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LAW OF CONTRACT I
Course Instructors
Shilpi Bhattacharya
Aditya Krishna Chintapanti
Shivangi Gangwar
Dolashree Mysoor
Shivprasad Swaminathan
Ishana Tripathi
(Semester B –2020)
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Course Manual for Law of Contract - I
The following information contains the official record of the details of the course.
PartI
Course Code:
Course Duration: One
Semester
No. of Credit Units: 4 credits
Level: B.A. LL.B/ B.B.A. LL.B
Medium of Instruction: English
Pre-requisites: Nil
Pre-cursors: Nil
Equivalent Courses: Nil
Exclusive Courses: Nil
The above information shall form part of the University database and may be uploaded
to Dspace into the KOHA Library system and catalogued and may be distributed
amongst students.
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PART II
A. Course Description
For most of you this is your first introduction to the world of contracts. Accordingly, you will
study the elements of a standard contract, how it is formed, its terms, the manner of
performance, and the various legal challenges to the enforcement or performance of any
agreement. This subject-matter will hold you in good stead throughout your law career and
beyond, as contracts permeate our personal, professional and commercial lives. As and
when appropriate, the course will also attempt to weave in readings from a literary,
historical, philosophical and economic perspective to allow us to get a more holistic sense of
the theories behind contract law.
B. Course Aims
(i) Demonstrate knowledge (i) Reading of relevant cases, Students’ ability to grasp
and understanding of the statutes, and other legal and critically evaluate
relevant aspects of contract 40% materials: the topics/issues
law; state relevant rules and discussed in the syllabus
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sources of law and be able to will be tested in the
discuss their effect Students are expected to read following ways:
the wide range of materials (i) End-semester
(ii) Demonstrate an interest in included in the Course Manual examination (50%).
the operation of day- to-day 30% or in handouts. (ii) Internal assessment
commercial transactions. (50%). Each Course
Students will be able to (ii) Lectures: Instructor will advise the
distinguish between the students separately as to
operation of various types of Students will acquire basic the methods by which
commercial contracts such as knowledge on how to read the students will be
indemnity contracts, cases, statutes, scholarly internally assessed.
guarantee, pledge, bailment, writings and other legal
etc. material, and formulate
arguments for or against a
legal proposition.
(iii) Apply the legal principles 30% Students will learn how to
to understand and appreciate comprehend a legal issue and
legal problems in the field of to find and apply legal rules to
commercial contracts a given situation/case through
background readings and case-
law analysis.
(iii) Tutorials:
Each Course Instructor will
advise the students separately
as to the specific tutorials that
will be conducted in class.
D. Grading of Student
Achievement
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Please note the grades and their values below:
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E. A Word of Caution on Online Readings
Students are encouraged to access online resources for research and preparation for
next class. However, online sources can be classified into reliable, unreliable and
outright bogus, and students are cautioned from depending on unreliable and bogus
materials. Internet is an open domain in which all can create web pages and indulge in
propaganda, falsification or misrepresentation of events. The few sources that can help
you with basic information and which are fairly unbiased are: websites of
established newspapers, magazines and journals.
Student should always consult with the instructor about the veracity and authenticity of
a particular website and its suitability for researching topics covered in this syllabus.
F. P lagiarism
Any idea, sentence or paragraph you cull from a web source must be credited with the
original source. If you paraphrase or directly quote from a web source in the exam,
presentation or essays, the source must be explicitly mentioned. You should not feel free
to plagiarize content, be it from scholarly sources (i.e. books and journal articles) or from
the internet. This is an issue of academic integrity on which no compromise
will be made, especially as students have already been trained in the perils of lifting
sentences or paragraphs from others and claiming authorship of them.
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Part III
A. Readings:
Faculty members may assign readings from any of the following secondary sources:
3. EWAN MCKENDRICK, CONTRACT LAW: TEXT, CASES & MATERIALS ( 5TH EDN,
OXFORD UNIVERSITY PRESS, 2012)[ENGLISH CASEBOOK]
https://www.law.ox.ac.uk/sites/files/oxlaw/briggsburrowsbook_-
_thelawofcontractinmyanmar.pdf
9. POLLOCK AND MULLA LAW OF CONTRACT (2ND ED. 1909) Note: this is the second
edition of 1909.
https://archive.org/details/indiancontractac00polliala/page/n4
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The students should familiarize with the following legislations during the progress of this
Course.
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B. Class Format
The class will cover between one and two topics each week as per the lecture
program. The instructor will tell students at least a week before how far ahead to
read in the required readings for the next week, and if there are any changes in the
readings. Students are expected to attend all classes and to complete all the required
readings and case laws. If you are unable to attend a class you should contact the
course instructor in advance.
The class format will combine lecture and discussion along with on the spot Q&A
sessions. Students are expected to prepare for and participate in class discussion on a
regular basis.
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PART IV
The following information is subject to modifications as per the progress of the course.
Teaching Plan
Week Topic
3 Acceptance
9 Illegality
10 Contingent Contract
11 Discharge
Relief
15 Quasi Contracts
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OFFER
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Compulsory Readings:
Statutory Provisions:
Cases:
Pharmaceutical Society of Great Britain v. Boots Cash Chemists (Southern) Ltd., [1952]
2 QB 795
McPherson v. Appana, AIR 1951 SC 184
Revocation of Offer
Advertisements as Offers
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Lefkowitz v Great Minneapolis Surplus Store Inc (1957) 86 NW 2d 689
Articles:
A.W.B. Simpson, ‘Quackery and Contract Law: The Case of the Carbolic
Smoke Ball’ (1985) Journal of Legal Studies 345-389.
Patricia Williams, Alchemical Notes, 22 Harv. C.R.-C.L. L. Rev. 401 (1987) (Extracts)
ACCEPTANCE
After an offeror communicates her offer to the offeree, the offeree may accept the
offer, reject the offer, or propose a counteroffer. Once an offeree accepts the offer, a
contract is born.
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Compulsory Readings:
Statutory Provisions:
Cases:
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Acceptance
How to accept
Butler Machine Tool Co. Ltd. v. Ex-Cell-O Corpn (England) Ltd., (1979) 1 WLR 401 CA
Communication of Acceptance:
Adams v Lindsell, (1818) 1 B & Ald. 681 [Communication of Acceptance]
Entores v. Miles Far East Corporation, [1955] 2 QB
Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas & Co., AIR 1966 SC
543
Articles:
S. Swaminathan, ‘The Will Theorist’s Mail Box: Misunderstanding the Moment of
Contract Creation in the Indian Contract Act’ (2018) 39 Statute Law Review 14-26.
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Frederick Lipman, ‘On Winning the Battle of the Forms: An Analysis of Section 2-207 of
the Uniform Commercial Code’, Vol. 24 The Business Lawyer (1969)
CONSIDERATION
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Compulsory Readings:
Statutory Provisions:
Cases:
Definitional problem?
The standard definition of consideration in English Law uses the language of ‘benefit’
and ‘detriment’. The Indian Contract Act doesn’t use those words. How far from the
English position does this really take the Indian law?
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Courts and academics alike have held that the Indian Contract Act reproduces the
consideration requirement of English law. But is there any warrant for this assumption?
Could it be argued instead that although the Indian Contract Act uses the term
consideration, it means something completely different from the English law?
Reading:
Cases:
Illusory consideration
General
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General Proposition
Central London Property Trust V High Trees House Ltd [1957] 1 KB 130
M.P. Sugar Mills v. State of U.P., AIR 1979 SC 621
Compulsory Readings:
Cases:
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Kleinwort Benson V Malaysia Mining Corporation [1989] 1 All ER 785 (involving the
legal status of comfort letters)
The doctrine of privity of contract states that a contract is a private affair between two
parties consequent upon which third parties neither have rights nor duties. However, the
destiny of the privity rule is tied closely to the doctrine of consideration (See Dunlop
Pnuematic and Tweddle v Atkinson ) . Now, given that the definition of consideration
under the Indian law is much wider than English law—and there is no specific provision
incorporating a privity requirement—does it still make sense to stick to the English rules
of privity?
Compulsory Readings:
Cases:
Tweddle v Atkinson, [1861] 1 B & S 393 [Privity of Consideration]
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Suggested Additional Reading
CAPACITY
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Compulsory Readings:
Statutory Provisions:
Cases:
General Rule
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Article:
S. Swaminathan, ‘Minors’ Contracts: A Major Problem with the Indian Contract Act, 1872’.
Forthcoming in Statute Law Review (with Ragini Surana)
https://academic.oup.com/slr/advance-article-abstract/doi/10.1093/slr/hmy034/5252089
Gadigappa Bhimappa v. Balangowda, AIR 1931 Bom. 561 (FB) [Application of rule of
estoppel to minors contracts]
Ajudhia Prasad v. Chandan Lal, AIR 1937 All. 610
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CONSENT
For a contract to come into existence, the contracting parties must consent to the
contract. But, there might be occasions in which the consent of a party to the
contract has been obtained in a questionable manner.
In this unit, we will discuss the ways in which the Contract Act seeks to intervene
when the fact of consent to a contract might have been influenced by (i) coercion, (ii)
undue influence, (iii) fraud, (iv) misrepresentation, and (v) mistake.
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
(1) What is consent? And under what circumstances is such content vitiated?
(2) How are coercion, undue influence, misrepresentation, fraud and mistake
defined, and what is their effect on a contract?
(3) What is the difference between coercion and undue influence?
(4) What is the difference between misrepresentation and fraud?
(5) What is the effect of a mistake of fact and a mistake of law?
Compulsory Readings:
Statutory Provisions:
Cases:
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Economic Duress
Undue Influence
Unconscionability
Central Inland Water Transportation Ltd. v. Brojo Nath Ganguly, AIR 1986 SC
1571
Readings:
Fraud
Misrepresentation
Mistake
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Tarsem Singh v. Sukhminder Singh, 1998 3 SCC 471
K.V. Krishnaprasad, ‘Fraud, Mistake and Misrepresentation in Indian Law’ in Mindy Chen-
Wishart, Stefan Vogenauer and Hiroo Sono (eds.) Studies in the Contract Laws of Asia IV :
Validity (Oxford University Press: forthcoming).
LEGALITY
A contract must be based not only upon the mutual assent of competent parties, but
must also have a lawful object and lawful consideration. If the object of an agreement,
or the consideration of an agreement, is not lawful, the agreement is unenforceable.
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Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Compulsory Readings:
Statutory Provisions:
Cases:
Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co. Ltd., AIR 1967
SC 1098
Percept D’Markr v. Zaheer Khan, (2006) 4 SCC 277
Other Readings:
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CONTINGENT CONTRACTS
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Statutory Provisions:
Cases:
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DISCHARGE OF CONTRACT
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
(1) What is the difference between actual performance and attempted performance?
(2) What are the various ways in which contracts are discharged by way of agreement?
(3) What is the doctrine of frustration?
(4) What are the different grounds for impossibility of performance?
(5) What is the difference between actual breach and anticipatory breach?
Compulsory Readings:
Attempted performance
Impossibility of performance
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Satyabrata Ghose v. Mugneeram Bangur, 1954 SCR 310
Ram Khilona & Ors. v. Sardar & Ors., AIR 2002 SC 2548
Kapur Chand Godha vs. Mir Nawab Himayatali Khan, (1963 AIR 250/ 1963 SCR (2)
168)
Discharge by breach
Murlidhar Chatterjee v. International Film Co., AIR 1943 PC 34
Anticipatory breach
Krishna and Co. v. The Government of A.P. & Ors., AIR 1993 AP 1 (Frustration of
Object)
Re Moore & Co. Ltd v. Landauer & Co., [1921] 2 KB 519 (Actual Performance)
Shipton, Anderson & Co v Weil Bros & Co., [1912] I KB 574 (Actual Performance)
Ralli Bros. v. Compania Nautera, (1920) 2 K.B. 287 (Impossibility of Performance)
Rash Behary Shaha v. Nrittya Gopal Nundy, (1906) ILR 33 Cal 477 (Anticipatory
Breach)
V.L. Narasu v. Iyer, ILR [1953] Mad. 831 (Self-induced Frustration)
Wasoo Enterprises v. J.J. Oil Mills, AIR 1968 Guj. 57 (Time of Performance)
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REMEDIES
A contract when breached gives rise to damages that could be claimed by the injured
party, and in certain instances a right to demand specific performance of the contract.
“Damages”, means compensation in terms of money for the loss suffered by the injured
party. Every action for damages raises two problems. The first is the problem of
“remoteness of damage” and the second that of “measure of damages”.
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
(1) What are the various remedies available to the aggrieved party?
(2) What are direct versus indirect damages? And what are the several ways that courts
measure the amount of damages owed?
(3) What is the difference between a liquidated damages provision and one that imposes
an impermissible penalty?
(4) When can a party require specific performance of a contract?
Compulsory Readings:
Statutory Provisions:
Cases:
Articles:
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Niranjan Venkatesan, ‘The Contract Remoteness Rule: Exclusion, Not Assumption of
Responsibility’ in Andrew Dyson, James Goudkamp and Fred Wilmot Smith eds.
Defences in Contract (Hart 2016) 186-213.
M.V. Swaroop, ‘Money Remedies in India’ in Mindy Chen-Wishart, Alexander Loke, &
Burton Ong eds. Studies in the Contract Laws of Asia: Remedies for Breach of Contract
(Oxford: Oxford University Press 2016)
Liquidated Damages
Cases:
Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd, (1915) AC 79 (Lord
Dunedin’s opinion)
Cavendish Square Holdings v Talal El Makdessi [2015] UKSC 67
Fatehchand v Balkishan Das [1964] 1 SCR 515
Maula Bux v Union of India [1969] 2 SCC 554
ONGC v. Saw Pipes [2003] 5 SCC 705
Articles:
S. Swaminathan, ‘De-Inventing the Wheel: Liquidated Damages, Penalties and the Indian
Contract Act,1872’ (2018) 6 Chinese Journal of Comparative Law 103-117.
Duty to Mitigate
Jamaal v. Moola Dawood, (1916) ILR 43 Cal 493
Specific Relief
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Suggested additional reading:
QUASI-CONTRACTS
There are also many situations in which law and justice require that a certain person
be required to conform to an obligation, although he has neither broken any contract
nor committed any tort. Such obligations are generally described as quasi-contractual
obligations. In this chapter we will under the theory of “Un-just Enrichment” and
theory of “Implied-in-fact” Contract.
Please keep the following questions in the back of your mind as you go through your
reading. This will help you glean the most pertinent information from your reading
materials:
Statutory Provisions:
Cases:
Articles:
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Alvin See, ‘Recovery of Non-Gratuitously Conferred Benefit under Section 70 of the Indian
Contract Act’ in Andrew Robertson, Michael Tilbury (eds), Divergences in Private Law (Hart
Publishing 2016)
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