CASE STUDY ON CONTRACT ACT

USHA MARTIN UNIVERSITY

Case Study 1:

Xyz & co. operated a mill, and a component of their steam engine broke causing them to shut
down the mill. Xyz & co. then contracted with Mr. Adams, common carriers, to take the
component to W. Joyce & Co. to have a new part created. When delivery was delayed due to
Mr. Adams neglect, causing Xyz & Co.’s mill to remain closed longer than expected, Xyz & co
sued to recover damages.

Based on above facts answer the following questions:

1. The above facts relates to which aspect of contract. Discuss

2. Can Xyz co. claim for special damages? Give reasons
3. Under would have been the circumstances to charge exemplary damages.
4. What if no loss was caused?

Case Study 2

The plaintiff, Dharmodas Ghose, while he was a minor, mortgaged his property in favour of the
defendant, Brahmo Dutt, who was a moneylender to secure a loan of Rs. 20,000.  The actual
amount of loan given was less than Rs. 20,000.  At the time of the transaction the attorney, who
acted on behalf of the money lender, had the knowledge that the plaintiff is a minor.

Based on above facts answer the following questions:

1. What is the nature of the contract? How does the law view it?
2. What would have been the status of the contract if the attorney was not aware of his
minority?
3. Can the contract be ratified after attaining majority?
4. Will the ststus remain the same if there is contract for supply of necessities?

Case Study 3

A sells by auction to B, a horse which A knows to be unsound. A says nothing to B about the
horse's unsoundness.
Based on above facts answer the following questions:

1. In the above mentioned circumstance has A committed fraud with B?

2. Will the case would have been different if B says to A "If you don't deny it, I shall assume
that the horse is sound".
3. What would have led the same case into misrepresentation?
4. Discuss at length the difference between fraud & misrepresentation.

Case Study 4

The Defendant, the Carbolic Smoke Ball Company of London (Defendant), placed an
advertisement in several newspapers on November 13, 1891, stating that its product, “The
Carbolic Smoke Ball”, when used three times daily, for two weeks, would prevent colds and
influenza.  The makers of the smoke ball additionally offered a 100£ reward to anyone who
caught influenza using their product, guaranteeing this reward by stating in their advertisement
that they had deposited 1000£ in the bank as a show of their sincerity.  The Plaintiff, Lilli Carlill
(Plaintiff), bought a smoke ball and used it as directed.  Several weeks after she began using the
smoke ball, Plaintiff caught the flu.

1. Whether the offer made by Carbolic Smoke Ball a valid offer?

2. How is this case exception to the clause “Acceptance must be communicated”?
3. Does this case involve consideration which is essential ingredient of contract?
4. Can this offer be set aside for being vague?