Last date for submission of projects May 05

1. No extension of time on any pretext for submission of research cards in proper packets each card duly signed by the researcher. 2. Projects to be submitted to the Academic committee under signature. 3. The academic committee in consultation with the teacher will prepare presentation schedule. 4. Presentations to be finished before May 20 5. Research cards and reports to be received by Academic Committee Between 4PM to 5PM.
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Instructions for projects for third semester.

1. Project performance not up to the mark except few. 2. Deficient data collection: Gender bias incompetence: No less than 300 RC individually. Credit will start for more than 150 RC. 3. May raise new RQs if data is complete with the existing RQs. 4. Procedure ,quantity, quality and merit of work. 5. No re-submission in the next semester.
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TRANSFORMATION IN TEACHER STUDENT RELATIONSHIP:CHANGE TOWARDS CAPITALIST PRODUCTION NATURE:CONTRACT

Regulated by legal education service market. Teacher a legal education service provider : Seller of the legal education process product. Student a legal education service consumer : Buyer to be the consumer of service to transform himself in to a seller of legal service in the legal service market. Purpose of the contract: To create a legal knowledge and skill-product in the buyer which should be in demand in the legal service market. Teaching objective: Creation of a legal knowledge and skillproduct in the buyer(student)which satisfy the demand of legal service market.(R&D for Curriculum)
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Legal education process contract between the teacher and the student
Market centric curriculum

Teacher: Seller

Student: Buyer

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Special about the contract

1. The consumer or buyer or student is a Party to the contract and also becomes the part of Purpose of the subject matter of the contract. 2. Therefore the stakes of the buyer are very high in terms of quality of product than the seller.
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Legal education product (Market centric)

1. The student, the buyer, gets the career in legal service market which makes him happy. 2. The teacher, the seller, gets the satisfaction which makes him happy.

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INDIAN TEACHER STUDENT RELATIONSHIP:PRIMITIVE SOCIALIST PLUS SOME KIND OF FEUDALISTIC 1. 2. 3. 4. 5. 6. Student (faithful disciple) education seeker. The education provision to be made through command system. Teacher (guru) education service provider. The faithful students were subject to uniform command system during the term of education without discrimination. The system survived during the substantial period of feudal production relations in India. The transformation in production relation from feudalism to capitalism transformed the teacher taught relationship from command to demand and supply (market) relationship.
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1. 2.

3. 4.

EFFICIENT CONTRACT FORMATION IMPERATIVES Inquisitive, alert, and absolutely honest with reference to legal education market forces. Ego-centricity in the parties is dangerous to the quality of the subject matter of contract between the teacher and the student. How to deal with ego-virus.? Ubemarrie fidie contract?

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Basic reading material

1. Theory of knowledge. (Bertrand Russell) 2. Epistemology. 3. Origin of private property, family and state. (Fredrick Angel) 4. Marriage and Morals. (Bertrand Russell)

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LAW:A REFLECTION OF PRODUTION RELATIONS (ECONOMIC SYSTEM)

1. Primitive tribal communist production ( socialist economic resources only) relations reflected the corresponding laws. (Instinctive mutual co-operation in the tribe was the basis of law) 2. Feudal production (origin of privatization of economic resources) relations. (Feudal administrative laws.) 3. Capitalist production (Public, Privatization of E.R):Contract laws. 4. Socialist production (Socialization of E.R):Socialist administrative laws. Conclusion: Law is the super-structure of the economic system, and the economic system is infrastructure of law.
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ECONOMIC RESOURCES (MEANS OF PRODUCTION)

1. EARTH:ANYTHING IN OR OVER IT 2. AIR AND SPACE 3. LIFE IN ANY FORM 4. KNOWLEDGE:OF ALL KINDS 5. LABOUR:OF ANY KIND AND FORM ETC.
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ECONOMIC SYSTEMS (METHOD OF RESOURCES ORGANISATION)

1.SOCIALIST ECONOMIC SYSTEM:ADMINISTRATIVE LAW 2.CAPITALIST ECONOMIC SYSTEM:CONTRACT LAW 3.MIXED ECONOMIC SYSTEM:MIXTURE OF CONTRACT LAW AND ADMINISTRATIVE LAW
The proportions of mixture of economic systems in a society reflects the proportions of the administrative and contract law applicable

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GROWTH OF CAPITALIST MODE OF PRODUCTION: SIGNIFY GROWTH OF CONTRACT LAW

1. 2.
1. 2. 3.

Privatisation in the country signify the growth of capitalist mode of production in the country. Globalisation signify :
Globalisation of markets. Globalisation of all other eco-resources and Globalisation of market leads to globalisation contract law. (WTO)

3.

Rich capital-resource countries by and large have become poor labour-resource countries.

4.

What needs to be globalised for the normal growth of capitalist mode of production: Globalisation of both capital markets and labour markets ?
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GLOBALISATION IMPERATIVES :LEVEL PLAYING FIELD ?

1. Uneven or non-capitalist mode of development in the different nations creates conflicts of interest amongst the nations: a centripetal force for globalisation. 2. Mutuality of interests in the capitalist mode of production across the nations: a centrifugal force for globalisation. 3. Conflict of interest in the capitalist mode of production: a centripetal force for globalisation.
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LAW OF CONTRACT
(LEGAL METHOD OF ECONOMIC RESOURCES ORGANISATION)

LAW:THE REFLECTION AND REGULATION OF ECONOMIC SYSTEM

CONTRACT LAW:REFLECTION AND REGULATION OF CAPITALIST ECONOMIC SYSTEM

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CAPITALIST ECONOMIC SYSTEM :CONTRACT LAW SYSTEM

CO-RELATION

1. CAPITALISM AND MARKET FORCES.

2. CONTRCT LAW AND MARKET FORCES CONTRACT CONCEPTS. 3. CONFLICT BETWEEN STATUTORY CONTRACT LAW AND MARKET FORCES. 4. ECONOMIC SYSTEM AS INFRASTRUCTURE AND CONTRACT LAW AS SUPERSTRUTURE OF SOCIETY.
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SPECIAL ABOUT CONTRACT LAW

CONTRACT LAWS 1. Legal regulation by private legislation, creating rights and duties. 2. Direct interface with economic system. 3. Method of learning has to be different than general. 4. Contract legal language: Very important.?
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OTHER LAWS 1. Public law creates rights and duties. 2. Not so direct interface with economic system. 3. General method of learning. 4. Important ?

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Assumption- basis of Contract law Principles

1. Freedom of contract of parties. (Laissez-faire.) 2. Equality of bargaining power.
1. Intensity of need of the parties for exchange of economic resources. 2. Level of information of market forces of the parties.

3. Symmetry of information of market forces. Are these assumption true or not?

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PRINCIPLES OF LAW OF CONTRACT

1.GENERAL PRINCIPLES:CONTRCT-1 (Sections 1 to 75 of Indian Contract Act). 2.SPECIAL PRINCIPLES:CONTRACT-2 (Remaining sections of Indian Contract Act and few other Acts dealing with special contracts). 3.OTHER SPECIAL PRINICIPLES-Other special principles in other special contract courses.

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GENERAL PRINCIPLES OF CONTRCT LAW (S.1-75)

1. CONTRACT FORMATION PRINCIPLES 2. CONTRACT DISCHARGE PRINCIPLES 3. SOME OTHER PRINCIPLES

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CONTRACT FORMATION PRINCIPLES

Essentials of a valid contract..S.10

1. Competent parties (S.11). 2. Offer(S.2(a),3,4,5,6.). 3. Acceptance(2(b),3,4,5,6,7,8.). 4. Consent(S.13,14,15,16,17,18,19,20-22). 5. Lawful consideration with lawful object (S.23,24.).

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Contract formation process

1.Competent party

222222

2. Offer

Competent party

Offerer

3.Acceptance

Offeree

4. Consent

Promise-i

Promise -ii

5.Consideration
Agreement
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COMPETENT PARTIES (Section.11)

1. Majority age (Sec.3,Majority Act XI of 1875,Family Law Reform Act 1969..english) 2. Sound mind (Sec.12,Economic rational behaviour test) 3. No legal disqualifications with reference to the specific contract.

(Burden of proof :one who alleges)

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MINORITY OR NO MAJORITY AGE: IMPLICATIONS

1. Mohoribibi Vs Dharmodasghose(1903)..void agreement 2. No estoppels against pleading age disqualification. 3. No liability in tort law if wrong emerges out of contract between the parties.Johnson V Pye case 4. Doctrine of restitution..not applicable 5. Application of restitution u/s 64(voidable contract) 6. Application of restitution u/s 65(contract becomes or discovered to be void) 7. Application of restitution under Specific Relief Act: Mohoribibi case,Khangul case..distinction 8. Beneficial contract?? Voidable contract? 9. Ratification 10. Necessaries (sec.68)

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PERSONS OF UNSOUND MIND

Indian law 1.Definition: section 12 2.Nature:void (Inder Singh Vs. P.Singh AIR 1957 Pat.491. English law 1.Competent to contract 2.(I)Voidable contract: If knowledge of defendant is proved. (II)Valid contract if the knowledge defendant is not proved or if it is confirmed by the plaintiff. 3.Burden of proof: who alleges
25

3.Burden of proof: who alleges

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PROPOSAL S.2(a)
1. 2. 3. 4. Two competent persons. Communication(S.3) Purpose: to seek the consent of other Intention to make contract
1. 2. Balfour V . Balfour(1919)2 KB 571 Indian law:(1973)1.SCC:yes, (1988)3.SCC.526: Doubtful. Objective theory of intention determination: (Carlill V Carbolic Smoke Ball Company(1893)1QB 256

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CATEGORISATION OF OFFER
1. Specific 0ffer 2. General offer..Lalman V.Gauridutt (1913) 11,All.L.J.489, and Carlill case 3. Standing offer(offer stands till accepted):Lalman Shukla case. 4. Continuing offer: Carlills case. 5. Cross offer. 6. Counter offer. Hyde V.Wrench(1840)Beav 334.($1000-950 case)

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INVITATION TO OFFER
Definition of Invitation to offer: Where a party without expressing his final willingness proposes certain terms on which he is willing to negotiate the contract he is said to make an invitation to offer
1. 2. Harvey Vs.Facey (1893) AC 552 :Lowest price for Bumper Hall Pen,$900 case McPherson Vs.Appana AIR 1951 SC 184:Plaintiff offered to purchase a lodge from the def for Rs.6000.If found reasonable he is ready to pay more.Def.replied,would not sell less than Rs.10,000.Plaintiff accepted it and brought the suit for specific performance. Decide?

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Comparison
1. Invitation to offer Not capable of being accepted. Objective is to seek offer. May or may not generate offer. If offer is generated the Offeree has the available options under the law. 1. Offer Capable of being accepted. Objective is to seek acceptance. May or may not generate acceptance. If acceptance is generated the contract formation may takes place.
29

2. 3. 4.

2.
3. 4.

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Acceptance: irreversible happening

1. Offer disappears: Promises emerge. 2. Consent. 3. Reciprocal promises. 4. Consideration.

5. Agreement.
6. Contract.
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ESSENTIAL ELEMENTS OF ACCEPTANCE(Ss.2.b,3,4,5,6,7)

1. Two competent persons: offerer and offeree. 2. Acceptance is acceptance when communicated: Means of communication: General rule and special rule. 3. Express or implied. 4. Absolute and unqualified. 5. Mode: usual and reasonable unless prescribed. 6. Mode prescribed: duty of the Offerer 7. Time for acceptance: when prescribed and when not prescribed. 8. Acceptance during subsisting offer

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COMMUNICATION OF ACCEPTANCE 1. By whom. 2. To whom. 3. When communication is complete: Depends on means of communication. 1. Electronic means. 2. Non electronic means. 4. Postal rules of communication: Jurisprudential crisis. 5. Jurisdiction
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COMMUNICATION OF OFFER AND ACCEPTANCE WHEN COMPLETE (S.4)

1. Offer : When it comes in the knowledge of offeree. 2. Acceptance:

1. as against the offerer: When it is put in the course of transmission so that it is 2. as against the acceptor: When it comes in the knowledge of the offerer.

3. Jurisprudential problem with acceptance communication rules.

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REVOCATION OF OFFER AND ACCEPTANCE(S.5): WHEN ?

1. Offer :May be revoked at any time before the communication of acceptance is complete as against the offerer. 2. Acceptance: May be revoked at any time before the communication of acceptance is complete as against the acceptor.

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WHEN COMMUNICATION OF ACCEPTANCE IS DISPENCED WITH ?

1. If offer dispenses with communication of acceptance . 2. Performance requirement may dispense with the communication of acceptance . 3. In that case the moment performance is done offer stand accepted.
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SOME CASES AS REFERENCE POINT OF DISCUSSION

1. Lalman Vs. Gauri Dutt,(1913) Cal.L.J489 2. Carlill Vs. Carbolic Smoke Ball Co.(1893) 1 QB 256 3. Mir Sarwarjan Vs.Fakhruddin Mohd Chaudhary (1912) 39 Cal.232 :PC 39 IA 1
(The guardian made contract on behalf of minor to purchase landed property for which minor filed suit for specific performance held not maintainable.)

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SOME CASES AS REFENCE POINT FOR DISCUSSION

(INTENTION TO MAKE CONTRACT) 1. Balfour Vs. Balfour (1919)2 KB 571. 2. Banwari Lal Vs.Sukhdarshan Dayal (1973) 1SCC 294. ( In this case limited recognition for
intention as essential element of offer recognised )

3. CWT Vs. Abdul Hussain (1988)3SCC562

( Supreme Court of India doubted the requirement of the element in view of consideration being essential element in all enforceable agreements)
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SOME CASES AS REFERENCE POINT OF DISCUSSION

(INVITATION TO OFFER) 3. Harvey Vs.Facey (1893) AC 552
Harvey asked: Will you sell us Bumper Hall Pen? Telegram us the lowest price. Facey replied lowest price: Lowest price for bumper hall is 900 pounds. Harvey said: We agree to buy Bumper Hall Pen for (00 pounds ,asked by you. Contract formation ?

4.
5.

Pharmaceutical Society of Great Britain Vs. Boots Cash Chemists Ltd.(1952) 2 QB 795.
Self serving medicine shop with price written on the product.?

Mac Pherson Vs.Appana AIR SC 184

A asked B would you sell your house for Rs.6000.B replied that he will not sell less than Rs.10,000 .A said buy it for Rs. 10,000.Is there contract formation.

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CONTRACT LAW ON CONSENT (Ss.13 to 19)

Contract law definition of consent: Section 13: When two or more person agree on the same thing in the same sense. Meeting of minds of two or more competent persons on three points 1. On the identity of the persons. 2. On the identity of the subject matter. 3. On the identity of the transaction.
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CONSENT
Consent elements
Meeting of minds on three points

Identity of parties
Identity of subject matter

Identity of nature of transaction

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Some cases
1. Cundy V.Lindsay 1878 (3) AC 459:
Respectable company Blenkiron& Co,37 Wood Street, London and Blenkarn & Co,37 Wood Street, London(cheat). case.
(Mistake of identity exists if particular identity exists in the knowledge of party to the contract) King's Norton Metal Co Vs Edridge,Merrett & Co Court of Appeal(1897)14TLR98: A named Wallis adopted the name of Hallam & Co,a fictitious name ordered goods which were supplied and immediately sold, consent was held to be present

2. Raffles Vs.Wichelhaus(1864):133 RR 853.

Ex Peerless from Bombay(October-November)

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FREE CONSENT(S.14,19)
Consent is free if it is not caused by; 1. Coercion.(S.15) 2. Undue influence.(S.16) 3. Fraud.(S.17) 4. Mis-representation.(S.18) 5. Mistake.? x .x ?.Can there be consensus ad idem if there is mistake?
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COERCION(S.15)
ESSENTIAL ELEMENTS 1. Committing or threatening to commit an act forbidden by Indian Penal Code. 2. Detaining or threatening to detain the property. 3. To the prejudice of any person( not the parties only) whatever.
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SOME CASES AS REFERENCE POINT OF DISCUSSION

1. Chikham Amiraju V.Chikham Seshamma (1917)14 Mad 33.Wallis,CJ,Seshagiri,J.Mojority judgment for coercion, Oldfield . dissented. Askari Mirza V.Bai Jai kishori(1912)16 IC 344: A minor borrowed on two mortgages by misrepresenting his age and agreed to compromise decree and subsequently pleaded that the compromise was under threatened prosecution ,hence his consent is obtained under coercion, if true charge is not forbidden if false it is forbidden. Hence referred back for retrial. Andhra Sugars Ltd.V.State of A.P. A.I.R.1968.S.C.599
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2.

3.
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COERCION:DURESS OR MENACE
The Madras High Court spelled out the distinction between the two in the case: K.Ammal V. K.Pillai (1987)1 Mad.L.J.138. 1. Re.Essentils.( Actual imminent violence or imprisonment of party or close relatives.) 2. Re.Origin. 3. Re.direction.(near relatives) 4. Re.Property.(Duress of goods:1989.1Lloyd Rep.138.) 5. Re.Economic duress .(trade union unlawful threat, to break contract if not re-negotiated ) 6. Re.Tort.
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UNDUE INFLUENCE(S.16)
16.1:Definition.two parameters. (a) Dominant position. (de-facto or de-jure ) (b) Misuse of the position to seek consent. 16.2:Presumtions of dominant position( de-jure) (a) Real or apparent position, fiduciary relation.(de-jure dominant position) (b) Affected mental capacity due age,illness, distress mental or bodily.(de-jure dominated position) 16.3:Presumtion of undue influence. 1. (a) Dominant position. (de-facto or de-jure ) (b) Unconscionable transaction. 2. Contract with Pardanashin lady. (through precedent)
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Definition of Undue influence under section 16(1) of Indian Contract Act

Section 16(1) lays down two parameters: 1. Subsisting relation of dominance between the parties at the time of contract formation. Dominant position? 2. Misuse thereof: If used for meeting of minds on any of the three points:
1. Choice of parties. 2. Choice of subject matter, and 3. Choice of nature of transaction.
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SOME CASES AS REFERENCE POINT OF DISCUSSION

1. Mannu Singh Vs. Umadat Pandey (1890) 12 All 532. Old person living alone on the advice of spiritual guru..? 2. Raghunath Prasad Vs. Sarju Prasad, AIR 1924 PC 60: Exorbitant rate of interest on money borrowed ( Rs.10,000 at 24%, becomes Rs.1,12,885 after 11 years) to defend a prosecution.(Held not to be in mental distress).No 3. Ranee Annapurni Vs. Swaminathan (1910) 34 Mad 7 Poor widow, seeking to establish right to maintenance loan at 100% interest.(Mental distress) Yes 4. Chand Singh Vs. Ram Kaur (1987)2 Punj. L.J 70: 70 years ,a parda- nashin widow,3 Daughters ,gifts land to tenant in possession of land.

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SOME CASES AS REFERENCE POINT OF DISCUSSION

5) Hodges Vs. Delhi & London Bank (1901) 27 IA (PC) 168. definition of Pardanashin lady, quasiPardanashin. 6) Kalibaksh Singh Vs. Ram Gopal Singh (1913) 41 IA (PC) 23. Pardanashin gifted half of her property to the son of her paramour case. 7) Andhra Sugars Ltd. Vs. State of AP. AIR 1968 SC 599. Consent under statutory compulsion : Held to be free. Can Statutory compulsion be a mental distress.?
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COERCION Vs. UNDUE INFLUENCE

1. 2. 3. 4. Re subsisting relation. Re dominant position. Re special rules of evidence. Re commission or threatened commission of acts forbidden by IPC. 5. Re detention of property. 6. Re tort or crime as well.
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Fraud and Misrepresentation (Ss.17,18,19)

Derry Vs. Peek (1889)14 A.C 337 Elements of fraud:
1. Statement.
1. 2. Statement (communication) Silence if statement. (Can silence communicate ?) Statement of fact. Statement of opinion.

2.

Statement must be of fact and not of opinion.

1. 2.

3. Fact in the statement must be false. 4. Person making the statement either knows the fact to be false or do not believe the fact to be true. 5. To cause the consent.
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Statement of fact not opinion

Opinion statement has two parts. (a) Fact part. (b) Opinion part. 1. Fact part is representation of factual situation which may be false or true. 2. Opinion part represent the assessment on the factual situation by the opinion holder which may be true or false.
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Statement: if silence is statement

1. Statement.
1. Express or 2. implied statement. Is silence a statement: It is implied statement.

2. If there is a duty to speak, silence may amount to statement. When there is a duty to speak.?
1. 2. 3. 4. 5. Fiduciary relationship. Uberrima fides contract. Insurance contracts Context may create duty to speak. Change of circumstances. Disclosure of half truth obligates to speak the whole truth.
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Continued..
3. If the silence makes the false statement.
1. Intentional or 2. Innocent

4. Cause consent.
5. Fraud or misrepresentation.

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FRAUD Vs. MISREPRESETATION

1. Regarding intention. 2. Regarding tort and crime. 3. Regarding discovering truth with ordinary diligence defense applicable in case of misrepresentation. 4. Regarding rescission and compensation in both the cases.(S.75,and The (English) misrepresentation Act,1967) 5. Regarding communication of rescission or revocation of rescission.(S. 66 read with S.3) 6. If notice is not possible for want of address the FIR for fraud has also been treated as notice . 7. Regarding application restitution for both.(S.64.)
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Grounds of rescission right loss

1. Affirmation of the transaction.( Long V.Lloyd,(1958)2All.ER 402.Lorry in excellent condition case) 2. Lapse of reasonable period of time. 3. Subsequent sale in good faith.

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MISTAKE
1. 2. 3. 4. 5. Mistake as to the identity of the parties. Mistake as to the identity of subject matter. Mistake as to the identity of transaction. Mistake as to the law applicable. (S.21) Mistake as to the law not applicable. (S.21:fact Subject matter) 6. Unilateral mistake of fact does (no effect on contract formation S.22)?.

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Mistake Vs Misrepresentation
Mistake (no communication of mistake) Misrepresentation ( communication of mistake)

1. Miss+ take=Mistake 2. Missing the take. 3. Mistake :No consent 4. Affect presence or absence of consent

1. Mistake+Representation =Misrepresentation. 2. Making false communication. 3. Misrepresentation: No free consent 4. Affect freedom of consent not existence.

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Effect of mistake as to law: Ss 21,22.

1. Mistake as to any law in force in India. (No effect: Ignorance of law no excuse) 2. Mistake as to the law not enforce in India (Effect as a mistake as to the matter of fact) 3. Unilateral mistake as to the matter of fact:22 .? (No effect on contract formation)

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SOME CASES AS REFERENCE POINT OF DISCUSSION

1. Cundy V. Lindsay(1878)3AC459. Blenkarn& Co (Blenkiron& Co) Pl.persue developments. 2. Raffles Vs.Wichelhaus(1864):133 RR 853.Ex Peerless from Bombay(October-November) 3. Pratap Vs.Puniya,AIR 1977 MP 108.Old illiterate lady and uterine brother case. Fraudulent misrepresentation .Void. 4. Dularia Devi V. J.Singh AIR 1990S SC 1173 216.Void.
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SOME CASES AS REFERENCE POINT OF DISCUSSION

1. Krishnan Vs.Kurukshetra University, AIR 1976 SC 376 2. P.Sarojam Vs.LIC AIR1986 201 3. Long Vs.Lloyd:1958 All ER 402 Decent condition car case

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CONSIDERATION (Ss.2.d,23,25)
1. Definition :S.2(d) 2. Forbidden considerations in contract formation:S.23 3. Relevance of consideration in contract formation:S.25 4. Consideration for the promise of the promisee who may dispense or remit performance of promise of promisor . S.63
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Consideration:S.2(d)
Definition :S.2(d) When, 1. at the desire of the promisor, 2. the promisee or any other person 3. has done or abstained from doing or 4. does or abstains from doing, or 5. promises to do or to abstain from doing, 6. something, such act or abstinence or promise is called a consideration for the promise.
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When, at the desire of the promisor

1. Durga Prasad Vs. Baldeo(1880) 3All.E.R 221
The Plaintiff on the order of collector constructed a Ganj,def. promised to pay commission on items sold in lieu his construction of the shop: Commissioners of Howrah sought charitable subscription to construct Town Hall at Howrah . Charitable subscription Rs.100.Contract for the work awarded.

2. Kedar NathVs.Gouri Mohamed 1886 ILR 14Cal 64

3. Abdul Aziz Vs. Masum Ali AIR1914 All 22

Charitable subscription Rs.500 for Mosque repair. Repairs not started as yet.

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THE PROMISEE OR ANY PERSON

1. The party to the contract need not be party to consideration . Promisee or any person. 2. But the contract can be enforceable only by the party to the contract.

English law: Dutton Vs. Poole (1677) 83 ER 523

If father forebear to sell the wood to give portion to his daughter the son promised to his father to pay $1000 to his sister. Sister neither party to the consideration nor contract. Brother held liable in a suit to sister?. Overruled in Tweddle Vs. Atkinson (1861) 123 ER 762 after 200 years.
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CASES AS REFERENCE POINT FOR DISCUSSION

Tweddle Vs. Atkinson (1861) 123 ER 762
The plaintiff was to be married to the daughter of one G and in consideration of this intended marriage G and the plaintiff s father entered in to a written agreement by which it was agreed that each would pay the Plaintiff a sum of money. G failed to do so and the plaintiff sued his executors. Whitman J considered it to be an established principle that a person can not take advantage of a contract, who is stranger to the contract.

Basic propositions of English law:

1. Consideration must move from promisee only. 2. Stranger to contract can not enforce the contract.? Benefit to third party (Law revision committee 1937) 3. Jamana Das V.Ram Autar (1911)39 IA 7 :PC extended this rule to India.
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Continued
Tweddle rule stranger to the contract have no cause action is applicable in India. Indian exceptions:2 kinds 1. Statutory :Negotiable Instrument Act, Contract of Agency ,TPA, Bill of lading, Railway receipt, trust beneficiary etc. 2.Judicial:marriage,partition or other family arrangements, estoppel,covenents running with land.
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Has done or abstained from doing

Executed consideration:
There can be two situations: 1. Promisee or any other has done or abstained from doing on the request of promisor

2.

Promisee has done or abstained from doing without the request of promisor. No consideration for the promise. This promise though without consideration is enforceable u/s 25(2) not for the reasons of contract but law.

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PRESENT CONSIDERATION
Does or abstains from doing The point of time of furnishing the consideration is the same as that of making the promise by the promisor for the consideration.

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FUTURE OR EXECUTORY CONSIDERATION

Promises to do or to abstain from doing The consideration for the promise is in the form of promise. The obligations are due from both the sides of the contracting parties. The reciprocal promises forming consideration for each other.

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SOMETHING: SOME VALUE IN THE EYE OF LAW?

1.

Consideration must have some value in the eye of law . ?

Value in the eye of law 1. Social value. 2. Emotional value. 3. Economic value. Note: Value need not adequate.

2. 3. 4.

5.

Doctrine of Laesio enormous ( less but enough) in civil legal system. Promise to forbear or forbearance to sue. Promise to compromising (before the court) of dispute irrespective of its merits. Promise to perform or the performance of pre-existing of legal duty.?
1. 2. Contractual legal duty. Non-contractual legal duty.

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Pre-existing contractual duty. English law

5. Promise to pay amount less than due. No consideration English (Pinnell) rule (1602) 5 Co Rep 117a. Indian law different under section 63 ,Indian Contract Act . Exceptions to the Pinnell rule: (a) Part payment by third party. (b) Payment before due time. (c) Payment at different place or different mode (c) Promissory Estoppel.

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Promises without consideration valid

Two categories: 1. Under section 25:In the making process. 2. Under section 63 at the instance of promisee. Subsequent to the making of contract.

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Promises without considerations valid under section 63

Indian law ,Section 63 :Makes promises without consideration valid.
Every promisee may (i) dispense with or remit, (ii) wholly or in part, (iii) the performance of the promise made to him, or (iv) may extend the time for such performance ,or (v) may accept instead of it any satisfaction which he thinks fit Such promise is valid even without consideration.
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Last date for submission of projects May 05

1. No extension of time on any pretext for submission of research cards in proper packets each card duly signed by the researcher. 2. Projects to be submitted to the Academic committee under signature. 3. The academic committee in consultation with the teacher will prepare presentation schedule. 4. Presentations to be finished before May 20
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Exceptions to the consideration requirements for enforceable promise

1.English law.
1. Contracts signed under seal ,attested and delivered.
1. 2. Contract by individual :Law of Property (Miscellaneous Provisions) Act 1989,Section 1.Written,signed,attested by two witnesses. Contract by the company: Deed under Common seal of the company, signed by two Directors or one Director and Company Secretary.

2.Indian law, Section 25.

1.

2. 3.
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Promise in writing, duly registered made on account of love and affection between parties in near relation. Promise to compensate voluntary done service. Promise in writing duly signed to pay time barred debt.
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Indian law: Section 25

1. Promise is in writing and registered. 2. Promise to compensate for something done. 3. Promise made in writing and duly signed to pay debt barred by limitation law. In any of these cases, such an agreement (2.e) is a contract(2.h).?
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Promise expressed in writing..love and affection: Section 25(1)

1. It(promise) is expressed in writing and 2. registered under the law for the time being in force for the registration of (documents) , and 3. is made on account of natural love and affection between parties
1. 2. 3.
1. 2. 3.
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Love and affection which nature of relation warrants. Love and affection not be instinctive.? No clear judicial pronouncement .
No definition of near relation. The expression include relation through blood/marriage. Poonuoo Bibi V. Fyaz Buksh 15 BLR App 5. Complete judicial definition yet to be settled.?
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4. standing in near relation;

LOVE AND AFFECTION IN NEAR RELATION:

(JUDICIAL UNDERSTANDING WITH REFERENCE TO FAMILY SETTLEMENTS)

1. 2. 3.

4.

Rajlukhy Dabee V. Bhootnath Mookerjee (1900)4 Cal.WN 488 :husband wife( marriage) case. Bhiwa V.Shivaram (1899)1 Bom.LR 495: two brothers (blood) property sharing case. Manali Singhal V.Ravi Singhal AIR 1999 Del 156:Promise in family settlement between husband and wife made for providing maintenance to wife for the sake of peace of mind.(marriage) See Ram Charan Dass V.Girja Nandini Devi AIR 1966 SC 323. and Maturi Pullaiah V.Maturi Narasimham AIR 1966 SC 1836: The court give effect to a family settlement upon a broad and general ground that the object is to settle existing or future disputes regarding property among the family members.
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Promise to compensate for something done Section. 25(2)

1. 2. It is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or
Whether it includes sex services: Courts opinion.S.23 1. Past voluntary sex services. 2. Future voluntary sex services.

3.

something which the promisor was legally compellable to do; Obligation of person enjoying voluntary nongratuitous act even if there is no promise to compensate for the same. Section 70
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Promise to pay a debt barred by limitation ( Section 25.3)

1. It is promise, made in writing and signed by the person to be charged therewith, 2. or by his agent generally or specially authorised in that behalf, 3. to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for limitation of suits. In any of these cases, such an agreement(2.e) is a contract(2.h).?
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Promise to pay time barred debt and acknowledgement to pay

1. Section 25.3 is applicable in case of promise to time barred debt. 2. It is not applicable in case acknowledgement. Limitation of period restarts under the Indian Limitation Act. 3. Difference between promise to pay time barred debt and acknowledgement.

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Promise to pay time barred debt and acknowledgement

Promise to pay time barred debt.

1. Gives cause of action fresh period of limitation. 2. Promise is without consideration. 3. It is not a contract but administrative action. 4. Action is based on administrative law.

acknowledgement 1. Give the fresh limitation period. 2. Promise is with consideration. 3. It is amounts to revision of the original contract. 4. Action is based on contract law.

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SOME CASES AS REFERENCE POINT OF DISCUSSION

Which promisor is bound u/s 25.3:
1. 2. 1. 2. Promisor of original promise to pay back the debt. Promisor of the promise who promise to pay the time barred debt. Bombay High Court. Promisor of original promise to pay back the debt which has become time barred : P.M.Mody V.Bai Meherbai(1928) 30Bom.L.R1407 Madras High Court. Any person who promise to pay the time barred debt who may or may not be the promisor of category 1:P.G.Nair V. P.A.Nair AIR 1940 Mad.678.

1. Two conflicting views:

2.

Reason for this conflicting view lies in the phrase :It is a promise, made in writing and signed by the person to be charged therewith, or his
1. 2. Charged there with the debt, or Charged there with promise.

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What considerations and objects are lawful, and what not ( Section 23)
The consideration or object of an agreement is lawful, unless:
1. 2. 3. 4. 5. 6. It is forbidden by law; or Is of such a nature that ,if permitted, it would defeat the provisions of any law; or Is fraudulent; or Involves and implies injury to the person or property of another; or The court regards it as immoral, or The court regards it to be opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful, is void. Difference between consideration or object of agreement unlawful
1. 2. Consideration and object of agreement may coincide. Consideration and object of agreement may not coincide.

1.

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1. Forbidden by law
1. Consideration is forbidden by law includes:
1. 2. 3. 4. Statutes, Customary law , Precedent, Rules and regulations, made under the law etc.

2. Objective of consideration is forbidden by law.

The object and consideration may in some cases be the same thing but in some cases it may be different. Chandra Sreenivasa Rao V. Kovapatti Raja Rama Mohana Rao AIR 1952 Mad 579 1. Money is borrowed to celebrate the child marriage.
Child marriage Restraint Act 1929; to celebrate the marriage of child is offence. Here debt-consideration for the promise to pay back by itself is not illegal but the object of debt is illegal.

2.

Money borrowed to buy sex services from a prostitute.

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2. Is of such a nature that ,if permitted, it would defeat the provisions of any law;
If the agreement defeat the objective of law:
1. 2.
1.

Objective of law. Objective of consideration.

Fateh Singh V. Sanwal Singh (1878)1 All. 751

The accused is required under Cr.P.C to surety bond for Rs.5000 for good behavior , he deposits the sum with the defendant and persuades him to become surety . After the period of surety is over the accused sues the defendant for the amount. The object of the surety agreement is that surety shall at his risk see to the regular appearances of the accused in the court. This objective of the agreement will defeat the purpose of law.

2.

Held not recoverable. Nandlal V.Thomas J.William,171 IC 948

The plaintiff was licensed under an Excise Act which forbids

1. its sale, 2. sub-lease, but he took the defendant in partnership. Is the consideration for Partnership contract forbidden by law or object of consideration is unlawful.? Agreement was held void.

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3.

Is fraudulent: (If the objective of agreement is to defraud third person)

Can the consideration be fraudulent independent of consent. Can the consideration be fraudulent only if the consent is also fraudulent under section 17. If proposition 2 is correct than how to harmonise section 19 with section 24,that is;

What is fraudulent consideration? 1. Fraudulent to the party to the agreement:

1. 2. 3.

1. 2.

Agreement is void under section 24 or Agreement is voidable under section 19 of The Indian contract Act 1872.

2. Fraudulent not to party to the agreement but to the third party to the agreement:
A and B agree to collaborate to defraud C and share the proceeds of fraud equally. Such agreement is void and not voidable.

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4. Involves or implies injury to the person or property of another

Who is Another "with reference to the consideration of the agreement: 1. Another in between the a parties to agreement or 2. Another person means a person other than the parties to agreement. 3. Judiciary is not clear about as to who this another person amongst the above two possibilities. 4. In my opinion it should be proposition 2.
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5. Involves and implies injury to the person or property of another

1. Ram Swarup V. Bansi Mandar (1915) 42 cal,742:Borrowed Rs.100 with exorbitant interest and executed a bond or to work for 2 years without salary. Slavery? 2. Beresford V. Royal Insurance Company Ltd. (1917) 2 All.E.R.243: Suicide to help representative to get money. The representative not allowed to get money.
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6. The court regards it immoral

Parameters of immorality: 1. The survey of the judicial decision reflects that immorality with reference to the consideration is limited to sexual immorality as of now. 2. Sexual immorality is a relative term in relation to values of the society at particular time and space. 3. The arbiter of consideration if involves sexual immorality under section 23 is the court.

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IN THE OPINION OF COURT IT IS IMMORAL:

Immorality is limited to sex outside marriage:
Gherulal V. M.Maiya (1959) 2SCA 342 Subba Rao J (after CJ) The case law in England and in India confines the doctrine to sexual immorality
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Instances of sexual immorality

1. 2. 3. Interference with matrimonial relations. Bai vijli V. Nansa Nagar (1885) 10 Bombay 152 :Money lended to seek divorce, not recoverable. Dealing with prostitutes :Pearce V. Brookes( 1866)LR 1EX 213.Thing sold and hired for prostitution. Cohabitation: Past,present,future.
1. 2. 3. 4. Present and future. Past cohabitation.
1. 2. 1. 2. 1. 2. Illegal cohabitation. Immoral cohabitation. Promise to pay under seal: Enforceable. Promise to pay not under seal: Past consideration ,not enforceable. Illegal cohabitation. Immoral cohabitation.

Past illegal and immoral cohabitation in English law: Past illegal and immoral cohabitation in Indian law:

D.Nagartnamba v Kunuku Ramayya AIR 1968 SC235:1 SCR 43. BACHAWAT J Certain properties were gifted by a male of joint Hindu family for past cohabitation case failed for incompetency of Karta of joint family . But BACHAWAT J recognised the past cohabitation as good consideration. Pyare Mohan V. Narayani AIR1982 Raj 43
A gift deed was executed in favour of a woman with whom he had adulterous relation .Held valid.The word used in S.23 means purpose or desgin.Past cohabitation ,even adultrous ,is no longer the object of the gift. 3/18/2012 Contract Law -1 94

COHABITATION AS CONSIDERATION
PAST COHABITATION.
1. English law under seal valid otherwise it is past consideration.

2. Indian law .1.adulterous or.2. non-adulterous cohabitation. Dhiraj Kuer V.Bikramji Singh (1831)3All 787 :Past cohabitation held good consideration. Pyare Mohan V. Narayani AIR 1982 Raj.43 :Logic different-gift needs no consideration logic. Husseinali Casan V.DinbaiAIR1924 Bom.135:Past cohabitation is illegal consideration. D.Nagartnamba v Kunuku Ramayya AIR 1968235:1 SCR 43. Certain properties were gifted my a male of joint Hindu family for past cohabitation case failed for incompetency but BACHAWAT J recognised the past cohabitation as good consideration.
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7. In the opinion of the court opposed to public policy

ENGLISH LAW 1.Public policy 2.Judicial observations on public policy Lord Halsbury in Egertone V.Brownlow (1953)4HLC 123 I deny that any court can invent new head of public policy.
Lord Atkin in Fender V.Johan Mildmay (1938) AC.1 The doctrine should be invoked in clear cases in which the harm to the public is substantially incontestable, and does not depend upon the idiosyncratic inference of a few judicial minds
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Public policy: Indian Law

Subba Rao J( after wards CJI) in Gherulal V.Mahadeodas AIR1959 SC781 Justice Subba Rao blended Halsbury and Atkin to articulate the Indian position. the primary duty of the court is to enforce the promise which the parties have made and to uphold the sanctity of the contract which forms the basis of the society (capitalist society) : but in certain cases ,the court may relieve them of their duty on the rule founded on what is called the public policy; for want of better words Lord ATKIN describes that something done contrary to public policy is a harmful thing; but the doctrine is extended to harmful cases but also to harmful tendencies; the doctrine of public policy is a branch of common law and just like any other branch of common law, it is governed the precedents; the principles have been crystallized under different heads and though it is permissible for the courts to expound and apply them to different situations, it should only be invoked in clear and incontestable cases of harm to the public.
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HEADS OF PUBLIC POLICY

1. 2. 3. 4. Trading with enemy. Trafficking in public offices. Marriage brokerage agreement. Interference with administration of justice.
1. 2. 3. Interference with the course of justice. Stifling prosecution. Maintenance and champerty. Central Inland Water transport corporation Vs. N Ganguly AIR 1986 SC 1571:Termination of service 3 months notice without reason .

5. Unfair deal.

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VOID AGREEMENTS
1. 2. 3. 4. 5. 6. 7. 8. Illegal agreements.24 With out consideration.25 Restraint of marriage.26 Restraint of trade .27 Restraint of legal proceedings.28 Uncertain agreements.29 Wagering agreements.30 Impossible agreements.56
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Agreement in restraint of trade is void (S.27)

1. Trade, profession or business are human activities. 2. Occupations are also human activities but protection of Section 27 is not available unless it amounts to business.? 3. Restraint on any human activities can only be in terms of two parameters:
1. Time restraint.
1. 2. 1. 2. Limited time. Unlimited time. Limited space. Unlimited space.

2. Space restraint.

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Agreement in restraint of trade is void (S.27)

27.Agreement in restraint of trade void: Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.(Occupation unless amounts to business not included: smacks class bias.) Exceptions; 1. Statutory exceptions.
1. 2. Sale of goodwill, limits specified, which is reasonable. Under Indian Partnership Act.

2. Judicial exceptions.
1. 2. 3.
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Trade combinations. Solus agreements. Service agreements.

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Lawful profession trade or business

One is restrained from exercising lawful
1. 2. 3. 4. Profession Trade Business Occupation amounting to business

Occupation not amounting to business can be restrained under section 27.

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English law: Restraint

Nordenfelt V.Maxim Nordenfelt Guns and Ammunition Co Ltd (1894) AC 535 1.Not to practice the same trade for 25 years (Reasonable) 2.Not to engage in any business for the time being carried on by the company.( unreasonable) 3.He afterwards enters into agreement with another manufacturer of guns and an action for restrain was filed. 4.New law laid down:
(a) In the interest of parties. (b) In the interest of society as well.

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Restraint in terms of time and space before 1894

Restraint: Four kinds
Unreasonable : Three kinds.

Reasonable: 1.Limited in time and space.

2.Unlimited in time and space

3.Unlimited in time and limited in space

4.Limited in time and unlimited in space

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English law: Reasonable restraint permissible

Two parameters: 1.Reasonable with reference to the interest of parties. 2.Reasonable with reference to the public interest.
1. The restriction should be framed and guarded as to afford adequate protection the party in whose favor it is imposed while at the same time it is no way injurious to the public interest. Justiciable question. 2. Judicial balancing of private and public interest is contemplated as the new norm.

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Indian law: All restraints covered

Madhub Chander V.Raj Coomar (1874)14 Bengal Law Reporter 76. Two rival shopkeepers in a locality case. Couch .J .held; The words restraint from exercising a lawful profession, trade or business, do not mean an absolute restriction, and are intended to apply to a partial restriction limited to some place.

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Profession, trade or business

1. Rewashanker Samji Vs. Vedji AIR 1951 Kutch 56: Agreement to monopolize the work to perform the religious services: held void? Religious services if trade, business or profession ? 2. Pothi Ram Vs. Islam Fatima AIR 1915 All.94 Two landlord in the neighbourhood,in order to avoid competition agreed to hold cattle mela on different dates in the same neighborhood . Held binding.? Is it an occupation?

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Statutory exceptions
A. Under section 27.
1. Sale of goodwill: Definition of goodwill: Lord Eldon (Cruttwell Vs. Lye Ves.335) :The goodwill which has been the subject of sale is nothing more than the probability that the old customer will resort to old place (name?)" (old name of business which attracts the old customers ). Two conditions for application:
1. 2. Local limits are prescribed. Limit appear to be reasonable, regards being had to the nature of business. Justiciable question.

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Continued.
B. Under Indian Partnership Act.
1. Section 11:During the continuance of partnership none will any business other than that of partnership. 2. Section 36 : Out going partner.
1. 2. 3. Limits are specified or The time is specified and The same are reasonable

3. Section 54: In anticipation of dissolution of partnership restriction may be agreed that any or none will carry on the business the partnership was carrying on.
1. 2. 3.
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Limits are specified or The time is specified and The same are reasonable
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Judicial exceptions
1. Trade combinations.
S.B.Fraser and Co.Vs. Bombay Ice Mfg.Co. (1904)29 ILR Bom.107 (Regulation not restrain)

2. Solus or exclusive dealing agreements.

Carliles Nephews and Co.Vs.Ricknauth Buttermull ILR (1882) 8 Cal 809 Agreement to sell 1,36,000 dhotis of certain description to the defendant only for certain period of time. (Assuring market not restraint)

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Continued.
3. Service agreements with restraint on employees:
1. Restraint during employment period.
Charles worth V. MacDonald

2.

Restraint beyond employment period.

Niranjan Shankar Vs.Century Spinning and Manufacturing (1967) SC 1098 The appellant torn the agreement to pieces only because he has been offered higher salary by the other company.

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Agreement by way of wager

Definition of agreement by way of wager:
1. Interpretation clause ,Section 2: No definition. 2. General Clauses Act: No definition. 3. Indian Judicial precedent definition: No definition. 4. English Judicial precedent: Justice Hawkins in Carlill Vs. Carbolic Smoke Ball Company (1892)2QB484 5. Why the Common law definition applicable : The Indian Contract Law is not exhaustic code.
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Agreement by way of wager is void. (Section 30)

Definition: Justice HAWKINS in Carlill V. Carbolic Smoke Ball Co.(1892)2QB484 A wagering contract is one by which two persons professing to hold opposite views touching the issue of a future uncertain event , mutually agree that, dependent on the determination of that event, one shall pay or hand over to him, a sum of money or other stake; neither of the contracting parties having any other interest in that contract than the sum or stake he will win or loose, there being no other real consideration for the making of such contract by either of the parties. It is essential to wagering contract that each party may under it either win or lose, whether he will win or lose being dependent on the issue of the event, and,therefore,remaining uncertain until that issue is known. If either of the parties may win but cannot lose, it is not a wagering contract
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ESSENTIAL ELEMENTS OF WAGER

1. 2. 3. 4. The parties holding opposite views. About a (future) uncertain event. Mutually agree to pay a certain sum of money or other stake. On the determination of the uncertain event.
1. 2. 3. Uncertain (future)therefore unknown event. Certain(past) but unknown event. Relation between uncertain and unknown event.

5. 6.

The parties are interested in money or stake only and not in the event otherwise. Mutual chances of gain or loss of certain sum of money or stake.
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Exception u/s 30
1. Horse racing with Rs.500 and above.
Note: Nothing in this section shall be deemed to legalize any transaction where section 294-A of Indian Penal Code is applicable.

2. Horse racing exception U/S 30 : Mr.Hasan Ali law.

Section 30 is used to make black money white.

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Examples
1. Lottery. 2. Life Insurance contracts: Provided the insurer have insurable interest "in the subject matter of insurance contract it is a wagering agreement. 3. Gambling in differences in the value of shares, or Satta or Teji -mandi transactions . Sukhdevadas V.Govind Dass ILR 51 Mad.96(PC) 1. Illegal wagers:
1. 2. When Section 294-A is applicable in the place. When the wagering agreements are declared illegal by the Statute such as in case of Forward Contract (Regulation) Act 1962
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Grounds of discharge of Contract

A contract may be discharged through the following methods: 1. Performance (Ss.31-67) 2. Impossibility of performance. 3. Contract to discharge the contract. 4. Breach of contract.
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Impossibility of performance,S.56
Section 56 1. Existing impossibility: void agreement. 2. Supernuing impossibility: void contract. 3. The commercial impossibility :No effect. 4. Compensation for loss through non performance of act known to the promisor to be impossible.
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Meaning of impossibility
Satyabrata V.Mugneeram AIR 1954 SC 44 :1954 SCR 310 (a) This much is clear that the word impossible has not been used here in the sense of physical or literal impossibility. (b) It should be impracticable and useless from the point of view of the object and purpose of the contract. (c) Commercial impossibility ?
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English law: The doctrine of frustration

1. The of implied term. Lord Loreburn in F.A.Tamplin Steamship company . 2. Theory of just and reasonable solution.Denning LJ British Movies News Ltd V.London and District Cinemas Ltd.(1951) 1KB 190 3. Foundation loss theory. Effects of frustration 1. Frustration should not be self-induced. 2. Frustration operates automatically. Theory of frustration is not applicable in India ?
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Specific grounds of impossibility

1. Destruction of subject matter. 2. Change of circumstances. 3. Non occurrence of contemplated event. 4. Death or incapacity of party. 5. Governmental administration. 6. Intervention of war.
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Discharge by breach of contract

Definition of breach of contract: When a party to the contract either refuses to perform or fails to perform or incapacitates himself to perform his part of the contract obligation he beaches the contract. Kinds of breach: The breach of contract is two kinds: 1. Anticipatory breach. 2. Breach.
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Anticipatory breach of contract

Definition:
It is the breach of the contract by the party to contract in anticipation of the date of the performance of the contract. Effects: 1. The aggrieved party is excused of the performance of contract. 2. The choices of action of the aggrieved party.
1. Right of Immediate action. Implications? Rochester V.De La Tour (1853) 95 RR 747. Courier hiring case. 2. Anticipatory breach of contingent contract. Frost V.Knight (1872) L.R.7 Exch.111. Engagement promising to marry on fathers death but refused to marry before fathers death, immediate action is maintainable. Continued..

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Continued
3. Right of action on due date of performance.

Consequences:
1. The anticipatory breacher may opt to perform the contract on due date. 2. Damages shall be calculated on the current market rate if market principle is applicable. 3. Discharge by any other event (like frustration) may benefit the parties.
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Breach of contract :Section73

When a contract has been broken, a party who suffers by such breach is entitled to receive, from the party who has broken the contract,
1. Compensation for any loss or damage caused to him thereby ,which naturally arose in the usual course of things from such breach, (general damages) 2. Or which the parties knew, when they made the contract, to be likely to result from the breach of it.( special damages ) Hadley V. Baxendale (1854)9 Ex 341 Alderson B
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Consequences of breach: Remedies

Remedies:
1. General remedy: Suit forcompensation,S.73
1. Identification of the loss or losses for which the compensation is awardable to the aggrieved. 2. Conversion of loss in to money compensation.

2. Exceptional remedy: Suit for specific performance under Specific Relief Act.

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Principles of Identification of the loss or losses. Section 73

Section 73 provides two rules for the identification of the loss or losses to be Mitigation of compensated. damage?
1. Any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach.(general loss) :General Hadley Vs.Buxandale damages. 2. Any loss which the parties knew at the time of contract making as likely to result from the breach. (Special loss): Special damages.
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Conversion principles of loss or losses (damage) in to damages

There are two principles for converting the loss or losses (damage) in to damages.
1. Market principle if applicable: Market forces will play a decisive role. 2. Evaluation principle if market principle is not applicable: The opinion of the evaluationexperts will guide the judge in the conversion of loss or losses (damage) in to damages. 3. Agreement principle.
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Damages computation rules

1. General damages Rule(Market rule): General loss. 2. Special damages Rule(Knowledge rule) : Special loss. 3. Exceptional exemplary damages Rule (Punitive damages rule): Exception to the general rule, emotional/reputational loss as well. 4. Nominal damages Rule: Injury but no loss. (Injuria sine Damnum ) 5. Agreement damages.?
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Agreement damages :Liquidated damages.

1. Q:Parties agree to make the contract can they agree to make the resolution of compensation in case of breaking the contract? Maula bux Vs. 1. Ans:Yes and no. Union of India 2. Q: Can the answer to the question be possible in Yes and No? 2. Ans:Yes, let us discuss.
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Agreement damages: Earnest money, penalty

Difference: Earnest money and penalty :
1. To be adjusted in price contract performed. 2. To be confiscated if contract not performed. 3. In case of confiscation it may either be liquidated damages or penalty. 4. If liquidated damages permissible if penalty not permissible.

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Certain relations resembling those created by contract(Ss.68-72)

English law
1.
1. 2. 3. 1. 2.
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Three kinds of earlier common law actions.

Contractual: Contract action. Delictual: Tort action. Quasi contractual. Unjust enrichment. Implied promise to pay.
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2. Juridical basis of quasi-contract.

S.68:Claim for necessaries

Meaning of necessaries: Alderson B in Chappel V.Cooper (1844)13 LJ(Ex)268
Things necessary are those with out which an individual cannot reasonably exist. In the first place, food, raiment, lodging and the like. About these there is no doubt. Again, as the proper cultivation of the mind is as expedient as the support of the body ,instruction in art or trade, or intellectual ,moral and religious education may be necessary also . . . Then the classes being established, the subject and extent of the contract may vary according to the state and condition of the infant himself. His clothes may be fine or coarse according to his rank; his education may vary according to the station he is to fill; and the medicines will depend on the illness with which he is afflicted, and the extent of his probable means when of full age. . . But in all these cases it must first be made out that the class itself is one in which the things furnished are essential to the existence and of reasonable advantage and comfort of the infant contractor. Thus articles of mere luxury are always excluded, though luxurious articles of utility are in some cases allowed.
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Nature of liability
Indian law
1. 2. 1. Not personal. To the extent of property.

English law
Based on the doctrine of unjust enrichment and enforced accordingly. 2. Liability not personal but of the property if any. Nash Vs. Inman (1908 (2) KB 1)

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Section 69:Reimbursement of a person paying money due by another, in the payment of which he is interested.
1. The person must be interested in the payment 2. Another person must be bound to pay by law 3. Person paying is entitled for reimbursement

Govindram Gordhandas Seksaria V.State of Gondal AIR 1950 PC 99 Maharaja having sold certain mills without paying overdue municipal taxes, was sued by the buyer who has to pay to save the property from being sold.
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Section 70:Obligation of a person enjoying benefit of non-gratuitous act

1. 2. 3. The service or act must be non-gratuitous The other person must enjoy the benefit The person enjoying the benefits needs to pay compensation for the same State of West Bengal V.B.K.Mondal & sons AIR 1962 SC 779 The plaintiff on the request of the officer of the State of West Bengal constructed a Kutch road,guard room, office, ,kitchen, room for clerks and storage sheds for the use of the civil supply department of the Government.
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Section 71 :Responsibility of finder of the goods

1. A person is a finder of the goods 2. The finder takes the goods in his custody 3. Finders responsibility is that of bailee Section 168 :Right of the finder of goods. Section 169: When finder of thing commonly on sale may sell it. (a) When the thing is perishable (b) When the lawful charges of finder, in respect of the thing found, amount to two third of its value
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Section 72
Liability of a person to whom money is paid or thing delivered by mistake or under coercion 1. Mistake of fact or law. 2. Coercion. Sales Tax Officer, Banas V. Kanhaiya Lal Mukund Lal Saraf AIR 1959 SC 135 Tax was paid on its forward transactions which was held ultra-vires
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