Contracts case laws Flashcards

Question

Hargopal vs People's Bank of Northern India

Answer 1

- Facts → X applied for 100 shares of bank and said if shares allotted I must also be allotted a place on the board of the bank. Shares were allotted and he enjoyed dividends. Afterwards, a dispute arose and he said there was only partial acceptance hence no contract - Held → though there was no express negotiation, allotment of shares was a counteroffer and by accepting the shares a valid contract was formed -

Answer 2

There was an auction and the terms of bid said that the bid will be accepted only after the approval of the Chief Commissioner. The bang of the hammer in this case was just a provisional acceptance. In the time period between the bang of the hammer and the sign of the Chief Commissioner, the offeror can revoke.

Answer 3

- Facts → X when to a builder of a building. He asked the price to purchase the building. Y gave certain terms of selling in writing. X took the page with him and travelled to some other city. The next day at 3:50 pm he posted a letter of acceptance into the course of transmission which reached Y on 8:50 pm of the same day. Y put the letter of revocation at 1:30 pm and it reached X at 5:30. - Held → for revocation to be effective it must reach the party to whom it is addressed before letter of acceptance was posted. So here it is not a binding revocation.

Answer 4

- X offered to sell indigo to Y and said offer is open for 8 days. On the 5th day he says don’t accept the offer as I already sold it - This was against no consideration for that exclusivity thus it was not a binding arrangement of 8 days - held → this condition is not a bar to rescinding the offer because it is at max a promise -

Answer 5

- X wanted to sell land. Gave Y exclusive offer for a certain amt. of time in exchange for 1 pound. Sends notice of revocation before time period elapsed - Held → this offer could not have been revoked as the exclusivity was given in exchange for some consideration. (Theory of peppercorn)

Answer 6

- Facts → voluntary retirement scheme In a case, there was a voluntary retirement scheme. Once a particular employee has applied for this, the authority can choose to accept or reject the application, the applying person cannot retract the application. Court - scheme goes against the principles. Scheme is not in the nature of an offer, but rather invitation to offer. The persons who wants to avail it will apply and the 'offer' to comply with the terms of the scheme will be considered by a Board. And before they 'accept' his offer, the person can very well retract his offer na

Answer 7

- Facts → X intended to sell Y land. X made an offer to Y which was open till certain date. In this duration X found a better buyer for the land. Barry got to know about this and went to Y and told him that the offer has already been revoked even though no such communication was made. X sold land and Y accepted the offer through Barry on the same day. - Issues → 1. sold land before time elapsed and 2. in the absence of communication of revocation Y was free to accept the offer so is there breach of contract? - Held → 1. exclusivity is not a contract , 2. an offer though generally is revoked by communication from offeror however if the offeree gets to know about any other trustworthy source that the offer should be considered revoked then this will be a valid revocation. - However, in the Indian context the revocation can only be sent by the offeror himself.

Answer 8

In April, a reward was published in a newspaper that if someone comes forward with information about a criminal, he would get a reward. In November, the reward was withdrawn. In April next year, a person comes forward with information about the criminal.

Answer 9

- Facts → X was hired as contractor by collector. X was to construct shops for ppl from low income so they can earn. Those poor people promised the contractor that we will give you commission from what we earn as a sign of gratitude. Allottees didn’t pay - Held → the court asked were those shops build at the desire of the allottees. Since the shops were build on govt. order and not at the desire of the allottees so it is not a consideration. Therefore, there was not contract in place. -- Facts → X was hired as contractor by collector. X was to construct shops for ppl from low income so they can earn. Those poor people promised the contractor that we will give you commission from what we earn as a sign of gratitude. Allottees didn’t pay - Held → the court asked were those shops build at the desire of the allottees. Since the shops were build on govt. order and not at the desire of the allottees so it is not a consideration. Therefore, there was not contract in place. -

Answer 10

- Facts → A town-hall was to be built in Howrah. The collector requested public subscription to raise funds for the town-hall. Every person could enter into a register the amount he would donate. X entered a sum of Rs 100. The government raised enough funds. The government then contracted with a contractor and got the town-hall built. Then, X refused to give the money saying he was short of money. He said that it was a contract between the government and the contractor and he was not a party to it. - Held → When X got into a contract w/ the contractor on the basis of the assurance of the construction of the town hall X made a unilateral promise ( I will pay if it gets constructed- cannot sue if the hall wasn’t constructed)

Answer 11

- Temple was being repaired in a village during which the people who were getting it done fell short of funds- roll out a ad for subscription - X subscribed 105 Rs. - when he was asked to pay he refused - Issue - Should he pay? Whether the above Calcutta HC will be binding on Madras HC? - Held - Unlike the above case , X will not be liable as in exchange of 105 Rs he is getting no consideration. - Why? → was it on his desire the temple being repaired ? No ( not at desire of promisor) + for a unilateral promise when one the promise from his end when that is an act done only then a contract comes into place. In this case the party is not doing temple repair on the 105’s promise. The contract for temple repair was in place already - However if the ad said that we are stopping the repair and will continue only if we get subscription then he would have been liable

Answer 12

A person promised an amount of money for repairs to a mosque. But the repairs were not done. When the mosque attempted to get the money from the promisor, the court said that the promisor was not bound because no change was made in the mosque’s position.

Answer 13

- A man offers to transfer the title to a house to his son if the son pays off the mortgage. In between, the man dies. - Issue → Can a unilateral contract be revoked after the death of the offeror? - Held → No. If the son continues to pay off the mortgage, the offer is still binding and he can claim the title.

Answer 14

- here were certain charges levelled by the wife against the husband. The wife then redacted the charges on the promise from her husband that he would pay her some allowance. After the charges were taken back, the husband refused to pay the allowance. - The court said that this was a binding, legal obligation, because in cases such as this, where the lady retracts charges against her husband on promise of allowance, there must have been intention to make a legal obligation. - In case the parties have not expressly assented to create a legal obligation, the test to check this is to look at the arrangement objectively. By objectively, it means to look at the arrangement like an outsider who has no stake in the arrangement. The outsider is, of course, the reasonable man.

Answer 15

- X was an English officer stationed in Ceylon - went to England on vacay - Wife couldn’t accompany him back to Ceylon cause she wasn’t well - husband made a promise that he will give her 30 pounds per week so that she could sustain herself in England- quarrel arises and husband stops sending the money- wife files a case - Held → there is a valid promise and consideration however it is not enforceable because agreement b/w husband and wife is not done with the intention of creating a legal obligation.- Eg: if husband asks his wife he will give her certain amount per month for HH needs, children and for herself . If we say that husband can be sued by her then can the wife be sued if she doesn’t do her work as we decided on earlier. This would create a logistical problem - Problem: how do you ascertain intention? - Objective test - would a reasonable person have intended to create legal obligations or not? ( McGreggor v McGreggor) - Generally in close ties b/w people no legal contract is formed.

Answer 16

- and her daughter and her tenant entered into a crossword competition and did not decide on how will it go and stuff - they won the competition - X got all the money as they had entered under her name - refused to share the money w/ tenant and daughter - Agreement b/w people of close ties - however from a lens of reasonability all person would expect equal distribution of wins and be willing to initiate legal enquiry if not given the amt- therefore, she was liable - Indian Position → the assumption is that if a consideration is involved, there will be an intent to create a legal obligation. Therefore, intention to create legal obligation is not necessary and in the absence of the same it is still enforceable

Answer 17

- X who was mohammadien by faith was in a partnership with Y also mohammadien- gave a loan of 4 lakhs. Y said you may or may not give it back. In Islamic law this may be called as Quarza- e - Hasan ( A debt of good faith) where there is no expectation of return. The question arose regarding the wealth of Y who said that they will include 4 lakhs as a part of their wealth to tax him. But Y was not charging him interest and may not get it back so should be taxed only when returned. - furthermore, it was argued that there is no intention to create legal obligation. - Held → It was held that Quarza- e - Hasan is not a strong notion in Islam so it can be presumed that regular contracts presumption that he will want it back will apply- The second argument that was that there was no intention of creating a legal obligation. The court observed that this doctrine is used in civil law jurisdictions which do not have consideration as a basic or fundamental element of contract creation- However, in India , where consideration is necessary to create a contract it is not necessary to see if there was an intention to enter into a legal obligation - they differ from England - therefore , they would have to say that consideration is not a worthy one - intention automatically assumed from consideration

Answer 18

- A son made a contract with his father for his father to not cut down an oak woodland. As consideration for this, the son would make a payment to his sister of £1000 once she had married. The money gained from the woodland would have been paid to the sister. The father died before the sister was married and the son subsequently refused to pay his sister the money as was previously agreed, at the time of her marriage. The sister sued her brother for the amount that was originally promised between the father and son. - Issue - The concept of privity of contract had not been fully established at this stage and therefore this decision had significant importance to the broader subject. The court had to understand whether the daughter could be considered to be privy to the contract between the father and son regarding the payment. Within this, it was vital for the court to establish whether the daughter had given consideration for the promise that was made by the son, to his father, to pay the daughter the sum of money upon her marriage. - Decision/Outcome - The court found in favour for the sister on the basis that the relationship between the father and the daughter had made the sister a party to the agreement, even if she was not included at the time the contract was agreed. The relationship between father and daughter was found to extend the consideration that the father gave in the promise to the children. (Scroggs CJ)

Answer 19

- Facts → A man and woman were about to get married- their fathers made promise to each other that on the solemnization of the marrige will pay certain amount of money to the groom - post solemnization the father of the bride could not pay the promised amount and the groom files a case - Held → Till now if someone is very close to the person making the promise can seek the enforcement of the promise on behalf of the promisor. However, this is not a good proposition as X could enforce a contract against Y , by X himself cannot be sued - in contracts the things are supposed to be bilateral -

Answer 20

- Facts → The company D had a practice of maintaining the price of its tyres in the market - contract: the distributors will not sell tyres below list price and if distributor does that he will have to pay damages of 5 pounds to the company + if distributor further sell to a retailer it has to be on the same terms as above of paying 5 pounds - D entered into an agreement with Dew & Co. and Dew had a same clause with Selfridge - S sold below list price - D files a case - Held → in this case Dew is not an agent of D. The tyres are their own property , not selling on behalf of D - What is the consideration of D in the arrangement b/w Dew and S? no. - D is not privy to contract in terms of party or consideration - Since he not privy he cannot institute a suit.

Answer 21

- Facts - Peter Beswick had a coal business - got too old - transfers business to nephew but on the condition that P will be the accountant till my death and if I die before my wife you will pay my wife 5 pounds per week in annuity - Nephew doesn’t pay wife - wife files a case as beneficiary of the contract and as the administratrix of her husband’s estate - Held → Denning: The wife should be allowed the annuity under both capacities- doctrine of privity came much later and cannot go over the basics of contract that a promise once made should be performed. This was appealed and she was allowed to recover only in administratrix capacity as it was for the Parliament to legislate on a newer interpretation of doctrine of Privity. - **Contracts (Rights of the Third Party ) Act, 1999** → removed the doctrine of privity in beneficiary context - 1999 was the 100 year b’day of denning and the year he died - In India, we do not have any such parallel act.

Answer 22

- Facts → Highlands bank indebted to Travancore - manager of H was liable personally to pay amt. to Travancore - H unable to pay - father of manager by way of gift gave his property to his children and said that property must first be used to pay back the debt and the residue can be used for your own purpose - Manager instead used it for own benefit - Travancore files a case that gift deed is not being used properly - Held → Travancore is not entitled to recover

Answer 23

- X transferred land she had in her name to her daughter by way of gift (Gift deed) - condition: from proceeds of the land a particular amount (657 rs.) needs to be paid by daughter to aunt - on the same day of gift deed being signed agreement b/w aunt and daughter that out of proceeds I will pay you 657 rs. (Ikrar nama) - daughter refused to pay amount - Aunt goes to court - Held →As per Privity doctrine, the person should be a party ( aunt was one because of ikrar nama). But if aunt can claim money under ikrar nama but she is not paying any consideration - however contracts act says the promisee or ‘ any other person’ - since consideration can be supplied by someone other than promisor looking at the entire transaction of gift deed and ikrar nama it was held that the consideration for ikrar nama comes from the gift deed This is the difference b/w India and Britain → third party beneficiary can be included as signatory to the contract thus they can get benefit

Answer 24

- Trusts - Family Arrangements - Acknowledgments and Estopple - Covenants running with the land

Answer 25

- Parker was indebted to Gregory and Williams- P transferred his property in satisfaction of the debt to both parties in the name of W - W was told to pay the debt that P owes provided that he pays G the debt he owes to him - W fails - P and G file a case - Held → G is beneficiary, W is trustee and O is Author. So, G allowed to maintain action against Williams as trust created for the benefit of G - Historically speaking Privity is an exception to trust ( Tweddle v Atkinson judgement came after this judgement) . However, in general parlance, trust is an exception to Privity.

Answer 26

- Facts → X transfers property to Y (Son) - said you have to maintain one village for the benefit of my illegitimate son Z (Jung) till he attains majority- after attainment of majority Z asks for the village but Y refused - Held → Talked about the conditions of a trust - Allowed the recovery of the village

Answer 27

- **Facts:** The plaintiff, namely Husaini Begam, who was a Mohammedan lady, married the son of the defendant, namely Khwaja Muhammad Khan. As per Islamic customs the plaintiff was to be given Rs. 500 as Kharch-i-Pandan. The father of the bride charged two properties to N for the same, the proceeds from the property were to go to beetle nut expenses. The agreement was enforced by the defendant at the time of marriage. The agreement was to be initiated after her reception into conjugal domicile, which started 6 years of their marriage. After 13 years of being together, the plaintiff abandoned her husband’s home and stayed in Moradabad as a result of certain altercations. The husband Rustam Ali Khan never bought an action against his wife for the restoration of conjugal rights.The plaintiff sued the defendant for recuperation of Kharch-i-Pandan. **Issue:** The contract between Khwaja Mohammad Khan and Husaini Begum existed, as according to rule of privity of contract, no stranger to contract can sue the parties in agreement to enforce the contract. Held → Cited Tweddle v Atkinson → distinguishes that from this case - In T case a mere promise was made - over here not only a promise was made, the father of the bride has allocated two properties for the Kharcha i Pandan - so this is a trust Note: The court looks at it as a case of trust. It is not a place where Indian jurisprudence deviated from the English Jurisprudence.

Answer 28

- couple was cohabiting - husband was a violent person - wife forced to leave matrimonial home and went to paternal house - husband went back to convince her to come back and promised FIL I will not illtreat your daughter again and if I do she can leave and I will provide her dwelling and resources to maintain herself- They start cohabiting again - again mistreatment and forced to leave - she wanted to enforce the arrangement b/w the husband and father - Held → these are not purely commercial arrangements but in the nature of family arrangement (personal angle) so the wife can be allowed - promise was made to convince her to come back - more in personal law arena than commercial

Answer 29

- X, a landlord had appointed Y as a tenant who had appointed a sub-tenant Z- Y and Z and came to an understanding that rather than paying money to Y and then he would pay Z, Z would directly pay X- after some time Z stopped paying X and X filed a case against Z - Z argued along privity of contract - Held → although the arrangement is b/w Y and Z since all the parties acted on that arrangement - they have acknowledged mutual rights and obligation and have acted on the contract - their acknowledgement has estopped them from going back - no one is stranger now

Answer 30

- when river Douglas has a lot of water causes destruction to the owners of land in the area- land owners and board entered into an agreement that board will ensure river flows in a way that it does not flood the land in exchange for extra money- after some time the owner of lands sold the property to one person who in turn sold it to another - land got flooded again and the new owner filed a case - Held → This is a contract and covenant that concerns the land not a particular person - so that rights and obligations keep getting transferred w/ change of ownership - privity will not obstruct as covenant is attached to land and not the person who owns it

Answer 31

- Facts → certain repairs and improvements were effectuated on a certain property as a result of a contract between two parties - beneficiary someone else who also desired those repairs and improvements - after it was done beneficiaries promised to give a sum of 488 pounds because of this - later refused to pay - Held → when an act has already been done and in response to that act a promise has been made afterwards there is no valid consideration as consideration cannot precede promise.

Answer 32

- X convicted of an offense punishable by death and he wanted someone to go king on his behalf and seek for mercy and pardon- requests friend to do that - friend does that - X said he will give Y 100 pounds because of this - Held → valid contract

Answer 33

- Facts: Defendant owed a sum of money under a promissory note to is father → defendant perpetually day and night complained to his father that he had not been treated equally with the other children in the distribution of his property → thereupon the father promised to discharge him from all liability in respect of loans provided he would stop complaining → defendant accordingly did but father then asks for debt→ question whether defendant’s promise to cease his complaints was sufficient consideration to sustain father’s promise - Held: that is would be ridiculous to suppose that promises could be binding and hence no consideration in reality

Answer 34

- American Case of ***Hammer v. Sideway*** {promise by nephew to abstain from drinking, smoking or using vulgar language and in return would be given sum of $5000 viewed as consideration} - Reason and distinguishing factor that in the latter case nephew had freedom to do what he promised not to but in the first case, the son couldn’t do so - Must see and measure value of breaking habit (stop complaints in first case but prevent addiction is second as it is of grievous nature → then would be consideration) - Case of first case was a trivial habit

Answer 35

- In this case, the defendant placed an advertisement in the newspaper to give financial advice to readers. The plaintiff wrote, asking for the name of a good stockbroker. The editor negligently recommended someone who was an undischarged bankrupt. - On the strength of the editor’s advice, the plaintiff sent some money to the broker, who misappropriated it. The plaintiff brought an action in court seeking to recover his money from the the newspaper. The issue in court was whether the plaintiff furnished any consideration. - The court considered that many people bought newspaper because of that publication. It further held that the plaintiff had furnished consideration for the contract. The defendant could and did benefit from the plaintiff buying the newspaper and the plaintiff had also consented to the publication of his question in the defendant’s newspaper if the defendants wished to do so.

Answer 36

- X owned a mine - workers strike - X went to police officers and requested: I am going to have a strike tomorrow and it may turn violent , can you billet/ post some officers in the premises of the mine - Officer: officers cannot be stationed in the mine but a special force may be assigned who will come when call - X made the same offer again - Officer : will do it only if the dept. is paid some amt. - X refuses to pay - X argued that the police was already bound to do this - Held → valid contract - it is the duty of the officers to prevent violence, however the general way of doing this was via special force - X asked for a special service so he needs to pay - the legal obligation was not to serve you the way you want -

Answer 37

- X called as witness in a case - Y was keen to ensure that X attended - he promised to pay him one guinea per day he was at court as compensation for the loss of his time- - not paid- he brought an action against the defendant for the sun owing. - Held → not valid

Answer 38

- at high seas two crewmembers of the ship deserted the ship - responsibility to sail the ship back to England fell on the remaining crewmembers - initially they were supposed to be paid 5 pounds - shipmaster said if you sail back the ship to England safely I will distribute the wages of the deserted members equally among the rest of the crew members - later ship master refused to pay - Held → the crew members of the ship were bound by a contract of employment and had a duty on them that in case of any contingent/ emergency the ship sails back safely for the benefit of the ship and the safety of the passengers - therefore, they cannot get extra remuneration - Therefore, an agreement to perform pre-existing contractual obligation b/w the parties is a void agreement as there is no valid consideration - note: the subsequent contract is formed while the previous contract is subsisting

Answer 39

- X was contracted by Y to refurbish 27 flats - X subcontracted carpentry to Z for £20,000 payable in instalments. Some work was done and £16,200 was paid. Then Z ran into financial difficulty because the price was too low. X was going to be liable under a penalty clause for late completion so X promised an extra £575 per flat for on time completion. Z did eight flats and stopped because he had only got £1,500. New carpenters were brought in. - Issue→ Had the claimant provided good consideration for the defendant’s agreement to pay an additional sum per flat completed? - Held → Stilk v Myrick hold good but is not applicable here as X is paying an additional amt. with a practical benefit in mind (avoiding litigation or penalty ) which was absent in Stilk - so the contract holds good - Therefore, practical benefit is a valid consideration.

Answer 40

- X was engaged to Y- the uncle of X(Z) send a letter to X that if you marry Y, I shall pay you an amt. and an allowance of a certain amt. which will be paid till I die or you say your income is more than 600 guineas - Z stopped paying and passed away - X says that he is entitled to arresrs from the estate for the 600 - Held → valid contract → Stilk v Myrick is acontextual in this case - when you form a contract you can either perform it or breach it at your will - Z does not want the exercise of the second option- considerable vested interest in the performance of the contract- the consideration for Z is the interest which it has in a vested form in the performance of a pre-existing contract - Z is facilitating the giving up the exercise of the second choice

Answer 41

- A purchaser of some coal paid the defendant to carry and to unload the coal. The claimant was the supplier of the coal who had also paid the defendant to carry and unload the coal. The claimant brought an action to recover the money paid arguing the defendant was already under an existing duty to carry and unload the coal and thus provided no consideration. - Held: - An existing contractual duty owed to a 3rd party to the contract can amount to valid consideration for a new promise. Consequently the claimant could not recover the sums paid and the defendant was entitled to get paid twice for doing the same thing. -

Answer 42

- X contract mill for cotton- Agent was to ensure mill gets money and X gets it - prices of cotton fluctuated extremely before fulfillment - agent got into a contract w/ the buyer that if he buys it X will be given 25000 rs or buy back the cotton from him at the same price- X buys and asks for 25000 - Agent refuses - held - agent had an interest in this performance of avoiding liability to the mill - binding arrangement - consideration for buyer is the options 25K/ buyback

Answer 43

- A person owed another person 8 pounds and 10 cents. He gave him 5 pounds and 2 cents, and the plaintiff was satisfied with that amount, and there was an agreement between the parties that this amount was good enough. Afterwards, the creditor sued the debtor for the rest of the amount. - The court said that for no reason would a reasonable man be willing to accept a lesser amount against a higher amount he is entitled to. But a consideration in kind for a lesser value is acceptable, because it may be that valuable to the other person.

Answer 44

- X was indebted to Y - case filed by Y for recovery of the amount - decree of 2000 pounds said that till the amt. is not paid interest will keep on accumulating - X and Y another agreement for repaying 800 pounds in installment of 500 now and150 later w/o interest as X was short of funds- X pays the principal amt. - Y files a case for recovery of interest sometime later - held → an agreement to pay a lesser sum when there is a decree of larger sum is w/o consideration - a debt of a larger sum cannot be satisfied by repayment w/ small amount as there is no consideration - but if something is given in less value but more use then it is valid - referred to the case of Penny v Cole - exception → (1) kind , (2) composition - lesser amount but in lump sum where installment was required, (3) amt paid back in lesser time, (4) doctrine of promissory estoppel

Answer 45

- A lessor gave a repair notice against his lessee on the 22nd of October. It was due to expire on the 22nd of April the next year. The lessor wrote back suggesting that they buy the property. The parties then began negotiations, which ended in December without any sale. The lessor sought to evict the lessee on the 22nd of April, as they had failed to enact the repairs. The lessee argued that they should have equitable relief against the eviction. - Held → In **equity,** if parties enter into a contract but later enter into negotiation which has the effect of making one side believe that the contract will be **suspended** **or not enforced**, the other side cannot enforce the contract if it would be **inequitable** having regard to the dealings which have thus taken place between the parties - duty to effectuate repairs was in abeyance, and the duty starts from when the negotiations fails (December) - since repairs were finished by June he cannot be evicted - Was there a consideration in exchange for the two months extra? No - It is binding not because there is a contract b/w them but because of the operation of Promissory estoppel -

Answer 46

- Company X owned certain premises and leased it to Company Y - Y were to sub- lease it to tenants - X and Y agreed : base rent will be 2500 pounds - WW2 breaks out and weren’t willing to stay in London - no. of tenants fall short - Y told X that the agreement is not sustainable - X says : pay 1200 till WW2 subsists - WW2 ceased and Y continued to pay 1200- X and Y came to court in a friendly action to test the position of law - Held → In past there have been several cases where a party to a contract makes a rep to the other party and if the person agrees to it it becomes valid - If we go by the Julia Beers decision this will not stand but back then principles of equity does not operate w/ the law - now we can step away from the judgement - rep was made, other party acted on that , so parties are bound by estopple not contract and the contract gets modified even if there is not consideration - The court reviewed the past case law, especially ***Hughes v Metropolitan Railway Co* (1877) 2 App Cas 439,** where the House of Lords had held that parties should be prevented from going back on a promise to waive certain rights. Denning J stated that the cases showed that a promise which the promisor knew was going to be acted on by the person to whom it was made was enforceable despite a lack of consideration. The time had come for this to be recognized as giving rise to an estoppel. Here, the plaintiffs had made a binding promise. However, the evidence showed this only applied during the war. Therefore, after the war the defendants were liable for the full rent. - Therefore, PE is an exception to the Julia Beers case and the Doctrine of Estoppel

Answer 47

- X promised Y that he would pay her an annual maintenance as a part of their divorce proceedings - Eventually, X refused to pay any of the maintenance he had promised - Seven years later Ms Combe brought an action against Mr Combe to have the promise enforced - There was no consideration in exchange for the promise and so no contract was formed. Instead, she argued promissory estoppel as she had acted on the promise to her own detriment. - in previous cases estoppel worked in favour of the defendant, in this case the wife ( the paintiff) would get the benefit - In earlier cases PE was working as a defense- this was the first case where PE was a cause of action - Issue → can promissory estoppel be an admissible cause of action? - Held → No. It is not akin to suing for breech of contract - if it were to be a cause of action it would make it equivalent to a contract then a doctrine of consideration would be set aside - “ the doctrine of consideration is too firmly rooted in the english soil to be affected by a side wind” - PE is an exception to Doctrine of Consideration, it cannot supplant the consideration

Answer 48

- Facts: Government of UP announced to give tax exemption from sales tax for three years to all new industrial units of the state. Based on this, plaintiff sought confirmation from Director of Industries who reiterated the decision of UP govt. Further unequivocal assurance was given by Chief Secy of Govt., on behalf of UP Government, to plaintiff about the same. - Plaintiff on this categorical assurance, borrowed money from financial institutions, brought plant and machinery and set up a new plant in UP. However, State govt. went back upon this assurance and instead now promised to give partial concession to which plaintiff consented and started production. Once again, however, State govt. went back even on this promise denying any concession to be given. Plaintiff sued the government on account of promissory estoppel. - Issues: Whether plaintiff waived his right to have a cause of action by accepting partial exemption? - Whether plaintiff can have a cause of action on grounds of promissory estoppel? - Whether any such action against government acting in governmental, sovereign, or administrative capacity can lie? - Whether in present case, plaintiff’s action is bound to succeed? - Held: Waiver as to a person’s right can operate only when person granting it has full knowledge of his right and intentionally abandons it, either expressly or impliedly. - widened the scope of Promissory estoppel - can also be used as a sword, can give rise to a cause of action - doctrine used at its optimal potential - no need for existing contractual relationship - no need for detrimental reliance, only to prove that the promise changed the position

Answer 49

- husband and wife separated on the grounds of bitter quarrel - X promised wife money & dwelling to wife for maintenance but what he got in return was not mentioned - X failed - Y goes to court - the agreement itself made reference to their bitter quarrel - wife said consideration not needed and took plea of Sec 25 - held: generally husband & wife have natural love and affection - in this case the quarrels is the cause of separation - facts and circumstances show that there was no natural love and affection - the contract was in furtherance of seperation

Answer 50

- Brothers dispute over property’s share - court said the property cannot be partitioned as it is not a joint family property and the suit was dismissed - after the court fight X wrote a relinquishment deed in favour of Y - Y asks for the property later but X refuses to give sole property rights - they go to court - Y said this agreement is a natural love affection one so I don’t need to show consideration - X said they never had natural love affection w.r.t this property - the court read natural love and affection here by saying that the rights were relinquished to preserve their relationship - here the deed was in furtherance of love and affection -

Answer 51

- X entered into a contract and thereby took a certain amount of money from a moneylender Y and mortgages his property - Y’s solicitor entered into the contract on Y’s behalf- The guardian of X through her solicitor sent a letter to Y’s solicitor telling him that X is a minor - despite this letter the solicitor advanced the money in the name of X- X signed a doc saying he is a major- X wanted the property he had mortgaged back - files for recovery - argument by Y - - the minor when he rep. himself as major → estoppel operates → didn’t work because Y’s solicitor already knew he was a minor → in estoppel you believe what is being said and act on it accordingly - Can sec 64 and 65 be applied ? lead to the question is the contract void or voidable? - neither can be applied here because these sections pre-suppose the existence of a contract. In this case the contract never come into being because the minor does not have the competence to contract - This contract is void ab initio - Justice requires that we should be paid our due (Sec 41 of SRA,1877) → this section is based on equity → so it cannot be applied to a person who already knows that the contract is with a minor - Held → Y had to give back the mortgage and the loan amt. cannot be recovered

Answer 52

- X, a minor, took a loan of 400 from a moneylender Y - had to pay back 475 - represented himself as a major- spent the money - realized he was minor - suit for recovery of atleast 400 - Argued - we agree that it is void (Infant reliefs Act) - we want the money back in the name of justice & equity - give us our due - If that is not possible then we wanted damages under the tort of fraud and misrepresentation - Held - asking minor to give money back would be enforced against his estate which would mean enforcement of the contract- we cannot invoke equity & justice in derogation of a statue - if what minor has taken a distinguished movable and immovable property or earmarked money in possession of the minor then that can be given back in the name of equity as it is not a part of his estate - what otherwise is an action ex contractu cannot be brought under ex delicto - because by extension you are enforcing the contract - ex contractu // ex delicto - by way of an action in contract // tort - Court looked at Johnson v Pye - same facts - argued I want damages under tort - court said we cannot enforce tort law action against minor which are directly related to the contract in such a fashion that their enforcement implies the enforcement if contract against the minor

Answer 53

- X, Minor - undergrad - took a mare on hire from a stable owner - minor enquired from the stable owner if she is suitable for jumping or only riding - owner said she does not enough strength for that , if you want for jumping I will show you another horse - X had also entered into a contract w/ another stable owner for hiring a horse for jumping - X asked a friend of his to go on a ride outside the Cambridge Shire - friend was on mare - they choose to take a route through fields which required jumping - his friend started jumping the mare - at one jump, she failed to make the jump and she got injured - mare eventually passed away because of this - suit for value of the mare under tort law for negligence - here the relation to contract law was that the contract was not for jumping - but the action her was not for contract ( recovery for amt. for hiring the horse or damages for breech of contract) but for tort ( loss suffered by death of mare). The tort action exists independent of contract - tort law action was not in furtherance of enforcement of contract - Held → damages were given

Answer 54

- X a minor took a loan of 17,500 w/ mortgage - represented themselves as major - Court- - on the question of estoppel - As per Sec 115 of evidence act, you can replace person w/ minor and thing w/ major - then minor cannot deny majority - but estoppel is a principle of evidence so that makes it a more general legislation - a general law would then thus be overriding a specific law- then the entire jurisprudence in minors will fall apart - but since specific law is more tailor made to the situation the special law should prevail ( interpretation of statutes) - so , estoppel will not apply here - on the question of restoration - court acknowledges that a tortious action which indirectly enforces a contract is not valid - what do we do when the property taken by the minor gets mixed with his estate? - when we say that there is no action under tort or contracts is a big problem - note- Specific relief act of 1877 → Specific Relief Act of 1963 ( applicable now) - court in this case was dealing w/ 41 of the 1877 act - court said lesley v shiel is not a very good precedent → it is trying to make a artificial distinction b/w the cases that came prior to it - in case a minor takes a particular advance irrespective of whether it has become part of his property you should still be able to get it back - a contract with a minor is void ab initio - if we look at it from the angle of performance it may look like the contract is being enforced but in actuality we are furthering the nullity of the contract - under sec 41 of the 1877 act - but under sec 41 → at cancelation of instrument the person who asks for cancelation is required for compensation - court said that this section was a recognition of the idea of equity- it is not a restricting principle- the idea behind it is that if an instrument has been cancelled no one should be allowed to benefit from it - therefore, it shouldn’t matter whether you are a plaintiff or a defendant - Further legal developments - Ajudiya Prasad v Chanda lal (1937) Allahbad HC-said that kahn gul is completely incorrect - In 1958 → 9th Law Commission report on SRA → new act should come in it’s place → to give reasons for the same gave backing to the Khangul judgement - New SRA, 1963 → Sec 33(2)(b) ( corresponds to the old Sec 41 of SRA) →gives effect to Khangul decision

Answer 55

- Facts: The plaintiff, a minor was allowed by the defendant, a film producer, the role of an actress in a particular film → the agreement was made with her father → the defendant subsequently allowed that role to another artist and subsequently terminated the contract with the plaintiff’s father - Held by Bombay HC that neither she nor father could have sued on promise - If a contract was with the plaintiff, she was a minor and hence it was nullity - If the contract was with father it was void being without consideration - Hence, the promise of the minor girl to save being not enforceable against her, can’t furnish any cosnderaruion for the defendant’s promise to pay her salary (the minor was still to perform the obligations and same for producer because the OBLIGATION of the minor was still pending, it need not be performed) → major can very well step back when the transaction is executory and in the future

Answer 56

- If a minor has paid for something and then consumed it then the minor cannot ask back his money - X a minor was given possession of a house w/ furniture- they were allowed to use furniture if they agree to pay 100 pounds - paid 68 in cash and the rest was to be paid for future via promissory note - Minor went to court for recovery of amt. that ought to be paid - Court cancelled the promissory amt. but if you paid for something and availed those services you cannot recover that amt. - note- if the promissory amount was for 100 he could not have been made to pay

Answer 57

- X threatened to commit suicide - forced son and wife to release some property over which they had right in favor of his brother - go to court that the transaction w/ brother is invalid - held → attempt to commit suicide is a crime under IPC - threat to commit suicide is a threat to attempt suicide - invalid contract

Answer 58

- X took a loan of 20 pounds from Y and gave movable property as security - returned money - Y said I will not give property back unless you pay 10 pounds more - X pays and recovers property - goes to court - comes under threat to detain - Note - read difference b/w duress and coercion

Answer 59

- X was a devotee to a spiritual guru Y - Y says if you transfer all your assets to me in this life it will secure you some benefit in the next world - X does the transfer - Later wanted to recover this - Held → a relationship b/w devotee and guru is one where the guru can very well dominate the will of the other as X devoted trust and faith in him - X can take back what he gifted

Answer 60

- a child forged the signatures of his father on a promissory note - creates a debt against him - father found out - asks the banker to cancel the promissory notes - banker said he will do it if he furnishes a mortgage in his favor or he will start criminal proceedings against the son for forgery - father gives mortgage and then went to court to get mortgage cancelled - Court cancels the deed as the banker dominated the will of the father by threatening crim. proceedings -

Answer 61

- X asked his solicitor to purchase a property for him on his behalf - Y purchased the property for the client at a rate much above market price - Later he found out the property was overpriced due to some possible collusion b/w seller and Y - Held → had it been a regular case of commerce the parties are free to weigh their own benefits i.e. at, above or below market price - however some case involves fiduciary - this requires fiduciary to act in the best interest of the person - therefore this is not a binding contract - the will automatically gets dominated w/o the solicitor saying anything // X never questioned Y

Answer 62

FIDUCIARY RELATIONSHIP- Relationship of utmost trust and conscience (vested faith completely, whatever you decide, you will decide in my best interest. You won’t get corrupted by your own self interest while judging mine) woman with no income source and had separated from her husband. She had no other way to maintain herself. But she didn’t even have the money to institute the suit to file for maintenance. Now she went to a moneylender, who decided to lend her money at 100% interest. She knew that this rate was unjust, but she had no option but to accept. Court – The woman was at extreme mental distress, and this was used against her by the moneylender in that situation. Hence she is entitled to repudiate the transaction. She is required to pay it back. The court slashed the ROI to the prevailing market rate – 24%.

Answer 63

There was a rift b/w father and son wrt certain immovable property in which they both asserted to having a certain right. While this rift was prevailing, the father instituted criminal proceedings against the son and as the son was to defend and did not have adequate funds. He went to a money lender and got money at ROI of 24%. Over a period of time, as the litigation went on, the debt became over a lakh, and the son realized that he wouldn’t be able to pay the amount back. He instituted a suit against the money lender on undue influence, and the ML gave a higher ROI than he otherwise would’ve, as the son was in distress. Question- did the ML have a position to dominate the will of the son? Held- idea of defending a case cannot be construed as lacking mental capacity under sec 16. this was a purely commercial relationship between the lender and the debtor. Nobody is in a position to dominate the will of the other; because this position has not been established, no claim of undue influence can be entertained as the entry point to undue influence is proving a dominant position.

Answer 64

A particular person took money on loan from a moneylender. This person was poor, did not have resources, and had a family to maintain. as he could not pay back the loan, he entered into an agreement w the money lender to transfer his only dwelling valued three times the debt to the money lender through sale. He later went to court to get the deed cancelled. The court held that money lender is a powerful societal figure and this man is a poor person with only one property, i.e., his house and a family to maintain. The authority of the money lender is very high over the person. The transaction, on the face of it, is a unconscionable, and since the lender could not prove that undue influence was not exercised. The sale deed stood cancelled and the court ordered the person to pay back the debt on original terms.

Answer 65

here was an old woman who owned several properties. She gifted the entire property to her nephew, leaving her with a mere income of 30 dollars to her advantage. The solicitor made this deed of the old lady, who said he did not know that the entire property was being transferred. The old lady said she knew that the entire property was involved, but due to her illiteracy and old-age, she was not very well aware of the nature of transaction she was entering into. The court here said that by the very nature of this transaction between the old lady and the nephew (who helped her manage the property), the nephew was in a position to dominate the will of the old woman wrt to the affairs of the estate. This transaction is highly unconscionable (advocate also said that he did not know that the entire property was being gifted). The court held that the onus of proof lies on the nephew to prove that undue influence was not exercised; he could not do so, and the court transferred the property back to the lady.

Answer 66

There was an old person with a lot of property. He transferred the properties he had to his only grandson in, exclusion of all other sons. After he passed away, the second son filed a case saying that the grandson took this property through undue influence. It was proven in the court that the old man, managed his estate to his advantage even in his last days of life. The court said the unconscionability even for presumption to rise is the second stage, and the first stage proves the position of dominance. Considering he was invested in his estate till the last days, we cannot say he was dominated due to his old age. The PoD is not being established here, there is no question for getting into the unconscionability of the transaction.

Answer 67

A landlady, excluding of all heirs, transferred her property to her tenant, who helped her manage her estate. but the tenant was able to show to the court through evidence that relationship was not merely of tenancy but of mother and son. he not only managed the affairs of the estate but also tended to her personal needs in her old age. because of her rapport he was able to pursuade the woman to transfer the estate to his name as he knew the estate really well. the court here distinguished between persuasion and undue influence. persuasion is convincing, but undue influence wrongfully molds the other party’s will. This is not something that the Law of contracts prohibits.

Answer 68

1. chand singh v ram kaur 70 yr ld lady transferred her propery to her tenant. she was illiterate old and had no interface w societal matrix. she also had 3 daughters to maintain. the burden of proof got shifted on the tenant.

Answer 69

Rani Annapurni vs Swaminatha a woman with no income source and had separated from her husband. She had no other way to maintain herself. But she didn’t even have the money to institute the suit to file for maintenance. Now she went to a moneylender, who decided to lend her money at 100% interest. She knew that this rate was unjust, but she had no but to accept. Court – The woman was at extreme mental distress, and this was used against her by the moneylender in that situation. Hence she is entitled to repudiate the transaction. She is required to pay it back. The court slashed the ROI to the prevailing market rate – 24%.

Answer 70

Raghunath Prasad Sahu v. Sarju Prasad Sahu- (important) - There was a rift b/w father and son wrt certain immovable property in which they both asserted to having a certain right. While this rift was prevailing, the father instituted criminal proceedings against the son and as the son was to defend and did not have adequate funds. He went to a money lender and got money at ROI of 24%. Over a period of time, as the litigation went on, the debt became over a lakh, and the son realized that he wouldn’t be able to pay the amount back. He instituted a suit against the money lender on undue influence, and the ML gave a higher ROI than he otherwise would’ve, as the son was in distress. - Question- did the ML have a position to dominate the will of the son? - Held- idea of defending a case cannot be construed as lacking mental capacity under sec 16. this was a purely commercial relationship between the lender and the debtor. Nobody is in a position to dominate the will of the other; because this position has not been established, no claim of undue influence can be entertained as the entry point to undue influence is proving a dominant position.

Answer 71

1. bhimba v yashwant rao 2. srimathi v udhakar 3. subhash chandra das mushib v ganga prasad das mushib 4. md tahir vs sk ali

Answer 72

1. bhimba v yashwant rao 2. srimathi v udhakar 3. subhash chandra das mushib v ganga prasad das mushib 4. md tahir vs sk ali

Answer 73

1. chikkam amiraju v chikkam sheshamma 2. ashley v reynolds

Answer 74

1. william v bayley 2. moody v cox 3. manu v udamat singh 4. sahu v sahu 5. subhash chandra mushib v ganga prasad mushib 6. srimathi v sudhakar 7. lancshire loans v black 8. rani annapoorni v swaminatha

Answer 75

1. universal tankships v int trade workers association 2. atlas v kafco

Answer 76

1. lloyds bank v bundy

Answer 77

There was a ship company, one of its ships was anchored at a certain harbour and was about to sail in due course. The workers’ federation reached an understanding that a certain amount is to be paid to us by the tank company and if they don’t pay up we won’t let the ship sail. On the day of due sail, the workers refused to do the work that would let the ship sail unless they were gievn 6k dollars. Universal tankships paid them to avoid losses as sailing of ship was essential. LATER, tankship asked for money back. workers refused question- should this agreement stand? Held- Universal tankships was a ship company, and at the time of the agreement, it depended on the workers to ensure the ship sails. the workers exerted undue pressure to secure this unfair benefit of 6k dollars. This was against free consent and hence, cannot stand. While the company understood the terms of the agreement and knew that they were to its detriment but still had to succumb owing to the undue pressure inflicted by the workers. Used that position to threaten economic harm to make the company agree to the terms, thereby making it economic duress.

Answer 78

X’s business was depenednt on the supply chain and entered into a contract with the transportation agency. During the course of the agreement, the agency said we won’t finish your tasks unless you revise the rates being paid to us. X tried looking for other transport agency but could not find any. Lack of transportation agency would be detrimental to his business. X agreed to the terms due to lack of alternatives and in order to avoid economic harm HELD- Court referred to Universal tankships vs INT Trade workers federation and said that X consented to this transactions due to lack of alternatives and the consent was not out of free will but because of the threat of business coming to a halt and the transporter used his dominant position to induce X into a contract. Therefore, business man must not pay the revised rates but the og rates they had agreed upon. - Not considered as a part of undue influence but duress (or coercion, in indian terms) in UK.

Answer 79

X, an old farmer and his son, Y took out a loan for his business from a bank. X mortgaged the only dwelling and house for the purposes of Y’s loan. Y wants to increase the loan by a certain amount and the banker and Y approach X for the same (loan+charge on property will increase). X did not know about the technicalities of Y’s business and the liabilities he will be incurring. He sought the advice of the same banker who gave him the green light. Y’s business sucked and got worse. Subsequently, the bank claimed the mortgaged property. X took the matter to court, saying he wasn’t aware of the nature of the transaction when he entered it; he did it post advice of the banker. HELD- Certain circumstances in commercial law where there is an inequality of bargaining power. It has 5 sub-heads:

Answer 80

1. 1. Duress over chattel (movable goods) (Ashley v Reynolds) 2. Unconscionable transactions (Annapoorni + SK ALI) 3. Undue influence (All cases) 4. Undue Pressure/Immense pressure (Tankships case, but it came later) 5. Salvage Agreements- agreements concerning maritime adventures.