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TCA-20

FACULTY OF LAW, JAMIA MILLIA ISLAMIA

INTRA MOOT COURT COMPETITION–2018

IN THE HON’BLE SUPREME COURT OF ASNARD.

HPC Ltd., & Amy Santiago ……………APPELLANT

v.

Steve Rovers ....………...RESPONDENT

(UNDER ARTICLE 136 OF THE CONSTITUTION OF DEMOCRATIC STATE OF

‘ASNARD’)

Most Respectfully Submitted before the Hon’ble Supreme Court of Asnard.

MEMORIAL FOR THE RESPONDENT

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TABLE OF CONTENT

1) THE LIST OF ABBREVATIONS ………………………………………... 4

2) THE INDEX OF AUTHORITIES ………………………………………… 5
3) THE STATEMENT OF JURISDICTION………………………………… 8
4) THE STATEMENT OF FACTS………………………………………….... 9
5) THE STATEMENT OF ISSUES……………………………………………10
6) THE SUMMARY OF ARGUMENTS………………………………………11
7) THE ARGUMENTS ADVANCED………………………………………… 13

I. Whether fraud was committed by Mr. Steve Rovers under Section 17 of the Indian
Contract Act, 1872?

II. Whether the contract dated 14th August 2017 voidable at the option of Mr. Tony
Snark?

III. Whether Mr. Steve Rovers is liable to compensate Amy Santiago for the death of
her husband and her consequent loss of livelihood?

IV. Whether Mr. Steve Rovers, being the supplier and service provider of LPT
Machines, is liable to compensate Mr. Tony Snark for breach of contract?”

8) THE PRAYER…………………………………………………………………..

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● LIST OF ABBREVATIONS

AIR All India Reporter

H.C High Court

GOVT. Government

HON'BLE Honorable,

SC Supreme Court

ORS Others

SCC Supreme Court Cases

& And

SEC. Section

U.O.I Union Of India

SCD Supreme Court Decision

SCR Supreme Court Reporter

ART. Article
VS Versus

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INDEX OF AUTHORITIES

CASES

SR. CASE LAW CITATIONS FOOTNOTE

NO.
1. Beers v. Sons (1919) 120 L.T. 570 4

2. Drek v. Peek (1889)UKHL 1 31

3. Gauri Shankar v. Joshi Ambala (1996) 3 SCC 310 3
Shankar Family Trust
4. Huri Alians v. Roshan Khudabux AIR 1923 Sindh 5 7
5. Hadley v. Baxendale (1854) 9 EX 341 16
6. Keats v. Lord Cadogan (1851) 10 CB 591 1
7. M/S State B.o.I v. Champalal (2009)WA 511 11
8. NOCTON V. LORD ASHBURTON (1914) AC 932 30

9. P. Radhakrishnan v. NBCC ltd. (2013) 3 SCC 742 13

10. Shashi Mohan v. Nobo krista (1878) 4 Cal 801 6
11. Shri Krishna V. (1976)1 SCC 311 9
KurushetraUniversity
12. State of Kerela v K Bhaskaran. AIR 1985 Ker 49 23
13. The University of madras v. AIR 1954 Mad 67 25
Shanta Bai
14. Kourfos v. Czarnikow Ltd. (1969) 1 AC 350 13
15. Victoria Laundary ltd v. New (1949) 2 kB 528 20
Man Industries
16. Ward v. Hobbs (1878) 4 Cal 801 2
BOOKS REFERRED

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(1). Durga Das Basu., Shorter Constitution of India, Ed. 10th (1989)

(2) M.P Jain, Indian Constitutional law, Ed. 6th (2012), Lexis Nexis Butterworths Wadhwa,
Nagpur.

(3). V.N.Shukla, Constitution of India, Ed.11th, (2008), Eastern Book Company.

(4). Pollock & Mulla The Indian contract and Specific Relief Acts 14th edition

(5). Contract and Specific Relief Avtar Singh 11th edition

(6). Contract 1 RK Bangia 16th edition

(7). Contract 2 RK Bangia 16th edition

(8). Good act RK bangia 10th edition

STATUTORY COMPILATION

(1) The constitution of india,1950

(2) Indian Contract Act 18720
(3) Sales of Good Act 1930

WEBSITES REFERENCE

▪ www.indiakanoon.org
▪ www.indlawinfo.org
▪ www.legalserviceIndia.com
▪ www.legalsutra.org
▪ www.lexisnexisacademic.com
▪ www.macmillandictionary.com
▪ www.manupatra.com
▪ www.scconline.com
▪ www.scdecision.in
▪ www.supremeCourtcases.com

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STATEMENT OF JURISDICTION

HPC Ltd., Amy Santiago V. Steve Rovers

The petitioner approached before the Honorable Supreme court of Asnard by Special Leave
Petition under Article 136 of the constitution of Asnard.

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THE STATEMENT OF FACTS

1. Healing Hand Pharmaceutical corporation limited,(HPC), company controlled and

managed in democratic state of ‘Asnard’ (DSC), incorporates as a small factory in
2012 HTC Limited enjoy absolute Monopoly with regard to production of ‘Lobanza’
capsule. The company has strongly advised that this capsule must not be consumed
when a person is still consuming substance such as drugs and tobacco. Intake of these
capsule while consuming organic substance may cause death.
2. HTC Limited is largely owned by a business tycoon named Tony Stark. Mr Steve
Rovers and Mr Tony Stark were childhood friend and residence of the district of
Drone. After completing the senior secondary school Examination, took admission in
Pharmaceutical bachelor program and bachelors technical programmer respectively.
3. In March 2017 Mr Snark planning to buy LPT in order to speed up the production of
the Lobanza capsule, he conducted a market research to test the viability of new
project, to his good fortune he discovered that LPT machine would slash the cost and
productivity shall increase buy roughly ten times.
4. HPC Limited purchase the LPT machine from Steve on, 4 th June 2017 owing to the
efficiency and productivity of the machine Mr. Snark planned to buy more machines
.On 14th August 2017 HPC Limited entered into an agreement with Mr Steve
regarding the purchase of three more machine for Lobanza capsule production. Mr
Steve agreed.
5. Mr .Pablo Escocar, a generator in government school Saw advertisement of Lobanza
capsule. Mr Pablo started consuming Lobanza capsule however he couldn’t refrain
from smoking.
6. A week prior to the sale of three LPTs on 14 August 2017 Mr Steve received detail
report highlighting certain patent defect in those machines. Mr Steve failed to
disclose that information to HPC Limited. Unfortunately on 22nd October 2017 all
machine malfunction.
7. Mr Pablo died after eight days of conception of the capsule. His pregnant wife went
into mental trauma and found herself completely helpless. Mr Stark found out about
the death of Mr Pablo approach the widow of the deceased and requested her to join
the Suit against Mr Steve for fraud. HPCL Limited appeal before The Honourable
Supreme Court of asnard.

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STATEMENT OF ISSUES

The Supreme Court ordered the parties to advance their contentions and arguments on 17th
November, 2018, on the following issues:

I. Whether fraud was committed by Mr. Steve Rovers under Section 17 of the Indian Contract
Act, 1872?

II. Whether the contract dated 14th August 2017 voidable at the option of Mr. Tony Snark?

III. Whether Mr. Steve Rovers is liable to compensate Amy Santiago for the death of her
husband and her consequent loss of livelihood?

IV. Whether Mr. Steve Rovers, being the supplier and service provider of LPT Machines, is
liable to compensate Mr. Tony Snark for breach of contract?”

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SUMMARY OF ARGUMENTS

ISSUE 1. Whether fraud was committed by Mr. Steve Rovers under Section 17 of the
IndiaContract Act, 1872?

It is most humbly submits that fraud was not committed by respondent under section 17 of
Indian Contract Act 1872. Mere silence is no Fraud according to Section 17 of ICA . The rule
of Caveat emptor applies buyer has the duty to take care and seller is under no obligation to
reveal each and everything. There is negligence on the part of buyer.

ISSUE 2.Whether contract dated 14th August 2017 voidable at the option of Mr. Tony
Snark?

It is humbly submitted before this Hon’ble court that the contract dated 14Th August 2017 is
not a voidable contract. There was a proposal on the part of Appellant Tony Snark which was
accepted by Respondent and both the parties performed their part.

ISSUE 3. Whether Mr. Steve Rovers is liable to compensate Amy Santiago for the
death of her husband and her consequent loss of livelihood?

The death of Pablo Escocar is a remote and indirect loss or damage which was not
foreseeable and neither the same was intended. And moresoever the actual cause of death of
Mr. Pablo Escocar is unknown.

There was no contract between Amy Santiago or Pablo Escocar and Steve Rovers, and
therefore there is no question of breach of contract and liability of Mr. Steve Rovers for the
consequential loss of livelihood of Ms. Amy Santiago. There is no claim for means of
livelihood against private individuals.

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ISSUE 4. Whether Mr. Steve Rovers , being the supplier and service provider of LPT

machines is liable to compensate Mr. Tony Snark for breach of contract?

There is no breach of contract on the part of the respondent.

There was no direct fraudulent act on part of respondent as the defects in machines were
minor and patent it was duty on part of appellant to duly check it before accepting order and
once order accepted contract was concluded

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ARGUMENTS ADVANCED

ISSUE 1.Whether fraud was committed by Mr. Steve Rovers under Section 17 of the
IndianContract Act, 1872?

The council on the behalf of Mr Steve (hereinafter respondent) most humbly submits that
fraud was not committed by respondent under section 17 of Indian Contract Act 1872. Mere
silence is no Fraud according to Section 17 of ICA . The rule of Caveat emptor applies buyer
has the duty to take care and seller is under no obligation to reveal each and everything.
There is negligence on the part of buyer.

1.1 Mere silence is no fraud

Mere silence as to facts likely to affect the willingness of a person to enter into a contract is
not fraud . Contracting party is not obliged to disclose each and everything to the other party.
If a person is to sell his goods he is under no duty to disclose the defects in the goods . If he
makes false statement is due to quality of is good it would be fraud but it will really keep
silence as regards defect and then there is no fraud . According to Illustration (a) of Section
17,  A sells, by auction, to B, a horse which A knows to be unsound. A says nothing to B
about the horse’s unsoundness. This is not fraud in A.

Keates v. Lord Cadogan1 A let his house to B which he knew was in ruinous condition. He
also knee that the house is going to be occupied by B immediately . A did not disclose the
condition of the house to B it was held that A had committed no fraud.

Ward v. hobbs2 the seller of pigs sold them without telling the buyer that they had been
suffering from typhoid fever. The disease was convert to other pigs of the buyer also and
many of pigs died because of that. It was held that there was no false statement on which
buyer could be deemed to have relied and therefore there was no fraud on the part of the
seller.

Filament of fact active concealment of fact

Active concealment must be distinguished from passive concealment. Passive concealment

means mere silence as to material fact does not amount to fraud where is active concealment
result in when the party takes positive a deliberate steps to prevent information from reaching
1
(1851) 10 C.B 591.
2
(1878) 4 A.C 13.

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the other party and this is treated as fraud. For example it is a horse to be in an auction
despise knowing the horse is unsound and buyer knew nothing about this horse’s
unsoundness. This is a case of passive concealment and cannot be tantamount to fraud.

Gauri Shankar vs Joshi Amba Shankar family trust 3stated that active concealment is
something different from mere passive concealment. Passive concealment means mere
silence as to material fact. Silence is no representation ordinary silence communicates
nothing and thus cannot be a misrepresentation. For example in the example of the horse
seller is aware of the fact that the horse is of an unsound mind, says nothing to be about the
horse unsoundness the situation does not constitute to fraud because there is no duty.
Contracting party is not obliged to disclose each and everything to the other part if a person
has to sell his goods. In the case of sale of goods the buyer has to be aware which means that
it is the duty of the buyer to be careful while purchasing the goods and there is no implied
condition or warranty by the seller as to the quality of fitness of the goods for any particular.

Thus, In the instant case mere silence on the part of the respondent does not amount to fraud.

1.2 Caveat emptor

M/S State Bank Of India vs H.Champalal Jain on 18 March, 2010 Caveat emptor means "let
the purchaser beware". It is one of the settled maxims, applying to a purchaser who is
bound by actual as well as constructive knowledge of any defect in the thing purchased,
which is obvious, or which might have been known by proper diligence. Caveat emptor does
not mean either in law or in latin that the buyer must take chances. It means that the buyer
must take care. Caveat emptor is the ordinary rule in contract. A vendor is under no duty to
communicate the existence even of latent defects in his wares unless by act or implication
he represents such defects not to exist Caveat emptor qui ignorare non debuit quod jus
alienum emit is a maxim meaning,' let a purchaser beware: who ought not to be ignorant
that he is purchasing the rights of another' Applying the maxim, it is held that it is the
bounden duty of the purchaser to make all such necessary enquiries and to ascertain all the
facts relating to the property to be purchased prior to committing in any manner.

In the instant case, owing to the efficiency and productivity of the machine Mr Snark became
so greedy and mean that when Mr Stark was requested by one of the colleague of Mr Snark to
conduct a routine check on the machine in the coming few days Mr Stark did not gave

3
(1996) 3 SCC 310.

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attention on it. Mr Stark even did not gave attention when on 1st September 2017 and article
got published in widely distributed journal about the infirmities of the machine
1.3 Condition negatived when goods examined by the buyers provided to Section 16 (2)

According to proviso to Section 16 (2) where the buyer has examine the goods there shall be
no implied condition as regards defect which such examination ought to have revealed. It
means that the implied condition of merchantability will exclude when the buyer has
examined the good and the defect in the goods was a patent one.

To exclude the working of implied condition of merchantability in case of patent defect it is

not necessary that buyers examination of goods must be through one. Even if it examines
cursorily the implied condition is not applicable. In Beers v. sons4 there was a sale of number
of barrels of vegetable glue. The buyers having an opportunity to examine them in only from
outside for want of time. The buyer subsequently found that the glue was not of mercantile
quality and this defect could have been discovered if the barrels have been examined
properly from inside. In an action by the buyer for damages for breach of implied condition
as to mercantile quality by the seller it was held that the buyer has examine the goods and the
defect in the good was a patent one, there were not entitled to sue the seller for the same.

Issue2-Whether contract dated 14th August 2017 voidable at the option of Mr. Tony
Snark?

It is humbly submitted before this Hon’ble court that the contract dated 14Th August 2017 is
not a voidable contract. There was a proposal on the part of Appellant Tony Snark which was
accepted by Respondent and both the parties performed their part.

4
(1919) 120 L.T. 570.

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Section 2(i) of Indian Contract Act 1872 defines voidable contract i.e-

An agreement which is enforceable by law at the option of one or more of the parties thereto,
but not at the option of the other or others, is a voidable contract.

Voidable contract is defined U/s 19 i.e Voidability of agreements without free consent5. In
absence of any vitiating element of Consent the contract is not voidable at the option of the
Mr. Snark.

In the present situation there is no question of consent as appellant was fully aware of the
facts and conditions of the machine and was free to use due diligence (which was advised by
the employee of respondent ) which he failed to do and for such sheer case of negligence on
the part of Appellant, respondent cannot be held liable.

There is no question of fraud or misrepresentation of the fact on the part of appellant as it is

clearly mentioned the defects were “patent”. Respondent has no duty to tell each and every
detail of product in such professional contracts as Mr. Snark was prudent businessman who
used due diligence and all checks at the time of first purchase.

Exception to Section 19 applies where the innocent party might, with due diligence, have
discovered, or had the means of discovering the misrepresentation before he entered into the
contract; in such a case, he cannot avoid the contract on the ground that he was deceived by
the fraud.

Purchaser of rice refused to take delivery on ground that rice was of an inferior quality to that
contacted for, it was held that he could not rescind the contract, for he could have discovered
the inferiority of the quality by using ‘ordinary diligence’.6

Failure by a person to make such enquiry as an ordinary prudent person would made, does
not mean that person was deceived and he had no right to rescind the contract merely on the
basis that he did not enquired or he believed on the sellers words.7

The general rule of common law is that a person contemplating entering contract with another
is under no duty to disclose information to that other. “The failure to disclose a material fact
which might affect mind of a prudent contractor does not give right to avoid the contract.”8
5
Section 14 Of ICA 1872.
6
Shoshi Mohan Pal Chaudhry v. Nobo Krishta Poddar, (1878) 4 cal 801.
7
Huri alias Alim Khatun v. Roshan Khudabux , AIR 1923 Sindh 5at 14,(FB).

8
– Bell v. Lever Bros Ltd.

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Also, exception of section 19 of Indian Contract Act clearly legal;izes act of respondent.

A contracting party is under no obligation to disclose the whole truth to the other party or to
give him the whole information as his possession affecting the subject matter of the contract.

Thus, In the case where a candidate has full knowledge of the fact that he has short of
attendance, did not mention this fact in his examination form. This was held to be no fraud, it
being duty of the university to scrutinize form and call for verification for information in case
of doubt9.

Thus there is no duty on the part respondent and the very fact that appellant got minutely
defected machines are due to his ignorance.

The maxim Caveat emptor, quia ignorare non debuit quod jus alienum emit (Let a
purchaser beware, for he ought not to be ignorant of the nature of the property which he is
buying from another party.) As it is mentioned in the fact sheet that defect was patent thus it
was visible with simple inspection so principle of caveat emptor applies.

Caveat emptor is ordinary rule in contract. A vendor is under no duty to communicate

the existence even of latent defects in his wares unless by act or implication he
represents such defects not to exist.10

M/S State Bank Of India vs H.Champalal Jain on 18 March, 201011

Caveat emptor means "let the purchaser beware". It is one of the settled maxims, applying to
a purchaser who is bound by actual as well as constructive knowledge of any defect in the
thing purchased, which is obvious, or which might have been known by proper
diligence. Caveat emptor does not mean either in law or in latin that the buyer must take
chances. It means that the buyer must take care. Caveat emptor is the ordinary rule in
contract. A vendor is under no duty to communicate the existence even of latent defects in his
wares unless by act or implication he represents such defects not to exist Caveat emptor qui
ignorare non debuit quod jus alienum emit is a maxim meaning,' let a purchaser beware: who
ought not to be ignorant that he is purchasing the rights of another' Applying the maxim, it is
held that it is the bounden duty of the purchaser to make all such necessary enquiries and to
ascertain all the facts relating to the property to be purchased prior to committing in any
manner.
9
Shri Krishnan V Kurukshetra University,(1976)1 SCC311.
10
William R Anson, Priciples of the law of contract 245 (Arthur L. Corbin Ed 3d. Am. Ed. 1919).
11
WA no 511&857 of 2009, mad

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Any argument as to quality of machines Non merchantable quality will be exaggeration of the
facts mentioned. There is difference with defective and non merchantable - A product is
unmerchantable if it does not fit the purpose for which it's used. A risk-utility test determines
defectiveness. A product can defective but of merchantable quality.

Thus the machines (LPTs ) delivered by respondent had some patent defects but it
cannot be treated as non merchantable quality.

ISSUE 3 MR. STEVE ROVERS IS NOT LIABLE TO COMPENSATE AMY

SANTIAGO FOR THE DEATH OF HER HUSBAND AND HER CONSEQUENT
LOSS OF LIVELIHOOD.

3.1 REMOTENESS OF DAMAGE

Section 73 of The Indian Contract Act, 1872

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73. Compensation for loss or damage caused by breach of contract.—When a contract has
been broken, the party who suffers by such breach is entitled to receive, from the party who
has broken the contract, compensation for any loss or damage caused to him thereby, which
naturally arose in the usual course of things from such breach, or which the parties knew,
when they made the contract, to be likely to result from the breach of it. —When a contract
has been broken, the party who suffers by such breach is entitled to receive, from the party
who has broken the contract, compensation for any loss or damage caused to him thereby,
which naturally arose in the usual course of things from such breach, or which the parties
knew, when they made the contract, to be likely to result from the breach of it." Such
compensation is not to be given for any remote and indirect loss or damage sustained by
reason of the breach. Compensation for failure to discharge obligation resembling those
created by contract.—When an obligation resembling those created by contract has been
incurred and has not been discharged, any person injured by the failure to discharge it is
entitled to receive the same compensation from the party in default, as if such person had
contracted to discharge it and had broken his contract. —When an obligation resembling
those created by contract has been incurred and has not been discharged, any person injured
by the failure to discharge it is entitled to receive the same compensation from the party in
default, as if such person had contracted to discharge it and had broken his contract."
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.

As stated in the provisions relating to damages under the Indian Contract Act 1872, one of
the vital requirements for an award of damages is that the loss or damage “arose in the usual
course of things from such breach; or parties knew that such a loss or damage could
subsequently arise at the end of the time of entering into the contract.”12 Thus, the defendant
would not be liable for damages that are remote to the breach of contract.

“Breach of contract” constitutes the pre-condition for a claim of damages, be it liquidated,

unliquidated or otherwise. Thus, irrespective of the extent to which the defendant profits from
the contractual arrangement, there can be no claim for damages unless there is a breach of the
contract. Further, the party committing the breach is liable to compensate by way of damages.

12
Indian Contract Act 1872, s 73.

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To establish a breach, it has to be adjudicated upon and be proved, and not merely decided by
the parties.13

The House of Lords in England in Kourfos v. C. Czarnikow Ltd.14 has enunciated the
following principles: “In case of breach of contract, the aggrieved party is only entitled to
recover such part of the loss actually resulting as was at the time of the contract reasonably
foreseeable as liable to result from the breach........ What was at that time reasonably so
foreseeable depends on the knowledge then possessed by the parties or at all events, by the
party who later commits the breach........ For this purpose, knowledge ‘possessed’ is of two
kinds: one imputed, the other actual. Everyone, as a reasonable person, is taken to know the
‘ordinary course of things and consequently what loss is liable to result from a breach of
contract in that ordinary course.’ But to this knowledge which a contract breaker is assumed
to possess whether he actually possesses it or not, there may have to be added in a particular
case -knowledge which he actually possesses, of special circumstances outside the ‘ordinary
course of things’ of such a kind that a breach in those special circumstances would be liable
to cause more loss.”

For a claim of damages and affixing liability, there has to be causal connection between the
breach committed and the loss or injury suffered. This causal connection is said to have been
established if the act of the defendant amounting to breach of the contract is the only “real
and effective” cause in relation to the injury or damage for which damages are claimed; in the
presence of multiple causes, the “dominant and effective” cause is to be taken into
consideration.15

Establishment of causation would not conclusively, make the defendant liable where the
injury caused is too “remote” to the breach of contract or not foreseeable or where the
contractual terms provide for exclusion of the liability of the defendant under the given
circumstances. Additionally there may be cases, where the flow of causation is broken by

13
. P Radhakrishna Murthy v. NBCC Ltd. (2013) 3 SCC 747; J.G. Engineers (P) Ltd., v. Union of India (2011)
5 SCC 758.
14
(1969) 1 A.C. 350.
15
Yorhhire Dale Steamship Co. Ltd. v. Minister of War Transport, The Coxwold [1942] 2 All ER 6 at 9-10 per
Viscount Simon LC (HL); Gray v. Barr [1971] 2 All ER 949 (CA).

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external causes like those by third parties or acts of nature or by acts of the plaintiff himself
or otherwise. In cases where there is contributory default or negligence of the plaintiff, he
would be disentitled from claiming damages. This would depend on the consideration of the
facts and circumstances. This can be related with the principles of equity that “He who comes
into equity must come with clean hands.”

In the landmark case of Hadley v. Baxendale16, the principle governing remoteness of

damages was elaborated. The rules enunciated in this case were that a party injured by a
breach of contract can recover only those damages that either should “reasonably be
considered... as arising naturally, i.e., according to the usual course of things” from the
breach, or might “reasonably be supposed to have been in the contemplation of both parties,
at the time they made the contract, as the probable result of the breach of it.”17

In circumstances where it is evident that the defendant has not assumed such risk as
contemplated under the special circumstances under the terms of the contract or that any
reasonable man would not have assumed such risk, then mere knowledge of the special
circumstances would not make the defendant liable for the corresponding loss or injury.18

Reiterating the finding in Hadley v. Baxendale19, the following principles of remoteness and
foreseeability were enunciated in Victoria Laundry (Windsor) Ltd v. Newman Industries
Ltd20: “In cases of breach of contract, the aggrieved party is only entitled to recover such part
of the loss actually resulting as was at the time of the contract reasonably foreseeable as liable
to result from the breach. What was at that time reasonably so foreseeable, depends on the
knowledge then possessed by the parties or, at all events, by the party who later commits the
breach. For this purpose, knowledge ‘possessed’ is of two kinds: one imputed, the other
actual. Everyone, as a reasonable person, is taken to know the ‘ordinary course of things’ and
consequently, what loss is liable to result from a breach of contract in that ordinary course.
This is the subject matter of the ‘first rule’ in Hadley v. Baxendale21. But to this knowledge,
which a contract-breaker is assumed to possess whether he actually possesses it or not, there

16
(1854) 9 EX 341.
17
Hadley v. Baxendale (1854) 9 EX 341.
18
H. G. Beale (ed.). Chitty on Contracts (28th edn, Sweet & Maxwell Ltd 1999) 1296.
19
(1854) 9 EX 341.
20
[1949] 2 KB 528.
21
(1854) 9 EX 341.

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may have to be added in a particular case knowledge which he actually possesses, of special
circumstances outside the ‘ordinary course of things,’ of such a kind that a breach in those
special circumstances would be liable to cause more loss. Such a case attracts the operation of
the ‘second rule’ so as to make additional loss also recoverable.”22

This can be summed by referring to the observation made by the Kerala High Court that:
“The defendant is liable only for natural and proximate consequences of a breach or those
consequences which were in the parties’ contemplation at the time of contract… the party
guilty of breach of contract is liable only for reasonably foreseeable losses - those that a
normally prudent person, standing in his place possessing his information when contracting,
would have had reason to foresee as probable consequences of future breach.”23

As per the facts, A research was conducted by Prof. Aldus Humbledore at the University of
Hemsworth on the ‘Lobanza’ Capsule. His Research Paper titled ‘Effects of Lobanza on
humans’ stated that:

“Adults who are prone to drugs, smoking, and tobacco are generally prescribed Lobanza
Capsule by doctors, who reiterate that the capsule has no side effects. The capsule, however,
is not advisable only for those who are prone to various forms of allergy. Consumption of the
same by any such person may cause severe neurological damage.”

Mrs. Amy Santiago, wife of Mr. Pablo Essar, had been constantly pushing him to get rid of
his drug addiction and smoking habit as soon as possible. Mr. Pablo bought and started
consuming Lobanza Capsule each day after subscribing to the advertisement on that hanging
banner. However, he couldn’t refrain from smoking.

On certain occasions, HPC Ltd. encountered frequent problems with few LPT Machines, and
unfortunately on 22nd October 2017 all machines malfunctioned. Mr. Tony appointed Mr.
Steve and his tech-team for the repair. Few instances of illness were reported amongst a few
people but no serious medical catastrophe had occurred.

Unfortunately, Mr. Pablo’s health started deteriorating rapidly, but he still couldn’t refrain
from smoking. As a consequence, he died after eight days of consumption of the capsule. Due
to a sheer lack of awareness in such small districts, Ms. Amy wasn’t aware of the causes that

22
Victoria Laundry (Windsor) Ltd v. Newman Industries Ltd. [1949] 2 KB 528.
23
State of Kerala v. K. Bhaskaran AIR 1985 Ker 49 (para 12).

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lead to her husband’s untimely death, and was oblivious to the legal ramifications of what
had recently transpired.

Thus, it is evident from the facts that death of Pablo Escocar is a remote and indirect loss or
damage which was not foreseeable and neither the same was intended. And moresoever the
actual cause of death of Mr. Pablo Escocar is unknown. Therefore respondent is not liable to
compensate Amy Santiago for the death of her husband and her consequent loss of
livelihood.

3.2 NO CONTRACT FORMED

Sec. 10 of The Indian Contract Act,1872-What agreements are contracts

All agreements are contracts if they are made by the free consent of parties competent to
contract, for a lawful consideration and with a lawful object, and are not hereby expressly
declared to be void.

Nothing herein contained shall affect any law in force in [India], and not hereby expressly
repealed, by which any contract is required to be made in writing    or in the presence of
witnesses, or any law relating to the registration of documents.

Mr. Escocar saw the advertisement of Lobanza capsule on a banner across both sides of the
road. The banner contained a blurry 3-D image of the Lobanza capsule and stated the
following:

“Lobanza Capsule- Lifeline for drug addicts, smokers, and tobacco consumers. Please
contact Riverrun Medicos for the capsule situated on the border of State of Westeros and
other states.”

Mrs. Amy Santiago, wife of Mr. Pablo Essar, had been constantly pushing him to get rid of
his drug addiction and smoking habit as soon as possible. Mr. Pablo bought and started
consuming Lobanza Capsule each day after subscribing to the advertisement on that hanging
banner. However, he couldn’t refrain from smoking.

Unfortunately, Mr. Pablo’s health started deteriorating rapidly, but he still couldn’t refrain
from smoking. As a consequence, he died after eight days of consumption of the capsule.

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Thus, as evident from the fact there was no contract between Amy Santiago or Pablo Escocar
and Steve Rovers, and therefore there is no question of breach of contract and liability of Mr.
Steve Rovers for the consequential loss of livelihood of Ms. Amy Santiago.

3.3 NO CLAIM FOR MEANS OF LIVELIHOOD AGAINST PRIVATE INDIVIDUAL

“The Fundamental Rights and Directive Principles together constitute the conscience of the

Constitution.”24 It is primarily against the might of the State that the individuals need
protection, Article 12 is the key to Part III and unless an authority can be said to be a ‘State’
within the meaning of Article 12 none of the provisions of Part III which relate to the
‘State’will apply to such authority.25The objective behind defining state was to provide an
impetus to the effective enforcement of fundamental rights.26

The doctrine of state action is not defined in the Indian Constitution rather it is implied in
Article 12 of which defines State for the purpose of Part III. It enumerates a list of authorities
against which fundamental rights can be enforced by invoking the writ jurisdiction if
Supreme Court and High Court. As per the Article, State includes the Government and
Parliament of India and government and legislatures of each state in India. It also includes
local and other authorities within the territory of India and local and other authorities under
the control of Government of India.27

24
GLANVILLE AUSTIN, INDIAN CONSTITUTION: CORNERSTONE OF A NATION 50 (1985).
25
The University of Madras v. Shanta Bai A.I.R. 1954 Mad. 67 (In this case the question was whether

the direction issued by the University to its affiliated college to prevent it from admitting girl students

was valid or not. The direction was given because the college lacked facilities to be accommodating

girls. It was alleged by the respondent college that the direction violated Article 15 (1) and 29 of the

Constitution).
26
VII CONSTITUTION ASSEMBLY DEBATES 607-610 (1948) (While initiating a debate on this

Article in the Draft Constitution in the Constituent Assembly, Dr. Ambedkar described the scope of

this Article and the reasons why this Article was placed in the Chapter on fundamental rights.

According to him the object of fundamental rights is twofold firstly, to enable every citizen to claimthose rights
secondly, and to make it binding upon every authority. He insisted on the retention of

Article 12 so that the fundamental rights could be claimed against anybody or authority exercising

power over the people).

27
CONSTITUTION OF INDIA, Art. 12 (“In this part, unless the context otherwise requires, 'the State'

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Therefore, Steve Rover is not liable for the loss of livelihood of Ms. Santiago as he does not
owe the duty to provide for her livelihood and thus she cannot claim for means of livelihood
from Steve Rovers.

Issue 4. Mr. Steve Rovers , being the supplier and service provider of LPT machines is
not liable to compensate Mr. Tony Snark for breach of contract.

It is humbly submitted before this Hon’ble court that there is no breach of contract on the
part of the respondent.

A contract is breached or broken when any of the parties fails or refuses to perform its
promise under the contract. Breach of contract is a legal cause of action in which a binding
agreement is not honoured by one or more parties by non-performance of its promise by him
renders impossible. But in the present matter there is no such case. The Offer made by Mr
Snark for purchase of 3 LPT machines on 14th august 2017 was accepted by respondent. The
delivery was delayed by four days but was accepted by appellant impliedly by making full
payments of machines and machine was duly assembled as per the agreed terms.

includes the Government and Parliament of India and the Government and, the legislature of each of

the States and all local or other authorities within the territory of India or under the control of the

Government of India.”).

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Section 37 of the Indian Contract Act,1872 provides that the parties to the contract are under
obligation to perform or offer to perform, their respective promises under the contract, unless
such performance is dispensed with or excused under the provisions of the Indian Contract
Act or of any other law.

There is no general duty to disclose facts which are or might be equally in access of both the
parties.28

In present case respondent performed his part of obligation comes under contract act.

In case of Keats v Earl of Cadogan29The defendant entered into an agreement with the
claimant for the lease of a property for a term of three years. The claimant intended to reside
in the property with his family. The property concerned was in an extremely poor structural
condition and was likely to collapse at any stage. The defendant however, despite knowing of
this condition, did not inform the claimant of it during the negotiations for the lease, nor did
the defendant inform the claimant after the claimant had agreed the lease and begun to
occupy the property with his family. Ultimately, a large part of the property collapsed and
the claimant sought to rescind the contract, or alternatively commence action in tort for his
losses.

In Nocton v Lord Ashburton 30it was pointed out that a mee passive non- disclosure of the
truth, however deceptive in fact, does not amount to fraud, unless there is a duty to speak.

In present case respondent promised that machine will be duly assembled asper the agreed
term and he delivered machines as per the agreement and appellant was informed to use all
necessary methods to check the machines which he failed to do so. And also machines were
delivered in August and problems started in month of October and in mean time appellant
used one of the machines for making medicine other than Lobanza which was completely
different composition so in such cases making respondent liable for breach of contract would
be injustice.

Also, there was no direct fraudulent act on part of respondent as the defects in machines were
minor and patent it was duty on part of appellant to duly check it before accepting order and
once order accepted contract was concluded.

28
Pollock and Mulla on Indian Contract act and Specific relief Act, ninth edition, P.158.
29
(1851) 20 LJ CP 76 Common Pleas.
30
(1914) AC 932.

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Vellasamy Lakshimi v Muthusamy Suppiah David it was held that unless a representee can
show that there is dishonesty on the part of the representor, there is no fraud even if the
statement is far-fetched, negligent or ill-conceived.

“whenever fraud or deceit is alleged, a high degree of proof is required on he who asserts”

And there is no case of dishonesty as appellant was advised to check the machines properly.
In case of Drek v. Peek 31- For fraudulent misrepresentation to arise, the false representation
must be made knowingly, or without belief in its truth, or recklessly, careless whether it be
true or false.

And in present matter none of these are present thus act of respondent is not fraudulent thus
no question of breach of contract arises.

PRAYER

Wherefore, in the light of the fact stated, arguments advanced and Authorities cited, it is most
humbly prayed and implored before the Honourable Supreme Court of Asnard that it may be
graciously pleased to adjudge and declare that
Fraud was committed by Mr. Steve Rovers under section 17 of the Indian Contract Act,1872?
Contract dated 14th August 2017 is voidable at the option of Tony Snark.
Right to Livelihood of Ms. Amy Santiago has been violated .
Mr. Steve Rovers is Liable to Compensate Mr. Tony Snark for breach of contract.
Also, pass any other order that it may deem fit in the favour of Applicant to meet the
ends of equity, justice and good conscience.
For this Act of Kindness, the Applicant shall duty bound forever pray.

31
1889 )UKHL 1.

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Place: JAMIA MILIA ISLAMIA

Date: 17th Nov.2018

THE RESPONDENT

Sd/-

.............................. (COUNSEL FOR THE “RESPONDENT”)

MEMORIAL FOR THE RESPONDENT