Seat no.

421059

In words: four lakh twenty one thousand fifty nine

Semester: October 2021

Name of course: law of contracts

Q.1. Mr. X telegraphed to Mr. Y, writing: “Will you sell me your Mercedes-
Benz? Telegram the lowest cash price?” Mr. Y also replied by telegram:
“Lowest price for Car is Rs. 40 Lakhs.” Mr. X immediately sent his consent
through telegram stating: “I agree to buy the Car for Rs. 40 Lakhs asked
by you”. Mr. Y refused to sell the Car. Whether Mr. X liable for breach of
contract in the above-mentioned situation. Decide with the help of
relevant statutory provisions and case laws. (10 Marks

Answer

Offer

When the promisor promises to do or abstain from doing something so as

to attain the assent of the promise he is said to make a proposal/offer.
Sec 2 b ICA 1872.

Invitation to treat/ offer

It is a process by which a person invites others to come and make a

proposal/ offer. it cannot be called an offer because the person himself
has not made an offer but prompts others to make an offer.
Advertisements, self-selling services come under come under invitation to
offer.

Issues

1. can the price stated by mr y be treated as an offer?

2. can the ‘acceptance’ by mr x really an acceptance to a valid offer?

An offer is the final set of promises by the proposer but in the above case
it could be clearly seen that there has been no negotiation which gives an
idea to the intent that the price quoted my mr y was an offer.
The act of mr y quoting the price is merely providing the information,
which may result in negotiations. Therefore it is an invitation to offer and
not an offer.

Since, the price quoted is not an offer it cannot be accepted by mr x and

therefore, there is no contract between the parties, so mr y cannot be
made liable for the breach of the contract.

Illustration

The starting price in an auction is also an example of invitation to offer.

Case law

Harvey vs Facey 1893

The plantiff sent a telegraph to the defendant with an intention to buy one
of the properties i.e. BUMPER HALL PEN and asked for the lowest price.

The plantiff replied lowest price no less than 900 pounds. To which the
plantiff replied that he is willing to buy the said for 900 pounds, to which
the plantiff refused. The plantiff sued the defendant. The suit failed. The
court said that the lowest price 900 pounds is the invitation to offer and
the subsequent telegraph by the plantiff was an offer which the defendant
rejected.

Conclusion

The price stated by the mr y is also considered invitation to treat and not
an offer.

Q.3. Mr. X agreed to give his house to one Archimedes' society for its
library on the condition that the library would be named after him. The
management of society accepted the condition. Subsequently, Mr. X,
changed his mind. Could the management of society enforce the contract?
Support your answer with the help of relevant case laws. (10 Marks)

Answer
When at the desire of the promisor the promise or any other person has
done or abstrained from doing something, does or abstains from doing
something, or is willing to do or abstain from doing something is said to
make a consideration to the promise. Sec 2 d ICA 1872.

The society can enforce the contract.

Mr x agreeing to give the house for the purpose of having the library to
be named after him is considered a valid consideration as consideration
can be of any form.

Also, the consideration should move from the promiser to the promise.
The act of proposing to have the liberary named after him makes certain
that he was of the knowledge of the consequences of his proposal.

It was at his desire to have the liberary named after him that he wanted
to vacate his house for the purpose that a liberary can be established
there. The society acted on to this consideration therefore he needs to
fulfil his end of the bargain.

Case law

Kedarnath vs Gauri Mahummad 1860

The municipal authority of Calcutta decided to build a town hall at

Hawarah. There was shortage of funds so the authorities dicided to raise
funds through public subscription. The plantiff also signed such
subscription of of rs 100. The contract clearly stated that they were going
to erect a town hall and the person was signing himself up to provide the
funds through it. The funds grew the more the necessary and they dicided
to raise the scale of construction, when gauri mahummad was called to
deliver the money he refused. The plantiff filed a suit. The court held the
defendant liable because by signing up for the contract he was aware of
its consequences and therefore liable to pay.

Chinnaya vs Ramayya 1876

An old lady named her daughter the heir of all he property on the
consideration that she shall pay her aunt an annual allowance. After the
death of the mother the daughter refused. The aunt sued her. The court
held the daughter liable to pay the allowance as the consideration was
moved for the mother to the daughter only because she promised to pay
the allowance.
Conclusion

The act of mr x to ask the library to be named after him to give the house
was a consideration for the promise, which has been moved at his desire,
is similar to gauri mahummad signing up himself for the subscription and
chinnaya who promised her mother to pay the allowance. Therefore he
will need to vacate the premises for the library of the society.

Q.4. Mr. M is a minor, Mr. B, the borrower approaches Mr. M for a loan on
the basis of a mortgage of the house owned by Mr. B. Hence, Mr. M
advances the money and Mr. B executed a mortgage in favour of Mr. M, a
minor. In these circumstances whether the mortgage is enforceable?
Support your answer with the case laws and relevant provisions of Indian
Contract Act, 1872. (10 Marks)

Answer

Sec 11 of the ICA 1872 gives the conditions for a person to be competent
to enter into a contract.

Any person who is a major i.e. above 18 is of sane mind and not
disqualified by law is eligible to enter into a contract.

Any contract with a minor who is less the 18 years is void ab initio.

The purpose of the law is to protect minors against their own immaturity.
That is why agreement made with a minor is void.

Mr b approached mr m the minor for a loan knowing that he was a minor

therefore the agreement of mortgage between them is void ab initio.
Therefore the mourtgage deed is not enforceable.

Case law

Mohribibi vs Damodardas Ghose 1903

Damodardas ghose was a minor and approached Brahmodat a
moneylender for mourtgage of the property who he was a sole owner of.
He took loan of rs 20000 at intrest of 12% p.a. his mother was his legal
guardian appointed by Calcutta high court. His mother informed the
attorney of the money lender of the minor status of the plaintiff. He had
been advanced rs 10000. On 10 sep 1895 the mother and the son sued
Brahmodat by stating that that when the deed was done he was a minor.
The plantiff contended that the money he extended should be returned.
The court held in favour of the defendant and gave ruling that any
contract made with a minor is void ab initio.

Conclusion

The murtgage deed of mr b will not be enforceable because the lender mr

m is a minor and the agreement will be considered void ab initio.

The court may even direct mr b to restore the money borrowed fron the
minor.

Q.6 Hotcup contracts with Ivor to hire him his reception suite and to
provide the catering for 500 guests for the wedding of Ivor’s daughter
Jane to Kelson, which is to be held on the afternoon of 1 May. Ivor makes
a pre-payment of Rs. 50,000 and agrees to pay the balance of Rs. 2
Lakhs on the morning of the wedding. On 25 April, by which time Hotcup
has made the wedding cake and procured supplies of beverages to be
served at the wedding but has not prepared any of the food for the
reception. Kelson is very seriously injured in a road accident and admitted
to the hospital, where he lies in a coma state. Ivor telephones this news
to Hotcup on the same day and tells him that the wedding is called off.
Hotcup replies: ‘That’s your business you are paying me to put on a
reception and so far, as I’m concerned the show goes on’. Hotcup
prepares the food and makes all the other arrangements for the
reception, but no guests come. In the above-stated situation answer the
following questions: (a) Is Ivor entitled to the recover the Rs. 50,000,
amount paid by him to Hotcup as an advance? (b) Is Hotcup entitled to
claim the Rs. 2 Lakhs, or any other sum? (10 Marks)

Answer
This is a case of anticipatory breach of the contract

An anticipatory breach is a breach of contract before the time of

performance. So, if a promisor denies to perform his promise and signifies
his unwillingness before the time for performance, then it is an
anticipatory breach of contract.

Section 39 means that where a party to a contract refuses altogether to

perform or is disabled from performing his part of it the other side has a
right to rescind it.

The remedy in anticipatory breech is that either the aggriverd party can
sue for damages before the time or after the time has passed he can sue
for the breach of contract.

In the above case ivor cannot claim the advance because he is liable to
pay for the servicrs he requested and this is a part consideration under
sec 2 d of ICA.

Hotcup is entitled to the sum of rs 200000 because he has arranged for

the reception on its end, it could be seen that he was ready and willing
also, sec 39 provides for the remedy for anticipated breach when it has
happened the claimant can sue for the breach of contract here hotcup can
sue for damages.

Illustration

A take a contract with a concert hall to sing for a whole month but after
half a month he meets with an accident and is in ICU therefore unable to
perform the contract

Mr x has a contract with a company to work of 7 years the after 5 years

he finds a more suitable job and the recruiting company is willing to bear
the penaity for mr x.

Hochester v. De La Tour (1853)

The defendants hired the plantiff’s services for 1 month during their work
in Europe. But informed him prior that his services were no longer
needed. he sued for the damages and the court granted him damages.

Frost v Knight (1872)

Defendant promised the plantiff that he shall marry her when her father
dies but before the death of her father he informed her otherwise. She
brought a suit againt her and the court awarded her damages.
Conclusion

During an anticipated breach of the contract damages could be claimed

prior to the date of execution of contract or after the breach has
happened . hotcup can sue for damages and can claim compensation.

Q. 5 Mr. X is a renowned singer who agreed to sing at the Cultural

Program of Windsor College on 5th July. The student oriented cultural
club of the college are the organizers of the event. Mr. X is a heart throb
among the students and they are excited to see him perform. Mr. X was
paid in advance a cheque of 10 thousand rupees for his upcoming
performance. On 1st July, just 4 days before the program, the head of
Windsor College Cultural Club receives an email from Mr. X which was an
apology letter. Mr. X stated that on 5th July he won’t be able to perform
in the College Program and has been hired by television channel RTV for a
live musical program on 5th July. Now, Windsor College wants your advice
on whether it can compel Mr. X to perform in the cultural program or not.
Support your answer with relevant statutory provisions and case laws.

Answer

This is a case of anticipatory breach of the contract

An anticipatory breach is a breach of contract before the time of

performance. So, if a promisor denies to perform his promise and signifies
his unwillingness before the time for performance, then it is an
anticipatory breach of contract.

Section 39 means that where a party to a contract refuses altogether to

perform or is disabled from performing his part of it the other side has a
right to rescind it.

The collage cannot compel mr x to perform because that would be breach

of fundamental rights.

According to sec 14 of SRA 2018

A contract whose performance is dependent on the personal qualification

of the parties cannot be enforced.
But the collage can under sec 39 of ICA claim damages for the
anticipatory breach before the execution of the contract or can claim
compensation for the breach of contract after it has actually happened.

Illustration

A contracts b an builder to build his house but before the execution of th

date the builder informs that thay have not completed their previous work
so the cannot work for him.

Case law

Hochester v. De La Tour (1853)

The defendants hired the plantiff’s services for 1 month during their work
in Europe. But informed him prior that his services were no longer
needed. he sued for the damages and the court granted him damages.

Frost v Knight (1872)

Defendant promised the plantiff that he shall marry her when her father
dies but before the death of her father he informed her otherwise. She
brought a suit againt her and the court awarded her damages.

Conclusion

Contracts can be specifically enforced under SRA but the contracts whose
execution is dependent on the personal qualifications on the parties
cannot be specifically enforced, therefore on damages is the remedy that
can be awarded to the victim.