Case Index of Law of Contracts

Name of the Case Details

Balfour v. Balfour A husband agreed to pay £30 to his
wife and child every month while he
was abroad. As he failed to pay the
promised amount, his wife sued him for
the recovery of the amount. Held: She
could not recover as it was a social
agreement and the parties did not
intend to create any legal relations.
Lord Atkin.

Rose and Frank Co. v. J.R. Crompton There was an agreement between Rose
and Bros. Company and Crompton Company,
where of the former were appointed
selling agents in North America for the
latter. One of the clauses included in
the agreement was: “This arrangement
is not... a formal or legal agreement and
shall not be subject to legal jurisdiction
in the law courts”. Held that: This
agreement was not a legally binding
contract as the parties intended.
Parker v. Clark An aged couple (C and his wife) held
out a promise by correspondence to
their niece and her husband (Mrs. and
Mr. P.) that C would leave them a
portion of his estate in his will, if Mrs.
and Mr. P would sell their cottage and
come to live with the aged couple and
to share the household and other
expenses. The young couple Sold their
cottage and started living with the aged
couple. But the two couples
subsequently quarreled and the aged
couple repudiated the agreement by
requiring the young couple to stay
somewhere else. The young couple
filed a suit against the aged couple for
the breach of promise.
Held: That there was intention to create
legal relations and the young couple
could recover damages
Carlill v. Carbolic Smoke Ball Co.
Harvey v Facie
Pharmaceutical Society of Great Britain Boots introduced the then new self-service
v Boots Cash and Chemists Ltd
The patent-medicine company advertised
that it would give a reward of £100 to
anyone who contracted influenza after
using the smoke balls of the company for a
certain period according to the printed
directions. Mrs. Carlill purchased the
advertised smoke ball and contracted
influenza in spite of using the smoke ball
according to the printed instructions. She
claimed the reward of £100. The claim was
resisted by the company on the ground that
offer was not made to her and that in any
case she had not communicated her
acceptance of the offer. She filed a suit for
the recovery of the reward.
Held: She could recover the reward as she
had accepted the offer by complying with
the terms of the offer.
Harvey sent a Telegram to Facey which
stated: -
"Will you sell us Bumper Hall Pen?
Telegraph lowest cash price-answer paid;" 
Facey replied by telegram:-
"Lowest price for Bumper Hall Pen £900."
Harvey then replied:-
"We agree to buy Bumper Hall Pen for the
sum of nine hundred pounds asked by you.
Please  send us your title deed in order that
we may get early possession." 
Held:  The Privy Council held that there
was no contract concluded between the
parties. Facey had not directly answered
the first question as to whether they would
sell and the lowest price stated was merely
responding to a request for information not
an offer. There was thus no evidence of
an intention that the telegram sent by
Facey was to be an offer.
system into their shops whereby customers
would pick up goods from the shelf put
them in their basket and then take them to
the cash till to pay. The Pharmaceutical
Society of Great Britain brought an action
to determine the legality of the system with
 regard to the sale of pharmaceutical
products which were required by law to be
sold in the presence of a pharmacist. The
court thus needed to determine where the
contract came into existence.
Held: Goods on the shelf constitute an
invitation to treat not an offer. A customer
takes the goods to the till and makes an
offer to purchase. The shop assistant then
chooses whether to accept the offer. The
contract is therefore concluded at the till in
the presence of a pharmacist.
Harris v. Nickerson The defendant advertised that an auction of
certain goods would take place at a stated
time and place. The plaintiff travelled to
the auction only to find that items that he
was interested in had been withdrawn. He
claimed compensation for breach of
contract, arguing that the advertisement
constituted an offer, and his travelling to
the auction, an acceptance by conduct.
HELD: The advertisement was not an
offer, merely a declaration of intention.

J.K Enterprises v. State of MP

Petitioner submitted a tender to purchase
Tendu leaves on certain date after one day
the Respondents sent communication of
acceptance by registered cover a day after
that. The said letter was returned but it was
held that the dispatch of letter of
acceptance had amounted to acceptance
and completion of contract.

Upton rural district council v Powell

Facts: When Powell called the Upton
Police Department to report that his barn
was on fire, the Upton fire brigade was
immediately sent out to extinguish the fire.
Unknown to both parties. Powell’s
property was located outside the Upton
Fire District, which meant that Powell was
not entitled to free services.

Issue: Is one liable in contract for services

requested in the belief that the services
 were gratuitous even though the services
could have been received without charge
from another party?
Rule: A contractual duty to pay arises when
one requests services from a party in the
erroneous belief that the services were free,
despite the fact that the party was entitled
to such services without charge from
another party.

Lalman Shukla vs. Gauri Dutt Lalman Shukla vs Gauri Dutt is a

popular case related to the Acceptance
of a Contract. Lalman Shukla was an
employee with Pt. Gauri Dutt.When the
nephew of Pt. Gauri Dutt was found
missing, Lalman Shukla was sent for
the search. It was announced later that
who so ever finds the missing nephew
will be rewarded with Rs. 501.
Unaware of the announcement of the
reward, Lalman Shukla located the the
missing nephew and brought back. It
was said that Lalman Shukla has no
right in the reward because he has no
knowledge of the proposal. Hence, an
action without the knowledge of the
proposal is no acceptance
Bengal Coal Co Ltd v. Homee Wadia A agreed in writing to supply coal to B at
and Co. certain prices and up to a stated quantity, or
in any quantity which may be required for
a period of twelve months, is not a contract
unless B binds himself to take some certain
quantity, but a mere continuing offer which
may be accepted by B from time to time by
ordering goods upon the terms of the offer.
In such a case, each order given by B is an
acceptance of the offer and A can withdraw
the offer, or, to use the phraseology of the
Act revoke the proposal, at any time before
its acceptance by an order from B. Such a
transaction may be reduced to a statement
by the intending vendor in this form If you
will send me orders for coal, I shall supply
it to you for a period of twelve months at a
particular rate.’ This is merely a proposal
 from A to B. If in reply to such a proposal,
B says to A ‘I agree’, it does not constitute
an acceptance of the proposal. An
acceptance can take place only by B
sending an order to A”
Tin v. Hoffman Cross Offer. A wrote to B indicating his
willingness to sell 800 tonnes of iron and
on the same day B also wrote to A
indicating his willingness to do so. Letters
crossed in post and B sued A for supply of
iron. No binding contracts since no
acceptance and others hence only cross
offers.
Powell v. Lee A was a candidate for the headmaster of a
school. The Board of Managers passed a
resolution confirming him as the
headmaster and one of the members in his
personal capacity informed the plaintiff of
this resolution. Later the resolution was
cancelled. Sued for breach. No contract
since no communication.

Durga Prasad v. Baldeo The plaintiff, baldeo, at the desire and

request of the elector of the town expanded
money in the construction of a market in
the town. Subsequently the defendants,
Durga Prasad & Ors. Occupied the shops in
the market. Since the plaintiff had spent
money for the construction of the market,
the defendants in consideration thereof,
promised to pay to plaintiff, a commission
on the articles sold through their
(defendants) shops in that market.
Defendants however, failed to pay the
promised commission; the plaintiff brought
an action to recover the promised
commission. Held: The plaintiff will not
succeed since the agreement was void for
the want of consideration. It was observed
in this case that the consideration of the
promise to pay the commission was the
construction of market by the plaintiff. But
the expenses incurred by the plaintiff in
construction of the market was not there in
the desire of the defendants (promisors) but
at the instance/ request of the 3rd party ie,

Kedarnath Bhaattacharya vs
Mohammed. (1887, Cal HC)
Mohori Bibee v. Dharmodas Ghosh
contractor of the town. It was therefore,
held that since the consideration for the
construction of market did not move at the
desire of the defendants. That is, the
promisor ( D & Ors.). It did not constitute
a valid / good consideration. Hence the
defendants were not liable in respect of the
promise made by them, following the first
legal rule.
Gauri The town planners of Howrah, thought
advisable to erect a town hall at Howrah,
provided sufficient subscription were
collected. With the object in view the
commissioner of Howrah municipality
started to raise necessary fund by public
subscription. The defendant’s one of the
subscribers of this fund for Rs 100 signed
his name in the subscription book at that
amount. On the faith of the promised
subscription the plaintiff (commissioner of
the Howrah municipality) entered into a
contract with a contractor for the purpose
of the building the town hall.
Later the defendant subscriber referred to
pay the amount upon the promise to pay /
subscribe. In other words, he contended
that there would be no personal benefit /
significance by the construction of the hall.
And there was no consideration for the
promise.
Held Liable.
Agent of defendant advanced money to
plaintiff, an infant, fully knowing his
incompetency to contract, against mortgage
of property belonging to latter. Plaintiff
commenced this action to get the mortgage
declared as void u/s 2, 10 and 11 of ICA
and repossession of property thereunder
conveyed to defendant.
Laying emphasis on true literal
construction of Indian Contract Act,
notwithstanding the rules as to
enforceability of contracts entered into by
minors, Supreme Court held that unless the
parties are competent to contract as u/s 11,
 no agreement is contract as u/s 10 and
hence, is not enforceable by law u/s 2(h)
and is void u/s 2(g). Since minor is not
competent to contract u/s 11, hence every
such agreement entered into by a minor is
void ab initio (void from the very
inception). Even u/s 68, a minor is deemed
as incompetent to contract and is not to be
personally liable for any necessaries
supplied to him, albeit a statutory claim is
created against his property
Suraj Narain v. Suku Ahir A minor borrowed a sum of money
executing a simple bond for it, and after
attaining majority executed a second bond
in respect of the original loan plus interests.
It was held by a majority of two as against
one that the suit upon the second bond was
not maintainable as that bond was without
consideration and did not come under
section 25(2) of ICA.
Leslie Ltd v. Sheill An infant succeeded in deceiving some
money-lenders by telling them a lie about
his age, and so got them lend him 400
Pounds on the faith of his being adult.
Attempt to recover the amount of principal
and interests as damages for fraud, quasi
contract and under doctrine of restitution
all failed.
Chappell v. Cooper The plaintiff’s writ had not been served
within the required time, and it had become
too late to extend its validity. The plaintiff
isued a second writ. The defendant argued
limitation. Counsel for the plaintiffs sought
to distinguish Walkley on the very narrow
ground that there was no question of the
first action having being struck out or
discontinued.
Held: (Roskill LJ) ‘ . . I cannot accept the
submission that [Walkley] is a decision
only on the facts of that case. It seems to
me plainly a decision on principle that if a
plaintiff starts but then does not for any
reason proceed with an action, whether it is
because the plaintiff chooses not to serve or
his solicitors fail to serve the writ
timeously or because the action is
 subsequently struck out for want of
prosecution, or because for good reason or
bad the plaintiff or his solicitors give notice
of discontinuance, it is not open to the
plaintiff thereafter to seek to take
advantage of the provisions of section
[33] . . because as their Lordships have laid
down (and we are of course bound by their
decision) the cause of his prejudice is not
the provisions of section [11], that is to say,
the existence of the primary limitation
period, but is the act or remission of
himself or his solicitors in acting or failing
to act as he or they have done in relation to
their action.’
Nash v. Inman FACTS:

A tailor supplied 13 waistcoats and other

things of that kind to a undergraduate
student when latter was a minor. Student
refused to pay for the goods supplied and
tailor brought this suit against him for
recovery of price of those goods.

ISSUES:

Whether the goods so supplied fall into the

category of necessary?
If the answer is No, whether the contract
was enforceable at law?
On whom does the onus to prove or
disprove the necessity of goods so supplied
fall?
HELD:

“Necessaries means goods or services

suitable to the condition in life of minor, or
any other person incapable of forming
contract for himself, and as to his actual
requirements at the time of sale and
delivery”. This means that not only the
goods need to be suitable and necessary to
the condition in life of a minor (here) but
also be needed by minor in actuality, i.e. he
must not be already having sufficient
supply of such goods. The onus to prove
that the thing contracted for was a necessity
lies on plaintiff, however difficult it may be
to prove that it was needed by minor in
actuality.

In English Law, incompetent person is to

compensate the supplier of necessities to
him by paying a reasonable price for such
necessities. However, if the necessities so
supplied are services instead of goods, then
action for recovery lies against estate of
such person and not against him.

Fletcher-Moulton LJ:

“An infant, like a lunatic, is incapable of

making a contract of purchase in the strict
sense of the words; but if a man satisfies
the needs of the infant or lunatic by
supplying to him necessaries, the law will
imply an obligation to repay him for the
services so rendered, and will enforce that
obligation against the estate of the infant or
lunatic.”

Buckley LJ:

“an infant may contract for the supply at a

reasonable price of articles reasonably
necessary for his support in his station in
life if he has not already a sufficient
supply. To render an infant’s contract for
necessaries an enforceable contract two
conditions must be satisfied, namely, (1.)
the contract must be for goods reasonably
necessary for his support in his station in
life, and (2.) he must not have already a
sufficient supply of these necessaries.”

Conclusion: Having settled the current

legal position in English law, Court held
for the defendant due to absence of any
major evidence for plaintiff. Since plaintiff
could not prove that the clothes so
delivered were actually needed as necessity
by minor, hence, Court observed that the
 contract was not the one for necessity and
hence was void ab initio.
Ryder v. Wombwell A minor who moved in high society was
supplied with a pair of diamond and ruby
cufflinks and a silver goblet could. It was
observed that there are exceptional cases
wherein even things merely ornamental in
nature could be deemed necessary.
However, the court held that the goods in
the particular case could not be necessaries
as the supplier could not prove that the
ornamental goods were especially
necessary for the minor in question.
Chinnaya v. Ramayya An old lady gifted certain property to her
daughter on the condition that an annuity of
Rs. 653 should be paid every year to the
plaintiff, who was the sister of the old
woman. The annuity was not paid.
Defendant contended to consideration from
sister of old woman. This contention would
have been eliminated on the ground that
consideration given by “any other person”
is equally valid. But court reached same
result on different reasoning. The sister was
receiving an annuity before that to and
hence if a promise causes loss to the
promisee it is sufficient consideration.
Chikkan Ammiraju v. Chikkam Question before Madras HC if threat to
Seshama suicide is coercion. In this case A, a Hindu,
by a threat of suicide induced his wife and
son to execute a release deed in favour of
A’s brother in respect of certain properties
claimed as their own by the wife and son. It
was held that threat to suicide came under
section 15 of Contracts Act and amounted
to coercion making the contract voidable.
Ranganayakamma v. Alwar Setti The question before the Madras HC
regarding the validity of adoption of a boy
by a widow, aged 13 years. On the death of
her husband, the husband’s dead body was
not allowed to be removed from her house
for cremation, by the relatives of the
adopted boy until she adopted the boy.
Held: Coercion for adoption.
Pournima Oils Mills v. State of Kerela Supreme Court : Kerela Govt offered tax
exemptions to small scale industries
 through an order dated 11.4.79. After over
one year the order was substantially
modified and the industries set up between
this period challenged the order. SC held
that all those industries will be entitled to
the benefits under the first order applying
the doctrine of promissory estoppel.
Rajlukhy Dabee vs. Bhootnath The husband promised to pay his wife a
Mookerjee certain sum of money per month for her
separate residence and maintenance. The
agreement also mentioned quarrels and
disagreements between them. It was held
that the agreement was without
consideration and void for there was no
love and affection between parties as
evidenced by their separation because of
quarrels and other conflicts.
Tweddle v. Atkinson It was held that only parties to the contract
can sue each other. In that case the
plaintiff, A married a girl, B. After this
marriage there was contract in writing
between A’s father and B’s father that each
would pay a certain sum of money to A and
that A will have the power to sue for such
sums. After the death of the two fathers, A
brought an action against the executors of
B’s father to recover the promised amount.
It was held that A could not sue for the
same.
White v. Bluett Father-Son quarrel over property share.
Father promised if son stopped
complaining then debt released. After the
death of father executors successfully
argued that promise not to bore was not a
good consideration for the debt release
Collins v Godefroy In earlier litigation, the defendant in this
action, Godefroy, had subpoenaed the
plaintiff, Collins, to give evidence on his
behalf, agreeing to pay his expenses. The
defendant had then refused to pay the
plaintiff. The plaintiff then commenced this
action to recover his expenses.
HELD
That since the law imposes a duty on
people to turn up, a promise of
remuneration to do that which the court

Stilk v. Myrick
Workmen of APPIN Tea Estate v. Held that collective bargaining under
Industrial Tribunal
Andhra Sugars Ltd. v. State of A.P. Factory bound to purchase sugar cane in
Mannu Singh v.Umadat Pande
Wajid Khan v. Raja Ewaz Ali Khan
requires is without consideration. The
principle also applies to promises not to do
that which the law prohibits.
The claimant was a seaman on a voyage
from London to the Baltic and back. He
was to be paid £5 per month. During the
voyage two of the 12 crew deserted. The
captain promised the remaining crew
members that if they worked the ship
undermanned as it was back to London he
would divide the wages due to the deserters
between them. The claimant agreed. The
captain never made the extra payment
promised.
Held: The claimant was under an existing
duty to work the ship back to London and
undertook to submit to all the emergencies
that entailed. Therefore he had not
provided any consideration for the promise
for extra money. Consequently he was
entitled to nothing.
Industrials Disputes Act under not
amounting to coercion under Contracts Act
thus bonus agreement valid.
certain zone due to statutory act. No
coercion or lack of free consent and legal
agreement.
Allahabad High Court case a spiritual Guru
asked his devotee to gift him his entire
property and in return he would secure him
a place in heaven. It was held that it was
undue influence for any reasonable man
cannot give away his entire property for the
sake of that. It is important to know when
we can say that one party is able to
dominate the will of the other. The answer
is in any case where there is some active
trust and confidence(Fiduciary
Relationship) between the parties or the
parties are not on the same level
Old pardashin lady incapable of transacting
any business conferred a grant of her
substantial property without any valuable
 consideration in favour of her confidential
managing agent. The Privy Council held
that it was incumbent on the grantee to
show that he had made proper use of
confidence reposed by the lady in him and
there was no undue influence.
Niku Devi v. Kripa Orphan girl raised by cousin who managed
all her affairs. Cousin divested her of all
her property through gift deed. Invalid –
Undue Influence
Derry v. Peek In a company prospectus the defendant
stated the company had the right to use
steam powered trams as oppose to horse
powered trams. However, at the time the
right to use steam powered trams was
subject of approval of the Board of Trade,
which was later refused. The claimant
purchased shares in the company in
reliance of the statement made and brought
a claim based on the alleged fraudulent
representation of the defendant.

Held: The statement was not fraudulent but

made in the honest belief that approval was
forthcoming.

Lord Herschell defined fraudulent

misrepresentation as a statement which is
made either:

i) knowing it to be false,
ii) without belief in its truth, or
iii) recklessly, careless as to whether it be
true or false
Shri Krishan v. Kurukshetra University In SC. Candidate having full knowledge of
the facts that he was short of attendance,
did not mentioned this fact in his exam
form. This was held to be no fraud since it
is duty of exam board of university to
scrutinize. Concealment by mere silence no
fraud.
Oceanic Steam Navigation o. v. Defendants chartered a ship from the
Soonderdas Dharmasey plaintiffs, who stated that the ship was
certainly not more thatn 2800 tonnage
register. As a matter of fact the ship had
never been in Bombay and was wholly
 unknown to the plaintiffs. She turned out to
be of more than 3000 tonnage. Held that
defendants entitled to avoid the charter-
party.
Allessio v. Jovica Land purchased expressly for the
construction of a duplex. The seller
represented that he saw no difficulty in any
such use of land. But a permission to build
such a complex was refused unless a
sewage costing some 3000 dollars was
provided. Though the misrepresentation
was innocent buyer allowed to avoid the
sale.
Dick Bentley Productions v. Harold Dick Bentley knew the defendant, who was
Smith Motors a car trader specialising in the prestige
market, for some time. He had asked him
to look out for a well vetted Bentley car.
The defendant obtained a Bentley and
recommended it to the claimant. He told
him that the car had been owned by a
German Baron and had been fitted with a
replacement engine and gearbox and had
only done 20,000 miles since the
replacement. Mr Bentley Purchased the car
but it developed faults. The defendant had
done some work under the warranty but
then more faults developed. It transpired
that the car had done nearer 100,000 miles
since the refit. The question for the court
was whether the statement amounted to a
term in which case damages would payable
for breach of contract, or whether the
statement was a representation, in which
case no damages would be payable since it
was an innocent misrepresentation and the
claimant has also lost his right to rescind
due to lapse of time.
Held:
The statement was a term. Mr Smith as a
car dealer had greater expertise and the
claimant relied upon that expertise.

Phillips v. Brooks A rogue purchased some items from the

claimant's jewellers shop claiming to be Sir
George Bullogh. He paid by cheque and
persuaded the jewellers to allow him to

Fateh Singh v. Sanwal Singh
Jai Ram v. Kahna Ram
Lowe v. Peers
Raj Rani v. Gulab Rani
take a ring immediately as he claimed it
was his wive's birthday the following day.
He gave the address of Sir George Bullogh
and the jewellers checked the name
matched the address in a directory. The
rogue then pawned the ring at the
defendant pawn brokers in the name of Mr.
Firth and received £350. He then
disappeared without a trace. The claimant
brought an action based on unilateral
mistake as to identity.
Held: The contract was not void for
mistake. Where the parties transact face to
face the law presumes they intend to deal
with the person in front of them not the
person they claim to be. The jewellers were
unable to demonstrate that they would only
have sold the ring to Sir George Bullogh.
If a person is persuaded to become a surety
by depositing a sum of money with him,
the person thus depositing the money
cannot recover back the same. In such case,
the deposit of the money with the surety is
contrary to the provisions of law, in so far
as the surety is no more a person interested
in procuring the presence of the accused to
the court, but a surety in name only.
The forest dept of Himachal Govt invited
tenders. A gave money to B for not biding
a tender and accepting the amount if Bs
tender was accepted. Agreement not
opposed to public policy.
The defendant had entered a promise under
seal to marry no one but the promisee on
penalty of paying her 1000 Pounds within
three months of marrying anyone else. The
Court remarking-
“that it was not a promise to marry her, but
not to marry anyone else, and yet she was
under no obligation to marry him.”
found the contract void as it was purely
restrictive and carried no promise to marry
on either side
Co widows agreed to forfeit one’s share
from late husband’s property if she

Lafatunissa v. Shaharbanu
Madhup Chander v. Rajcoomar Dass
remarries. Agreement not in restraint of
marriage.
An agreement containing a condition in a
wakf that a widow would lose her right of
maintenance on re-marriage is not an
agreement in restraint of marriage.
A and B agreed to B closing his shop in a
locality for an amount. Even though partial
restraint still amounted to total restraint
being void.