C-37

III NOVICE INTRA MOOT COURT COMPETITION, 2020

BEFORE
THE HON’BLE CITY CIVIL COURT OF MEDITARRENEO

DISPUTE RELATING TO

NON-PAYMENT AND NON-PERFORMNACE OF

THE CONTRACT

CIVIL CASE NO……/2020

In the matter of

THE VERITAS CORPORATION_______________________________THE

PLAINTIFF

MR. SOMEL______________________________________________THE DEFENDANT

MEMORIAL FOR MR. SOMEL

THE DEFENDANT

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 TABLE OF CONTENTS

1. LIST OF ABBREVIATIONS……………………………………3
2. INDEX OF AUTHORITIES……………………………………..4
3. STATEMENT OF JURISDICTION……………………………..5
4. STATEMENT OF FACTS……………………………………….6
5. STATEMENT OF ISSUES……………………………….………7
6. SUMMARY OF ISSUES…………………………………………8
7. ARGUMENTS ADVANCED…………………………………….9
ISSUE 1- WHETHER A BINDING CONTRACT FOR THE SALE
OF GOODS HAS BEEN VALIDLY FORMED BETWEEN THE
PARTIES TO THE DISPUTE?
1.1 Was there a valid agreement?.....................................................10
1.1.1 Was there a valid offer?
1.1.2 Was there valid acceptance?
1.2 Was there a valid consideration?.................................................11
1.2.1 Was the consideration at the desire of the promisor?
1.2.2 Was the consideration of some value?

ISSUE 2- WHETHER VERITAS CORPORATION IS RIGHT IN

ASSERTING THAT THE CHANGE IN LABOUR COST IS A
RESULT OF UNFORESEEN EVENT OUT OF THE CONTROL
OF VERITAS CORP?
2.1 Does the labour strike amount to an unforeseen event out of control of
Veritas Corp?......................................................................................12
2.2 Whether Veritas Corporation has been negligent in its conduct by not
maintaining proper communication with Somel?...............................13
8. PRAYER……………………………………………………………14

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 LIST OF ABBREVIATIONS

1. A.I.R All India reporter

2. SC Supreme Court
3. Ors. Others
4. & And
5. Corp Corporation
6. Ltd. Limited
7. Pvt. Private
8. Co. Company
9. IR Indian Railway
10. Jhar Jharkhand
11. Hon’ble Honorable
12. i.e. That is
13. Viz. Namely
14. R&D Ratanlal & Dhirajlal

INDEX OF AUTHORITY

1. STATUTES REFERRED

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 Indian Contracts Act, 1972
Industrial Disputes Act, 1947

2. CASES REFERRED

INDIAN CASES-
i. Satyabrata Ghose v. Mugneeram Bangur & Co. AIR 1954 SC 44
ii. Energy Watchdog v. Central Electricity Regulatory Commission
and Anr (2017) 14 SCC 80
iii. Sadul Textile Mills Ltd. V. Workmen of Sadul Textile Mill AIR
1958 Raj 202, (1958)IILJ 628 Raj

FOREIGN CASES
i. Hyde v Wrench[1840]EWHC J90
ii. Tsakiroglou & Co. Ltd v. Noblee Thorl [GmbH, 1961 (2) AII ER
179]

3. BOOKS REFRRED
Ratanlal and Dhirajlal

STATEMENT OF JURISDICTION

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The Plaintiff has approached the City Civil Court of Meditarraneo u/s 9 of The Code of Civil
Procedure, 1908. The most humbly submits to the jurisdiction of this court and authority
regarding the same.

The parties agree to accept the decision of The City Civil Court as final and binding.

THE PRESENT MEMORANDUM SETS FORTH CONTENTIONS, AND ARGUMENTS

IN THE PRESENT CASE.

STATEMENT OF FACTS

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Somel, a merchant of fine wines was attracted by the vineyards owned by the Veritas
Corporation. These vineyards used to produce three rare collection edition wines, Veri Red,
Veri White, and Veri Gold. Somel got to know about that Veritas Corporation is struggling to
turn a profit and on the brink of shutting down. Somel addresses an email to the CEO of the
Veritas Corporation to buy 10 Barrels of each of the different wines from the coming April
harvest.

EMAIL 1.

Somel is offering to purchase 10 Barrels each of the three wines, 50 Vins a Barrel for total
payment of 1500 Vins. Somel expects the delivery date by April 1, 2020. In return, Somel
wants the confirmation mail with specified quantity and time. He being concerned about the
conditions of Veritas Corporation wrote them back to accept the order rather than going
bankrupt.

EMAIL 2.

Veritas Corporation found the offer reasonable and was thankful to Somel for providing them
business. The Corporation in return asked for the address of delivery, described the mode of
payment as half via online transfer within two weeks and other half at the time of delivery.
Veritas Corporation put forth some conditions that, it would not be liable for any damage
caused to the good or delay caused in delivery of the goods on account of an unforeseen
event beyond the reasonable control of the Corporation including:

a) Floods, earthquakes and tsunamis;

b) Meteor showers, and alien attacks;
c) War, terrorist attacks and hostilities;
d) Change in law; and
e) Change in the geographical borders of Veritas.

EMAIL 3.

Somel thanked Veritas for their responses. Somel wrote back the address as Vinonia City. He
sent the digital copy of the receipt of the online transfer of 750 Vins.

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Having not heard back about his order over a month Somel sends an email to keep a track on
the delivery.

EMAIL 4.

Veritas Corporation sited an excuse of nationwide labour strike and due to the consequent
labour shortage there was a severe shortage in the number of barrels of each of the wines. The
price per barrel has increased to 75 Vins a barrel. Accordingly, Somel has to either accept a
lower quantity of barrels for his 1500 Vin or pay the additional amount required for his
original order of 30 barrels.

EMAIL 5.

Somel was disappointed by the mail and demanded a refund of his 750 Vins. His payment
was in a good faith and he claimed that there was never a concluded contract between them.
He also claimed that he will not foot the bill for the Corporation’s inability to keep their
labour in check.

EMAIL 6.

Veritas corporation refuses the refund of Somel’s part payment and asserted that there was a
valid contract between the parties. They claimed that nationwide labour strike was an
unforeseen event beyond the control of the Corporation. They said that they will go ahead
with the shipping of 30 barrels at the enhanced price.

MATTER OF DISPUTE

Veritas went ahead with the shipping but received no response from Somel who once again
refuses to pay citing the lack of contract between the parties. Aggrieved by this action,
Veritas sues Somel for non-payment of his part of the contract. Somel wants the refund back
and Veritas claims the payment to be done as soon as possible.

ISSUE RAISED

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1. WHETHER A BINDING CONTRACT FOR THE SALE OF
GOODS HAS BEEN VALIDLY FORMED BETWEEN THE
PARTIES TO THE DISPUTE?

2. WHETHER VERITAS CORPORATION IS RIGHT IN

ASSERTING THAT THE CHANGE IN LABOUR COST IS A
RESULT OF AN UNFORESEEN EVENT OUT OF THE
CONTROL OF VERITAS CORPORATION?

ARGUMENTS ADVANCED

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WHETHER A BINDING CONTRACT FOR THE SALE OF GOODS
HAS BEEN VALIDLY FORMED BETWEEN THE PARTIES TO THE
DISPUTE?

1.1 WAS THERE A VALID AGREEMENT?

The counsel contends that in the instant case Somel had presented Veritas Corporation
with an offer which was countered by Veritas Corp, by adding its own conditions. The
acceptance communicated by Somel to Veritas was not absolute. Thus, there was no
valid acceptance- hence, no valid agreement.

1.1.1 WAS THERE A VALID OFFER?

In the present case Somel had offered Veritas Corp. to sell him ten barrels each of
three different varieties of wine, a total of thirty barrels, for 50 Vins per barrel, a total
of 1500 Vins. Veritas Corp countered the offer by adding its own terms and
conditions. This is a valid offer under Section 2(a)1, which defines proposal as when
one person signifies to another his willingness to do or to abstain from doing anything
with a view to obtaining assent of the other to such Act or abstinence. A counter offer
too, is considered a valid offer.2
Therefore, when Somel communicated(signified) his willingness to do an act, that is,
purchasing 30 barrels of wine, with a view to obtaining Veritas Corp’s assent, it
constituted a valid offer. However, when Veritas put conditions in the initial contract,
it communicated its willingness to do the act, that is selling 30 barrels of wine along
with the specified conditions, with a view to obtaining Somel’s assent, it constituted a
counter offer.

1.1.2 WAS THERE A VALID ACCEPTANCE?

In the given proposition, Veritas Corp in its e-mail to Somel lays down three
specifications, namely-
i. Somel must provide address for delivery within two weeks
1
Section 2(a) Indian Contract Act 1972
2
Hyde v Wrench[1840]EWHC J90

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 ii. Half the payment be made via online transfer within next two weeks, and the
other half at the time of receipt of delivery.
iii. Five conditions where Veritas would not be liable in case any damage/
inability to deliver/delay/ was caused to the goods on account of unforeseen
event beyond the reasonable control of Veritas Corp.

In the answering e-mail by Somel to Veritas, he sent in his address and also half
payment of 750 Vins via online transfer. Which means, he expressly accepted the first
two conditions. However, he doesn’t accept the third condition, hence his acceptance
is not absolute. In order to convert a proposal into a promise, the acceptance must be
absolute and unqualified3.

Any departure from the terms of the offer or any qualification vitiates the acceptance
unless it is agreed to by the person from whom the offer comes. In other words, an
acceptance with a variation is no acceptance; it is simply a counter proposal which
must be accepted by the original promisor before a contract is made, as explained in
Hyde v Wrench (supra)4

Hence, the second e-mail by Somel to Veritas was not an acceptance, but again, a
counter-offer, which Veritas Corp was open to accept or reject. It did not bind either
of the parties towards performance, as there no contract came in force.

WHETHER VERITAS CORPORATION IS RIGHT IN ASSERTING

THAT THE CHANGE IN LABOUR COST IS A RESULT OF
UNFORSEEN EVENT OUT OF THE CONTROL OF VERITAS CORP?

.1 DOES THE LABOUR STRIKE AMOUNT TO AN UNFORSEEN EVENT

OUT OF CONTROL OF VERITAS CORP?
In the instant case, due to labour shortage in the vineyards as a result of nationwide
labour strike, Veritas Corp raised the price of wine per barrel. However, in the case
of Satyabrata Ghose v. Mugneeram Bangur & Co.5, it was established by the courts
that the courts have no general power to absolve a party from the performance of its

3
Section 7 Indian Contract Act 1972
4
Hyde v Wrench[1840]EWHC J90
5
Satyabrata Ghose v. Mugneeram Bangur & Co. AIR 1954 SC 44

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 part of the contract merely because its performance has become onerous on account
of an unforeseen turn of events.
In the case of Tsakiroglou & Co. Ltd v. Noblee Thorl6, the court observed that mere
closure of the Suez Canal, when there is alternative way of transporting goods
through the Cape of Good Hope, does not qualify as a condition for the frustration of
contracts just because the alternative route is longer than the original one.
Energy Watchdog v. Central Electricity Regulatory Commission and Anr7, the
Supreme Court reiterated that the ambit of force majeure cannot be stretched to
probable difficulty or loss caused to the entity obligated to perform the contract.
Therefore, in the present case, the labour shortage due to labour strike did not amount
to impossibility of performance of the contract.

.2 WHETHER VERITAS CORPORATION HAS BEEN NEGLIGENT IN ITS

CONDUCT BY NOT MAINTAINING PROPER COMMUNICATION WITH
SOMEL?
Veritas Corp, in the given proposition, after the email sent by Somel on 21 February
2019, did not deem it fit to reply to Somel or inform him regarding the strike unless
Somel, after nearly a month inquired about the same. The legality or illegality of the
strike is a detrimental piece of information Somel was entitled to receive, however,
even if the strike was legal or illegal, it holds Veritas Corp as negligent. Since the
facts are silent as to the legal position of the strike, it is imperative to consider both
the possibilities.
A. The strike was Legal- Section 22 of the industrial Disputes Act 19478 establishes
four conditions, which, if fulfilled, would render a strike legal, if performed by
people employed under public utility services. According to the act-
Prohibition of strikes and Lockouts- (1) No person employed in a public utility
service shall go on strike in breach of contract-
a. Without giving to the employer notice of strike, as hereinafter provide, within
six weeks before striking; or
b. Within fourteen days of giving such notice; or

6
Tsakiroglou & Co. Ltd v. Noblee Thorl [GmbH, 1961 (2) AII ER 179]
7
Energy Watchdog v. Central Electricity Regulatory Commission and Anr (2017) 14 SCC 80
8
Section 22 Industrial Disputes Act 1947

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 c. Before the expiry of the date of strike specified in any such notice as aforesaid;
or
d. During the pendency of any conciliation proceedings before a conciliation
officer and seven days after the conclusion of such proceedings before a
conciliation officer and seven days after the conclusion of such proceedings.

The four conditions make it implicit, that had this strike been legal, a month
long time was enough for Veritas Corp to communicate the same to Somel or
present to him an anticipatory breach of contract9. Since Veritas Corp failed in
doing so, it is to be made liable under negligence.

B. The Strike was Illegal- Had the labourers not fulfilled the aforementioned four
conditions, the strike would be declared as illegal, implying, the employees of
Veritas Corp were engaged in an illegal activity, thus making Veritas Corp liable
under the principle of Vicarious Liability as it is liable for the negligent acts of its
employees10. In the case of Sadul Textile Mills Ltd. V. Workmen of Sadul Textile
Mills11 striking work without notice amounted to misconduct and each and every
one of them was liable to summary dismissal without notice or compensation in
lieu of notice under the standing orders.

For Section 22 of Industrial Disputes Act to be applicable, the people must be

employed in Public Utility Services. The First Schedule12 of the same Act, lays down
twenty four industries which qualify under public utility services. The sixth industry
mentioned is “FOOD STUFFS”.

Section 3(1)(j) of the Food Safety and Standards Act of India(FSSAI) states the
definition of food- In this Act, unless the context otherwise requires-

―Food means any substance, whether processed, partially processed or unprocessed,

which is intended for human consumption and includes primary food to the extent
defined in clause (zk), genetically modified or engineered food or food containing
such ingredients, infant food, packaged drinking water, alcoholic drink, chewing
gum, and any substance, including water used into the food during its manufacture,
9
Section 39 Indian Contract
10
Ratanlal and Dhirajlal on Law of Torts
11
Sadul Textile Mills Ltd. V. Workmen of Sadul Textile Mill AIR 1958 Raj 202, (1958)IILJ 628 Raj
12
First Schedule Indian Contract Act

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preparation or treatment but does not include any animal feed, live animals unless
they are prepared or processed for placing on the market for human consumption,
plants, prior to harvesting, drugs and medicinal products, cosmetics, narcotic or
psychotropic substances.

Since Wine is an alcoholic drink, which comes under the definition of food as per
FSSAI, which comes under the definition of Public Utility Services. Thus Section 22
of Industrial Disputes Act shall be applicable.

PRAYER

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 Wherefore, in the light of the facts stated, the case sited, issues raised, arguments advanced,
and authorities sited, it is most humbly prayed and implored before the Hon’ble City Civil
Court of Meditarraneo, that it may be graciously pleased to adjudge and declare that:

1. A binding contract for the sale of goods has been validly formed between the parties
to the dispute.
2. Veritas corporation is right in asserting that the change in labour cost is a result of an
unforeseen event out of the control of the corporation, therefore the enhanced price is justified.
3. The part payment of 750 Vins made by defendant to the plaintiff should not be
returned.

Also, pass any other order that the court may deem fit in the favour of the plaintiff to
meet the ends of equity, justice and good governance.

For this act of kindness, the Plaintiff shall duty bound forever pray.

Respectfully Submitted

Council for Plaintiff

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