LEGAL

ASPECTS
ASSESSMENT

Submitted By:
Name: Sahil Pahuja
Roll
Number:220mba017

5 cases of contract act

Case 1 .
Balfour vs Balfour
The case of balfour vs balfour is a well known illustration of a domestic agreement. In this
case a husband (Mr. Balfour) was working in ceylone. During the holidays, he and his wife
(Mrs. Balfour) went to England to enjoy the leave. When Mr. Balfour was to return to
ceylone, his wife was advised to remain in England, due to ill health. Mr. Balfour agreed to
send a sum of $930 per month for probable expense of maintenance. For some time he sent
the amount but afterwards differences arose between them which resulted in their separation
and the allowance fell into arrears. Mrs. Balfour suit for recovery was dismissed by Lord
Atkin on the ground that parties did not intend that it will be attended by legal consequences.
Issues Raised In The Case:
 Did Mr. Balfour ever intended to enter into any sort of agreement with his wife, Mrs.
Balfour?
 Is the agreement between Mr. And Mrs. Balfour valid in nature at all?
 Does the contract between husband and wife enforceable in court of law?
Case Analysis:
Initially, at the first instance of the case, the claims made by Mrs. Balfour are valid and Mr.
Balfour should be entitled to pay her the maintenance which he promised to pay. Finally, Mr.
Balfour appealed in the court of appeal. In the court of Appeal, it was held by the bench of
judges, Warrington LJ, Duke LJ, Atkin LJ that the agreement is not enforceable in court of
law. Though there may be certain circumstances, where husband and wife may enter into an
agreement which is legally binding in nature, but here in this case there was no such
circumstance. The doctrine attracted attention and gained prominence. This intention is
sometimes also referred as animus contrahendi.

Conclusion:
By studying the case of Balfour vs. Balfour we understand that a mere social agreement made
within a family can not be enforced in court of law, these agreements do not hold any legally
binding authority. Owing to all this, Mr. Balfour could not be sued by Mrs. Balfour in court
of law. In this case, though the couple was married but they already had an estranged
relationship, when the agreement was made, so in this scenario, any sort of agreement
between them was to be considered that of legal in nature.
Case 2.
Carlill vs. Carbolic Smoke Ball Co
The case of Carllil vs. Carbolic Smoke Ball Co. is an illustration of a contract arising out of a general
offer. As per the facts of the case, the company issued an advertisement in a newspaper about its
product, “the smoke ball” a preventive medicine against influenza. In the advertisement, the company
offered to pay a sum of $ 1,000 as compensation to anyone who contacted influenza or a cold after
having used the smoke ball according to the printed directions. The advertisement also contained that
a sum of $ 1,000 had been deposited with the Alliance bank to show the sincerity of the company. A
lady, Mrs. Carllil relying on the advertisement purchased and used the smoke balls as per directions
but still contacted influenza. She sued the company to claim the compensation of $ 1,000. Held, it was
a general offer and Mrs. Carllil had accepted it by her act, by performing the conditions for
acceptance. She was therefore entitled to get the claim.
Issues raised:

 Whether the contract in question required a formal notification of acceptance? 

 Whether Mrs Carlill was required to communicate her acceptance of the offer to the
Carbolic Smoke Ball Company? 

Case Analysis

The Carbolic Smoke Ball Company argued that their offer didn’t have a binding impact in
order to form a valid contract. Their reasoning was that words used in the advertisement did
not really amount to a proper promise because the advertisement was too vague in its terms to
form a contract. There was no specified limit as to time and there was no means of checking
as to how the smoke ball (product) was being utilised by the consumers. In this case, Carlill
didn’t really send any acceptance with regard to the offer either expressly or impliedly or
through any performance of an overt act. Thus, it is clear that the advertisement was just a
marketing strategy and the company didn’t have any intention to form any form of a contract
while making an offer to the world at large. 

Conclusions:
The particular judgment made in Carlill v. Carbolic Smoke ball Co. made a huge impact on
English contract law. This is the most cited case in the common law of contract mostly if the case
is concerned with unilateral contracts. After this judgment the companies and agencies are more
careful about what they advertise to the world at large. It lays foundation to contract law as all the
essential elements are mentioned such as offer and acceptance , intention to form legal
relationship etc.

Case 3.

Mohori Bibee vs. Dharmodas Ghose

Mohori Bibee vs. Dharmodas Ghose In this case, a minor (dharmodas) mortgaged
his house for Rs. 20,000 and received Rs. 10,500 from the mortgage. Subsequently,
the mortgagor sued for setting aside the mortgage on the ground of his minority at
the time of execution of mortgage deed. The privy council held that according to
Section 11, a minor is incompetent to contract and therefore, minor’s agreement
was absolutely void, not merely voidable. Hence, mortgage was cancelled.
Moreover, the morgagee’s request for refund of Rs. 10,500 was also turned down
on the ground that minor’s agreement was void from the beginning and therefore,
mortgagee has not right of restitution.

Issues Raised:-
Issues Raised in this case were: Whether the deed was void under section 2, 10[5], 11[6], of
Indian Contract Act, 1872 or not? Whether the defendant was liable to return the amount of
loan which he had received by him under such deed or mortgage or not? Whether the
mortgage commenced by the defendant was voidable or not?
Case Analysis:
In the case of Mohori Bibee V/S Dharmodas Ghose, the Privy Council strictly defined that
any sought of contract or agreement with a minor or with any infant shall be null and void.
All contacts with the minors will be void ab-initio. Majority Act, 1875 outlined the definition
of a minor, according to such act, any person who is below the age of 18 years or has not
completed the age of 18 years shall not be competent to create or enter into any sought of
contact or agreement. According to me any sought of contract in which a minor is party to
contract or whether he/she is involved in it shall be void. This perception is correct because
minor or infant comes in the category of such people who cannot give there free consent
along with the reason that they are not in a situation where they can think in a manner in
which a prudent or an ordinary person could do it. The court also through its verdict has
propounded that, a contact with an infant shall be declared null and void it means that it is
neither valid nor voidable.
Conclusion:
In Mohori Bibee V/S Dharmodas Ghose, at the end it can be concluded that any agreement or
deed in which minor is party to it or is included in such contact by any way, such deed or
agreement shall be declared null and void because such agreement is no agreement in the
eyes of law. Any agreement with an infant cannot be administered against them. In cases
minors parents or custodians shall not be liable for the dealings done by the minor without
their consent or knowledge, and hence they will not be liable to return the amount back taken
by the minor out of the moral obligations. But parents and guardians will be liable to repay
back the amount when minor or an infant acted with the consent of the his/her parents or his/
her custodians.

Case 4.
Chinnaya vs. Ramaya

ISSUES:
Whether the plaintiff, who is a stranger to the contract, can bring an action against the
defendant for the amount promised in a contract where the consideration for such promise has
been furnished by the mother of the defendant ?
Case Analysis:
Although the plaintiff was stranger to the consideration but since she was a party to the
contract she could enforce the promise to the promisor, since under the Indian Contract Act,
1971, consideration may be given by the promisee or anyone on her behalf – vide Section
2(d) of Indian Contract Act, 1872. The defendant’s promise to pay the plaintiff was the
consideration for the defendant’s mother to transfer the property to the defendant.
Consideration furnished by the old lady constitutes sufficient consideration for the plaintiff to
sue the defendant on her promise. The judgment was fair and just.
Conclusion:
The case of Chinnaya vs Ramayya emphasized the rule of consideration under the contract
law. According to it, it does not matter who furnishes the consideration. The consideration
shall be valid whether it is moved by the promisee himself or any other person.
Case 5.
Dunlop Pneumatic Tyre Co Ltd vs. Selfridge & Co
The doctrine of privity of contract can be best illustrated by an English case Dunlop
Pneumatic Tyre Co Ltd vs Selfridge & Co. As per the facts of the case, Dunlop & Co sold
some tyre to one dew & co with an agreement that these tyres will not be sold below the list
price. Dew & Co in turn sold some of the tyres to selfridge & co with an agreement that they
will observe conditions as to the Price and They also promised that they will pay to the
Dunlop & Co a sum of Rs. 500 for every tyre sold below the list price. Selfridge sold some
tyres below the list price and the Dunlop & Co brought an action to recover the damages for
the same. Held that Dunlop & Co cannot bring an action against Selfridge because there was
not contract between the two.

ISSUE RAISED:
● Was the appellant a party in the contract done between Dew and Selfridge?
● Can the appellant sue the respondent without any contractual relationship?
● Was Dew & Co. acting as an agent of appellants while contracting with Selfridge?

Case Analysis:

After going through the whole case, we can analyze that this landmark case
affirmed the rule of ‘Privity of contract’ that only parties to the contract can sue. It
established that an agreement for resale price maintenance was not enforceable due
to the matter of the privity of contract. We here find that the appellants could not
sue the respondents as they were not a party to the contract between the dealers and
the respondents. Even if Dew was recognized to be acting as Dunlop’s agent,
appellants still couldn’t maintain the action as there was no consideration between
them and Selfridge.
Hence, as analyzed, the court’s decision in this case was appropriate. The rules laid
down in this case (Doctrine of Privity) are still in conformity with the existing law
and this very particular case proves to be a great precedent even in today’s law
world and is equally applicable in India. An example could be Advertising Bureau
vs. CT Devaraj In this case, a person mortgaged his property and subsequently sold
the same property to a third person. The person to whom the property had been
sold had agreed to pay the debt of the property but when he was sued by the person
to whom the property was mortgaged, it was held that the property buyer was a
stranger to contract done for mortgaging the property and hence can’t be liable.
CONCLUSION:
After going through the case, I conclude that a contract can be enforced only by a party to
that particular contract. There were two separate contracts in this case. One was done
between Dunlop and Dew, and the second one between Dew and Selfridge. Due to this
reason, Dunlop wasn’t able to enforce the contract between Selfridge and Dew. Dunlop was
just a third party and a stranger to the contract. The actual contract was between Dew and
Selfridge. The judges after considering the different contentions of parties rightly dismissed
the allegations and ruled the case in favor of the respondents.