Contracts case laws Flashcards
Upton on Severn RDC v Powell
- Implied contracts
- X had a fire in his farm, thought it fell in the Upton fire district, called them, and got charged for it because it was Pershore.
- Implied contract even in parties didn’t know that the services were payable.
Steven v Bromly & Sons
- Implied Contracts
- Charterer wanted to load steel billets, ended up loading general merch, the price of which was higher.
- Had to pay for it, implied contract
Lalman Shukla vs Gauri Datt
- General Offer
- Gauri Datt’s nephew was lost. She asks Lalman Shukla (servant) to go find him. She also issues a reward for Rs. 501 for finding him. Servant finds nephew but did not know about reward. He asked asks for reward later.
- Banerji J held- there needs to be a contract, for a contract u need acceptance of offer, for acceptance of offer you need knowledge of offer
Weeks vs Tybald
- Old position on general offer
- father made an ad that whoever marries my daughter w/ her and my consent her will be given 100 pounds. A man gets consent and asks for reward but the reward was never paid. The man asks for recovery of payment
- held- such unspecific offer would lead to multiplicity of unwanted contracts
Carlil vs Carbolic Smoke Co
- New position on general offer
- Facts→ During an influence epidemic , this company came up with a product called carbolic smoke ball. The said that if people still get influenza after using this product we will give you a reward of 100 pounds. In pursuance of the same they deposited 1000 pounds in a bank. They also said that previously a lot of people used it and it is the cheapest way to prevent it. Carllil bought it, used it as per instructions, but still contracted influenza.
- arguments and rebuttal by Bowens J: 1) offers can be general not contracts 2) not a puff coz 1000 pounds w alliance bank 3) acceptance via conduct in absence of prescribed mode (sec-8 of contract act)
Har Bhajan Lal vs Har Charan Lal
- General offer and acceptance by conduct
- Based on carbolic smoke case
- The man’s son ran away from the house. The man issued an offer to the public that whoever finds the boy will get paid Rs. 500. The plaintiff found out about the offer. He spotted the boy at the railway station, and took the boy to the railway police station. He sent a telegram to the defendant saying that he found the boy.
- acceptance by conduct and substantial tho not literal completion of offer
Harvey vs Facey
- Invitation to offer
- X sent a telegram to Y asking if they would sell a piece of land called Bumper Hall Pen, and asked them to quote the minimum price. The other party said that the minimum price is 900 pounds. X telegraphed Y that they agreed to purchase the land at 900 pounds. There was no further communication between the parties. When the plaintiff, on the payment of the amount, asked for the land, there was a dispute.
- 2 questions- answered one- no final expression of willingness
Col DI McPherson vs MN Apanna
- similar to harvey vs facey
- lodge- 6k
- quoted price 10 k
Pharmaceutical society of great britain vs boot cash chemists
- Invitation to offer
- Drugs and Poisons Act in England said certain drugs and poisons cannot be sold without inspection by pharmacist. In Boots certain non prescription drugs were kept in display. Person could pick drug from shelf, pharmacist will inspect it and then sell it. In light of this act Pharma society sued Boots by saying that the arrangement of the shop is such that they are making the entire provision of the act redundant as they are displaying the goods in the racks which is an offer. When he goes to pharmacist to buy if pharma rejects to sell he is in breach of contract and if he says yes he breaches the act.
- display of goods is an invitaion to bargain even with price chits and self-service
Partridge v Crittenden
- Ad which stated ‘ cocks and hen 25s. each’ was held to be an invitation to offer. Holding otherwise would lead to the problem of needing to keep unlimited supply for the shopkeeper.
Spencer v Harding
highest bid can be refused and it is an offer to sell. not in cases w/o reserve price where auction+bid= unilateral contract
Brogden vs Metropolitan Railway Company
Facts → Coal supplier was supplying coal to a rail company. This trade was going on b/w them on un-written terms. B wanted to get a written contract. The Railway company made a template with their terms and blank spaces. In blank spaces the supplier wrote terms and signed. Agent of company kept the draft in the drawer forgot to get it signed. Trade started on new terms. Dispute arises. B said they are not bound by contract as there is no acceptance by railway company.
2. Held- keeping file in drawer is mentally accepting
3. overt manifestation- conduct as parties started to perform the terms of the agreement
R vs Clarke
- Aussi Govt - reward of 1000 pound to anyone who gave info about murderers and if accomplice gives info they will be given pardon - accomplice comes forward due to the pardon but forgot about the reward - he could not recover reward
Paul Felthouse vs Bindley
- Facts → X wrote a letter to his nephew that he wants to buy his horse 33.15 pounds and if you don’t bring up this in our next communication I shall consider my offer accepted. Nephew told his auctioneer to not sell his horse as he wanted to sell it to uncle. Auctioneer sold horse by mistake.
- Held → (1) No breach of contract as acceptance was not communicated to the offeror but to his auctioneer. (2) Additionally, an offeror cannot impose a burden of refusal on the offeree. Assent cannot be deemed, it must be spoken. Even if we go by the definition of ‘offer’ under ICA, it is the willingness of a person to take the assent of the other person for an act. It is not the willingness to imply the dissent of a person.
3) Just as mental acceptance is not enough, internal acceptance in office is also not enough
Powell vs Lee
- Facts → ad to appoint headmaster of a school. A board was constituted for interviewing. X was selected by the board and a board member told X he was selected in his personal capacity. Later on the appointment was withdrawn.
- ## Held → no breach as acceptance was not by the offeree to the offeror. The board member was not acting on behalf of the board.
Eliason vs Henshaw
A sent an offer to a flour merchant through his wagon driver and said that if the offer was accepted , load the wagon and send it back. Y accepted it but sent it via post as he though it would be faster. But wagon reached first. A was not held to be bound by the agreement.
1) prescribed manner
2) minor departure is ok provided it is more or equally expeditious
Yates Building and co vs RJ Pedley and Sons
-Certain offers were sent to certain people regarding sale of flats. Offer said that every acceptance should be sent via registered post. X filed an acceptance not by registered post but ordinary post
Held → The court said that since the acceptance arrived in time, despite being through a different mode, the contract was binding.
-Though mode of communication must generally be made as stipulated by the offeror, it is just a technicality. This technicality cannot supervene over an offer and acceptance relation.
- Indian law, however, differs on this point. It says that if a person, the offeror, mentions a
mode of acceptance but the offeree follows another mode in communicating the acceptance, the offeror within a reasonable period can ask the offeree to send the acceptance once again in the stipulated mode. If the offeror does not ask the offeree to do so, the acceptance will be said to be binding on the parties.
Adams vs Lindsell
- Facts → On September 2nd, 1817, defendants sent a letter offering to sell quantity of wool to the plaintiffs → The letter reached the plaintiffs on September 5th morning → On that evening plaintiffs wrote an answer agreeing to accept the wool and posted to be sent → This was received but he defendants on September 9th → The defendants waited for the acceptance up to September 8th and not having received it, sold the wool to other parties on that date → They were sued for the breach of contract → The offeror countered that he had sold the wool before he received the acceptance.
- Held → in case of postal communication, the contract becomes binding on the party when the acceptance is posted by the offeree. Otherwise, if we have to wait till the offeror gets the acceptance, then he has to send a receipt to the offeree, then the offeree has to send a receipt for the receipt, and so on. This will go on ad infinitum. To stop this at the first instance, the above principle was made.
Otherwise no contract by post could ever be made as it would go on ad infinitum
Household fire and accident insurance co vs grant
- Facts → Defendant applies for allotment of 100 shares in plaintiff company → Letter of allotment addressed to defendant at his residence was posted in due time but it never reached the defendant → Nevertheless bound by acceptance
- Both parties contracting through post → Acceptance with acceptor not binding but if post is created, as soon as the postal letter of acceptance is delivered to the post office → binding, contract complete and final, as acceptor in posting letter put it out of his control and done an extraneous act which clinches the matter {hence, how can casualty, delay or non-delivery unbind parties or unmake contract}
- Through POST
- Basically the post acts as an agent for offeror. So the acceptance is given to agent and by extension the offeror
Entores vs Miles Far East Corporation
-facts → X send an offer to Y from London to Amsterdam. The offer was made by Telex/ Fax, and so was the acceptance.
- Issue → laws of which country which govern the contract?\
Held- Instantaneous communication- contract is made where the acceptance is received (here, London)
Bhagwandas Govardhandas Kedia vs Girdharilal Purshottamdas
- Facts → X lived in Ahmedabad to Y in Khamgao via telex. Acceptance received in Ahmedabad
- Issue → jurisdiction? ( keep in mind that we have a codified statue sec 4)
- Held → back when the act was written the legislatures could not have contemplated such modes of communication. so direct application would be acontextual. So above judgement applied.
Hyde vs Wrench
- Facts → X wanted to sell land to Y at 1000 pounds. Y counters I am willing to purchase at 950 pounds. X says no. Y says okay I will buy it at 1000. X refuses to sell
- Issue→ did X breach the contract?
- Held → The court dismissed the claims and held that there was no binding contract for the farm between Mr Hyde and Mr Wrench. It was stated that when a counter offer is made, this supersedes and destroys the original offer. This original offer is no longer available or on the table. In this case, when Mr Hyde offered £950, he cancelled the £1,000 offer and could not back track and accept.
- absolute and unqualified acceptance
UP State Electricity Board vs Goyal Electric Stores
- Facts → The offer required for a sale in return of Rs. 40. The offeree enquired whether he needed to pay the money immediately, or in instalments for two months. After clarified, he accepted, the offeror refused to perform his part of contract.
- Held → it was breach of contract. Y was only inquiring into terms of contract and hadn’t qualified any terms of the contract.
INQUIRY INTO TERMS OF AN OFFER
SD KATHERINE STIFFLES VS MP CARR MACKERITCH
Acceptance said: “terms accepted, remit cash down Rs 25,000 by February 5, otherwise acceptance subject to withdrawal”
- Not a counter-proposal but acceptance with warning that if money was not sent the contract would be deemed to be broken
- Condition added → covers an aspect that isn’t so covered by the terms of the original offer itself
- This new term is up for negotiation. The rest of it is still a valid contract. They are not a part of the original offer but are material to the formation of the contract
Hargopal vs People’s Bank of Northern India
- 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
UoI vs S Narain Singh
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.
Henthorne vs Fraser
- 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.
Alfred Scholank v Muthunnya Chetti
- 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
Mountford v Scott
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- 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)
K Appa Rao v Tungabhadra Steels
- 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
Dickinson v Dodds
- 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.
Shuey vs USA
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.
DURGA PRASAD V BALDEO
- 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.
Kedarnath Bhattacharjee v Gorie Mhd
- 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)
Doraswami Iyer v Arunachala Ayyar
- 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
Abdul Aziz v Masoom Ali
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.
Errington v Errington Woods
- 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.
McGregor v McGregor
- 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.
Balfour v Balfour
- 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.
Simpkins v Pays
- 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
Commissioner of Wealth Tax v Abdul Hussain Mullah Md. Ali
- 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
