NATIONAL LAW UNIVERSITY ODISHA, CUTTACK

Course Outline
Law of Contract-1
General Principles of Contract Law

B.A.L.LB/ B.B.A.L.LB 2017-2022

Prepared by
Ms. Nanditta Batra
Assistant Professor of Law, NLUO
Course Instructor, Law of Contract
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I. INTRODUCTION TO THE COURSE:

The Contract Law is based on the premise is that an individual is the source of
rights and he/she can enter into legal relations i.e can create obligations and
oblige others as per their will and the State will enforce those obligations
provided they are legal and not against public morality or public policy or
detrimental to the interest of state or public at large. In fact, Contract Law is the
foundation of business law and was the first law to develop in field of trade and
commerce. All other laws including sale of goods are specific forms of contract
and based on the Contract Law. The evolution of modern law of contract has
been contemporaneous with industrial revolution. The Indian Contract Act, 1872
contains the general principles of contract and these principles have withstood
the test of time despite being rocked by the tsunami of technological
advancements and development in instantaneous means of communications.
II. COURSE OBJECTIVES :

The Students are expected to have achieved the following on the culmination of
the course:

1. To differentiate between a contract, quasi contract and a tort.

2. To understand the differences between agreement and a contract.
3. To be able to tell the place of conclusion of contract.
4. To understand the implication of voidable and void agreements.
5. To fathom the time, place and manner of performance.
6. To be able to find the remedy in case of breach of contract and advise the
clients.
7. To be able to draft model contracts.
III. COURSE PEDAGOGY: The course instructor aims to explain various concepts
through classroom lectures, discussions & presentation with special emphasis on
cases and problems as well as live case studies to offer a hands-on learning
experience. We will make use of international as well as domestic examples. Each
student will be expected to prepare thoroughly and to participate actively in
class discussion, Contract Drafting sessions and assist in the preparation of legal
briefs and make case notes.
IV. COURSE MODULES
THE COURSE IS DIVIDED INTO 9 MODULES AND 2 MODULES HAVE BEEN FURTHER DIVIDED
INTO SUB MODULES.
1. INTRODUCTION TO LAW OF CONTRACT
i. Historical Evolution of Contract Law in India
ii. Meaning of Contract and other definitions as per Indian Contract
Act, 1872
Readings:

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 Horwitz, Morton J., The Historical Foundations of Modern Contract Law, 87 Harv. L. Rev. 917
(1973-1974)
 A. W. B. Simpson, The Horwitz Thesis and the History of Contracts, The University of Chicago Law
Review, Vol. 46, No. 3 (Spring, 1979), pp. 533-601
 Atul Chandra Patra, Historical Background of Indian Contract Act, 1872

2. FORMATION OF CONTRACT:
i. Formation of Proposals and Agreements
a. Offer- Types and Invitation to Treat
b. Intention to Contract- essential?
c. Communication
d. Acceptance
e. Revocation- Meaning and Modes
ii. Capacity to Contract
a. Age
b. Soundness of Mind
c. Legal Disqualifications
iii. Consent of the parties
a. Meaning and ingredients of “Free Consent”
b. Effect of Coercion, Undue Influence, Fraud,
Misrepresentation
c. Effect of Mistakes
iv. Consideration to Contract
a. Lawfulness of Consideration
b. Exceptions to the rule of consideration
c. Privity of Contract and Consideration

Readings:
 Valerie Watnick, The Electronic Formation of Contracts and the Common Law Mainbox
Rule, 56 Baylor L. Rev. 175 (2004)
 M.D. Chinappa, Forfeiture of Bid security- An Answer in Contract Law
 Sir Fredrick Pollock, Law of Fraud, Misrepresentation and Mistake in British India, Tagore
Law Lectures (1894)
Case Laws:
 Carlill v. Carbolic Smoke Ball Co. [1891-4] All ER 127
 Lalman Shukla v. Gauri Datt (1913) XL ALJR 489
 Bhagwandas Goverdhandas Kedia v. M/s. Girdharilal Parshottamdas & Co. A.I.R.
1966 SC 543
 Harvey v. Facey [1893] AC 552
 Felthouse v. Bindley (1862) 11 CB 869
 Union of India v. Maddala Thathaiah AIR 1966 SC 1724
 Indian Airlines Corporation v. Madhuri Chowdhuri AIR 1965 Cal. 252
 Kedarnath Bhattacharji v. Gorie Mahomed (1886) 7 I.D. 64 Cal.
 Doraiswami Iyer v. Arunachala Ayyar (1935) 43 L.W. 259 (Mad.)
 Abdul Aziz v. Masum Ali AIR 1914 All. 22
 Venkata Chinnaya Rau v. Venkataramaya Garu (1881) 1 I.J. 137 (Mad.)

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 Nawab Khwaja Muhammad Khan v. Nawab Husaini Begam (1910) 37 I.A. 152
 Mohori Bibee v. Dhurmodas Ghose (1903) 30 I.A. 114
 Khan Gul v. Lakha Singh AIR 1928 Lah. 609
 Ajudhia Prasad v. Chandan Lal AIR 1937 All. 610
 Raj Rani v Prem Adib, 1948 (Bom)
 Mahati Mahati v Joseph Mary, 2015 (SC)
 Raghunath Prasad v. Sarju Prasad (1923) 51 I.A. 101
 SUBHAS CHANDRA v. GANGA PRASAD AIR 1967 SC 878
 Lakshmi Amma v. Talengalanarayana Bhatta (1970) 3 SCC 159
 Tarsem Singh v. Sukhminder Singh (1998) 3 SCC 471
 Gurmukh Singh v. Amar Singh (1991) 3 SCC 79 286
 Balfour v. Balfour (1918-19) ALL ER 860 (C.A.)
 Twedle v Atkinson , [1861] EWHC J57 (QB)
 Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 1

3. LIMITATIONS ON FREEDOM OF CONTRACT

i. LAWFULNESS OF OBJECT AND CONSIDERATION
ii. VOIDABLE AGREEMENTS
iii. VOID AGREEMENTS
a. Agreements in Restraint of marriage
b. Agreements in Restraint of trade
c. Agreements in Restraint of legal proceedings
d. Agreements void for uncertainty
e. Wagering Agreements
Readings:
 Stifling Prosecution By Justice P.N. Ramaswami
 Dr. Avinash Govindjee and Dr. Sairam Bhat, Restrictive Covenants In Employment Contracts: A
Comparison Between The Legal Positions In India And South Africa
Case Laws:
 Gherulal Parakh v. Mahadeodas Maiya AIR 1959 SC 781
 Central Inland Water Transport Corporation Limited v. Brojo Nath Ganguly (1986)
3 SCC 156
 Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd. 2003 (4) SCALE 92
 Vennangot Anuradha Samir …..Petitioner versus Vennangot Mohandas Samir, 2015
(SC)
 Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co. Ltd. AIR 1967
SC 1098
 Percept D 'Mark (India) Pvt. Ltd . v. Zaheer. Khan&Anr,. (2006) 4 SCC 227
 M/S Gujarat Bottling Co.Ltd. & Ors. v. The Coca Cola Co. & Ors. 1995 SCC (5) 545
 Superintendence Company Of India v Krishan Murgai,1980 SCR (3)1278
 Desiccant Rotors International v Bappaditya Sarkar & Anr, 2009 (Delhi HC)
 Bharat Sanchar Nigam Ltd.& Anr vs Motorola India Pvt.Ltd
 Dhurandhar Prasad Singh v. Jai Prakash University AIR 2001 SC 2552

4. STANDARD FORM OF CONTRACT – ISSUES AND VALIDITY

i. Consumer Protection and approach of Courts

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Readings:
103rd Report of Law Commission of India

5. FORMATION OF E-CONTRACTS
i. Formation of contract by Click Wrap, Shrink Wrap and Via
Exchange of E Mails
ii. Jurisdictional Issues
iii. UNCITRAL Model of Law on Electronic Commerce 1996
iv. Information Technology Act, 2000
Readings:
 Jennifer Femminella, Online Terms and Conditions Agreements: Bound by the Web, 17
St. John's J. Legal Comment. 87 (2003)
 David F. Scranton, Clickwrap or Browsewrap: Enforceable Website Agreements, 119
Banking L.J. 290 (2002)
 Jana Smlsalova, Shrink-Wrap/Click-Wrap Agreements and English Contract Law, 8
Common L. Rev. 13 (2007)
 Reggie O'Shields, Smart Contracts: Legal Agreements for the Blockchain, 21 N.C. Banking
Inst. 177 (2017)
Cases:
 Bhagwandas Goverdhandas Kedia v. M/s. Girdharilal Parshottamdas & Co. A.I.R.
1966 SC 543
 InterGlobe Aviation Ltd. v. N. Satchidanand, (2011) 7 SCC 463
 Trimex International v. Vedanta Aluminium Limited , 2010 (SC)
 World Wrestling entertainment v. Reshma Collections, Del(DB) 2014
 P.R. Transport Agency v. Union of India, AIR 2006 All 23.
 Banyan Tree Holdings (P) Ltd v. A Murali Krishna Reddy Del(DB), 2009

6. CONTINGENT CONTRACTS
i. Concept and Scope
ii. Applicability to Options and Derivatives
Case Laws:
 Forst v Knight

7. PERFORMANCE OF CONTRACT AND DISCHARGE

i. Contracts which must be performed
ii. Who should perform?
iii. Time of performance
iv. Place of performance
v. Subsequent impossibility or unlawfulness- effect
vi. Contracts which need not be performed
Readings:
B.K. Chatterjee, Pre contract Negotiations- Are they enforceable?
Santanu Roy, Time is of the essence in Indian law

Case Laws:
 Satyabrata Ghose v. Mugneeram Bangur & Co. AIR 1954 SC 44

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 M/s. Alopi Parshad and Sons Ltd. v. Union of India AIR 1960 SC 588
 Punj Sons Pvt. Ltd. v. Union of India AIR 1986 Del. 158
 Easun Engineering Co. Ltd. v. The Fertilizers & Chemicals Travancore Ltd. AIR
1991 Mad. 158

8. QUASI CONTRACTS AND CLAIM FOR COMPENSATION

i. Claim for necessaries
ii. Reimbursement of person paying money due by another
iii. Obligation of person enjoying benefit of non-gratuitous act
iv. Responsibility of finder of goods
v. Liability of person to whom money paid by mistake or under
coercion
Case Laws:
 State of West Bengal v. B.K. Mondal and Sons AIR 1962 SC 779

9. CONSEQUENCES OF BREACH OF CONTRACT

i. Extent of damage
ii. Liquidated and Unliquidated damages
Readings:
Case Laws:
 Hadley v. Baxendale (1843-60) All ER Rep.460
 Karsandas H. Thacker v. M/S. The Saran Engineering Co. Ltd. AIR 1965 SC 1981
 Maula Bux v. Union of India AIR 1970 SC 1955
 Shri Hanuman Cotton Mills v. Tata Air Craft Limited 1969 (3) SCC 522
 Ghaziabad Development Authority v. Union of India AIR 2000 SC 2003

Recommended Books and Texts:

1. A. W. B. Simpson ,A History of the Common Law of Contract, The Rise of the
Action of Assumpsit (Clarendon Press)
2. Andrew Burrows, A Casebook on Contract, Second Edition (Indian Print),
Mohan Law House, New Delhi.
3. Avtar Singh, Contract & Specific Relief (EBC)
4. Charles Mitchell & Mitchell Paul, Landmark Cases in the Law of Contract,
Hart Publishing Oregon.
5. D S Chopra, Cases and Materials on Contract Law & Specific Relief, Second
Edition, Thomson Reuters, New Delhi.
6. H.K. Saharay, Dutt on Contract, Tenth Edition, Eastern Law House,
Kolkata.
7. J. Beatson (ed.) , Anson’s Law of Contract, 29th Edition, Oxford University
Press, London.
8. Larry DiMatteo and Martin Hogg (Eds),Comparative Contract Law, British
and American Perspectives (OUP)

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9. MP Furmston ,Cheshire, Fifoot, and Furmston's Law of Contract (17th

Edition, OUP)
10. Nilima Bhadbhade (ed.), Indian Contract and Specific Relief Acts, 14th
Edition, Lexis Nexis, Nagpur.
11. Pollock & Sir Dinshaw Fardunji Mulla (Revised by R Yashod Vardhan &
Chitra Narayan),The Indian Contract and Specific Relief Acts (LexisNexis)
12. Sir Jack Beatson FBA, Andrew Burrows FBA, QC (Hon), and John
Cartwright, Anson's Law of Contract (13th edition)
13. V Keshva Rao, Cases and Materials Contract I, 2nd Ed (Lexis Nexis)
Reports:
1. 13Th Report of Law Commission of India (1958)
2. 97th Report of Law Commission of India (1984)
3. 103rd Report of Law Commission of India (1984)
4. 108th Report of Law Commission of India (1984)
5. 199th Report of Law Commission of India (2006)