FRESHERS’ INDUCTION MOOT 2021,

Campus Law Centre

IN THE COURT OF HON’BLE DISTRICT JUDGE AT

HOGSMEADE, BRITANNIA

MR. RONALD………………………………………..PLAINTIFF

VERSUS

MALFOY CONSTRUCTION
& RENOVATION LTD……………………………….DEFENDANT

MEMORIAL ON BEHALF OF PLAINTIFF

COUNSEL APPEARING ON BEHALF OF PLAINTIFF

 TABLE OF CONTENTS

Page No.

Index of authorities 3

Statement of jurisdiction 4

Statement of facts 5

Statement of issues 6

Summary of arguments 7

Arguments advanced 9

1. Whether time was of the essence of contract ? 9

A. Whether the parties intended to make time as essence of 10
contract?
B. Whether the nature of contract required time to be of essence
11
to the contract?

2. Whether there was a breach of Contract by the 13

defendant ?
A. Did the non-performance of contractual obligation result in 13
breach?
B. Whether COVID-19 can be termed as a force majeure 16
event ?

3. Whether the losses which accrued to the plaintiff 19

due to the breach of contract by defendant?

Prayer 23

~2~
 INDEX OF AUTHORITIES

STATUTES:

1. The Indian Contract Act, 1872

2. Code of Civil Procedure, 1908

BOOKS:

1. Pollock & Mulla, The Indian Contract Act,1872, 15th ed

2. Avtar Singh, Contract & Specific Relief, 12th ed.
3. Dr. R.K Bangia, Indian Contract Act, 15th ed.

CASES:

1. Hitkari Motors v Attar Singh (AIR 1962 J & K 10)

2. Saradamani Kandappan v S Rajalakshmi (MANU/SC/0717/2011)
3. Bhudar Chandra Goswani v C.R.S. Betts (MANU/WB/0363/1915)
4. China Cotton Exporters v Beharilal Ramcharan Cotton Mills Ltd (MANU/SC/0058/1961)
5. Muhammad Habidullah v. Bird and Company (MANU/PR/0018/1921)
6. Aryan Mining and Trading Corporation Ltd. vs. B.N. Elias and Co. Ltd. and Ors.
(MANU/WB/0131/1959)
7. Naihati Jute Mills Ltd. v. Hyalira (MANU/SC/0348/1967)
8. Satyabrata Ghose v. Mugneeram Bangur & Co and Ors (MANU/SC/0131/1953)
9. Energy Watchdog vs. Central Electricity Regulatory Commission And Ors.
(MANU/SCOR/12947/2017)
10. Goel Associates vs. Shama Cooperative Group Housing Society (MANU/DE/2843/2009)
11. Kanchan Udyog Limited vs. United Spirits Limited (MANU/SC/0699/2017)
12. B.R. Herman and Ors. vs. Asiatic Steam Navigation Co., Ltd. and Ors.
(MANU/SN/0056/1941)

~3~
 STATEMENT OF JURISDICTION

The plaintiff approached the Hon’ble Court to exercise its jurisdiction as per section 15 of Civil
Procedure Code, 1908 read along with the Delhi High Court Act (Amendment), 2015.

Section 15 of the Civil Procedure Code, 1908 reads:

Court in which suits to be instituted.—Every suit shall be instituted in the Court of the lowest
grade competent to try it.

Section 5 sub section 2 of the Delhi High Court Act,2015 reads:

Notwithstanding anything contained in any law for the time being in force, the High Court of
Delhi shall also have in respect of the said territories ordinary original civil jurisdiction in every
suit of value which exceeds rupees two crore.

The notification published in Delhi gazette dated 4 July, 2018 regarding the pecuniary
jurisdiction of commercial courts at district level specifies that,

‘The pecuniary value of the commercial courts at district level shall be above three lakh rupees
and not more than 2 crore rupees.’

~4~
 STATEMENT OF FACTS

1. Mr. Ronald (plaintiff) owns Hogwarts Garden, a wedding parlour in Hogsmeade,

Britannia. The Renovation of this commercial estate was contracted out to Malfoy
Construction & Renovation Ltd (herein after Malfoy) whose CEO Mr. Draco was a
trusted friend of the plaintiff. The work began in January as per the agreement and had to
be completed in a reasonable time, to be ascertained jointly by both the parties.
2. In July Mr. Draco was informed about the booking of Hogwarts Garden by Mr. Harry for
the purpose of his daughter’s marriage on November 5. On learning this, it was affirmed
that the renovation shall be completed by 30th September.
3. On September 25 through Draco’s mail, where he cited managerial and financial issues in
the company that led to delay in work did the plaintiff came to know about the internal
strife that has been prevalent in Malfoy.
4. Mr. Draco asked for extension to complete the project. Staying true to his Britannian
value of treasuring relationships, the plaintiff gave an extension to his friend. He asked
Mr. Draco to complete the renovation under any condition by 20th October, thereby
giving him an ultimatum.
5. On October 9 guidelines were released by the government on COVID 19 which had
emerged in the state. The guidelines in Annexure C asked workplaces to comply with
hygiene and social distancing norms while continuing with their work.
6. Due to mismanagement amongst various projects and non compliance of proper
precautionary measures to prevent spread of COVID-19 by Malfoy (defendant), the
workers went on strike on October 15 thereby halting the renovation work at Hogwarts
Garden. With only 5 days remaining to complete the project and 30% of the work left
owing to the lethargic pace at which the work was going on, Mr. Draco could not
complete the renovation in time which ultimately resulted in the venue not being
prepared for Mr. Harry’s daughter’s marriage.
7. Mr. Harry thus sued Mr. Ronald in Consumer Court making him liable to return the token
amount of 10000 pound and pay additional 4000 pounds as damages. Mr. Ronald’s
inability to perform his obligation resulted in delay of a marriage which not just led to
loss of business but also his reputation solely due to Malfoy’s breach of contract.

~5~
 STATEMENT OF ISSUES

1. Whether time was of the essence of contract?

A. Whether the parties intended to make time as essence of contract?
B. Whether the nature of contract required time to be of essence to the contract?

2. Whether there was a breach of Contract by the defendant?

A. Did the non-performance of contractual obligation result in breach?
B. Whether COVID-19 can be termed as a force majeure event?

3. Whether the losses which accrued to the plaintiff due to the breach of contract
by defendant?

~6~
 SUMMARY OF ARGUMENTS

1. Whether time was of the essence of contract?

It is respectfully submitted that to prove time as essence of contract there needs to an express or
implied stipulation which is to be determined examining the intention of the parties. The nature
of the contract should require time to be an essence and delay should operate as an injury. The
contract between the plaintiff and the defendant is of renovating a commercial estate where time
is considered to be of essence, delay proved to be injurious to the plaintiff. Both the parties were
aware of the urgency to complete project in time and had agreed to do so. Their conduct sheds
light on their intention to keep time as essence of contract

2. Whether there was a breach of contract by the defendant?

The non-performance of contractual obligations by Malfoy resulted in breach of contract. The

workforce and management had been at odds with each other even before the renovation began,
this was kept out of the knowledge of the plaintiff. Malfoy due to their internal managerial and
financial issues had created such circumstances that disabled them from completing the project
in time. The defendant failed to deliver upon the terms of the agreement; it was thus a breach of
contract

COVID 19 cannot be termed as a force majeure event as per the circumstances in Hogsmeade.
The COVID guidelines allowed the workplaces to continue with their work if they complied with
social distancing and hygiene norms. Relief is given in case of force majeure events when the
event upsets the very foundation of the contract and the circumstances are altered in a way that it
is impossible to perform their obligations. The guidelines did not alter the circumstances such
that it would be impossible for a construction and renovation company to complete a renovation
project in time.

3. Whether the losses which accrued to the plaintiff due to the breach of contract
by defendant?

~7~
The defendant had failed to deliver on his terms of the agreement and hence breached the
contract. As per Section 73 of the Indian Contract Act, when one party breaches the contract then
the aggrieved party can claim damages for the losses that were a direct consequence of that
breach. The defendant’s breach of contract by not completing the renovation in time made Mr.
Ronald liable to pay damages to Mr. Harry. Mr. Ronald also suffered loss of business and loss of
reputation due to the failure of the defendant to fulfil their contractual obligations.

~8~
 ARGUMENTS ADVANCED

1. Whether time was of the essence of contract?

1) Section 55of the Indian Contract Act 1872 states:

Effect of failure to perform at fixed time, in contract in which time is essential.—When a

party to a contract promises to do a certain thing at or before a specified time, or certain things
at or before specified times, and fails to do any such thing at or before the specified time, the
contract, or so much of it as has not been performed, becomes voidable at the option of the
promisee, if the intention of the parties was that time should be of the essence of the contract.

Effect of such failure when time is not essential.—If it was not the intention of the parties that
time should be of the essence of the contract, the contract does not become voidable by the
failure to do such thing at or before the specified time; but the promisee is entitled to
compensation from the promisor for any loss occasioned to him by such failure.

Effect of acceptance of performance at time other than that agreed upon.—If, in case of a
contract voidable on account of the promisor’s failure to perform his promise at the time agreed,
the promisee accepts performance of such promise at any time other than that agreed, the
promisee cannot claim compensation for any loss occasioned by the non-performance of the
promise at the time agreed, unless, at the time of such acceptance, he gives notice to the
promisor of his intention to do so.

2) The aforementioned section states the distinct legal rights of parties in a contract when time is
of essence and when it’s not but the section does not shed light on when time is regarded to be
the essence of a contract. The question whether time is of essence to the contract is a question of
fact and hence it becomes the duty of the court to look at the pith and substance of the contract
and determine the same1

3) Time is generally considered to be of essence of a contract in the following cases:

1. Where parties have expressly agreed to treat it as the essence of the contract;
1
Hitkari Motors v Attar Singh, AIR 1962 J & K 10, p 11

~9~
 2. Where delay operates as an injury;
3. Where the nature and necessity of the contract requires it to be so construed2

The contract between the petitioner and defendant fulfilled each of the aforementioned
conditions, hence the petitioner claims that time was of essence to the contract.

A. Whether the parties intended to make time as essence of contract?

4) Mere insertion of a term in a contract that a certain act shall be done at a specified time will
not necessarily indicate that time is the essence of the contract, nor would the absence of it
indicate that time is not of the essence. The question, whether time is of the essence of the
contract, does not depend upon express stipulation to that effect made by the parties, but it
depends upon the intention of the parties. The intention can be gathered either from the express
terms of the contract or impliedly from the intention of the parties as expressed by the terms of
the contract3

5) The contract between the plaintiff and the defendant was dated 15th December 2019 and the
defendant was expected to finish the work within a reasonable time4. After completion of more
than 7 months i.e. in July he was informed of the marriage that is supposed to take place at the
Hogwarts Garden on November 5 and reminded of the need for timely completion. Mr. Draco
had assured that the renovation would be complete by September 30; he was given a reasonable
time to complete the project. The plaintiff believed in the assurance given by Mr. Draco as
Malfoy was a renowned name in the market however the mail by Mr. Draco attached in
Annexure B came as a shock to the plaintiff where he states that there has been a delay in
completion of the project.

6) His acceptance of delay signifies that he too intended to adhere to the time limit. He was
aware that he was at fault for not completing the project in time and he expressed regret for the
same5, this shows that time was an essence of the contract and it is further evident from his
request of extension. The Hon’ble High Court of Calcutta in Bhudra Chand v Betts held that the

2
Avtar Singh, Contracts & Specific relief, 12th ed., Pg. 377
3
Saradamani Kandappan v S Rajalakshmi (MANU/SC/0717/2011)
4
Annexure A, Clause 1
5
Annexure B

~ 10 ~
very circumstance that the defendant asked for extension of the time, showed that time was
intended to be of the essence of the contract6

7) The plaintiff agreed to the extension asked by Mr. Draco and gave him another 20 days
because being a Hogsmadean he values his relationships, however he expressly notified that it
was an ‘ultimatum’ and the work should be completed ‘under any condition’. This clearly
ascertains the intention of the parties being in agreement of time being the essence of the
contract.

B. Whether the nature of contract required time to be of essence to the contract?

8) A Treatise on Specific Performance of Contracts enunciates that time may be implied as

essential in a contract from the nature of the subject matter with which the parties are dealing.
The learned author made it very clear that in a contract relating to commercial enterprise the
Court is strongly inclined to hold time to be essential 7 . Even the Hon’ble Supreme Court
ascertained that in Commercial contracts time is ordinarily of the essence of the contract 8. In
Commercial Contracts the need for certainty is of great importance, the reason being that such
contracts are not in isolated transactions but form a link to a chain of transactions say if A does
not keep his contract with B, then B may not be able to keep his contract with C

9) Annexure A clearly states that it is an agreement for the renovation of a commercial estate, the
nature and necessity of the contract thus requires it to construe that time was the essence of the
contract. It is thus implied that since the estate is a commercial property which is used for the
purposes of marriages and other social gathering, the work of renovation shall be conducted in a
manner to ensure that the minimum loss of business could be caused to the plaintiff and the
estate can be used for such purposes at the earliest possible. The delay in the performance by the
defendant led to the inability of the plaintiff to perform his obligation towards Mr. Harry. It
proved to be injurious to the plaintiff as he lost business and it even hampered the reputation of
Hogwarts Garden

6
Bhudar Chandra Goswani v C.R.S. Betts (MANU/WB/0363/1915)
7
Fry Edward, A Treatise on Specific Performance of Contracts, 6th Ed, Pg 505
8
China Cotton Exporters v Beharilal Ramcharan Cotton Mills Ltd (MANU/SC/0058/1961)

~ 11 ~
10) The nature of commercial contracts sheds light on the fact that delay in performance of
contract operates as an injury to the party, it is thus presumed that time will be of essence in such
contracts.

11) The agreement between the plaintiff and the defendant was a commercial contract with
stipulated time limits which the defendant had assured they would follow. Their delay operated
as an injury for the plaintiff. The chain of correspondence right from the inception down to the
date of ultimatum reminding the appellant to do the job within the period laid down in the
contract under any condition, quite clearly and unambiguously expresses the intention of the
parties to keep time as essence of contract.

12) The facts of the current case manifest that both the parties intended to keep time as essence
of the contract , the nature of contract also ascertains that time was an essence of the contract.
The delay evidently proved to be injurious to the plaintiff, thus all the three conditions which
prove that time was the essence of the contract are fulfilled.

~ 12 ~
 2. Whether there was a breach of contract by the defendant?

13) A breach of contract occurs when a party in a binding agreement fails to fulfil their part of
the agreement. According to the contract signed between the plaintiff and the defendant both the
parties had to jointly ascertain the date by which the renovation of Hogwarts Garden shall be
finished.9

A. Did the non-performance of contractual obligation by the defendant result in breach

of contract?

Section 39 of the Indian Contract Act states:

Effect of refusal of party to perform promise wholly.—When a party to a contract has refused
to perform, or disabled himself from performing, his promise in its entirety, the promisee may
put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its
continuance

14) The aforementioned section asserts that if a party due to his own act disables himself from
performing his promise then the other party can end the contract. A party is seen to have disabled
themselves from performing their contractual obligations not only when he deliberately puts it
out of his power to perform the contract, but also when, by his own act or default, circumstances
arise which render him unable to perform his side of the contract or some essential part thereof10.
In this case too, the defendant due to their own internal discord created circumstances which led
to their inability to perform their contractual obligation.

15) The defendant was given the contract to renovate a commercial estate which implied that the
work needed to be done timely to ensure minimum loss of business to Hogwarts Garden, one of
the most sought after wedding parlor in Hogsmeade.

16) The defendant had kept the plaintiff in dark from the very beginning of the contract; the
plaintiff had no information about the growing friction between the management and the
workforce that existed even before the renovation work began. Hence even in July i.e. 6 months
after the beginning of the renovation there was considerable work remaining.

9
Annexure A, Clause 1
10
Pollock & Mulla The Indian Contract Act,1872, 15th ed. (s 39.5)

~ 13 ~
17) In July, Mr. Draco was informed about the booking of Hogwarts Garden for November 5 and
again asked to complete the work as soon as possible. Mr. Draco assured that the work would be
completed before 30th September. The date for completion of project was thus jointly ascertained
to be by 30th September 2020.

18) However in August 2020 the friction between the management of Malfoy and the workforce
escalated. Malfoy had taken numerous projects and could not manage the work , there was delay
in payment to the workforce by Malfoy which had been a major bone of contention between the
management and workforce even before the Hog wart’s Garden project had begun. The
management was still in talks with the trade union of workers which signifies that the parties had
not yet come to a resolution. All this was kept out of the knowledge of the plaintiff, even when
he asked for an extension to pay his installments which ascertains his willingness to keep his part
of the promise, Mr. Draco agreed to the extension and not once expressed any contrary
contention. These managerial and financial issues of Malfoy as cited by Mr. Draco in Annexure
B were the principal cause of their discord with the workers.

19) The escalated strife in August let to a lethargic pace of work not just at Hogwarts Garden but
at numerous other projects taken up by Malfoy which stresses the inability of the defendant. to
manage its project and deliver on its contractual obligations.

20) Mr. Draco through mail on 25th September expressed regret for the delay that their own
issues had caused and asked for an extension. The petitioner gave the defendant an extension of
20 days and asked them to complete the project under and condition by 20th October. This date
was agreed upon by the defendants, evident from his act and conduct, when the defendant
continued the renovation work at Hogwarts Garden.

21) However with emergence of COVID 19, new guidelines were provided on 9th October.
Workplaces had to ensure social distancing and maintain hygiene by use of masks and sanitizers
to prevent spread of COVID-19 while continuing with their work. But the haphazard
management and non compliance of precautionary measures further intensified the existing rift
with the workers. The workers on October 15th went on strike i.e. 5 days before the deadline.
There was still 30% work to be completed and only 5 days to complete it, thus the defendant

~ 14 ~
could not complete the project. Since the defendant failed to deliver even on the extended date,
they breached the contract.

22) Lord Dunedin while giving the judgment of the Judicial Committee, after referring to Section
55, para 1 of the Indian Contract Act said:

"The respondents here did not elect to avoid the contract; they held it as subsisting, and agreed
to prorogue the time of performance. This they were entitled to do. See Section 63 of the Indian
Contract Act, which explicitly says so."11

Section 63 of the Indian Contract Act States:

Promisee may dispense with or remit performance of promisee.—Every promisee may dispense
with or remit, wholly or in part, the performance of the promisee made to him, or may extend the
time for such performance, or may accept instead of it any satisfaction which he thinks fit

23) In view of Sections 55 and 63 of the Indian Contract Act, on the expiry of the stipulated time
for delivery the buyer may elect not to avoid the contract and may extend the time for
performance and where such extension is agreed to by both the seller and the buyer the
agreement is binding on both of them and the seller is bound to deliver on the extended date. It
does not matter that this agreement takes place after the original date of delivery has expired and
when the seller has already committed breach of the contract. If the goods are not delivered, the
buyer is entitled to damages for non-performance at the extended time and such damages must
be calculated in the ordinary way.12

24) Malfoy was thus liable for the non performance of contract obligations due to its inability to
complete the renovation of Hogwarts Garden within the extended time period agreed upon by the
two parties. This failure of the defendant to deliver upon his terms of the agreement resulted in a
breach of contract.

11
Muhammad Habidullah v. Bird and Company (MANU/PR/0018/1921)

12
Aryan Mining and Trading Corporation Ltd. vs. B.N. Elias and Co. Ltd. and Ors. (MANU/WB/0131/1959)

~ 15 ~
 B. Whether COVID-19 could be treated as a force majeure event ?

25) According to Black’s Law Dictionary, the term ‘force majeure’ means an event or effect that
can be neither anticipated nor controlled. It is used with reference to all circumstances
independent of the will of man, and which, it is not in his power to control and such force
majeure is sufficient to justify the non-execution of a contract13

26) The concept of force majeure owes its origin to Roman Law which recognized the principle
of “clausula rebus sic stantibus” which provides that obligations under a contract are binding so
long as the situation existing at the time the contract was entered into fundamentally remains the
same.

27) Neither has the term force majeure been particularly defined in any of the provisions in the
Indian Contract Act 1872 nor any qualification given for events/circumstances to be termed as
force majeure events. Nevertheless the references to the same may be gathered from certain
specific provisions laid therein. In cases where the contract entered into between the parties
contains an express or implied force majeure clause, defining the type of events, the dissolution
of the contract would take place under the terms of the contract itself and such cases would be
dealt with under Section 32. However, when no relevant event is mentioned in a contract as in
the present case, the occurrence of which frustrates the very purpose of the contract, the
provision contained in Section 5614comes into play.

28) Section 56 15 the Indian Contract Act states that a contract to do an act which, after the
contract is made, becomes impossible, or, by reason of some event which the promisor could not
prevent, unlawful, becomes void when the act becomes impossible or unlawful16

29) Its unequivocally clear that the contract to renovate the commercial estate had neither
become unlawful nor impossible. The prevalence of COVID 19 and the subsequent guidelines

13
Black’s Law Dictionary, Edition 11 (2019
14
Indian Contract Act, 1872
15
Indian Contract Act, 1872
16
Indian Contract Act, 1872

~ 16 ~
only place basic social distancing and hygiene related guidelines, the workplaces could continue
with their work.

30) The apex court has stated that under Section 5617, the court can proceed to grant relief on the
ground of subsequent impossibility when the very foundation of the contract becomes upset by
the happening of an unforeseen event which was not anticipated by the parties at the time when
the contract was entered into by them. Such event or change must be so fundamental as to be
regarded by law as striking at the root of contract as a whole18

31) The Supreme Court in 2017 reiterated the celebrated judgment of Satyabrata Ghose v.
Mugneeram Bangur & Co and Ors.19 where the Hon’ble Court concluded that a contract is not
frustrated merely because the circumstances in which it was made are altered. The Courts have
no general power to absolve a party from the performance of its part of the contract merely
because its performance has become onerous on account of an unforeseen turn of events.20

32) In Pollock and Mulla, Indian Contract Act, 187221:

The impossibility referred to in the second clause of section 5622 does not include what is called
commercial impossibility, namely, extreme or unforeseen cost or difficulty of performance. A
strike of workmen employed in executing work under a contract does not of itself make
performance impossible for the purpose of this section.

33) Therefore it is unambiguously evident that COVID-19 cannot be termed as a force majeure
event with respect to the contract between the plaintiff and defendant. COVID-19 Guidelines
provided in Annexure C did not restrict the working of workplaces; it just spelled out
precautionary measures which were to be complied by everyone alike. This did not alter the
fundamental conditions in such a way that it made it impossible to complete a renovation project.

17
Indian Contract Act, 1872
18
Naihati Jute Mills Ltd. v. Hyalira (MANU/SC/0348/1967)
19
Satyabrata Ghose v. Mugneeram Bangur & Co and Ors (MANU/SC/0131/1953)
20
Energy Watchdog vs. Central Electricity Regulatory Commission And Ors. (MANU/SCOR/12947/2017)
21
Pollock & Mulla The Indian Contract Act,1872, 15th ed. (s.56.4.6)
22
Indian Contract Act,1872

~ 17 ~
What hindered the defendant from completing his obligation were commercial impossibility and
not COVID 19.

34) The workplaces were free to continue with their work if they complied with the guidelines.
This did not alter the circumstances which would render the contract between the plaintiff and
defendant impossible to complete. It can thus be affirmed that COVID-19 cannot be termed as a
force majeure event as per the circumstances that were prevalent when the contract was breached
by the defendant.

~ 18 ~
 3. Whether the losses which accrued to the plaintiff due to the breach of contract by
defendant?

35) The defendant could not complete the project by 20th October and thus breached the contract.
A breach of contract entitles the aggrieved party to claim damages for the losses that accrued to
them due to the breach.

Section 73 of Indian Contract Act states:

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. Such compensation is not to be
given for any remote and indirect loss or damage sustained by reason of the breach.

36) The aforementioned section states that that when a contract is breached then the party
suffering due to it can claim damages from the party who broke the contract, therefore in this
case the plaintiff who has accrued losses due to non-performance of the contract by the
defendant is entitled to claim damages. The Hon’ble Delhi High Court stated that the governing
objective of damages is to put the aggrieved party in a position which it would have been had the
contract been satisfactorily performed23.

37) Section 73 24 provides that in order to claim damages, the losses have to be a direct
consequence of the breach of contract. The Supreme Court upheld the following principle:25

The important issue in remoteness of damage in the law of contract is whether a particular loss
was within the reasonable contemplation of the parties, but causation must also be proved: there
must be a causal connection between the Defendant's breach of contract and the Plaintiff's loss.
The courts have avoided laying down any formal tests for causation: they have relied on

23
Goel Associates vs. Shama Cooperative Group Housing Society (MANU/DE/2843/2009)
24
Indian Contract Act,1872
25
Kanchan Udyog Limited vs. United Spirits Limited (MANU/SC/0699/2017)

~ 19 ~
common sense to guide decisions as to whether a breach of contract is a sufficiently substantial
cause of Plaintiff's

38) Despite there not being a definite set of guidelines, one ought to prove that the breach caused
the losses. For example, if a contractor employed for a specified work fails to do it in the
stipulated time or in a reasonable time period if no time has been specified and as a consequence
of this delay, the employer incurs losses then he is entitled to recover the losses.26

39) When on October 20 the renovation project was not completed it resulted in a breach of
contract by the defendant. Solely due to this and through no fault of his own, the plaintiff could
not complete his contractual obligation of providing the renovated venue to Mr. Harry for his
daughter’s wedding and this led to loss of business for the plaintiff. The plaintiff owned the most
sought after wedding parlor in Hogsmeade where people celebrate every monumental event with
show and pomp. When he could not provide the venue in time, he upset Mr. Harry a respectable
citizen and this news spread like wildfire in town and his reputation suffered immensely. Not just
this, he also had to face a suit filed by Mr. Harry in Consumer Court where he had to return the
10000 pounds he had taken as advance as well as pay 4000 pounds as damages for his breach.
None of this would have happened but for the breach of contract by the defendant.

40) The damages he had to pay for the suit, the loss of business and the loss of reputation of
Hogwarts Garden naturally arose in the usual course of things from the breach of the defendant
as he was well aware of Mr. Harry’s booking of the venue for November 5. It is evident that the
losses which plaintiff accrued were due to the breach of contract by the defendant.

Section 73, Illustration (l)27:

A, a builder, contracts to erect and finish a house by the first of January, in order that B may
give possession of it at that time to C, to whom B has contracted to let it. A is informed of the
contract between B and C. A builds the house so badly that, before the first of January, it falls
down and has to be re-built by B, who, in consequence, loses the rent which he was to have
received from C, and is obliged to make compensation to C for the breach of his contract. A must

26
Pollock & Mulla The Indian Contract Act,1872, 15th ed. (s. 73.26.3)
27
Indian Contract Act, 1872

~ 20 ~
make compensation to B for the cost of rebuilding the house, for the rent lost, and for the
compensation made to C

41) In accordance with the aforementioned illustration the defendant is liable to compensate for
the damages that the plaintiff paid to Mr. Harry as he had knowledge about the contract between
Mr. Harry and Mr. Ronald. It was due to the defendant’s breach that plaintiff had to pay damages
to Mr. Harry and thus claims compensation. The defendant should thus finance the damages i.e.
4000 pounds that the plaintiff paid to Mr. Harry.

42) Illustration (l) also provides B with compensation for loss of rent which he would have
received from C, hence the as per the illustration the defendant should also pay damages for the
loss of business which accrued to the plaintiff. The contract also states that the delay in
completion of the project caused due to the Contractor, shall entitle the Owner to receive
damages to be determined reasonably in proportion to the loss of business suffered by the
Owner28, the plaintiff thus reasonably claims 10000 pounds for his loss of business.

43) The theory of damages is that they are a compensation and satisfaction for the injury
sustained, that is, that the sum of money to be given for reparation of the damages suffered
should as nearly as possible, be the sum which will put the injured party in the same position as
he would have been if he had not sustained the wrong for which he is getting
damages29.Hogwarts Garden was one of the most sought after wedding parlors in Hogsmeade
however the position of the estate has altered considerably in the eyes of the citizens after the
plaintiff’s failure to provide the venue in time for Mr. Harry. This was a direct consequence of
the defendant’s breach of contract. It is imperative to put the plaintiff in the same position he
would have been had he not suffered the injury. The plaintiff thus prays to the Hon’ble court to
compensate him for loss the loss of reputation of Hogwarts Garden.

28
Annexure A, Clause 4
29
B.R. Herman and Ors. vs. Asiatic Steam Navigation Co., Ltd. and Ors. (MANU/SN/0056/1941)

~ 21 ~
The plaintiff has suffered loss on numerous grounds due to Malfoy’s breach of contract. Section
7330 thus entitles him to claim damages from the defendant. The plaintiff claims the following
from the defendant:

Particulars Amount (In Pounds)

Compensation for damages paid to Mr. Harry 4000
Damages for loss of business 10000
Damages for loss of reputation 4000
Litigation costs 2000
Total 20000

30
Indian Contract Act, 1872

~ 22 ~
 PRAYER

In light of the issue raised, arguments advanced, authorities cited and the pleadings made before
this Hon’ble Court, the plaintiff respectfully prays for a decree for compensation of damages in
the sum of 20,000 pounds (Twenty thousand pounds) in favour of the plaintiff and against the
defendant.

The Hon’ble Court may pass any other or further such order as it may deem fit and proper in the
facts and circumstances of the present case.

Signed
s/d- Counsel for the Plaintiff

~ 23 ~