1. Balfour Vs Balfour
Court: Court of Appeal (England and Wales)
Citation: (1919) 2KB 571
Year: 1919
Facts: As the Director of Irrigation for the Government of Ceylon (now Sri Lanka), Mr. Balfour was a civil engineer who had his wife, Mrs. Balfour, living with him. In 1915, when Mr. Balfour was on leave, they both went to England. However, Mrs. Balfour suffered from rheumatoid arthritis, and her doctor advised her to stay in England due to the unfavorable climate in Ceylon. As Mr. Balfour was about to set sail, he verbally agreed to pay his wife £30 monthly until her return. Nevertheless, their relationship soured, and Mr. Balfour ceased paying the agreed amount of maintenance. He later proposed that they dissolve their marriage in a letter to his wife, which resulted in a legal separation and ultimately divorce. In 1918, Mrs. Balfour sued her former spouse for failure to fulfill his court-ordered obligation to pay her maintenance.
Issues:
- Was there any intention on the part of Mr. Balfour to make an agreement with his spouse, Mrs. Balfour?
- Can the agreement made between Mr. and Mrs. Balfour be legally enforced?
Judgement:
Mr. Balfour’s appeal proved successful, with the court ruling that there was no legal relationship or contract between him and his wife. The examination of the circumstances surrounding the formation and execution of the agreement could establish whether the parties intended to create a legally binding relationship. Consequently, Mr. Balfour was not obligated to provide financial support to Mrs. Balfour as per the terms of the agreement.
2. Lalman Shuka Vs. Gauri Dutt
Court: Allahabad High Court
Citation: (1913) 11 ALJ 489
Year: 1913
Facts: The defendant employed the plaintiff as a minimum-wage worker, and tasked him with finding the defendant’s missing nephew. While the plaintiff was away, the defendant distributed handbills promising a reward of Rs. 501 to whoever could locate the missing boy. The plaintiff eventually found the boy but was unaware of the handbills at the time. Upon returning, the plaintiff claimed the reward, which consisted of 2 sovereigns at Hardwar and Rs. 20 upon arrival back home. After discovering that the reward had been offered publicly, the plaintiff sued the defendant for the promised amount.
Issues:
- whether there is a contract in place or if the situation meets the criteria for a contract between the involved parties.
Judgement:
Upon scrutinizing all pertinent facts, the Honorable High Court arrived at a decision that a contract can only be considered legally binding if the proposer possesses the knowledge and consent of the offeree. In this particular case, the plaintiff was ignorant of the reward before performing the task, and hence had no opportunity to accept the offer. Consequently, there was no contract, and the plaintiff was not entitled to receive or demand the reward.
3. Carlill Vs. Carbolic Smoke Ball Company
Court: Court of Appeal (England and Wales)
Citation: (1893) 1 QB 256; (1892) EWCA Civ 1
Year: 1893
Facts:
Advertisements for the Carbolic Smoke Ball Company’s smoke ball product were featured in The Pall Mall Gazette. The advertisement included a guarantee to compensate anyone who contracted the flu after using the product as directed for two weeks, three times a day, with a payment of £100. Moreover, the advertisement indicated that the company had deposited £1,000 with the Alliance bank as a security. Mrs. Carlill purchased the smoke balls and followed the instructions, but she subsequently contracted the flu. When the defendant refused to honor her claim, she initiated legal proceedings to seek a refund of the money.
Issues:
- Does the agreement between the parties hold any legal validity?
- Was a formal acceptance notice required for the contract in question?
- Was it necessary for Mrs. Carlill to communicate her acceptance of the offer to the Carbolic Smoke Ball Company?
- Did Mrs. Carlill provide any consideration in exchange for the £100 reward offered by the company?
Judgement:
The company’s objections were unanimously dismissed by the Court of Appeal, who ruled that a legally binding contract for £100 existed between Mrs. Carlill and the company.
The three judges provided various reasons for their decision, including the following:
(1) The advertisement constituted a unilateral offer to the entire world;
(2) Complying with the smoke ball usage requirements was tantamount to accepting the offer;
(3) Purchasing or using the smoke ball was sufficient consideration;
(4) The company’s deposit of £1000 at the Alliance Bank demonstrated a genuine intention to assume legal responsibility.
4. Mohori Bibee Vs. Dharmodas Ghose
Court: Calcutta High Court
Citation: (1903)ILR30Cal539(PC)
Year: 1903
Facts:
Brahmodutt, a lender in Calcutta, granted a loan to Dharmodas Ghose, who claimed to be an adult and executed a mortgage deed in Brahmodutt’s favour. However, it was later discovered that Dharmodas Ghose was a minor. Kedarnath, Brahmodutt’s agent, was unable to execute the deed as a result. Despite this, he proceeded to execute the mortgage deed from Dharmodas Ghose. Subsequently, Dharmodas Ghose filed a lawsuit against Brahmodutt through his mother and legal guardian, seeking to invalidate the mortgage deed due to his status as a minor at the time of execution. The trial court accepted the respondent’s appeal and revoked the mortgage deed. The High Court dismissed the appeal against the decision, and the appellant appealed to the Privy Council. However, by the time the appeal was filed, Brahmodutt had passed away, and Mohori Bibee, his successor, took his place.
Issue:
- Is the contract void or valid?
- Is the defendant obligated to repay the amount mentioned in the deed?
- Did the deed contravene Sections 2, 10, and 11 of the Indian Contract Act of 1872?
Judgement:
The Privy Council dismissed the appeal and determined that there was no contract between the minor and the adult. The contract that was created or initiated is also deemed null and void under the law since the minor was not eligible to enter into such a mortgage agreement. Consequently, since Dharmodas Gosh was not bound by the obligations outlined in the contract, he cannot be compelled to repay the sum of money that was lent to him.
5. Chinnaya Vs. Ramayya
Court: Madras High Court
Citation: (1882) ILR (1876-82) 4 Mad 137
Year: 1987
Facts:
Initially, an elderly widow was providing financial support to her sister (the plaintiff) from her estate. Subsequently, the elderly woman transferred her property to her daughter (the defendant) through an officially recorded deed of gift. However, this transfer was subject to a condition – the defendant had to pay the plaintiff an annual amount of Rs. 653/-. Both parties agreed to this condition, and the defendant committed to paying the specified amount each year. However, after the elderly woman’s demise, the defendant reneged on her promise to pay the plaintiff the annuity. Consequently, the plaintiff sued the defendant to enforce the agreement and receive the promised annuity.
Issues:
Can the plaintiff sue the defendant for the amount agreed upon in a contract where the consideration was provided by the defendant’s mother (who is also the plaintiff’s sister)?
Judgement:
As per the Court’s ruling, the agreement between the respondent’s mother to gift her the estate and the arrangement to pay the annuity should be considered as a single simultaneous agreement. This is in accordance with the definition and justification of compensation provided by section 2(d) of the Indian Contract Act of 1872. Therefore, the respondent is bound to make the agreed-upon payment since she had given her consent to it while accepting the estate as a gift from her mother.
6. Hyde Vs. Wrench
Court: Rolls Court
Citation: (1840) 49 ER 132
Year: 1840
Facts:
Mr. Wrench, the accused, initially proposed to sell his farm to Mr. Hyde, the complainant, for £1,200 but Mr. Hyde declined the offer. Subsequently, Mr. Wrench made a final offer of selling the property to Mr. Hyde for £1,000 via another letter. In response, Mr. Hyde countered with a letter offering £950 for the land, but Mr. Wrench rejected this offer and reiterated that his prior offer of £1,000 was his final one. Later, Mr. Hyde decided to accept the previous offer of £1,000 to purchase the farm, but Mr. Wrench refused to sell the farm. As a result, Mr. Hyde filed a lawsuit against Mr. Wrench, seeking specific performance of the contract.
Issues:
- whether a valid contract existed between the parties and if any counter offer made during their discussions would render the original offer invalid?
Judgement:
The court dismissed the claims and ruled that there was no legally binding agreement between Mr. Hyde and Mr. Wrench regarding the property. When a counteroffer is presented, it supersedes and replaces the previous offer, rendering it no longer valid. In this case, Mr. Hyde’s initial offer of £1,000 was revoked when he proposed the £950 offer, and he could not retract it and accept the previous offer.
7. Harvey Vs. Facey
Court: Judicial Committee of the Privy Council
Citation: (1893) AC 552
Year: 1893
Facts:
Harvey, who was heading the Jamaican partnership firm, expressed interest in buying a property that was also being negotiated for by Facey with the Kingston City council and mayor. To prevent the property from being sold to the city, Harvey sent a telegram to Facey on October 6, 1893, while Facey was traveling by train. The telegram requested Facey to sell them the Bumper Hall Pen, asking for the lowest cash price, and promising to pay for the reply. Facey responded with the price of £900, which Harvey agreed to, stating that they would buy the property for the amount quoted and requesting Facey to send them the title deed as soon as possible for a quick transfer of ownership. However, Facey had a change of heart and refused to sell the property to Harvey, prompting the latter to sue Facey for breach of contract, arguing that the telegram constituted an offer that he had accepted.
Issues:
- Did Mr. Facey make a clear offer to sell the property to Mr. Harvey for £900, and was this offer capable of being accepted?
- was the contract legally valid?
Judgement:
The Privy Council determined that no contract had been formed between the parties. The initial discussion between them did not amount to an offer that could be accepted, but rather a request for information. Therefore, the telegram sent by Mr. Facey was not a valid offer, but rather a statement of information. It was concluded that Mr. Facey did not make a proposal that could be accepted, and thus there was no contract between them.
8. Hadley Vs. Baxendale
Court: The Court of Exchequer
Citation: (1854) 9 Exch 341
Year: 1854
Facts:
The plaintiff, who owned a mill powered by steam, experienced a broken crankshaft and needed to transport the fractured piece from Gloucester, located in the west of England, to Greenwich, near London. The broken piece was to serve as a model for the creation of a replacement, and due to the plaintiff’s lack of a spare part and the engine’s malfunction, the delivery of the piece was urgent. Consequently, the plaintiff filed a claim against Pickfords, the shipping company responsible for transporting the piece, for the lost profits resulting from the delayed delivery.
Issues:
- Is it possible for the plaintiff to be compensated for lost profits, and can the defendant be held accountable for breaching the contract?
Judgement:
The defendant was granted a favorable ruling by the court, which stated that a party can only seek damages for losses resulting from a breach of contract if the loss was an expected outcome of the breach, or if the parties had reasonable foresight that such losses may occur at the time of contract formation. Baxendale was found not liable for the mill’s lost profits since he had not reasonably anticipated them, and Hadley had not informed him of their possibility.
9. Felthouse Vs. Bindley
Court: Court of Common Pleas
Citation: (1862) EWHC CP J 3
Year: 1862
Facts:
Felthouse and his nephew had discussions regarding the purchase of a horse, but they couldn’t come to an agreement on the price. The uncle made a specific offer to his nephew in January, but no action was taken, as the horse was still in the nephew’s possession. Although the nephew instructed that the horse be reserved, it was sold at an auction along with all of the nephew’s farm stock in February. To recover the horse, Felthouse initiated legal proceedings against the auctioneer, Bindley.
Issues:
- Is there a valid contract between the plaintiff and defendant?
- Is silence or rejection considered as acceptance?
Judgement:
The Court ruled that Paul Felthouse did not have any ownership rights to the horse from the outset since there was no contract that was meant to be accepted. It is the duty of the party accepting the offer to notify the offeror of their acceptance; acceptance cannot be presumed from silence alone. Although the acceptance communication was completed on the initial date of February 27th, the auction had already taken place on February 25th, demonstrating that Felthouse had no intention of purchasing the property.
10. Durga Prasad Vs. Baldeo
Court: Allahbad High Court
Citation: (1881) ILR3ALL221
Year: 1880
Facts:
The complainant requested the district collector to establish various outlets in his locality. The defendant paid rent to those outlets in exchange for their business, and the rent was fixed. Later, the defendant offered the plaintiff a 5 percent commission on all goods he would supply from the shop in return for the plaintiff’s construction of the building at a significant expense. However, the claimant declined to pay the commission, and Durga Prasad filed a lawsuit against the shop owners who refused to pay the commission.
Issues:
- Is the contract valid?
- Is the contract enforceable by law?
Judgement:
The court dismissed the case since there was no prominent and recognized consideration in this case, leading section 2(d) of the Indian Contract Act, 1872, to reject the agreement’s eligibility for recognition as a contract. Section 25 of the Act deems a contract void if there is an absence of consideration. Additionally, the judges determined that there was no possibility of an appeal since the Act clearly specifies that consideration is necessary for a valid contract.