perform the
contract
 Attempted performance u/s 38
Sometimes if the promisor offers to perform
his obligation on proper time and place but
the promisee does not accept it is called
attempted performance.
 Essentials of a valid tender

It must be unconditional

It must be at proper time and place

It must be in the proper form

It must be made to the proper person

The tender must be for the whole not in parts

Reasonable opportunity to inspecting the goods

It must be by the person who is in position and willing to perform

 Contracts which need not be
performed
• If the parties to contract agree to NOVATION
OR ALTERATION. The original contract
disappears.(u/s 62)
• If the parties agree for REMISSION. It means
parties agree to remit performance either
wholly or in part.(u/s 63)
• If the party on whose option the contract is
voidable rescinds it ,the other party need not
to perform.(u/s 64).
• If the failure is caused by promisee's neglects
or refusal .(u/s 67).
 By whom the contract must be
performed ?
• By the promisor himself- e.g. painting a
picture, singing in a theatre.
• By the agent-A had to give some money to B
on his behalf A ‘s agent can also give money
to B.
• By the legal representative- in the above case
if A dies ,the burden comes on legal
representatives.
• By third person-if a promisee accepts
performance from third party. he can not
enforce promisor to