MONSOON SEMESTER’ 19 CASE LIST

Legal Intention
1. Balfour vs Balfour – husband wife, maintenance, domestic relationship
2. Errington vs Wood- mother, son dinl, father bought house installments, unilateral
promise,
3. Jones vs Padavatton – mother daughter, bar exams, house on rent, uk to become
barrister, legal intention absent, dom rela
4. Merritt vs Merritt – husband wife, car me convo, pay mortgage will transfer lease to
wife, dr, legal intention present
5. Snelling vs John G Snelling – 3 bro directors, one resigns other pay mort value, legal
intention, comp was not going good.
6. Parker vs Clark – old couple, come at house, sold house, changed will, lr present
7. Simpkins vs Pays – grandmother, gd, lodger, competition, prize, presence of outsider,
lr, not dr
8. Coward vs Motor Insurance Bureau – saath jate the mar gae, sues ministry, not
compensation as co workers and thus no li, shares fees as friends.
9. Rose & Frank Co. vs J.R.Crompton & Bros. – paper good, presence of not legally
binding contract, commercial relations, all other fine, but no li
10. Baird Textiles Holdings vs Marks & Spencers- 30 years, claimed-implied cont not
expressed, no time given before termination, essentials not decided thus no li,
estopple cannot itself become a cause to sue. Terms are flexi thus no li

Offer and Invitation

11. Carlil vs Carbolic Smoke Ball Factory- acceptance by perf, general offer, absolute,
acting was consi
12. Queen’s defendant v Demer’s – standing offer1, 8 years, govt changed, reimb for one
year not aage., nothing was binding on them to deal with one another only.
13. Morris Lefkowitz vs Great Minneapolis Surplus Store – man, fur coats and stoles 1$
each, advertisement first serve come, advi direct not open for nego, accepted before
changed.
14. Ankit Sharma vs Punjab Technical University, Jalandhar- first counselling not aaya,
gave money thus li, accepted offer, aac no money to give
15. Madhya Pradesh State Road Tranportation vs Manoj Kumar – voluntary retirement
scheme, cannot be revoked after accepted, can be revoked before the last date of the
scheme , scheme was ito, app offer and was accepted and not cannot be revoked.
16. Ghaziabad Development Authority v UOI - promised land, nai dia, comp dena for the
amount taken no mental agony, invi to offer tha, refund tbhi nai when clainmant natak
kre. When a development authority announces a scheme for allotment of plots, the
brochure issued by it for public information is an invitation to offer. Several
members of public may make applications for availing benefit of the scheme. Such
applications are offers. Some of the offers having been accepted by the Authority
result into a contract between the applicant and the Authority. In present case, since
the contract was breached by GDA by not giving the possession of the house to the
claimants even after reasonable period of time had elapsed; it was liable for paying

1
In the case of standing offers, the offeror gives an open offer whereby he offers to supply goods or services as
required by the offeree. A separate acceptance is made each time an order is placed. Thus, there are as many
contracts as are the acts of acceptance.
 back the amount taken alongwith interest; and not the damages w.r.t. mental agony for
it didn’t fall into any of the exception.

17. Maharashtra Housing Development Authority Versus Shapoorji Pallonji And

Company Private Limited And Others- online bid submission, no acknowledgment,
dint inform, freeze button not pressed, no glitch
Acceptance & Communication
18. Felthouse vs Bindley – deal relating to horse, silence mot acceptance, aceeptance is to
be communicated
19. Butler Machine Tool Co. Ltd. vs Ex-Cell-O Corporation [England] Ltd- variation
clause in ito, counter offer with fixed price in offer, acted upon thus acceptance, fixed
price now. Battle of forms, buyer ne dia aur fir unhone machine bjej dia mltb accept
kia. As per Denning M.R., “when there is a ‘battle of the forms’, then there is a
contract as soon as the last of the forms is sent and received without objection being
taken to it” (LAST SHOT DOCTRINE). Here, the ‘last shot’ was fired by the buyers
by attaching T&C to their order which were materially different from those of sellers.
Since, that order was received and acknowledged without any objection to any of the
T&C attached therewith, hence, buyers’ terms will prevail.

20. Trimex International vs Vedanta Aluminium Ltd.- shipment of bauxite, arbi clause,
contract cancels no arbi, payment made to ship owners, contract not vague, accepted
when read, thus breach, oral contract also binding when all the essential details have
been discussed.
21. Bhagwandas Kedia vs Girdharilal- cotton seed cake, phone call, where is the contact
formed, at the place where the acceptance is received this is where the offeror is.
22. Hollwell Securities vs Thomas Hughes- sell propert, inform by notice in writing, letter
sent, not delivered thus no communication and thus no contract, postal rule not
applied. The postal rule does not apply in situations where a notification of acceptance
has been specified. Notification was zaroori nai hua.
23. Jawahar Lal Burman vs Union of India- condition subsequent. Letter me likha hai ki
contra ban gaya hai aur ab deposit dena hai. Although Section 7 of the Contract Act
demands that the acceptance
be absolute and unqualified, and not conditional, the document

must be read as a whole. In that case, the acceptance ‘subject to

making security deposit’ was treated as a condition subsequent, one that did not affect the
making of the contract.
24. Union of India & Ors. vs M/s Bhim Sen Walaiti Ram- no contract, acceptance by
commissioner, he rejected thus no acc thus no contract, no damages. Contra form hi ni
hua islie vo breach k lie bhi liable nai.
25. D. Wren International v. Engineers India Ltd.
26. M/s Rickmers Verwaltung vs Indian Oil CoHigh Trerp. Ltd. – contract regarding
pipes, negotiation still going on, precedent held, thus no contract. Shipment kisi aur
ko de dia toh arbi k lie kha. But resp ne kha no arbi as no contra islie court case. There
 is enough material on the record to show that an irrevocable letter of credit was a
condition precedent to the conclusion of a contract. Thus the fax messages show till
the charter party agreement was drafted on 11 th Nov. 1993 did the parties agree to
proceed further without agreeing upon the format of the letter of credit and
performance guarantee. The appellant was, thus, for all intent and purposes treating
the furnishing of the letter of credit as a condition precedent for carrying the cargo.
We are of the opinion that no concluded bargain had been reached between the parties
as the terms of the standby letter of credit and performance guarantee were not
accepted by the respective parties. In the absence of acceptance of the standby letter
of credit and performance guarantee by the parties, no enforceable agreement could
be said to have come into existence.
27. M.R. Engineers vs Som Dutt Builders- contruction, arbi clause cannot be passed 2,
therefore mr lost. The Supreme Court accepted the proposition that even where a
contract between two parties does not contain a provision for arbitration, an
arbitration clause contained in an independent document will be incorporated into the
contract between the parties by reference to an independent document in the contract
if the reference is such to make the arbitration clause in the independent document a
part of the contract. However, based on the facts of the case, it was held that there was
no incorporation of the arbitration clause contained in the main contract into the
subcontract between SomDatt and MR Engineers by reference because: (i) the parties
never intended to incorporate the same into the subcontract; and (ii) the entire
arbitration agreement contained in the main contract was tailor-made to meet the
requirements of the contract between PWD and SomDatt, and was wholly
inappropriate and inapplicable in the context of a dispute between SomDatt and MR
Engineers.
28. P.R Transport Agency v. Union of India – email communication, instant , pace of
contract up where the acc was recieved
29. Entores v Miles- purchase of copper cathode by telex, instanatnous, asm no London
me bna, made where acceptance is received
30. Ramji Dayawala and Sons v. Invest Import- silence is acceptance. They were already
contracting.
Implied Terms
31. B.P. Refinery vs The President Councillors & Ratepayers of the Shire of Hastings-
For a term to be implied, the following conditions (which may overlap) must be
satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give
business efficacy to the contract, so that no term will be implied if the contract is
effective without it; (3) it must be so obvious that ‘it goes without saying’; (4) it must
be capable of clear expression; (5) it must not contradict any express term of the
contract.’ Changes in rating scheme comes under (2). Therefore implied stuff. [rating
laws changed, not informed, necess]
32. The Moorcock Case- In a business transaction, implied terms are meant to fulfill the
intentions of both the parties, and to bring about business efficacy; if business could

2
The contract should contain a clear reference to the documents containing arbitration clause, (ii) the
reference to the other document should clearly indicate an intention to incorporate the arbitration clause into
the contract, (iii) The arbitration clause should be appropriate, that is capable of application in respect of
disputes under the contract and should not be repugnant to any term of the contract.
 not be carried on without the fulfillment of a certain implied duty, the party which did
not perform that implied duty is liable. Area where ship was damaged the ship, this
was to be informed.
33. NHAI v. Gwalior Jhansi Expressway- para 19 to 25 judgment, facts 2.

Consideration
34. McArdle vs McArdle-. Renovated house, made them sign the deed to pay, they ref,
work done already, past consi, for her comfy, not their desire, they didn’t even check,
said give in consi in contract but did not do ath after signing the contracts therefore
the contract had the flaw. Therefore the pc was not accepted. Worked before asking
for payment.
35. Chapell vs Nestle (Court of Appeal and House of Lords) - Consideration need not be
strictly 'adequate'; a valid consideration may consist of some right, benefit, interest or
profit accruing to the promisor.If the promisee has value for the consideration, it
becomes sufficient consideration. When qualification(of purchase) is the doing
something of value to the promisor, and the qulaification does not suffice for just one
sale, the qualification shall held to be part of the consideration of the sale. Wrapper
unhi ka le rha that is why unhe consi me money mil rha.
36. Lampleigh vs Braithwaite- b asked l to seek pardon, consi there, as l went because b
said. Promise to pay in future for an act done is past is a valid consi when it came
from the person who has to pay the amt.
37. L.E. Godfrey vs Parbati Paluni- mistress, immoral still served for years therefore past
consi thus comp given. Notwithstanding the morality of the consideration, if the
object of a contract is to compensate for past injuries/services, the contract is valid,
even if those services were immoral in nature.
38. Esso Petroleum Ltd. vs Income Tax Commissioners – legal int but no consi, money
for petrol not for coins. Sale transact me consi is money. Yahan 4-gallon petrol tha
thus no consi.
39. Samuel Pillai vs Ananthanatha Pillai - U/s 25(3) of the ICA, promise made in writing
and signed by the person charged therewith to pay wholly or partly the debt of which
the creditor might have enforced payment but for the law of limitation, is valid and
subsisting contract though devoid of any consideration.
The promissory note thus signed by the defendant was valid and subsisting. The contention of
the defendant that the note was signed under undue influence exercised by the Administratrix
couldn’t be upheld for the defendant, under his free will signed the note on account of the
agreement with the Administratrix to convey the property without any deduction. the contract
with the Administratrix was also valid and supported by the consideration as u/s 2(d), for she
agreed to transfer share of assets inherited to the defendant without making any deductions on
latter’s request. Hence, she needs to be credited for the part payment made by the plaintiff out
of her own account by the defendant.
40. District Board of Ramnad v. D k Mahomed Ibrahim Sahib – bridge bana tha,
promised mony and also subscribed, dene baad bhi kaam nai hua, later paise maanga,
not barred by limitation as , lim begins from the day when work starts.
41. Combe vs Combe (King’s Bench Division and Court of Appeal)- husband wife
divorce, 100$ not given by hus, no consi as legal procee not stopped by husband, even
 if consi it is void due to waivering of natural right. Pe not applied as it cause be a
cause of an action. In present case, the principle of PE therefore can’t do away with
the necessity of consideration when that is an essential part of the cause of action.

42. P. Balamba v. K Krishnayya- consi, any other person, is okay.

Privity of Contract
43. Dunlop Pneumatic Tyres vs Selfridge – deal to sell tyres, Dunlop to dew to selfridge.
Not to sell at a lower price. Sel did. Dun sued him. Dismissed as dun was not a part of
the contract. The court held in a unanimous decision that Dunlop could not claim for
damages in the circumstances. The court found that firstly, only a party to a contract
can claim upon it. Secondly, Dunlop had not given any consideration to Selfridge and
therefore there could be no binding contract between the parties. Lastly, Dunlop was
not listed as an agent within the contract and could therefore not be included as a valid
third-party who had rights to claim on the contract. One cannot act in the capacity of
both a principal and an agent in the same contract; For a principal-agent contract to be
realized, consideration must flow indirectly or directly from the principal when the
agent is contracting with any party.
https://casebrief.fandom.com/wiki/Dunlop_Pneumatic_Tyre_Co._Ltd._v_Selfridge_
%26_Co._Ltd.
44. Essar Oil v. Hindustan Shipyard- ongc contracted hs to construct sth. Hs
subcontracted eo to build it. Ongc paid the eo some of the payments and hs cpould not
have. But this doents make ongc a party to contract and thus ongc cannot be made
liable to further pay eo.
45. M.C.Chacko vs State Bank of Travancore, Trivandrum- If a trust is created by a
contract, a beneficiary may enforce the rights given to him through that trust; a
charge, on the other hand, cannot be enforced by a third party. In order for a charge to
be created, there must be clear intention that a specific immovable property would be
liable to satisfy a debt.

Promissory Estoppel
46. Central London Property Trust vs High Trees House – ratio- If a party leads another
to think that he would not enforce his legal rights, he would be prevented from doing
so on a later date (concept of promissory estoppel). Gave house on lease. Reduced
rent during world was. Reduced rent only during world war not after the time when
the flat were whole full with tenants. PE not applicable .
47. Motilal Padampat Sugar Mills vs State of Uttar Pradesh- Appellant is a limited
company engaged in the business of manufacturing sugar. In
October 1968 Government declares an exemption of sales tax for three years via
announcement in a newspaper. Appellant sends letter to government for confirmation, in
order to start his new vanaspati unit. The same is reiterated by the government. Appellant
starts work on factory, meanwhile in May 1969 government calls appellant for a meeting
agreeing to provide concessional rates. Appellant representative states that they are already
entitled to exemption. The government however back tracks and instead of exemption, grants
only concession. On July third, 1970 the government yet again changes their decision,
deciding to revoke exemption all together. Appellant brings suit. Suit rejected in High Court
on the basis of the fact that appellant by accepting concession had waived off exemption.
Appeal to Supreme Court.
held in the Indo Afghan agencies case that a party who has altered their position acting on
the reliance provided by the Government is entitled to enforce the promise against the
government even in the absence of a formal contract. Only if the court is satisfied with
evidence that the public interest is over riding will the promise not be held enforceable
against the government. Where the government makes a promise, even in sovereign,
administrative or governmental capacity, knowing or intending that it would be acted on by
the promisee and, in fact, promisee, acting in reliance on it, alters his position, the
Government will be abstained to go back on its promise if it will be inequitable to do so,
notwithstanding that there is no consideration for the promise and promise is in fact is not
recorded in form of a formal contract as required by Art.299 of Constitution. The defence
of ‘executive necessity’ which holds that Government can’t fetter its future executive action
to be determined by needs of community at relevant time do not release government from
being bound by such promises for it will be ultra-vires to rule of law and justice.
However, Firstly, Government can’t be bound by its promise to do an act or omission either
expressly prohibited by Law or is in prevention of its acting in discharge of its public duty
under the Law; Secondly, government can’t be bound by any promises made by officers or
agents without any authority; Thirdly, if in accordance with facts that have subsequently
transpired, it will be inequitable to hold Government to its promise, Courts will not invoke
equity in favor of any such promise made, albeit this onerous burden to prove that any such
enforcement of promise will be against ‘public interest’ and hence against ‘equity’ lies on
the Government; Fourthly, even when there is no overriding public interest, if government
gives a reasonable notice, thereby providing promisee a reasonable opportunity to resume
his position, it will be allowed to go back on it unless promisee has so altered his position
that status quo can’t be restored.

plaintiff will be entitled to sales tax exemption in respect of new industrial plant established
in UP, and the knowledge of government that such promise is to be acted on, it will be
inequitable to allow Government to go back on promise because it was in fact acted on by
promisee resulting into altering his position which could not now be restored. Plaintiff not
only borrowed money from various financial institutions, purchased machinery but also
established hydrogenation plant in UP and went ahead with production. Hence, rule of
promissory estoppel can be evoked in present case to be of avail to plaintiff.

48. Hughes vs Metropolitan Railways -

https://casebrief.fandom.com/wiki/Hughes_v_Metropolitan_Railway_Company
A party who waives a part of the performance of a contract may later re-instate that
portion if it would not be unjust or violate the reliance of the other party. A landlord gave
a tenant 6 months notice to carry out repairs failure to do so would result in forfeiture of
the lease. Under the lease, Hughes was entitled to compel the tenant to repair the building
within six months of notice. The landlord and tenant then entered into negotiations for the
tenant to purchase the freehold of the property. It was thought by both parties that a
conveyance of the property would take place. The tenant had not carried out the repairs as
 they believed they would be purchasing the freehold and the repairs required by the
landlord were not essential to his use of the property. At the last minute negotiations
broke down and the Landlord gave the tenant notice to quit for failure to carry out the
repairs. [Once the six months had elapsed the landlord sued the tenant for breach of
contract and tried to evict the company. The tenant completed the repairs in June. Hughes
was successful at trial but was overturned on appeal. The House of Lords affirmed the
Court of Appeal. It ruled that with the initiation of the negotiations there was an
implied promise by the landlord not to enforce their strict legal rights with respect
to the time limit on the repairs, and the tenant acted on this promise to their
detriment. The implied promise is enough to allow estoppel to apply.

49. Manuelsons Hotels v State of Kerala-

Capacity to Contract
50. Leslie vs Shell (minor)- Defendant obtained loans from plaintiff by fraudulently
misrepresenting that he was of full age at the time of contract. Defendant sued him to
recover the money. If an infant obtains property or goods by misrepresenting his age,
he can be compelled to restore it so long as the same is traceable in his possession.
This is known as equitable doctrine of restitution. But if the amount is spent the
minor is not liable. Forcing him to pay then mean enforcing a void contract.
51. Mohori Bibi vs Dharmodas Ghose (minor)- regarding a plot, misrep age, parties knew
about it thus cannot claim specific relief, they knew eth still contracted thus no fraud
and misrep 65-64 don’t works because here exists no contract, minor won and
should not pass on the title
52. Mathai Mathai v. Joseph Mary (minor)- uncle transferred land to mother via deed
when mother was a minor, tus no contract and no passing of the deed, plaintiff
contended that he should get the possession of the property, contract originally void
because of incompe void therefore no land possession.
53. Manik Chand v. Ramachandra (minor)- plaintiff via his mother contracted to purchase
a land. Paid money. Def refused to act. Acc to hindu law minor can enter into a contra
with the help of the natural guardian, only if it is for his benefit. Thus, contra not void.
54. Dadasaheb Dasrathrao v. Bai Nahani – deed to sell house, was not aware that the he
was minor, estopped, and should return the prop
55. Proform Sports Management vs Proactive Sports Management (minor)- player’s
representative agent, one sued ano for inducement, other not liable because there
exists no cont as this is not a necessity. Tus not liable for breach. No liablity of
inducing a breach of a voidable contract.
56. Monosseh Jacob Monosseh vs Shapurji Hormusji Harver – man with mom then taj
etc, contract to pay debt, def suffering from general dementia but at time of entering
into contract he was all fine thus valid contract and should pay the debts.
57. Imperial loan Co. vs Stone- def signed a surety, claimed that signing time pe insane,
Mental incapacity is not a valid ground to avoid a contract unless it is proven that the
other party was aware of the unsoundness at the time of the making of the contract.
Heirs of the insane party can use the defence of insanity of ancestors to avoid the
contract.
2 points- prove insanity at the time of contra+ plus was known to the other party
Burden of proof on the one pleading insanity. KNOWLEDGE SHOULD BE
CONTRUCTIVE PLUS ACTUAL.
 58. Nilima Ghosh vs Harjeet Kaur & Ors.- contract to sell house by nili, 3 saal me ghar
chorna tha, vrna 50000 plus 18%int dena tha, ghar kisi aur ko rent pe de dia, claimned
insanity at the time of contract. Reps se pta tha us time nai thi jb cobtract form ho rha
tha. formation person has to be umsound while executing the contract, generally
proving the insanity is not enough
59. S.Basavaraj vs V.N. Adilakshmamma- property, previous contracts perfomed, claims
alcoholism, not valid, never objected ath, finally did. Shows he understood. Having
said that, the intoxication has to be AT THE TIME OF THE MAKING OF THE
CONTRACT and also has to be SPECIFICALLY PROVEN. A general plea of being
an alcoholic addict is insufficient.
60. Charanjit Singh vs Chattaranjan Pal & Others- A person who is unsound mind, i.e.,
incapable of making a rational judgment as to the effects of a contract upon himself,
cannot contract. His contracts would be void. Plaintiff of unsound mind, land deed, in
presence of father, does not make contract valid. The contract void as was of unsound
mind while making.
61. Chacko v. Mahadevan- 1 cent pehle sold for 18000, then 3 cent for 1000, claimed was
intoxicated. claim upheld the inadequate consi showed that the he was not sound.
62. Dunhill v. Burgin- accident, brain injury, comp compromised outside court with less
amt, said consent was not valid as was of unsound mind, claimed for more, granted, a
person not having mental capacity to understand stuff can file suits for liti, and has
rights for the legal proceedingS. Mc at the time of disposing the claim is not zaroori.
Coercion
63. Chief Engineer General vs Sai Suraj Construction – contruction, did additional work,
payment said work under coercion, no coercion as per the facts, Coercion is a
question of fact which depends on the circumstances of each case, a mere probability
is insufficient to support a plea of coercion.
64. Bansraj Das vs Secretary of State- Agreement entered into under the compulsion of
law can amount to coercion, when the party being coerced(bansraj) is not an
offender(jairaj). (In this case, the plaintiff was the joint owner of a property where in
his coparcener was an offender, and to release the property a fine was paid.) J was to
pay amt, didn’t pay, cattle taken in custo, B paid, not valid as cattle was detained, b
was coerced to pay. It defined coercion as given in section 15 of Indian Contract Act
as inclusive of detaining of property in order to make any payment.
65. P. Rengaswami Pillai vs Srirangam Municipal Council- demanded tax giving fear of
prosecution, case of eco duress3, but this was a civil claim and was justified as a of
civil nature. Thus, no eco duress, money was voluntary and was not returned. Was
tax. Erroneous belief that you are legally entitled to exact payment and suing for not
paying does not amount to coercion. They believed that they are bound by legislation
to extract the tax.
66. CTN Cash and Carry v Gallaher- CTN contracted with Gallagher for the purchase of
cigarettes. Gallagher delivered the cigarettes to the wrong address where they were
stolen before Gallagher could rectify the mistake. Gallagher threatened to stop CTN’s
3
Thus, the essential elements of duress are (1) coercion, (2) putting a person in such fear that he is bereft of the
quality of mind essential to the making of a contract and (3) that the contract was thereby obtained. Duress may
be exercised by (a) personal violence or a threat thereof, or (b) imprisonment, or threat of imprisonment, except
where the imprisonment brought about or threatened is for the enforcement of a civil claim, and is made in good
faith in accordance with law, or (c) threats of physical injury, or of wrongful imprisonment or prosecution of a
husband, wife, children or other near relative, or (d) threats of wrongfully destroying, injuring, seizing, or
withholding land or other things, or (e) any wrongful acts, that compel a person to manifest apparent assent to a
transaction, without his volition, or cause such fear as to preclude him from exercising free will and judgment in
entering into a transaction.
 credit facilities for future dealings if CTN failed to pay. To prevent the loss of its
credit facilities CTN paid. However, CTN sued for repayment on grounds of
economic duress – in other words, CTN was of the view that the contract was
voidable due to duress and inequality of bargaining power.The Court found against
CTN. There is no doctrine of inequality of bargaining power in the commercial
context under common law, so cases have to be decided on their individual facts. The
Court based its decision on three factors here. First, the agreement/dealings in
question took place between two commercial entities, two companies, and not
between a supplier and a consumer. Second, Gallagher had the right to refrain from
future dealings with CTN for any reason it chose. Thus, because a decision to
discontinue dealings with CTN was lawful, it was also lawful for Gallagher to
threaten CTN with credit withdrawal in the absence of payment of an invoice that was
already due. Third, and most important, Gallagher acted in good faith when it
demanded payment from CTN – it genuinely felt entitled to the payment. In the
absence of malice or any other form of bad faith, economic duress could not be
established.

67. Sara International v Rizhao Steel Holding Group- revise case. Iron ore. Conditions for
eco duess not fulfilled. Three requirements to constitute economic duress: (a) Pressure
which is illegitimate; (b) Its effect on the victim i.e. that the pressure must be a
significant cause inducing the Claimant to enter into the contract; (c) Lack of
reasonable alternative i.e. that the practical effect of the pressure was that there is
compulsion on, or a lack of practical choice for, the victim.
This principle, however, will not apply where the bargaining power of the contracting
parties is equal or almost equal. This principle may not apply where both parties are
businessmen and the contract is a commercial transaction.....The court must judge each
case on its own facts and circumstances."

Undue Influence
68. Sita Devi vs Prithi Chand & Ors.- aise ai ui, you have parti say ki kaise transact unfair
that, ya domi kaise tha, face of it uncon hai toh domi person ko show krna padega . no
ui. Prove relationship by person alleging domination of will. Use the relationship to
get an unfair advantage. Burden of proof shifts to the defendant to prove that no
undue influence exists
69. Poosathurai v Kannapa Chettiar- sale deed, ui
70. Mohanlal v. Kashiram- Panchas delivered an award under which defendant was to
convey half of his share in his inherited property to his uncle who was to pay
defendant’s share of debt, payable by him. Defendant consented to this award in
return for his uncle assuring his release from the non-compoundable criminal charge,
cropped up by his uncle himself, against him; however no such mention was there in
award delivered. In spite of mutation of property (to which he objected on grounds of
undue influence), defendant continued in possession of disputed properties; but after
his uncle died, latter’s heir, plaintiff claimed possession. A person who seeks his own
 advantage by stifling a prosecution or compounding an offence which is not
compoundable in law as against the interests of justice, does a serious abuse of the
right of private prosecution; an act against public policy. No court can give
countenance to an agreement between the parties which proceeds on such bargain
whether implied or express.

71. Lingo Bhimrao Naik vs Dattatraya Shripad Jamadagni- deed to transfer prop to
relative when he was minor signed by his father, maj hua toh stepmother and sb ne
force kia. Isne sign kr dia. Threats die shaadi nai hone denge, padhai band krva denge
adontion lis cancel krva denge.. Under 16. he had no independent advice and no
opportunity to acquaint himself as to his rights. Under Section 15 "coercion" is
defined and section 16 says that a contract would be said to have been induced by
"undue influence" where the relations between the parties are such that one of them is
in a position to dominate the will of the other and uses that position to obtain an unfair
advantage over the other. This section has been interpreted to mean that the first
thing to be considered was the relationship between the parties, whether one party
was in a position to dominate over the other, and then it must be proved that that
position was used to obtain an unfair advantage, and even though the transaction
may be unconscionable, relief cannot be granted until the initial fact of the
position to dominate the will was established. The burden of proving that the
contract was not induced by undue influence would lie on the person in a position to
dominate the will of the other. It has also been held that a transaction would be
voidable as against a third party if it is the result of undue influence and that party
took the benefit either as a volunteer or with the knowledge of the exercise of undue
influence by a person who was in a position to dominate the will of the executants, as
the third party's knowledge of the fiduciary relationship between the parties to a
contract and the exercise of undue influence puts that party under the same disability
as the other party who occupied the position of confidence.
72. Subhash Chandra Das Mushib vs Ganga Prasad Das Mushib- The suit in the present
case was for declaring that a deed of settlement executed by the plaintiff's father and
the plaintiff's sister in favour of the plaintiff’s brothers son in respect of certain
properties was fraudulent, collusive and invalid and for cancellation of the said
document. All the statements not proved, no ui. The relation was not of a dominating
one , it could be made out of love, The statement filed by donor that “he no longer
holds any interest in the property” shows that he was fully conscious and consented
the transfer of property to the defendant. Further, the fact that donor was actively
involved in the management of his property clearly proves that no undue influence
was exercised over him.

73. Ladli Prasad Jaiswal v Karnal Distillery Company- company, brothers, shares, elder
brother then managing direc, high salary etc. proves ui How undue influence works.
Prove relationship by person alleging domination of will. OPP, Use the relationship to
get an unfair advantage OPP, Burden of proof shifts to the defendant to prove that no
undue influence exists OPD
 74. Parbhu v Puttu and Others- Mere illiteracy doesn’t raise presumption of undue
influence unless there is evidence that the party seeking to avoid the contract is
unaware what he was bargaining for.
75. Royal Bank of Scotland v Etridge – presumed ui, 8 husbands wife se sign le lia
regarding mortgage of house, bank ko btana chahie tha bank ne nia bataya. Husband
wife me presumed ui hai on the basis of trust. Ghar nai mila. No consi for the wife,
islie bank ka duty tha pta krna. They didn’t. laid ki if wife would have known then
fine. Contructive knowledge.
76. Dai-chi Karkaria vs ONGC (Economic Duress)- Difference between economic duress
and commercial pressure. No choice left and no position to negotiate. Other party
exploits this ‘substantive inequality’ .
Severability of unfair terms from fair terms is possible and must be done.
Standard form of Contract
77. Central Inland Water Transport Corp. vs Brojo Nath Ganguly(unconscionable
bargain)- Plaintiffs worked in a company which was dissolved by Court’s order and
they were then inducted into defendant Corporation upon latter’s T&C. After years of
serving Corporation, plaintiffs were arbitrarily kicked out of the Corporation by virtue
of Rule 9(i) of said T&C which provided for termination of employees’ services on
three months’ notice on either side upon which three months’ salary to be paid by
Corporation. Plaintiffs requested Court to quash Rule 9(i) on grounds of
unconscionability. When the bargain is harsh or unconscionable, equity, grounded
upon ‘distributive justice’ curtails the freedom of contract so as to protect the
interests of party who entered into such bargain under distress. Freedom of contract is
of little value when parties don’t stand on equal footing; party with weaker
bargaining power enjoys no realistic opportunity to bargain and party has no
alternative between accepting a set of terms proposed by other or doing without the
goods or services offered. These agreements are called as ‘Adhesion Contracts’,
however not every such contract is unconscionable: only when there is gross
inequality of bargaining power compounded with terms unreasonably favourable to
stronger party can the indication that weaker party had no meaningful choice except
to consent to the unfair and unreasonable terms, hold ground.

Therefore Courts will strike down any unfair or unreasonable clause/ agreement entered into
by parties when there is gross inequality in their bargaining power,  and the victimized party
had  no meaningful choice but to give his assent to the contract, however unreasonable,
unfair and unconscionable a clause in that contract may be.

These adhesion/ standardized contracts are entered into by parties enjoying much superior
bargaining power with a large no. of people, hence, affect people at large and if
unconscionable, unfair and unreasonable are injurious to public interest. These bargains
therefore must be void on account of being opposed to public policy (S.23). Further, if they
were to be merely voidable on account of undue influence (for in many cases, superior party
has ‘real or apparent authority over other party’ and hence, uses that position to obtain
unfair advantage over another as according to S.16) it would compel each victimized party
to go to Court to get the contract adjudged as voidable which would lead to multiplicity of
litigations.
In present case, plaintiffs had much less bargaining power as compared to that of
Corporation, for they did not have any meaningful choice while assenting to the terms and
conditions of their appointment in the Corporation. If they would have refused to accept the
said rule, it would have led to their termination from service and exposed them to consequent
anxiety, harassment and uncertainty of finding alternative employment.

78. M/s Interglobe Aviation Ltd v N. Satchidanand- check brief. A)The exclusive
jurisdiction clause in the case gave the Delhi High Court jurisdiction of all cases no
matter where the dispute occurs. This makes the clause itself void. In our present case,
the passenger had got on the flight from Delhi and hence Delhi HC does have
jurisdiction, but since the clause is part of an adhesion contract that is applicable to all
the consumers, this clause itself is void. The exemption of liability clause gives Indigo
the right to not give food and water in ordinary circumstances, but when the consumer
is stuck inside the flight for say 11 hours, the circumstance is extraordinary. The
consumers were completely under the care of Indigo. They did not have any other
provision to get food. In these circumstances, a term has to be implied into the
contract whereby Indigo is liable to give food to its consumer. This implied term is
obvious and is backed by guidelines of international conventions as well as airport
guidelines. The respondent was given a choice to leave the flight and refund his
money. The respondent should have reasonably known that he could not expect
anything more than what was provided to him by the aircraft.

79. Barclays Bank v O’Brien- husband share holder in bank asked wife to sign the doc,
house at stake, wife claimed ui and misrep, ui not granted, but misrep granted as the
agent didn’t inform eth about the contra and got the sign laid down princi of ui.

Fraud
80. Laidlaw vs Organ- sale of tobacco after ww, embargo lifted price reduced, even asked
any change didn’t say ath, no fraud. - Principle of caveat emptor must exist in
commercial contracts. It is a rebuttal but strong presumption that there is no duty to
disclose in business transactions.
81. R.C. Thakkar vs Bombay Housing Board- Lump sum contracts are different from rate
contracts. Exception to §19 deals with fraud by silence when there’s a duty to disclose
ONLY. Elements of fraud:
1. Suggestion of fact
2. Suggestion to be true believing it to not be true
3. Intention to induce
Motive to deceive immaterial
82. Bhaurao Dagdu Paralkar vs State Of Maharashtra – scheme for freedom fightrs k
bachche lie, fraud not only for person but also and public auth, concealing docs is
evidence to fraud. Fakes doc bnane lge log.
83. David Birkett v Acorn Business Machines- finance company tele finance ko hi insure
krti thi, inlogon ne anvai machine ko tele ka naam dia taki vo finance ho jaae, they did
 this to defraud the 3rd party thus fraud. Obejtive was to dfraud thirtd party thus against
public policy.
84. Trojan & Co. Ltd vs Rm. N. N. Nagappa Chettiar- share holder maket was going to
crash sold their share to plaintiff deceiving him. Market crashed he was in loss. Sold
many shared via them they still never gave any acc. Where a person is induced to
purchase shares at a certain price by fraud the measure of damages which he is
entitled to recover from the seller is the difference between the price which he paid
for the shares and the real price of the shares on the date on which the shares were
purchased. Ordinarily the market rate of the shares on the date when the fraud was
practised would represent their real price in the absence of any other circumstance. If,
however, the market was vitiated or was in a state of flux or 790 panic in consequence
of the very fact that was fraudulently concealed, then the real value of the shares has
to be determined on a Consideration of a variety of circumstances, disclosed by the
violence led by the parties. Held also that the plaintiff was entitled to get interest on
the amount awarded as damages from the 5th April till the date of suit on the principle
that where money is obtained or retained by fraud a court of equity will order it to be
returned with interest.

Misrepresentation
85. Esso Petroleum Co Ltd v Mardon- esso bought a site for service center esti 20000
gallons per year, pumps installed red effi, leased to mardon to get petrol. Esso exp.
Mardon new. Mardon cannot produve 20000 and cant give esti as well. Went in loss.
Esso broke contra. Mardon demanded relief. Ratio- Where a party makes a
statement based on the experience and expertise that it has as its disposal and
intends that the other party should act on it and he DOES act on it, it can be
interpreted as a warranty.Future predictions can be warranties if they are given with
the intent to induce another party to enter into a contract, and they are relied upon in
the decision to enter into the contract (these are called collateral warranties).The
Hedley Byrne principle applies to contract law as well – when two parties in a
"special relationship" are parties to a contract, the party with special knowledge has a
duty not to be negligent in the representations that they give to the other party.

86. With vs O’Flanagan- change in the earning of the medical practice, did not infirm the
other party about the reduction, ratio- any fundamental changemust be communi,
intention for not telling not necess, but should be known to hider, the contract was
uberrimae fidei.
87. Hedley Byrne & Co Ltd v Heller & Partners Ltd- advertising comp, new cust ask
about it to bank, said good but denied taking respo, cust bankrupt ho gaya , heller
sued , no dams as no resp already with disclaimer
88. Derry v Peeke- def made claims that they were allowed to use steam powers trams
rather than horse powered. They had applied for spt but were rejected. They believed
they would get it thus made statement in good belief. Held also that the
misrepresentation had to be the inducing cause of entering into the contract. In this
case, it could not be established that the claim that the use of steam power was
sanctioned was the inducing cause of entering into the contract. Defined fraud. 4

4
T
his is a landmark case that defined fraud.
“Fraud is proved when it is shown that a false representation has been made knowingly, or without belief
in its truth, or recklessly without caring whether it is true or false.” A false statement made without
reasonable grounds for believing it to be true, may be evidence of fraud in light of plaintiff’s contention that
 Knowledge of falsity and intention to deceive important. A deliberate act is fraud.
Motive to commit fraud immaterial Difference between elements of fraud and
evidences to prove it. ‘Reasonable grounds to believe it’ test for evidence not an
element. “You don’t need to know for sure that it is false so long as it is made with
the intent to give out false information for it to constitute fraud”.
89. Sorabshah Pestonji vs The Secretary Of State For India- liquor shop in 5 miles, was
not reformed thus case under misrep as he incurred loss.

Mistake as to the formation of the contract not existing subsequently

90. Smith v Hughes- wanted to buy old oats, got new one, dint pay, sued, got a chance to
go through sample and also the old term was not discussed. Mistake of quality of
product is not mistake of subject matter to render contract void. Unless there be a
warranty making a particular quality of product as a part of the bargain or there be
any fraudulent misrepresentation on part of seller to that effect, buyer must take the
good as he contracted for, even if that quality was absent in the product. Such a
unilateral mistake on part of buyer unless induced by seller will not result in
avoidance of the contract.
91. Bell v Lever Brothers Ltd- lever employed bell, gave him retirement with comp, got
to know about his illegal personal trading, sued him for comp. suit failed. The court
held that the contract was not void, as the mistake was not an ‘essential and integral’
part of the contract. The personal trading that had happened during the employment
was not related to the subject matter of the contract and was said to be minor
compared to the profits Mr Bell had made for Lever Bros Ltd 5. Only a mistake to the
identity of the parties or of subject matter to the contract, as well as an item’s quality,
would be able to successfully negate consent and therefore void a contract, as if it had
never existed. The mistake must be essential to the identity of the contract.
92. Chwee Kin Keong vs Digilandmall(snapping up)- EXECPTION CASE. price of hp
laser printer reduced on website by mistake, people ordered in 1000s. appealents
knew. Unilateral mistake + other party aware of it = void contra. The element of
consensus ad idem cannot be claimed by the party (who is aware of such mistake)
against the other party (who has committed such a mistake). The appellants had
constructive knowledge about the mistake in the pricing of the product. Due to this
mistake related to the fundamental terms of the contract, the contract was held void
under the common law. UNILATERAL MIS DOES NOT RENDER IT VOID .
CONTRA IS SUBSISTING. BILATERAL – VOID.

defendant had no actual belief in its truth; but such a presumption is rebuttable. Such a statement, if made in
the honest belief that it is true, is not fraudulent and no action for deceit will lie. ‘Fraud without damage’ and
‘damage without fraud’ doesn’t give rise to an action for deceit which lies only when both fraud and damage
converge, i.e. when plaintiff relying upon the fraudulent statement acts upon it to his detriment.

5
For the contract to be void by common mistake the mistake must involve the actual subject-matter of the
agreement and must be of such a "fundamental character as to constitute an underlying assumption without
which the parties would not have entered into the agreements".
93. Shogun Finance vs Hudson- A dealer agreed a price for the sale of motor vehicle on
hire-purchase to a fraudster who produced stolen driving license of Mr. Patel and
forged the signatures. Having completed a satisfactory credit check of Patel, SF
approved the sale on HP. Fraudster then sold the car to H who purchased it in good
faith. When SF came to know of fraud, it claimed mistake as to identity making its
contract with fraudster void and hence claimed back car from H. In case of written
agreements, identity of the parties contracting is of material importance. Shogun
wanted to deal with mr patel only as he checked eth on his behalf. Contract void
because of the identity. Fraudster has no title thu the title cannot be passed to mr.
Hudson and he had to return the car back.

94. Raffles v Wichelhaus- Final Decision – Mellish and Cohen- The moment it appears
that two ships called Peerless were about to sail from Bombay there is latent
ambiguity, and parol evidence may be given for the purpose of showing that the
Defendant meant one Peerless and the Plaintiff another.  That being so there was no
consensus between the parties and therefore no binding contract. Here Millward gave
a dissenting Opinin. According to him the contract was for the sale of a number of
bales of cotton, which the Plaintiff was ready to deliver.  It is immaterial by which
ship the cotton was to arrive upon.  If the contract was for the sale of a ship named the
Peerless and two existed, then the question of what was meant or the intention of the
parties would be relevant.  The Plaintiff did not have any goods on board the other
ship.  Intention is of no avail UNLESS stated at the time of the contract.  The time of
sailing is not part of the contract.

95. Dhulipudi Namayya v Union of India

96. Kalyanpur Lime Works Ltd vs State Of Bihar-
Non-est Factum6
97. Saunders v Anglia Building Society- mrs. g signed without eading, giving prop to
nep, gave on lease to lee, rent pe de dia, plan failed, paisa dene sunty ko sue kia, aunty
non es factum demand kre, nai hoga kyunki aunty ne care nai lia padhne se pehle aur
padha bhi hota toh shyd de dete

98. Prem Singh v Birbal- minor parents prop on minr name, transferred by uncle without
minor ka consent, 3 saal se bar ho gaya. Nef islie because list doct of narrow limits,
minor ko knowledge hona tha ki 3 saal k within hi claim krna hai. Na pta hona is no
excuse.

Consent
99. Tarsem Singh v Sukhminder Singh- buying land, measuring units glt smjhe, therefore
void under 13 and 20.

Public Policy- Unlawful Consideration and Object

100. Taylor vs Chester- The maxim, “in pari delicto…” is founded upon the
principles of public policy, which states that courts will not assist plaintiff who has
paid over money or handed over property in pursuance of an illegal or immoral
agreement, fully knowing its nature. The true test for determining whether plaintiff
and defendant were ‘in pari delicto’ is by considering whether plaintiff could make
out his case without the aid of illegal transaction of which he himself was party.
In present case, illegality wasn’t collateral to the contract but the direct result of the
transaction upon which the deposit of half note took place. Hence, judgment for defendant.

101. Sundara Gownder v Balachandran.- x asked y to sit for auction and paid y for
it, but x was not allowed by rules to be a part of it, y got the prob and then x
demanded y rejected , x claimed money back, not given because the contract was void
because ot was against the provi of law. When a contract is entered into between
parties to circumvent any statutory provision it is not a case of contract "becoming" or
of being "discovered to be" void as the parties should know that the contract was void
from its inception (ignorance of law is no excuse). §65 has no application in where the
contract is void from the inception and the plaintiff was aware of it.
102. Teegula Babiah v Mohammad Abdus Subhan Khan- entered into a contract, in
return of the partenership one party will get the liscence for sendi ka shop , this
procurement of sendi was illegal, thus to get this lis was against public policy and
purpose of the contract was for this. Statute k contravention is going against pub
policy.
103. Surasaibalini Debi vs Phanindra Mohan Majumdar- p bought land under
benami transaction showing the name of d to evade tax. Went abroad for medical
6
When a man of full age and understanding, who can read and write, signs a legal document not taking trouble
to read it but signs it as it is relying on another as to its character or contents or effect, he cannot take defense
that it is not his deed. If the signature is taken by fraud, misrepresentation or undue influence, document is void
to that extent. But document is not void if other third party has innocently relied on or acted upon such
document. Signer must be legally negligent to deprive him of taking this defense. Stated doctorine of narrow
limits.
 reasons and gave possession to d. d refused to return prop back saying that the name
was his regis. Court- But it cannot on that account be held that the transaction on
which he founded his claim was unlawful. In claiming a decree for possession from
the defendant, the plaintiff did not plead any invalidity of the transaction under
which possession of the business was entrusted to the defendant. The plaintiff. As
the owner of the business, was therefore not prevented from enforcing his title
against the defendant there being no taint attached to the entrustment in the
circumstances of the case.

Agreements in Restraint of Trade

104. Gujarat Bottling Co. Ltd. v Coca Cola- coca cola as ked the gbc to make bottle
and distribute their products for them. Made agreements and asked them to refrain
from entering into contract with any other beverage company. Held- 1993 agreement
was commercial agreement where under both parties undertook obligations to
‘wholeheartedly’ promote the sale and production of Coca Cola goods for their
mutual benefit, such that the restriction not to deal with the competing goods was for
facilitating the distribution of goods of franchiser (Coke) and was not in anyway
restraint of trade. When the contract is in promotion, furtherance or facilitating of
trade, then it cannot be said to be in restraint of trade. Secondly, except in cases
where the contract is wholly one sided and unconscionable, normally when the
restriction is subsisting only during the period of the contract and not thereafter,
such restriction isn’t held to be in restraint of trade. A negative covenant, if subsisting
during the existence of contract, must not be greater than necessary to protect the
interest of employer, nor unduly harsh and oppressive to the employee”
(Superintendence Company of India v. Krishan) But, a post-contractual restriction
of trade imposed upon the party, whether partial or complete, is to be held as
violative of S.27 (Zaheer & Krishan). Also the contract of 1994 was not substituting
the contract of 1993 because, Mutuality as under S.62 required for substitution of
agreement requires both consensus ad idem between the parties and an intention to
substitute the original agreement. No such intention of the parties to substitute 1993
agreement could be construed from 1994 agreement.

105. Percept D’ Mark v Zaheer Khan-

106. Superintendence Company of India v Shri Krishan Murugai- surviellence
corp, asks to not join or work same thing nearby for 2 years after leaving the corp, job
terminated, he started survi services of his own. Nth wrong as he didn’t leave but was
terminated. All contracts that put restriction on a person to profess a lawful
profession, trade or any business after the termination of the contract is void. This
section does not differentiate between ‘partial restriction’ and ‘complete restriction
107. Association of Medical Super Speciality Aspirants and Residents & Ors. v
Union of India and Ors. – bond to work after completing the course, they agreed to it
plus it is for the public good.

Agreements in restraint of legal proceedings

108. Manohar Singh And Sons v Raksha Karamchari Coop. GR. H. SOC. And
another- contracter demands payment for the work but is denied full because work
still has some defects. Defects coorected and then demanded amt for the delay in
payment. 28 days me notice dena tha arbi nk lie, nai dia toh kha no arbi. But in actual
law aisa nai hai. A clause which provides for forfeiture or waiver of a right if no
 action is commenced within the period stipulated by the agreement is valid under
section 28 of Indian Contract Act. To protect the insurance comp ka right. VOID IN
RES OF LEGAL PROCEEDINGS.
109. National Insurance Company Limited v Sujir Ganesh Nayak and Company
and Anr- company workers went on strike demanding higher wages, work stopped,
policies covered no loss, also there was prescribed time till when the suit could have
been filed, time passed thus cannot file anymore. Time barred for litigation was not
there, only time till which claim can be demanded was given.

Uncertainty (Misc)
110. Pawan Kumar Dutt v Shakuntala Devi – land to be given, not defined what
segment of the land, uncertain thus void.
111. Hillas v Arcos- hillas bought timber from arcos, said 100000 ton at a discount
of 5% next year, valid agreement and can be enforced because his was more than a
mere ‘agreement to agree’ because the only thing necessary for the agreement to be
brought into existence was for the buyers to decide to exercise their option to
purchase the wood. Whilst the price had yet to be agreed, this was only because it
naturally fluctuated as a commodity depending on market conditions. Where the issue
was in the balance, as here, it was held that the court should try to interpret the words
of the agreement in such a way as to preserve the subject matter of the agreement
rather than destroying it, and contracts made between merchants in this way should be
upheld where the court can interpret the terms in order to do so.

Wagering Agreements
112. Gherulal Parekh v Mahadeodas- Though wagers are void u/s 30 of ICA but
cannot be considered as forbidden by law u/s 23 for a person entering into wagering
transactions does no legal wrong but only fails to get protection of law in enforcing
those transactions. Hence any collateral agreement with the object of wagering cannot
be declared to be void due to ‘object forbidden by law’ u/s 23, and is subsisting
between the parties. Immorality u/s 23 should be confined to cases of sexual
immorality like agreements for concubinage, sale or hire of things to be used in a
brothel, marriage for consideration; agreements facilitating divorce, etc. are all
immoral in nature. This limitation on meaning of word ‘immoral’ as in S.23 is
because of reasons: Firstly, its juxtaposition with equally wide concept of ‘public
policy’ in S.23 highlights legislative intent to give it a narrow meaning otherwise it
will lead to overlapping of two concepts; secondly, the phrase “Courts regard it as
immoral” as in S.23 highlights immorality is also a branch of common law and must
be confined to principles recognized and settled by Courts; Thirdly, case law in
England and in India confines its operation to sexual immorality.

113. Subhash Kumar Manwani v State of MP- claimed lottery prize prize money,
though with govt permi lot was held, it is void.

Contingent Contracts
114. HPA International v Bhagwandas Fateh Chand Daswani and Others- When an
agreement is entered into subject to ratification by others not party to contract, a
concluded contract is not arrived at and such ratification is held to be condition
precedent for coming into force of a concluded contract. Yahan court approve krega
tbhi contra form hoga – condition prece to formation.
 115. Gian Chand v Gopala and Others- The appellant was in agreement with the
respondent to purchase 1/3 of property. The property was notified under the Land
Acquisition act which came to the notice of the appellant after entering into the
agreement. The appellant had paid earnest money for the purchase and sought refund
for the purchase money. As the clause pertaining to the refund of earnest money in
case of notification for Land Acquisition was expressly mentioned in the contract, and
contingent contracts are valid appellant is entitled to the refund of the earnest money.

116. Smt. Deokabai v Uttam- Deokabai, an old widow lived in a house with her
daughter and grand-children. She drew up an agreement to sell it to Uttam for Rs.
48,000. Rs. 5,000 was paid as earnest money. One term was that she would take
appropriate permission to transfer the registration of the sale deeds in her name and
then look for new accommodation for her family and only then would she transfer the
deeds. He asked for a decree of specific performance and possession of property or,
alternately, the return of the earnest money, with interest. The trial court ruled in
favour of the plaintiff, granting him specific performance. She appealed and specific
performance was replaced with return or earnest money with 8%interest. According to
the terms of the contract it is clear that the transfer would occur only after she had
found new accommodation for her family, which was considered by the court to be a
contingency. It is clear that both parties recognised the need for the appellant to find
another house. Therefore, the appeal is allowed with earnest money being returned at
the rate of interest of 8 %.

117. Energy Watchdog v Central Electricity Regulatory Commission- Gujrat tender

noti for elec supply plus even Haryana. Adani won. Had to supply elec. Indonesia me
price of coal inc. adani imp coal from indo, they claimed that contract is frus as price
inc. court- radical hinderance in contra nai ho rha. Also clause tha ki unvailiblity nai
hai in force majeur clause.
118. Om Builders v Anil Chinubhai Kilachand –non-performance of conditions
cannot render a contract void even if it is based on default of the third party to aquire
some prop condi was to take, this is a condition precendent to perf (within control of
party). Person wanted possesiion of prop uske lie permi from co-owners. permi nai
mila. Court gaya.
119. Steel Authority of India v Tycoon Traders- sail to give iron to p, going to take
permi from the wildlife officer, rejected saying it was against a statute protecting the
tigers, thus cannot be performed, the sail has to now return all the earnest amt taken of
the contract.
120. Dhanrajamal Gobindram vs Shamji Kalidas And Co.- D- buyer, S- seller .
agreement for African cotton. 2 clauses 1)if necess seller can carry product for 2
months 2) force majeur clause. Party claims that both are uncertain clauses as they us
eif. But court says though uncertain, that they agreed to it and cannot say now ki
uncertain hai. Consensus ed idem tha. Even if uncertain capable of being made certain
on the basis of event going to happen.

Performance (Section 37-67)

121. Jagannath Patnaik v Sri Pitambar Bhupati Harichandan Mohapatra (Personal
Contracts)- diwan per hai
122. I. K. Sohan Singh v State Bank of India(S.46)- as and when hai mtlb as soon
as possible, if and when nai, ghar denge as when possible, vague nai hai reasonable
time imply hofa if and when is contigency
123. Mukanchand Rajaram Balia v Nihalchand Gurrmikhrai(s.47)-
124. Mohammed v Pushpalatha(S.51)- Promisor is not bound to perform the
reciprocal promise unless the promise is ready and willing to perform his part. A
promise for a promise is a reciprocal promise. In view of section 51 of the contract
act, it is the opinion that even though reconstruction has taken place, since the toilet
has not been constructed, the appellant is liable to pay Rs.1250 per month only after it
has been constructed and possession given.

125. Bolton v Mahadeva (Substantial Performance)- The plaintiff was to install

central heating and to perform certain other work in the defendant’s house. The
contract was for a lump sum £560. After the work had been completed the defendant
refused to pay up, complaining that the work was defective. there was no
substantial performance in this case because of the general ineffectiveness of its
primary purpose. If there is no substantial performance, the contractor cannot
recover. It is on the application of this converse rule that plaintiff’s case here fails.
Fumes aa re the aut thnada nai ho rha tha thus main kaam nai hua aur paisa nai
milega.
126. Cutter v Powell (Substantial Performance)- d promised man to pay 31 g after
the completion of the voyage. Man died in middle. P claimed dams.The intestate did
not perform the contract on his part, he was not indeed to blame for not doing it, but
still as this was a condition precedent and as he did not perform it, his representative
is not entitled to recover.
127. Williams v Roffey Bros & Nicholls (Substantial Performance)- The appellants
Roffey Bros, were builders who were contracted to refurbish 27 flats belonging to a
housing corporation. The contract had a penalty clause for late completion. The
appellants subcontracted some work to Williams, a carpenter. When Williams fell
behind with his work the appellants offered him bonus payment to finish on time.
Williams carried on working until the payments stopped. He sued the appellants for
breach of contract. promise to make bonus payments to complete work on time was
enforceable if the promisor obtained a practical benefit and the promise was not given
under duress of by fraud. It was the appellants’ own idea to offer the extra payment.
Therefore, there was no duress. The appellants also gained a practical benefit by
avoiding the penalty clause.  Russel LJ said (at 19) that the court would take ‘a
pragmatic approach to the true relationship between the parties’. Consequently, the
promise for extra pay was enforceable.

128. Benode Behari Das Gupta v Benoy Bhusan Choudhury (S.51Reciprocal

Promises)- Plaintiff sold the house in dispute to the defendant for a sum of Rs.400. On
the same day, defendant executed another registered deed in favour of the plaintiff
undertaking to retransfer of the house to the latter on the payment of Rs.400 to him at
any time within a period of five years. Plaintiff remained in possession of the house
and rented it out to Unnayan Sangha Club who terminated the lease and delivered
possession of the house to the plaintiff on 2nd June 1962. Plaintiff repeatedly
approached the defendant for retransfer of the house to him on receipt of Rs.400, but
the defendant put him off. Ultimately, the plaintiff sent a registered notice on 11th June
 1962 to the defendant requesting him to appear at the Sub-registry office of
Hailakandi on 21st June 1962 for execution of a deed of reconveyance on receipt of
Rs.400. Defendant did not reach on the day mentioned. Plaintiff having lost hope that
defendant would honour his commitment within the period of 5 years, he filed the suit
on 26th June 1962 claiming specific performance of agreement of reconveyance.
The promisor is bound to perform his promise i.e. executing the sale deed as soon as the
promise shows his willingness to perform his part i.e. paying Rs 400 within 5 years. Case
falls under section 51 rather than section 55 of the contract act. Plaintiff had indisputably the
legal right to pay Rs.400 at any time within 5 years of the date of the contract, but the
moment he made up his mind to pay the money to the defendant, the latter was bound to
execute the sale deed in favour of the plaintiff right at the very moment unless they could
mutually agree to defer its execution.

129. State of Orissa v Harekrishna Mahatab and Others – there are 2 diff contracts.
Bet samw parties dono me ek doosre ka mention hai ka mtlb ye nai ki breaching one
ka mtl 2nd perform hi nai krna hai.

Time as (or not as) an essence of the contract

130. The Food Corporation of India v M/s. Anupama Warehousing Establishment-
F gave construction work to A to make godown so as to store grains and gave 4
months for it. A kept on extending and gave it in 1980 still not poora. F rescinded the
contract earlier saying they don’t need it anymore. Sued. F won because though time
was not the essene but still time should be the reasonable time within which the
godown was to be provided. Thus, no comp. purpose ended.
131. Nevilal Rohita Construction Private Limited and Another v State of Bihar and
Others- contract to build road in 4 weeks extended to 7. Did not get intruments on
site, slow and late work. Contra cancelled. Appelaed to another person (who had no
auth to confirm) and suppressed facts to get contract. Final order to rescind following
which he filed suit. Time is the essence and he by not doing ath, was liable. Contract
regarding public work such as construction of road are contracts where Time is
essential & failure will make it voidable
132. Saradamani Kandappan and another v S. Rajalakshmi and another- deal to buy
land and the payment was to be made in installments, and was agreed that failure of
one would terminate the contract. Last one failed as the plaintiff was bankrupt. Ratio-
Time is the essence of the contract which is related to sale or transfer of immovable
property. When a party to a contract fails do a certain thing within the fixed time
where Time is the essence of the contract, then the contract becomes void at the
option of the aggrieved party. Also the claim for sale deed was nullified as the
payments were to be made unconditionally and were not dependent on the execution
of the sale deed.
133. KS Vidyanadam v Vairavan- execution of a deed to seel the house, payment in
6 months, the defs didn’t do anything and made excuse that the tenang is not vacating
 the house as the price of the land was increasing day by day. 2.5 years passed.
Plaintiff demanded for the earnest money back. Appeal allowed as there was complete
inaction from the side of the defs thus time being the essence the contra was breached
by the defs. Where time is not the essence of the contract, it has to be performed
within reasonable time period
Promisor is not bound to perform his promise unless the promise shows his
willingness tto perform his part in case of Reciprocal promise
It is well established law that in case of immovable property, it is presumed that time is not of
the essence of the contract. However, the courts may in such circumstances infer that it has to
performed within a reasonable time if the conditions are evident from i. the terms of the
agreement ii. From the nature of the property iii. From the currounding circumstances like the
object of making the contract.

Refusal to accept performance (Section 38)

134. Startup v Macdonald - This was an action brought to recover the price of
certain oil, which had been sold by the plaintiffs to the defendant, and which the
defendant had refused to accept. The defendant bought of the plaintiffs ten tons of
linseed oil at 31s6d per cwt., to be free delivered by the plaintiffs to the defendant,
within the last fourteen days of March 1838, and to be paid for, at the expiration of
that time, in cash. Plaintiffs were ready and willing, and tendered and offered, to
deliver to the defendant, the said ten tons of oil, within the said 14 days; yet the
defendant would not accept the same, or pay to the plaintiffs the price thereof.
They further found that there was full and sufficient time before midnight, and after the
tender, for the plaintiffs to deliver and for the defendant to examine, weigh and receive into
his possession the said oil, but the defendant refused to receive it by reason of the lateness of
the hour. The plaintiffs did, in pursuance of that contract, tender the oil to the defendant at a
time which, according to the express finding of the jury, left him full opportunity to examine,
weigh and receive it, before the end of March. The plaintiffs did, in pursuance of that
contract, tender the oil to the defendant at a time which, according to the express finding of
the jury, left him full opportunity to examine, weigh and receive it, before the end of March.
Since in the present case M was present in the warehouse and was in a position to reasonably
ascertain the quality and quantity of the product delivered, hence, there was a valid tender
even when made at unreasonable time for it was made within the time stipulated under the
contract and thus rendered the literal possibility of performance with the latter of contract.
Therefore, p wins and can claim dams.

135. Balwan Singh Raghav v. Dalip Kumar -

136. Ismail Bhai Rahim and Others v Adam Osman and Others – the debtor has to
show his willingness to give the money back to the creditor. Creditor mar gaya uski
prop uske biwi bete ki. Debtor ko nai pta ki kise dena hai paisa toh said ki ghar aa k
 lelo.. Creditors court gae to file suit with int from day 1. She said us din se jis din se
letter bheja uske baad se hi. Claim not accep as debtor ko jaa k paise dena tha. Mere
saying is not sufficient. Comp perf debtor ko jaa k dena hai to show ki he wiklling and
ready to pay the money.
137. P. L. S A. R. S. Arunachallam Chettiar v Krishna Ayyar and Others –
performance was allowed. Buyer asked for the receipt to be confirmed that the goods
being provided are the original ones or not. Seller refused to give the receipt. Later
seller asked to take the receipt but buyer ref. Buyer ref to acc perf and filed suit for
dams. Court held that all that seller had to do was to provide reasonable opportunity to
buyer to acertain the goods but is not answerable to all the questions asked. It was
duty of the buyer to ascertain himself by asking the real fella about the price etc. seller
fulfilled his obli thus perf to be accepted. 38(3) does not place a very heavy burden on
the seller as it only requires that the promise must have reasonable opportunity of
seeing that the thing offered is the thing that the promise has contracted for and the
promisor is bound to deliver. It is the promises duty to take steps necessary to satisfy
himself. Promisor has only to give him an opportunity
138. Guna Krishna Gauns and Another v Antonio Joao Braganza @ Antush
Braganza and Others – same as ismail. Bas ghar pe paise pade rehne hain aa k le lena.
Take the due amount from my house. Sec 38(2).
139. Barber Maran and Another v Ramana Goundan and Another(Joint
CREDITORS)- Payment made to one of two persons jointly entitled under mortgage
bond can be pleaded as a valid discharge of the debt in an action brought by the other
person interested in the bond. It was held that Mortgage amount was discharged by
payment made to the plaintiffs co-mortgagee. Payment mad to one sued by another.

Frustration
140. Ms. Gwalior Rayon Silk Manufacturing (Wvg.) Company Limited v Shri
Andavar and Company- The doctrine of frustration is based not only on the physical
or literal impossibility of the performance of the agreement but also of circumstances
which make it impossible or illegal for a contracting party to perform the contract. In
a case where there is evidence of supervening events which shake the contract to the
very root performance of the contract cannot be insisted upon by the Court. The
doctrine of frustration according to Indian Law is really an aspect of part of the law of
discharge of contract by reason of supervening impossibility or illegality of the act
agreed to be done. The respondents (plaintiff) entered into an agreement with the
appellants for the supply of 15,000 tons of Eucalyptus hybrid from Arimalam
Plantations and 3000 tons of Eucalyptus grandis from Cinchona Plantations. These
plantations belonged to TN Forest Plantation Corporation and were leased to the
plaintiffs. The respondent as security towards performance of the contract supplied
some part of the order. Later, the plaintiffs wrote a letter saying that there was some
difficulty in the transportation and the defendant must make their own
arrangement.Defendant also writes saying the girth of timber not enough.Plaintiff
claims frustration of contract as the timber of required girth is not available. The court
says you cannot claim frustration as to do so you must prove that:
The Contract has become impossible to perform,
The party seeking the frustration must not have foreseen the event and
The impossibility is not self-induced by the promisor.
In this case, the court holds that the plaintiff must have ascertained the amount of timber in
the area and the availability of transport and labour before entering into the contract and thus
cannot claim anything now.

141. Naihati Jute Mills v. Khyaliram Jagannath-

142. Mugneeram Bangur and Co. v Sardar Gurbachan Singh- same facts as below.
Ratio- Doctrine of Frustration cannot be pleaded when- Time is not the essence of the
contract, Parties knew about the difficulties of the performance at the time of entering
into the contract, Performance has been restricted for a temporary period of Time.
judgment if time is of the essence of the contract or if time for performance is set out
in the contract it may be that the contract would stand discharged even though its
performance may have been rendered unlawful for an indeterminate time provided
unlawfulness attached to the performance of the contract at the time when the contract
ought to have been performed. Thus, where the performance of a contract had been
rendered unlawful by reason of some subsequent event the contract would stand
discharged but such discharge will take place not necessarily from the date on which
the further performance was rendered unlawful, unless further performance was
rendered unlawful for all time. If the performance of the contract is rendered unlawful
either for a determinate period of time or for an indeterminate period of time the
contract would not stand discharged unless the ban on its performance existed on the
day or during the time in which it has to be performed. Time was not the essence of
the contra thus, no frustration. UNLAWFULNESS.
143. Satyabrata Ghose v Mugneeram Bangur- land was to be sold to plaintiff, cant
because it was requitioned by the givt for defence purposes, cancellend the contra,
asked to take back the earnest money. P demands specific perf of same claiming it is
not frustration. Meaning of the term ‘impossibility’: The court for the first time tried
to define impossibility used in sec. 56 as not just limited to its literal or physical
meaning but also refers to impracticability which occurs when an unforeseen event
or change in circumstance upsets the very foundation upon which parties rested their
bargain
Even that can be regarded as impossibility which discharges performance. ‘Impossibility’ u/s
56 doesn’t mean literal impossibility to perform (like strikes, commercial hardships, etc.)
but refers to those cases where a supervening event beyond the contemplation and control
of the parties (like the change of circumstances) destroys the very foundation upon which
the contract rests, thereby rendering the contract ‘impracticable’ to perform, and
substantially ‘useless’ in view of object and purpose which the parties intended to achieve
through the contract.
IMPOSSIBLITY.

Time is not an essence. Sb thodu time k lie tha islie dono suits failed. They cpould have
waited and resumed their contruction jbhi land wapas milta.

Apportionment of Payments (Section 59 to 61)

144. Cory Brothers and Company Ltd. V Owners of the Turkish Steamship- Cory
brothers had supplied necessaries to two Turkish steamships Mecca and Medina.
Payment was made to the appellants (suppliers) for the necessaries in the form of 4
bills which were dishonoured. Accordingly a sum of 900 pounds was paid to the
appellants. The suppliers gave particulars of the four bills. The bills were entered in
order of date, but the Medina bill came after the Mecca bill of the same date.
However, the suppliers appropriated 900 pounds towards Medina and brought an
action against the respondents for recovery of the money due in respect of the
necessaries supplied to Mecca. The trial court and the Court of Appeal ruled in favour
of the respondents. Hence the plaintiffs, i.e appellants (suppliers) brought the present
appeal. The accounts passing between the parties did not itself operate as an
appropriation or afford any indication of an intention to appropriate it. When a debtor
is making a payment to his creditor he may appropriate the money as he pleases, and
the creditor must apply it accordingly. If the debtor does not make any appropriation,
the right of application devolves on the creditor. It has long been held that the
creditor has the right of election “up to the very last moment” and he is not
bound to declare in express terms. He may declare it by bringing an action or in
any other way that makes his meaning and intention plain. When the election is
with the creditor, it is always his intention express or implied and not any rigid rule of
law. Moreover the way a creditor maintains his accounts is not conclusive of his
intention. NOT CURRENT.

145. Clayton’s Case (Devaynes and ors v Noble and ors.)- William Devaynes, for
many years prior to the time of his death carried on a business as a banker in a
partnership under the firm of Devaynes, Dawes, Noble and Co. He had taken several
loans from Clayton as a partner as well as on an individual basis. Some loans were
paid off by him whereas some remained outstanding. Even after his death (on
29/11/1809), the creditor continued issuing loans to the partnership. Some debts were
cleared, while some remained outstanding. Eventually the surviving partners became
bankrupt on 30/07/1810. Clayton claims the property of Devaynes in order to
discharge the outstanding debts.
In a situation, where neither the debtor nor the creditor has mentioned the rule for
appropriation of payment, the payment has to be appropriated in favour of the debtor. This
can be done in two ways- either the application is to be made to the oldest debt or it is to be
made to the debt which it is most for the interest of the debtor to discharge. If the debts are
equal the payment is to be applied to the first in point of time, if one be more burdensome
than the other, it is to it that the payment shall be first imputed. In the case of a current
account between debtor and creditor there is, in the absence of agreement to the contrary, a
presumption that the first item on the credit side is intended to be applied to the payment of
the first item on the debit side of the account. CURRENT.
 146. Ouseph Lukka v Ananthanarayana Iyer Ramakrishna Iyer- According to S.59,
when a debtor owes several distinct debt to a particular person and makes payment,
either with express intimation or under circumstances implying that the payment is to
be applied to the discharge of some particular debt, the payment if accepted, must be
appropriated accordingly. P owned several debts to def, p paid, def applied to one, p
claimed it was for another debt. Suit files. Older wale pe hoga.
147. ICDS Ltd. V Smithaben H Patel and Others- debtapplied to the int. Case. Did
right. Clayton’s rule.

Decretal case
148. Chaganlal Shrilal v Gopilal Choturam- debt was paid and the amount was used
to clear of the int rather than the main amt. issue- do sec 59-61 apply to single debt?
The amount due in this present case for costs, interest and principal as awarded by the
decree however constitute only one debt and hence sections 59 to 61 do not apply. But
the general principal applied to a single debt is that the payments should be applied in
the first instance to interest and then to the principal the balances only so far as those
payments exceed the interest due.

Novation, Alteration and Rescission of Contract

149. UOI V Kishorilal Gupta (Arbitration Clause)- entered into 3 contracts with
govt, substituted the 3rd one, had arbi clause, so the arbi also subsi, read brief . ratio-
@In Collateral Agreement, there is no executory clause in the 2nd agreement & it can
only be sued only on the Original contract @If there is any Arbitration Clause in the
Original Contract & if it is not been incorporated in the substituted contract, then the
arbitration clause also becomes void along with the Original Contract
Dissent: The new agreement (Accord & Satisfaction) did not purport to destroy the
original contract or the arbitration clause but only to settle the dispute of the Original
Contract. Thus the Arbitration Clause stands apart from rest of the contract & it is not
affected by novation or altercation
2 k saath theek tha sb, 3rd comp hi ald ho gaya, arbi clause nai in new 3 rd one. Arbi
clause integral part though collateral thus agree dissolves then abri also dissolves.

150. Rankanidhi Sahu v Nandkishore Sahu – pardanashi women, son does

alteration in will k sale deed of prop, material alt, without consent thus void. She
cannot read. Boy agrees ki vo use maintain krega prop k paise se but ye kahi nai tha
contract me. Islie ye mat alt hua.
151. Pachkodi Gulab v Krishnaji (Material Alteration)- Facts: A debtor (defendant)
executed a sarkat in favour of four brothers who were minors. Subsequently at the
instance of their guardian (appellant) the name of the eldest brother was scored out
from the sarkat without the knowledge and consent of the debtor in order to extend
the period of limitation for the suit, and enable the remaining brothers to file a suit
without impleading the elder brother.
Judgement: Held that the alteration was material alteration and rendered the sarkat void and
the remaining brothers were not entitled to recover the amount due on the sarkat.
Any change in the instrument, which causes it to speak a different language in legal effect
from that which it originally spoke, which changes the legal identity or character of the
instrument either in its terms or the relation of the parties to it, is a material change, or
technically, an alteration, and such a change will invalidate the instrument against all parties
not consenting to the change.
152. New Standard Bank Ltd. V Probodh Chandra Chakravarty-
153. Murlidhar Chatterjee v International Film Company – mc9 film paise dene pe
milti thi) was supposed to distribute the film, liscense from the exhibitors to screen
the film, 1 movie aai toh diffi hui toh get exhi, film ko wapas kr dia toh ifc ne kha
theek hai wapas kr do. 2nd time paise dia toh import hi nai kie film. Breach k lie file
kia mc ne. 4000 wapas maanga. Ifc says not breached films abhi bhi hai. 39 k under
ifc ne apna part nai kia toh mc ka put an end . voidable ho gaya. Then 64 k under
restitution mil gaya.
154. Chunnamal Ram Nath v Moolchand Ram Bhagat- FACTS
Plaintiffs entered into contract for taking deliveries of the goods packed in wooden boxes
from the defendants, which latter was to secure from London. Since British government
prohibited the supply of such goods in wooden boxes, hence, defendants offered to supply the
goods in bales to which plaintiffs refused and “cancel[ed] the goods” without claiming any
compensation thereof in any of the correspondences. Plaintiffs later claimed damages for
non-delivery.

ISSUE
Whether plaintiffs can claim any compensation.

HELD
Plaintiffs upon the ancillary breach of defendants claimed to have ‘put an end to the contract’
u/s 39; however, it is the plaintiffs themselves who by wrongfully refusing to take deliveries
under the contract have given a chance to defendants to ‘put an end to it’. Nevertheless,
defendants did not exercise this option and by acquiescence continued it; but Plaintiffs by
insisting on “cancel[lation] of goods” to be supplied by the defendants, had expressly
dispensed with the performance by the latter such that no claim for damages could be brought
against the any breach by latter.
The promisee may dispense the promise made to him. After dispensing such promise, the
promisee cannot go back to it and claim breach of contract.
Rule: S 39 and S 63 of the ICA
v APPLICATION: S 39 is an enabling section which entitles the promisee to take action on
anticipatory breach. S 63 creates a defence for him as defendant, if the other side after
remitting the performance, subsequently tries to enforce it.

155. M/s Young Achievers v IMS Learning Resources Pvt. Ltd. (Arbitration
Clause)- Exit paper would clearly indicate that it is a mutually agreed document
containing comprehensive terms and conditions which -admittedly does not contain
an arbitration clause. We are of the view that the High Court is right in taking the
view that in the case on hand, is not a case involving assertion by the respondent of
accord a satisfaction in respect of the earlier contracts dated 01.04.2007 and
01.04.2010 If that be so, it could have referred to arbitrator in terms of those two
agreements going by the dictum in Union of India v. Kishorilal Gupta and Bros. AIR
 1959 SC 1362. This Court in Kishorilal Gupta’s case (supra) examined the question
whether an arbitration clause can be invoked in the case of a dispute under a
superseded contract. The principle laid down is that if the contract is superseded by
another, the arbitration clause, being a component part of the earlier contract, falls
with it. But where the dispute is whether such contract is void ab intio, the arbitration
clause cannot operate on those disputes, for its operative force depends upon the
existence of the contract and its validity. The various other observations were made
by this Court in the above-mentioned judgment in respect of “settlement of disputes
arising under the original contract, including the dispute as to the breach of the
contract and its consequences”. We may indicate that so far as the present case is
concerned, parties have entered into a fresh contract contained in the Exit paper which
does not even indicate any disputes arising under the original contract or about the
settlement thereof, it is nothing but a pure and simple novation of the original contract
by mutual consent. Above being the factual and legal position, we find no error in the
view taken by the High Court. The appeal, therefore, lacks merit and stands
dismissed, with no order as to costs.

156. Mulheim Pipecoatings Gmbh v Welspun Fintrade Ltd and Another (Also,
doctrine of separability)- arbi hoga because it only discharged perf not the whole
contract.
157. Heyman v Darwins – ratio- repudiation me abri clause doesnt die. Novation
nai breach tha. Breach se primary obli void ho gae secondary nai(ath except perf).
Islie arbi clause subsisted till end even if contra ended. Arbi clause wide because of
lang used.
158. Lata Construction and Others v Dr Rameshchandra Ramniklal Shah-pehle
wala dischsarge hoga novation me, pay the pehle wala amt then new substitute hoga.
First contra k under rights give up nai kia toh novation nai kia.
159. K.M.P.R.N.M. Firm Merchants vs P. Theperumal Chetty A Merchant- 6 bales
ka contra can , new 8 ka. Sue for 14. 6 ka cancel kia toh cant sue for that. Substitutioj
ho gaya tha.
160. Payana Reena Layana Chetty v Pana Lana Pana Lana Palaniappa Chetty-
promis note is just a mode of payment, that is invalid mtln pay nai krna hai ye nai.
One party ne rate of int increase kr dia tha. Material alt. void ho gaya.
161. Nathu Lal v Mussamat Gomti Kaur(Material Alteration)- sale deed with two
holes one at bottom and one at top. Claimesd that these holes caused various changes
in the original document. A material alteration has been defined as one which
varies the rights, liabilities or legal position of the parties ascertained by the
deed, etc. (Under English law, but it is applicable in India as well). The two
alterations, in the present case do not fall within that category. The first alteration
relating to the date is of no legal consequence for the reason that the corresponding
date, Chait Sudi 6th 1251 Fasli, (Urdu form of 25 th March) was left intact. So far as
 this alteration is concerned, it did not cause, in the slightest degree, any variation in
the rights and the obligations of the parties under the document. The second alteration
is just as immaterial. In spite of the torn paper, the word “sharita” is clearly
discernible and that word would mean “conditionally” and nothing else. It was not in
the plaintiffs’ interest to obliterate this word and in the transalation of this document,
the last two lines mention in clear words that the parties had executed the document
by way of a conditional agreement, so that it may serve as evidence and be of use
whenever needed. This part of the document is not tampered with. This alteration is
not material in the sense of altering the rights or liabilities of the parties or the legal
effect of the document.
A material alteration (S.62) is one which varies the rights, liabilities or legal position of
parties as ascertained by deed in its original state, or otherwise varies the legal effect of
the deed as originally it had. When such material alteration is made unilaterally by one
party without the consent of other party, it operates to make the deed void from the date
such alteration is made and both the parties will be discharged from their respective
future obligations under the deed.

162. State of Bihar v Ram Ballabh Das Jalan and Another- Defendant had a debt of
certain amount due to plaintiff alongwith certain credit due from latter. Plaintiff, by its
letter acknowledged the credit and made claim for remaining debt due. Defendant
acknowledged the said letter and offered plaintiff to recover the debt outstanding from
the Bank of Bihar and Food Supply Officer, notwithstanding any debt still left to be
paid by him. Plaintiff was able to recover some portion of debt from both sources
mentioned above and filed a claim for the remaining debt on the original contract.
Defendant denied any obligation to pay on original contract alleging that by accepting
Bank of Bihar and Food Supply Officer as debtors, plaintiff consented to substitution
of original contract u/s 62.There was nothing on record to show that Bank of Bihar
and Food Supply Officer contracted new debts with plaintiff in substitution of the old
debts due to it from the defendants and bound themselves for the payment of the same
so as to entitle the plaintiff to enforce its realization from them. In other words, they
neither accepted any liability nor expressed any intention to be bound by the debt
originally due from defendant so as to extinguish old debt due against defendant and
create new debt, now due against them.

163. Morris v Baron- Morris entered into written contract (A) with Baron to supply
him with certain no. of pieces of cloth: dispute arose between the parties as Morris
demanded payment of supplied pieces of cloth while Baron claimed damages for
breach of contract out of delay in supplying rest of the pieces. Parties thereafter, by
parol, made an arrangement (B) by which they both decided to withdraw legal
proceedings, and Morris agreed to give 30 pounds as damages to Baron for not
supplying in time. Further, three months were given to Baron to pay Morris due
amount, and also an option to demand delivery of the remaining goods, if he pleases.
The suit was filed by Morris when Baron consistently refused to pay the due amount
while insisting on the delivery of the remaining goods.
whether there has been rescission or mere variation of terms must depend upon the
intention of the parties and the nature of the new contract itself: In case of
variation/alteration, there is no such executory clause in second contract as would
enable parties to sue upon it alone if the first contract did not exist; while in case of
novation /substitution, parties could sue on the second contract alone and the first
 contract is extinguished either by express words or because second dealing with the
same subject matter or having the same legal effect as the first but in a materially
different way. In present case, both the parties mutually intended and agreed not
merely to vary the original contract but to set it aside and substitute another for it, as
the two contracts are in conflict with each other w.r.t. fundamental or material
provisions which go to their ‘root’.

Present case involves the breach of original contract and formation of arrangement B in lieu
of it. B was the ‘accord’ by which obligations under original contract A were discharged.
Further, withdrawal of legal proceedings by both parties was the ‘satisfaction’ which acted as
consideration for making the accord operative.

2) Baron’s refusal of due payment under contract B (even after 3 months period was over)
unless delivery of remaining goods was made, amounted to repudiatory breach (which when
accepted by plaintiff—could have amounted to rescission). Since, he himself was at breach,
hence, could not claim any damages from plaintiff.
Mutually agree kia dono ne, to waive of the older
Oral contracts can abrogate written contract. Cannot plead on variation. Rescission me new
contract ban rha. Thus you can rely on the second formed by recision.

164. Khardah Company v Raymon & Co.(assignment)-

Recession (S.63)
165. MS Shoes East Ltd. V Munak Chemicals Ltd – P settled a deal with D in
Bangladesh. D- late delivery, first rake not manu on time, inspection of the shoes not
done, colour prescribtion not followed. Thus, the def breach the contract and the
plaint was right in recending the contra and was entitled toh get the advance paid back
also, Limitation period starts running when the letter of inability to perform and thus
the suit is well within limitation period. the promisee on the refusal of the promisor
to perform has a right to elect to put an end to the contract or to condone the
breach and accept later performance. It is from the facts of each case that it is to
be found whether the def refused to perform upon which the plaintiff put an end
to the contract or was it a wrongful recession by the plaintiff.

It was an obvious fact that by the time the addendum was made the plaintiff was not ready
with the first rake. Even after the amended LC was given to the def the first rake could not be
manufactured in the required off-white colour but only in grey colour as is evident from def
letter to plaintiff explaining his inability to conform to the MOU. Also there is lack of
urgency evident from the fact that when shipments were to be made by Jan 31, the def
booked railway wagon only on 2ndFeb. Also there was no arrangement with respect to
inspection, but merely enquiry to an inspection agency. The demand of amended LC and
export licence is mere excuse and def should not have been considered with these issues.
Limitation period starts running when the letter of inability to perform and thus the suit is
well within limitation period.

Conclusion: The def has failed to prove wrongful rescission; rather it is he who has not
adhered to the terms of MOU and addendum. Thus the plaintiff is entitled to recovery of the
advance paid with interest.
 166. All India Power Engineer v Sasan Power Ltd.- Waiver (u/s 62) is an
intentional relinquishment of a known right, and, therefore, unless there is a clear
intention to relinquish a right that is fully known to a party, a party cannot be said to
waive it. If any element of public interest is involved and a waiver takes place by one
of the parties to an agreement, such waiver will not be given effect to, if it is contrary
to such public interest. Whenever waiver is pleaded, it for the party to show that an
agreement for the same has come into being. Waiver should not be against pub int

167. Jagad Bandhu Chatterjee v Nilima Rani and Others- General principle of
waiver can be found in section 63 of the ICA. Under that section, it is open to a
promise to dispense with or remit wholly or in part, the performance of the promise
made to him or he can accept instead of any satisfaction he sees fit. Neither
consideration not an agreement is essential to constitute waiver under Indian Law

Restitution (Section 65)

168. Kuju Colleries v Jharkhand Mines Ltd- minig lease given to p by the def, govt
act that all mining leases by the govt now, p demands comp. This section makes a
distinction between an agreement and a contract. When the earlier part of the section
speaks of an agreement being discovered to be void it means that the agreement is not
enforceable and is, therefore not a contract. It means that it was void. It may be that
the parties or one of the parties to the agreement may not have, when they entered into
agreement, known that the agreement was in law not enforceable. The second part of
the s. refers to a contract becoming void. That refers to a case where an agreement
which was originally enforceable and was, therefore a contract, becomes void due to
subsequent happenings. In both these cases any person who has received any
advantage under such agreement or contract is bound to restore such advantage, or to
make compensation for it to the person from whom he received it. But where even at
the tie when the agreement is entered into both the parties knew that it was not lawful
and, therefore void, there was no contract but only an agreement which was void at its
inception and it is not a case where it is discovered to be void subsequently. Nor is it a
case of the contract becoming void due to subsequent happenings. As the plaintiff was
already in the business of mining and had the advantage of consulting its lawyers and
solicitors, there was no occasion for the plaintiff to have been under any kind of
ignorance of law and as the Mineral Concession Rules of 1949 rendered any
stipulation for payment of salami illegal and the lease on that basis was also illegal,
the plaintiff was not entitled to claim relief under S. 65 of the Indian Contract Act.
S.65 is not applicable. Nor is it a case of S.70 or S.72 since the payment of money
was not made lawfully, nor was it done under a mistake or under coercion.

169. M/s Alopi Prashad v UOI (Quantum Meruit) - vague assurances don’t modify
contract and nor can be invoked to have a cause of action in respect of promissory
estoppel for it was never intended to be legally binding. There is nothing in Indian law
which justifies the view that a change of circumstances ‘completely outside the
contemplation of parties’ from the time when the contract was made will justify a
Court to absolve a party from express terms thereof. A contract isn’t frustrated merely
because of change in circumstances. Therefore rather than ‘intention of the parties,
as reasonable men’, focus should be on ‘true interpretation of contract.’
Therefore the contention of plaintiffs that “turn of events were never in the
 contemplation of parties”, hence, original contract wasn’t binding, was unsupportable
by law. Further, it was untrue in fact also for after three years of WWII had been
already started was the mutual alteration in original contract brought about, such that
parties were fully aware as to the altered circumstances. Further, contract was never
rendered impossible or unlawful u/s 56 as it was duly performed by the plaintiffs and
they received remuneration by govt. expressly stipulated to be paid thereunder. Ghee
– you cannot demand more than the amount agreed for a specific work earlier.
170. Puran Lal Shah v Sate of UP (Quantum Meruit)- The appellant had accepted a
tender notice issued by the respondent- State for the construction of a road. The
tender was accepted and the contract was signed. 2.The stone required for
building the road was at a distance of 26 chains as claimed by the PWD.
However no stone was available in that distance. 3.The appellant had to get stone
from Gadhera and Bhumendar, a distance of 79 and 110 chains respectively. 4.The
stone was indeed available inside 26 chains but it was located inside the
Cantonment Area, but for its removal permission from the Cantonment
authorities had to be taken. The appellant was not able to obtain the necessary
permission from the Cantonment Authorities, and so he had to get the stone from a
much longer distance. 5.The appellant requested for a higher rate but his request was
refused. 6.He commenced work, and only after the work was completed did the
Chief Engineer recommend his case for a higher rate. The appellant also took
to execute some additional work for the department. However, the quantity of
work performed was far in excess of what was mentioned in the contract. He thus
claimed a higher rate of payment for such extra work. The principle of quantum
meruit is rooted in English law under which there were certain procedural
advantages in framing an action for compensation for work done. In order to
avail a remedy under quantum meruit: The original contract must have been
discharged by the defendant in such a way as to entitle the plaintiff to regard
himself as discharged from further performance and he must have elected to do so.
The remedy is not available to the party who breaks the contract even though
he may have partially performed part of his obligation. This remedy is
restitutionary i.e. it is recompense for the value of the work done by the
plaintiff in order to restore him to the position in which he would have been
if the contract had never been entered into. [It is different from a
compensatory remedy because compensatory remedy, the aim is to restore the party
to the position in which it had been had the contract been carried out.] Refers
Alopi Prasad and says that compensation quantum meruit is not applicable
when work is done pursuant to the terms of the contract. Under clause 12, the
plaintiff is bound to perform some additional work on the same terms and
conditions under which he tendered. The contractor was bound to perform all
additional work required of him (contract + 30% extra). Thus the appellant could not
claim anything apart from that mentioned in the contract. Where work is done under
a contract persuant to the terms thereof no amount can be claimed by way of quantum
meriut.plaintiff was not entitled to any extra amount as he agreed to for work
increased till 30%.

171. Harnath Kaur v Inder Bahadur Singh- promised villages in return of money,
bhai ki wife k mrne baad milega aisa kha court ne, jise promise kia tha uske lie deed
execute kr dia tha islie ab vo comp maang ri, cant give the land because vo agreement
ab void ho gai but comp ka paisa milega jo uske hus ne dia tha. The Plaintiff’s claim
 to compensation rests on the words of S.65. This section includes both agreements
discovered to be void as well as contracts which become void. An agreement,
discovered to be void, is not enforceable by law, and, on the language of the section,
would include an agreement that was void in that sense from its inception. The
agreement in this present case is void from its inception because its subject matter was
incapable of being bound in the manner stipulated. Thus the agreement was
discovered to be void and was one within the words and the meaning of S.65 of the
ICA. The plaintiff, therefore not entitled to recover the possession of the villages, is
entitled to recover compensation.

172. Uttamchand v Mohandas- minor made part of the partnership, contract turned
out to be void as is against the esta law. Under 65.

Unjust enrichment [Section 68-72]

173. Lipkin Gorman v Karpnale Ltd. And Another- The bona fide recipient of the
stolen money is under an obligation to restore an equivalent sum to the plaintiff if he
had not given full consideration for it and thus had been unjustly enriched by it unless
he could show that he-
1. He had altered his position in good faith so that it would be inequitable to require
him to make restitution or restitution in full
2. This change of position was not in the ordinary course of events, i.e. defendant
must establish that he incurred expenditure of the money so received, which he would
not have incurred but for money so received.

Section 68
174. Nash v Inman- 13 waistcoats to minor, not a necessity, thus no comp.
Necessaries means goods or services suitable to the condition in life of minor, or any
other person incapable of forming contract for himself, and as to his actual
requirements at the time of sale and delivery”. This means that not only the goods
need to be suitable and necessary to the condition in life of a minor (here) but also be
needed by minor in actuality
175. P.E.R.M Annamalai Chetty v Satyavadivel Muthuswami
Section 69
176. Govindram Gordhandas Seksaria v The State of Gondal- mill owned by the
maharaja, ses bought sold further, then realized that there was a municipal tax that
was to paid, tax levied when mill was under maha thus he was bound to pay it, they
paid because of the int in the mill, thus claimed back because of the ue.
177. Musammat Munni Bibi alias Ambika v Trilokinath- 2 people, golak paid taxes
for the land with good faith and int in the prop. Thus should be reimb. Ratio-A person
who is interested in the payment’ (u/s 69),is one who should really and honestly
believe that he must make the payment in his own interest. Therefore, when a
proprietor in good faith pending litigation makes the necessary payments for the
preservation of the estate in dispute, and the estate is afterwards adjudged to his
opponent, he should be reimbursed. However, no charge on property is created in
favour of such a person who makes the payment on behalf of the other. Therefore,
such a person who pays for other cannot treat reimbursement by the other as condition
precedent to the other getting possession of that property.
 178. Boja Sellappa Reddy v Vridhachala Reddy- paid tax of the land as being
owner he was legally bound by law to pay the tax, thus cannot claim the money. Deal
was to lease not pay tax. Owner pays the tax. The common law principle requires a
common liability to be sued for that which the plaintiff had to pay and an interest of
the defendant in the payment in the sense that he gets the benefit of the payment,
either entirely, as in the case of the assignee of a lease, or pro tanto, as in the case of a
surety who has paid and has his action for contribution against his co-surety
179. Mothooranath Chuttopadhyaya v Kristokumar Ghose- bought a land together,
plaintiff was asked to pay all the debts related to the land, he paid whole otherwise the
land would have been confesticated, demaded share from def, as even he was legally
bound to pay the amt plaintiff paid.
Section 70
180. Mulamchand v State of Madhya Pradesh- tendu leaves forest se lene ka
liscense from govt, govt ne cancel kr dia said ki paise die hain govt ka ue, but could
not prove the same thus no dams under ue. So where a claim for compensation is
made by one person against another under s. 70, it is not on the basis of any subsisting
contract between the parties but a different kind of obligation.
181. UOI v Sitaram Jaiswal- sleeves dena tha. Goi bhot time baad bola nai chahie.
Restore kr dia advantage nai uthaya. Thus poora 70 k andr nai hai. Appeal hua. Ab
situ jeet gai.
) The three. ingredients to support the cause of action under section 70 of the Indian
Contract Act are: First, the goods are to be delivered lawfully or anything has to be done
for another person lawfully. Second, the thing done. or the' goods delivered is so, done or
delivered "not intending to do so gratuiously". Third, the person to whom the goods are
delivered "enjoys the benefit thereof". It is only when the three ingredients are pleaded in
theplaint that a cause of action is constituted under section 70 of the India Contract Act. If
any plaintiff pleads three ingredients and proves the three features the defendant is then
bound to make compensation in respect of or to restore the things so done or delivered.
182. Sri Sri Gajapati Kistna v P Srinivasa Charlu- gave village ka segment, regis
passed to the def, paid all the taxes of the land and the def adopted the benefit by
accepting it and enjoying the bene, plaint claimed reimb, granted as plaint was not
bound by law to pay and land regis done. But had int as it was earlier his segment of
land. When the separate registry comes into existence defendant has to               
compensate the plaintiff as the old agreement is expired with its benefits
183. State of WB v BK Mondal and sons- construction done, they started using it,
claimed 70. Granted. Lawfull, took benefit, non gratuitous, estopple not applied, plus
was not part of the contract. 70 k under reimb. THE CONSTRUCTION WAS DONE
AND GOVERNMENT ENJOYED                    BENEFIT OF IT AND HENCE SEC
70 IS APPLICABLE ON THEM  HIGH COURT DECISION UPHELD
GOVERNMENT MUST PAY THE FIRM FOR THE EXTRA WORK.
184. Mahanagar Telephone Nigam Ltd vs Tata Communication Ltd- if you have
contract then no 70. No remedy under 70.
Section 72
185. Mahabir Kishore and Others v State of MP- tender of alco, 7.5% of tax was
levied, this was declared illegal by the court, still the govt took it, finally stopped,
contra got to know that the tax was illegal and claimed reimb. Got reimb under 72 as-
first, that the defendant has been enriched by the receipt of a benefit, secondly, that
this enrichment is at the expense of the plaintiff, and thirdly, that the retention of the
enrichment be unjust. Also they paid it under mistake of law. Also, in the case of a
suit for relief on the ground of mistake, the period of limitation does not begin to run
 until the plaintiff had discovered the mistake or could with reasonable diligence have
discovered it. The period of limitation prescribed for recovery of money paid by
mistake started from the date when the mistake was known. Thus also not barred by
limitation act.
186. Sales Tax Officer v Kanhaiya Lal- forward taxes paid, no such law, mistake in
72 includes both law and fact, tax is not an exception to sec 72, no estople when both
parties are under mof, comp received , No question of estoppel can ever arise where
both the parties, as in the present case, are labouring under the mistake of law and one
party is not more to blame than the other. Estoppel arises only when the plaintiff by
his acts or conduct makes a representation to the defendant of a certain state of facts
which is acted upon by the defendant to his detriment. Money must be paid
voluntarily without compulsion, extortion, undue influence, or even fraud and with
full knowledge of facts.
In present case, plaintiff committed mistake in thinking that the monies paid were due when
in fact they weren’t due and that mistake on being established entitled plaintiff to recover the
same from State u/s 72.
However, on the contention raised by the State that it has altered its position by appropriating
the tax collections in developmental works and it will now be inequitable for it to repay;
Court disputably observed that no equitable considerations are to be imported u/s 72, albeit
it is clearly established in Lipkin Gorman case that when the person receiving money in
quasi-contractual relationship has changed his position but for the money so received, it will
be inequitable to require him to repay/return it.

Section 72 dealing not with the contractual relations between the parties rather the relations
which resemble those of contracts (quasi contractual) doesn’t conflict with the provisions of
S.21 (which renders contract made in mistake as to law as valid) which operates at the stage
of formation of contract. If mistake of law has led to the formation of a contract, S.21
enacts that that contract isn’t for that reason voidable. If money is paid under that
contract, it cannot be said that that money was paid under “mistake of law” for it was paid
under a valid contract, and if it wouldn’t have been paid it could have been enforced.
Payment, “by mistake” in S.72 refers to a payment which wasn’t legally due and which
couldn’t have been enforced; mistake is thinking that money paid was due when in fact it
wasn’t due. Further laying stress on literal interpretation of unequivocal terms of ICA to
ascertain its true meaning and intent of the legislature, divorced from English law
considerations, Court held that by using the term “mistake” in S.72 without any qualification
or limitation, it must include within its ambit mistake as to law and mistake as to fact.

187. Sri Shiba Prasad Singh v Maharaja Srish Chandra Nandi- mining, paid extra
loyalties on basis of old cost, mistake of fact, reimb [ was decided that royalty would
inc if the cost increases, it increased thus royalty was inc then later when it was dec
the plaint still paid the higher royalty]
188. Mafatlal Industries v. Union of India- challenge the tax amt that was paid
under the specific legilations there were declared unconsti by the govt. held-
@ 72 cannot be used to claim reimb under specific acts @the one who loses the claim cannot use
precedents to refight the case @recog equitable def #it the state spent money on public then
no ue #if the claimant passes on the burden to the end consumer , reimb cannot be claimed –
passing on. Court observed that either when defendant who has received any advantage
arising independent of contract, has altered his position but for the advantage so received
and it will be inequitable to require him to make restitution or compensation for such
advantage; or when plaintiff who has conferred upon him any advantage, but defendant
hasn’t been unjustly enriched “at plaintiff’s expense”, i.e. plaintiff by passing on the costs to
his final customers has recovered any loss sustained; then equity steps in to present any
claim arising under unjust enrichment. The same rule is applicable to S.72 for it also delas
with quasi contractual relationships.

Damages [Section 73]

189. Hadley v Baxendale- shaft broken, ask to deliver, delayed, direct but
unforeseeable, thus not liable to repay
190. Victoria Laundry v Newman Industries- boiler, delivery delayed, special dams
granted, they knew about boiler and the fact that it is neceess in their profit making.
Thus, dams granted. Engi comp knew thus actual knowledge hai.
191. Murlidhar v Harishchandra- transport to cal from kan, receipt not gen, contract
canceled, ought to assume that to be sold in cal, assumption invalid, no special relief,
cannot get the price of the material in kan to get the comp acc to quantum meriut.
Thus, no comp. A entered in a contract with B to sell certain type of canvass. The
railway receipt was supposed to be delivered to Kanpur which was not delivered. B
purchased it for resale in Kolkata but it could not be inferred from the contract.
Neither B can prove the market price in Kanpur was different from the contract price.
So due to lack of information to A, about the resale of the goods in Kolkata, B can’t
be provided damages as per the difference of the price in Kolkata and the contract
price because the damages did not arise naturally in the usual course of things from
such breach. Hence the appeal by respondents to not pay the damages is allowed.
Market price of white canvas nai pta kr paae. There is duty to mitigate.(overruled in
lachia) special dam nai bas nominal mila as

192. Lachia Shetty v Coffee Board- pool auction, 2 bids, before result they sent
their revocation by tele(which the board claims is not a valid way), did not pay amt,
thus re auction, expense for re auc and diff in price demanded, revoked already thus
not liable, the Board was under an obligation to mitigate or minimise the loss arising
from the failure on the part of the appellants to pay for and take delivery of the coffee
allotted to them at the pool auction, but instead deliberate measures were taken by the
Board to bring down the prices of coffee and then effected a re-sale on December 23,
1952 resulting in the alleged loss of Rs. 34,570-6-6 and Rs. 5,917 respectively, which
could not be regarded as a loss directly and naturally arising from the breach in the
ordinary course of events, but was unreal, created and brought about by the
respondent and, therefore, the same was not recoverable from the appellants.
Secondly, the re-sale was not held within reasonable time of breach but was
inordinately delayed and, therefore, the appellants were not liable for the quantum
claimed. It may be stated that the contention that the defaulted coffee ought to have
been put up for sale at Export Auction and not at Pool Auction, though urged in the
lower Courts, was not pressed before us. For the reasons which we shall indicate
presently, we do not find substance in either of these two grounds of attack.
Defendant breached the contract which was formed during the auction sale by the
plaintiff. So defendants were liable for the loss arising on resale.Moreover plaintiff
has no duty to minimize damages because no one has a right of action against the non
defaulting party if he does not reasonably avoid certain consequences arising from the
default. MITIGATION- REASONABLE HONA HAI. INJURE NAI KRNA
 INNOCENT PARTY KO. AGAINT SOME STATUTE NAI HONA CHAHIE.
DUTE NAI MITIGATION.
193. Jarvis v Swans Tours Ltd- holiday, not nice, demaded comp, comp for
frustration also provided.
194. Melachrino v Nickoll- In my opinion the true rule is that where there is an
anticipatory breach by a seller to deliver goods for which there is a market at a fixed
date the buyer without buying against the seller may bring his action at once, but that
if he does so his damages must be assessed with reference to the market price of the
goods at the time when they ought to have been delivered under the contract. If the
action comes to trial before the contractual date for delivery has arrived the Court
must arrive at that price as best it can. 2 egyptian cotton boats, going to uk, seller
refused to deliver, buyer accepted, claimed for ab. Mp lower than cp then nominal hi
milega.
195. Millett v Van Heek & Co.- p was the cotton waste merchant, contact with D to
deliver waste. Embargo placed therefore cant deliver. Waited long but then said wont
deliver and D accepted and claimed ab. After embargo terminate krne kia. Embargo
utha. Ab k lie breach. Dams cal from the day of perf. Thus the day jb embargo utha.
Because ab vhi day of perf hai.
196. Dunlop v Lambert- consigner to send the product to the specific person at a
specific place, samaan kho gaya, consigner sued, def please ki he cannot sue as good
ab uske nai but ab vo jaa chuke hain, but contra comp hota jb good milte acc to the
statements, toh owner abhi bhi consignor hi hai. Thus can sue. where the party
undertaking to consign undertakes to deliver at a particular place, and if he undertakes
to deliver at a particular place, the property, till it reaches that place, and is delivered
according to the contract, is at the risk of the party consigning; so although the
consignor may follow the directions of the consignee, and deliver the property to be
conveyed, either by a particular carrier or in the ordinary course of business, still the
consignor may make such a contract with the carrier as will make the carrier liable to
him .’ and ‘Although, generally speaking, where there is a delivery to a carrier to
deliver to a consignee, the consignee is the proper person to bring the action against
the carrier if they should be lost; yet the consignor may have a right to sue if he made
a special contract with the carrier, and the carrier has agreed to take the goods from
the consignor and to deliver them to any particular person at a particular place, which
special contract supersedes the necessity of showing ownership in the goods; loss ka
risk jiska vo sue krega. USUALLY CONSIGNEE KRTA.
197. Funnell v Aadams & Remer-ratio- Plaintiff was entitled to damags due to
defendant’s negligence and he can claim the amount invested for the new work which
was undertaken by the plaintiff. Lawyer ka na batana was cause of damage. Land.
Rent revision clause. Also some extra work. Puts the extra work in necess obligation
islie ab dikkat. Sue kia lawyer.
198. Frederick Thomas Kingsley v Secretary of State India- elephant catching case.
If the damage is and it’s extent is uncertain then the plaintiff fails to claim damages
under sec 73 of the ICA because of uncertainity in the cause of damage itself and in
it’s extent too.
Cal of dam was the average. Delay in giving passport. Sec penalty accept nai kia.
199. Quinn v Burch Bros Ltd- ladder case. No causation chain. Fell due to his own
negligencs. Foreseeability of possible injury shall be a criteria to prove or disprove
negligence. The test for determining whether the damages arising from breach of
contract were reasonably foreseeable at the time the contract was entered into as
likely to result from its breach.Connection between breach of contract and injury
 sustained must be suffientely established through causation In contract it has long
been held that it is a good defence to an action founded on a breach of contract that
the party suing has chosen himself to act in a way in which a reasonable man would
not act and so brought about the damage claimed. Such an act breaks the chain of
causation leading to the damage.
The plaintiff voluntarily and without the defendants' knowledge chose to use the trestle, which
was unsuitable and subject to the risk of slipping. The failure to foot the trestle and using it
carelessly on a wooden floor broke the chain of causation; such that, injury to the plaintiff didn’t
not arise from the failure of the defendants to provide a step-ladder (which though created the
occasion of accident but wasn’t in anyway the cause of it) , but, from their deliberate choice to
use the trestle imprudently. Apna kahi se khud kharab samaan laya. Normal contract ka dam
mila. Special ka nai. Sep of forseeablity from causation.
200. Photo Production Ltd v Securicor Transport Ltd- Whether or not an exclusion
clause applies (the extent of the exclusion clause) in the case of fundamental breach of
contract does NOT depend on the kind of breach, but rather on the intention of the
contracting parties. The doctrine of fundamental breach states that if a party to
contract fails to perform that obligation which goes to the root of the contract, there
exists a rule of law which restricts the party to rely on the effect of an exclusion
clause in the contract purporting to protect him from that breach unless such
exclusion clause has been explicitly or implicitly intended in Contract to be subsisting
even when there occurs a fundamental breach. On the facts, Court found that the
exclusion clause limited primary obligation of Securicor, of being responsible for the
safety and security of the premises, to the extent of exercising due diligence as
employer of the security-men. This obligation was duly performed by the Co. for it
took due care while appointing alleged security guard. Hence, no liability of
Securicor exists.
Whether or not an exclusion clause applies (the extent of the exclusion clause) in the case
of fundamental breach of contract does NOT depend on the kind of breach, but rather on
the intention of the contracting parties. Can rely on exlusion clause even if there is
fundamental breach agr consent free the.

201. VL Narasu v PSV Iyer and Others – performance hall burnt thus no perf,
perforemrs claimed boc, kuch nai milega, impossible, friustration 56 39.
For ‘self-induced’ frustration, mere passive negligence is not enough, the intention of the
party to repudiate the contract must be clearly visible. Essential conditions for frustration: 1)
of apermanent nature so as to render the contract impossible to be performed on any
future date or, 2) of fundamental nature or, 3) of such a duration, so as to make
the contract, when resumed, a different one from the original contract. Kansal.
When a contract is dependent on the continued existence of one particular thing, and the
thing comes to an unforeseen end, the owner is not bound by the contract.
202. Maharasthra State Electricity Distribution Company Ltd v. Datar Switchgear –
if someone repudiate can claim for full pd of time. SIRF CLAUSE THA ISILIE.

Section 74
203. Fateh Chand v Balkishan Das- land lease, compensation, It has been
contended that Section 74 of the Contract Act does not permit any such forfeiture
without loss being proved and the onus to prove such loss is on the forfeiting party. In
the constitutional Bench judgment of Fateh Chand v. Balkishan Dass , it was held that
where breach of contract causes no loss and where no attempt is made to establish that
 party had suffered any loss or damage on account of breach so committed, the amount
deposited by way of earnest money or security deposit cannot be forfeited.  Sale deed.
Earnest was 10000 and also 24000 bhi dia as extra. Paise dena wale ne breach kia.
Thus forfeit ka right hai. 1000 unhe mila baki penalty. Penalty k lie prove actual
damage. Earnest money bhi unreasonable hota toh govt wapas krne keh de skta tha.
Court cannot enforce penalty clause. Penalty is just to terrorise and has no legal
power.
204. Maula Bux v UOI- Where under the terms of the contract the party in breach
has undertaken to pay a sum of money or to
forfeit a sum of money which he has already paid to the party complaining of a breach of
contract, the undertaking is in the nature of a penalty and, s. 74 applied thereto. The party
complaining of breach is entitled ,whether or not actual damage or loss is proved to have
been caused thereby, to receive from the party who has broken the contract reasonable
compensation.uoi Bta dete kita dam that oh milta. Nai bataya nai milega.
205. M/s Kailash Nath Associates v Delhi Development Authority and Another-
they won auction, ext time to perform. Fir sue kr dia. 1) breach nai hai 2) hai bhi toh
actual damage prove kro.
206. Steel Authority of India Ltd v Gupta Brother Steel Tubes Ltd- ld ka clause nai
hai thus uld milega. Predet nai tha islie 74 .
207. ONGC v Saw Pipes-  If the parties had agreed upon a sum as being pre-
estimated genuine liquidated damages there was no reason for the tribunal to ask the
purchaser to prove his loss. that Liquidated Damages should be regarded as
reasonable compensation, while penalties should not. Further, it also appears to have
concluded in case of penalty damages will have to be proved. The Hon’ble Court
reaffirms that no compensation at all be awarded if the court concludes that no loss is
likely to occur because of the breach. Very diif to calculate dam isilie penalty allow
kia vrna engi sb krna hai.
208. V Venkataramaiah Pillai and Another v PV Subramania Pillai- heavy rate pe
coumpound int lga re the. Said bhot heavy hai specific limit tk hona tha. Reasonable
nai tha. Acc to market place. Thus it is penalty. Ci is not penalty hai bhot high hai
islie hai.
209. Anand Construction Works v State of Bihar- ac worked for b for some time.
Nai kia. Ext time me bhi nai kia. B ne termi kr dia. Fir bhi anand ne bheja sb. Jo bheja
uska paisa mil gaya tha islie no paisa. Said ld dam maanga toh mila, comp contract
tha.

Anticipatory Breach & Mitigation

210. Ramgopal v Dhanji Jadhavji Bhatia- An estimate of profit would be the
natural way of measuring the plaintiff’s loss and, though only an estimate , it could be
correctly formed by the court,the actual course of markets being known at the date of
the trail.
Defendant’s (firm) action has led to anticipatory breach.So the plaintiff is entitled to measure
his damages as they than stood.
Hence, the appeal by the respondants fails. Cooton dena tha. Doc k pehle repudiated kr
dia, mitigation reasonalble nai tha. Contra form krte hi repu kr dia , dop aaya nai tha.
Kaise cal. 1) speculative market price 2)trial krte krte dop aa jaaega.

211. Albert Hochster v Edgar Frederick de la tour- Plaintiff was a courier who
agreed to accompany Defendant on a three-month tour scheduled to begin on June 1.
On May 11, Defendant wrote to Plaintiff that he had changed his mind, and did not
 need his services. Defendant refused to pay Plaintiff any of the promised wages. On
May 22, Plaintiff sued for breach of the contract. Shortly after, Plaintiff found another
position, scheduled to begin July 4. Defendant asserted that it was not possible for the
contract to be breached before June 1. The court disagreed and held for the Plaintiff.
When parties enter into a contract for future performance, a relationship is established
when there is an implied promise that both parties will act consistent with their
contract and not interfere with its future performance. In this case, Defendant clearly
repudiated his agreement with the Plaintiff, and it is wasteful to require Plaintiff to
wait and make preparation for an event that will not occur. Upon receiving clear and
firm notice of renunciation, Plaintiff was absolved from his obligation on the contract.
The injured party retains the option to sue immediately or to wait until the date
performance is due before bringing an action for breach. Ratio- A party who receives
clear notice of repudiation of a contract before performance is due may bring suit
immediately, before the performance is due.

212. White and Carter v McGregor- If there is a legitimate interest, other than
immediate financial interest, to perform the contract then the party is entitled to
recover damages. Where a party is in renunciatory breach of contract, the other party
is not bound to accept the breach and sue for damages, but may perform its own
obligations under the contract and claim what is due under the contract. A party is not
bound to enforce its contractual rights in a reasonable way. Adver on dustbins. Repu
kia but they were willing to perform.

213. Nathulal v Phoolchand- The transferor of any property is debarred from

seeking against the transferee the enforcement of any right that the transferee has
taken, other than a right expressly provided for by the contract; if one party to a
contract of reciprocal promises fails to fulfill his obligations, the other party, It will be
assumed that the other party would be at all times willing to carry out the contract.
RECIPROCAL PERF. Bhai ne deed se naam nikaalna tha usne nai nikaalna, aur use
apna flat transfer krna tha. Usne thodu paisa dia fir doosra vo baar baar keh rha flat
dene. Reciprocal prom tha. Pehle use naam htana tha fir use
214. PERFORMAMCE. Chanakya and Company and Others v Kay Aar Decobuild
Pvt Ltd- brief, chotu sa hi hai. Ch to pay amt as bank draft. Bank liquid ho gaya. Bank
is just mode. Discharge nai hua. Sue bank alg se. but discharge bna do
215. Pannalal v janakidas

WHAT IS PROMISSORY E./STOPPEL?

The doctrine of Promissory Estoppel state that whenever an unequivocal promise is made
with the intention of creating legal relationship or affect a legal relationship to arise in the
future (notwithstanding any pre-existing legal or contractual relationship between the
parties), knowing or intending that it would be acted on by other party and is in fact acted on
(altering the position of other party, not necessarily detrimentally) then promisor will be
abstained from going back on the promise if it will be inequitable for him to do so (i.e. if
promisor’s going back on the promise will detrimentally affect the promisee).
 The principle of promissory estoppel means where one party has by his words or
conduct, made to the other a promise or assurance which was intended to affect the
legal relations between them and to be acted upon accordingly in future. Once the
other party has acted upon the assurance provided by the promisor, the promisor
cannot go back on his words, instead he must accept the relations provided he himself
has introduced them, even though it is not supported by any consideration in the eyes
of law, except his words.
 Differs fundamentally from traditional contract theory because it protects reliance,
not bargains
 The promise is rendered binding if the promisee has suffered some detriment in terms
of change of position in relying on the promise.
 Difference between English Law and Indian Law:
- Under English Law need for a pre-existing legal relationship; no such
requirement under Indian Law.
- Under English Law you cannot do away with consideration. Under Indian Law
consideration not a requisite.
- Under English law it is only a defense. Under Indian law it is a defense and it
gives rise to a cause of action
 Difference between Promissory estoppel and Estoppel:
- Promissory estoppel involves representation of future events. Estoppel
involves representation of present facts.