Case Laws in Indian Contract Act 1872

Case laws and important examples
in Indian contract act 1872
Ranika chaudhary
Offer and acceptance
• X says to y will you buy my car for one lakh?
• X writes a letter to y , Will you buy my house for
20 lakh?
• X gives an advertisement in the newspaper that I
will pay 10 thousand ,whoever traces my missing
nephew.
• X writes a letter to y, I offer to sell my car for one
lakh if I do not receive your reply by Monday I
will assume you have accepted the offer.
Carlil vs. smoke ball co
• A co advertised that it would pay $100 to
anyone who contracts influenza after using
the smoke balls of the company according
to the printed directions. Mrs. Carlil used
as per given directions but she contracted
influenza. she filed a suit for money
announced .
Decision of the case
• It was a general offer (means an offer
made to public) so anyone could have
accepted it
• She used the medicine as per given
directions .
• She can sue the company for promised
reward and co was held liable.
Lalman shukla vs. Gauridutt
• Gauridutt sent his servant lalman to find
his lost nephew. when the servant had left,
Gauridutt announced reward to anyone,
who will trace the boy. Lalman found the
boy and brought him home .when lalman
came to know he claimed for reward.
Decision in this case
• Lalman’s plea was cancelled on the
grounds that he can not accept the offer
unless he is not aware of it.
FREE CONSENT
• X Threatens to kill Y if he refuses to sell his
house to him . Here Y’s consent has been
taken by coercion.
• A devotee gifted her property to spiritual
guru to secure benefits to her soul in next
world. it was held guru was in a position to
dominate the will of devotee.
Lawful object and consideration
• A ,B and C enter into contract to share
profits, to be acquired by fraud.
• X pays 1000 Rs to Y to beat Z. Y does not. X
can not recover his money back.
• X promises to pay Y Rs 50000 if he secures
employment for him in govt sector.
• X who knows that Y has committed a murder,
receives Rs 7 lakh from y in consideration of
not exposing.
Agreement in restraint to trade
• X a seller of imitation jewellary in England
sold his business to Y and agreed not to
deal for two years
-in imitation jewellary
-in real jewellary in certain foreign countries
• X after selling the goodwill of his business
to Y promises not to carry the similar
business anywhere in the world.
Agreement to do impossible act
• A agrees to give Rs 10000 to B ,if he
marries C (a Hindu) who is already
married to D.
• A ,a singer contracts with B the manager of
a theatre to sing for two nights every week
for next two months. A on sixth night,
willfully absents herself and B rescinds the
contract.
Agreements made by incompetent parties
(minor)
• Case law –Nash vs. Inman
Inman an undergraduate in Cambridge
bought eleven fancy waistcoats from Nash.
he was adequately provided with clothing.
DECISION
• The court held waistcoats were not part of

necessary things so the price could not be
recovered
Performance of contract u/s 37
• A contract creates an obligation which
continues till the contract has not been
discharged.
• It means when both the parties to contract
fulfill their respective legal obligation
within time and the manner prescribed.
• It means the contract comes to a happy
ending.
Performance of contract ..
Actual performance
Attempted performance or tender of performance

Actual performance
• When both the parties have performed
their respective promises the contract is
said to be actually performed. in case of
death of the promisor ,the legal
representatives are bound to perform the
contract
Attempted performance u/s 38
Sometimes if the promisor offers to perform
his obligation on proper time and place but
the promisee does not accept it is called
attempted performance.
Essentials of a valid tender
It must be unconditional
It must be at proper time and place
It must be in the proper form
It must be made to the proper person
The tender must be for the whole not in parts
Reasonable opportunity to inspecting the goods
It must be by the person who is in position and willing to perform

Contracts which need not be performed
• If the parties to contract agree to NOVATION OR

ALTERATION. The original contract disappears.(u/s
62)
• If the parties agree for REMISSION. It means parties
agree to remit performance either wholly or in part.
(u/s 63)
• If the party on whose option the contract is voidable
rescinds it ,the other party need not to perform.(u/s
64).
• If the failure is caused by promisee's neglects or
refusal .(u/s 67).
By whom the contract must be performed
?
• By the promisor himself- e.g. painting a picture,
singing in a theatre.
• By the agent-A had to give some money to B on
his behalf A ‘s agent can also give money to B.
• By the legal representative- in the above case if A
dies ,the burden comes on legal representatives.
• By third person-if a promisee accepts
performance from third party. he can not
enforce promisor to

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Case laws and important examples

in Indian contract act 1872

• The court held waistcoats were not part of

Attempted performance or tender of performance

It must be at proper time and place

It must be in the proper form

It must be made to the proper person

The tender must be for the whole not in parts

Reasonable opportunity to inspecting the goods

It must be by the person who is in position and willing to perform

• If the parties to contract agree to NOVATION OR

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