Contracts Course Revision

OFFER

Statutory Provisions:

Contract Act, 1872: Sections 2-4, 8-10

Cases:
Invitation to Make Offer/Invitation to Treat

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

Dickinson v. Dodds [1876] 2ChD 463

Sandhoo Lal Motilal v. State of Madhya Pradesh, AIR 1972 All 137

Advertisements as Offers

Carlill v. Carbolic Smoke Ball Co., [1893] 1 QB 256

Leonard v. Pepsico, 88 F. Supp. 2d (1999)

ACCEPTANCE

Statutory Provisions:

Contract Act, 1872: Sections 2-7

Cases:

Acceptance

Harvey v. Facey, [1893] 3 App. Cas. 459

How to accept

Badrilal v. Indore Municipality, AIR 1973 SC 508

Butler Machine Tool Co. Ltd. v. Ex-Cell-O Corpn (England) Ltd., (1979) 1
WLR 401 CA
[Consider what are the pros and cons of Mirror Image Rule?]

How to accept: Acceptance by Conduct

Brodgen V Metropolitan Railway [1877] 2 App Cas 666

Pro CD v. Zeidenberg, 86 F. 3d 1447 (7th Cir. 1996)

Acceptance in Ignorance of offer

R V Clarke (1927) 40 CLR 227 (Australia)

Communication of Acceptance:
Entores v. Miles Far East Corporation, [1955] 2 QB
Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas & Co.,
AIR 1966 SC 543 [consider: contrast the position of the majority judges
with that of the minority, and with which position of law do you agree?]

Is it justified to apply the English legal position to India?

S. Swaminathan ‘The Will Theorist’s Mail Box: Misunderstanding the
Moment of Contract Creation in the Indian Contract Act’ has been
accepted for publication in (2017) 38 Statute Law Review (forthcoming)
 CONSIDERATION

Statutory Provisions:

Contract Act, 1872: Sections 2(d) and 25

Cases:
Need not be adequate

Chappel & Co V Nestle [1960 AC] 87

Illusory consideration

Ramchandra Chintaman v. Kalu Raju, (1877) 2 Bom 362

Past consideration and its limits

Pao On V Lau Yiu Long [1980] AC 614

Webb v. McGowin, 27 Ala. App. 82 (1935)

Pre Existing Duty

Stilk v Myrick (1809)2 Camp 317
Lalman Shukla v. Gauri Dutt, (1913) 11 ALJ 489 (is there any basis for
the pre=existing duty rule in Indian law?)

General

Kedarnath Bhattacharji v. Gorie Mahomed. (1866) ILR 14 Calcutta 64

Consideration and Promissory Estoppel

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]

Shield or Sword?
Crabb V Arun DC [1976] Ch. 179

Crabb v Arun District Council [1976] Ch 179 Court of Appeal

A Mr Alford owned a 5 ½ acre plot of land, two acres of which had been developed with industrial
buildings, the other three and a half acres was undeveloped. Mr Alford died. His executors obtained
planning permission for the erection of houses on the undeveloped portion and the land was then
sold onto the defendant District Council. The two-acre plot was sold to Mr Crabb, the claimant. The
development necessitated the construction of a new road and as part of the sale, Mr Crabb was
granted a right of way on the road and an access point to his land. Also as part of the sale, the
Council were to erect a fence 5 ft 6in high along the boundary of the two plots and leaving the
access point. After the sale had gone through, but before the erection of the fence, Mr Crabb
decided he wished to divide his plot in two and sell half. For this he would need another access
point and approached the council. The council informally agreed to a second access point and
when they erected the fence they left two access points with gates at each. Mr Crabb then sold half
the land which had the formal access point and retained for himself the portion of land that had the
informal access point. He did not reserve any right of way on the land he sold. He then had a
disagreement with the Council. The council pulled down the gate and erected a fence at the access
point leaving Mr Crabb’s land with no access. They then asked for £3,000 to grant him access. Mr
Crabb claimed that he had a right of access arising through proprietary estoppel.

Held:

Mr Crabb was entitled to an easement granting right of access arising through an estoppel. He was
not required to pay for it.

Scarman LJ on the principles to be applied for proprietary estoppel:

"First, is there an equity established? Secondly, what is the extent of the equity, if one is
established? And, thirdly, what is the relief appropriate to satisfy the equity?"

Lord Denning MR:

“Here equity is displayed at its most flexible. If the matter had been finally settled in 1967, I should
have thought that, although nothing was said at the meeting in July 1967, nevertheless it would be
quite reasonable for the Council to ask Mr. Crabb to pay something for the access at point B,
perhaps - and I am guessing - some hundreds of pounds. But, as Mr. Millett pointed out in the
course of the argument, because of the Council's conduct, the back land has been landlocked. It
has been sterile and rendered useless for five or six years: and Mr. Crabb has been unable to deal
with it during that time. This loss to him can be taken into account. And at the present time, it
seems to me that, in order to satisfy the equity, Mr. Crabb should have the right of access at point
B free of charge without paying anything for it. I would, therefore, hold that Mr. Crabb, as the
owner of the back portion, has a right of access at point B over the verge on to Mill Park Road and
a right of way along that road to Hook Lane without paying compensation. I would allow the appeal
and declare that he has an easement, accordingly.

Does estoppel extinguish or suspend rights?

Total Metal Manufacturing V Tungstein Electric [1955] 1 WLR 761

Intention to Create Legal Relations

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 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.
Cases:

Balfour V Balfour [1919] 2 KB 571

Coward V Motor Insurers’ Bureau [1963] 1 QB 259

Kleinwort Benson V Malaysia Mining Corporation [1989] 1 All ER 785

(involving the legal status of comfort letters)

Is ‘intention to create legal relations’ a requirement under Indian

Contract Law?

Singh 16-17

Banwari Lal V Sukhdarshan Dayal (1973) 1 SCC 294

CWT Vs Abdul Hussain (1988) 3 SCC 562

Privity of Contract and Consideration

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:

Dunlop Pnuematic Tyre Company V Selfridge Co [1915] AC 79

Chinnaya v. Venkataramaya (1881) ILR 4 Madras 137

M.C.Chacko v. The State Bank of Travancore (1969) 2 SCC 343

Orthodox contract scholarship says that consideration, offer and
acceptance are the part of an inviolable trinity. This has been questioned
off late. We will no doubt touch upon some of these criticisms. But given
that this is a core course on contract we will go along with the orthodox
idea of this trinity being at the heart of contract.

“At the desire of the promisor”

Raja of Venkatagiri v. Krishanayya, AIR 1948 PC 150

Kedarnath v. Gorie Mohamed, 1886 ILR 14 Cal 64
Doraswami Iyer v. Arunachala Ayyar, AIR 1936 Mad 135 [consider:
compare and contrast the Kedarnath and Doraswami cases. Why did the
courts reach two different opinions on such similar facts?]

Suggested Additional Reading

Currie v Misa, (1875) LR 10 Ex. 153 [Consideration]

Tweddle v Atkinson, [1861] 1 B & S 393 [Privity of Contract and
Consideration]
Hughes v. Metropolitan Railway Co., (1877) 2 App. Cas. 439 [Promissory
Estoppel]

CONSENT

(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?

Statutory Provisions:

Contract Act, 1872: Sections 13-23, 64, 65, 66

Cases:

Threat of self-harm and coercion

Chikham Amiraju v. Chikham Sesamma, 1917 41 Mad. 33

Threat of criminal prosecution and coercion

Askari Mirza v. Bibi Jai Kishori, 1912 16 IC 344

Kishen Lal Kalra v. NDMC, AIR 2001 Del 402

Undue Influence

Raghunath Prasad v. Sarju Prasad, 1923 51 I.A. 101

Subhash Chandra Mushib v. Ganda Prasad Mushib, AIR 1967 SC 878
Central Inland Water Transportation Ltd. v. Brojo Nath Ganguly,
AIR 1986 SC 1571

‘Inequality of bargaining power doctrine’

Lloyds Bank v. Bundy, [1975] 1 QB 326 (close analysis of the judgment
of Lord Denning)

Fraud

Derry v. Peek, 1899 14 App Cas 337

Ramesh Kumar v. Furu Ram, 2011 8 SCC 613
Vokes v. Arthur Murray, 212 So. 2d 1906 (1968)

Misrepresentation

Union of India v. Benode Kumar, AIR 1926 Cal 48

K.R. Raghavan v. Union of India, Delhi High Court, May 4, 1979
Bhagwani Bai v. LIC, Jabalpur, AIR 1984 MP 126
Esso Petroleum v Mardon, [1976] QB 801
Mistake

Tarsem Singh v. Sukhminder Singh, 1998 3 SCC 471

Cundy v Lindsay, (1878) 3 App. Cas. 459 [Mistake]

 LEGALITY

(1) When is the consideration or the object unlawful?

(2) What is an agreement in restraint of trade, and an agreement in
restraint of legal proceedings?
(3) What are agreements by way of wager?
(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?

Statutory Provisions:

Contract Act, 1872: Sections 23-30

Cases:

BOI Finance Ltd. v. Custodian and Ors., AIR 1997 SC 1952

Buy-back/ Ready Forward Transactions – 2 legs; ready leg – sale/purchase of certain
securities at a specified price, forward leg – sale/purch. Of the same security at a
later date.
B entered into a contract with C for sale of securities not listed in the exchange.
1st leg (set of promises) was executed, but second remained executory.
S.57 – When 2 distinct promises are there in a contract. And, when void part of
agreement can be separated from the contract, the whole contract is not invalid.

With the ready leg having been performed the illegality of the forward leg contained in the
agreements cannot affect that the transfers which had already taken place.

S.57 was applied – 1st set was binding but second was void.

Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co.

Ltd., AIR 1967 SC 1098
 CONTINGENT CONTRACTS

(1) What are contingent contracts?

(2) How are contingent contracts enforced?

Statutory Provisions:

Contract Act, 1872: Sections 31-36

Cases:

Ramzan v. Hussaini, AIR 1990 SC 529

Ganga Saran v. Firm Ram Charan Ram Gopal, AIR 1952 SC 9

 DISCHARGE OF CONTRACT

(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?

Statutory Provisions: Sections 37-67, 73

Attempted performance

Cutter v Powell, (1795) 101 ER 573

Cutter died in between the voyage, 19 days prior. Powell agreed to give 30 Guinea’s if
C completes voyage.
Action to recover the portion of agreed sum failed.
Held – As deceased was obliged to perform a duty before he would demand a
payment.

Impossibility of performance

Taylor v. Caldwell, QB (1863) 3 B & S: 122 ER 309

C agreed to give T, his Music Hall for performance. It catches fire one night before. T
sued C for breach.
Held – It was impossible for C to perform the contract.
“This rule is applicable only when the contract is +ve and absolute, but not implied.”

Frustration of the object

Satyabrata Ghose v. Mugneeram Bangur, 1954 SCR 310

Defendant Company was developing land into housing colonies. Plaintiff was granted
a plot on certain amount of earnest money. Portion of the land was taken by govt. for
world war 2. Plaintiff sued the company for not giving him his plot of land.

This much is clear that the word "impossible" has not been used here in the sense of physical or literal impossibility. The performance
of an act may not be literally impossible but it may be impracticable and unless from the point of view of the object and purpose which the
parties had in view; and if an untoward event or change of circumstances totally upsets the very foundation upon which the parties rested
their bargain, it can very well be said that the promisor finds it impossible to do the act which he promised to do.
10. Although various theories have been propounded by the judges and jurists in England regarding the juridical basis of the doctrine of
frustration, yet the essential idea upon which the doctrine is based is that of impossibility of performance of the contract; in fact
impossibility and frustration are often used as interchangeable expressions. The changed circumstances, it is said, make the performance
of the contract impossible and the parties are absolved from the further performance of it as they did not promise to perform an
impossibility. The parties shall be excused, as Lord Loreburn says: (See Tamplin Steamship Co. Ltd. v. Anglo Mexican Petroleum Products Co.
Ltd. L.R. (1916) 2 A.C. 397, 403). If substantially the whole contract becomes impossible or performance or in other words impracticable by
some cause for which neither was responsible.

In one class of cases the question may simply be, as to what the parties themselves had actually intended; and whether or not there was a
condition in the contract itself, express or implied, which operated, according to the agreement of the parties themselves, to release them
from their obligations; this would be a question of construction pure and simple and the ordinary rules of construction would have to be
applied to find out what the real intention of the parties was. According to the Indian Contract Act, a promise may be express or implied
(vide Section 9. ). In cases, therefore, where the Court gathers as a matter of construction that the contract itself contained impliedly or
expressly a term, according to which it would stand discharged on the happening of certain circumstances the dissolution of the contract
would take place under the terms of the contract itself and such cases would be outside the purview of Section 56 altogether. Although in
English law these cases are treated as cases of frustration in India they would be dealt with under, Section 32 of the Indian Contract Act
which deals with contingent contracts or similar other provisions contained in the Act. In the large majority of cases, however, the doctrine
of frustration is applied not on the ground that the parties themselves
agreed to an implied term which operated to release them from the performance deciding cases in India the only doctrine of the contract.
The relief is given by the court on the ground of subsequent impossibility when it finds that the whole purpose or basis
of a contract was frustrated by the intrusion or occurrence of an unexpected event of change of circumstances which was beyond what
was contemplated by the parties at the time when they entered into the agreement. Here there is no question of finding out
an implied term agreed to by the parties embodying a provision for discharge, because the parties did not think about the matter at all nor
could possibly have any intention regarding it. When such an event or change of circumstance occurs which is so fundamental as to be
regarded by law as striking at the root of the contract as a whole, it is the Court which can pronounce the contract to be frustrated and at
an end. The Court undoubtedly has to examine the contract and the circumstances under which it was made. The belief, knowledge and
intention of the parties are evidence, but evidence only on which the Court has to form its own conclusion whether the changed
circumstances destroyed altogether the basis of the adventure and its underlying object (Vide Morgan v. Mansor (1947) 2 All. E.R. 606. This
may be called a rule of construction by English Judges but it is certainly not a principle of giving effect to the intention of the parties which
underlines all rules of construction. This is really a rule of positive law and as such comes within purview of Section 56 of the Indian
Contract Act.

Krishna and Co. v. The Government of A.P. & Ors., AIR 1993 AP 1
Promisor himself is involved in making the contract frustrated – U/S 56 of the ICA.

Discharge by agreement: novation

Ram Khilona & Ors. v. Sardar & Ors., AIR 2002 SC 2548

Discharge by agreement: alteration

Kalianna Gounder v. Palani Gounder, (1970) 2 SCR 455

M. Sham Singh v. State of Mysore, AIR 1972 SC 2440

Discharge by agreement: accord and satisfaction

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

Hochster v De La Tour, (1853) 2 E & B 678

Discharge of joint liabilities
Devilal v. Himat Ram, AIR 1973 Raj. 39

REMEDIES

(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?

Statutory Provisions:

Contract Act, 1872: Sections 73-74

The Specific Relief Act: Sections 9-19

Cases:

Remoteness of damage and Measure of damages

Hadley v. Baxendale (1854), 9 Ex 341

2 measure of damages – Usual Course, Foreseeability/Contemplation of
Parties
The appellant carriers (B) appealed against a decision awarding damages in negligence to the
respondent mill owners (H). The crank shaft of the steam engine used by H in their mills had
broken, H contracted with B for B to deliver the broken shaft to an engineering firm to be
used as the model for a new one. H told B that the shaft had to be sent immediately and B
promised to deliver it the next day. B were unaware that the mill was unworkable without a
new shaft. B delivered the shaft seven days after receiving it. H claimed B's negligence caused
the mill to be inoperable for an additional five days and sought damages covering the
resulting loss of profits and payment of wages. B argued that the damages sought were too
remote. H were awarded damages by the jury in excess of the amount paid into court. H
contended that they were entitled to the damages awarded as they were not only the natural
consequence of B's negligence but were the losses actually sustained.

Held: Appeal allowed.

Damages recoverable for a breach of contract should be such as might fairly and reasonably
be considered as arising naturally from the breach or might reasonably be supposed to have
been in the contemplation of the parties at the time the contract was made. If there were
special circumstances which had been communicated by one party to the other, the damages
resulting from the breach would be the amount as might have been reasonably contemplated
as flowing from such a breach in those circumstances. If those circumstances were unknown
to the party alleged to have breached the contract, that party could only be supposed to have
contemplated the amount of damages arising generally from such a breach. In the instant
case, the jury ought to have been directed that they were not entitled to award damages for
profits lost to H through the mill being inoperable and a new trial would be ordered.
rendering the mill unworkable. (Defendants were not informed that they <P> had only
one shaft)
Pannalal Jankidas v. Mohanlal, AIR 1951 SC 144

Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB

528
Plaintiff’s ordered a boiler for their laundry from the defendant’s firm, which was
mishandled by 3rd party. This took them a lot of time to deliver, where the contract
stated “AS SOON AS POSSIBLE”. Plaintiffs sued the defendants claiming the loss in
their business which otherwise on correct delivery they would not have incurred.
Held- Damages of 110l to be paid but no damage for loss of business as boiler was
just a tool, not the whole machine, so it is not responsible for all loss. - Streatfield J.
Plaintiffs appealed for more damages to be rewarded than given.
Asquith LJ – Took remoteness and critical difference
between the measure of damages applicable when the defendant defaults in
supplying a self-contained
profit-earning whole and when he defaults in supplying a part of that whole.
Appeal was allowed and a official referee was nominated to measure the amount of
damage.
Murlidhar Chiranjilal v. Dwarkadas, [1962] 1 SCR 653

Facts: A was to send cotton to B @ Rs.1/meter. He could not get the train tickets and
hence could not send. B had to buy it in emergency from Kolkata itself at
Rs.1.5/meter. He wants to paid 0.5/meter by A.
A contested that B could have brought it from elsewhere in Kanpur only @ about
Rs.1.1/meter. And this way he could have just suffered 0.1/meter loss and my liability
would be way less.
The quantum of damages in a case of this kind has to be determined under s. 73 of
the Contract Act.
“Explanation - In estimating the loss or damage arising from a breach of
contract, the means which existed of remedying the inconvenience caused
by the non-performance of the contract must be taken into account."

Held – B should have brought it from some other vendor in Kanpur and hence as he
couldn’t prove it, matter dismissed, appeal was allowed.
The court says that there are two principles which are used to decide the damages in such cases that are one that the person who proves
the breach of contract by the other party shall be restored by the other party into a condition as if the contract had never been breached
but
the second condition says that the so-called person who is supposed to get the damages shall get them only if he or she was not
responsible by being negligent in performance of his duty to avoid the damages that he suffered.
In this case, the court said that the respondent was supposed to show the rate of canvas in Kanpur to have increased on that particular
day when the canvas was to be delivered by the appellant which the respondent did not take an initiative to do and hence was negligent
therefore shall not be eligible for the restoration of the damages. provision of s. 73 of the Contract Act, which provides that the measure
of damages in certain circumstances may be what the parties knew when they made the contract to be likely to result from the breach of
it.
We are therefore of opinion that this is not a case of the special type to which the words "which the parties knew, when they made the
contract, to be likely to result from the breach of it" appearing in s. 73 of the Contract Act apply. This is an ordinary case of contract
between traders which is covered by the words "which naturally arose in the usual course of things from such breach" appearing in s. 73.
As the respondent had failed to prove the rate for similar canvas in Kanpur on the date of breach it is not entitled to any damages in the
circumstances. The appeal is therefore allowed, the decree of the High Court set aside and of the trial court restored with costs to the
appellant throughout. appeal allowed.

Liquidated Damages
Fact of loss must be there – Requirement to prove loss.

Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd, (1915) AC
79
After suing Selfridge, Dunlop sued New Garage. He demanded £5/tyre which usually
costs £2-3/ tyre. This was much higher.
New Garage’s Contention - That Dunlop didn’t suffer any loss. In return, the one who
sold in 10 penns less suffered. Also, Dunlop’s market share increased. £5 is a
deterrence(penalty) and is void in English law.

Court – Appeal by Dunlop is

The House of Lords held the clause was not a penalty, and merely a genuine pre-
estimate of Dunlop’s potential loss, and so Dunlop could enforce the agreement. Lord
Dunedin set out the following principles.
 “ To assist this task of construction various tests have been suggested,
which if applicable to the case under consideration may prove helpful,
or even conclusive. Such are:
( a ) It will be held to be penalty if the sum stipulated for is
extravagant and unconscionable in amount in comparison with the
greatest loss that could conceivably be proved to have followed from
the breach. (Illustration given by Lord Halsbury in Clydebank Case).
[2]

( b ) It will be held to be a penalty if the breach consists only in

not paying a sum of money, and the sum stipulated is a sum greater
than the sum which ought to have been paid (Kemble v Farren[3]). This
though one of the most ancient instances is truly a corollary to the
last test. Whether it had its historical origin in the doctrine of the
common law that when A. promised to pay B. a sum of money on a
certain day and did not do so, B. could only recover the sum with, in
certain cases, interest, but could never recover further damages for
non-timeous payment, or whether it was a survival of the time when
equity reformed unconscionable bargains merely because they were
unconscionable, - a subject which much exercised Jessel
MR in Wallis v Smith[4] - is probably more interesting than material.
( c ) There is a presumption (but no more) that it is penalty when
"a single lump sum is made payable by way of compensation, on the
occurrence of one or more or all of several events, some of which
may occasion serious and others but trifling damage" (Lord Watson
in Lord Elphinstone v Monkland Iron and Coal Co[5]).
On the other hand:
( d ) It is no obstacle to the sum stipulated being a genuine pre-
estimate of damage, that the consequences of the breach are such
as to make precise pre-estimation almost an impossibility. On the
contrary, that is just the situation when it is probable that pre-
estimated damage was the true bargain between the parties
(Clydebank Case, Lord Halsbury; Webster v Bosanquet, Lord
Mersey[6]).
Turning now to the facts of the case, it is evident that the
damage apprehended by the appellants owing to the breaking of the
agreement was an indirect and not a direct damage. So long as they
got their price from the respondents for each article sold, it could not
matter to them directly what the respondents did with it. Indirectly it
did. Accordingly, the agreement is headed "Price Maintenance
Agreement," and the way in which the appellants would be damaged if
prices were cut is clearly explained in evidence by Mr. Baisley, and no
successful attempt is made to controvert that evidence. But though
damage as a whole from such a practice would be certain, yet damage
from any one sale would be impossible to forecast. It is just, therefore,
one of those cases where it seems quite reasonable for parties to
contract that they should estimate that damage at a certain figure,
and provided that figure is not extravagant there would seem no
reason to suspect that it is not truly a bargain to assess damages, but
rather a penalty to be held in terrorem.

Cavendish Square Holdings v Talal El Makdessi [2015] UKSC 67

Duty to Mitigate
Jamaal v. Moola Dawood, (1916) ILR 43 Cal 493

QUASI-CONTRACTS

(1) What is a quasi-contract?

Agreements resembling a contract or an implied contract by law.
(2) What are the elements of unjust enrichment?
ICA doesnot have provisions for quasi contract. S.60-72 talks about unjust
factors. Unjust enrichment refrains someone from retaining unjust benefit
from innocent party.

Statutory Provisions:

Contract Act, 1872: Sections 68-72

Cases:

State of W.B. v. B.K. Mondal, AIR 1962 SC 779

B made roads for Govt. for 17000/-. Govt. denied the payment on the ground that no
valid contract was between them due to the lack of governor’s signature.

Court – S. 70 if applied, makes a contract valid which in general terms was not.
However, court looked at the intention of the party wherein they accepted the work
of the respondent and enjoyed the benefit. Also s.70 was imposed on the basis of s.
175 of the gov. of India Act. Also all the requirements under s.70 (Lawful work, non-
gratuitous and latter enjoys the benefit) was met in this case.

“Furthermore, we do not see that s. 175(3) in any way prevents a contract

with the Government being implied or a Government from incurring an
obligation under a quasi-contract. A contract implied in law or a quasi-
contract is not a real contract or, as it is called, a consensual contract and
s.175(3) is concerned only with such contracts. The section says that "all
contracts made in the exercise of the executive authority of the Federation or
of a Province shall be expressed" in a certain manner and "shall be executed
on behalf of the Governor General or Governor by such person and in such
manner as he may direct or authorise".

Remedy – Specific Performance – Damages are not required – performance of contract is

prayed for.