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Contracts I Project

A general offer of Rs. 10,000 was made for finding a lost dog. B, an employee of A, found the dog but was not aware of the reward. C also searched for the dog. B claims the reward from A, while C claims based on a disappointed adventure. There is no contract between A and B, as B was unaware of the reward and found the dog as part of his employment duties. C also cannot claim as he did not fulfill the conditions of finding the dog. The judgement is in favor of A, finding that neither B nor C have a valid claim against A.

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156 views6 pages

Contracts I Project

A general offer of Rs. 10,000 was made for finding a lost dog. B, an employee of A, found the dog but was not aware of the reward. C also searched for the dog. B claims the reward from A, while C claims based on a disappointed adventure. There is no contract between A and B, as B was unaware of the reward and found the dog as part of his employment duties. C also cannot claim as he did not fulfill the conditions of finding the dog. The judgement is in favor of A, finding that neither B nor C have a valid claim against A.

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Isha Pal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CONTRACTS I PROJECT

Problem 6

A makes an offer that whosoever finds his dog will be given a reward of Rs. 10,000/-. In the meanwhile,
B, who is employed at A’s factory, is asked by A to find his lost dog. C comes to know about the reward
and puts in effort to find A’s lost dog. However, it is B who is successful in finding the lost dog. B
decides to claim the reward from A. On the other hand C who has devoted time and energy in finding A’s
dog, also wants to sue A on the basis of a disappointed adventure. Give your opinion as to the relevant
issues and decide the case.
Table of Contents
1. Introduction
2. Issues
3. Counsel for A
4. Counsel for B
5. Judgement
Introduction
The Indian Contract Act, 1872 dictates and regulates law related to contracts across India. In
consultation with its Bare Act, this project aims to solve the given problem and analyze the
concept of offer and acceptance in contracts formed through appropriate judgement. The
presented case, in its substance, an application of Section 2 and Section 8 of the Indian Contracts
Act which deals with offer and acceptance as an important element of a contract.

Issues
1. Does there exist a contract between A and his servant B?
2. Whether the claim of Rs. 10,000 should be provided to B or not?
3. Can C succeed in his claim based on a disappointed adventure against A?

Arguments for the Plaintiffs


In this case, there exists a general offer. A general offer is not made to any specific party but to
the public at large. Any person who fulfills or acts upon the required conditions is sad to accept
the offer which leads to formation of a legally binding Unilateral contract. A unilateral contract
is a one-sided contract where the promise is made by only one party. That is why the condition
of privity of contract is unnecessary here. To make a case, there needs to be a contract between A
and B.
When a proposal is assented by the person to whom the proposal is made, it is noted to be
accepted. A proposal, when accepted, becomes a promise. And Section 2(e) specifies every
promise and every set of promises, forming consideration for each other, is an agreement.
According to Section 2(h) an agreement enforceable by law is a contract. Hence, offer and its
acceptance is an essential to forming a contract. In this case, there exists a valid general offer
available to all and when a person performs the required conditions stated for the reward, the
person is said to have accepted the offer hence forming a legally binding agreement between the
offeror and the offeree. Here, neither motive nor knowledge is essential. For in the case of
Williams v. Carwardine, it was held that any person who performed the required condition is
entitled to reward, and his motivation is of no material consequence. As a result, a contract is
formed. In a case of reward, neither mutual consent nor communication of acceptance is
necessary. Also citing the case of Gibbons v Proctor, where the idea was purported that an
offeree need not be aware of an offer to accept it, the interpretation holds that mere fulfillment of
the required condition is sufficient enough to entitle the person performing it to secure the
reward promised.

Arguments for the Defendant


The process of formation of a contract begins when a proposal or an offer is made by a party to
another with intention to enter into a legal agreement. Section 2(b) states “When the person to
whom the proposal is made signifies his assent thereto, the proposal is said to be accepted.” As
per Section 4, acceptance is complete when “it comes to the knowledge of the person to whom it
is made”. In the case of Lalman Shukla v. Gauri Datt, it was held by the Honorable Court that
knowledge and assent about a proposal is must in order to convert a proposal into enforceable
agreement and in the case plaintiff was neither aware nor has assent about the particular
rewarding act. In reference to the current problem, there exists no contract between A and B
since B did not have any knowledge about the reward announced and hence without knowledge
of the offer there can be no acceptance. An acceptance is valid only if the offeree knows of the
offer as stated in the very relevant case of FITCH V. SNEDAKER.
When A asked B to find his dog, B was in the service of the defendant and he was sent on the
search in his capacity as a servant. It was, therefore, his duty occurring in the course of
employment and fully within the scope and line of duty to find the dog and he took upon the
obligation to search for and trace out the dog. A person cannot claim reward for performance of a
duty.
C also cannot succeed in his claim since in a general offer, the offer is said to be accepted and an
agreement formed only when the required conditions for the reward are fulfilled. Since, C was
unsuccessful in finding the dog, there exists no agreement and hence this open offer is not legally
binding as we can understand from a proper analysis of Carlill v Carbolic Smoke Ball case.

Judgement
Section 8 of the Indian Contracts Act states that, “Performance of the conditions of a proposal, or
the acceptance of any consideration for a reciprocal promise which may be offered with a
proposal, is an acceptance of the proposal." And a proposal when accepted becomes an
Agreement. And only a legally binding agreement can make a contract. A promise constitutes an
offer and its acceptance. In legal terms, the person promising a reward is offering to enter into a
contract with the person who performs the requested action. Performance will be rewarded with
money or some other compensation. Therefore, the legal concepts involving rewards are derived
from the law of contracts. A contract of reward must be supported by consideration or something
of value. The consideration that upholds the promise of reward is an act or performance by the
person who has acted on the faith of the promise. In unilateral contracts consideration is
executed, and the promise of the offeror is only enforceable when the task has been completed
by the offeree with the actual knowledge of the reward. Here, the servant B did not have
knowledge and he acted on his duty as A’s servant without the said reward in mind. In this case,
the cases cited by the plaintiff has, however, been adversely criticized by Sir Frederick Pollock
(Law of Contracts, 8th Edn., pp. 15 and 22) and by the American author Ashley (in his Law of
Contracts, pp. 16, 23 and 24).
When a reward is offered to the public, anyone who performs the required service can claim and
accept the reward, except persons who are under a duty to perform such services. A law
enforcement officer, therefore, cannot claim a reward if the service performed is within the line
and scope of the officer's duty. This prohibition will apply even if the officer performed the
service at a time when he was not on duty or was outside his territorial jurisdiction. That is why
the second defense of B also fails.
Therefore, judgement is given in favor of A, the defendant after proper analysis of the facts
stated in the given problem. There does not exist a contract between A and B and hence B is not
entitled to reward money. C also fails in his suit against A.

Bibliography
Table of Cases:
1. Williams v. Carwardine [(1833) 4 B. & A. 621]
2. Gibbons v. Proctor [(1891) 64 L.T. 594]
3. Lalman Shukla v. Gauri Datt (1913) XL ALJR 489
4. FITCH V. SNEDAKER. (1868) JELR 87314 (CA)
5. R v Clarke (1927), 40 CLR 227
6. Carlill v Carbolic Smoke Ball Co [1893] 1 Q.B. 256

Bare Acts:
1. The Indian Contracts Act, 1872

Books:
1. Ewan Mckendric, Contract Law, 4th edition
2. Chitty on Contracts, Volume 2
3. Pollock and Mulla, The Indian Contract and Specific Relief Acts, 14th Edition 2012,
volume 2

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