OFFER – capacity to Powell v. Lee A person appeared for an interview for a school job.

iew for a school job. was told by some unauthorized person that he was
offer as a necessary selected. so resigned from the previous job. later on got to know he was not selected. sued for breach of
precondition to a valid contract. Court said the guy had no capacity to offer. OFFER SHOULD BE MADE BY OFFEROR
offer HIMSELF, OR PERSON AUTHORIZED BY HIM

OFFER – Certainty of Harvey v. Facey Involved negotiations over property in Jamaica. Facey wanted to sell property to the City. Harvey
offer as a necessary… wanted to buy it, so sent him a telegram saying “Will you sell us Bumper Hall Pen? Telegraph lowest
valid offer. cash price-answer paid”. (only query) Facey replied “Lowest price for Bumper Hall Pen
£900.”(statement offer) H said “Í agree to buy at 900” (OFFER) Harvey accepted the offer. Facey
refused to sell. Court held – difference between offer and supply of information. quoting minimum price
is not offer. Rather it is an “offer to treat” – enter into negos.

Communication of Offer Lalman Shukla v. Gauri Shukla is an employee with Dutt. His nephew goes missing. Sends Shukla to search for him, pays travel
as precondition…, Dutt expenses. in the meanwhile, a 501 rupee reward announced.(in handbills) After this, Shukla found and
Offer/Intention to Offer, returned the kid, without knowledge of the reward. Six months later, he was dismissed and sued for the
reward. Held that there was no contract (cuz no offer – acceptance clearly seen) plus the plaintiff was
already under obligation to do it, and hence can’t recover. basically, 1. there can be no acceptance
without knowledge. (SEE SECTION 4) 2. There was already a subsisting obligation and therefore, the
performance of the act cannot be regarded as a consideration for the defendant’s promise. (obligation
arose from employment contract, not contract of reward).

Offer and Invitation to Bank of India v. BOI offered VRS. The letter to be signed by employees read “I offer to take VRS…” Later, employees
Offer Swarankar decided to withdraw the letter. What Is the offer? Bank’s announcement/ employee’s letter? If
announcement treated as offer, every person who applies will get VRS. Bank laid down the T&C in the
announcement which is Invitation to Offer, letter was offer.

Invitation to offer/treat Fisher v. Bell (similar to Shopkeeper dude displayed a flick knife in the window, with price and label (it was illegal to offer for
Patridge v. Crittenden) sale such knifes). However – acquitted – cuz it was not offer for sale, rather invitation to treat.
(Thereafter, the statute was modified to also illegalize display)

Invitation to offer and Pharmaceutical Society Boots chemist started using the supermarket style for selling goods, but Pharmaceutical Society of GB
Invitation to Treat v. Boots objected cuz of a law that said “a pharmacist is needed to supervise at the pt. where the sale is effected”
GB said that sale is effected when the customer picks up the meds from shelf as display is an offer.
Boots (and court held) that display was an invitation to treat, and sale is effected at the till only. Said that

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 keeping goods on display, even with a price tag is NOT an offer.

Offer, counter offer, MacPherson
acceptance, revocation, Appanna
Certainty of Offer
v. MN On receiving an offer from A for the purchase of a house belonging to B, Y who was looking after the
house, cabled to B that there was an offer of Rs. 6,000 for the house. B sent a cable in reply on the 5th
August, 1944, that he would not accept less than Rs. 10,000. Y conveyed this information to A on the
9th and on the 14th A wrote a letter to Y stating that he thereby confirmed the oral offer of
Rs.10,000 that he had made to Y on the 11th. On the 26th Y cabled to B as follows: "Offered Rs.
10,000. May I sell". On the same day, W, another friend of B, with whom also B was in
correspondence, sent an offer for Rs. 11,000 and B accepted it. A sued for specific performance
alleging that B's cable of the 5th was a counter-offer and as he had accepted it on the 14th,
there was a concluded contract for sale in his favour on that day. Held, that the cable sent by B on
the 5th was a mere statement of the lowest price at which he would sell and contained no implied
contract to sell at that price. A's letter of the 14th was under the circumstances only a fresh offer;
and as B had not accepted it there was no concluded contract in favour of A.

Invitation to Offer Union of India v. Tender done. Accepted. But T&C said govt held the right to cancel the balance amount of goods
(tender) Maddala Thathia anytime. They did cancel an order. But SC held – they must accept the jiggery cuz you can’t cancel
orders that you have made with definite time period and quantity mentioned. --- cancel the agreement
for such supply of jiggery about which no formal order had been passed by the Deputy General
Manager with the respondent and did not apply to such supplies of jaggery about which a formal order
had been placed specifying definite amount of jaggery to be supplied and the definite date or definite
short period for its actual delivery (read comments on pg 7 of ICA u/s 10)

Counter Offer Hyde v. Wrench Wrench offered to sell the form for 1200, hyde declined, then 1000, hyde decline and offered 950 – to
which Wrench declined. Then Hyde agreed at 1000$ but Wrench declined. H sued W for breach of
contract. This case laid down the relationship btw initial offer and counteroffer. any counteroffer
cancels the original offer.

Invitation to Offer Thornton v. Shoe Lane Thornton took a parking ticket out, the ticket said that the issue of the same is subject to conditions
Parking mentioned in the pillar. the pillar excluded the parking from any liability for injury. Court held that – no.
(in contemporary times) 1 the ticket vending machine was an offer, not invitation to offer. so when ticket came out – contract
concluded. the terms & conditions cant be added thereafter! 1

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General offer : ads are Patridge v. Crittenden P gave an ad selling an illegal bird – no “offer for sale”- C sent a cheque, P dispatched the bird. Held-
only invitation to treat, ads are not offers, just invitation to treat. J Parker – “it does not make sense to make ads offers”.
not offer

Sec 8 (acceptance Carlill v. Carbolic Co. made a smoke ball – supposed to cure influenza. claimed that it would pay £100 to anyone who got
through performance of Smoke Ball Co. sick with influenza after using its product according to the instructions provided with it. When Carlill got
conditions), ill, the co. sent a letter that she must use it in their office for sometime, to protect themselves from
Offer/Invitation to offers “fraudlent claims” Carlill filed a case saying it is a contract cuz she read the promise and acted on it (Sec
(Ads), Intention to enter 8!!), Co. said it was not a serious contract. 4 points in the ruling – 1. it was not a unilateral offer to the
into legal relation. world, but an offer to the people who acted on it 2. conditions of using the ball, if satisfied is acceptance
(if formal acceptance needed, they would have gone for specific offers) 3. buying or using it is
- Specific consideration cuz It is a detriment incurred on behest of the co, with which the co benefits. 4. The
promises result deposit of 1000$ in the bank shows it was serious. mere puffery is magnifying the qualities of the
in an offer product. SRB – multiple issues here. no.1 – was there a contract? (yes^) no. 2- was it a contract with the
whole world? (no^) no. 3 – was the ad “a mere puff” (INTENTION TEST!) – keep in mind the
ESCROW! no.4 (UNRESOLVED!) – what if the 11th guy claimed money?

Basically – an ad can constitute a unilateral offer at times. like in this case. (usually ads are invitation to
treats) – acceptance would be acting on T&C. – another exception to how we generally treat ads.

Offer/invitation to offer ; Bowerman v. ABTA announced that It would reimburse all holiday expenses if booked with an ABTA member.

1 IT Act amendment , amended in 2008 (2000) – Electronic contracts are enforceable. this changed the 2 person requirement. section 10A. no need to go back to
1872 requirement of 2 persons. In US, through Uniform Commercial Code, machines can be the agent of the person. (traditionally agents used to be natural, princis could be
natual or juristic)
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Intention to enter into a Association of British Question is – is this an offer that can be accepted by the public. Court held – like in Carlill where certain
legal relation ; specific Travel Agents circumstances make an advert an offer, rather an invitation, here too – same case. !
promise

The intention test to Dunton v. Dunton Husband promised his estranged wife an allowance if she behaved in a respectable manner. Held – that -
Offer Though promising not to do something which cannot lawfully be done is not good consideration, a
promise not to do something which can be lawfully done is good consideration. here, she could have
(oral domestic contracts) behaved unrespectable while being lawful! – so upheld. since it was written too.

The intention test to Balfour v. Balfour Held - is a rebuttable presumption against an intention to create a legally enforceable agreement when
Offer – introduced (Atkin) (1919) the agreement is domestic in nature. facts – hubby lived in Ceylon, while wife in UK cuz of illness.
intention test Hubby promised wife allowance every month. When they drifted apart (NOT yet divorced), she sued
him for fulfilling the promise. Held not enforceable. Atkin’s reasoning – was lack of intention to create
(oral domestic contracts) legal relations! Wife could not rebut the presumption! plus, no commercial purpose. no BARGAIN (wife
not giving anything) – made out of natural love and affection. Ratio – presumption is that there was no
intention in domestic arrangements. Subsisting social/domestic relationship.

The intention test to Jones v. Padavatton Mother promises daughter she ll fund her college edu. Daughter leaves the job, goes to UK. They had a
Offer quarrel before her edu finished, mother wanted possession of the house daughter lived in. The Court held
that there was no binding contract. Although there would have been a contract if it was not the domestic
(Domestic parties related, there was insufficient evidence to rebut the presumption against domestic arrangements.
Arrangements) Burden of proof on daughter to prove legal intention. Subsisting social/domestic relationship.
(oral domestic contracts)

Intention to enter into a Merritt v. Merritt
legal relation
Guy left the girl for another woman. They entered into a written agreement where the girl was to make
mortgage payments on their jointly owned house and the dude would pay 40$ maintenance to her. At the
end of the payments, house will transfer to her. Dude refused later. Court differentiated it from Balfour
case, cuz here the facts refute the presumption of no intention made in domestic arrangements. – cuz
they were separated when agreement made plus wrote it down! Relationship not subsisting or
domestic anymore – agreement binding.

Intention to enter into a Mcgregor v. McGregor Agreement between husband and wife held to be binding – divorce settlement- relationship no longer
legal relation 1888 subsisting or domestic – no natural love and affection.

Intention to create legal Rose & Frank Co v JR Blue Pencil Rule.2 Regarding intention to create legal relations in commercial arrangements. Rose was
relations Crompton & Bros Ltd the sole distributor of latter’s products. They had excluded legal obligations from their contract. When

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 Crompton refused to supply, Rose sued. Question Is – can intention be negatively enforced – as in, can
their intention be to make it non enforceable? Does “Freedom of Contract” extent to freedom not to
contract? – said it is not legally binding. parties are capable of forming an agreement that does not give
rise to legal relations.

Intention to create legal Edwards v. Skyways The claimant was an airline pilot working for the defendant. He was to be made redundant. The
relations in commercial Ltd. (1964) – Queen’s defendants said that if he withdrew his contributions to the company pension fund, they would pay him
contracts Bench Division the equivalent of company contributions in an ex gratia payment. The claimant agreed to this and
withdrew his contributions. The company then ran into further financial difficulty and went back on their
promise relating to the ex gratia payment. Held: The agreement had been made in a business context
which raised a strong presumption that the agreement is legally binding. The claimant could therefore
enforce the agreement and was entitled to the money.

Are all commercial Banwari Lal
contracts binding? Sukhdarshan Dayal
v. There was a large area earmarked for a Dharamshala to be built. However, one of the owners of one of
the subplots sold it to the defendant, who then built a fence around his subplot. The owners of the other
subplots sought to file an injunction against this, however it was held that they had no interest in the
property after it had been sold to a 3 rd party and could not enforce the construction of the Dharamshala.
HELD – “commercial contracts must be binding, despite parties intending it not be so”- applicable fore
justice and equity, not contractually.

Intention to create Coward v. Motor Coward was killed whilst riding pillion (peeche baithna) on a motorcycle driven by a friend. The
legally binding Insurers’ Bureau collision was due to the negligence of the friend. Coward's widow sought to claim damages from the
agreement – Motor Insurance Bureau, which would only be obliged to pay if insurance for the pillion was
presumption against compulsory, i.e. if they were carried for hire or reward. Coward paid the friend a small weekly sum to
intention take him to and from work each day. The widow therefore argued that this was a contract for hire or
reward. However, the MIB argued that to amount to a contract for hire or reward there had to be an
intention to create legal relations which was absent in agreements of this nature between friends.
Held: There was no contract of hire or reward as it was a social and domestic agreement and therefore
no intention to create legal relations. The widow was therefore not entitled to compensation.

Revocation of Offer Dickinson v. Dodds Defendant offered to sell property to plaintiff on Wednesday. Time given till Friday. Sold it on Thursday
through conduct to someone else. Friday –acceptance conveyed. no contract. (just that, Plaintiff must get notice of
transaction) – unless purchase of option made to keep it open (basically pay a part of consideration).

2 The blue pencil doctrine is a legal concept in common law countries, where a court finds that a portion of contract is void or unenforceable, but the
other part of the contract is enforceable. In that case the court may order the parties to follow the enforceable part and can delete the voided portion.
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Revocation of offer Errington v. Errington Father bought a house for his son and DIL. Condition – they must pay the monthly mortgage to be able
to own it. they start paying. but MIL tries to evacuate DIL after father’s death. not possible = offer
accepted by conduct. now can’t be revoked. (CONTRACTUAL SUCCESSION)

Revocation of auction Champalla v. Jaigopal The highest bidder, made his bid, and realized minutes before the last hammers, that it was mortgaged.
offer It was also sought by the city body. court – said he can express revocation before acceptance anytime.

Revocation of auction UOI v. S Narain Singh the auction sale could not be complete until the bid was accepted by the Collector and finally approved
offer of by the Chief Commissioner. the bid was withdrawn before CC gave his assent, there was no
completed contract between the parties and the plaintiff is therefore not liable on the resale.

Implied Acceptance Upton Rural District Powell called the police to send a fire brigade as his farm was on fire. police sent the Upton firemen,
Council v. Powell while the jurisdiction was that of Pershore. So, Upton guys wanted to charge for their services. Powell
(Sec 8) refused saying he did not know police will send the wrong guys. Held – there is an implied contract,
cuz of an implied acceptance for the services by Powell – had to pay.

Can silence amount to Felthouse v. Bindley Felthousee (uncle) wanted to buy a horse from his nephew. Said that “If I hear no more from you about
acceptance ? (1862) him, I will consider it mine” (after a string of negos) Bindley could not reply cuz he was not free, and his
agent sold it someone else accidentally. Felthouse sued for tort of conversion! but for it the contract
needs to be shown to be valid. Court held - Felthouse did not have ownership of the horse as there was
no acceptance of the contract. Acceptance must be communicated clearly and cannot be imposed due to
silence of one of the parties. basically, said silence does not amount to acceptance.

Can silence / mere Brogden v Metropolitan Brogden, wanted to sign a long term coal supply agreement with Metro. Metro’s agents drafted an
conduct amount to Railway Company agreement, Brogden wrote things where the terms were blank, inserted an arbitrator and sent them back
acceptance ? (1876) – later case “approved”. Metro’s agents just filed the documents and both parties started following its terms till a
dispute arose – Brogden said no formal contract. Court – contract arose out of conduct.

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Can silence/ mere LIC of India v. The guy died after paying two checks towards his premium for life insurance. Check were encashed.
conduct amount to Vasireddy Died next day. LIC – contended that there was no contract, cuz encashing was done on suspense account,
acceptance? , who is and acceptance can’t be taken till Divisional manager accepts and everything. (prescribed procedure) -
authorized to accept? agents can’t accept. Acceptance not complete, implied consent not in express manner.

Postal/Mailbox rule for Adams v. Lindsell 1st case towards est a “postal rule”. 2nd September – Ds wrote to Ps offering to sell wool and asking for
acceptance (1818) acceptance through post, the proposal reached on 5 th. They posted acceptance on same day, but reached
on 9th. They had expected an answer by 7 th, so they sold it on 8 th. Court - if the defendants were not
bound by their offer until the answer was received, then the plaintiffs would not be bound until they had
received word that the defendants had received their acceptance, and this could go on indefinitely.
Instead it must be considered that the offerors were making the offer to the plaintiffs during every
moment that the letter was in the post. Then when the Offeree has placed his acceptance in the post there
is a fictional meeting of minds, which concludes the offer and gives effect to the acceptance. So contract
formed on the 5th. (not same as modern day post rule) – D bound when letter in mailbox, out of P’s
control.

Revocation of Dunmore v Alexander Held: each party may revoke so long as the offer or acceptance has not been communicated to the other
offer/acceptance party. Idea of knowledge and communication important.

Application of postal Dunlop v Higgins Held: posting the acceptance merely barred the possibility of the offeror withdrawing the offer and did
rule not result in a binding contract

Application of mailbox Entores Ltd v. Miles Far The claimant sent a telex message from England offering to purchase 100 tons of Cathodes from the
rule in Instantaneous East Corp. (1955) defendants in Holland. The defendant sent back a telex from Holland to the London office accepting that
mode of offer. The question for the court was at what point the contract came into existence. If the acceptance
communication and was effective from the time the telex was sent the contract was made in Holland and Dutch law would
Questions of apply. If the acceptance took place when the telex was received in London then the contract would be
jurisdiction that arise governed by English law.
Held: To amount to an effective acceptance the acceptance needed to be communicated to the offeree.
Therefore the contract was made in England. Regular postal rule did not apply for instantaneous
means of communications such as a telex. Instead, acceptance occurs where the message of
acceptance is read.

Application of mailbox Bhagwan Goverdhan Offer made to Ps at Ahmedabad, Accepted at Khamgaon, received at A’bad. Jurisdictional issue arose

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rule in Instantaneous Kedia v. Girdharilal when contract was breached. Held – acceptance must be expressly communicated to offeror (Brogden
mode of communication Parshottamdas case), unless waived by the offeror (Carbolic case). However in Indian scenario we have clarity from
and Questions of Section 4 - S.4 doesn’t imply that the contract is formed qua the proposer at one place and qua the
jurisdiction that arise acceptor at another place”. The gap of time between posting of acceptance and its coming into
knowledge of proposer can be utilized by acceptor in revoking his acceptance by speedier
communication which will overtake the acceptance. So contract formed at Ahmedabad. (where contract
was completed, as here acceptance came to knowledge of offeror.)

Capacity to Contract Mohori Bibee v. Dharmodas was a minor when he mortgaged property to Dutt for getting a loan of 20000 rs. Returned
(Age) Dharmodas Ghose 8000, refused to return the rest and filed a suit claiming the contract was void. defend’ knew of the
(1903) minority while giving loan. Court – held contract with a minor as void ab initio. (different from
Proforma Case) Also said that law of estoppels (in sec 115) of Indian evidence act wont apply cuz def
(still a partial precedent knew true age. Sec 64 – only for voidable contracts. Sec 65 not applied cuz it starts with a presumption
on money lent to a of agreement/ contract existing, and wont apply to this situ where there never was, and never could
minor) have been a contract. False representation made, but the other party knew it was false, so doesn't take
away the privilege of infancy.

Ratification by minor Nazir Ahmed v. Jivan Ratio - held that the consideration which passed under the earlier contract cannot be implied into the
turned major Das (1938) contract into which the minor enters on attaining majority. (basically no ratification)

Rule of estoppel not Sadiq Ali Khan v Jai The rule of estoppel does not apply to a minor, i.e., a minor is not estopped from pleading his infancy in
applicable on minors Kishore order to avoid a contract, even if he has entered into an agreement by falsely representing that he was of
full age

Capacity to contract, Khan Gul v. Lakha Minor concealed his age, sold a plot of land. Took money, refused to give the land. Other party sued for
fraudulent Singh either refund or specific performance. contract was held void (not ab initio)– so specific performance
misrepresentation of age not granted, but consideration paid back (Section 65, doc of resti, section 115 of Indian evidence act,
section 33 of specific reliefs act) – Clean Hands Principle

Joint Promise by a minor Sain Das v. Ram Chand there was a joint purchase by two vendees, one of whom was a minor, it was held that the vendor could
and an adult enforce the contract against the major vendee. – see section 43 of ICA, 1872. Minor is considered a
beneficiary here.

Liability of minor under Fawcett v. Smethrust Minor hired a car but drove it further than agreed. Specifically mentioned that liable for damage
torts irrespective of negligence. Held to onerous, not liable. Also established test to see if tort independent of a

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 contract

“” Jenning v. Rundall Minor hired a horse. Horse injured due to over-riding. Not liable as it was within the contract and not a
separate tort.

“” Burnard v. Haggis Minor hired a horse and clearly stated not for jumping. Gave it to friend who jumped, horse fell and
injured. Liable as act outside the contract – independent tort.

Contract for necessaries Ryder v. Wombwell A minor moved in high society-supplied with a pair of diamond and ruby cufflinks and a silver goblet. In
(UK POSITION) some exceptional cases even ornamental things could be deemed necessary. But here the goods are not
necessary as the supplier couldn’t prove that they were esp necessary for the minor in ques.

“” Elkington v. Amery Held a gold vanity bag brought by a man for his fiancée on credit was not a necessary. Point of law
being that items regarded as luxurious are not usually regarded as necessaries.

“” Chapple v. Copper A young widow was sued successfully for the funeral expenses for her late husband, as these services
were regarded as necessaries. Point of law is that if a person orders a service that is required and suitable
for their condition in life at the time of sale and deliver, they liable. (however the onus is on the party
supplying the goods/service to prove they are necessaries)

“” Nash v. Inman A tailor (N) supplied 11 fancy waist coats to a Cambridge undergraduate. Held these were not
necessaries because the minor had already had sufficient quantity (provided by his father) therefore the
minor need not pay for them.

Minor contract through a Great America Co. v. Minor was sole coparcener in his HUF business. His brother in law got the property insured on his
guardian Madan Lal behalf. later company refused to pay up saying that contract with a minor is void, but court enforced it.
(here minor is the only beneficiary, guardian just there to validate It is not a joint promise)

Insanity Indersingh v. person who was idiot and incapable of understanding the transactions, agreed to sell property worth
Parmeshwar Dhari Singh about Rs. 25,000/- for Rs .7000/- only, it was held that the agreement was void as the person was
incapable of exercising his own judgement.

Burden to prove insanity Johri v. Mahila Draupadi ….?

Insanity – senility due to Warner v. Warner Father gave property to son just before being adjudged insane. Ruling - ???
old age

Ratification of contract Mathews v. Baxter the defendant went to an auction while he was drunk and successfully bid certain land and houses. After
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made when drunk he sobered up the defendant ratified the contract. He then refused to proceed with the transaction. The
court held that the defendant was liable because he ratified the contract after his period of drunkenness
had passed. He was therefore liable. Note that this case is authority for the view that a person is not
liable for a contract entered into while he or she did not have capacity. However, if he or she
ratifies the contract when capacity is regained then he or she becomes bound by the contract which
would have been void.

Contract when Lucy v. Zehmer The Defendant, Zehmer writes a contract to sell land on a napkin and when the Plaintiff, Lucy (Plaintiff),
intoxicated tries to enforce it, Defendant claims he was only joking. Held : If a party to the contract has a
reasonable belief that the other party has the requisite intent to enter into the agreement when he
does not, the contract is still enforceable.

Doctrine of Ultra Vires Ashbury Railway the Ashbury Railway Carriage and Iron Company Ltd’s memorandum, clause 3, said its objects were "to
Carriage and Iron Co Ltd make and sell, or lend on hire, railway-carriages…" and clause 4 said activities beyond needed a special
v Riche resolution. But the company agreed to give Riche and his brother a loan to build a railway in Belgium.
Later, the company refused the agreement. Riche sued, and the company pleaded the action was ultra
vires. – and thus it is void. – court agreed

Doctrine of Ultra Vires A Lakshamanaswami The directors of a company were authorized “to make payments towards any charitable or any
Mudaliar v. LIC of benevolent object or for any general public, general or useful object”. In accordance with a shareholders
India resolution the directors paid two lakh rupees to a trust formed for the purpose of promoting technical and
business knowledge. The payment was held to be ultra vires. The court said that the directors could not
spend the company’s money on any charitable or general object which they might choose. They could
spend for the promotion of only such charitable objects as would be useful for the attainment of the
company’s own objects. The company’s business having been taken over by the Life Insurance
Corporation, it had no business left to promote.

Article 299 contracts UoI v. N. K. (P) Ltd If requirements under Article 299 not met, contract void. Formal, written contract

“” contracts with govt. k. p. chowdhary v. state A299 contracts should not be implied contracts
of MP

AREA OF LAW CASE NAME REMARKS

Consideration as a price Fazaladdin Mandal v. F agreed to lease a land to P for a certain rent and rs 50/- as salami. Also signed an ikrarnama (tyagapatra)

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for a promise Panchanan Das (1957) saying that the defendant will give up the lease if the plaintiff gives back the 50 bucks. Contention of the
defendant – no consideration. However, court held that ikrarnama is not a separate contract, but a clause in
(quid pro quo) the overall contract – and a single consideration by F (the grant of lease) can support two promises (the
rent plus the ikrarnama) – specific performance allowed. gratuitous promise are generally* not enforceable.

Importance of Labriola v. Pollard At – will employment (could be terminated anytime without cause or notice). First contract – restrictive, but
consideration for Group Inc. (2004) both had cause and benefit in it and formed mutual consideration. Second contract – no consideration for
employment contracts – employee – no cause/benefit to him. Second not enforceable.
cause and benefit to all.

Benefit/ Detriment Test Currie v. Misa (1875) Defined consideration “A valuable consideration, in the sense of the law, may consist either in some right,
(after Bargain Theory of interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility,
Contract lost ground) given, suffered, or undertaken by the other.” Facts - ?

Adequate/Sufficient Chappell Co. Ltd. v Confirmed – Consideration must be sufficient, need not be adequate. Facts – Nestle promised to give music
Consideration Nestle Co. Ltd. (1960) records owned by Chappell on showing of three wrappers. – a copyright issue. So, issue came up as to
amount – had to be det. whether the wrappers amounted to part consideration. (or were just a condition to
making the purchase) Court – Peppercorn theory – consideration won’t become null just bc the promisor
does not value it. So it was a partial consideration. Basically court kind of used the logic used in Case 1 –
money+wrapper – consideration for toffees as well as records. (not independent) – cuz evidence of sale has
to be a partial consideration (Nestle tried to argue otherwise when their contention that there was no bargain
due to unilateral nature failed) – read notes.

Cannot revoke contract Errington v. Errington Father bought a house for his son and DIL. Condition – they must pay the monthly mortgage to be able to
after commencement of (1852) own it. they start paying. but MIL tries to evacuate DIL. not possible = offer accepted by conduct, and
consideration pays. consideration paid. now can’t be revoked. (CONTRACTUAL SUCCESSION)

Adequate consideration De La Bere v. Pearson A person lost money due to a financial advice given in a newspaper. The newspaper was held liable because
Ltd. (1908) the consideration of buying the newspaper was of some value even if not adequate.

“” Merrit v. Merrit Mr. went to live with another woman, promised the wife to pay monthly allowance and transfer the house to
her if she paid the monthly mortgage. Refused later. Court – differentiated it from Balfour saying on
grounds of breakdown of marriage. – not a mere domestic arrangement. enforced. (plus it was a written
agreement)

Consideration Kedarnath v. Gori Howrah municipality raised subscription for construction of a town-hall. Contracted with a builder on the

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 Mohamed basis of those subscriptions. some dude refused to pay up, contending there was no consideration for him.
Judgment – Sec 2(d) of ICA – desire of the promisor. He knew the purpose of the subscription. valid
/ Promissory Estoppel contract.

Consideration / N. S. Society v. The 1st defendant promised a sum of Rs.10,000/- for the starting college and was started on the strength of
Promissory Estoppel Kujukrishana that promise and of similar promises by other persons. Held-the 1st defendant's promise to pay Rs. 10,000/-
became enforceable as soon as definite steps were taken on the faith of that promise for the starting of it.
Pillai

Privity of Contract and Tweddle v. Atkinson Groom’s father agreed with bride’s father to pay the groom to pay the groom 200 if he paid him 100. But
Consideration – the bride’s father died. The groom sued his estate to recover the 200. Court - His suit was not successful as it
original doctrine – was held no stranger to the consideration can take advantage of a contract, although made for his benefit.
stranger cannot sue Can’t have an obligation imposed too.

Consideration –doctrine Dunlop Pneumatic Tyre Lord Dunedin - Dunlop entered into a contract with the dealer to not sell tyres below a certain price and to
of privity v. Selfridge (1915) get the same clause signed by the retailers (here, Selfridge). Selfridge broke the term, Dunlop sued for
damages (3rd party). Held – Dunlop couldn't sue. – Cuz, Doctrine of Privity (party to contract can sue; No
z Public Policy Sec. 23 consideration from Dunlop
interface

Privity of Contract Beswick v. Beswick A transferred his business to his nephew for the rest of his life, on the condition that he ll employ him till
he lives and after that pay a weekly annuity to his wife. Did not make payment to wife. Argued privity (no
consideration flowed from wife) held – Denning said that a contract specifically for her benefit, can be
enforced by her. This reasoning was overturned, and said that Mrs. Beswick as the administrator of
Beswick’s estate can ask for specific performance of the promise. But now – Denning’s ratio has become
the statutory law. Denning’s ratio which was overturned which is law now – “Where a contract is made for
the benefit of a third person who has a legitimate interest to enforce it, it can be enforced by the third person
in the name of the contracting party or jointly with him or, if he refuses to join, by adding him as a
defendant. In that sense and it is a very real sense, the third person has a right arising by way of contract.” -
called the beneficiary doctrine. = read with sec. 45. Successors also have right to sue in name of deceased.

Whether 3rd parties can Klaus Mittlebachert v. under the original doctrine of privity as held above – pilots would not have the right to sue as they are 3 rd
sue in Tort? (??) - Yes East India Hotels Ltd. party beneficiaries. But, Denning’s beneficiary doctrine – would get right to sue. Delhi HC allowed the suit.

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 (But privity is a contract doctrine, how does it even matter in tort law? :/) wife can sue for deceased husband
– successor in interest rule – legal heir can sue

Privity of Contract, Sec. MC Chacko v. State H bank had an O/D ac with SBT. Manager’s father had promised to pay it off, and died. In his will, he made
25(1) ICA Bank of Travancore Chacko obligated to pay the bank personally or from the inheritance. SBT sued all the heirs, despite the
limitation period passing. Is the charge created by the deed enforceable by the bank, which is not a party to
it? – Held – No. SBT Is a complete stranger, not even a beneficiary.

Privity of contract and Shanklin Pier v. Detel Detel told Shanklin that a particular paint will last for 7 years. So, the painters bought that paint and painted
its 2nd exception – products Ltd. the pier. Started peeling off. Shanklin sued Detel. Held - the consideration for the warranty in the usual case
Collateral Contract is the entering into of the main contract in relation to which the warranty is given, I see no reason why there
Theory (1st was may not be an enforceable warranty between S and D supported by the consideration that D should cause
Denning’s Doctrine) painters to enter into a contract with A or that D should do some other act for the benefit of A. (so Detel’s
warranty is a collateral contract – for which consideration is the main contract.

Doctrine of Privity, Chinnaya v. Verikatara A sister agreed to pay an annuity of Rs653 to her brothers who provided no consideration for the promise.
Section 2(d) – “promisee Maya But on the same day their mother had given the sister some land, stipulating that she must pay the annuity to
or any other person” her brothers. The sister subsequently failed to pay the annuity and was sued by her brothers. The court held
she was liable to pay the annuity. There was good consideration for the promise even though it did not move
from her brothers. (consideration need not move from the promisee).

Contracts for benefit of Bhujendra Nath v. Contracts for benefit of minors or incapacitated persons as exception to doctrine of privity
minors/incapacitated Sushamoyee Basu
persons (1936)

Tort Contract Interface Donoghue v. Stevenson Facts – bleh. Important for the interface between torts and contracts (and COPRA). Principle –
(1932) manufacturer’s duty towards end user. Now, we have consumer contracts – product liability principle
(Product Liability) – (UNCISG) – manu liable for life cycle of the product till chain of contract is not broken
exception to doctrine of
privity

Privity and Arbitration NHAI v. China Coal NHAI awarded a contract to A, and subcontracting is the accepted norm there. The subcontractor finishes
Provisions Construction Co, the job but doesn’t get payment.(neither did the contractor) Can he invoke arbitration clause against the
(2006) other two? Decision – yes. (similar to UK 3 rd parties Act’s provisions.) – subcontracting can be taken as a

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 collateral contract.

Evolution of doctrine of Hughes v. Metropolitan Origin of the estoppel doctrine.

Estoppel Railway

Estoppel Central London Property There was a lease agreement btw the 2 cos, where they agreed at a specific rent. When war started, 1 st co
Trust Ltd v. High Trees reduced the rent to maintain demand. So 2 nd co, accordingly reduced rent to end consumers. Court stopped
House Ltd. plaintiff from claiming full rent for the period between 1940 and 1945. (party promises not to enforce its
legal rights, and other party acts accordingly – 1 st party is stopped from enforcing them) Contention was cuz
of the Weighing Scale Logic – does every change need to be supported by a corresponding consideration
from the other side too? (See sec. 63, 62 of ICA) – consideration may be essential for formation, but is it
for amendment?

Estoppel - Equitable Union of India v. Indo Held – as an obiter - the Government of India announced certain concessions with regard to the import of
Estoppel Afghan Agencies certain raw materials in order to encourage export of woolen garments to Afghanistan. Subsequently, only
partial concessions and not full concessions were extended as announced. The Supreme Court held that the
Government was estopped by its promise. Government cannot be released from its obligation either on the
ground of executive necessity or of the absence of a formal contract executed after due compliance of
statutory formalities.

Estoppel MP Sugar Mills v. State assurance that total exemption from sales tax would be given for three years to all new industrial units.
of UP (1979) Subsequently, the Government changed its policy and announced that sales tax exemption will be given at
varying rates over three years. The appellant contended that they set up the plant and raised huge loans only
due to the assurance given by the Government. held that the Government was bound by its promise. Issues
of contention – 1. Can State be exempt from estoppels? Is article 299 a defence? 2. Isn’t it common for new
govt to scrap old’s policies? Here, the owner had written to the Secy to confirm. Can the successive govt be
stopped to the previous ones promise – Yes. (contractual succession) – only conditions are the 4 points laid
down by Justice Bhagwati (refer to notes) – buying the land also was enough. Bhagwati tried to bring in
stability to policy making.

Estoppel Union of India v. Bhagwati. CBEC said that the cost of a particular material used in producing cigarettes will not be included
Godfrey Philips Ltd. In levying excise duty. so the plaintiff did not recover that duty from the wholesaler. Now, govt refused.
Court – held to the promise.

Estoppel L&T v. UOI Held – for an estoppels - 1 st – rep of an existing fact distinct from a mere promise made by one party to the

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 other 2nd – other party must believe it and get induced to act on its faith 3rd – to its detriment.

Estoppel - Sovereign Kasturi Lal v. State of Held-The State is not liable - the view that tort was committed by the police officers in the exercise of
and Non Sovereign UP delegated sovereign powers. State not liable for sovereign functions.
distinction

Estoppel?? Gwalior Silk Rayon While forming this opinion, the employer is
Manufacturers v. V
Raghavan undoubtedly expected to act honestly and fairly. But if it is found that the estimate made by the employer is
incorrect, this fact alone, without anything more, would not lead to the inference that the employer has not
acted honestly and fairly. It cannot be held that he has not deducted tax on the estimated income of the
employee.

Held- A duty is cast on an employer to form an opinion about the tax liability of his employee in respect of
the salary income.

Estoppel M/S Jat Ram Shiv SC – No estoppels against a statute. Facts -- A municipality granted exemption from octroi for
Kumar v. State of developing a mandi, but subsequently is revoked the exemption. Later it again granted the exemption in
Haryana keeping with the terms of the original sale of plots, but levied taxes again.

Estoppel – repeal of Mulamchand v. State of Contracts in violation of article 299 of consti cant be enforced through an estoppel.
important constitutional MP
provisions not possible. Held- If the contract was not in accordance with the constitutional provisions, in the eye of the law, there
was no contract at all and the question of ratification did not arise. Therefore, even the provisions of S.
230(3) of the Indian Contract Act, 1872 would not apply to such a contract and it could not be enforced
against the government officer in his personal capacity.

Estoppel not against Lekh Raj v. State of The petitioner was given a license to sell liquor at a certain issue price for 2 years and the government
license (license is not a Rajasthan provided a rebate. Later the issue price was changed by the authorities leading to a 15-20% increase. The
contract) petitioners requested an enhanced rate of rebate which was declined by the government. Held – As the
petitioner failed to establish that the license are unreasonable and arbitrary and it does not exploit the
condition of a licensee the suit was not admitted.

Estoppel v. Policies PTR Exports Pvt. Ltd. v. SC held that govt can change its policies for exports and imports without any estoppel. No claim of
UoI (1995) legitimate expectations.

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Estoppel against Somashekar Reddy v. Road project from Bangalore to Mysore. India’s first private road- MoU with NICE (Nandi Infra Corridor
legislations State of Karnataka Enterprise). Govt to acquire land, transfer to NICE, they make road and get toll. Govt later thought no
benefit to them. Went to SC to cancel contract for executive necessity. But bound as both parties equal.
However, SC gave a window and said although executive is equal, legislature is supreme and can override
the contract by enacting a law nationalizing the road (take over). No estoppel against statutes and
legislative functions – so they neutralize doctrines of LE and EN. SC allowed this.

“At the desire of the Baldeo v. Durga Prasad Baldeo was asked to construct shops by the city contractor. Owners occupied these and promised to pay him
promisor” (Another test some commission from their sales. Refused to pay later. Held – that the shops were not constructed at the
for consideration – apart desire of the defendants. So, there was no consideration flowing from the plaintiff to the defendant. not a
from benefit/detriment) contract. Section 2(d)

Past Consideration in Eastwood v. Kenyon Sarah’s father died when she was an infant leaving her to Eastwood’s care as guardian, who paid for her
Common Law (very education. Sarah promised to pay him back. Then she married Kenyon, who also promised the same but
different from Indian failed to. Decision – no contract exists. benefit conferred by plaintiff voluntarily in the past. Held that
decisions) promises are not sufficient to form a contract (even if voluntarily made as consideration doctrine will be
hurt). Also, that past consideration is no consideration. So, promise made to recompense an act done by
Eastwood in the past – is nudum pactum.

Restitution for burial Schoenfeld v. Schoenfeld performed the burial rites of Ochsenhaut who apparently died without a surviving family (Cuz
expenses // Past Ochsenhaut Jewish law mandated so). Now, a long lost bro appeared. He (allegedly) promised these guys to recompense
Consideration them for the expenses. He refuses. Held – even if there was an oral promise, not enforceable in absence of a
deed (under some clause in US law). Also, no statutory obligation on bro to pay for the expenses. so not
liable.

Past consideration Lampleigh v. Brathwait B asked L to ride to the king and plea for pardon for a murder case B was accused in. L succeeded. B
(1615) promised to pay him some money, but never did. Argued that it was a case of past consideration. Held –
here, when the benefit was conferred at his request, a reward was reasonably expected, and therefore bound
B to his promise. (this is dissimilar to the case of Eastwood where a guardian cant reasonably expect (in an
implied way) to be compensated for education expenses on his ward, and it was not done at “desire of
promisor” in that case.

Consideration? Lee v. Muggeridge Held – existence of a previous moral obligation is sufficient consideration – notion of benefit and reliance in
(Lord Mansfiled) previous moral obl.

Adequacy of Bentley v. Lamb A gave to B, who had been employed by him for several years as a sales lady a due bill payable one year
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consideration after his death. This was to be given in pursuance of an agreement as an additional compensation of the
services provided. Held- The services provided were sufficient consideration even though they were partly
paid.

Inadequacy of Pridmore v. Calvert Plaintiff after being in a MV accident, signed a release from all her claims in ex for a small sum of money.
consideration can be put that the plaintiff was of limited intelligence, had no business acumen, was in poor physical condition at the
under challenge/ time the release was signed, and sought no advice concerning the document. The judge concluded that the
Agreeing to withdraw a plaintiff “was on such unequal footing with respect to the defendants and their representatives, that in all the
legal claim – adequate circumstances, it would be inequitable to hold her to the bargain that was made.” Unequal Bargain
consideration? Doctrine

Inadequacy of Rameshar Mistry v. Compromise of A Disputed Claim

Consideration – Babulal Pandit

Contracts, Crime Arun Bhandari v. State Court said that only if there is an intention from the beginning to cheat then liability arising can be both
interface of UP (2013) contractual and criminal.

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