TC – 20

IN THE HON’BLE SUPREME COURT OF ASNARD

In Appeal No. _____ of 2018

HPC Ltd.

&

Amy Santiago …Appellant

v.

Steve Rogers …Respondent

Under Article 136 of the Constitution of the Democratic State of Asnard

-Written Submission on behalf of the Respondent-

Table of Content
 Faculty of Law, Jamia Millia Islamia – Intra Moot Court Competition, 2018

STATEMENT OF JURISDICTION................................................................................................II

LIST OF ABBREVIATIONS.......................................................................................................III

INDEX OF AUTHORITIES.........................................................................................................IV

STATEMENT OF FACTS........................................................................................................VIII

STATEMENT OF ISSUES.............................................................................................................X

SUMMARY OF ARGUMENTS....................................................................................................XI

ARGUMENTS ADVANCED...........................................................................................................1

1. Whether fraud was committed by Mr. Steve Rovers under Section 17 of the Indian
Contract Act, 1872?...............................................................................................................1

1.1. Mere silence is no fraud...........................................................................................1

1.2. There was no active concealment............................................................................1

1.3. Caveat Emptor.........................................................................................................2

1.4. Condition negated when goods examined by the buyers provided to Section 16 (2)
.................................................................................................................................3

2. Whether the contract dated 14th August 2017 voidable at the option of Mr. Tony
Stark?.....................................................................................................................................3

3. Whether Mr. Steve Rovers is liable to compensate Amy Santiago for the death of her
husband and her consequent loss of livelihood?....................................................................6

3.1. Remoteness of damage............................................................................................6

3.2. No contract formed................................................................................................11

3.3. No claim for means of livelihood against a private individual..............................12

4. Whether Mr. Steve Rovers, being the supplier and service provider of LPT Machines,
is liable to compensate Mr. Tony Stark for breach of contract?.........................................13

PRAYER..................................................................................................................................XII

-Written Submission on behalf of Respondent- I|

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STATEMENT OF JURISDICTION

The petitioner approached before the Honourable Supreme Court of Asnard by Special Leave
Petition under Article 136 of the Constitution of Asnard, which reads as follows:

136. Special leave to appeal by the Supreme Court

(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion,
grant special leave to appeal from any judgment, decree, determination, sentence or
order in any cause or matter passed or made by any court or tribunal in the territory of
India.

(2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order
passed or made by any court or tribunal constituted by or under any law relating to the
Armed Forces.

The Respondent humbly submits to the jurisdiction of this court.

-Written Submission on behalf of Respondent- II

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LIST OF ABBREVIATIONS

AIR All India Reporter

H.C. High Court

Govt. Government

Hon'ble Honorable,

SC Supreme Court

Ors. Others

SCC Supreme Court Cases

& And

Sec. Section

U.O.I. Union Of India

SCD Supreme Court Decision

SCR Supreme Court Reporter

Art. Article
Vs. Versus

-Written Submission on behalf of Respondent- III

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INDEX OF AUTHORITIES

CASES

CASES

SR. CASE LAW CITATIONS FOOTNOTE

NO.
1. Beers v. Sons (1919) 120 L.T. 570 4

2. Drek v. Peek (1889)UKHL 1 31

3. Gauri Shankar v. Joshi Ambala (1996) 3 SCC 310 3
Shankar Family Trust
4. Huri Alians v. Roshan Khudabux AIR 1923 Sindh 5 7
5. Hadley v. Baxendale (1854) 9 EX 341 16
6. Keats v. Lord Cadogan (1851) 10 CB 591 1
7. M/S State B.o.I v. Champalal (2009)WA 511 11
8. NOCTON V. LORD ASHBURTON (1914) AC 932 30

9. P. Radhakrishnan v. NBCC ltd. (2013) 3 SCC 742 13

10. Shashi Mohan v. Nobo krista (1878) 4 Cal 801 6
11. Shri Krishna V. (1976)1 SCC 311 9
KurushetraUniversity
12. State of Kerela v K Bhaskaran. AIR 1985 Ker 49 23
13. The University of madras v. AIR 1954 Mad 67 25
Shanta Bai
14. Kourfos v. Czarnikow Ltd. (1969) 1 AC 350 13
15. Victoria Laundary ltd v. New (1949) 2 kB 528 20
Man Industries
16. Ward v. Hobbs (1878) 4 Cal 801 2

-Written Submission on behalf of Respondent- IV |

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BOOKS REFERRED

1. Durga Das Basu., Shorter Constitution of India, Ed. 10th (1989).

2. M.P Jain, Indian Constitutional law, Ed. 6th (2012), Lexis Nexis Butterworths Wadhwa,
Nagpur.
3. V. N. Shukla, Constitution of India, Ed.11th, (2008), Eastern Book Company.
4. Pollock & Mulla The Indian contract and Specific Relief Acts 14th edition.
5. Contract and Specific Relief Avtar Singh 11th edition.
6. Contract 1 R.K. Bangia 16th edition.
7. Contract 2 R.K. Bangia 16th edition.
8. Goods act R.K. Bangia 10th edition.
STATUTORY COMPILATION

1. The Constitution of India,1950.

2. Indian Contract Act, 1872.
3. Sale of Goods Act, 1930

INTERNET SOURCES

 www.indiakanoon.org
 www.indlawinfo.org
 www.legalserviceIndia.com
 www.legalsutra.org
 www.lexisnexisacademic.com
 www.macmillandictionary.com
 www.manupatra.com
 www.scconline.com
 www.scdecision.in
 www.supremeCourtcases.com

-Written Submission on behalf of Respondent- V|

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STATEMENT OF FACTS

1. Healing Hand Pharmaceutical Corporation Limited Company (HPC) controlled and

managed in democratic state of ‘Asnard’ (DSC), incorporates as a small factory in
2012 HTC Limited enjoy absolute Monopoly with regard to production of ‘Lobanza’
capsule. The company has strongly advised that this capsule must not be consumed
when a person is still consuming substance such as drugs and tobacco. Intake of these
capsule while consuming organic substance may cause death.
2. HTC Limited is largely owned by a business tycoon named Tony Stark. Mr. Steve
Rovers and Mr. Tony Stark were childhood friend and residence of the district of
Drone. After completing the senior secondary school Examination, took admission in
Pharmaceutical bachelor program and bachelors technical programmer respectively.
3. Mr. Steve succeed in designing machine ‘Labzo-pharma tech’(LPT) which could help
medical industry in increasing the production of medicine. Owing to the uniqueness
and success of the machine . In March 2017 Mr. Snark planning to buy LPT in order
to speed up the production of the Lobanza capsule, he conducted a market research to
test the viability of new project, to his good fortune he discovered that LPT machine
would slash the cost and productivity shall increase buy roughly ten times.
4. HPC Limited purchase the Lpt. machine from Steve on 4th June 2017 owing to the
efficiency and productivity of the machine Mr. Snark planned to buy more
machines .On 14th August 2017 HPC Limited entered into an agreement with Mr.
Steve regarding the purchase of three more machine for Lobanza capsule production.
Mr. Steve agreed.
5. Mr.Pablo Escocar, a generator in government school Saw advertisement of Lobanza
capsule. Mr. Pablo started consuming Lobanza capsule however he couldn’t refrain
from smoking.
6. A week prior to the sale of three LPTs on 14 August 2017 Mr. Steve received detail
report highlighting certain patent defect in those machines. Mr. Steve failed to
disclose that information to HPC Limited. Unfortunately, on 22nd October 2017 all
machine malfunction.
7. Mr. Pablo died after eight days of conception of the capsule. His pregnant wife went
into mental trauma and found herself completely helpless. Meanwhile Mr. Stark
aggrieved by such a huge loss to the production accusing Mr. Steve for fraud. Mr.

-Written Submission on behalf of Respondent- VI

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Snark found out about the death of Mr. Pablo approach the widow of the deceased and
requested how to join the Suit against Mr Steve. HPCL Limited appeal before The
Honorable Supreme Court of Asnard.

-Written Submission on behalf of Respondent-

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STATEMENT OF ISSUES

The Supreme Court ordered the parties to advance their contentions and arguments on 17
November 2018, on the following issues:

I. Whether fraud was committed by Mr. Steve Rovers under Section 17 of the Indian
Contract Act, 1872?
II. Whether the contract dated 14th August 2017 voidable at the option of Mr. Tony Stark?
III. Whether Mr. Steve Rovers is liable to compensate Amy Santiago for the death of her
husband and her consequent loss of livelihood?
IV. Whether Mr. Steve Rovers, being the supplier and service provider of LPT Machines, is
liable to compensate Mr. Tony Stark for breach of contract?

-Written Submission on behalf of Respondent-

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SUMMARY OF ARGUMENTS

I. Whether fraud was committed by Mr. Steve Rovers under Section 17 of the Indian
Contract Act, 1872?
It is most humbly submitted that fraud was not committed by respondent under section 17
of Indian Contract Act 1872. Mere silence is no Fraud according to Section 17 of ICA.
The rule of Caveat emptor applies buyer has the duty to take care and seller is under no
obligation to reveal each and everything. There is negligence on the part of buyer.
II. Whether the contract dated 14th August 2017 voidable at the option of Mr. Tony
Stark?
It is humbly submitted before this Hon’ble court that the contract dated 14 Th August 2017
is not a voidable contract. There was a proposal on the part of Appellant Tony Snark
which was accepted by Respondent and both the parties performed their part.
III. Whether Mr. Steve Rovers is liable to compensate Amy Santiago for the death of
her husband and her consequent loss of livelihood?
The death of Pablo Escocar is a remote and indirect loss or damage which was not
foreseeable and neither the same was intended. And moresoever the actual cause of
death of Mr. Pablo Escocar is unknown.
There was no contract between Amy Santiago or Pablo Escocar and Steve Rovers, and
therefore there is no question of breach of contract and liability of Mr. Steve Rovers for
the consequential loss of livelihood of Ms. Amy Santiago. There is no claim for means of
livelihood against private individuals.
IV. Whether Mr. Steve Rovers, being the supplier and service provider of LPT
Machines, is liable to compensate Mr. Tony Stark for breach of contract?
There is no breach of contract on the part of the respondent. There was no direct

fraudulent act on part of respondent as the defects in machines were minor and patent it

was duty on part of appellant to duly check it before accepting order and once order

accepted contract was concluded.

-Written Submission on behalf of Respondent- IX

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ARGUMENTS ADVANCED

1. Whether fraud was committed by Mr. Steve Rovers under Section 17 of the Indian
Contract Act, 1872?
The counsel on the behalf of Mr Steve (hereinafter ‘Respondent’) most humbly submits
that fraud was not committed by respondent under section 17 of Indian Contract Act
1872. Mere silence is no Fraud according to Section 17 of ICA. The rule of Caveat
emptor applies buyer has the duty to take care and seller is under no obligation to reveal
each and everything. There is negligence on the part of buyer.

1.1. Mere silence is no fraud.

1.1.I. Mere silence as to facts likely to affect the willingness of a person to enter
into a contract is not fraud. Contracting party is not obliged to disclose each
and everything to the other party. If a person is to sell his goods, he is under
no duty to disclose the defects in the goods. If he makes false statement is
due to quality of is good, it would be fraud, but it will really keep silence as
regards defect and then there is no fraud. According to Illustration (a) of
Section 17, A sells, by auction, to B, a horse which A knows to be unsound.
A says nothing to B about the horse’s unsoundness. This is not fraud in A.
1.1.II. Keates v. Lord Cadogan1 A let his house to B which he knew was in ruinous
condition. He also knees that the house is going to be occupied by B
immediately. A did not disclose the condition of the house to B it was held
that A had committed no fraud.
1.1.III. Ward v. Hobbs2 the seller of pigs sold them without telling the buyer that
they had been suffering from typhoid fever. The disease was converted to
other pigs of the buyer also and many of pigs died because of that. It was
held that there was no false statement on which buyer could be deemed to
have relied and therefore there was no fraud on the part of the seller.

1.2. There was no active concealment.

1.2.1. Active concealment must be distinguished from passive concealment. Passive
concealment means mere silence as to material fact does not amount to fraud
where is active concealment result in when the party takes positive a deliberate
1
(1851) 10 C.B 591.
2
(1878) 4 A.C 13.
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steps to prevent information from reaching the other party and this is treated as
fraud. For example, it is a horse to be in an auction despise knowing the horse
is unsound and buyer knew nothing about this horse’s unsoundness. This is a
case of passive concealment and cannot be tantamount to fraud.
1.2.2. Gauri Shankar vs Joshi Amba Shankar family trust 3stated that active
concealment is something different from mere passive concealment. Passive
concealment means mere silence as to material fact. Silence is no
representation ordinary silence communicates nothing and thus cannot be a
misrepresentation. For example, in the example of the horse seller is aware of
the fact that the horse is of an unsound mind, says nothing to be about the horse
unsoundness the situation does not constitute to fraud because there is no duty.
Contracting party is not obliged to disclose each and everything to the other
part if a person has to sell his goods. In the case of sale of goods, the buyer has
to be aware which means that it is the duty of the buyer to be careful while
purchasing the goods and there is no implied condition or warranty by the seller
as to the quality of fitness of the goods for any particular.
1.2.3. Thus, In the instant case mere silence on the part of the respondent does not
amount to fraud.

1.3. Caveat Emptor

1.3.1. M/S State Bank Of India v. H.Champalal Jain on 18 March, 2010 Caveat
emptor means "let the purchaser beware". It is one of the settled maxims,
applying to a purchaser who is bound by actual as well as constructive
knowledge of any defect in the thing purchased, which is obvious, or which
might have been known by proper diligence. Caveat emptor does not mean
either in law or in latin that the buyer must take chances. It means that the
buyer must take care. Caveat emptor is the ordinary rule in contract. A vendor
is under no duty to communicate the existence even of latent defects in his
wares unless by act or implication he represents such defects not to
exist Caveat emptor qui ignorare non debuit quod jus alienum emit is a maxim
meaning, “let a purchaser beware: who ought not to be ignorant that he is
purchasing the rights of another”. Applying the maxim, it is held that it is the
bounden duty of the purchaser to make all such necessary enquiries and to

3
(1996) 3 SCC 310.
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ascertain all the facts relating to the property to be purchased prior to

committing in any manner.
1.3.2. In the instant case, owing to the efficiency and productivity of the machine Mr.
Snark became so greedy and mean that when Mr Stark was requested by one of
the colleagues of Mr. Snark to conduct a routine check on the machine in the
coming few days Mr. Snark did not gave attention on it. Mr Stark even did not
give attention when on 1st September 2017 and article got published in widely
distributed journal about the infirmities of the machine
1.4. Condition negated when goods examined by the buyers provided to Section 16 (2).
1.4.1. According to provison to Section 16 (2) where the buyer has examined the
goods there shall be no implied condition as regards defect which such
examination ought to have revealed. It means that the implied condition of
merchantability will exclude when the buyer has examined the good and the
defect in the goods was a patent one.
1.4.2. To exclude the working of implied condition of merchantability in case of
patent defect it is not necessary that buyer’s examination of goods must be
through one. Even if it examines cursorily the implied condition is not
applicable. In Beers v. sons4 there was a sale of number of barrels of
vegetable glue. The buyers having an opportunity to examine them in only
from outside for want of time. The buyer subsequently found that the glue
was not of mercantile quality and this defect could have been discovered if
the barrels have been examined properly from inside. In an action by the
buyer for damages for breach of implied condition as to mercantile quality by
the seller it was held that the buyer has examine the goods and the defect in
the good was a patent one, there were not entitled to sue the seller for the
same.
2. Whether the contract dated 14th August 2017 voidable at the option of Mr. Tony
Stark?
2.1. It is humbly submitted before this Hon’ble court that the contract dated 14 Th August
2017 is not a voidable contract. There was a proposal on the part of Appellant Tony
Stark which was accepted by Respondent and both the parties performed their part.
2.2. Section 2(i) of Indian Contract Act 1872 defines voidable contract i.e. –

4
(1919) 120 L.T. 570.
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An agreement which is enforceable by law at the option of one or more of the parties
thereto, but not at the option of the other or others, is a voidable contract.

2.3. Voidable contract is defined U/s 19 i.e. Voidability of agreements without free
consent5. In absence of any vitiating element of Consent the contract is not voidable
at the option of the Mr. Stark.
2.4. In the present situation there is no question of consent as appellant was fully aware
of the facts and conditions of the machine and was free to use due diligence (which
was advised by the employee of Respondent) which he failed to do and for such
sheer case of negligence on the part of Appellant, respondent cannot be held liable.
2.5. There is no question of fraud or misrepresentation of the fact on the part of
appellant as it is clearly mentioned the defects were “patent”. Respondent has no
duty to tell each and every detail of product in such professional contracts as Mr.
Stark was prudent businessman who used due diligence and all checks at the time of
first purchase.
2.6. Exception to Section 19 applies where the innocent party might, with due diligence,
have discovered, or had the means of discovering the misrepresentation before he
entered into the contract; in such a case, he cannot avoid the contract on the ground
that he was deceived by the fraud.
2.7. Purchaser of rice refused to take delivery on ground that rice was of an inferior
quality to that contacted for, it was held that he could not rescind the contract, for
he could have discovered the inferiority of the quality by using ‘ordinary
diligence’.6
2.8. Failure by a person to make such enquiry as an ordinary prudent person would
made, does not mean that person was deceived, and he had no right to rescind the
contract merely on the basis that he did not enquired, or he believed the sellers’
words.7
2.9. The general rule of common law is that a person contemplating entering contract
with another is under no duty to disclose information to that other. “The failure to
disclose a material fact which might affect mind of a prudent contractor does not
give right to avoid the contract.”8

5
Section 14 Of ICA 1872.
6
Shashi Mohan Pal Chaudhry v. Nobo Krishta Poddar, (1878) 4 cal 801.
7
Huri alias Alim Khatun v. Roshan Khudabux , AIR 1923 Sindh 5at 14,(FB).
8
– Bell v. Lever Bros Ltd.
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2.10. Also, exception of section 19 of Indian Contract Act clearly legalizes act of
respondent. A contracting party is under no obligation to disclose the whole truth to
the other party or to give him the whole information as his possession affecting the
subject matter of the contract.
2.11. Thus, In the case where a candidate has full knowledge of the fact that he has short
of attendance, did not mention this fact in his examination form. This was held to
be no fraud, it being duty of the university to scrutinize form and call for
verification for information in case of doubt9. Thus, there is no duty on the part
respondent and the very fact that appellant got minutely defected machines are due
to his ignorance.
2.12. The maxim Caveat emptor, quia ignorare non debuit quod jus alienum emit (Let a
purchaser beware, for he ought not to be ignorant of the nature of the property
which he is buying from another party.) As it is mentioned in the fact sheet that
defect was patent thus it was visible with simple inspection, so principle of caveat
emptor applies.
2.13. Caveat emptor is ordinary rule in contract. A vendor is under no duty to
communicate the existence even of latent defects in his wares unless by act or
implication he represents such defects not to exist.10
2.14. In M/S State Bank Of India vs H.Champalal Jain on 18 March, 201011, it was held
that:
Caveat emptor means "let the purchaser beware". It is one of the settled maxims,
applying to a purchaser who is bound by actual as well as constructive knowledge
of any defect in the thing purchased, which is obvious, or which might have been
known by proper diligence. Caveat emptor does not mean either in law or in latin
that the buyer must take chances. It means that the buyer must take
care. Caveat emptor is the ordinary rule in contract. A vendor is under no duty to
communicate the existence even of latent defects in his wares unless by act or
implication he represents such defects not to exist Caveat emptor qui ignorare non
debuit quod jus alienum emit is a maxim meaning,' let a purchaser beware: who
ought not to be ignorant that he is purchasing the rights of another' Applying the
maxim, it is held that it is the bounden duty of the purchaser to make all such

9
Shri Krishnan V Kurukshetra University, (1976)1 SCC311.
10
William R Anson, Priciples of the law of contract 245 (Arthur L. Corbin Ed 3d. Am. Ed. 1919).
11
WA no 511&857 of 2009, mad
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necessary enquiries and to ascertain all the facts relating to the property to be
purchased prior to committing in any manner.
Any argument as to quality of machines Non-merchantable quality will be
exaggeration of the facts mentioned. There is difference with defective and non-
merchantable - A product is unmerchantable if it does not fit the purpose for which
it's used. A risk-utility test determines defectiveness. A product can defective but of
merchantable quality.

2.15. Thus, the machines (LPTs) delivered by respondent had some patent defects but it
cannot be treated as non-merchantable quality.
3. Whether Mr. Steve Rovers is liable to compensate Amy Santiago for the death of her
husband and her consequent loss of livelihood?
3.1. Remoteness of damage
3.1.1. Section 73 of the Indian Contract Act, 1872.

73.Compensation for loss or damage caused by breach of contract.—When

a contract has been broken, the party who suffers by such breach is entitled
to receive, from the party who has broken the contract, compensation for
any loss or damage caused to him thereby, which naturally arose in the
usual course of things from such breach, or which the parties knew, when
they made the contract, to be likely to result from the breach of it. —When a
contract has been broken, the party who suffers by such breach is entitled to
receive, from the party who has broken the contract, compensation for any
loss or damage caused to him thereby, which naturally arose in the usual
course of things from such breach, or which the parties knew, when they
made the contract, to be likely to result from the breach of it." Such
compensation is not to be given for any remote and indirect loss or damage
sustained by reason of the breach. Compensation for failure to discharge
obligation resembling those created by contract. —When an obligation
resembling those created by contract has been incurred and has not been
discharged, any person injured by the failure to discharge it is entitled to
receive the same compensation from the party in default, as if such person
had contracted to discharge it and had broken his contract. —When an
obligation resembling those created by contract has been incurred and has
not been discharged, any person injured by the failure to discharge it is
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entitled to receive the same compensation from the party in default, as if

such person had contracted to discharge it and had broken his contract."

Explanation. —In estimating the loss or damage arising from a breach of

contract, the means which existed of remedying the inconvenience caused by
the non-performance of the contract must be taken into account.

3.1.2. As stated in the provisions relating to damages under the Indian Contract
Act 1872, one of the vital requirements for an award of damages is that the
loss or damage “arose in the usual course of things from such breach; or
parties knew that such a loss or damage could subsequently arise at the end
of the time of entering into the contract.” 12 Thus, the defendant would not be
liable for damages that are remote to the breach of contract.

3.1.3. “Breach of contract” constitutes the pre-condition for a claim of damages, be

it liquidated, unliquidated or otherwise. Thus, irrespective of the extent to
which the defendant profits from the contractual arrangement, there can be
no claim for damages unless there is a breach of the contract. Further, the
party committing the breach is liable to compensate by way of damages. To
establish a breach, it has to be adjudicated upon and be proved, and not
merely decided by the parties.13

3.1.4. The House of Lords in England in Kourfos v. C. Czarnikow Ltd.14 has

enunciated the following principles: “In case of breach of contract, the
aggrieved party is only entitled to recover such part of the loss actually
resulting as was at the time of the contract reasonably foreseeable as liable to
result from the breach........ What was at that time reasonably so foreseeable
depends on the knowledge then possessed by the parties or at all events, by
the party who later commits the breach........ For this purpose, knowledge
‘possessed’ is of two kinds: one imputed, the other actual. Everyone, as a
reasonable person, is taken to know the ‘ordinary course of things and
consequently what loss is liable to result from a breach of contract in that

12
Indian Contract Act 1872, s 73.
13
. P Radhakrishna Murthy v. NBCC Ltd. (2013) 3 SCC 747; J.G. Engineers (P) Ltd., v. Union of India (2011)
5 SCC 758.
14
(1969) 1 A.C. 350.
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ordinary course.’ But to this knowledge which a contract breaker is assumed

to possess whether he actually possesses it or not, there may have to be
added in a particular case -knowledge which he actually possesses, of
special circumstances outside the ‘ordinary course of things’ of such a kind
that a breach in those special circumstances would be liable to cause more
loss.”For a claim of damages and affixing liability, there has to be causal
connection between the breach committed and the loss or injury suffered.
This causal connection is said to have been established if the act of the
defendant amounting to breach of the contract is the only “real and
effective” cause in relation to the injury or damage for which damages are
claimed; in the presence of multiple causes, the “dominant and effective”
cause is to be taken into consideration.15

3.1.5. Establishment of causation would not conclusively, make the defendant

liable where the injury caused is too “remote” to the breach of contract or
not foreseeable or where the contractual terms provide for exclusion of the
liability of the defendant under the given circumstances. Additionally, there
may be cases, where the flow of causation is broken by external causes like
those by third parties or acts of nature or by acts of the plaintiff himself or
otherwise. In cases where there is contributory default or negligence of the
plaintiff, he would be disentitled from claiming damages. This would
depend on the consideration of the facts and circumstances. This can be
related with the principles of equity that “He who comes into equity must
come with clean hands.”

3.1.6. In the landmark case of Hadley v. Baxendale16, the principle governing

remoteness of damages was elaborated. The rules enunciated in this case
were that a party injured by a breach of contract can recover only those
damages that either should “reasonably be considered... as arising naturally,
i.e., according to the usual course of things” from the breach, or might
“reasonably be supposed to have been in the contemplation of both parties,

15
Yorkshire Dale Steamship Co. Ltd. v. Minister of War Transport, The Coxwold [1942] 2 All ER 6 at 9-10 per
Viscount Simon LC (HL); Gray v. Barr [1971] 2 All ER 949 (CA).
16
(1854) 9 EX 341.
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at the time they made the contract, as the probable result of the breach of
it.”17

3.1.7. In circumstances where it is evident that the defendant has not assumed such
risk as contemplated under the special circumstances under the terms of the
contract or that any reasonable man would not have assumed such risk, then
mere knowledge of the special circumstances would not make the defendant
liable for the corresponding loss or injury.18

3.1.8. Reiterating the finding in Hadley v. Baxendale19, the following principles of

remoteness and foreseeability were enunciated in Victoria Laundry
(Windsor) Ltd v. Newman Industries Ltd 20: “In cases of breach of contract,
the aggrieved party is only entitled to recover such part of the loss actually
resulting as was at the time of the contract reasonably foreseeable as liable to
result from the breach. What was at that time reasonably so foreseeable,
depends on the knowledge then possessed by the parties or, at all events, by
the party who later commits the breach. For this purpose, knowledge
‘possessed’ is of two kinds: one imputed, the other actual. Everyone, as a
reasonable person, is taken to know the ‘ordinary course of things’ and
consequently, what loss is liable to result from a breach of contract in that
ordinary course. This is the subject matter of the ‘first rule’ in Hadley v.
Baxendale21. But to this knowledge, which a contract-breaker is assumed to
possess whether he actually possesses it or not, there may have to be added
in a particular case knowledge which he actually possesses, of special
circumstances outside the ‘ordinary course of things,’ of such a kind that a
breach in those special circumstances would be liable to cause more loss.
Such a case attracts the operation of the ‘second rule’ so as to make
additional loss also recoverable.”22

17
Hadley v. Baxendale (1854) 9 EX 341.
18
H. G. Beale (ed.). Chitty on Contracts (28th edn, Sweet & Maxwell Ltd 1999) 1296.
19
(1854) 9 EX 341.
20
[1949] 2 KB 528.
21
(1854) 9 EX 341.
22
Victoria Laundry (Windsor) Ltd v. Newman Industries Ltd. [1949] 2 KB 528.
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3.1.9. This can be summed by referring to the observation made by the Kerala
High Court that: “The defendant is liable only for natural and proximate
consequences of a breach or those consequences which were in the parties’
contemplation at the time of contract… the party guilty of breach of contract
is liable only for reasonably foreseeable losses - those that a normally
prudent person, standing in his place possessing his information when
contracting, would have had reason to foresee as probable consequences of
future breach.”23

3.1.10. As per the facts, A research was conducted by Prof. Aldus Humbledore at
the University of Hemsworth on the ‘Lobanza’ Capsule. His Research Paper
titled ‘Effects of Lobanza on humans’ stated that:

3.1.11. “Adults who are prone to drugs, smoking, and tobacco are generally
prescribed Lobanza Capsule by doctors, who reiterate that the capsule has no
side effects. The capsule, however, is not advisable only for those who are
prone to various forms of allergy. Consumption of the same by any such
person may cause severe neurological damage.”

3.1.12. Mrs. Amy Santiago, wife of Mr. Pablo Essar, had been constantly pushing
him to get rid of his drug addiction and smoking habit as soon as possible.
Mr. Pablo bought and started consuming Lobanza Capsule each day after
subscribing to the advertisement on that hanging banner. However, he
couldn’t refrain from smoking.

3.1.13. On certain occasions, HPC Ltd. encountered frequent problems with few
LPT Machines, and unfortunately on 22nd October 2017 all machines
malfunctioned. Mr. Tony appointed Mr. Steve and his tech-team for the
repair. Few instances of illness were reported amongst a few people but no
serious medical catastrophe had occurred.

3.1.14. Unfortunately, Mr. Pablo’s health started deteriorating rapidly, but he still
couldn’t refrain from smoking. As a consequence, he died after eight days of
consumption of the capsule. Due to a sheer lack of awareness in such small
districts, Ms. Amy wasn’t aware of the causes that lead to her husband’s

23
State of Kerala v. K. Bhaskaran AIR 1985 Ker 49 (para 12).
-Written Submission on behalf of Respondent- 10
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untimely death and was oblivious to the legal ramifications of what had
recently transpired.

3.1.15. Thus, it is evident from the facts that death of Pablo Escocar is a remote and
indirect loss or damage which was not foreseeable and neither the same was
intended. And moreover, the actual cause of death of Mr. Pablo Escocar is
unknown. Therefore, respondent is not liable to compensate Amy Santiago
for the death of her husband and her consequent loss of livelihood.

3.2. No contract formed.

3.2.1. Sec. 10 of The Indian Contract Act,1872-What agreements are contracts
All agreements are contracts if they are made by the free consent of parties
competent to contract, for a lawful consideration and with a lawful object,
and are not hereby expressly declared to be void.

Nothing herein contained shall affect any law in force in [India], and not
hereby expressly repealed, by which any contract is required to be made in
writing or in the presence of witnesses, or any law relating to the registration
of documents.

3.2.2. Mr. Escocar saw the advertisement of Lobanza capsule on a banner across
both sides of the road. The banner contained a blurry 3-D image of the
Lobanza capsule and stated the following:
“Lobanza Capsule- Lifeline for drug addicts, smokers, and tobacco
consumers. Please contact Riverrun Medicos for the capsule situated on the
border of State of Westeros and other states.”

3.2.3. Mrs. Amy Santiago, wife of Mr. Pablo Essar, had been constantly pushing
him to get rid of his drug addiction and smoking habit as soon as possible.
Mr. Pablo bought and started consuming Lobanza Capsule each day after
subscribing to the advertisement on that hanging banner. However, he
couldn’t refrain from smoking.
3.2.4. Unfortunately, Mr. Pablo’s health started deteriorating rapidly, but he still
couldn’t refrain from smoking. As a consequence, he died after eight days of
consumption of the capsule.
3.2.5. Thus, as evident from the fact there was no contract between Amy Santiago
or Pablo Escobar and Steve Rovers, and therefore there is no question of
-Written Submission on behalf of Respondent- 11
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breach of contract and liability of Mr. Steve Rovers for the consequential loss
of livelihood of Ms. Amy Santiago.
3.3. No claim for means of livelihood against a private individual
3.3.1. “The Fundamental Rights and Directive Principles together constitute the
conscience of the Constitution.” 24 It is primarily against the might of the State that
the individuals need protection, Article 12 is the key to Part III and unless an
authority can be said to be a ‘State’ within the meaning of Article 12 none of the
provisions of Part III which relate to the ‘State’will apply to such authority. 25The
objective behind defining state was to provide an impetus to the effective
enforcement of fundamental rights.26

3.3.2. The doctrine of state action is not defined in the Indian Constitution rather it is
implied in Article 12 of which defines State for the purpose of Part III. It
enumerates a list of authorities against which fundamental rights can be enforced
by invoking the writ jurisdiction if Supreme Court and High Court. As per the
Article, State includes the Government and Parliament of India and government
and legislatures of each state in India. It also includes local and other authorities
within the territory of India and local and other authorities under the control of
Government of India.27

24
GRANVILLE AUSTIN, INDIAN CONSTITUTION: CORNERSTONE OF A NATION 50 (1985).
25
The University of Madras v. Shanta Bai A.I.R. 1954 Mad. 67 (In this case the question was whether

the direction issued by the University to its affiliated college to prevent it from admitting girl students
was valid or not. The direction was given because the college lacked facilities to be accommodating
girls. It was alleged by the respondent college that the direction violated Article 15 (1) and 29 of the
Constitution).
26
VII CONSTITUTION ASSEMBLY DEBATES 607-610 (1948) (While initiating a debate on this

Article in the Draft Constitution in the Constituent Assembly, Dr. Ambedkar described the scope of
this Article and the reasons why this Article was placed in the Chapter on fundamental rights.
According to him the object of fundamental rights is twofold firstly, to enable every citizen to claim those rights
secondly, and to make it binding upon every authority. He insisted on the retention of
Article 12 so that the fundamental rights could be claimed against anybody or authority exercising
power over the people).
27
CONSTITUTION OF INDIA, Art. 12 (“In this part, unless the context otherwise requires, 'the State'

includes the Government and Parliament of India and the Government and, the legislature of each of
the States and all local or other authorities within the territory of India or under the control of the
-Written Submission on behalf of Respondent- 12
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Therefore, Steve Rover is not liable for the loss of livelihood of Ms. Santiago as he does not
owe the duty to provide for her livelihood and thus, she cannot claim for means of livelihood
from Steve Rovers.

4. Whether Mr. Steve Rovers, being the supplier and service provider of LPT
Machines, is liable to compensate Mr. Tony Stark for breach of contract?
It is humbly submitted before this Hon’ble court that there is no breach of contract on the
part of the respondent.

4.1. A contract is breached or broken when any of the parties fails or refuses to perform
its promise under the contract. Breach of contract is a legal cause of action in which
a binding agreement is not honoured by one or more parties by non-performance of
its promise by him renders impossible. But in the present matter there is no such
case. The Offer made by Mr Snark for purchase of 3 LPT machines on 14 th august
2017 was accepted by respondent. The delivery was delayed by four days but was
accepted by appellant impliedly by making full payments of machines and machine
was duly assembled as per the agreed terms.
4.2. Section 37 of the Indian Contract Act,1872 provides that the parties to the contract
are under obligation to perform or offer to perform, their respective promises under
the contract, unless such performance is dispensed with or excused under the
provisions of the Indian Contract Act or of any other law. There is no general duty
to disclose facts which are or might be equally in access of both the parties.28
4.3. In present case respondent performed his part of obligation comes under contract
act.
4.4. In case of Keats v Earl of Cadogan29, the following was given:
The defendant entered into an agreement with the claimant for the lease of a
property for a term of three years. The claimant intended to reside in the property
with his family. The property concerned was in an extremely poor structural
condition and was likely to collapse at any stage. The defendant however, despite
knowing of this condition, did not inform the claimant of it during the negotiations
for the lease, nor did the defendant inform the claimant after the claimant had
agreed the lease and begun to occupy the property with his family. Ultimately, a

Government of India.”).
28
Pollock and Mulla on Indian Contract act and Specific relief Act, ninth edition, P.158.
29
(1851) 20 LJ CP 76 Common Pleas.
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large part of the property collapsed, and the claimant sought to rescind the
contract, or alternatively commence action in tort for his losses.
30
4.5. In Nocton v Lord Ashburton it was pointed out that a mee passive non-
disclosure of the truth, however deceptive in fact, does not amount to fraud, unless
there is a duty to speak.
4.6. In present case respondent promised that machine will be duly assembled asper the
agreed term and he delivered machines as per the agreement and appellant was
informed to use all necessary methods to check the machines which he failed to do
so. And also, machines were delivered in August and problems started in month of
October and in mean time appellant used one of the machines for making medicine
other than Lobanza which was completely different composition so in such cases
making respondent liable for breach of contract would be injustice.
4.7. Also, there was no direct fraudulent act on part of respondent as the defects in
machines were minor and patent it was duty on part of appellant to duly check it
before accepting order and once order accepted contract was concluded.
4.8. In Vellasamy Lakshimi v Muthusamy Suppiah David it was held that unless a
representee can show that there is dishonesty on the part of the representor, there
is no fraud even if the statement is far-fetched, negligent or ill-conceived.
“Whenever fraud or deceit is alleged, a high degree of proof is required on he who
asserts”
4.9. And there is no case of dishonesty as appellant was advised to check the machines
properly. In case of Drek v. Peek 31 - For fraudulent misrepresentation to arise, the
false representation must be made knowingly, or without belief in its truth, or
recklessly, careless whether it be true or false.
4.10. And in present matter none of these are present thus act of respondent is not
fraudulent thus no question of breach of contract.

30
(1914) AC 932.
31
(1889) UKHL 1.
-Written Submission on behalf of Respondent- 14
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PRAYER

Wherefore, in the light of the facts stated, arguments advanced and Authorities cited, it is
most humbly prayed and implored before the Honourable Supreme Court of Asnard that it
may be graciously pleased to adjudge and declare that:

1. Fraud was not committed by Mr. Steve Rovers under section 17 of the Indian Contract
Act,1872
2. Contract dated 14th August 2017 is not voidable at the option of Tony Snark.
3. Right to Livelihood of Ms. Amy Santiago has not been violated by Steve Rovers.
4. Mr. Steve Rovers is not liable to Compensate Mr. Tony Stark for breach of contract.
Also, pass any other order that it may deem fit in the favour of Applicant to meet the ends of
equity, justice and good conscience.

For this Act of Kindness, the Respondent shall duty bound forever pray.

-Written Submission on behalf of Respondent-

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