Case Study – Contract Act

1. Amar Nath after completing his MBA with

specialization in marketing in the year 2001 joined a job
in a leading FMCG company. He was the eldest child of
his parents He had a desire to become an entrepreneur.
He was not keen to marry as his priority was to set up
his own business & thereafter plan to get married but his
parents forced & he had to accept their wish. So , he got
married in Feb 2006 was blessed with a child on 3 July
2009.

2. Amar set up his own business of printing press in the

year 2013. He also used to invest in stocks & shares. On
4th July Amar had two visitors; Bharat & Ram in his
office. Bharat ran an event management company
named Glaxy Pvt Ltd . Amar had hosted a party the
previous evening to celebrate his son’s birthday . Party
was arranged by M/S Glaxy Pvt Ltd . Party arrangements
& food were appreciated by all the guests, especially the
games were enjoyed by the children. Mr Bharat himself
coordinated all the arrangements of the party. Mr Bharat
had come to Amar’s office to collect the payment of Rs
30,000/= for having done the work.

3. Amar conveyed his thanks to Bharat for meticulously

making all the arrangements for the party. He was about
to pay to Mr Bharat that Mr Rahul entered his office.
 Rahul was the son of ex- colleague of Amar ; who was
also his very good friend. Rahul’s family had fallen into
bad times . They had accumulated a lot of debts. Rahul
was studying in the final year of the college. He was
finding extremely difficult to pay college fees . He was
going around and meeting all those person who were
known to his father & also had good relations with him.

4. Rahul had come to Amar to solicit money as donation, so

as to be able to pay his education expenses & complete
the studies. Amar was a kind person . He told Rahul that
he would give him Rs5,000/= . Rahul requested that If
Amar could give him 20,000/= , then he will not have to
go to any one else to seek donation or loan. Amar agreed
to give him Rs10,000/=

5. While Amar was in the process of getting money to pay

Bharat & Rahul , his phone rang. It was a call from
Amar’s broker. He informed Amar that on a particular
purchase & sale order Amar had placed , Amar had lost a
huge amount of money. He had to pay broker 9 lakhs
with in 3 weeks . Amar was very upset. He told Bharat
& Rahul that his bad days have come . Over & above the
cash he had with him at that time , he would have to sell
off his belongings to pay back the broker. Under such
circumstances , Amar refused to pay the money he had
 agreed to pay to Bharat & Rahul earlier, and asked them
not to come back again.

Questions to be discussed
1. Was there an agreement between Amar & Bharat?
2. Was there an agreement between Amar & Rahul?
3. If the above are agreements , must these agreements
be fulfilled .
4. If Amar does not honor these agreements , then can
Bharat & Rahul file suit against him?