RULES OF INTERPRETATION

LEGAL METHODS
PROBLEM
• NOT GUILTY:
• GUILTY:
• THE ACT DOESN’T MAKE A DISTINCTION
BETWEEN A HAND GESTURE OR ACTUAL
POSSESSION OF A FOREIGN OBJECT.
• IT DOESN’T MAKE ANY HAND GESTURE
CULPABLE, ONLY THOSE WHICH ARE
MADE (1) IN COURSE OF A CRIME AND (2)
MAY APPEAR AS A FIREARM IN THE
MIND OF A REASONABLE PERSON
• THE PURPOSE OF THE ARMS ACT IS TO
BRING TO BOOK PEOPLE WITH ACTUAL
POSSESSION OF AN OBJECT WHICH MAY
QUALIFY AS A FIREARM OR AN
IMITATION FIREARM.
• THE PURPOSE OF THE ACT IS NOT TO
PUNISH BODY GESTURES.
• THIS WOULD SET A BAD PRECEDENT AS
MANY BODY GESTURES (EVEN THOUGH
IN COURSE OF A CRIME SHALL BECOME
CULPABLE)? WHAT IF HIS BLUFF IS
CAUGHT?
TEXTUAL INTERPRETATION

• ALSO KNOWN AS THE “LITERAL RULE”: GIVING THE WORDS OF THE STATUTE
THEIR ORDINARY MEANINGS. IT IS DEEMED THAT THE INTENTION OF THE
LEGISLATURE IS PRE-EMPTED IN ITS CHOICE OF WORDS OF THE STATUTE.
APART FROM THAT THERE IS NO OTHER WAY OF ARRIVING AT THE
INTENTION OF THE LEGISLATURE (IS THIS THE BEST JUSTIFICATION FOR
APPLYING TEXTUALISM? THE BLACK PERSON CONUNDRUM).
• HOWEVER, LANGUAGE HAS ITS OWN DEFICIENCY AND
AMBIGUITY/VAGUENESS WILL REMAIN TO A CERTAIN DEGREE WHICH WILL
SHOW IN MARGINAL CASES. IT IS NOT POSSIBLE FOR THE LEGISLATURE PRE-
EMPT EVERY SITUATION THAT MIGHT ARISE IN FUTURE WHERE THE LAW
WOULD BE APPLICABLE.
ORIGINALIST INTERPRETATION

• ALSO KNOWN AS PURPOSIVE INTERPRETATION: A JUDGE MUST PAY HEED TO THE INTENTION
OF THE LEGISLATURE. HE MAY REFER TO EXTERNAL GUIDES TO ARRIVE AT THE INTENTION
OF THE LEGISLATURE. THIS METHOD VINDICATES THE DOCTRINE OF SEPARATION OF POWER
BETTER. IT WORKS TO ARRIVE AT A DECISION ON HOW WOULD THE LEGISLATURE WOULD
HAVE REACTED IF FACED WITH A MARGINAL CASE. A TEXTUALIST WILL ALSO NOT BE
ADVERSE TO ORIGINALIST INTERPRETATION IF THE SAME WORDS IN A PARTICULAR
CONCEPT ARE EQUALLY CAPABLE OF BEING GIVEN TWO DIFFERENT MEANINGS.
• THE GOLDEN RULE IS THAT THE WORDS OF A STATUTE MUST PRIMA FACIE BE GIVEN THEIR
ORDINARY MEANING. IT IS YET ANOTHER RULE OF CONSTRUCTION THAT WHEN THE WORDS
OF THE STATUTE ARE CLEAR, PLAIN AND UNAMBIGUOUS, THEN THE COURTS ARE BOUND TO
GIVE EFFECT TO THAT MEANING, IRRESPECTIVE OF THE CONSEQUENCES.
PEPPER V. HART [1993] A.C. 593

• THE APPELLANTS WERE EMPLOYED BY AN INDEPENDENT BOYS' SCHOOL, MALVERN

COLLEGE. THEY HAD ALL TAKEN ADVANTAGE OF A CONCESSIONARY SCHEME OPERATED
BY THE SCHOOL WHICH PERMITTED THE SONS OF MASTERS TO BE EDUCATED AT THE
SCHOOL FOR A PROPORTION OF THE NORMAL FEE. A QUESTION AROSE AS TO THE
ASSESSMENT OF THE VALUE OF THAT BENEFIT FOR TAXATION PURPOSES.
• SECTION 61(1) OF THE FINANCE ACT 1976 PROVIDES THAT WHERE, “BY REASON OF HIS
EMPLOYMENT”, A DIRECTOR OR HIGHER-PAID EMPLOYEE OR A MEMBER OF HIS FAMILY
OR HOUSEHOLD IS PROVIDED WITH A BENEFIT, “THERE IS TO BE TREATED AS
EMOLUMENTS OF THE EMPLOYMENT, AND ACCORDINGLY CHARGEABLE TO INCOME
TAX UNDER SCHEDULE E, AN AMOUNT EQUAL TO WHATEVER IS THE CASH
EQUIVALENT OF THE BENEFIT.” SECTION 63(1) DEFINES THE “CASH EQUIVALENT” OF
THE BENEFIT AS “AN AMOUNT EQUAL TO THE COST OF THE BENEFIT, LESS SO MUCH
(IF ANY) OF IT AS IS MADE GOOD BY THE EMPLOYEE TO THOSE PROVIDING THE
BENEFIT.” UNDER S.63(2), THE “COST OF THE BENEFIT IS THE AMOUNT OF ANY
EXPENSE INCURRED IN OR IN CONNECTION WITH ITS PROVISION, AND ... INCLUDES A
PROPER PROPORTION OF ANY EXPENSE RELATING PARTLY TO THE BENEFIT AND
CONTD.

• THE ISSUE THAT AROSE WAS WHETHER, IN THOSE CIRCUMSTANCES, THE

“COST OF THE BENEFIT” IN ACCORDANCE WITH THE STATUTORY PROVISIONS
WAS THE AMOUNT OF THE ADDITIONAL DIRECT COSTS ONLY, I.E., THE
MARGINAL COST, OR WHETHER IT INCLUDED A PROPORTION OF THE COST OF
RUNNING THE WHOLE SCHOOL. IF IT WAS THE FORMER, THEN THE AMOUNT
OF TAX PAYABLE WOULD BE NIL BECAUSE THE REDUCED FEES COVERED
THE MARGINAL COST BUT IF IT WAS THE LATTER, THEN SUBSTANTIAL
AMOUNTS OF TAX WOULD BE DUE.
CONTD.
• HOUSE OF LORDS:-
• COURTS MAY REFER TO PARLIAMENTARY MATERIAL WHEN CONSTRUING A STATUTE
WHERE LEGISLATION IS AMBIGUOUS OR OBSCURE, OR LEADS TO AN ABSURDITY;
THE MATERIAL RELIED UPON CONSISTS OF ONE OR MORE STATEMENTS BY A
MINISTER OR OTHER PROMOTER OF A BILL TOGETHER, IF NECESSARY, WITH SUCH
OTHER PARLIAMENTARY MATERIAL AS IS NECESSARY TO UNDERSTAND SUCH
STATEMENTS AND THEIR EFFECTS; AND THE STATEMENTS RELIED UPON ARE CLEAR
• STATUTE LAW CONSISTS OF THE WORDS THAT PARLIAMENT HAS ENACTED. IT IS FOR
THE COURTS TO CONSTRUE THOSE WORDS AND IT IS THEIR DUTY IN SO DOING TO
GIVE EFFECT TO THE INTENTION OF PARLIAMENT IN USING THE WORDS. WHERE THE
STATUTORY WORDS ARE CAPABLE OF BEARING TWO MEANINGS AND IT EMERGES
THAT THE VERY QUESTION WAS CONSIDERED BY PARLIAMENT IN PASSING THE
LEGISLATION, THERE CAN BE NO REASON WHY THE COURTS SHOULD BLIND
THEMSELVES TO A CLEAR INDICATION OF WHAT PARLIAMENT INTENDED IN USING
THE WORDS.
• IT INVOLVED AN AMBIGUOUS STATUTORY PROVISION WITH A CLEAR STATEMENT BY
THE RESPONSIBLE MINISTER AS TO WHAT WAS INTENDED.
CONTD.

• THE STATUTORY WORDS WERE CAPABLE OF BEARING EITHER MEANING.

• THERE WAS A CLEAR STATEMENT BY THE RESPONSIBLE MINISTER AS TO THE EFFECT OF
THE AMBIGUOUS WORDS IN S.63, WHICH PARLIAMENTARY HISTORY SHOWS TO HAVE
BEEN THE BASIS ON WHICH THE SECTION WAS ENACTED. THE MINISTER REPEATEDLY
ASSURED MEMBERS OF PARLIAMENT THAT THE EFFECT OF THE PROVISIONS ON CERTAIN
CLASSES OF TAXPAYERS WHO ENJOYED IN-HOUSE BENEFITS, INCLUDING SCHOOL
TEACHERS, WAS THAT IN ALL CASES THE CHARGE TO TAX WOULD BE “NIL”, “SMALL”, OR,
IN THE CASE OF TEACHERS, “VERY SMALL INDEED”. THOSE ASSURANCES WERE
INCONSISTENT WITH ANY INTENTION OTHER THAN THAT THE WORDS “EXPENSE
INCURRED IN OR IN CONNECTION WITH” PROVISION OF THE BENEFIT WOULD PRODUCE A
CHARGE TO TAX ON THE ADDITIONAL COST ONLY.
MISCHIEF RULE : HAYDON'S CASE (1584)

• CAN BE SEEN AS A DERIVATIVE OF PURPOSIVE INTERPRETATION: THE RULE IS

TO DETERMINE THE "MISCHIEF AND DEFECT" THAT THE STATUTE IN
QUESTION HAS SET OUT TO REMEDY, AND WHAT RULING WOULD
EFFECTIVELY IMPLEMENT THIS REMEDY. THE COURT IS ESSENTIALLY
ASKING WHAT PART OF THE LAW DID THE LAW NOT COVER, BUT WAS MEANT
TO BE RECTIFIED BY PARLIAMENT IN PASSING THE BILL.
S. B. NORONAH V. PREM KUMARI KHANNA AIR
1980 SC 193
• A LANDLADY GAVE HER PREMISES FOR RUNNING A LUCRATIVE SCHOOL.
HOWEVER THE DEED EXECUTED BETWEEN THEM USED THE TERM “FOR
RESIDENTIAL PURPOSES”. WHEN THE LANDLADY EXECUTED A SUMMARY
EVICTION AGAINST THE TENANT, THE TENANT SOUGHT REFUGE UNDER THE
DELHI RENT CONTROL ACT, 1958.
• S. 21: WHERE A LANDLORD DOES NOT REQUIRE THE WHOLE OR ANY PART OF
ANY PREMISES FOR A PARTICULAR PERIOD, AND THE LANDLORD, AFTER
OBTAINING THE PERMISSION OF THE CONTROLLER IN THE PRESCRIBED
MANNER, LETS THE WHOLE OF THE PREMISES OR PART THEREOF AS RESIDENT
FOR SUCH PERIOD AS MAY BE AGREED TO IN WRITING BETWEEN THE LANDLORD
AND THE TENANT AND THE TENANT DOES NOT, ON THE EXPIRY OF THE SAID
PERIOD, VACATE SUCH PREMISES, THEN, NOTWITHSTANDING ANYTHING
CONTAINED IN SECTION 14 OR IN ANY OTHER LAW, THE CONTROLLER MAY, ON
AN APPLICATION MADE TO HIM IN THIS BEHALF BY THE LANDLORD WITHIN
SUCH TIME AS MAY BE PRESCRIBED, PLACE THE LANDLORD IN VACANT
POSSESSION OF THE PREMISES OR PART THEREOF BY EVICTING THE TENANT AND
EVERY OTHER PERSON WHO MAY BE IN OCCUPATION OF SUCH PREMISES.
 CONTD.
• KRISHNA IYER, J.
• RENT CONTROL LEGISLATION IN DELHI, AS ELSEWHERE IN THE COUNTRY, IS BROADLY
INTENDED 'TO PROVIDE FOR THE CONTROL OF RENTS AND EVICTIONS AND OF RATES OF
HOTELS AND LODGING HOUSES AND FOR THE LEASE OF VACANT PREMISES TO
GOVERNMENT, IN CERTAIN AREAS IN THE UNION TERRITORY OF DELHI.
• SEC. 14 (1): "NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ANY OTHER LAW OR
CONTRACT, NO ORDER OR DECREE FOR THE RECOVERY OF POSSESSION OF ANY
PREMISES SHALL BE MADE BY ANY COURT OR CONTROLLER IN FAVOR OF THE
LANDLORD AGAINST A TENANT: PROVIDED THAT THE CONTROLLER MAY, ON AN
APPLICATION MADE TO HIM IN THE PRESCRIBED MANNER, MAKE AN ORDER FOR THE
RECOVERY OF POSSESSION OF THE PREMISES ON ONE OR MORE OF THE FOLLOWING
GROUNDS ONLY, NAMELY:- [……]
• IT CARVES OUT A CATEGORY FOR SPECIAL TREATMENT. WHILE NO LANDLORD CAN EVICT
WITHOUT COMPLIANCE WITH SECTIONS 14, 19 AND 20; DOES A LIBERAL EVICTION POLICY
UNDERLIE SEC. 21 ?
CONTD.
• PARLIAMENT WAS PRESUMABLY KEEN ON MAXIMIZING ACCOMMODATION
AVAILABLE FOR LETTING, REALIZING THE SCARCITY CRISES. ONE SOURCE OF SUCH
SPARE ACCOMMODATION WHICH IS USUALLY SHY IS POTENTIALLY VACANT
BUILDING OR PART THEREOF WHICH THE LANDLORD IS ABLE TO LET OUT FOR A
STRICTLY LIMITED PERIOD PROVIDED HE HAS SOME CREDIBLE ASSURANCE THAT
WHEN HE NEEDS HE WILL GET IT BACK. IF AN OFFICER IS GOING ON OTHER
ASSIGNMENT FOR A PARTICULAR PERIOD, OR THE OWNER HAS OFFICIAL QUARTERS
SO THAT HE CAN LET OUT IF HE IS CONFIDENT THAT ON HIS RETIREMENT HE WILL
BE ABLE TO RE-OCCUPY, SUCH ACCOMMODATION MAY ADD TO THE TOTAL LEASE-
WORTHY HOUSES. THE PROBLEM IS FELT MOST FOR RESIDENTIAL USES. BUT NO
ONE WILL PART WITH POSSESSION BECAUSE THE LESSEE WILL BECOME A
STATUTORY TENANT AND, EVEN IF BONA FIDE REQUIREMENT IS MADE OUT, THE
LITIGATIVE TIERS ARE SO MANY AND THE LAW'S DELAYS SO TANTALIZING THAT NO
REALIST IN HIS SENSE WILL TRUST THE SWEET PROMISES OF A TENANT THAT HE
WILL RETURN THE BUILDING AFTER THE STIPULATED PERIOD.
CONTD.
• THE LAW SEEKS TO PERSUADE THE OWNER OF PREMISES AVAILABLE FOR LETTING
FOR A PARTICULAR OR LIMITED PERIOD BY GIVING HIM THE SPECIAL ASSURANCE
THAT AT THE EXPIRY OF THAT PERIOD THE APPOINTED AGENCY WILL PLACE THE
LANDLORD IN VACANT POSSESSION. AS STATED EARLIER, THE CRITICAL NEED WAS
FOR RESIDENTIAL, NOT NONRESIDENTIAL HOUSING. THEREFORE, SECTION 21
CONFINES THIS SPECIAL REMEDY TO LETTING FOR RESIDENTIAL USES ONLY.
• WE MUST NOTICE THAT SECTION 21 RUNS COUNTER TO THE GENERAL SCHEME
AND, THEREFORE, MUST BE RESTRICTED SEVERELY TO ITS NARROW SPHERE.
SECONDLY, WE MUST PLACE ACCENT ON EVERY CONDITION WHICH ATTRACTS THE
SECTION AND IF ANY ONE OF THEM IS ABSENT THE SECTION CANNOT APPLY AND,
THEREFORE, CANNOT ARM THE LANDLORD WITH A RESISTLESS EVICTION
PROCESS. THIRDLY, WE MUST REALIZE THAT THE WHOLE EFFECT OF SECTION 14
CAN BE SUBVERTED BY RITUALISTIC ENFORCEMENT OF THE CONDITIONS OF
SANCTION UNDER SEC. 21 OR MECHANICAL GRANT OF SANCTION THEREIN.
CONTD.
• THE FIRST CONDITION IS THAT THE LANDLORD DOES NOT REQUIRE THE DEMISED
PREMISES "FOR A PARTICULAR PERIOD" ONLY. THIS MEANS THAT HE MUST INDICATE
TO THE AUTHORITY BEFORE WHICH SANCTION IS SOUGHT FOR LETTING WHAT IS THE
PARTICULAR PERIOD FOR WHICH HE CAN SPARE THE ACCOMMODATION. THE
CONTROLLER MUST BE SATISFIED THAT THE LANDLORD MEANS WHAT HE SAYS AND
IT IS NOT A CASE OF HIS NOT REQUIRING THE PROPERTY INDEFINITELY AS
DISTINGUISHED FROM A SPECIFIC OR PARTICULAR LIMITED PERIOD OF SAY ONE
YEAR, TWO YEARS OR FIVE YEARS. IF A MAN HAS A HOUSE AVAILABLE FOR LETTING
FOR AN INDEFINITE PERIOD AND HE SO LETS IT, EVEN IF HE SPECIFIES AS A PRETENSE,
A PERIOD OR TERM IN THE LEASE, SECTION 21 CANNOT BE ATTRACTED.
• THE SECOND CONDITION IS THAT THE LETTING MUST BE MADE FOR A RESIDENTIAL
PURPOSE. THE HOUSE MUST BE MADE OVER "AS A RESIDENCE". IF IT IS LET OUT FOR A
COMMERCIAL PURPOSE, SECTION 21 WILL NOT APPLY, WHETHER THE RITUAL OF A
SANCTION UNDER THAT PROVISION HAS BEEN GONE THROUGH OR NOT.
CONTD.

• THIRDLY, THE CONTROLLER'S PERMISSION IS OBLIGATORY WHERE HE SPECIFIES THE

PARTICULAR PERIOD FOR WHICH HE GIVES PERMISSION AND FURTHER QUALIFIES
THE PERMISSION FOR USE AS A RESIDENCE. THE CONTROLLER EXERCISES AN
IMPORTANT REGULATORY FUNCTION ON BEHALF OF THE COMMUNITY……. IF HE
MAKES A MINDLESS ORDER, THE COURT, WHEN CHALLENGED AT THE TIME OF
EXECUTION, WILL GO INTO THE QUESTION AS TO WHETHER THE TWIN CONDITIONS
FOR SANCTION HAVE REALLY BEEN FULFILLED. OF COURSE, THERE WILL BE A
PRESUMPTION IN FAVOR OF THE SANCTION BEING REGULAR, BUT IT WILL STILL BE
OPEN TO A PARTY TO MAKE OUT HIS CASE THAT IN FACT AND IN TRUTH THE
CONDITIONS WHICH MAKE FOR A VALID SANCTION WERE NOT PRESENT.
CONTD.

• A FRAUD ON THE STATUTE CANNOT BE PERMITTED ESPECIALLY BECAUSE OF THE

GRAVE MISCHIEF THAT MAY BE PERPETRATED IN SUCH EVENT. IT IS EASY TO
ENVISAGE THE TERRIBLE BLOW TO THE RENT CONTROL LAW IF SECTION 21 WERE
FREELY PERMITTED TO SUBVERT THE SCHEME OF SECTION 14. EVERY LANDLORD
WILL INSIST' ON A TENANT GOING THROUGH THE FORMAL EXERCISE OF SECTION
21, MAKING IDEAL AVERMENTS IN TERMS OF THAT SECTION. THE CONSEQUENCE
WILL BE THAT BOTH THE CIVIL PROCEDURE CODE WHICH PRESCRIBES SUITS FOR
RECOVERY OF POSSESSION AND THE DELHI RENT CONTROL ACT WHICH
PRESCRIBES GROUNDS FOR EVICTION WILL BE ECLIPSED BY THE PERVASIVE
OPERATION OF SECTION 21….. NO COURT-FEE, NO DECREE, NO EXECUTION
PETITION, NO TERMINATION OF TENANCY-WISH FOR POSSESSION AND THE COURT
IS AT YOUR COMMAND.
•
S. R. BATRA V. SMT. TARUNA BATRA (2007) 3 SCC
169

• T MARRIED A AND STARTED LIVING WITH A IN THE FLAT OWNED BY A’S

MOTHER. AFTER A FILED A DIVORCE PETITION AGAINST T, SHE FILED AN FIR
AGAINST A AND HIS PARENTS U/S 498A OF THE IPC. THEY GOT BAIL FROM THE
COURT AFTER THREE DAYS. MEANWHILE T OCCUPIED THE FLAT OF A’S
MOTHER DUE TO WHICH THEY HAD TO SPEND NIGHT IN A’S OFFICE. A HAD
ALREADY MOVED TO A DIFFERENT APARTMENT IN GHAZIABAD. A’S MOTHER
BROUGHT A SUIT FOR INJUNCTION.
CONTD.

• MARKANDAY KATJU, J.-

• THE LEARNED SINGLE JUDGE BENCH HAS ERRED IN SAYING THAT T HAS ARIGHT
TO LIVE IN THE FLAT BELONGING TO HER MOTHER-IN-LAW AS IT IS HER
MATRIMONIAL HOME. THERE IS NO LAW IN THE COUNTRY LIKE THE ENGLISH
MATRIMONIAL HOMES ACT, 1967.
• HERE, THE HOUSE IN QUESTION BELONGS TO THE MOTHER-IN-LAW OF SMT.
TARUNA BATRA AND IT DOES NOT BELONG TO HER HUSBAND AMIT BATRA.
HENCE, SMT. TARUNA BATRA CANNOT CLAIM ANY RIGHT TO LIVE IN THE SAID
HOUSE.
• THE MOTHER-IN-LAW OF SMT. TARUNA BATRA HAS STATED THAT SHE HAD TAKEN
A LOAN FOR ACQUIRING THE HOUSE AND IT IS NOT A JOINT FAMILY PROPERTY.
WE SEE NO REASON TO DISBELIEVE THIS STATEMENT.
CONTD.
• 2(S) OF THE PROTECTION OF WOMEN FROM DOMESTIC VIOLENCE ACT,
2005: “SHARED HOUSEHOLD” MEANS A HOUSEHOLD WHERE THE PERSON
AGGRIEVED LIVES OR AT ANY STAGE HAS LIVED IN A DOMESTIC
RELATIONSHIP EITHER SINGLY OR ALONG WITH THE RESPONDENT AND
INCLUDES SUCH A HOUSEHOLD WHETHER OWNED OR TENANTED EITHER
JOINTLY BY THE AGGRIEVED PERSON AND THE RESPONDENT, OR OWNED OR
TENANTED BY EITHER OF THEM IN RESPECT OF WHICH EITHER THE
AGGRIEVED PERSON OR THE RESPONDENT OR BOTH JOINTLY OR SINGLY
HAVE ANY RIGHT, TITLE, INTEREST OR EQUITY AND INCLUDES SUCH A
HOUSEHOLD WHICH MAY BELONG TO THE JOINT FAMILY OF WHICH THE
RESPONDENT IS A MEMBER, IRRESPECTIVE OF WHETHER THE RESPONDENT
OR THE AGGRIEVED PERSON HAS ANY RIGHT, TITLE OR INTEREST IN THE
SHARED HOUSEHOLD.
CONTD.
• IF THE AFORESAID SUBMISSION IS ACCEPTED, THEN IT WILL MEAN THAT
WHEREVER THE HUSBAND AND WIFE LIVED TOGETHER IN THE PAST THAT
PROPERTY BECOMES A SHARED HOUSEHOLD. IT IS QUITE POSSIBLE THAT THE
HUSBAND AND WIFE MAY HAVE LIVED TOGETHER IN DOZENS OF PLACES E.G.
WITH THE HUSBAND'S FATHER, HUSBAND'S PATERNAL GRAND PARENTS, HIS
MATERNAL PARENTS, UNCLES, AUNTS, BROTHERS, SISTERS, NEPHEWS, NIECES
ETC. IF THE INTERPRETATION CANVASSED BY THE LEARNED COUNSEL FOR THE
RESPONDENT IS ACCEPTED, ALL THESE HOUSES OF THE HUSBAND'S RELATIVES
WILL BE SHARED HOUSEHOLDS AND THE WIFE CAN WELL INSIST IN LIVING IN
THE ALL THESE HOUSES OF HER HUSBAND'S RELATIVES MERELY BECAUSE SHE
HAD STAYED WITH HER HUSBAND FOR SOME TIME IN THOSE HOUSES IN THE
PAST. SUCH A VIEW WOULD LEAD TO CHAOS AND WOULD BE ABSURD. IT IS WELL
SETTLED THAT ANY INTERPRETATION WHICH LEADS TO ABSURDITY SHOULD
NOT BE ACCEPTED.
CONTD.

• `SHARED HOUSEHOLD' WOULD ONLY MEAN THE HOUSE BELONGING TO OR

TAKEN ON RENT BY THE HUSBAND, OR THE HOUSE WHICH BELONGS TO THE
JOINT FAMILY OF WHICH THE HUSBAND IS A MEMBER. THE PROPERTY IN
QUESTION IN THE PRESENT CASE NEITHER BELONGS TO AMIT BATRA NOR
WAS IT TAKEN ON RENT BY HIM NOR IS IT A JOINT FAMILY PROPERTY OF
WHICH THE HUSBAND AMIT BATRA IS A MEMBER.
ECONOMIC EFFICIENCY

• S10 OF THE SPECIFIC RELIEF ACT, 1963

• CASES IN WHICH SPECIFIC PERFORMANCE OF CONTRACT ENFORCEABLE 
• EXCEPT AS OTHERWISE PROVIDED IN THIS CHAPTER, THE SPECIFIC PERFORMANCE OF ANY CONTRACT MAY, IN
THE DISCRETION OF THE COURT, BE ENFORCED- 
• (A) WHEN THERE EXISTS NO STANDARD FOR ASCERTAINING ACTUAL DAMAGE CAUSED BY THE NON-
PERFORMANCE OF THE ACT AGREED TO BE DONE; OR 
• (B) WHEN THE ACT AGREED TO BE DONE IS SUCH THAT COMPENSATION IN MONEY FOR ITS NON-PERFORMANCE
WOULD NOT AFFORD ADEQUATE RELIEF. 
• EXPLANATION: UNLESS AND UNTIL THE CONTRARY IS PROVED, THE COURT SHALL PRESUME- 
• (I) THAT THE BREACH OF A CONTRACT TO TRANSFER IMMOVABLE PROPERTY CANNOT BE ADEQUATELY RELIEVED
BY COMPENSATION IN MONEY; AND 
• (II) THAT THE BREACH OF A CONTRACT TO TRANSFER MOVABLE PROPERTY CAN BE SO RELIEVED EXCEPT IN THE
FOLLOWING CASES: 
• (A) WHERE THE PROPERTY IS NOT AN ORDINARY ARTICLE OF COMMERCE, OR IS OF SPECIAL VALUE OR INTEREST
TO THE PLAINTIFF, OR CONSISTS OF GOODS WHICH ARE NOT EASILY OBTAINABLE IN THE MARKET; 
• (B) WHERE THE PROPERTY IS HELD BY THE DEFENDANT AS THE AGENT OR TRUSTEE OF THE PLAINTIFF. 

• A BUILDER FAILING TO PROVIDE YOU WITH A HOUSE ON TIME?

PROCD V. ZEIDENBERG 86 F.3D 1447

• PROCD, THE PLAINTIFF, HAS COMPILED INFORMATION FROM MORE THAN 3,000
TELEPHONE DIRECTORIES INTO A COMPUTER DATABASE. PROCD SELLS A VERSION
OF THE DATABASE, CALLED SELECTPHONE (TRADEMARK), ON CD-ROM DISCS. THE
"SHRINK-WRAP LICENSE" GETS ITS NAME FROM THE FACT THAT RETAIL
SOFTWARE PACKAGES ARE COVERED IN PLASTIC OR CELLOPHANE "SHRINK-
WRAP," AND SOME VENDORS, THOUGH NOT PROCD, HAVE WRITTEN LICENSES THAT
BECOME EFFECTIVE AS SOON AS THE CUSTOMER TEARS THE WRAPPING FROM THE
PACKAGE. IT USES AN APPLICATION TO SEARCH INSIDE THE DIRECTORY
ACCORDING TO THE CRITERIA PUT IN BY THE USER. PROCD OFFERS A
POTENTIALLY CHEAPER ALTERNATIVE. PEOPLE COULD USE THE DATABASE AS A
SUBSTITUTE FOR CALLING LONG DISTANCE INFORMATION, OR AS A WAY TO LOOK
UP OLD FRIENDS WHO HAVE MOVED TO UNKNOWN TOWNS, OR JUST AS A
ELECTRONIC SUBSTITUTE FOR THE LOCAL PHONE BOOK.
CONTD.

• PROCD IS DECIDED TO ENGAGE IN PRICE DISCRIMINATION, SELLING ITS

DATABASE TO THE GENERAL PUBLIC FOR PERSONAL USE AT A LOW PRICE
(APPROXIMATELY $ 150 FOR THE SET OF FIVE DISCS) WHILE SELLING
INFORMATION TO THE TRADE FOR A HIGHER PRICE.
• IF PROCD HAD TO RECOVER ALL OF ITS COSTS AND MAKE A PROFIT BY
CHARGING A SINGLE PRICE THAT IS, IF IT COULD NOT CHARGE MORE TO
COMMERCIAL USERS THAN TO THE GENERAL PUBLIC IT WOULD HAVE
TO RAISE THE PRICE SUBSTANTIALLY OVER $ 150. THE ENSUING
REDUCTION IN SALES WOULD HARM CONSUMERS WHO VALUE THE
INFORMATION AT, SAY, $ 200.
CONTD.
• PROCD TURNED TO THE INSTITUTION OF CONTRACT. EVERY BOX CONTAINING ITS CONSUMER
PRODUCT DECLARES THAT THE SOFTWARE COMES WITH RESTRICTIONS STATED IN AN
ENCLOSED LICENSE. THIS LICENSE, WHICH IS ENCODED ON THE CD-ROM DISKS AS WELL AS
PRINTED IN THE MANUAL, AND WHICH APPEARS ON A USER'S SCREEN EVERY TIME THE
SOFTWARE RUNS, LIMITS USE OF THE APPLICATION PROGRAM AND LISTINGS TO NON-
COMMERCIAL PURPOSES.
• MATTHEW ZEIDENBERG BOUGHT A CONSUMER PACKAGE OF SELECTPHONE (TRADEMARK) IN
1994 FROM A RETAIL OUTLET IN MADISON, WISCONSIN, BUT DECIDED TO IGNORE THE LICENSE.
HE FORMED SILKEN MOUNTAIN WEB SERVICES, INC., TO RESELL THE INFORMATION IN THE
SELECTPHONE (TRADEMARK) DATABASE. THE CORPORATION MAKES THE DATABASE
AVAILABLE ON THE INTERNET TO ANYONE WILLING TO PAY ITS PRICE--WHICH, NEEDLESS TO
SAY, IS LESS THAN PROCD CHARGES ITS COMMERCIAL CUSTOMERS. PROCD FILED THIS SUIT
SEEKING AN INJUNCTION AGAINST FURTHER DISSEMINATION THAT EXCEEDS THE RIGHTS SPECIFIED
IN THE LICENSES (IDENTICAL IN EACH OF THE THREE PACKAGES ZEIDENBERG PURCHASED). THE
DISTRICT COURT HELD THE LICENSES INEFFECTUAL BECAUSE THEIR TERMS DO NOT APPEAR ON
THE OUTSIDE OF THE PACKAGES. THE COURT ADDED THAT THE SECOND AND THIRD LICENSES
STAND NO DIFFERENT FROM THE FIRST, EVEN THOUGH THEY ARE IDENTICAL, BECAUSE THEY MIGHT
HAVE BEEN DIFFERENT, AND A PURCHASER DOES NOT AGREE TO AND CANNOT BE BOUND BY TERMS
THAT WERE SECRET AT THE TIME OF PURCHASE.
CONTD.

• UCC: A CONTRACT FOR SALE OF GOODS MAY BE MADE IN ANY MANNER SUFFICIENT
TO SHOW AGREEMENT, INCLUDING CONDUCT BY BOTH PARTIES WHICH
RECOGNIZES THE EXISTENCE OF SUCH A CONTRACT. .
• ZEIDENBERG DOES ARGUE, AND THE DISTRICT COURT HELD, THAT PLACING THE
PACKAGE OF SOFTWARE ON THE SHELF IS AN "OFFER," WHICH THE CUSTOMER
"ACCEPTS" BY PAYING THE ASKING PRICE AND LEAVING THE STORE WITH THE
GOODS. IN WISCONSIN, AS ELSEWHERE, [HN2] A CONTRACT INCLUDES ONLY THE
TERMS ON WHICH THE PARTIES HAVE AGREED. ONE CANNOT AGREE TO HIDDEN
TERMS, THE JUDGE CONCLUDED. SO FAR, SO GOOD BUT ONE OF THE TERMS TO
WHICH ZEIDENBERG AGREED BY PURCHASING THE SOFTWARE IS THAT THE
TRANSACTION WAS SUBJECT TO A LICENSE..
CONTD.

• BUT WHY WOULD WISCONSIN FETTER THE PARTIES' CHOICE IN THIS WAY? VENDORS
CAN PUT THE ENTIRE TERMS OF A CONTRACT ON THE OUTSIDE OF A BOX ONLY BY
USING MICROSCOPIC TYPE, REMOVING OTHER INFORMATION THAT BUYERS MIGHT
FIND MORE USEFUL (SUCH AS WHAT THE SOFTWARE DOES, AND ON WHICH COMPUTERS
IT WORKS), OR BOTH. THE "READ ME" FILE INCLUDED WITH MOST SOFTWARE,
DESCRIBING SYSTEM REQUIREMENTS AND POTENTIAL INCOMPATIBILITIES, MAY BE
EQUIVALENT TO TEN PAGES OF TYPE; WARRANTIES AND LICENSE RESTRICTIONS TAKE
STILL MORE SPACE. NOTICE ON THE OUTSIDE, TERMS ON THE INSIDE, AND A RIGHT TO
RETURN THE SOFTWARE FOR A REFUND IF THE TERMS ARE UNACCEPTABLE (A RIGHT
THAT THE LICENSE EXPRESSLY EXTENDS), MAY BE A MEANS OF DOING BUSINESS
VALUABLE TO BUYERS AND SELLERS ALIKE.
CONTD.

• AND THAT IS WHAT HAPPENED. PROCD PROPOSED A CONTRACT THAT A

BUYER WOULD ACCEPT BY USING THE SOFTWARE AFTER HAVING AN
OPPORTUNITY TO READ THE LICENSE AT LEISURE. THIS ZEIDENBERG
DID. HE HAD NO CHOICE, BECAUSE THE SOFTWARE SPLASHED THE
LICENSE ON THE SCREEN AND WOULD NOT LET HIM PROCEED WITHOUT
INDICATING ACCEPTANCE. SO ALTHOUGH THE DISTRICT JUDGE WAS
RIGHT TO SAY THAT A CONTRACT CAN BE, AND OFTEN IS, FORMED
SIMPLY BY PAYING THE PRICE AND WALKING OUT OF THE STORE, THE
UCC PERMITS CONTRACTS TO BE FORMED IN OTHER WAYS. PROCD
PROPOSED SUCH A DIFFERENT WAY, AND WITHOUT PROTEST
ZEIDENBERG AGREED.