CENTRAL UNIVERSITY OF SOUTH BIHAR

SCHOOL OF LAW AND GOVERNANCE

CONTRACT-1
ASSIGNMENT ON CASE – POWELL VS LEE KING
(1908) 99 LT 284

SUBMITTED TO: SUBMITTED BY:

DR. PRADEEP KUMAR DAS SAMTA KUMARI

[ASSOCIATE PROFESSOR] B.A.LL.B[Hons]2nd semester

SLG, CUSB ENROLLMENT NO. CUSB2213125091

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 ACKNOWLEDGEMENT

I would like to express my sincere gratitude and appreciation to all those who have
contributed to the successful completion of this university assignment.
First and foremost, I would like to thank my professor DR. P.K Das (Associate professor)
CUSB, SLG, whose guidance and expertise have been invaluable throughout this assignment
that is case review on Powell v lee king. Their insightful feedback and encouragement have
helped shape my understanding of the subject matter and have pushed me to strive for
excellence.
I am also deeply indebted to my classmates and friends who have supported and inspired me
during this academic journey. Their constructive discussions and collaborative efforts have
fostered a stimulating learning environment, enabling me to expand my knowledge and
develop new perspectives.
Furthermore, I would like to acknowledge the university library staff for their assistance in
accessing relevant resources and materials, which have significantly enriched the quality of
my research.
Lastly, I am grateful to my family for their unwavering support and understanding. Their
constant encouragement and belief in my abilities have been instrumental in my academic
pursuits.
In conclusion, I extend my heartfelt appreciation to everyone who has contributed to the
completion of this assignment. Your guidance, support, and encouragement have been
instrumental in my growth as a student, and I am truly grateful for the opportunities provided.

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 TABLE OF CONTENT

S.NO. TITLE PAGE NO.

1. CASE DETAILS 4
2. FACT OF THE CASE 5
3. ISSUE OF THE CASE 6
4. RELEVANT SECTIONS AND LAWS INVOLVED 7-8
5. JUDGEMENT/ RATIO DECIDENDI 9
6. CRITICAL ANALYSIS OF THE JUDGEMENT
AND MY OWN OPINION 10-11
7. CONCLUSION 12
8. LIST OF REFERRED CASES 13-17
9. BIBLIOGRAPHY 18

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 CASE DETAILS

Powell vs Lee was an English contract law case, the ruling established that acceptance of an
offer must be communicated to offeror by offeree himself or authorised agent.

Powell v Lee King

Court King's Bench Division , England and Wales

Decided 1908

Citation(s) 99 LT 284

Appellant: Mr Powell Respondent: Mr. LEE

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 FACT OF THE CASE

The plaintiff applied for the job for the position of the headmaster at a school. In the same
school there was an authorising committee that made the decisions for hiring. The manager at
that time referred his candidature to the appointing authority, and the appointing authority, in
return, release a resolution which sort of appointing him at the said position.
A member from the same committee informed the plaintiff about his selection by the
committee for the said position and the resolution that was put forth by the manager. Plaintiff
was quite happy for his selection. This communication was just a verbal communication, and
it is important to note that there was no formal communication from the school to the plaintiff
these were only internal dealings at that time.
Later the management of the school cancelled the resolution for hiring the committee.
Plaintiff did not get the job which he was supposed to get as per the member who informed
plaintiff about his selection.
Aggrieved by the decision of management of school and confused by the state of affairs
plaintiff filed the suit in court against breach of contract against the manager.

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 ISSUE OF THE CASE

1.The main contention that came to the court whether there was an actual breach of contract
or not as stated by the plaintiff.
2. Was there a completed and binding contract between the plaintiff and the school?
3. if there was one could the school be held liable for the breach?

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 RELEVANT SECTIONS AND LAWS INVOLVED IN THE CASE

Sections involved:
According to Indian contract act a contract in nutshell, an agreement that could be enforced
by respective laws, having jurisdiction of a particular region.
There are at least two parties involved in a contract:
1.The promisor
2.The promise
Section 2(a) of the Indian Contract Act says that a person is said to make a proposal when he
signifies to another his willingness to do or abstain from doing anything with a view to
obtaining the assent of that other to such act or abstinence". Means an offer is called to be a
suggestion made to a party by another party. This suggestion could be in the context of either
performing an act or refraining from it. In this process a promisor is the one who makes the
offer to the other party, and promise is the party to whom the offer is made.
A contract can only be binding after acceptance of the offer by both the parties.
In a case where offer is presented to particular group, it should be only accepted by the
person of the group /if it is accepted by any other person or third party there should be no
significance of it.
There are also other conditions associated with the acceptance of such an offer.
The acceptance must be clearly notified to concerned person’
Section 2(b) of the Indian Contract Act says that "When the person to whom the proposal is
made, signifies his assent thereto, the offer is said to be accepted. A proposal, when accepted,
becomes a promise."
By reading section 2(b) of the act, we come to know that:
1.It is only after the concerned person has accepted the contract, the whole proposal is
accepted and come into force.
2.The basic guideline is that acceptance should be expressed towards offeror for advantage of
the offeror.
Section 4 of Indian contract act deals with communication of offer and acceptance
An offer is considered as valid only after it is communicated to the offeree. Communication
of an offer in contract law is only complete when it is conveyed to the other party and same is
accepted by them. The offer can be dispatched through any common means such as post,
email, telephone or through word of mouth.
Additionally, communication of acceptance of an offer is also necessary since an offer only
becomes a contract after the individual to whom it was sent gives his or her consent to it.

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Laws involved:
1.Acceptance could also be made in written or verbal form and can also be conveyed by the
legally authorised representative to act on the behalf of the person.
2.Who should communicate;
In order to be effective, an acceptance must be made by the offeree or the person who is
authorised to accept the same. if the communication of acceptance is communicated by any
unauthorised third party there is no binding contract or it will not result in legal relations.
3. Communication other than by offeree
The justification of the rule requiring communication is that the offeror is entitled to know
whether a binding contract has been concluded by acceptance. In principle therefore, there
would seem to be no reason (other than one of certainty) why a contract should not come into
existence if the offeror is made aware or is informed that the offer has been accepted even
though the acceptance is not communicated to the offeror by the offeree or by his duly
authorised agent. Powell v Lee however appears to hold that it is necessary that the
acceptance be communicated by the offeree or by his duly authorised agent.
4. The communication of acceptance of an offer should be absolute.
5. The offer will be considered accepted, once the promise dispatches their acceptance.

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 JUDGEMENT OF THE CASE OR RATIO DECIDENDI

The Bench heard both the parties, viewed the evidence and came to the conclusion that there
was no breach of contract and school management is not liable for the same, as there was no
contract from the side of school committee or the management.
The plaintiff was informed about the alleged selection that was under discussion when the
resolution was submitted. The information was furnished to him by a member of the
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committee and not someone representing the committee. That person of the committee had
no authority to do so, nor did he have the consent to the inform the plaintiff which was not
even confirmed yet.
[1]
There was a resolution that put forth to the board. However, there was no form of official
confirmation provided to the plaintiff which spoke about his selection as the headmaster of
the school. The only form of official information the plaintiff received from the school
management that said that the plaintiff was not selected for the position he applied for.
This was again held to be insufficient to constitute the contract, as acceptance had not been
communicated to the plaintiff by the acceptor, i.e., is the board. Generally, the rule as to
communication of acceptance will be satisfied when it is brought to the notice of offeror.
Since, there was no contract only an offer put forward by the plaintiff, there was no breach of
contract. The status of the contract stood at the offer of the job being rejected by the school
management.

1
V. Kesava Rao, Cases and Materials Contract- I 161-162 (Lexis and Nexis, Haryana, 2 nd edn.,2014)

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 CRITICAL ANALYSIS OF THE DECISION THE CASE AND MY OWN
OPINION ON THE DECISION

CHANNELL.J.
[2]
I think the decision of the learned country court judge was right. In my opinion the case
depends on this, that where, as in the case, a body of six people, acting not as a corporation or
as a board of the directors, but as six persons having the power to appoint the post, vote on
the question and resolve to appoint someone, they do not make a concluded contract then and
there. There must be something more. There must be communication made by the body of the
persons to the selected candidate. In this case the managers authorised a communication to
Mr. Powell to the effect that he had not been elected, but they did not authorise a
communication to Mr. Powell to the effect that he had been elected. To my mind, that implies
that they reserved the power to consider the matter. Then one of the parties desired to reopen
that matter, and he told the plaintiff that there was a difficulty. Later, another party, Mr.
Dinsmore told that plaintiff that he had been elected on March 26. I think Mr. Dinsmore made
that communication to the plaintiff acting as an individual, and not for the body of the
managers. If the mere knowledge of what happened at the meeting was sufficient to complete
the contract as for the instance, if the result of voting was overheard at the door, the matter
would rest upon a different footing. But I do not think that is sufficient to complete the
contract. There must be notice of acceptance from the contracting party in some way, and the
mere fact that the managers did not authorise such a communication, which is the usual
course adopted, implied that they meant to be reserve the power to reconsider the decision at
which they had arrived. On these grounds and grounds stated by the learned country court
judge, I think his decision was right, and appeal must be dismissed.
SUTTON.J
I am of the same opinion.

The court’s decision was logically coherent. Any document which is provided by one party to
another is at least signed or stamped or in the official letter head of the party’s company.
It is essential for the contract to be delivered by competent authority. The member of the
committee who informed the plaintiff about his selection was not a competent authority.
Though the person was in the committee of the school that made all major decisions, the
same person was not authorised to communicate something to the outside parties without the
consent of the people who he might be representing.
The concept of due diligence also talks about the same as well. If the plaintiff had applied the
due diligence, he would know that the official letter of appointment, or a call would have
come from the school itself. There was an incorrect representation by the person from the
committee on the same had it is the duty of the plaintiff to cross check the details to jump to a
conclusion that would be beneficial and would have a strong legal backbone.

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 This case simply put, the right example of competency of a person to speak on behalf of
organisation regarding the contract, the essentials of a contract, the breach of the contract, and
the rejection of an offer.
“Acceptance subject to the contract is no acceptance.”
The acceptance was never formally conveyed to Mr. Powell. So technically, he shouldn’t be
engaging in a suit of breach of contract as- to the law; he was never conveyed anything. And
when he was conveyed the final decision by the members of the board, it was a rejection.
This decision was the only and final decision as it was conveyed to him by a formally
authorised person in charge of doing the same. If we take this case in context to the Indian
contract act, we will see that the opening to the post of headmaster was only an invitation to
offer and when Mr. Powell applied for the same, he basically intimated his offer to be in
place of the headmaster. And now it was up to the board of members to either accept the offer
and convey their acceptance to him or reject the offer, which they actually did. So, there is
nothing wrong, legally, with this whole situation, and the judgement of the court is, in fact, in
the interest of all the parties involved.

By reading above relevant sections, laws, judgement I am also of the same opinion and
satisfied by the decision of the court as the member of that committee was unauthorised
agent. There was no breach of contract as the only official information he received that he is
not selected for the post of headmaster.

2
Roger Brownsword, Smith and Thomas: A Casebook on Contract73-74 Smith and Maxwell,12th edn.,2009)

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 CONCLUSION

As observed from this case, for a contract to be valid it is essential that the acceptance must
be communicated by an offeree acting in his authorized capacity or any other person duly
authorized on his behalf. If any unauthorized person communicates the offer for acceptance,
then in such case the contract shall deem to be invalid.
Ruling that for an acceptance to be valid, the same should be communicated, and the same
should be carried out by the person offering in an authorized capacity, the Court dismissed
the plea of breach of contract between the plaintiff, and the defendant.

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 LIST OF REFERRED CASES

1.Rose and Frank Co v JR Crompton and Bros Ltd [3]

2. Boulton vs Jones [ 4 ]

3. Felthous v Bindley [5] 3

3
[1924] NUKHL 2, [1925] AC 445
4
[1857] 2 Hurlstone and Norman 564; 157 ER 232
5
(1862) 11 (NS) 869, EWHC CO J35; 142 ER 1037

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 Rose & Frank Co. v Crompton & Bros. Ltd., [(1925) AC 445]

Facts
An American company and English company entered into a sole agency agreement in 1913
for the sale of paper goods in the USA. The written agreement contained a clause stipulating
that it was not a formal nor legal agreement, and an “honourable pledge” between business
partners. Subsequently, the American company placed orders for paper which were accepted
by the British company. Before the orders were fulfilled, the British company terminated the
agency agreement and refused to send the goods, claiming that the 1913 agreement was not
legally binding and that, consequently, the orders did not create legal obligations.

Issues
The questions arose as to

(1) whether the sole agency agreement of 1913 constituted a legally binding contract, and

(2) whether the orders constituted enforceable contracts of sale.

Held
Firstly, as to the 1913 agreement, the Court gave overriding weight to the provision in the
agreement that expressly provides that it is to be solely an “honourable pledge”, as
demonstrating that the parties did not intend the arrangement as a legally-binding contract.
The Court explained that the argument that clauses restricting the legal enforceability of a
contract apply solely when the document is otherwise unquestionably of legal force. In this
case, the document and circumstances did not intend to create any legal interest, and the
clause expressly precluding the agreement’s legal enforceability applies. Secondly, the Court
held that the fact that the arrangement does not constitute a legal contract does not preclude
the orders and acceptances from constituting legally-binding contracts. The lack of
enforceability of an express legal arrangement under an agency agreement does not preclude
the legal transactions. The orders constituted mutual offers and acceptances with each
transaction having ordinary legal.

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 Boulton v Jones 1857

Facts:

The defendant i.e., Jones carried on the business of building material. He was a regular
customer Brocklehurst which used to supply the building material to him. Both of them had
developed friendly relations with each other.

On a fine day the defendant sent a written order for goods to a shop that was owned by
Brocklehurst. The defendant was unaware that Brocklehurst had already been sold and
transferred his business to Boulton.

When Boulton received the order of goods he decided to fulfil the order and delivered the
goods to the defendant without informing him that he had taken over the business of
Brocklehurst.

The defendant accepted the goods and used them in the belief that they had been supplied by
Brocklehurst. When he received Boulton’s invoice he was shocked to see it. He had never
entered into a contract with Boulton.

When he had placed the order for goods, he was under the impression that the business
belongs to Brocklehurst.

Jones refused to pay the price of the goods claiming that he had intended to deal with
Brocklehurst and not with Boulton.

He had dealt with Brocklehurst many times previously. Boulton decided to file a case to
claim the amount in the invoice.

Issues:

 1) Is Jones liable to pay Boulton? Whether Boulton claim the amount of the goods
which was used by the Jones?
 2) Whether there was duty on Brocklehurst or Boulton to inform about the takeover of
the business to Jones?

Held:

Pollock CB, Martin B, Bramwell B, Channel B heard the matter between the parties. Boulton
argued before the court that he had already sent the bricks to Jones. So, Jones should pay
money to him as he has supplied the bricks.

Jones contended before the court that he had made the deal with Brocklehurst and not with
Boulton. He was unaware of the fact that the business had been transferred to Jones.

 Justice Pollock said that rule of law is clear, that if one proposes to make a contract
with A, then B cannot substitute himself for A without the consent and leading the
other party to a disadvantage position, himself getting all the benefit of the contract.

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  Justice Bramwell said that the contract was made in name of one person so the other
person cannot sue, except in the cases of agency. But when any person makes a
contract with a particular party to write a book or paint a picture, or do any work of
personal skill, or whether because there is a set-off due from that party, no one else
can step in and say that he is the party with whom he contracted with.
 Justice Martin was of the opinion that where the facts prove that the defendant never
meant to contract with Boulton, so how can Boulton force a contract with him and a
contract with no one else can be enforced against him.
 Justice Channel pinioned that said that the plaintiff sustains an action in this
particular case as there was no contract between himself and the defendant. In case is
not Principal and agent relationship rather it was a contract made with Brocklehurst,
who had transactions with the defendant and owed him money.

The court held that the defendant Mr Jones was not liable for the payment of a price to
Boulton. When a contract is made with a particular person it is important to the contract.
Hence, there was no contract between the parties.

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 Felthous v Bindley(1863)
Facts:

The complainant, Paul Felthous, had a conversation with his nephew, John Felthous, about
buying his horse. After their discussion, the uncle replied by letter stating that if he didn’t
hear anymore from his nephew concerning the horse, he would consider acceptance of the
order done and he would own the horse. His nephew did not reply to this letter and was busy
at auctions. The defendant, Mr Bindley, ran the auctions and the nephew advised him not to
sell the horse. However, by accident he ended up selling the horse to someone else.

Issues:
Paul Felthous sued Mr Bindley in the tort of conversion, with it necessary to show that the
horse was his property, in order to prove there was a valid contract. Mr Bindley argued there
was no valid contract for the horse, since the nephew had not communicated his acceptance
of the complainant’s offer. The issue in this case was whether silence or a failure to reject an
offer amount to acceptance.

Held:
It was held that there was no contract for the horse between the complainant and his nephew.
There had not been an acceptance of the offer; silence did not amount to acceptance and an
obligation cannot be imposed by another. Any acceptance of an offer must be communicated
clearly. Although the nephew had intended to sell the horse to the complainant and showed
this interest, there was no contract of sale. Thus, the nephew’s failure to respond to the
complainant did not amount to an acceptance of his offer.

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 BIBLIOGRAPHY

INTERNET SOURCES USED:

1. Powell v Lee (1908) 99 LT 284 Available on https://indianlegalsolution.com/powell-

v-lee-1908-99-lt-284/ last visited on 11 June, 2023.
2. Powell v Lee available on https://casebriefs.truthandyouth.com/2021/09/27/powell-
vs-lee/ last visited on 11 June, 2023.
3. Communication of offer, Acceptance and Revocation of offer available at
https://www.vedantu.com/commerce/communication-of-offer-and-acceptance-and-
revocation-of-offer last visited on 11 June, 2023.
4. Rose v Frank available on https://www.lawteacher.net/cases/rose-and-frank-v-
crompton.php last visited on 12 June, 2023.
5. Boulton vs. Jones [1857] |Case Brief! Available on https://thelegallock.com/boulton-
vs-jones-1857-case-brief/ last visited on 12 June, 2023.

BOOKS USED:
1. The Indian Contract Act, 1872 (Act 9 of 1872)
2. Rao, V. Keshava. (2014) Cases and Materials Contract I. Haryana, Lexis and Nexis.
pp. 162-163.
3. Brown sword, Roger. (2009) Smith and Maxwell. pp. 73-74.

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