Contract-I moot

CONTRACT-I MOOT

BEFORE THE HON’BLE COURT, JAIPUR

MR. KARAN SINGH

PLAINTIFF

V.

HEATHCARE (P) LTD.

DEFENDANT

IN THE CASE CONCERNING

SUIT FOR DAMAGES AND CLAIMING REWARD AMOUNT UNDER

CONTRACT

MEMORANDUM ON BEHALF OF PLAINTIFF

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TABLE OF CONTENTS

TITLE PAGE NO.

1. Index of authorities 3
2. Statement of jurisdiction 4
3. Synopsis of Facts 5
4. Issues Raised 7
5. Summary of Arguments 8
6. Arguments Advanced 9
7. Prayer 14

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INDEX OF AUTHORITIES

STATUTES REFERRED:
 The Indian Contract Act, 1872
 Civil Procedure Code, 1908

CASES REFERRED:
 Carlill v. Carbolic smoke ball company
 Harbhajan Lal v. Harcharan Lal
 Kedar Nath v. Gauri Mohammad
 Raghava Chariar v. Srinivas
 Great American Insurance Co. Ltd. V. Mandanlal Sonulal
 Hanumant Laxman v. Jaya Rao Narsingh
 Abdul Gafar v. Pyarelal Saligram

BOOKS REFERRED:
 Law of Contract And Specific Relief Act, 1963 – Avtar Singh
 Civil Procedure Code – Basanti Lal Babel
 The AIR Manual- Civil and Criminal – Manohar and Chaitaley

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STATEMENT OF JURISDICTION

The counsel has approached the Hon,ble Court u/s 6, 9, 15, 19 and 20 of Civil
Procedure Code.

 Sec.6 of C.P.C.1
 Sec.9 of C.P.C.2
 Sec.15 of C.P.C. 3
 Sec.19 of C.P.C.4
 Sec.20 of C.P.C.5

1
“Save in so far as is otherwise expressly provided, nothing herein contained shall ooperate to give any Court
jurisdiction over suits amount of value of the subject-matter of which exceeds the pecuniary limits (if any) of
its ordinary jurisdiction”
2
The court shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature
excepting suits of which their cognizance is either expressly or impliedly barred.
3
“Every suit shall be instituted in the Court of the lowest grade competent to try it.”
4
Suits for compensation for wrong to person or movables.
5
Other suits to be instituted where defendants reside or cause of action arises

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SYNOPSIS OF FACTS

1. The Healthcare (P) Ltd., a pharmaceutical Jaipur based company, made a multivitamin
capsule called the "Energy E". The company claimed that the production of such
capsules is purely for the overall health, wellbeing and vitality of men, and therefore,
these capsules are one of the best diet health supplements as these capsules are very
effective and a unique blend of ginseng, vitamins and minerals.
2. The company announced in public that by taking one capsule a day, it provides great
energy as well as helps to fight against tiredness. It enhances the stress handling ability.
The company aggressively fixed the price of each capsule at Rs.60/-
3. . The company declared in public interest that these capsules are prepared to boost
immunity as well as help to enhance the quality of life. It improves the physical and
mental health as well as helps to rejuvenate and strengthen the body organs. To stay fit
and active during the day, bring home the "Energy E" capsules.
4. The Healthcare(P) Ltd., published advertisements in the reputed newspapers and other
media channels on Jan 01, 2015, claiming the number of benefits for the consumption of
"Energy E" capsules such as a diet health supplement for men; a unique combination of
minerals, vitamins and ginseng; Provides energy and fights against tiredness; Perfect for
overall health and vitality; Enhances quality of life; Helps to boost immunity;
Strengthens and rejuvenates body organs; Enhances mental and physical health; Helps
to stay fit and active throughout the day.
5. The company mentioned in the advertisement that these capsules have not been
evaluated by the Food and Drug Administration or the FSSAI (i.e., Food Safety and
Standard Authority of India). The Company declared in its advertisement that this
product is not intended to diagnose, treat, cure or prevent any disease.
6. The company also mentioned that all disputes regarding the consumption of these
capsules must be subject to the jurisdiction Courts in Jaipur, Rajasthan only.
7. The Healthcare(P) Ltd., further published advertisements in the same reputed
newspapers and other media channels on June 25, 2015, claiming that it would pay Rs.
60,000/- to anyone who got sick after using these capsules according to the instructions
provided with it i.e., one capsule a day and this offer is not retrospectively applicable.
8. The statement generated by the Healthcare(P) Ltd., is as under:- “Rs.60,000/- reward
will be paid by the Healthcare(P) Ltd., to any person who contracts with the increasing
fatigue, weakness or any disease caused by taking multi-vitamins "Energy E" capsules,
after having used one capsule a day, according to the printed directions supplied with
the pack of 10, 30 and 60 capsules whose expiry period will be of 5 years from the date
of manufacturing. The statement regarding award of Rs.60,000/- was printed on each
pack of 10, 30 and 60 capsules.”
9. During the period of 2015-16, people consumed thousands of "Energy E" multi-vitamin
capsules as preventive against body weakness; fatigue or any other disease due to

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deficiency of any vitamin in the body and in no ascertained case any adverse effect was
found by those using these capsules.
10. Mr. Karan Singh, aged 15 years, suffered from malnutrition; chronic fatigue syndrome
and vitamin deficiency that led to muscle weakness in the entire body system. The
doctor recommended him daily intakes of selected vitamins.
11. He saw the advertisement of the Healthcare (P) Ltd., on 1 st Dec. 2014 regarding "Energy
E" multi-vitamin capsules. He bought 5 packs of capsules bearing the manufacturing
and packing date of Dec 1st 2014. Each pack contained the dose of 60 capsules. He
started consuming one capsule a day as per the instructions mentioned in each pack.
12. He consumed the entire capsules as per the instructions mentioned by the company for
nearly 10 months but after a week he found that his body is heavily relying on these
capsules. He felt lot of bodily changes due to stop consuming capsules such as frequent
stomach upset; severe allergic reactions; difficulty in breathing; tightness in the chest;
swelling of the mouth, face, lips or tongue; feeling of fatigue and weakness of the entire
body.
13. Mr. Karan Singh discovered that on resuming the consumption of these "Energy E"
multi-vitamin capsules as per the usage prescription of the Healthcare(P) Ltd.,
Company, he got relief from all types of bodily changes.
14. In the meantime, during Nov. 2016, the company again aggressively raised price of each
capsule by 50% to Rs.90/- as it found the enormous success and rise in demand for the
product.
15. Mr. Karan Singh after having been firmly believed that his body cannot smoothly work
without consuming these capsules and his body developed an addiction for such
capsules, he felt himself cheated by the company as he again cannot afford such a high
price multi-vitamin capsules.
16. He, therefore, claimed Rs.60,000/- and other form of damages from the Healthcare(P)
Ltd.,. The company bluntly ignored the claim of Mr. Karan Singh. After few days, Mr.
Karan Singh’s advocate sent notice to the Healthcare(P) Ltd., regarding his claim of
Rs.60,000/- and other damages.
17. On this notice, the company’s officers replied with an anonymous letter that if it is used
properly, the company had complete confidence in the capsule's efficacy, but "to protect
the company against all fraudulent claims" they would need him to come to the
company’s office to use the capsule each day and be checked by the secretary
18. . Mr. Karan Singh now brought a claim to the court of law for seeking justice. The
advocate representing him argued that the advertisement and his reliance on it was a
contract between him and the company, and so the company ought to pay. The company
denied such type of contract.

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ISSUES RAISED

ISSUE 1:

Whether, the contract, in preview of, proposal, acceptance and consideration is

valid or not?

ISSUE 2:

Whether, the minor can be a beneficiary under a contract or not?

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SUMMARY OF ARGUMENTS

Issue 1:
General offer: Is an offer made to general public.

 Proposal made to public at large

 In this case the advertisement clearly shows that it is a general proposal and the
intention of the company to enter into the contract with as many people who fulfil the
given conditions and acts upon it.

In general proposal satisfying the conditions of the proposal itself constituted Acceptance to
the proposal.

 In this case the acceptance is given through his conduct of purchasing the capsule and
using in prescribed manner as stated by the company i.e. 1 capsule daily.

Valid consideration

 Purchasing of the capsule i.e. there was a consideration in monetary terms

 The act itself also forms a valid considerations.

 There was a perfect knowledge of the proposal to the plaintiff by the way of the
advertisement as published by the respondent company.

Issue 2:
Minor can be a beneficiary under a contract.

Incapacity to enter into a contract means incapacity to bind himself by a contract. There is
nothing which can stops him from becoming a beneficiary.

The law does not regard him an incapable of accepting a benefit.

When the minor has given the complete consideration and no liability has been left on him,
he can claim for the benefits that he is eligible for.

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ARGUMENTS ADVANCED

Issue 1:
Was there a proposal?

General Offer- General Offer is an offer which is made to the public at large and can be
accepted by anyone who fulfils the conditions of the offer or does the desired act.

Section 8 of the Indian Contract Act: (Acceptance by performing conditions, or received

consideration)

Performance of the conditions of the proposal, or the acceptance of any consideration for a
reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.

Case : Carlill v. Carbolic smoke ball co.6

The carbolic smoke ball company made a product called the “smoke ball”. It claimed to be a
cure of influenza and a number of other diseases in the context of the 1889-1890 flu
pandemic. The company published advertisement in Pall Mall Gazette and other newspapers
on November 13, 1891 claiming that it would pay £100 to anyone who got sick after using its
product according to the instruction provided with it and the company also deposited £1000
with the Alliance Bank, Regent Street, showing sincerity in the matter.

Mrs. Louisa Elizabeth Carlill saw the advertisement, bought one of the balls and used it three
times daily for nearly 2 months until she contracted the flu on 17 th Jan. 1892. She claimed
£100 from the Carbolic Smoke Ball Company. The company ignored two letters from her,
they replied with an anonymous letter that if it is used properly the company had complete
confidence in the smoke ball’s efficiency but “to protect themselves against all fraudulent
claims” they would need her to come to their office to use the ball each day and be checked
by the secretary. Mrs. Carlill brought a claim to court. The barristers representing her argued
that the advertisement and her reliance on it was a contract between the company and her, so
the company ought to pay. The company argued it was not a serious contract.

JUDGEMENT:
The Carbolic Smoke Ball Company, represented by H.H. Asquith, lost its argument at the
Queen's Bench. It appealed straight away. The Court of Appeal unanimously rejected the
company's arguments and held that there was a fully binding contract for £100 with Mrs
Carlill. Among the reasons given by the three judges were

(1) that the advertisement was not a unilateral offer to all the world but an offer restricted to
those who acted upon the terms contained in the advertisement

6
(1893) 1 QB 256

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(2) that satisfying conditions for using the smoke ball constituted acceptance of the offer

(3) that purchasing or merely using the smoke ball constituted good consideration, because it
was a distinct detriment incurred at the behest of the company and, furthermore, more people
buying smoke balls by relying on the advertisement was a clear benefit to Carbolic

(4) that the company's claim that £1000 was deposited at the Alliance Bank showed the
serious intention to be legally bound

Here in this case also:

My client Mr. Karan Singh was suffering from malnutrition; chronic fatigue syndrome and
vitamin deficiency that led to muscle weakness in the entire body system. The doctor
recommended him daily intakes of selected vitamins.

The defendant company, Healthcare (P) Ltd. Producing Energy E capsule , claiming the
number of benefits for the consumption of "Energy E" capsules such as a diet health
supplement for men; a unique combination of minerals, vitamins and ginseng; Provides
energy and fights against tiredness; Perfect for overall health and vitality; Enhances quality of
life; Helps to boost immunity; Strengthens and rejuvenates body organs; Enhances mental
and physical health; Helps to stay fit and active throughout the day. As stated in the facts.

Since my client was suffering from similar symptoms, he started consuming the Energy E
capsules, to recover from it. He consumed the entire capsules as per the instructions
mentioned by the company for nearly 10 months but after a week he found that his body is
heavily relying on these capsules. He felt lot of bodily changes due to stop consuming
capsules such as frequent stomach upset; severe allergic reactions; difficulty in breathing;
tightness in the chest; swelling of the mouth, face, lips or tongue; feeling of fatigue and
weakness of the entire body. Mr. Karan Singh discovered that on resuming the consumption
of these "Energy E" multi-vitamin capsules as per the usage prescription of the
Healthcare(P) Ltd., Company, he got relief from all types of bodily changes. So he
continued the consumption.

Mr. Karan Singh after having been firmly believed that his body cannot smoothly work
without consuming these capsules and his body developed an addiction for such capsules, he
felt himself cheated by the company.

Meanwhile the company published an advertisement on 25 th June 2015 stating that it would
pay Rs. 60,000/- to anyone who got sick after using these capsules according to the
instructions provided with it i.e., one capsule a day and this offer is not retrospectively
applicable.

In the course of all these events my client never stopped the consumption and continued it
even after the second advertisement dated 25th June 2015 for nearly 3½ months. He was
taking the capsule as per the prescribed manner i.e. 1 capsule daily for nearly 3½ month.

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On resuming the consumption i.e. he purchased those capsule all over again, gave his
acceptance to the proposal of the respondent company, through his 2 nd advertisement, i.e. of
reward of Rs. 60,000.

Making the petitioner eligible to claim the reward of 60,000 by the respondent company,
Healthcare (P) Ltd.

Valid Acceptance:

In the case of Carlill v. Carbolic smoke ball co. , Justice Bowen LJ made it clear that in this
kind of situations the one who fulfils the conditions of the proposal forms a valid acceptance
and also a liability be created against him, although such offer is given to general public the
contract will be formed with only those who fulfils the conditions of the proposal.

Acceptance given through conduct:

In this regard The Justice had made it clear that the information of acceptance is not
necessarily being given to the offeror. He also stated that in such a case the fulfilment of the
conditions is important and it is not inevitable to provide any prior information regarding
acceptance to the proposer.

In this case also the petitioner gave his acceptance by fulfilling all the conditions and using it
in prescribed manner.

CASE: Harbhajan Lal v. Harcharan Lal7

In this case the court held that there was substantial fulfilment of the terms offered. And
there must be a decree in favour of the plaintiff for Rs. 500 with costs.

Valid Consideration:

Section 2(d) – When at the desire of the promisor, the promisee or any other person has done
or abstained from doing, or does or abstained from doing, or promises to do or abstain from
doing, something, such act or abstinence is called a consideration for the promise.

My client, the petitioner has purchased the Energy E capsules i.e. he has given the monetary
considerations.

As well as

If at the desire of the promisor, the promisee has done something it formed a valid
consideration.

So the act of consuming the capsule as prescribed by the company i.e. acting upon the
conditions of the proposer is the act itself forms a valid consideration.

7
AIR 1925 All 539

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CASE: Kedar Nath v. Gauri Mohammad8

Issue 2:

Although section 11 declares a minor to be incompetent to contract, nothing in the contract

act prevents him from making the other party bound to the minor. Incapacity to enter in to a
contact means incapacity to bind him by a contract. There is nothing which stops him from
becoming a beneficiary. Such contract may be enforced at his option but not at the option of
the other party. The law does not regard him incapable of accepting a benefit.

A minor can enforce a contract made in his favour for a valuable consideration, as while no
liability can be incurred by a minor; he is not debarred from acquiring a title to anything
valuable.9

A pronote executed in favour of a minor is valid and can be sued upon when the minor did
not subject himself to any detriment by accepting it. 10

In Raghava Chariar v Srinivas11 the following question was referred for the decision of the
Full Bench of the Madras High Court: “Whether a mortgage executed favour of a minor who
has advanced the whole of the mortagage executed in favour of a minor who has advanced
the whole of the mortagage money is enforceable by him or by any other person on his
behalf.”

The unanimous opinion of the of the Full Bench was that the transaction was enforceable by
or on behalf of a minor. WALLIS CJ said:

“The provision of law which renders minors incompetent to bind themselves by contract was
enacted in their favour and for their protection, and it would be a strange consequence of this
legislation if they are to take nothing under transfers in consideration of which they have
parted with their money12.”

The same opinion was expressed by BEAUMONT CJ of the Bombay High Court: 13 “the
provision of the law which make a contract by a minor not binding were no doubt intended to
be for the benefit of the minors, and the courts in this country when faced with a contract
which has been carried out by or on behalf of the minor, the performance of which by the
other party is then resisted on the ground of minority, have struggled hard to avoid holding
the contract wholly void to the detriment of the minor.”

8
ILR (1886) 14 Cal 64
9
AIR 1927 Lah 24 (27) (DB) – THE AIR MANUAL- CIVIL AND CRIMINAL- 6 TH Edn. -Vol. 14 – Pg.1027
10
(1913) 18 Ind Cas 968 (969) (Mad)
AIR 1924 Rang 136 (136,137).
11
(1917) 40 Mad 308
12
A.T. Raghava Chariar v O.A. Srinivasa Raghava Chariar, (2011) 3 M WN (Civ) 1 (FB), nothing in the Contract
Act promisee, where consideration passes from minor, he can enforce the promise of the adult promisor; if the
consideration for the promise is transfer of property by minor, promise would be unenforceable. Minor is
wholly incompetent to transfer property. Minor can seek cancellation of the transfer of property to him y
returning the consideration to the other party.
13
Great American Insurance Co Ltd v Mandanlal Sonulal, ILR (1935) 59 BOM 656.

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Accordingly, the Hon’ble Chief Justice rejected the defence of an insurance company that the
person whose behalf certain goods were insured was a minor and allowed the minor to
recover the insurance money.14

The principle that the minor has already given the full consideration to be supplied by him,
and there is nothing that remains to be done by him under the contract. He is now a mere
promisee and prays the court for recovering the benefit to be stipulated.15

Here in this case too, my client, the plaintiff also has paid the full consideration and there was
nothing which was left from his side. And has the right to recover the benefits.

PRAYER
14
The decision achieves substantial justice, there is no fault with it. It would have been absurd to allow an
insurer to escape responsibilities having accepted the proposal with full knowledge of the plaintiff’s minority.
15
Hanumant laxman v. Jaya Rao Narsingh (1888) 13 Bom 50.
Abdul Gafar v. Pyarelal Saligram AIR 1934 Lah. 480.

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Wherefore in the lights of the facts and circumstances of the case, issues raised
and arguments advanced and authorities cited, counsel for the plaintiff humbly
prays to the Hon’ble court to grant the following relief:

 The reward of Rs. 60,000, and other damages to be granted to the

plaintiff.

And grant any other relief it deems fit in the interests of justice, equity and
good conscience in favour of plaintiff.

For the above act of kindness counsel for the plaintiff shall forever be
obliged and grateful.

(Counsel for the Plaintiff)

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