Study Material

Subject : Contracts 1
Prepared by: B.V.S.Suneetha
Assistant Professor
Damodaram Sanjivayya
National Law University
Sabbavaram.
1. Balfour v Balfour [1919] 2 KB 571
2. Merritt v Merritt [1970] 1 WLR 1211
EWCA Civ 11 QB 256
3. Carlil v Carbolic Smoke Ball company
4. Galloway v Galloway (1914) 30 TLR 531
5. Harvey v Facie [1893] UKPC 1
6. Pharmaceutical society v Boots Cash Chemist Ltd 2 WLR 427
7. Lalman Shukla V Gauri Datt 1913 40 ALJ 489
8. Boulton v Jones (1857) 2 H and N 564
9. Ramsgate v Victoria Montefiore (1866) LR 1 Ex 109
10. Henderson v Stevenson (1843) 3 Hare 100
11. Parker v South eastern railway [1877] 2 CPD 416
12. Brogden v Metropolitan Railway Co (1877) 2 AppCas 666
13. Henthorn v Fraser [1892] 2 Ch 27
14. Felthouse v Bindley (1862) EWHC CP J 35
15. Powell v Lee (1908) 99 LT 284
16. Thornton v Shoe lane parking ltd. [1970] EWCA Civ 2
17. Entores v Far Miles East Company [1955] EWCA Civ 3
20. Bhagwandas Goverdhandas Kedia vs. Girdharilal [1965] Insc 171
Parshottamdas & Co. & Ors.
21. Tweedle v Atkinson [1861] EWHC J57 (QB)
22. Chinnaya v Ramayya ILR (1876-82) 4 Mad 137
23. Durgaprasad v Baldeo 1880 3 ALL 221
24. Kedarnath v Gorie Muhammad (1887) ILR 14 Cal 64
25. Shuppu Ammal v K. Subramaniam 4 Ind Cas 1083
26. Khwaja Mohammad Khan v Hussaini Begum (1907) ILR 29 All 222
27. Mohireebibi v Dharmodas Ghose (1903) 30 Cal. 539
28. Leslie v Shiell [1914] 3 KB 607
29. Chikkam Ammiraju v Chikkam Seshamma (1917) 41 Mad 33
30. Derry v Peek [1889] UKHL 1
31. Peek v Gurney [1873] LR 6 HL 377
32. With v O’Flanagan [1936] Ch 575
33. Shri Krishnan v Kurukshetra University AIR 1976 SC 376
34. Mannu singh v Umadatt (1890) 12 All 523
35. Cundy v Lindsay LR 3 App Cas 459
36. Griffith v Brymer 1903 19 T.L.R. 434.
37. Ingram v Little [1961] 1 QB 31
38. Bai Vijili v Nansa Nagur (1886) I.L.R. 10 B. 152

39. Sumitra Devi Agarwal v Sulekha AIR 1976 Cal 196

40. Pearce v Brooks (1865) LR 1 Ex 213
41. Nordenfelt v Nordenfelt [1894] AC 535
42. Sb fraser v Bombay Ice Manufacturing Company (1905)ILR29BOM107

43. Guthing v Lynn (1831) 2 B7 Ad 232

44. Startup v Mcdonald (1843) 6 Mann & G 593
45. Dominion of India v Gaya Pershad AIR 1954 All 747 (A)
46. Caltex v Bhagwan Devi Marodia AIR1969SC405
47. Couturier v Hastie 1856] UKHL J3
48. Taylor v Caldwell [1863] EWHC QB J1
49. Henry v Krell [1903] 2 KB 740
50. Satyabrata Ghosh v Mugneeram 1954 SCR 310
51. Frost v Knight (1872) LR 7 Exch 111
52. Cutter v Powell 101 ER 573
53. Dominion of India v. All India Reporter AIR 1952 Nag 32
54. Hadley v Baxendale [1854] EWHC J70
55. Prema v Ahmed (1987) 1 GLR 462
 she got a decree nisi and in December she
obtained an order for alimony.
INTENTION TO CREATE LEGAL
RELATIONS At first instance, judge Charles Sargant held
that Mr Balfour was under an obligation to
support his wife.
BALFOUR
JUDGMENT
V
The Court of Appeal unanimously held that
BALFOUR there was no enforceable agreement,
although the depth of their reasoning
[1919] 2 KB 571
differed. Warrington LJ delivered his
opinion first, the core part being this
BENCH passage.

WARRINGTON LJ, DUKE LJ AND “The matter really reduces itself to an

ATKIN LJ absurdity when one considers it, because if
we were to hold that there was a contract in
FACTS
this case we should have to hold that with
Mr Balfour was a civil engineer and worked regard to all the more or less trivial
for the Government as the Director of concerns of life where a wife, at the request
Irrigation in Ceylon (now Sri Lanka). Mrs of her husband, makes a promise to him,
Balfour was living with him. In 1915, they that is a promise which can be enforced in
both came back to England during Mr law. All I can say is that there is no such
Balfour's leave. But Mrs Balfour had contract here. These two people never
developed rheumatic arthritis. Her doctor intended to make a bargain which could be
advised her to stay in England, because the enforced in law. The husband expressed his
Ceylon climate would be detrimental to her intention to make this payment, and he
health. Mr Balfour's boat was about to set promised to make it, and was bound in
sail, and he orally promised her £30 a honour to continue it so long as he was in a
month until she came back to Ceylon. They position to do so. The wife on the other
drifted apart, and Mr Balfour wrote saying hand, so far as I can see, made no bargain
it was better that they remain apart. In at all. That is in my opinion sufficient to
March 1918, Mrs Balfour sued him to keep dispose of the case.”
up with the monthly £30 payments. In July
Then Duke LJ gave his. He placed weight of the lady was this: In consideration that
on the fact that the parties had not yet been you will agree to give me 30l. a month I will
divorced, and that the promise had been agree to forego my right to pledge your
made still whilst as husband and wife. credit. In the judgment of the majority of
the Court of Common Pleas in Jolly v Rees
In the Court below the plaintiff conceded
(1864) 15 C. B. (N. S.) 628, which was
that down to the time of her suing in the
affirmed in the decision of Debenham v
Divorce Division there was no separation,
Mellon (1880) 6 App. Cas. 24 Erle C.J.
and that the period of absence was a period
states this proposition: “But taking the law
of absence as between husband and wife
to be, that the power of the wife to charge
living in amity. An agreement for
her husband is in the capacity of his agent,
separation when it is established does
it is a solecism in reasoning to say that she
involve mutual considerations.
derives her authority from his will, and at
That was why in Eastland v Burchell 3 the same time to say that the relation of wife
QBD 432, the agreement for separation was creates the authority against his will, by a
found by the learned judge to have been of presumptio juris et de jure from marriage.”
decisive consequence. But in this case there What is said on the part of the wife in this
was no separation agreement at all. The case is that her arrangement with her
parties were husband and wife, and subject husband that she should assent to that which
to all the conditions, in point of law, was in his discretion to do or not to do was
involved in that relationship. It is the consideration moving from her to her
impossible to say that where the husband. The giving up of that which was
relationship of husband and wife exists, and not a right was not a consideration. The
promises are exchanged, they must be proposition that the mutual promises made
deemed to be promises of a contractual in the ordinary domestic relationship of
nature. In order to establish a contract there husband and wife of necessity give cause
ought to be something more than mere for action on a contract seems to me to go
mutual promises having regard to the to the very root of the relationship, and to
domestic relations of the parties. It is be a possible fruitful source of dissension
required that the obligations arising out of and quarrelling. I cannot see that any
that relationship shall be displaced before benefit would result from it to either of the
either of the parties can found a contract parties, but on the other hand it would lead
upon such promises. The formula which to unlimited litigation in a relationship
was stated in this case to support the claim which should be obviously as far as
possible protected from possibilities of that arrangements which are made between
kind. I think, therefore, that in point of husband and wife. It is quite common, and
principle there is no foundation for the it is the natural and inevitable result of the
claim which is made here, and I am satisfied relationship of husband and wife, that the
that there was no consideration moving two spouses should make arrangements
from the wife to the husband or promise by between themselves - agreements such as
the husband to the wife which was are in dispute in this action - agreements for
sufficient to sustain this action founded on allowances, by which the husband agrees
contract. I think, therefore, that the appeal that he will pay to his wife a certain sum of
must be allowed.” money, per week, or per month, or per year,
to cover either her own expenses or the
Lord Justice Atkin took a different
necessary expenses of the household and of
approach, emphasising that there was no
the children of the marriage, and in which
"intention to effect legal relations". That
the wife promises either expressly or
was so because it was a domestic agreement
impliedly to apply the allowance for the
between husband and wife, and it meant the
purpose for which it is given. To my mind
onus of proof was on the plaintiff, Mrs
those agreements, or many of them, do not
Balfour. She did not rebut the presumption.
result in contracts at all, and they do not
“The defence to this action on the alleged result in contracts even though there may be
contract is that the defendant, the husband, what as between other parties would
entered into no contract with his wife, and constitute consideration for the agreement.
for the determination of that it is necessary The consideration, as we know, may consist
to remember that there are agreements either in some right, interest, profit or
between parties which do not result in benefit accruing to one party, or some
contracts within the meaning of that term in forbearance, detriment, loss or
our law. The ordinary example is where two responsibility given, suffered or undertaken
parties agree to take a walk together, or by the other. That is a well-known
where there is an offer and an acceptance of definition, and it constantly happens, I
hospitality. Nobody would suggest in think, that such arrangements made
ordinary circumstances that those between husband and wife are
agreements result in what we know as a arrangements in which there are mutual
contract, and one of the most usual forms of promises, or in which there is consideration
agreement which does not constitute a in form within the definition that I have
contract appears to me to be the mentioned. Nevertheless they are not
contracts, and they are not contracts affection which counts for so little in these
because the parties did not intend that they cold Courts. The terms may be repudiated,
should be attended by legal consequences. varied or renewed as performance proceeds
To my mind it would be of the worst or as disagreements develop, and the
possible example to hold that agreements principles of the common law as to
such as this resulted in legal obligations exoneration and discharge and accord and
which could be enforced in the Courts. It satisfaction are such as find no place in the
would mean this, that when the husband domestic code. The parties themselves are
makes his wife a promise to give her an advocates, judges, Courts, sheriff's officer
allowance of 30s. or 2l. a week, whatever and reporter. In respect of these promises
he can afford to give her, for the each house is a domain into which the
maintenance of the household and children, King's writ does not seek to run, and to
and she promises so to apply it, not only which his officers do not seek to be
could she sue him for his failure in any admitted. The only question in this case is
week to supply the allowance, but he could whether or not this promise was of such a
sue her for non-performance of the class or not. For the reasons given by my
obligation, express or implied, which she brethren it appears to me to be plainly
had undertaken upon her part. All I can say established that the promise here was not
is that the small Courts of this country intended by either party to be attended by
would have to be multiplied one legal consequences. I think the onus was
hundredfold if these arrangements were upon the plaintiff, and the plaintiff has not
held to result in legal obligations. They are established any contract. The parties were
not sued upon, not because the parties are living together, the wife intending to return.
reluctant to enforce their legal rights when The suggestion is that the husband bound
the agreement is broken, but because the himself to pay 30l. a month under all
parties, in the inception of the arrangement, circumstances, and she bound herself to be
never intended that they should be sued satisfied with that sum under all
upon. Agreements such as these are outside circumstances, and, although she was in ill-
the realm of contracts altogether. The health and alone in this country, that out of
common law does not regulate the form of that sum she undertook to defray the whole
agreements between spouses. Their of the medical expenses that might fall upon
promises are not sealed with seals and her, whatever might be the development of
sealing wax. The consideration that really her illness, and in whatever expenses it
obtains for them is that natural love and might involve her. To my mind neither
party contemplated such a result. I think
that the parol evidence upon which the case
[1970] EWCA Civ 6
turns does not establish a contract. I think
that the letters do not evidence such a [1970] 1 WLR 1211

contract, or amplify the oral evidence which

was given by the wife, which is not in
BENCH
dispute. For these reasons I think the
judgment of the Court below was wrong LORD DENNING J
and that this appeal should be allowed.”
FACTS

Mr Merritt and his wife jointly owned a

house. Mr Merritt left to live with another
woman. They made an agreement (signed)
that Mr Merritt would pay Mrs Merritt a
£40 monthly sum, and eventually transfer
the house to her, if Mrs Merritt kept up the
monthly mortgage payments. When the
mortgage was paid Mr Merritt refused to
transfer the house.

JUDGMENT

The Court of Appeal held that nature of the

dealings, and the fact that the Merritts were
separated when they signed their contract,
allowed the court to assume that their
agreement was more than a domestic
arrangement. Lord Denning MR stated:

“The husband and the wife were married as

long ago as 1941. After the war, in 1949
they got a building plot and built a house. It
was a freehold house, 133 Clayton Road,
MERRITT
Hook, Chessington. It was in the husband’s
V name, with a considerable sum on mortgage
MERRITT with a building society. There they lived
and brought up their three children, two been completed I will agree to transfer the
daughters, now aged 20 and 17, and a boy property in to your sole ownership. Signed.
now 14. The wife went out to work and John B. Merritt 25.5.66.’
contributed to the household expenses.
The wife took that paper away with her. She
Early in 1966 they came to an agreement did, in fact, over the ensuing months pay off
whereby the house was to be put in joint the balance of the mortgage, partly, maybe,
names. That was done. It reflected the legal out of the money the husband gave her, £40
position when a house is acquired by a a month, and partly out of her own earnings.
husband and wife by financial contributions When the mortgage had been paid off, he
of each. But, unfortunately, about that time reduced the £40 a month to £25 a month.
the husband formed an attachment for
The wife asked the husband to transfer the
another woman. He left the house and went
house into her sole ownership. He refused
to live with her. The wife then pressed the
to do so. She brought an action in the
husband for some arrangement to be made
Chancery Division for a declaration that the
for the future. On 25 May, they talked it
house should belong to her and for an order
over in the husband’s car. The husband said
that he should make the conveyance. The
that he would make the wife a monthly
judge, Stamp J, made the order; but the
payment of £40 and told her that out of it
husband now appeals to this court.
she would have to make the outstanding
payments to the building society. There was The first point taken on his behalf by

only £180 outstanding. He handed over the counsel for the husband was that the

building society’s mortgage book to the agreement was not intended to create legal

wife. She was herself going out to work, relations. It was, he says, a family

earning net £7 10s a week. Before she left arrangement such as was considered by the

the car she insisted that he put down in court in Balfour v Balfour and in Jones v

writing a further agreement. It forms the Padavatton. So the wife could not sue on it.

subject of the present action. He wrote these I do not think that those cases have any

words on a piece of paper: application here. The parties there were

living together in amity. In such cases their
‘In consideration of the fact that you will
domestic arrangements are ordinarily not
pay all charges in connection with the house
intended to create legal relations. It is
at 133, Clayton Road, Chessington, Surrey,
altogether different when the parties are not
until such time as the mortgage repayment
living in amity but are separated, or about
has been completed, when the mortgage has
to separate. They then bargain keenly. They Counsel for the husband sought to say that
do not rely on honourable understandings. this agreement was uncertain because of the
They want everything cut and dried. It may arrangement for £40 a month maintenance.
safely be presumed that they intend to That is obviously untenable. Next he said
create legal relations. that there was no consideration for the
agreement. That point is no good. The wife
Counsel for the husband then relied on the
paid the outstanding amount to the building
recent case of Gould v Gould', when the
society. That was ample consideration. It is
parties had separated, and the husband
true that the husband paid her £40 a month
agreed to pay the wife £12 a week ‘so long
which she may have used to pay the
as he could manage it’. The majority of the
building society. But still her act in paying
court thought that those words introduced
was good consideration. Counsel for the
such an element of uncertainty that the
husband took a small point about rates.
agreement was not intended to create legal
There was nothing in it. The rates were
relations. But for that element of
adjusted fairly between the parties
uncertainty, I am sure that the majority
afterwards. Finally, counsel for the husband
would have held the agreement to be
said that, under s 17 of the Married
binding. They did not differ from the
Women’s Property Act 1882, this house
general proposition which I stated ([1969] 3
would be owned by the husband and the
All ER at 730, [1970] 1 QB at 280):
wife jointly; and that, even if this house
‘When … husband and wife, at arm’s were transferred to the wife, she should
length, decide to separate and the husband hold it on trust for them both jointly. There
promises to pay a sum as maintenance to the is nothing in this point either. The paper
wife during the separation, the court does, which the husband signed dealt with the
as a rule, impute to them an intention to beneficial ownership of the house. It was
create legal relations.’ intended to belong entirely to the wife.

In all these cases the court does not try to I find myself in entire agreement with the
discover the intention by looking into the judgment of Stamp J. This appeal should be
minds of the parties. It looks at the situation dismissed
in which they were placed and asks itself:
would reasonable people regard the
agreements as intended to be binding?
 CARLILL £100 reward will be paid by the Carbolic
Smoke Ball Company to any person who
V
contracts the increasing epidemic influenza
CARBOLIC SMOKE BALL colds, or any disease caused by taking cold,
COMPANY after having used the ball three times daily

[1892] EWCA CIV 1 for two weeks, according to the printed

directions supplied with each ball.

£1000 is deposited with the Alliance Bank,

COURT MEMBERSHIP
Regent Street, showing our sincerity in the
JUDGE(S) SITTING matter. During the last epidemic of
influenza many thousand carbolic smoke
LINDLEY LJ, BOWEN LJ AND AL
balls were sold as preventives against this
SMITH LJ
disease, and in no ascertained case was the
FACTS disease contra
The Carbolic Smoke Ball Co. made a
product called the "smoke ball" and claimed
it to be a cure for influenza and a number of
other diseases. (The 1889–1890 flu
pandemic was estimated to have killed 1
million people.) The smoke ball was a
rubber ball with a tube attached. It was cted by those using the carbolic smoke ball.
filled with carbolic acid (or phenol). The One carbolic smoke ball will last a family
tube would be inserted into a user's nose several months, making it the cheapest
and squeezed at the bottom to release the remedy in the world at the price, 10s. post
vapours. The nose would run, ostensibly free. The ball can be refilled at a cost of 5s.
flushing out viral infections. Address: “Carbolic Smoke Ball Company”,

The Company published advertisements in 27, Princes Street, Hanover Square,

the Pall Mall Gazette and other newspapers London.

on November 13, 1891, claiming that it Mrs. Louisa Elizabeth Carlill saw the
would pay £100 (equivalent to £11,000 in advertisement, bought one of the balls and
2018) to anyone who got sick with used it three times daily for nearly two
influenza after using its product according months until she contracted the flu on 17
to the instructions provided with it.
January 1892. She claimed £100 from the (2) that satisfying conditions for using the
Carbolic Smoke Ball Company. They smoke ball constituted acceptance of the
ignored two letters from her husband, a offer
solicitor. On a third request for her reward,
(3) that purchasing or merely using the
they replied with an anonymous letter that
smoke ball constituted good consideration,
if it is used properly the company had
because it was a distinct detriment incurred
complete confidence in the smoke ball's
at the behest of the company and,
efficacy, but "to protect themselves against
furthermore, more people buying smoke
all fraudulent claims", they would need her
balls by relying on the advertisement was a
to come to their office to use the ball each
clear benefit to Carbolic
day and be checked by the secretary. Mrs.
Carlill brought a claim to court. The (4)that the company's claim that £1000 was

barristers representing her argued that the deposited at the Alliance Bank showed the

advertisement and her reliance on it was a serious intention to be legally bound. The

contract between the company and her, so judgments of the court were as follows.

the company ought to pay. The company

argued it was not a serious contract.
Lord Justice Lindley
JUDGMENT
Lindley LJ gave the first judgment on it,
The Carbolic Smoke Ball Company, after running through the facts again. He
represented by H. H. Asquith, lost its makes short shrift of the insurance and
argument at the Queen's Bench. It appealed wagering contract arguments that were
straight away. The Court of Appeal dealt with in the Queen's Bench.
unanimously rejected the company's
“I will begin by referring to two points
arguments and held that there was a fully
which were raised in the Court below. I
binding contract for £100 with Mrs. Carlill.
refer to them simply for the purpose of
Among the reasons given by the three
dismissing them. First, it is said no action
judges were
will lie upon this contract because it is a
(1) that the advertisement was not a policy. You have only to look at the
unilateral offer to all the world but an offer advertisement to dismiss that suggestion.
restricted to those who acted upon the terms
Then it was said that it is a bet. Hawkins, J.,
contained in the advertisement
came to the conclusion that nobody ever
dreamt of a bet, and that the transaction had
nothing whatever in common with a bet. I no insurmountable obstacle. And fifth, the
so entirely agree with him that I pass over nature of Mrs. Carlill's consideration (what
this contention also as not worth serious she gave in return for the offer) was good,
attention. because there is both an advantage in
additional sales in reaction to the
Then, what is left? The first observation I
advertisement and a "distinct
will make is that we are not dealing with
inconvenience" that people go to when
any inference of fact. We are dealing with
using a smoke ball.
an express promise to pay £100. in certain
events. Read the advertisement how you LORD JUSTICE BOWEN
will, and twist it about as you will, here is a
Bowen LJ's opinion was more tightly
distinct promise expressed in language
structured in style and is frequently cited.
which is perfectly unmistakable —
Five main steps in his reasoning can be
“£100. reward will be paid by the Carbolic identified. First, he says that the contract
Smoke Ball Company to any person who was not too vague to be enforced, because
contracts the influenza after having used the it could be interpreted according to what
ball three times daily for two weeks ordinary people would understand by it. He
according to the printed directions supplied differed slightly from Lindley LJ on what
with each ball.” time period one could contract flu and still
have a claim (Lindley LJ said a "reasonable
He follows on with essentially five points.
time" after use, while Bowen LJ said "while
First, the advertisement was not "mere
the smoke ball is used"), but this was not a
puff" as had been alleged by the company,
crucial point, because the fact was that Mrs.
because the deposit of £1000 in the bank
Carlill got flu while using the smoke ball.
evidenced seriousness. Second, the
Second, like Lindley LJ, Bowen LJ says
advertisement was an offer made
that the advert was not mere puff because
specifically to anyone who performed the
£1000 was deposited in the bank to pay
conditions in the advertisement rather than
rewards. Third, he said that although an
a statement "not made with anybody in
offer was made to the whole world, the
particular." Third, communication of
contract was not with the whole world.
acceptance is not necessary for a contract
Therefore, it was not an absurd basis for a
when people's conduct manifests an
contract, because only the people who used
intention to contract. Fourth, that the
it would bind the company. Fourth, he says
vagueness of the advertisement's terms was
that communication is not necessary to
accept the terms of an offer; conduct is and Finding by the trial court that plaintiff wife
should be sufficient. Fifth, good had been gainfully employed prior to her
consideration was clearly given by Mrs. marriage to the defendant and was "able-
Carlill because she went to the bodied, intelligent and capable to find
"inconvenience" of using it, and the employment" was not sufficient to support
company got the benefit of extra sales. the trial court's conclusion that plaintiff was
not a dependent spouse within the meaning
of, as it did not include a finding that the
GALLOWAY plaintiff had a reasonable opportunity to but

V did not adequately support herself.

GALLOWAY William A. Smith, Jr., for plaintiff

appellant.
(1914) 30 TLR 531
The plaintiff instituted this action against
the defendant for alimony pendente lite,
BENCH permanent alimony and attorney's fees by
the filing of a complaint on 21 November
JUDGE MITCHELL.
1977. During the hearing before the trial
court on these matters, the plaintiff
FACTS presented evidence tending to show that she
and the defendant were married to each
The presumption that the husband is the
other on 17 August 1973. During the latter
supporting spouse, and thus by definition
part of 1975, the parties separated and lived
that the wife is the dependent spouse,
apart for approximately one year. They
controls until evidence has been presented
reunited in December of 1976 and moved
tending to show that the wife is not in fact a
their residence to Raleigh. Prior to that
dependent spouse, and the husband has not
time, the plaintiff had been working part-
borne his burden in such cases until he has
time in her parents' motel in Wilson.
offered evidence tending to show that his
Despite her husband's objections, the
wife is neither substantially dependent upon
plaintiff continued to work at the motel in
him for her maintenance and support nor
Wilson after the couple had moved to
substantially in need of maintenance and
Raleigh. She normally worked at the motel
support by him.
from 9:00 a.m. until 3:00 p.m., but about
JUDGEMENT twice every three weeks she was required to
stay at the motel overnight. The plaintiff's The defendant introduced evidence tending
weekly salary during this period ranged to show that he objected to the plaintiff
from $60 to $90 depending upon whether working at the motel during their marriage
she worked on weekends. and asked her to quit working there. He
testified that she often failed to return from
On 27 October 1977 the plaintiff left a
the motel until 6:00 p.m. or 7:00 p.m. and
message for her husband informing him
would at times return as late as 9:00 p.m. In
that she was planning to spend the night at
addition, he testified that she spent the night
the motel in Wilson. The defendant called
at the motel from three to five times a
the plaintiff at about 6:00 p.m. and told her
month during this period.
that he wanted her to come to Raleigh and
take all of her belongings out of the house At the conclusion of the hearing on these
they were occupying. The next day, the matters, the trial court found among other
plaintiff complied with the defendant's things that the defendant had ordered the
request. plaintiff out of their home on 27 October
1977 and had provided no support for the
The plaintiff's evidence further tended to
plaintiff since that time. The trial court also
show that she then moved to her parents'
found that the plaintiff was gainfully
motel in Wilson. She helped with the work
employed prior to the marriage and living
at the motel when she was needed but was
in her own apartment and was, at the time
not paid a regular salary and did not want a
of the hearing, "able-bodied, intelligent and
regular salary. In addition to room and
capable to find employment." The trial
board, however, the plaintiff's mother
court further found that the plaintiff had, at
occasionally gave her money for car
the time of the hearing, no salary other than
payments when she needed such money and
room, board and spending money as
gave her "some spending money." The
provided by her parents and that the
plaintiff testified that she did not have any
defendant had a net income of
regular source of income and that the
approximately $8,400 per year. Based upon
defendant had not provided any support for
its findings, the trial court concluded that
her since their separation. In addition,
the defendant abandoned the plaintiff on 27
evidence was introduced tending to show
October 1977. The Court also concluded
that the defendant had a gross income of
that the plaintiff was not substantially
less than $13,200 per year and a net income
dependent upon the defendant for her
of approximately $8,400 per year.
maintenance and support or in substantial
need of maintenance and support and was need of support by him if she is incapable
not, therefore, a dependent spouse within of adequately providing for herself or is
the intent and meaning of the General capable of adequately providing for herself
Statutes of North Carolina. From the entry but does not have a reasonable opportunity
of judgment reflecting these findings and to do so.
conclusions by the trial court, the plaintiff
Once it is established, however, that the
appealed.
defendant is the plaintiff's husband and that
MITCHELL, Judge. he is capable of supporting her, the
defendant is presumed to be the supporting
Only a dependent spouse is entitled to
spouse provides in part that, "A husband is
alimony or alimony pendente lite. G.S. 50-
deemed to be the supporting spouse unless
16.2 and 16.3. A dependent spouse is by
he is incapable of supporting his wife." This
definition married to a supporting spouse
sentence of the statute establishes a
since a dependent spouse always has a
presumption that a male spouse is the
spouse "upon whom [he or she] is actually
supporting spouse and, conversely, that the
substantially dependent or from whom [he
female is the dependent spouse. The
or she] is substantially in need of
defendant did not seek during the hearing
maintenance and support." Conversely, a
before the trial court, nor has he sought
supporting spouse is by definition married
before this Court, to challenge this
to a dependent spouse. Therefore, a
presumption on the ground that it
determination that one spouse is a
constitutes unconstitutionally gender based
supporting spouse is a determination that
discrimination. Therefore, we are not
the other is a dependent spouse and vice
required to express an opinion here with
versa.
regard to the very substantial constitutional
A dependent spouse is "a spouse, whether questions which would arise should this
husband or wife, who is actually portion of the statute be challenged on
substantially dependent upon the other constitutional grounds.
spouse for his or her maintenance and
The presumption that the husband is the
support or is substantially in need of
supporting spouse, and thus by definition
maintenance and support from the other
that the wife is the dependent spouse,
spouse." A wife is actually substantially
controls until evidence has been presented
dependent upon her husband for her
tending to show that the wife is not in fact a
maintenance and support or in substantial
dependent spouse. The husband has not
borne his burden in such cases until he has wife to adequately support herself might
offered evidence tending to show that his have been shown by introducing evidence,
wife is neither substantially dependent upon if any existed, that the plaintiff did not make
him for her maintenance and support nor reasonable efforts to obtain employment for
substantially in need of maintenance and which she was suited and which was
support by him. G.S. 50-16.1(3). Such available, that she had refused employment
evidence may be presented in the form of opportunities that were available to her, or
evidence tending to show that the wife is in that she had been employed in a manner
fact adequately supporting herself or is which would have adequately supported her
capable of adequately supporting herself but terminated such employment in order to
and has a reasonable opportunity to do so establish her status as a dependent spouse.
but has not sought to support herself. Cf. As the defendant failed to offer sufficient
Conrad v. Conrad, 252 N.C. 412, 113 evidence to overcome the presumption that
S.E.2d 912 (1960) (capacity of supporting the plaintiff was a dependent spouse, the
husband to earn rather than actual earnings trial court erred in concluding in the order
considered in determining amount of appealed from that the plaintiff was not a
alimony); Robinson v. Robinson, 10 N.C. dependent spouse.
App. 463, 179 S.E.2d 144 (1971) (same).
We additionally note that the order
The trial court in the present case found that appealed from was entered more than one
the plaintiff wife had been gainfully year ago and that some change in the
employed prior to her marriage to the conditions of the parties is likely. Further,
defendant and was "able-bodied, intelligent the record on appeal does not reflect any
and capable to find employment." This evidence with regard to the reasonable
finding was not sufficient, however, to value of attorney's fees sought by the
support the trial court's conclusion that the plaintiff. For the reasons previously stated,
plaintiff was not a dependent spouse within the order of the trial court from which the
the meaning of G.S. 50-16.1(3), as it did not plaintiff has appealed will be vacated and
include a finding that the plaintiff had a the cause remanded to the trial court for a
reasonable opportunity to but did not new hearing with regard to the plaintiff's
adequately support herself. application for alimony pendente lite and
counsel fees and for such other actions as
Additionally, the evidence presented would
accord with applicable law and the present
not have supported such a finding.
status of the parties.
Evidence of a reasonable opportunity by the
 reversed the decision. Defendant’s
appealed to the judicial committee of privy
council
INVITATION TO OFFER
ISSUE

Was there an explicit offer from Facey to

HARVEY V FACIE sell the land for $900 to Harvey?

1893 UKPC 1 HOLDING

RULING COURT: No, there was not.

JUDICIAL COMMITTEE OF THE RULE

PRIVY Council
An offer CAN NOT be implied by writing.
FACTS It can only be concrete and sound…The
appellants can’t imply that Facey made an
Letters were written back and forth
offer when he, as a matter of fact, did not
Harvey – Will you sell us bumper hall pen?
make an offer.
Telegraph lowest price -answer paid.
REASONING
Facey – Lowest price for bumper hall is
(from Harvey) 1st question was willingness
$900.
to sell, 2nd question asks the lowest price.
Harvey – We agree to buy bumper hall for
Facey only replied to the second question in
the sum of $900 asked by you.
regard to the price. Harvey treated his
Harvey sued for specific performance of response as an unconditional off to sell
this agreement and for an injunction to them the price named. Only binding aspect
restrain the town of Kingston from taking is the lowest price in regard to a contract
conveyance of the property (Facey was being formed. Agreement could have
previously engaged in negotiations to sell ONLY been legit if Facey responded to the
the land to Kingston) third telegram from Harvey.

PROCEDURAL HISTORY The case involved negotiations over a

property in Jamaica. The defendant, Mr LM
Trial court dismissed the action on the
Facey, had been carrying on negotiations
ground that the agreement did not disclose
with the Mayor and Council of Kingston to
a concluded contract. Appealed by
sell a piece of property to Kingston City. On
plaintiffs, Supreme court of Jamaica
7 October 1893, Facey was traveling on a be accepted. Lord Morris LC gave the
train between Kingston and Porus and the following judgment
appellant, Harvey, who wanted the property
DISPOSITION
to be sold to him rather than to the City, sent
Facey a telegram. It said, "Will you sell us Reversed, judgment to the trial court in

Bumper Hall Pen? Telegraph lowest cash favour of Harvey is restored.

price-answer paid". Facey replied on the

same day: "Lowest price for Bumper Hall
Pen £900." Harvey then replied in the
following words. "We agree to buy Bumper
Hall Pen for the sum of nine hundred
PHARMACEUTICAL SOCIETY OF
pounds asked by you. Please send us your
GB
title deed in order that we may get early
possession." V

Facey, however refused to sell at that price, BOOTS CASH CHEMIST

at which Harvey sued. Harvey had his [1953] 1 All ER 482, [1953] 2 WLR 427
action dismissed at trial but won his claim
on the Court of Appeal, which reversed the
trial court decision, declaring that a binding BENCH
agreement had been proved. The appellants SOMERVELL LJ, BIRKETT LJ AND
obtained leave from the Supreme Court of ROMER LJ
Judicature of Jamaica to appeal to the
FACTS
Queen in Council (i.e. the Privy Council).
The Privy Council reversed the Supreme Boots Cash Chemists had just instituted a
Court's opinion, reinstating the appeals new way for its customers to buy certain
court's decision and stating the reason for its medicines. Shoppers could now pick drugs
action. off the shelves in the chemist and then pay
for them at the till. Before then, all
The Privy Council advised that no contract
medicines were stored behind a counter
existed between the two parties. The first
meaning a shop employee would get what
telegram was simply a request for
was requested. The Pharmaceutical Society
information, so at no stage did the
of Great Britain objected and argued that
defendant make a definite offer that could
under the Pharmacy and Poisons Act 1933,
that was an unlawful practice. Under s completed and both sides bound when the
18(1), a pharmacist needed to supervise at article is put into the receptacle, or is it to
the point where "the sale is effected" when be regarded as a more organised way of
the product was one listed on the 1933 Act's doing what is done already in many types of
schedule of poisons. The Society argued shops — and a bookseller is perhaps the
that displays of goods were an "offer" and best example - namely, enabling customers
when a shopper selected and put the drugs to have free access to what is in the shop to
into their shopping basket, that was an look at the different articles and then,
"acceptance", the point when the "sale is ultimately, having got the ones which they
effected"; as no pharmacist had supervised wish to buy, coming up to the assistant and
the transaction at this point, Boots was in saying "I want this"? The assistant in 999
breach of the Act. Boots argued that the sale times out of 1,000 says "That is all right",
was effected only at the tills. and the money passes and the transaction is
completed. I agree entirely with what the
JUDGMENT
Lord Chief Justice says and the reasons he
Both the Queen's Bench Division of the gives for his conclusion that in the case of
High Court and the Court of Appeal sided the ordinary shop, although goods are
with Boots. They held that the display of displayed and it is intended that customers
goods was not an offer. Rather, by placing should go and choose what they want, the
the goods into the basket, it was the contract is not completed until, the
customer that made the offer to buy the customer having indicated the articles
goods. This offer could be either accepted which he needs, the shop-keeper or
or rejected by the pharmacist at the cash someone on his behalf accepts that offer.
desk. The moment of the completion of Then the contract is completed. I can see no
contract was at the cash desk, in the reason at all, that being I think clearly the
presence of the supervising pharmacist. normal position, for drawing any different
Therefore, there was no violation of the implication as a result of this layout. The
Act. Lord Chief Justice, I think, expressed one of

Somervell LJ said, the most formidable difficulties in the way

of the suggestion when he pointed out that,
“Whether that is a right view depends on
if the Plaintiffs are right, once an article
what are the legal implications of this
has been placed in the receptacle the
layout, the invitation to the customer. Is it
customer himself is bound and he would
to be regarded as an offer which is
have no right without paying for the first
article to substitute an article which he saw there and then takes place, On the other
later of the same kind and which he perhaps hand, it is said the sale does not take place
preferred. I can see no reason for implying until that customer who has placed that
from this arrangement which the package in the basket comes to the exit.
Defendants have referred to any
The Lord Chief Justice dealt with the matter
implication other than that which the Lord
in this way, and I would like to adopt these
Chief Justice found in it, namely, that it is a
words:
convenient method of enabling customers to
see what there is and choose and possibly "It seems to me therefore, applying common

put back and substitute articles which they sense to this class of transaction, there is no

wish to have and then go up to the cashier difference merely because a self-service is

and offers to buy what they have so far advertised. It is no different really from the

chosen. On that conclusion the case fails, normal transaction in a shop. I am quite

because it is admitted that then there was satisfied it would be wrong to say the

supervision in the sense required by the Act shopkeeper is making an offer to sell every

and at the appropriate moment of time. For article in the shop to any person who might

these reasons, in my opinion, the appeal come in and that he can insist by saying 'I

should be dismissed. ” accept your offer'".

Birkett LJ followed on by saying, Then he goes on to deal with the illustration

of the bookshop and continues:
“The short point of the matter was, at what
point of time did the sale in this particular "Therefore, in my opinion, the mere fact

shop at Edgware take place? My Lord has that a customer picks up a bottle of

explained the system which has been medicine from the shelves in this case does

introduced into that shop (and possibly not amount to an acceptance of an offer to

other shops since) in March 1951. The two sell. It is an offer by the customer to buy. I

ladies in this case, Miss Mainwaring and daresay this case is one of great

Miss Marrable, who went into that shop, importance, it is quite a proper case for the

each took a particular package containing Pharmaceutical Society to bring, but I think

poison from the particular shelf, put it into I am bound to say in this case the sale was

their basket, came to the exit and there paid. made under the supervision of a

It is said upon the one hand that when the pharmacist. By using the words 'The sale is

customer takes the package from the poison effected by, or under the supervision of, a

section and puts it into her basket the sale registered pharmacist', it seems to me the
sale might be effected by somebody not a
pharmacist. If it be under the supervision of
a pharmacist, the pharmacist can say 'You
cannot have that. That contains poison'. In OFFER MUST BE COMMUNICATED
this case I decide, first that there is no sale TO THE OFFEREE
effected merely by the purchaser taking up
the article. There is no sale until the buyer's
LALMAN SHUKLA
offer to buy is accepted by the acceptance
of the money, and that takes place under the V
supervision of a pharmacist. And in any
GAURI DATT
case, I think, even if I am wrong in the view
I have taken of when the offer is accepted, 1913 40 ALJ 489
the sale is by or under the supervision of a
pharmacist".
BENCH
I agree with that and I agree that this appeal
BANNERJI J.
ought to be dismissed.
BACKGROUND

Plaintiff was a servant of defendant who

was sent to Hardwar for finding the nephew
of his master, who has absconded from his
house. The servant was able to find the
missing child and he was rewarded with
two sovereigns and Rs. 20. Later on after 6
months when he was dismissed from his
work he brought a suit against his masters
claiming Rs. 499 for the reward offered by
plaintiff under the hand bills issued by him.

An appeal is filed against the order of

subordinate court in the High Court of
Allahabad in order to provide claim of Rs.
49 to the appellant.

Statutes and provisions involved:

§ 2 (h), and 8 of Indian Contracts Act, 1872 master of not providing reward for the
specific performance of his promise.
Issues Dealt:
CONTENTIONS OF BOTH THE
1. Whether the claim of Rs. 499 should be
PARTIES
provided to the appellant or not?
PETITIONERS
2. Whether subordinate court’s decision
was according to the general principles of The petitioners strongly contended that
law or not? performance of an act is sufficient for
providing rewards attached with such
FACTS
performance. They stated that it is
In the January, 1913 defendant’s nephew immaterial that whether person performing
has absconded from his house and in order the act has knowledge of rewards
to find his nephew he sent all his servants to associated with it or not. He also argued that
different parts, so that he can be traced at § 8 of the Indian Contracts Act, 1872 states
his position. Defendant was among those that performance of a condition of proposal
several servants who were sent for the is an acceptance of proposal and in the
search of master’s child. He was sent to present case the condition was that the
Hardwar from Cawnpore and there he was person who will find the missing child will
able to trace the child and for this be rewarded and thus as per this provision
accomplishment he was awarded with two he has fulfilled the condition, hence
sovereigns and Rs. 20 when he returned to plaintiff is entitled to claim reward.
Cawnpore. In the meantime when plaintiff
RESPONDENTS
was at the search of child defendant issued
a hand bill offering reward of Rs. 501 to the It was contended by the respondents that
person who traces the missing child and there must be an acceptance to offer in order
defendant was totally ignorant of this to convert it into a contract and assent is the
reward. basic essential in order to constitute a
contract. At the time he was tracing the boy
he was unaware about this reward
Later on after 6 months of this incident associated with child, so without
plaintiff brought a suit against his master knowledge how can it create a contract
claiming Rs. 499 stating that the master had between parties.
promised to the person who will find the
missing child a reward. He alleged his
It was also argued by them that at the time knowledge about the proposal and without
of tracing the missing child he was acting as knowledge of the proposal it cannot
a servant and thus fulfilling the converted into agreement even if condition
responsibilities and obligations for which associated with such proposal is fulfilled.
he was sent to Hardwar from Cawnpore.

JUDGMENT
BOULTON
It was held by the Honorable Court that
V
knowledge and assent about a proposal is
must in order to convert a proposal into JONES

enforceable agreement and in the present {1857} 2H AND N564

case plaintiff was neither aware nor has
assent about the particular act. It was also
said by the Honorable Judge that plaintiff BENCH
was merely fulfilling his obligations at the
POLLOCK CB
time when he was tracing the boy.
BRAMWELL B
So, the appeal was dismissed and it was
held that plaintiff was not entitled to claim
reward for finding the missing boy. In this FACTS
case it was highlighted by the Honorable
This case is based on the offer made to a
High Court of Allahabad that knowledge
particular person. In Contract Law, an offer
and acceptance of a proposal are the basic
is a promise in exchange for performance
essentials in order to constitute a valid
by other party. An offer can be revoked or
contract. If the person gives his assent and
terminated under certain conditions.
then performs the condition of proposal
than only he is entitled to claim rewards KINDS OF OFFER
associated with such proposal. There are two kinds of offer which are as
CONCLUSION follows:-

It can be concluded that through this case it GENERAL OFFER – General offer is
was clearly established that firstly, made to the public at large. It may be
acceptance or assent is a must for accepted by any person who fulfills the
converting a proposal into enforceable necessary conditions.
contract. Secondly, parties must have
SPECIFIC OFFER – Specific offer is made The court held that the defendant i.e. Jones
to a particular person. No right of action was not liable for the price. When a
accrues to persons other than those to whom Contract is made for the identity of the
the offer is made. person is important to the Contract. Hence,
there was no Contract. “POLLOCK” said
FACTS
that the rule of law is clear, that if you
The defendant i.e. Jones sent a written order propose to make a contract with A, then B
for goods to a shop which is owned by cannot substitute himself for A without
Brocklehurst and which was addressed to your consent and to your disadvantage,
him by name. Unknown to the defendant, securing to himself all the benefit of the
Brocklehurst had earlier that day sold and contract.
transferred his business to Boulton.But
“MARTIN B” said that where the facts
Boulton fulfilled the order and delivered the
prove that the defendant never meant to
goods to the defendant without notifying
contract with A alone, B can never force a
him that he had taken over the business. The
contract upon him, he was dealt with A, and
defendant accepted the goods and
a contract with no one else can be set up
consumed them in the belief that they had
against him.
been supplied by Brocklehurst. When he
received Boulton’s invoice he refused to “BRAMWELL B” said that I do not lay it
pay it claimimg that he had intended to deal down because a contract was made in one
with Brocklehurst personally, since he had person’s name another person cannot sue
dealt with them previously and had a set-off upon it, except in cases of agency.
on which he had intended to rely.
“CHANNELL B” said that the plaintiff is
ISSUES clearly not in a situation to sustain this
action, for there was no contract between
1 Is whether Jones is liable to pay Boulton?
himself and the defendant. The case is not
2 Is it the duty of the Brocklehurst or one of Principal and agent; it was a contract
Boulton to inform about the takeover of the made with B, who had transactions with the
business to Jones? defendant and owed him money, and upon

3 Can Boulton claim the amount of the which A seeks to sue.” So, the Jones will

goods which was used by the Jones? not be liable to pay {Section 64 will also
apply} which talks about rescissions of a
JUDGEMENT
voidable contract.
COMMENT action for their price. But since the plaintiff
has chosen to sue, the only course the
Originally the contract is between
defendants could take was to plead that
Brocklehurst and Jones has no idea that
there was no contract with him.
now the business is taken over by the
Boulton. Jones assumed that he placed an Bramwell B
order to Brocklehurst which is the original
The admitted facts are, that the defendants
party to the contract but not to the Boulton.
sent to a shop an order for goods, supposing
Only the person to whom the offer is made they were dealing with Brocklehurst. The
can acceptit. No other party can accept on plaintiff, who supplied the goods, did not
behalf of the either party. According to me undeceive them. If the plaintiff were now at
the judgement which is given in this case is liberty to sue the defendants, they would be
right according to the facts of the case. deprived of their right of set-off as against
Brocklehurst. When a contract is made, in
Acceptance is only made by that person to
which the personality of the contracting
whom it is given. For example- Contract to
party is or may be of importance, as a
write a book or perform a concert, paint a
contract with a man to write a book, or the
portrait then no other person can adopt the
like, or where there might be a set-off, no
contract.
other person can interpose and adopt the
Pollock CB contract. As to the difficulty that the

The point raised is, whether the facts defendants need not pay anybody, I do not

proved did no shew an intention on the part see why they should, unless they have made

of the defendants to deal with Brocklehurst. a contract either express or implied. I

The plaintiff, who succeeded Brocklehurst decide the case on the ground that the

in business, executed the order without any defendants did not know that the plaintiff

intimation of the change that had taken was the person who supplied the goods, and

place, and brought this action to recover the that allowing the plaintiff to treat the

price of the goods supplied. It is a rule of contract as made with him would be a

law, that if a person intends to contract with prejudice to the defendants.

A, B. cannot give himself any right under it.

Here the order in writing was given to
Brocklehurst. Possibly Brocklehurst might
have adopted the act of the plaintiff in
supplying the goods, and maintained an
 Lapse of time occurring upon the expiration
of the time prescribed in the proposal for its
REVOCATION OF OFFER,
acceptance. Therefore, the issue in the case
IMPORTANCE OF TIME IN A
was that there was no specific time limit for
CONTRACT
the acceptance of the offer given by the
defended by the company.

By the lapse of a reasonable time, in the

above case the acceptance was
RAMSGATE VICTORIA HOTEL
communicated after a reasonable or
V
practiced time. The issue in the case is
MONTEFIORE based on the lapse of a reasonable time
since there was no specific time was
FACTS
assigned for the acceptance.
In this case defended who applied to buy
JUDGMENT
shares in the company in June and also paid
a deposit into the company account. So, the Based on the nature of a proposal, once
offer was not accepted in a reasonable time communicated, remains open until it lapses
by the company. The acceptance took place or is withdrawn. Under normal
in November and the company informed circumstances, there is no obligation for the
the defendant that shares had been allotted proposer to keep his proposal open
to him and that the balance of the purchase indefinitely.
price should be paid. But at that time the
He may revoke it at any time before
value of the shares was less and the
acceptance. Furthermore, one of the
defendant refused to accept the shares and
conditions that automatically revoke the
the court held the refusal justified because
proposal is the lapse of time either specified
such a proposal should have been accepted
or reasonable time limits. As in the above
within a reasonable time. The period
case the court accepted and judged against
between June and November was clearly
the plaintiff because no specific time was
not reasonable.
prescribed by the company and they did not
communicated their acceptance within a
reasonable time limit.
Issues: The issues in the above case deal
with: Revocation of offer by lapse of time The offer lapsed after the reasonable time
and provides for two situations: not because this must be implied in the offer
but because failure to accept the offer conclude the contract with the second party.
within a reasonable time. And in the case, two possible situations
could be seen;
Moreover, the proposer at the beginning
when he was submitting his application 1. Where an offer is stated to be open
forms to be allotted shares did not allow for a specific length of time in
such a long period of time and as a result he which the time would be prescribed
was winner of the case and the court either by the proposer or by the
accepted his refusal to pay the share price acceptor. So, when the acceptance is
when the acceptance was communicated to not given or communicated during
him. Lesson learned: Firstly, from the the specified time the proposal is
above case I have learned that an offer can revoked.
be made from any party in the contract.
2. Where an offer is stated to be open
It is not necessarily or compulsory that the for a reasonable length of time in
offer should come from the party who ones which the chance for acceptance
the object consideration. As, in the above open utile the lapse of the
case the offer comes from the buyer of the reasonable time. The reasonable
shares which are owned and to be allotted time is based on the nature and the
by the company. Secondly, I have learned custom of the business which
about the revocation of an offer in which the determines for how long the door
proposer can claim that the offer is revoked. for the acceptance is open or what is
Based on this case the revocation was made the range of time that is acceptable
based on the lapse of a reasonable time for giving the acceptance after the
which is accepted by both parties. proposal is communicated.

Although the plaintiff which sued the

defendant in the court but because of the
lapse of a reasonable time the court judge
against the plaintiff because they didn’t
have an specific time prescribed for the
acceptance and also the reasonable time
was lapsed. To conclude my learning from
the case: The communication of proposal
can be from any party who wants to
 filed the documents and did nothing more.
For a while, both acted according to the
ACCEPTANCE
agreement document's terms. But then
some more serious disagreements arose,
and Brogden argued that there had been no
formal contract actually established.
BROGDEN

V
JUDGMENT
METROPOLITAN RAILWAY
The House of Lords (The Lord Chancellor,
COMPANY
Lord Cairns, Lord Hatherley, Lord
(1876–77) L.R. 2 APP. CAS. 666
Selborne, Lord Blackburn, and Lord
Gordon) held that a contract had arisen by
conduct and Brogden had been in clear
COURT
breach, so he must be liable. The word
JUDICIAL COMMITTEE OF THE "approved" on the document with
HOUSE OF LORDS Brogden's name was binding on all the

FACTS partners, since Brogden was the chief

partner, even though the standard signature
Mr Brogden, the chief of a partnership of
of “B. & Sons” was not used. A mere
three, had supplied the Metropolitan
mental assent to the agreement's terms
Railway Company with coals for a number
would not have been enough, but having
of years. Brogden then suggested that a
acted on the terms made it so. Lord
formal contract should be entered into
Blackburn also held that the onus of
between them for longer term coal supply.
showing that both parties had acted on the
Each side's agents met together and
terms of an agreement which written
negotiated. Metropolitan's agents drew up
agreement had not been, in due format,
some terms of agreement and sent them to
executed by either, lies upon person
Brogden. Brogden wrote in some parts
alleging such facts. A key extract from Lord
which had been left blank and inserted an
Blackburn's judgment [Lord Blackburn was
arbitrator who would decide upon
one of the most distinguished judges of his
differences which might arise. He wrote
time]:
"approved" at the end and sent back the
agreement documents. Metropolitan's agent
“I have always believed the law to be this, drawer, completes a contract, I must say I
that when an offer is made to another party, differ from that. It appears from the Year
and in that offer there is a request express Books that as long ago as the time of
or implied that he must signify his Edward IV, Chief Justice Brian decided this
acceptance by doing some particular thing, very point. The plea of the Defendant in that
then as soon as he does that thing, he is case justified the seizing of some growing
bound. If a man sent an offer abroad saying: crops because he said the Plaintiff had
I wish to know whether you will supply me offered him to go and look at them, and if
with goods at such and such a price, and, if he liked them, and would give 2s. 6d. for
you agree to that, you must ship the first them, he might take them; that was the
cargo as soon as you get this letter, there can justification. That case is referred to in a
be no doubt that as soon as the cargo was book which I published a good many years
shipped .the contract would be complete, ago, Blackburn on Contracts of Sale, and is
and if the cargo went to the bottom of the there translated. Brian gives a very
sea, it would go to the bottom of the sea at elaborate judgment, explaining the law of
the risk of the orderer. So again, where, as the unpaid vendor's lien, as early as that
in the case of Ex parte Harris, a person time, exactly as the law now stands, and he
writes a letter and says, I offer to take an consequently says: “This plea is clearly
allotment of shares, and he expressly or bad, as you have not shewn the payment or
impliedly says, If you agree with me send the tender of the money;” but he goes
an answer by the post, there, as soon as he farther, and says (I am quoting from
has sent that answer by the post, and put it memory, but I think I am quoting correctly),
out of his control, and done an extraneous moreover, your plea is utterly naught, for it
act which clenches the matter, and shews does not shew that when you had made up
beyond all doubt that each side is bound, I your mind to take them you signified it to
agree the contract is perfectly plain and the Plaintiff, and your having it in your own
clear.” mind is nothing, for it is trite law that the
thought of man is not triable, for even the
But when you come to the general
devil does not know what the thought of
proposition which Mr. Justice Brett seems
man is; but I grant you this, that if in his
to have laid down, that a simple acceptance
offer to you he had said, Go and look at
in your own mind, without any intimation
them, and if you are pleased with them
to the other party, and expressed by a mere
signify it to such and such a man, and if you
private act, such as putting a letter into a
had signified it to such and such a man, your
plea would have been good, because that contemplated that they were to exchange
was a matter of fact. agreements, so that each side should be
perfectly safe and secure, knowing that the
I take it, my Lords, that that, which was said
other side was bound. But, although that
300 years ago and more, is the law to this
was what each party contemplated, still I
day, and it is quite what Lord Justice
agree (I think the Lord Chief Justice
Mellish in Ex parte Harris accurately says,
Cockburn states it clearly enough), that if a
that where it is expressly or impliedly stated
draft having been prepared and agreed upon
in the offer that you may accept the offer by
as the basis of a deed or contract to be
posting a letter, the moment you post the
executed between two parties, the parties,
letter the offer is accepted. You are bound
without waiting for the execution of the
from the moment you post the letter, not, as
more formal instrument, proceed to act
it is put here, from the moment you make
upon the draft, and treat it as binding upon
up your mind on the subject.
them, both parties will be bound by it. But
But my Lords, while, as I say, this is so it must be clear that the parties have both
upon the question of law, it is still necessary waived the execution of the formal
to consider this case farther upon the instrument and have agreed expressly, or as
question of fact. I agree, and I think every shewn by their conduct, to act on the
Judge who has considered the case does informal one. I think that is quite right, and
agree, certainly Lord Chief Justice I agree with the way in which Mr. Herschell
Cockburn does, that though the parties may in his argument stated it, very truly and
have gone no farther than an offer on the fairly. If the parties have by their conduct
one side, saying, Here is the draft,—(for said, that they act upon the draft which has
that I think is really what this case comes been approved of by Mr. Brogden, and
to,)—and the draft so offered by the one which if not quite approved of by the
side is approved by the other, everything railway company, has been exceedingly
being agreed to except the name of the near it, if they indicate by their conduct that
arbitrator, which the one side has filled in they accept it, the contract is binding.
and the other has not yet assented to, if both
parties have acted upon that draft and
treated it as binding, they will be bound by
it. When they had come so near as I have
said, still it remained to execute formal
agreements, and the parties evidently
 person who makes it; as against the person
to whom it is made, when it comes to his
POSTAL RULE
knowledge. Illustrations

(a) A proposes, by letter, to sell a house to

HENTHORN B at a certain price. (a) A proposes, by
letter, to sell a house to B at a certain
V
price." The communication of the proposal
FRASER
is complete when B receives the letter. The
communication of the proposal is complete
when B receives the letter."
2 CH 27
(b) B accepts A’s proposal by a letter sent
by post. (b) B accepts A’s proposal by a
BENCH letter sent by post." The communication of

LORD HERSCHELL the acceptance is complete, The

communication of the acceptance is
4. Communication when complete.—The
complete," as against A when the letter is
communication of a proposal is complete
posted; as against A when the letter is
when it comes to the knowledge of the
posted;" as against B, when the letter is
person to whom it is made. —The
received by A. as against B, when the letter
communication of a proposal is complete
is received by A."
when it comes to the knowledge of the
person to whom it is made." The (c) A revokes his proposal by telegram. (c)

communication of an acceptance is A revokes his proposal by telegram." The

complete,— as against the proposer, when revocation is complete as against A when

it is put in a course of transmission to him the telegram is despatched. The revocation

so as to be out of the power of the acceptor; is complete as against A when the telegram

as against the acceptor, when it comes to is despatched." It is complete as against B

the knowledge of the proposer. The when B receives it. It is complete as against

communication of a revocation is B when B receives it." B revokes his

complete,— as against the person who acceptance by telegram. B’s revocation is

makes it, when it is put into a course of complete as against B when the telegram is

transmission to the person to whom it is despatched, and as against A when it

made, so as to be out of the power of the reaches him. B revokes his acceptance by
telegram. B’s revocation is complete as The case is based on a line of decision
against B when the telegram is despatched, starting with Adams v Lindsell (1818),
and as against A when it reaches him." according to which the acceptance was
valid at the time of posting. The importance
FACTS
of this decision's ratio is that a postal
The defendant and the claimant were acceptance will only be valid at the time of
situated at Liverpool and Birkenhead posting if it is reasonable for the offeror to
respectively. The defendant called at the expect an acceptance by post. The fact that
office of the claimant in order to negotiate both parties were living in different towns
the purchase of some houses. The defendant justifies the inference that both parties had
handed the claimant a note giving him the contemplated that a letter sent by post was
option to purchase some houses within 14 a mode by which acceptance might be
days. On the next day, the defendant communicated
withdrew the offer by post, but his
withdrawal did not reach the claimant until
5 P.M. Meanwhile, the claimant responded
by post with an unconditional acceptance of
the offer, which was delivered to the
defendant after its office had closed. The
letter was opened by the defendant the next
morning.

JUDGEMENT

The Court of Appeal ordered that the

claimant was entitled to specific
performance. Lord Herschell argued:
"Where the circumstances are such that it
must have been within the contemplation of
the parties that, according to ordinary usage
of mankind, the post might be used as a
means of communicating the acceptance of
an offer, the acceptance is complete as soon
as it is posted."

SIGNIFICANCE
 to communicate such proposal, acceptance
or revocation, or which has the effect of
communicating it. —The communication of
MERE SILENCE IS NOT proposals, the acceptance of proposals, and
ACCEPTANCE the revocation of proposals and
acceptances, respectively, are deemed to be
made by any act or omission of the party
FELTHOUSE
proposing, accepting or revoking, by which
V he intends to communicate such proposal,
acceptance or revocation, or which has the
BINDLEY
effect of communicating it."

FACTS
(1862) 11 CB (NS) 869; [1862] EWHC
Paul Felthouse was a builder who lived in
CP J35; 142 ER 1037
London. He wanted to buy a horse from his
nephew, John Felthouse. After a letter from

BENCH the nephew concerning a discussion about

buying the horse, the uncle replied saying,
WILLES J, BYLES J
"If I hear no more about him, I consider the
KEATING J
horse mine at £30.15s."
Section 2(b) of Contract Act 1872- When
The nephew did not reply. He was busy at
the person to whom the proposal is made
auctions on his farm in Tamworth. He told
signifies his assent thereto, the proposal is
the man running the auctions, William
said to be accepted. A proposal, when
Bindley, not to sell the horse. But by
accepted, becomes a promise.
accident, Bindley did. Uncle Felthouse then
3. Communication, acceptance and sued Bindley in the tort of conversion -
revocation of proposals.—The using someone else's property
communication of proposals, the inconsistently with their rights. But for the
acceptance of proposals, and the Uncle to show the horse was his property,
revocation of proposals and acceptances, he had to show there was a valid contract.
respectively, are deemed to be made by any Bindley argued there was not, since the
act or omission of the party proposing, nephew had never communicated his
accepting or revoking, by which he intends acceptance of the uncle's offer.
JUDGMENT bargain at that time. On the 1st of January,
1861, the nephew writes,
The court ruled that Felthouse did not have
ownership of the horse as there was no "I saw my father on Saturday. He told me
acceptance of the contract. Acceptance that you considered you had bought the
must be communicated clearly and cannot horse for £30. If so, you are labouring under
be imposed due to silence of one of the a mistake, for 30 guineas was the price I put
parties. The uncle had no right to impose a upon him, and you never heard me say less.
sale through silence whereby the contract When you said you would have him, I
would only fail by repudiation. Though the considered you were aware of the price."
nephew expressed interest in completing
To this the uncle replies on the following
the sale there was no communication of that
day,
intention until before the horse was sold at
auction on 25 February. The nephew's letter "Your price, I admit, was 30 guineas. I

of 27 February which was submitted as offered £30.; never offered more: and you

evidence by Felthouse was judged to be the said the horse was mine. However, as there

first instance of communication where the may be a mistake about him, I will split the

acceptance was communicated to the difference. If I hear no more about him, I

offeror (Felthouse).And by this time, the consider the horse mine at £30 and 15s."

horse had already been sold. Accordingly It is clear that there was no complete
Felthouse had no interest in the property. bargain on the 2nd of January: and it is also

Willes J delivered the lead judgment. clear that the uncle had no right to impose
upon the nephew a sale of his horse for £30
“I am of opinion that the rule to enter a
and 15s. unless he chose to comply with the
nonsuit should be made absolute. The horse
condition of writing to repudiate the offer.
in question had belonged to the plaintiff's
The nephew might, no doubt, have bound
nephew, John Felthouse. In December,
his uncle to the bargain by writing to him:
1860, a conversation took place between
the uncle might also have retracted his offer
the plaintiff and his nephew relative to the
at any time before acceptance. It stood an
purchase of the horse by the former. The
open offer: and so things remained until the
uncle seems to have thought that he had on
25th of February, when the nephew was
that occasion bought the horse for £30, the
about to sell his farming stock by auction.
nephew said that he had sold it for 30
The horse in question being catalogued
guineas, but there was clearly no complete
with the rest of the stock, the auctioneer (the
defendant) was told that it was already sold. February, and that the letter of the 27th was
It is clear, therefore, that the nephew in his a mere expression of the terms of that prior
own mind intended his uncle to have the bargain, and not a bargain then for the first
horse at the price which he (the uncle) had time concluded, it would be directly
named, £30 and 15s.: but he had not contrary to the decision of the court of
communicated such his intention to his Exchequer in Stockdale v. Dunlop to hold
uncle, or done anything to bind himself. that that acceptance had relation back to the
Nothing, therefore, had been done to vest previous offer so as to bind third persons in
the property in the horse in the plaintiff respect of a dealing with the property by
down to the 25th of February, when the them in the interim. In that case, Messrs. H.
horse was sold by the defendant. It appears & Co., being the owners of two ships, called
to me that, independently of the subsequent the " Antelope" and the "Maria," trading to
letters, there had been no bargain to pass the the coast of Africa, and which were then
property in the horse to the plaintiff, and expected to arrive in Liverpool with
therefore that he had no right to complain of cargoes of palm-oil, agreed verbally to sell
the sale. the plaintiffs two hundred tons of oil,- one
hundred tons to arrive by the "Antelope,"
Then, what is the effect of the subsequent
and one hundred tons by the "Maria." The
correspondence? The letter of the
"Antelope" did afterwards arrive with one
auctioneer amounts to nothing. The more
hundred -tons of oil on board, which were
important letter is that of the nephew, of the
delivered by H. & Co. to the plaintiffs. The
27th of February, which is relied on as
"Maria," having fifty tons of oil on board,
shewing that he intended to accept and did
was lost by perils of the sea. The plaintiffs
accept the terms offered by his uncle's letter
having insured the oil on board the "Maria,"
of the 2nd of January. That letter, however,
together with their expected profits thereon,
may be treated either as an acceptance then
it was held that they had no insurable
for the first time made by him, or as a
interest, as the contract they had entered
memorandum of a bargain complete before
into with H. & Co., being verbal only, was
the 25th of February, sufficient within the
incapable of being enforced.
statute of frauds. It seems to me that the
former is the more likely construction: and, Byles J
if so, it is clear that the plaintiff cannot
I am of the same opinion, and have nothing
recover. But, assuming that there had been
to add to what has fallen from my Brother
a complete parol bargain before the 25th of
Willes.
Keating J

I am of the same opinion. Had the question POWELL

arisen as between the uncle and the nephew,
V
there would probably have been some
difficulty. But, as between the uncle and the LEE

auctioneer, the only question we have to 257 S.W. 308 (TEX. CIV. APP. 1923),
consider is whether the horse was the
99 LT 284
property of the plaintiff at the time of the
sale on the 25th of February. It seems to me
that nothing had been done at that time to
BENCH
pass the property out of the nephew and vest
it in the plaintiff. A proposal had been KING’S BENCH DIVISION

made, but there had before that day been no Section 2(b) of Contract Act 1872- When
acceptance binding the nephew. the person to whom the proposal is made
signifies his assent thereto, the proposal is
Willes J.
said to be accepted. A proposal, when
Coats v. Chaplin is an authority to shew that
accepted, becomes a promise
John Felthouse might have had a remedy
3. Communication, acceptance and
against the auctioneer. There, the traveller
revocation of proposals.—The
of Morrisons, tradesmen in London,
communication of proposals, the
verbally ordered goods for Morrisons of the
acceptance of proposals, and the
plaintiffs, manufacturers at Paisley. No
revocation of proposals and acceptances,
order was given as to sending the goods.
respectively, are deemed to be made by any
The plaintiffs gave them to the defendants,
act or omission of the party proposing,
carriers, directed to Morrisons, to be taken
accepting or revoking, by which he intends
to them, and also sent an invoice by post to
to communicate such proposal, acceptance
Morrisons, who received it. The goods
or revocation, or which has the effect of
having been lost by the defendants'
communicating it. —The communication of
negligence, and not delivered to Morrisons,
proposals, the acceptance of proposals, and
it was held that the defendants were liable
the revocation of proposals and
to the plaintiffs.
acceptances, respectively, are deemed to be
made by any act or omission of the party
proposing, accepting or revoking, by which
he intends to communicate such proposal, before a special judge, the appellee being
acceptance or revocation, or which has the the regular county judge, and Judgment
effect of communicating it." again rendered for defendant. From this
judgment plaintiff appeals.

Opinion.
FACTS
Appellant only has one assignment of error,
Appellant, as plaintiff below, sued Appellee
which is multiplicitous. In this assignment
on April 25, 1922, in the justice court, on a
it sets up all the alleged errors of which it
written order signed by appellee, for a set of
complains, and under it sets out eight
law books, entitled "Standard Encyclopedia
propositions. Only a part of these are
of Procedure." This order was dated May
propositions of law, and these so mixed
23, 1916. The order called for delivery of
with argument as to be difficult of
the books as published at $6.50 per volume,
ascertainment. Its brief does not comply
all volumes in excess of 26 to be furnished
with the rules, but we have, nevertheless,
free, and provided payment of $8 on
considered the salient points raised. There
September 1, 1916, and $3 per month for
is an agreed statement of facts, but no
the remainder, with privilege of paying $9
findings of fact nor conclusions of law
each three months. Appellee defended on
made by the trial court. Nor is it made to
three grounds, as follows: First, that the
appear that any such were requested. Only
order was procured through fraud; second,
one witness, the appellee, testified, all other
failure of consideration; and, third, the
evidence being documentary.
statutes of limitation. Appellant, by
supplemental petition, pleaded waiver by
appellee on any question of fraud or failure
JUDGEMENT
of consideration, and that appellee had
tolled the statute of limitation by a renewed We think appellee's testimony clearly

written promise to pay in a letter to establishes his pleas of fraud and limitation

appellant, dated May 30, 1917, all of which unless same were defeated by his letter to

supplemental pleadings were properly appellant, dated May 30, 1917. This letter

excepted to and denied by appellee. The as shown in the record, and omitting the

case was tried before the justice of the peace parts not pertinent to our inquiry, contained

and judgment rendered for defendant. On the following language:

appeal to the county court, it was tried

"I want to make you the proposition to pay sufficient evidence to authorize the trial
you $25.00 and reship you the books, and I court in finding that appellant accepted
will pay freight on same. The books are in appellee's offer of compromise and that it
as good condition as when I opened them, could not, therefore, sue upon the original
for the reason that they are not suited to my contract. This would sustain a judgment
practice and therefore have not been used. against appellant.

"I am inclosing you my check for $10.00. If If the trial court did in fact find that the
you will accept my proposition I will order sued upon was supplanted by a
immediately send you the other $15.00. If compromise between the parties on May
you do not accept this, then I will pay you 30, 1917, inasmuch the suit was not filed
for the books as I can. At any rate do not until April 25, 1922, nearly five years later,
ship me any more of the books, I cannot use we think he could also have found for the
them." appellee on his plea of limitation even as
applied to the new agreement, which would
It appears that when this letter was written
also support his judgment.
appellee had paid nothing on the books and
that, due to failure to pay the installments Appellant contends, however, that
called for in the order, the appellant had appellee's letter was not a compromise
exercised its option, provided for in the offer, but a renewed promise to pay for the
order, of declaring the full amount due, and books, in the following language of his
had demanded payment in full. Appellee letter: "If you do not accept this, then I will
testified that it was in response to threats to pay for the books as I can" — and urges that
sue him made in letters of appellant that he this defeats his plea of limitation. In order
wrote the letter above quoted from, and that for a new promise to pay to toll the statutes
such offer was made only as a compromise. of limitation it must contain an unqualified
This is not denied nor contradicted by admission of a just subsisting indebtedness
appellant. The undisputed testimony shows and express a willingness to pay it. Krueger
that appellant did not ship any more books v. Krueger, 76 Tex. 178, 12 S.W. 1004, 7
to appellee, that it kept the $10 sent, and L.R.A. 72. In the instant case, neither the
that it sent the local expressman for the amount of the debt nor that it is just appears
books to be reshipped to it. He declined to to have been admitted by appellee in said
receive same from appellee because not letter, and his promise to pay is expressly
properly boxed, but we think this contingent upon his ability to pay. Being, to
immaterial. We think that there was that extent at least, a conditional promise to
pay, the burden was cast upon the plaintiff,
if it depended upon such new promise, to
prove that appellee was in fact able to pay
within such time as would stop the running STANDARD FORM OF CONTRACT
of the statute of limitation against it. Lange
v. Caruthers, 70 Tex. 718, 8 S.W. 604. A
HENDERSON
finding of the trial court against the
appellant on this issue would likewise V
support a judgment against it.
STEVENSON
We have taken occasion in this opinion to
[1873] SLR 1198
set out some of the issues on which the trial
court, under the evidence, could have found
against the appellant. It is not the province FACTS
of this court to pass upon the weight of
Plaintiff bought a steamer ticket. Which
testimony. There being evidence to support
contained on the face, words “Dublin to
the judgment of the trial court, in the
White heaven” on the back, certain terms,
absence of his findings of fact and
one of which excluded liability of the Co.
conclusions of law, this court must affirm
for loss, injury or delay to the passenger or
the judgment below.
his luggage. Plaintiff had not seen back of
Affirmed. the ticket not there was any indication on
the face about the conditions on the back.
Plaintiff’s luggage was lost by the ship
wreck caused by the fault of Co’s servants.

ISSUES

Can the plaintiff recover from the

company?

Plaintiff claimed :

- that they failed to complete their part of

the contract
- that the conditions on the ticket were It is the duty of the person delivering the
insufficient to protect them against the document to give adequate notice to the
consequences from near future. offeree of the printed terms and conditions.
Otherwise acceptor is not bound by these
HELD
terms.
Plaintiff was entitled to recover his loss
from the Company inspite of exemption
clause. PARKER

SOUTH EASTERN RAILWAY [1877]

2 CPD 416
JUDGEMENT

Plaintiff could not be said to have accepted

the a term which he has not seen, of which BENCH
he knew nothing and which is not in any
MELLISH LJ, BAGGALLAY LJ,
way ostensibly connected with that which is
BRAMWELL LJ
printed and written upon the face of the
contract presented to him. The result would FACTS

have been otherwise, if words like “for Mr. Parker left a bag in the cloakroom of
conditions see back” had been printed on Charing Cross railway station, run by the
face of the ticket to draw the passengers’ South Eastern Railway Company. On
attention to the place where the conditions depositing his bag and paying two pence he
were printed. received a ticket. On the front it said "see

PRINCIPLE back". On its back, it stated that the railway

was excluded from liability for items worth
“Where a written document is presented to
£10 or more. Mr. Parker failed to read the
a party for acceptance, a reasonably
clause as he thought the ticket was only a
sufficient notice shall be given of the
receipt of payment. However, he admitted
presence of terms and conditions. Notice
that he knew the ticket contained writing.
will be regarded as sufficient if it will
Mr. Parker's bag, which was worth more
convey to the minds of people in general
than £10, was lost. He sued the company.
that ticket contains conditions.
The question of law put to the court was
REASONABLE NOTICE whether the clause applied to Mr. Parker. At
trial the jury found for Mr. Parker as it was is, that if the person receiving the ticket did
reasonable for him not to read the ticket. not see or know that there was any writing
on the ticket, he is not bound by the
JUDGMENT
conditions; that if he knew there was
Divisional Court writing, and knew or believed that the

Lord Coleridge CJ, Brett J and Lindley J writing contained conditions, then he is

decided in favour of Mr. Parker, upholding bound by the conditions; that if he knew

the jury award. Lindley J remarked, there was writing on the ticket, but did not
know or believe that the writing contained
On the finding of the jury, I think we cannot
conditions, nevertheless he would be
say that the defendants did not accept the
bound, if the delivering of the ticket to him
article, to be taken care of by them, without
in such a manner that he could see there was
any special terms. Henderson v Stevenson,
writing upon it, was, in the opinion of the
therefore, is undistinguishable from this
jury, reasonable notice that the writing
case, except for the words “see back,”
contained conditions. ”
which did not appear on the face of the
ticket in that case. But the findings here Baggallay LJ concurred, and predicted that

make that distinction immaterial. After the the same result would be reached by the

conclusions of fact which the jury have jury (in Mr Parker's favour). Bramwell LJ

drawn, it is, upon the authority of that case, dissented, holding that reasonable notice

quite immaterial whether the special terms should be a question of law, and that he

relied on were on the front or on the back of would have decided in favour of the railway

the ticket. ” company.

COURT OF APPEAL

The majority of the Court of Appeal held

there should be a retrial. They said that if
Mr Parker knew of the conditions he would
be bound. If he did not know, he would still
be bound if he was given the ticket in such
a way as amounted to "reasonable notice".
Mellish LJ said the following.

I am of opinion, therefore, that the proper

direction to leave to the jury in these cases
 THORNTON the judge should have held the matter
regulated by this contract, not tort.
V
JUDGMENT
SHOE LANE PARKING LTD
Lord Denning MR held that the more
onerous the clause, the better notice of it
[1970] EWCA CIV 2 needed to be given. Moreover, the contract
was already concluded when the ticket
came out of the machine, and so any
COURT MEMBERSHIP
condition on it could not be incorporated in
JUDGE(S) SITTING the contract.

LORD DENNING MR, MEGAW LJ “The important thing to notice is that the
AND SIR GORDON WILMER company seek by this condition to exempt
themselves from liability, not only for
FACTS
damage to the car, but also for injury to the
Francis Thornton, "a freelance trumpeter of
customer howsoever caused. The condition
the highest quality", drove to the entrance
talks about insurance. It is well known that
of the multi-storey car park on Shoe Lane,
the customer is usually insured against
before attending a performance at
damage to the car. But he is not insured
Farringdon Hall with the BBC. He took a
against damage to himself. If the condition
ticket from the machine and parked his car.
is incorporated into the contract of parking,
It said
it means that Mr. Thornton will be unable
"this ticket is issued subject to the to recover any damages for his personal
conditions of issue as displayed on the injuries which were caused by the
premises". And on the car park pillars near negligence of the company.
the paying office there was a list, one We have been referred to the ticket cases of
excluding liability for "injury to the
former times from Parker v South Eastern
Customer howsoever that loss, mis-
Railway Co (1877) 2 CPD 416 to
delivery, damage or injury shall be
McCutcheon v David MacBrayne Ltd
caused".
[1964] 1 WLR 125. They were concerned
Three hours later he had an accident before with railways, steamships and cloakrooms
getting into his car. The car park argued that where booking clerks issued tickets to
customers who took them away without
reading them. In those cases the issue of the the offer are contained in the notice placed
ticket was regarded as an offer by the on or near the machine stating what is
company. If the customer took it and offered for the money. The customer is
retained it without objection, his act was bound by those terms as long as they are
regarded as an acceptance of the offer: see sufficiently brought to his notice before-
Watkins v Rymill (1833) 10 QBD 178, 188 hand, but not otherwise. He is not bound by
and Thompson v London, Midland and the terms printed on the ticket if they differ
Scottish Railway Co [1930] 1 KB 41, 47. from the notice, because the ticket comes
These cases were based on the theory that too late. The contract has already been
the customer, on being handed the ticket, made: see Olley v Marlborough Court Ltd
could refuse it and decline to enter into a [1949] 1 KB 532. The ticket is no more than
contract on those terms. He could ask for a voucher or receipt for the money that has
his money back. That theory was, of course, been paid (as in the deckchair case,
a fiction. No customer in a thousand ever Chapelton v Barry Urban District Council
read the conditions. If he had stopped to do [1940] 1 KB 532) on terms which have been
so, he would have missed the train or the offered and accepted before the ticket is
boat. issued.

None of those cases has any application to In the present case the offer was contained
a ticket which is issued by an automatic in the notice at the entrance giving the
machine. The customer pays his money and charges for garaging and saying "at owner's
gets a ticket. He cannot refuse it. He cannot risk," i.e., at the risk of the owner so far as
get his money back. He may protest to the damage to the car was concerned. The offer
machine, even swear at it. But it will remain was accepted when Mr Thornton drove up
unmoved. He is committed beyond recall. to the entrance and, by the movement of his
He was committed at the very moment car, turned the light from red to green, and
when he put his money into the machine. the ticket was thrust at him. The contract
The contract was concluded at that time. It was then concluded, and it could not be
can be translated into offer and acceptance altered by any words printed on the ticket
in this way: the offer is made when the itself. In particular, it could not be altered
proprietor of the machine holds it out as so as to exempt the company from liability
being ready to receive the money. The for personal injury due to their negligence.
acceptance takes place when the customer
Assuming, however, that an automatic
puts his money into the slot. The terms of
machine is a booking clerk in disguise - so
that the old-fashioned ticket cases still made. I do not pause to inquire whether the
apply to it. We then have to go back to the exempting condition is void for
three questions put by Mellish LJ in Parker unreasonableness. All I say is that it is so
v South Eastern Railway Co, 2 CPD 416, wide and so destructive of rights that the
423, subject to this qualification: Mellish LJ court should not hold any man bound by it
used the word "conditions" in the plural, unless it is drawn to his attention in the most
whereas it would be more apt to use the explicit way. It is an instance of what I had
word "condition" in the singular, as indeed in mind in J Spurling Ltd v Bradshaw
the lord justice himself did on the next page. [1956] 1 WLR 461, 466. In order to give
After all, the only condition that matters for sufficient notice, it would need to be printed
this purpose is the exempting condition. It in red ink with a red hand pointing to it - or
is no use telling the customer that the ticket something equally startling.
is issued subject to some "conditions" or
But, although reasonable notice of it was
other, without more: for he may reasonably
not given, Mr. Machin said that this case
regard "conditions" in general as merely
came within the second question
regulatory, and not as taking away his
propounded by Mellish L.J., namely that
rights, unless the exempting condition is
Mr. Thornton "knew or believed that the
drawn specifically to his attention.
writing contained conditions." There was
(Alternatively, if the plural "conditions" is
no finding to that effect. The burden was on
used, it would be better prefaced with the
the company to prove it, and they did not do
word "exempting," because the exempting
so. Certainly, there was no evidence that
conditions are the only conditions that
Mr. Thornton knew of this exempting
matter for this purpose.) Telescoping the
condition. He is not, therefore, bound by it.
three questions, they come to this: the
customer is bound by the exempting Mr. Machin relied on a case in this court last

condition if he knows that the ticket is year - Mendelssohn v Normand Ltd. [1970]

issued subject to it; or, if the company did 1 QB 177. Mr. Mendelssohn parked his car

what was reasonably sufficient to give him in the Cumberland Garage at Marble Arch,

notice of it. and was given a ticket which contained an

exempting condition. There was no
Mr. Machin admitted here that the company
discussion as to whether the condition
did not do what was reasonably sufficient to
formed part of the contract. It was conceded
give Mr. Thornton notice of the exempting
that it did. That is shown by the report in the
condition. That admission was properly
Law Reports at p. 180. Yet the garage
company were not entitled to rely on the
exempting condition for the reasons there
ENTORES LTD
given.
V
That case does not touch the present, where
the whole question is whether the MILES FAR EAST CORP

exempting condition formed part of the [1955] EWCA CIV 3,

contract. I do not think it did. Mr. Thornton
[1955] 2 QB 327
did not know of the condition, and the
company did not do what was reasonably
sufficient to give him notice of it.
JUDGEs SITTING:
I do not think the garage company can
TOM DENNING, BARON DENNING,
escape liability by reason of the exemption
NORMAN BIRKETT, 1ST BARON
condition. I would, therefore, dismiss the
BIRKETT, HUBERT PARKER,
appeal.”
BARON PARKER OF WADDINGTON
Megaw LJ and Sir Gordon Wilmer agreed
with the onerous point but reserved their
opinions on where the contract was FACTS

concluded. Furthermore, Sir Gordon Entores was a London-based trading

Wilmer distinguished this from the other company that sent an offer by telex for the
ticket cases based upon the fact that a purchase of copper cathodes from a
human clerk proffered the ticket and the company based in Amsterdam. The Dutch
buyer had the opportunity to say I do not company sent an acceptance by telex. The
like those conditions. contract was not fulfilled and so Entores
attempted to sue the owner of the Dutch
The car park at Shoe Lane was demolished
company for damages. The controlling
in early 2014
company, Entores, was based in the UK and
under English law Entores could only bring
the action in the UK (serve notice of writ
outside the jurisdiction) if it could prove
that the contract was formed within the
jurisdiction, i.e. in London rather than
Amsterdam.
JUDGMENT The problem can only be solved by going in
stages. Let me first consider a case where
Denning LJ, delivered the leading
two people make a contract by word of
judgment. He said that the postal rule could
mouth in the presence of one another.
not apply to instantaneous
Suppose, for instance, that I shout an offer
communications, such as telephone or
to a man across a river or a courtyard but I
telex: if a phoneline "went dead" just
do not hear his reply because it is drowned
before the offeree said "yes", it would be
by an aircraft flying overhead. There is no
absurd to assume that the contract was
contract at that moment. If he wishes to
formed and the parties would not have to
make a contract, he must wait till the
call each other back. The same applied to
aircraft is gone and then shout back his
telex. Since the contract was therefore only
acceptance so that I can hear what he says.
formed when and where the telex was
Not until I have his answer am I bound. I do
received, the place of formation was
not agree with the observations of Hill J in
London.
Newcomb v De Roos.
there was a completed contract by which
Now take a case where two people make a
the defendants agreed to supply 100 tons of
contract by telephone. Suppose, for
cathodes at a price of £239 10s. a ton. The
instance, that I make an offer to a man by
offer was sent by Telex from England
telephone and, in the middle of his reply,
offering to pay £239 10s. a ton for 100 tons,
the line goes "dead" so that I do not hear his
and accepted by Telex from Holland. The
words of acceptance. There is no contract at
question for our determination is where was
that moment. The other man may not know
the contract made?
the precise moment when the line failed.
When a contract is made by post it is clear But he will know that the telephone
law throughout the common law countries conversation was abruptly broken off:
that the acceptance is complete as soon as because people usually say something to
the letter is put into the post box, and that is signify the end of the conversation. If he
the place where the contract is made. But wishes to make a contract, he must
there is no clear rule about contracts made therefore get through again so as to make
by telephone or by Telex. Communications sure that I heard. Suppose next, that the line
by these means are virtually instantaneous does not go dead, but it is nevertheless so
and stand on a different footing. indistinct that I do not catch what he says
and I ask him to repeat it. He then repeats it
and I hear his acceptance. The contract is In all the instances I have taken so far, the
made, not on the first time when I do not man who sends the message of acceptance
hear, but only the second time when I do knows that it has not been received or he
hear. If he does not repeat it, there is no has reason to know it. So he must repeat it.
contract. The contract is only complete But, suppose that he does not know that his
when I have his answer accepting the offer. message did not get home. He thinks it has.
This may happen if the listener on the
Lastly, take the Telex. Suppose a clerk in a
telephone does not catch the words of
London office taps out on the teleprinter an
acceptance, but nevertheless does not
offer which is immediately recorded on a
trouble to ask for them to be repeated: or the
teleprinter in a Manchester office, and a
ink on the teleprinter fails at the receiving
clerk at that end taps out an acceptance. If
end, but the clerk does not ask for the
the line goes dead in the middle of the
message to be repeated: so that the man who
sentence of acceptance, the teleprinter
sends an acceptance reasonably believes
motor will stop. There is then obviously no
that his message has been received. The
contract. The clerk at Manchester must get
offeror in such circumstances is clearly
through again and send his complete
bound, because he will be estopped from
sentence. But it may happen that the line
saying that he did not receive the message
does not go dead, yet the message does not
of acceptance. It is his own fault that he did
get through to London. Thus the clerk at
not get it. But if there should be a case
Manchester may tap out his message of
where the offeror without any fault on his
acceptance and it will not be recorded in
part does not receive the message of
London because the ink at the London end
acceptance - yet the sender of it reasonably
fails, or something of that kind. In that case,
believes it has got home when it has not -
the Manchester clerk will not know of the
then I think there is no contract.
failure but the London clerk will know of it
and will immediately send back a message My conclusion is, that the rule about
"not receiving." Then, when the fault is instantaneous communications between the
rectified, the Manchester clerk will repeat parties is different from the rule about the
his message. Only then is there a contract. post. The contract is only complete when
If he does not repeat it, there is no contract. the acceptance is received by the offeror:
It is not until his message is received that and the contract is made at the place where
the contract is complete. the acceptance is received.
In a matter of this kind, however, it is very variations consisted in the ports of delivery,
important that the countries of the world the provisions of import licence and so
should have the same rule. I find that most forth. The English company say that they
of the European countries have accepted the variations by dispatching from
substantially the same rule as that I have London the import licence, and giving
stated. Indeed, they apply it to contracts by instructions in London for the opening of
post as well as instantaneous the letter of credit, and that this was an
communications. acceptance by conduct which was complete
as soon as the acts were done in London.
Applying the principles which I have stated,
I think that the contract in this case was I am not sure that this argument about
made in London where the acceptance was variations is correct. It may well be that the
received. It was, therefore, a proper case for contract is made at the place where first
service out of the jurisdiction. completed; not at the place where the
variations are agreed. But whether this be
Apart from the contract by Telex, the
so or not, I think the variations were
plaintiffs put the case in another way. They
accepted by conduct in London and were
say that the contract by Telex was varied by
therefore made in England. Both the
letter posted in Holland and accepted by
original contract and ensuing variations
conduct in England: and that this amounted
were made in England and leave can
to a new contract made in England. The
properly be given for service out of the
Dutch company on September 11, 1954,
jurisdiction.
wrote a letter to the English company
saying: "We confirm having sold to you for I am inclined to think also that the contract
account of our associates in Tokyo: 100 is by implication to be governed by English
metric tons electrolitic copper in cathodes: law, because England is the place with
£239 10s. for longton c.i.f. U.K./ which it has the closest connection.
Continental main ports: prompt shipment
I think that the decisions of the master and
from a Japanese port after receipt of export
the judge were right, and I would dismiss
licence: payment by irrevocable and
the appeal.
transferable letter of credit to be opened in
favour of Miles Far East Corporation with a
first class Tokyo Bank. The respective
import licences to be sent directly without
delay to Miles Far East Corporation." The
 On July 22nd 1959 Kedia Ginning Factory
and Oil Mills (appellant) of Khamgaon
entered into a contract over telephone to
BHAGWANDAS GOVERDHANDAS supply cotton seed cakes to M/s. Girdharilal
KEDIA Parshottamdas and Co. (respondents) of

VS. Ahmedabad. The respondents commenced

an action against the appellant in the City
GIRDHARILAL PARSHOTTAMDAS
Civil Court of Ahmedabad for failing to
& CO. & ORS.
supply cotton seed cakes as per the
aforementioned agreement. The
respondents contended that the cause of
1966 AIR 543, 1966 SCR (1) 656
action for the suit arose at Ahmedabad as
the appellant’s offer to sell was accepted at
BENCH Ahmedabad and the appellant was to be
paid for the goods through a bank in
J.C. SHAH, K.N. WANCHOO AND M.
Ahmedabad. The appellant contended that
HIDAYATULLAH, JJ
the respondents’ offer to purchase was
BACKGROUND accepted at Khamgaon; the delivery and

For the formation of a contract, an offer payment of the goods were also agreed to

must be made and accepted. The contract is be made in Khamgaon and the City Civil

deemed to be complete only when the Court of Ahmedabad did not have

acceptance of such offer is expressly or jurisdiction to try the suit. The City Civil

impliedly communicated to the offeror. The Court of Ahmedabad held that it had

earlier laws regarding contracts did not jurisdiction as the acceptance of the offer

envisage the formation of contracts through was intimated to the offerree at Ahmedabad

instantaneous modes of communication and that is where the contract was made.

such as telephone which facilitate The appellants filed a revision application

formation of contract between parties in in the High Court of Gujarat which was

different territories instantaneously. rejected. Then, the appellants preferred an

Therein, the question of the place of appeal to the Supreme Court with special

formation of contract arises which was leave.

decided in this case. ARGUMENTS

FACTS CONTENTIONS OF APPELLANT

In the case of a contract by telephone, only put into a course of transmission to the
the court within whose territorial offerer. The same rule is applicable in case
jurisdiction the acceptance of offer is of a contract by telegram. Mere making of
spoken into telephone has jurisdiction to try an offer does not form part of the cause of
any suit regarding the contract. action for damages for breach of contract
which has resulted from acceptance of the
Sections 3 and 4 of the Indian Contract Act
offer (Baroda Oil Cakes Traders v.
(1872) are applicable in determining the
Purshottam Narayandas Bagulia and Anr.
place where a contract is made and not the
AIR1954Bom491).Though sections 3 and 4
decisions of UK courts.
of the Contract Act speak about the
CONTENTIONS OF RESPONDENTS communication, acceptance and revocation

The making of an offer is a part of cause of of a proposal and acceptance respectively,

action in a suit for damages for breach of the Act does not expressly deal with the

contract. Hence, the court in whose place where a contract is made and in

territorial jurisdiction such offer was made determining the same, the interpretation

can try such suit. clauses in section 2 of the Act must be taken
into consideration.
The contract is formed where the
acceptance of offer is intimated to the In the case of a telephone conservation, the

offerree. Hence, the court in whose contract is only complete when the answer

territorial jurisdiction such acceptance of accepting the offer is made [Denning LJ in

offer was intimated can try such suit. Entores Ltd. v. Mills Far East Corporation,
(1955) 2 Q.B.D. 327]. In the majority of
JUDGMENT
European countries and the US, the
A contract comes into existence when an generally accepted rule based on the theory
offer is accepted and the acceptance of the of consensus ad idem is that the contract is
offer is intimated through anexternal made in the district where the acceptance is
manifestation by speech, writing or other spoken. The Indian Contract Act (1872) did
act recognised by law. However, an not envisage the formation of contracts
exception to this rule has been made in the through an instantaneous mode of
interest of commercial expediency. When a communication such as telephone. The
contract is negotiated through post, the exception of commercial expediency
communication of acceptance is deemed to applicable to contracts formed via post is
be complete when the acceptance of offer is not applicable to contracts made through
telephone. Hence, the Hon’ble Court held where the contract is made. Acceptance
that the trial Court was right in taking that a over the telephone is of the same effect as if
part of the cause of action arose within the the person accepting it had done so by
jurisdiction of the Civil City Court. posting a letter, or by sending off a telegram
Ahmedabad, where acceptance was from that place”. In an old English case
communicated by telephone to the Newcomb v. De Roos [(1859) 2 E & E
respondents. The appeal was dismissed 271], Hill J. observed: “Suppose the two
with costs. parties stood on different sides of the
boundary line of the district: and that the
DISSENTING OPINION BY JUSTICE
order was then verbally given and accepted.
HIDAYATULLAH
The contract would be made in the district
Though the Contract Act is applicable in in which the order was accepted.”
India, it was drafted in England and English
Where the speech is fully heard and
common law permeates it.In Entores Ltd. v.
understood there is a binding contract and
Mills Far East Corporation, it was held that
in such a case the only question is as to the
a contract made by telephone is complete
place where the contract can be said to be
only where the acceptance is heard by the
completed. The acceptance was put in the
proposer [offeror in English common law]
course of transmission at Khamgaon and
because generally an acceptance must be
under the words of the Contract Act, it is
notified to the proposer to make a binding
difficult to say that the contract was made
contract and the contract emerges at the
at Ahmedabad where the acceptance was
place where the acceptance is received and
heard and not at Khamgaon where it was
not at the place where it is spoken into the
spoken. Section 4 of the Act covers in its
telephone. In cases of contracts by
language a contract through telephone. The
correspondent or telegram, a different rule
decision in Entores case was based on
prevails and acceptance is complete as soon
interpretation of common law whereas in
as a letter of acceptance is posted or a
the instant case, the interpretation of
telegram is handed in for dispatch.
statutory law is in question. Hence, the
In Carrow Towing Co. v. The Ed Mc contract was completed at Khamgaon
William, (46 D.L.R. 506), it was held: where the acceptance was spoken.
“Where a contract is proposed and accepted
CASE COMMENT
over the telephone, the place where the
acceptance takes place constitutes the place
In this case, the court decided the question CONSIDERATION
of the place of origin of the cause of action
in a suit for breach of contract made over
telephone. Here, the court also clarified the TWEDDLE V ATKINSON

rules regarding the communication, (1861) 1 B&S 393

acceptance and revocation of proposal and
acceptance with respect to a contract made
over the telephone. The decision further JUDGE(S) SITTING
clarified that the rule of communication and
WIGHTMAN J, CROMPTON J,
acceptance of offer applicable to contracts
BLACKBURN J
made through post would not be applicable
to contracts made over the telephone. FACTS

The son and daughter of the parties

involved in this dispute were getting
married. As such, the father of the groom
and father of the bride entered into an
agreement that they would both pay sums
of money to the couple. Unfortunately, the
father of the bride died before he paid the
money to the couple and the father of the
son died before he could sue on the
agreement between the parties.

As a result of this, the groom brought a

claim against the executor of the will for the
payment that was previously agreed
between the fathers.

ISSUE

The primary issue for the court was whether

or not the son could, as a third party to the
agreement, enforce the contract between
the fathers, which was ultimately for the
benefit of him and his wife.
It was argued that the intention of the governing ethic was honour; here the
agreement between the fathers was for the governing paradigm is exchange and
couple to derive a benefit from the payment reciprocity. Crompton further says it would
of the money. Moreover, it was argued that be "a monstrous proposition" if an
preventing the son from being able to individual would be able to sue for a
enforce the contract would effectively contract but not be able to be sued under it.
ignore the intention of the fathers.
Blackburn deals with an agency argument
that natural love and affection trickles from
the father to the son and this entitles son to
HELD
sue in his father's place (as if he had
The groom’s claim was rejected by the provided the consideration). Blackburn
court. It was held that the groom was not a holds that the cases say that natural love and
part of the agreement between the fathers affection are not sufficient consideration for
and he did not provide any consideration for an action
the promise made by the father of the bride.
Also, as a stranger to the contract, the son
could not enforce it. On this basis, the court
found in favour for the executor of the will.

REASONS

Wightman held that there was precedent

that a stranger to the consideration of a
promise can still have an action if the
relationship is close enough (Bourne v
Mason, 1669). Despite this precedent, he
maintains that the current position is that no
stranger to the consideration can take
action, even if it was for his benefits.

Crompton examines whether there was

consideration from the son and holds that
natural love and affection (from the
marriage) was not sufficient consideration.
This is in contrast to Provender where the
 CHINNAYA V RAMAYYA ARGUMENTS ADVANCED

ILR (1876-84) 4 Mad 137 CONTENTIONS BY THE PLAINTIFF

The consideration for the defendant’s

mother to gift the property to the defendant
In the Madras High Court
was defendant’s promise to pay an annuity
to the plaintiff. Hence, the plaintiff is

Equivalent Citation: entitled to sue the defendant to recover the

same.
ILR (1876-82) 4 Mad 137
CONTENTIONS BY THE
BENCH
DEFENDANT
INNES J, KINDERSLEY J.
The plaintiff had not furnished any
FACTS consideration under the contract. Hence,
she is not entitled to sue the defendant for
A lady transferred her property which
the recovery of the amount promised to her.
consisted of certain lands to her daughter
(defendant), by a deed of gift. Such deed JUDGMENT
was registered. One of the terms of the gift
According to section 2(d) of the Indian
deed was that the daughter would pay a sum
Contract Act (1872), “When, at the desire
of Rs. 653/- every year to the lady’s sister
of the promisor, the promisee or any other
(plaintiff). The defendant executed an
person has done or abstained from doing or
Iqrarnama or agreement in favour of the
does or abstains from doing, or promises to
plaintiff promising to do the same. The
do or abstain from doing, something, such
defendant failed to pay the annual amount
act or abstinence or promise is called a
to the plaintiff. Hence, the plaintiff sued the
consideration for the promise. From this
defendant for the recovery of the same.
definition, it is clear that in a valid contract
ISSUE the consideration need not flow from the
promisee only. It could flow from any other
Whether the plaintiff can bring an action
person who is not a party to such contract.
against the defendant for the amount
The Hon’ble Court in this case, upheld this
promised in a contract where the
point of law in the plaintiff’s right to
consideration for such promise has been
recover the annuity due to her from the
furnished by the mother of the defendant
defendant under the contract in question
(plaintiff’s sister)?
but their reasons for the same were annuity that she had been receiving so far.
different. It was held that such loss formed the
consideration for the promise. Hence, the
Innes J drew similarities between the
plaintiff was deemed to have given the
instant case and the English case Dutton v.
consideration.
Poole [(1677) 2 Levinz 210]. In Dutton v.
Poole, a man had a daughter of Kindersley J also arrived at the same
marriageable age and wanted to sell a conclusion but his reasoning was different.
portion of wood that he possessed at the The deed of gift and the defendant’s
time to meet his daughter’s wedding agreement to pay the annuity to the plaintiff
portion. The man’s son (defendant) were executed at the same time. Thus, they
promised to pay the daughter (plaintiff) could be considered parts of the same
£.1000 if the man forbore from selling the transaction. The defendant’s promise to pay
wood. The man forbore but the defendant the plaintiff was the consideration for the
failed to pay the promised sum. The defendant’s mother to transfer the property
daughter and her husband sued the to the defendant. Hence, the defendant’s
defendant for the sum. Though the failure to pay the same would amount to
defendant made the promise to his father breach of contract and would entitle the
and the father furnished the consideration plaintiff to sue her for the recovery of the
for it, it was clear that the contract was same. The defendant was held liable to pay
made for the benefit of the plaintiff. The the annuity to the plaintiff.
court held that it would be highly
inequitable to deprive the plaintiff of the
money and held the defendant liable to pay
the same to her.

Innes J observed that prior to the creation

of the contract in question, the plaintiff had
been receiving a sum of money out of her
sister’s estate. When the lady transferred
the same to her daughter, the defendant, the
contract stipulated that the same
arrangement be continued by her. When the
plaintiff’s sister transferred the property to
the defendant, the plaintiff suffered a loss of
 Consideration must be moved at the claimed remuneration from A for rendering
desire of the promisor additional work to which A refused.

DURGAPRASAD

V JUDGEMENT

BALDEO The agreement was void being without

consideration as it had not moved at the
desire of A. Hence the Court decided that
1880 3 ALL 221 the additional work done by B was not

FACTS wanted by A and hence B cannot claim

anything from A.
The plaintiff sued to establish an agreement
in writing by which the defendants
promised to pay him a commission on
articles sold through their agency in a azar
in which they occupied shops, in
consideration of the plain tiff having'
expended, money in the construction of
such bazar. Such money had not been-
expended by the plaintiff at the request of
the defendants nor had it been expended by
him for them voluntarily, but it had been
expended by him voluntarily.

In this case there was a contract between A

and B. According to the contract A was
supposed to provide for all requirements to
B to run the market and the profits were
agreed to be shared between the parties.
Upon C`s request, B made the market
available for 24 hours for a consideration
from C. Thereafter C refused to give
remuneration to B on the ground that he (C)
has no consideration from B. Afterwards B
 KEDARNATH BHATTACHARJI VS contract, because the additions to the
building were made by the authority of the
GORIE MAHOMED
Commissioners and with their sanction.

The defendant, on being applied to,

EQUIVALENT CITATIONS subscribed his name in the book for Rs.
(1887) ILR 14 CAL 64 100, and the question is, whether the
plaintiff, as one of the persons who made
IN CALCUTTA HIGH COURT himself liable under the contract to the
contractor for the cost of the building, can
BENCH: W C PETHERAM, sue, on behalf of himself, and all those in
BEVERLEY the same interest with him, to recover the
amount of the subscription from the
defendant.
The plaintiff is a Municipal Commissioner
of Howrah and one of the trustees of the
Howrah Town Hall Fund. Some time ago, JUDGEMENT
it was in contemplation to build a Town
Persons were asked to subscribe, knowing
Hall in Howrah, provided the necessary
the purpose to which the money was to be
funds could be raised, and upon that state of
applied, and they knew that on the faith of
things being existent, the persons interested
their subscription an obligation was to be
set to work to see what subscriptions they
incurred to pay the contractor for the work.
could get. When the subscription list had
Under these circumstances, this kind of
reached a certain point, the Commissioners,
contract arises. The subscriber by
including the plaintiff, entered into a
subscribing his name says, in effect,--In
contract with a contractor for the purpose of
consideration of your agreeing to enter into
building the Town Hall, and plans of the
a contract to erect or yourselves erecting
building were submitted and passed, but as
this building, I undertake to supply the
the subscription list increased, the plans
money to pay for it up to the amount for
increased too, and the original cost, which
which I subscribe my name. That is a
was intended to be Rs. 26,000, has
perfectly valid contract and for good
swelledbup to Rs. 40,000; but for the whole
consideration; it contains all the essential
Rs. 40,000 the Commissioners, including
elements of a contract which can be
the plaintiff, have remained liable to the
enforced in law by the persons to whom the
contractor as much as for the original
liability is incurred. In our opinion, that is to the parties to a contract. The
the case here, and therefore we think that consideration may be “right, interest, profit
both questions must be answered in the or benefit” for one of the parties. It may also
affirmative, because, as I have already said, be ‘some indulgence, prejudice, loss or
we think that there is a contract for good responsibility given, suffered or assumed
consideration, which can be enforced by the by the other.
proper party, and we think that the plaintiff
can enforce it, because he can sue on behalf
of himself and all persons in the same SHUPPU AMMAL AND ANR. VS K.

interest, and, therefore, we answer both SUBRAMANIAM AND ORS

questions in the affirmative, and we 4 IND CAS 1083

consider that the Judge of the Small Cause
Court ought to decree the suit for the
amount claimed, and we also think that the BENCH
plaintiff ought to get his costs including the
R BENSON, OFFG., K AIYAR
costs of this hearing

REASONING
FACTS
Section 25 of the Indian Contract Act, 1872
states openly that “an agreement made JUDGEMENT

without consideration is void”. In other

words, the presence of consideration is
MUHAMMAD RUSTAM ALI KHAN
essential for a contract to be valid.
VS
Section 2(d) of the Indian Contract Act,
HUSAINI BEGAM
1872, talks of Consideration for a promise
is “When the promisor wishes, the fiancé or IN ALLAHABAD HIGH COURT
any other person has done or abstained EQUIVALENT CITATIONS
from doing, or does or refrains from doing,
(1907) ILR 29 ALL 222
or promises to do or refrain from doing
something, such act or abstinence or
Promise.” It is the price paid by one party
BENCH
for the promise of the other. The
consideration is the benefit that corresponds J STANLEY, W BURKITT
FACTS not merely that she had become immoral,
but that she had actually committed
This appeal arises out of a suit brought by
adultery and was at the time, as a
the plaintiff Muhammad Rustam Ali Khan
consequence of that adultery, pregnant. The
against his wife for restitution of conjugal
following is the allegation in paragraph (6)
rights. The plaintiff is the son of Khwaja
of the claim: "Although her parents are
Muhammad Khan, a Nawab of Dholepur,
dead, yet the defendant lives alone at
and was married to the defendant Husaini
Moradabad, where there is no near relative
Begam, who is the daughter of a wealthy
of hers who may look after and take care of
resident of Moradabad, now deceased, on
her. She wanders about wherever she likes
the 2nd of November 1877. At the time of
and has become immoral. Moreover, she
the marriage the plaintiff's father agreed to
has now became pregnant by adultery." It is
give the defendant Rs. 500 a month for pin-
a significant fact that it only occurred to the
money. The plaintiff and the defendant
husband to institute a suit for restitution of
lived together from the year 1883 up to the
conjugal rights when the wife had taken
year 1896, when she left her husband and
legal steps to recover her arrears of annuity
went to her father's house on the ground, as
from his father. And it is also significant
she alleges, of her husband's misconduct.
that he should desire to resume connubial
She subsequently sued her father-in-law for
relations with a person in the condition in
arrears of the monthly annuity, agreed to be
which he alleges his wife to be.
paid to her, up to 1901, and obtained a
decree in the terms of a compromise. Her In her defence the defendant avers that
father-in-law failing to pay the annuity after owing to the enmity subsisting between her
the date of this decree, a suit was instituted and the plaintiff she has strong
by the defendant against him for arrears of apprehension of danger to her life. She
it, from the 1st of May 1901 to the 31st of further alleges acts of immorality on the
October 1903. The Court below dismissed part of her husband, and that owing to
her suit, but upon appeal to this Court the pressure exercised by his father he had
decision of that Court was reversed and a shamelessly charged her with adultery. She
decree passed in her favour. further states that she has what she
describes as magnificent houses of her own
During the pendency of that suit, the suit
in the city of Moradabad, and that she is
which has given rise to this appeal was
willing that her husband should live with
instituted. In his plaint the plaintiff makes
her in that city as he formerly did or arrange
serious charges against his wife, alleging
for a separate house at Moradabad. She A case such as the present must, as Mr.
charges in answer to the suit that it was Karamat Husain has rightly said, be decided
brought in consequence of the institution of according to the Muhammadan law
the suit for arrears of pin-money.
If it be granted that according to the
JUDGEMENT Muhammadan law a husband may sue to
enforce his right to the custody of his wife,
Both the Courts below have found that there
and that, if her defence be legal cruelty, she
is no reasonable apprehension of danger to
must prove cruelty of the nature just
the life of the defendant if she goes and
described, it does not follow that she has no
lives with her husband in his house, or of
other defences to a suit for the restitution of
serious maltreatment. The learned District
conjugal right. In the case which we have
Judge in the course of his judgment says: "It
cited their Lordships say (at p. 712): "The
is urged that the case at present pending in
marriage tie amongst; Muhammadans is not
appeal before the High Court between the
so indissoluble as it is among Christians.
appellant in this case and the respondent's
The Muhammadan wife, as has been shown
father shows that enmity exists and the fact
above, has rights which the Christian, or at
that the respondent charged her with
least the English, wife has not against her
having committed adultery indicates that he
husband. An Indian Court might well admit
would maltreat her were she to be
defences founded on the violation of those
compelled to live with him. I do not think
rights, and either refuse its assistance to the
that these facts are sufficient to warrant the
husband altogether, or grant it only upon
conclusion that the danger of the woman
terms of his securing the wife in the
being maltreated is so great as to justify the
enjoyment of her personal safety and her
Court in a refusal to grant a decree for
other legal rights; or it might, on it
restitution of conjugal rights, and I note
sufficient case, exercise that jurisdiction
that the parties have admittedly lived
which is attributed to the Kazee by the
together after the institution of the suit by
Fatwa (if the law indeed warrants such a
the appellant against the respondent's
jurisdiction) of selecting a proper place of
father." From this we gather that in the
residence for the wife other than the
opinion of the learned judge there is some
husband's house." Lord Herschell, L.C., in
danger. The last remark of the learned
the course of his judgment in Mackenzie v.
Judge refers to a visit paid by the plaintiff
Mackenzie (1895) A.C., 384 dismissing the
to the defendant in Moradabad.
question whether in an action in Scotland
for adherence by the husband, which was only when the suit for arrears of pin-
corresponds to a suit for restitution of money was instituted by his wife against his
conjugal rights in England, misconduct on father that he took action. This suggests the
his part short of cruelty or other idea that the suit was not instituted with a
matrimonial offence may be a ground for view to renew happy connubial relations,
refusing relief, observes (at p, 390): "It but with the sinister object of giving trouble
seems to me open to question whether the and annoyance to his wife. We find him in
Courts ought in all cases to disregard the the plaint itself heaping the vilest insults
conduct of the party who invokes their aid upon her. He charges her with immorality
in an action for adherence, and to decree it and with adultery. In view of her parentage,
in all cases where a matrimonial offence position and fortune, this charge, if untrue,
cannot be established by the defender. It is is sheer cruelty. If the plaintiff believed that
certain that a spouse may, without having there was any truth in it, it is hard to
committed an offence which would justify a understand why he should desire to resume
decree of separation, have so acted as to conjugal relations with a woman who had
deserve the reprobation of all right-minded proved so faithless. If he believes it to be
members of the community. Take the case true, as we must assume he does, can we say
of a husband who has heaped insults upon that the defendant has not any ground for
his wife, but has just stopped short of that reasonable apprehension, that, if she return
which the law regards as saevitia or to Dholepur, a native State, in which she
cruelty; can he, when his own misconduct could not invoke the protection of the
has led his wife to separate herself from British law, she will be subject to
him, come into Court and, allowing his maltreatment and violence. We think that
misdeeds, insist that it is bound to grant him the charge of immorality and adultery,
a decree of adherence?" which has not been substantiated, is of so
cruel a nature as to justify a Court in
refusing to grant him a decree for restitution
Now we have it here that the defendant left of conjugal rights. The defendant in view of
her husband's house and came to all the facts has established that she has
Moradabad in 1896. From that time until reasonable grounds for believing that her
the time when the suit out of which this health and safety would be endangered if
appeal has arisen was instituted, namely, on she returned to her husband's house at
the 12th of July 1904, plaintiff took no steps Dholepur. We arrive at this conclusion as
to obtain restitution of conjugal rights. It
an inference of law from the facts found and MINOR
admitted in the lower Courts.
MOHIREEBIBI
The defendant states in her defence, and it
V
is not denied, that she has property worth
between 4 and 5 lakhs of rupees, and has DHARMADAS GHOSE

houses in the city of Moradabad suitable to 7 CWN 441

the position in life of her husband, She says
that she has no objection to her husband
residing with her in one of her houses as he BENCH OF JUDGES
did formerly, and that she has no objection
LORD MCNAUGHTON, LORD
to resume connubial relations with him in
DAVEY, LORD LINDLEY, SIR FORD
her own home or in a separate house, if he
NORTH, SIR ANDREW SCOBLE, SIR
so choose, in Moradabad. We think under
ANDREW WILSON, JJ
the circumstances that this offer is not
unreasonable. The course then which we FACTS

propose to adopt is to allow this appeal, set On 20th July, 1895 the respondent
aside the decrees of the Courts below, and Dharmodas Ghose executed a mortgage in
dismiss the plaintiff's suit upon the favour of Brahmo Dutt to secure the
defendant's undertaking, as mentioned in repayment of Rs. 20,000 at 12 per cent
the written statement, to live with her interest with respect to some houses
husband in Moradabad and there resume belonging to the respondent. At the time,
conjugal relations with him. the respondent was a minor and attained 21
years of age only in the month of September
If this undertaking be not fulfilled, liberty is
of the same year. In the absence of Brahmo
reserved to the plaintiff to seek in another
Dutt from Calcutta, the whole transaction
suit restitution of conjugal rights. We
was carried out by his attorney Kedar Nath
accordingly allow the appeal, set aside the
Mitter and the money was advanced by his
decrees of the Courts below and dismiss the
manager, Dedraj. It was claimed that while
plaintiff's suit with costs in all Court
the transaction was being considered, the
respondent’s mother and guardian, Smt.
Jogendranundinee Dasi, had sent a letter
through her attorney, Mr. Bhupendra Nath
Bose, revealing the minority of the
respondent and intimated to Mr. Kedar  The knowledge of the respondent’s
Nath Mitter that any money lent to the actual age which Mr. Kedar Nath
respondent would be at the lender’s own Mitter possessed should not be
peril. The deed of mortgage contained a imputed to the appellants as Mr.
declaration by the respondent that hehad Dedraj acted as the agent of Brahmo
attained majority and the mortgagee’s Dutt in this transaction.
assent to lend him money was obtained
 The respondent is estopped by
upon assurance of the same. Mr. Kedar
section 115 of the Indian Evidence
Nath Mitter was aware of the respondent’s
Act, 1872 from claiming that he was
status as a minor. On 10th September 1895,
a minor at the time of executing the
the respondent and his mother initiated an
mortgage.
action for the declaration of the mortgage as
void and sought cancellation of the same.  The respondent must repay the

The Court of First Instance granted the amount advanced according to

relief sought by the respondent and the section 64 and 38 of the Indian

Appellate Court dismissed the appeal of the Contract Act (1872); and section 41

appellants. After the institution of this of the Specific Relief Act (1877).

appeal, Mr. Brahmo Dutt died and this  The Indian Contract Act (1872)
appeal was prosecuted by his executors. does not deal with contract by

ARGUMENTS ADVANCED minors.

CONTENTIONS BY APPELLANTS CONTENTIONS BY RESPONDENT

 The respondent was a major when Brahmo Dutt and his agents, Mr. Kedar

he executed the mortgage. Nath Mitter and Mr. Dedraj, possessed

knowledge of the respondent’s actual age.
 Neither the appellant nor his agent
had any notice that the respondent Since the respondent was a minor at the

was a minor. time of executing the mortgage, the contract

is void.
 The respondent made a fraudulent
declaration regarding his age and is JUDGMENT

hence disentitled from seeking any Though Mr. Brahmo Dutt was not
relief. personally present at the time of the
transaction, Mr. Mitter acted as his
authorised agent in the transaction and Mr. him to return the money advanced was
Dedraj too acted under his instructions in upheld by the Privy Council.
good faith believing Mr. Mitter to be Mr.
Dutt’s authorised agent. Hence, their The impugned mortgage in the instant case
Lordships held that the knowledge of the was executed under the Transfer of
respondent’s minority possessed by Mr. Property Act (1882). Section 7 of the
Mitter was rightly imputed to Mr. Dutt. aforementioned Act says that a person must
be competent to contract in order to be
Section 115 of the Indian Evidence
competent to transfer property. Section 4 of
Act,1872 was held to be not applicable in
that Act provides that the chapters and
the instant case as both the parties were
sections of that Act which relate to
aware of the truth. Further, such provision
contracts are to be considered part of the
was held to be not applicable in the case of
Indian Contract Act, 1872. Hence, the
minority as held in Nelson v. Stocker 4 De
instant case was considered to fall
G. and J. 458 (1859). Their Lordships also
underTransfer of Property Act (1882).
relied on section 19 of the Indian Contract
Act (1872) which says that a fraud or
Their Lordships, taking into consideration
misrepresentation which does not cause the
sections 2, 10 and 11 of the Indian Contract
consent to a contract of the party on whom
Act (1872), held that the Act makes it
such fraud is practised, or to whom such
essential that all contracting parties should
misrepresentation is made, does not render
be “competent to contract,” and expressly
the contract voidable.
provides that a person who by reason of
According to section 64 of Indian Contract minority is incompetent to contract cannot
Act (1872), when a person at whose option make a contract within the meaning of the
a contract is voidable rescinds the contract, Act. Their Lordships also considered
he must restore to the other party any various other provisions of the same Act to
benefits that he might have received from point out the void nature of a contract by a
that party. Their Lordships found the same minor. Sec. 68 states that if a person
to be applicable only in the case of persons incapable of entering into a contract or any
competent to contract and not in the case of one whom he is legally bound to support is
minors who are incompetent to contract. supplied by another person with necessaries
The decision of the lower courts to decree suited to his condition in life, the person
in the respondent’s favour without ordering who has furnished such supplies is entitled
to be reimbursed from the property of such
incapable person.It is clear from the Act equitable to compel a person to pay any
that a minor is not liable even for moneys in respect of a transaction which as
necessaries, and that no demand with against that person the Legislature has
respect to the same is enforceable against declared to be void and rejected the
him by law, though a statutory claim is appellants’ claim for an equitable remedy.
created against his property. Under sections The appeal was dismissed.
183 and 184 no person under the age of
majority can employ or be an agent. Again, According to Section 2(A) of the Indian
under sections 247 and 248, although a Contracts Act, 1872, when one person
person under majority may be admitted to signifies to another his willingness to do or
the benefits of a partnership, he cannot be to abstain from doing anything, with a view
made personally liable for any of its to obtaining the assent of that other to such
obligations; although he may on attaining act or abstinence, he is said to make a
majority accept those obligations if he proposal. Hence, a proposal is synonymous
thinks fit to do so. to offer. So, we can say that the above
definition of the proposal is also valid for
Their Lordships held that when there was an offer. According to Section 2(B) of the
no question of creation of a contract on Indian Contract Act, 1872, when the person
account of one of the parties being a minor, to whom the proposal is made signifies his
the question whether such a contract is void assent thereto, the proposal is said to be
or voidable does not arise at all as the accepted. A proposal, when accepted,
contract itself is void ab initio. The Indian becomes a promise.
Contract Act (1872) is exhaustive and
Offer is an open invitation by the promisor
imperative and clearly provides that a
for the acceptance of the terms and
minor is not capable of entering into a
conditions of the undertaking, which when
contract. Their Lordships further found no
accepted by the promisee becomes binding
merit in interfering with the decisions of the
on both parties and the proposal becomes a
lower courts not to order the respondent to
promise. Hence the difference between an
return the money advanced. They relied on
offer (proposal) and a promise lies in
the decision in Thurston v. Nottingham
acceptance of the offer (proposal).
Permanent Benefit Building Society [L. R.
(1902)1 Ch. 1 (1901); on appeal, L. R. Under Section 2(h) it is said that an

(1903) App. Cas. 6] wherein it was held that agreement enforceable by law is said to be

a Court of Equity cannot say that it is a contract. American Law defines contract
in the following manner -A contract is a However, in present case, since the money
promise or a set of promises for the breach was spent by the defendant, there was
of which the law gives a remedy or the neither any possibility of tracing it nor any
performance of which the law in some way possibility of restoring the thing got by
recognizes as a duty. fraud, for if the court will ask defendant to
pay the equivalent sum as that of loan
received, it would amount to enforcing a
LESLIE LTD. void contract. Restitution stops when

V. repayment begins and equity does not

enforce against minor any contractual
SHEILL
obligation.
(1914) 3 K.B.607
Infant can’t be held liable for a wrong when
FACTS the cause of action is ex contractu or is so
directly connected with the contract that it
Defendant obtained loans from plaintiff by
would be an indirect way of enforcing the
fraudulently misrepresenting that he was of
contract. But, if the wrongful act though
full age at the time of contract. Defendant
connected with the subject matter of the
sued him to recover the money.
contract, yet is independent of it in the sense
ISSUES of not being an act contemplated by it, then
1) Whether defendants are entitled to infant can be liable.
equitable restitution against loan given to
In present case, since an action either on
minor?
torts or on quasi contractual claim would be
2) Whether they could claim restitution tantamount to enforcing the contract by
either under action for tort arising out of making defendant liable to pay the damages
contract, or of quasi-contractual claim? or restitution, hence, no such action lies.

JUDGEMENT Lord Sumner further repeated the decision

in Sinclair in the case of R. Leslie Ltd v
If an infant obtains property or goods by
Sheill that gave an understandable
misrepresenting his age, he can be
indication about the way that Lord Sumner
compelled to restore it so long as the same
further helped to develop equity in regard to
is traceable in his possession. This is known
this area. Since Sinclair’s decision applied
as equitable doctrine of restitution.
the qualification that equity involves the
principle of the receiver to recognise the For instance, the principles which were
obligation, “it is a decision which tends to identified in Sheill are now accounted for
confirm the formulation” as is clearly seen under the Minors Contracts Act. Which,
in the R. Leslie case. provides that; “in relation to contracts
entered into after the commencement of the
This case is about a minor who has lied
Act which are unenforceable against the
about his age in order to obtain a loan from
defendant (or which he repudiates) because
the plaintiff in order to recover the amount
he was a minor when the contract was
of the advances on the reason that they had
made, the court may if it is just and
obtained by fraudulent misrepresentation.
equitable to do so, require the defendant to
In addition, as such, it was held that, in
transfer to the claimant any property
reliance of the formulation exemplified in
acquired by the defendant under the
Sinclair, that the minor could be forced to
contract, or any property representing it.”.
pay back the money in which he borrowed.
Accordingly, Sumner’s judgement in this
case brought up the existence of this Act,
Yet, the contract was not enforceable.
and this shows that his decision helped in
Nevertheless, it was held; that “Sheill could
the development of equity law.
not be sued for deceit because that would
make a minor indirectly liable for an
To conclude, all the above cases
unenforceable contract and the court could
demonstrate how Lord Sumner helped in
only order restitution if the lender could
his decisions to develop the equity law.
prove Sheill still possessed the actual notes
Moreover, each case affected the
and coins he had borrowed.”
development of equity in a different way.
For example, his decision in Blackwell v
Efficiently, this evidently shows how the
Blackwell developed the equity in relation
reasoning in Sinclair will be capable to
to half-secret trusts; the reasoning that was
apply as supportive argument in other cases
provided is still in use nowadays in respect
even where the facts of these cases are
of this area of the law, which clearly
completely different. As a result, this makes
exemplifies its significance. Additionally,
it easy to realise the method that Lord
the way that Lord Sumner explained and
Sumner had used to assist in the
applied the reasoning in Blackwell
development of equity; he expanded upon
exemplifies major the fact that subsequent
the legal principles which laid down in
cases applied the reasoning in Blackwell
another cases such as; Sinclair v Brougham.
further highlights the contribution of
Sumner’s explanations to the principle of CHIKKAM AMMIRAJU
equity law with great clarity. In addition,
V
the decision in Leeds Industrial Co-Op v
Slack further specifies the importance of SHESHAMA

Sumner’s analysis in regards to damages

and injunctions ought to be effectuated.
MADRAS HIGH COURT
Thus, Lord Sumner judgment in this case CITATIONS:
allows a straightforward explanation of
34 IND CAS 578, (1917) 32 MLJ 494
how damages may be awarded in
substitution for an injunction developed BENCH
because of Sumner’s decision. In addition,
SADASIVA AIYAR, J
because succeeded cases have extended
upon the reasoning of Sumner further FACTS

demonstrates the cases significance. As The defendants are the appellants. The only
such, it is palpable that equity in this area question in this case is whether the release-
was developed with the assistance of dead Ex. A. was executed by the plaintiffs
Sumner’s judgments. with their free consent or whether it was
obtained from the two plaintiffs (mother
and son) through the exercise of coercion or
undue influence or both, brought to bear
upon them by the defendants (the younger
brothers of the 1st plaintiff's husband) and
their father Doraiyya through the 1st
plaintiff's husband Swami who threatened
to commit suicide unless the plaintiffs
executed the release deed in respect of their
reversionary rights in certain lands which
the 1st plaintiff's mother had sold without
necessity to the defendant's father's vendor.

The lower Courts found

(a) that the 1st plaintiff's husband (the 2nd

plaintiff's, father) did threaten to commit
suicide if the plaintiffs would not execute think also that the words " to the prejudice
the release deed and that it was on account of any person whatever," which are
of that threat working on their minds that separated by a comma from the previous
the plaintiffs executed the deed; word "property" relate both to the
committing or threatening to commit an act
(b) that such a threat was "coercion" and a
forbidden by the Penal Code and to the
deed brought about by such a threat is not a
unlawful detaining or threatening to detain
deed executed with free consent and
property. It means the same thing whether,
(c) that though the threat was not made by when a man kills himself, it is called an act
the defendants (the parties to the deed) but of suicide or a successfully accomplished
by their brother, the document was voidable attempt to commit suicide; and an attempt
as "coercion". to commit suicide is punishable under the
Used by a person who is not a party to the Penal Code. Hence suicide and an attempt

deed also negatived free consent. On these to commit suicide are acts forbidden by the

findings the plaintiffs suit for cancellation Penal Code though the former cannot be

of the deed was decreed. punished under the code as a dead man
cannot be punished. Provided the threat of
REASONING
the forbidden act does have the intended
The Courts below ought to have held that effect of bringing about the consent to the
any persuasion on the part of the 1st agreement, it does not matter who made the
plaintiff's husband who is no party to Ex. A, threat or to whose prejudice it was made.
even if proved, cannot invalidate the
Mr. Patanjali Sastriar for the appellants
document," Coercion is defined (Contract
argued that the "prejudice" to the feelings or
Act, Section 15) as "committing, or
to the supposed spiritual welfare of the wife
threatening to commit, any act forbidden by
and son of Swami by the carrying out of
the Indian Penal Code, or the unlawful
Swami's threat was not the sort of prejudice
detaining, or threatening to detain any
contemplated by Section 15 and that the
property to the prejudice of any person
"prejudice" to Swami's own life by the
whatever, with the intention of causing any
threatened act was immaterial as ho was not
person to enter into an agreement". I think
a party to the deed. It is unnecessary to go
the words "any person whatever" have been
into the question whether prejudice or
advisedly used by the legislature to indicate
injury to sentiments, feelings or supposed
that the act need not be to the prejudice of
the person entering into the Contract. I
spiritual welfare is also contemplated in the Contract Act) and undue influence (Section
definition of coercion in the Contract Act. 16 of the Act) is sometimes thin and it is
possible to conceive of cases where the Act
I agree with the lower Courts that the
might fall under both beads. In
prejudice to Swami's own life is sufficient
Ranganayakamma v. Alwar Setti (1889)
to bring his threat within the definition of
I.L.R. 13 Mad. 214 a widow executed a
"coercion," provided it was intended by the
deed of adoption, as her relations (not the
person using the threat to bring about the
adopted boy) obstructed the removal of her
agreement thereby. Mr. Sastriar put the
husband's corpse by her or her guardian to
following question in support of his
the cremation ground unless she executed
contention : "Suppose A threatens to blow
the deed.
up the Taj Mahal unless B gives C a pronote
for Rs. 10,000 and suppose B is a man of Collins, C.J. and Muthuswami Aiyar, J.,
such fine artistic feelings that to save the held that the act of the defendants was an
noble structure, he gives the pronote, is the unlawful act covered by Section 15 or
note voidable for coercion?" I see no Section 16 of the Contract Act. I think that
difficulty in answering the question in the when a man uses a threat of suicide to his
affirmative, provided the court is able to wife and his son and they owing to the
arrive at the conclusion that the threat distress of mind caused by the strength of
(which was to do an act of mischief or that threat execute a document, they are
vandalism prohibited by the Penal Code to persons "whose mental capacity" which, I
the prejudice of Government) was in- take it, includes volitional freedom and
tended to bring about the execution of the strength) "is temporarily affected by reason
pronote and did have that effect (I need not of mental distress" within the meaning of
say that the mere use of the threat will not that expression in Clause 2(b) of Section
render the agreement voidable unless the 16 of the Contract Act.
agreement was not only intended to be but
JUDGEMENT
was actually "caused" by it. See Section 19
of the Contract Act and the explanation The court held in favour of the respondents

thoreto.) and dismissed the appeal. The court agreed

with the contention of Mr.Venkataramaih
It is unnecessary to consider in detail the
that forbidden act is a wider term. It held
question whether the release deed was
that suicide and attempt to commit suicide
caused by undue influence. The line
are both punishable, but suicide is not
between coercion (Section 15 of the
punishable as it is impossible to reach that of Trade's consent. The company applied,
person. The court observed that in honestly believing that they would get
definition, the words “to prejudice to any permission because it was a mere formality.
person whatsoever” are included. The In reality, after the prospectus was issued,
respondents will not execute such a deed permission was refused and the company
unless they were prejudicially affected by ended up in liquidation.
the threat of the husband. This case does not
Led by Sir Henry Peek, shareholders who
fall under the undue influence because the
had purchased their stakes in the company
husband was not a party to the contract. The
on the faith of the statement sued the
threat by the husband amounted to coercion
directors in misrepresentation.
and the appeal by the younger brothers of
the husband was, thus dismissed.

MISREPRESENTATION AND FRAUD JUDGMENT

DERRY V PEEK The House of Lords held that the

shareholders' action failed because it was
[1889] UKHL 1
not proved that the director lacked honest
belief in what they had said. Lord
Herschell, however, pointed out that
JUDGE(S) SITTING
although unreasonableness of the grounds
LORD HALSBURY L.C., LORD of belief is not deceitful, it is evidence from
WATSON, LORD BRAMWELL, which deceit may be inferred. There are
LORD FITZGERALD, AND LORD many cases, "where the fact that an alleged
HERSCHELL belief was destitute of all reasonable

FACTS foundation would suffice of itself to

convince the court that it was not really
The Plymouth, the Devonport and District
entertained, and that the representation
Tramways company issued a prospectus
was a fraudulent one."
stating that the company had permission to
use steam trams, which would replace their SIGNIFICANCE
horse-powered trams. In fact, the company The tort of deceit would have been
had no such permission because the right to established only if the misstatements had
use steam power was subject to the Board been fraudulently made. Derry v Peek thus
validated the perspective of the majority PEEK
judges in the Court of Appeal in Heaven v
V.
Pender. That is, for there to be deceit or
fraud (which is the same) it must be shown GURNEY

that a defendant:

(i) knows a statement is untrue, or 1873 LR 6 HL 377

(ii) has no belief in its truth, or

(iii) is reckless as to whether it is true or BENCH

false.
LORD CAIRNS R
Derry v Peek also outlined that no duty
would be required in relationship to non-
fraudulent misrepresentation, without the FACTS
presence of a contract, a fiduciary
The appellant purchased shares on the faith
relationship, fraud or deceit; but this was
of false statements contained in a
later overruled in Hedley Byrne v Heller.
prospectus issued by the promoters of the
The finding of fact that the directors "had company. The appellant was not a person to
an honest belief in the statement" runs whom shares have been allotted to on the
contrary to the evidence that although they formation of the company. He had merely
expected to get planning permission as a purchased shares from such allottees.
mere formality, they plainly knew that they
HELD
did not yet have that permission.
House of Lords held that the prospectus was
only addressed to the first applicants for
shares. It could not be supposed to extend
to others other than these. Thus the
appellant's action against the promoters
failed since the false statements in the
prospectus were not addressed to him.

The action failed because he had not in fact

relied on the prospectus but had purchased
the shares in the market. Lord Cairns
expressed his agreement with the
observations of Lord Chelmsford and Lord by the directors in the prospectus. share,
Colonsay that mere silence could not be a would in my opinion form no ground for an
sufficient foundation for the proceedings: action in the nature of an action for
‘Mere non-disclosure of material facts, misrepresentation. There must, in my
however morally censurable, however that opinion, be some active misstatement of
non-disclosure might be a ground in a fact, or, at all events, such a partial and
proper proceeding at a proper time for fragmentary statement of fact, as that the
setting aside an allotment or a purchase of withholding of that which is not stated
share, would in my opinion form no ground makes that which is stated absolutely false
for an action in the nature of an action for
misrepresentation. There must, in my
opinion, be some active misstatement of
fact, or, at all events, such a partial and
fragmentary statement of fact, as that the
withholding of that which is not stated
makes that which is stated absolutely false

RATIO

A prospectus for an intended company was

issued by promoters who were aware of the
disastrous liabilities of the business of
Overend and Gurney which the company
was to purchase. The prospectus made no
mention of a deed of arrangement under
which those liabilities were, in effect, to be
transferred to the company. The appellant
bought shares in the company and, when it
was wound up, he was declared liable as a
contributory and had to pay almost
andpound;100,000. He sought an indemnity
against the directors, alleging
misrepresentation and concealment of facts
 WITH V O’FLANNAGAN point when the contract was signed. He
referred to Fry J in Davies v London
[1936] Ch 575
Provincial Marine Insurance that there is no
duty to disclose, even when someone

COURT OF APPEAL believes facts to be operating on another’s

mind. He noted fiduciary relationships can
bring an entire duty of disclosure.
BENCH Uberrimae fidei contracts, including
partnership and marine insurance, do too.
LORD WRIGHT MR
But also where in negotiations a statement
is false and then the representor discovers
FACTS it, though if he had said nothing he is
entitled to hold his tongue throughout. He
Dr O’Flanagan said truthfully in January
noted that a ‘representation made as a
1934 that his medical practice had takings
matter of inducement to enter a contract is
of £2000 pa. However, in May the takings
to be treated as a continuing
were only £5 a week because O’Flanagan
representation.’
had become ill. The contract was signed
with Mr With to buy the medical practice, Romer LJ stated,
but Mr O'Flanagan did not disclose the
“I agree. The only principle invoked by the
change in circumstances.
appellants in this case is as follows. If A
At trial the judge held that because the with a view to inducing B to enter into a
contract was not made uberrimae fidei. contract makes a representation as to a
Where a statement is rendered false by a material fact, then if at a later date and
change in circumstances there is a duty to before the contract is actually entered into,
disclose the change. A failure to do so will owing to a change of circumstances, the
result in an actionable misrepresentation representation then made would to the
knowledge of A be untrue, and B
subsequently enters into the contract in
JUDGMENT ignorance of that change of circumstances

Lord Wright MR held that Mr With could and relying upon that representation, A

rescind either because there was a duty to cannot hold B to the bargain. There is

point out the change in circumstance or ample authority for that statement and,

because the representation continued till the indeed, I doubt myself whether any
authority is necessary, it being, it seems to SHRI KRISHNAN
me, so obviously consistent with the
VS
plainest principles of equity.”
THE KURUKSHETRA UNIVERSITY
Clauson J concurred.

SIGNIFICANCE
AIR 1976 SC 376, (1976) 1 SCC 311,
This affirms a general principle that any
1976 (8) UJ 15 SC
change to a fundamental reason for
contracting (supervening falsification)
must be communicated, where it is known BENCH
to one party. It does not matter what the
H KHANNA, P BHAGWATI, S M ALI
reason or motive is for not communicating
is, it need not be malicious or fraudulent,
but merely known to the representor
FACTS

What appears to have, been a clear case of

refusal of admission to the appellant or the
cancellation of his candidature at the proper
time has been completely bungled and
destroyed by the inherent inconsistency and
seemingly contradictory stand taken by the
respondent and lack of proper vigilance on
the part of the Head of the Department of
Law. The facts of the present case lie within
a very narrow compass and only two short
points of lay have been raised before us by
Mr. Kapil Sibbal learned Counsel for the
appellant

The appellant was a teacher in the

Government High School, Dumarkha in the
District of Jind (Haryana). The University
of Kurukshetra was running law classes for
three years course and had extended the
facility to persons who were in service to offences under Sections 376, 366 and 363
attend the evening classes and complete the I.P.C. and was suspended during the period
three years course in that manner. The when the case was going on against him.
appellant decided to take the benefit of the The appellant was, however, acquitted and
facility given to the Kurukshetra University was reinstated by his employer on August
and joined LL.B. Part I classes some time 22, 1972. It would thus appear that on May
in years 1971. According to the University 18, 1973 as also on April 25, 1973 when he
statute a student of the Faculty of Law was had applied for his Roll Number to clear the
given the option to clear certain subjects in subjects, the stigma of criminal case had
which he may have failed at one of the been completely removed.
examinations before completing the three-
years course. The students were to appear
in six papers each year. In April 1972 the HELD

petitioner appear in the annual examination A copy of this letter is appended as

of Part I but failed in three subjects, namely, Annexture 'Rule 1' to this affidavit. A
Legal Theory, Comparative Law and perusal of this letter would show that the
Constitutional Law of India. Subsequently petitioner had not been granted permission
he was promoted to Part II which he joined by his employer to attend the law classes at
in the year 1972. Under the University the University. Furthermore, the
Statute the appellant was to appear in Part approximate distance between his station of
II Examination in April 1973. On April 26, posting and the University is more that fifty
1973 the appellant applied for his Roll miles. Keeping in view the fact that he was
Number to the University in order to posted in the interior of District Jind, it is
reappear in the subjects in which he had impossible that the petitioner could have
failed and to clear them but he was refused attended the requisite number of lectures.
permission and according to the appellant Evidently, the petitioner was himself aware
without any reason. The annual of the fact that he had not attended the
examination for Part II was to be held on requisite number of lectures, It is also
May 19, 1973 and the appellant approached incorrect to suggest that the petitioner's
the University for granting him provisional name could be sent for the examination
permission to appear subject to his getting only if he had completed and required
the permission from his employer to attend minimum attendance of lectures. The
the Law Faculty. In between it appears that examination forms are always sent in
the appellant had been prosecuted for
December. Rule 2(b) of Ordinance 10 of the
Kurukshetra University Calendar, Volume
(a) that the candidate has satisfied him by
I, provides as under inter alia:
the production of the certificate of a
Mr. Sibbal learned Counsel for the competent authority that he has passed the
appellant submitted two points before us. In examinations which qualified him for
the first place it was argued that once admission to the examination; and
appellant was allowed to appear at LL.B.
(b) that he has attended a regular course of
Part II examination held on May 19, 1973
study for the prescribed number of
his candidature could not be withdrawn for
acadamic years.
any reason whatsoever in view of the
mandatory provisions of Clause 2(b) of the Certificate (b) will be provisional and can

Kurukshetra University Calender Vol. I, be withdrawn at any time before the

Ordinance X under which the candidature examination if the applicant fails to attend

could be withdrawn before the candidate the prescribed course of lectures before the

took the examination. Secondly it was end of his terra.

argued that the order of the University was The last part of this statute clearly shows
mala fide because the real reason for that the University could withdraw the
canceling the candidature of the appellant certificate if the applicant had failed to
was the insistence of the District Education attend the prescribed course of lectures. But
Officer that the appellant should not have this could be done only before the
been admitted to the Law Faculty unless he examination. It is, therefore, manifest that
had obtained the permission of his superior once the appellant was allowed to take the
officers. In order to appreciate the first examination, rightly or wrongly, then the
contention it may be necessary to extract statute which empowers the University to
the relevant portions of the statute withdraw the candidature of the applicant
contained in Kurukshetra University has worked itself out and the applicant
Calender Volume I, Ordinance X. Clause 2 cannot be refused admission subsequently
of this Ordinance runs as follows: for any infirmity which should have been

 The following certificates, signed looked into before giving the applicant

by the Principal of the College/Head permission to appear. It was, however,

of the Department connerned, shall submitted by Mr. Nandy learned Counsel

be required from each applicant: for the respondent that the names of the
candidates who were short of percentage
were displayed on the Notice Board of the committed is in a position to discover the
College and the appellant was fully aware truth by due diligence, was fraud is not
of the same and yet he did not draw the proved. It was neither a case of suggestion
attention of the University authorities when falsi, or suppression yeri. The appellant
he applied for admission to appear in LL.B never wrote to the University authorities
Part II Examination, Thus the appellant was that he attended the prescribed number of
guilty of committing serious fraud and was lectures. There was ample time and
not entitled to any indulgence from this opportunity for the University authorities to
Court. have found out the defect. In these
circumstances, therefore, if the University
It appears from the averments made in the
authorities acquiesced in the infirmities
counter-affidavit that according to the
which the admission form contained and
procedure prevalent in the College the
allowed the appellant to appear in part I
admission forms are forwarded by the Head
Examination in April 1972, then by force of
of the Department in December preceding
the University Statute the University had no
the year when the Examination is held. In
power to withdraw the candidature of the
the instant case the admission form of the
appellant. A somewhat similar situation
appellant must have been forwarded in
arose in Premji Bhai Ganesh Bhai
December 1971 whereas the examination
Kshatriya v. Vice Chancellor, Ravishankar
was to take place in April/May 1972. It is
University, Raipur and Ors. where a
obvious that during this period of four to
Division Bench of the High Court of
five months it was the duty of the
Madhya Pradesh observed as follows:
University authorities to scrutinise the form
in order to find out whether it was in order, From the provisions of Ordinance Nos. 19
Equally it was the duty of the Head of the and 48 it is clear that the scrutiny as to the
Department of Law before submitting the requisite attendance of the candidates is
form to the University to see that the form required to be made before the admission
complied with all the requirements of law. cards are issued. Once the admission cards
If neither the Head of the Department nor are issued permitting the candidates to take
the University authorities took care to their examination, there is no provision in
scrutinise the admission form, then the Ordinance No. 19 or Ordinance No. 48
question of the appellant committing a which, would enable the Vice-Chancellor
fraud did not arise. It is well settled that to withdraw the permission. The discretion
where a person on whom fraud is having been clearly exercised in favour of
the petitioner by permitting him to appear were series of parleys and correspondence
at the examination, it was not open to the between the District Education Officer and
Vice-Chancellor to withdraw that the respondent in the course of which the
permission subsequently and to withhold respondent was being persuaded, to the
his result. extent of compulsion, to withdraw the
candidature of the appellant because he had
We find ourselves in complete agreement
not obtained the permission of his superior
with the reasons given by the Madhya
officers. Mr. Nandy appearing for the
Pradesh High Court and the view of law
respondent has not been able to show any
taken by the learned Judges. In these
provision in the statutes of the University
circumstances, therefore, once the appellant
which required that the candidates
was allowed to appear at the Examination
attending the evening law classes who are
in May 1973, the respondents had no
in service should first get the prior
jurisdiction to cancel his candidature for
permission of their superior officers. We
that examination. This was not a case where
have also perused the University Statute
on the undertaking given by a candidate for
placed before us by counsel for the
fulfilment of a specified condition a
appellant and we do not find any provision
provisional admission was given by the
which could have afforded justification for
University to appear at the examination
the respondent to cancel the candidature of
which could be withdrawn at any moment
the appellant on the ground that he had not
on the non-fulfilment of the aforesaid
obtained the previous permission of his
condition. If this was the situation then the
superior officers.
candidate himself would have contracted
out the statute which was for his benefit and Mr. Nandy counsel for the respondent
the statute therefore would not have stood placed great reliance on the letter written by
in the way of the University authorities in the appellant to the respondent wherein he
cancelling the candidature of the appellant. undertook to file the requisite permission or
to abide by any other order that may be
As regards the second point that the order
passed by the University authorities. This
was passed malafides, it is difficult to find
letter was obviously written because the
any evidence of malafides in this case. The
appellant was very anxious to appear in Part
order suffers from yet another infirmity.
II Examination & the letter was written in
The annexures filed by the appellant and the
terrorem and in complete ignorance of his
respondent as also the allegations made in
legal rights. The appellant did not know that
the counter-affidavit clearly show that there
there was any provision in the University refused admission to the appellant to LL.B.
Statute which required that he should obtain Part III or for that matter to refuse
the permission of his superior officers. But permission to appear at the examination on
as the respondent was bent on prohibiting a ground which was not mentioned in the
him from taking the examination he had no impugned order.
alternative but to write a letter per force. It
Having gone into the circumstances
is well settled that any admission made in
mentioned above, we are of the view that
ignorance of legal rights or under duress
the impugned orders suffers from errors of
cannot bind the maker of the admission. In
law patent on the face of the record, and in
these circumstances we are clearly of the
any event this was not a case which should
opinion that the letter written by the
have been dismissed by the High Court in
appellant does not put him out of court. If
liming.
only the University authorities would have
exercised proper diligence and care by The appeal in accordingly allowed and the

scrutinising the admission form when it was order of the University dated June 26, 1973,

sent by the Head of the Department to the is hereby quashed by a writ a certiorari. The

University as far back as December 1971 respondent is directed to declare the result

they could have detected the defects or of LL.B. Part II Examination in which the

infirmities from which the form suffered appel ant had appeared on May 19, 1973

according to the University Statute. The and also to give him an opportunity to

Head of the Department of Law was also appear in the three subjects in which he had

guilty of dereliction of duty in not failed in LL.B. Part I Examination, at the

scrutinising the admission form of the next examination which may be held by the

appellant before he forwarded the same to University.

the University.

Moreover, the stand taken by the UNDUE INFLUENCE

respondent that as the appellant did not get
the requisite permission from his superior
officers, therefore he was not allowed to MANU SINGH
appear at the examination, does not merit
V
consideration, because the impugned order
does not mention this ground at all and it UMA DATT
was not open to the respondent to have FACTS
 MISTAKE

CUNDY

LINDSAY

1877-78 LR 3 APP CAS 459

HOL OF UK

BENCH

BLACKBURN J.,

LORD CAIRNS

FACTS

Lindsay & Co were manufacturers of linen

handkerchiefs, amongst other things. They
received correspondence from a man
named Blenkarn. He had rented a room at
37 Wood Street, Cheapside, but purported
to be 'Blenkiron & Co'. Lindsay & Co knew
of a reputable business of this name which
resided at 123 Wood Street. Believing the
correspondence to be from this company,
Lindsay & Co delivered to Blenkarn a large
order of handkerchiefs. Blenkarn then sold
the goods – 250 dozen linen handkerchiefs
– to an innocent third party, Cundy. When
Blenkarn failed to pay, Lindsay & Co sued
Cundy for the goods.
JUDGMENT COURT OF APPEAL

The Divisional Court held that Lindsay The Court of Appeal, with Mellish LJ, Brett
could not recover the handkerchiefs from J and Amphlett JA overturned the
Cundy. Blackburn J, giving judgment, held Divisional Court, holding that Lindsay
the following. could recover the handkerchiefs, since the
mistake about the identity of the rogue
“The rule of law has been thoroughly
voided the contract from the start. Cundy
established—the cases are numerous, and I
appealed.
need not cite them—that where a contract
is voidable on the ground of fraud, you may HOUSE OF LORDS
avoid it, so long as the goods remain in the
The House of Lords held that Lindsay & Co
man's hands who is guilty of the fraud, or in
had meant to deal only with Blenkiron &
the hands of anybody who takes them from
Co. There could therefore have been no
him with notice; but where a person has
agreement or contract between them and
bonâ fide acquired an interest in the goods,
the rogue. Accordingly, title did not pass to
you cannot, as against that person, avoid
the rogue, and could not have passed to
the contract. Where the goods have come
Cundy. They were forced to therefore
into the hands of a bonâ fide purchaser you
return the goods.
cannot take them back. The case is very
closely analogous to the old common-law Lord Cairns explained the mistake to

rule, in the case of felony or trespass. If identity, and the consequences:

goods are stolen or taken away by trespass, “Now, my Lords, stating the matter shortly
no title whatever is conferred, in general, in that way, I ask the question, how is it
upon a purchaser from the person who took possible to imagine that in that state of
them, however bonâ fide the purchase may things any contract could have arisen
have been; but if the sale be in market overt between the Respondents and Blenkarn, the
to a person who has no knowledge of the dishonest man? Of him they knew nothing,
felony or trespass, then the purchaser and of him they never thought. With him
acquires the property, notwithstanding the they never intended to deal. Their minds
goods had been taken from the owner by never, even for an instant of time rested
felony or trespass.” upon him, and as between him and them

Mellor J and Lush J agreed. there was no consensus of mind which

could lead to any agreement or any disarray. The question before the House on
contract whatever. As between him and this appeal is whether this distinction, so far
them there was merely the one side to a as it remains, should still be regarded as
contract, where, in order to produce a good law
contract, two sides would be required. With
the firm of Blenkiron & Co. of course there
was no contract, for as to them the matter GRIFFITH

was entirely unknown, and therefore the V.

pretence of a contract was a failure.”
BRYMER

DEVELOPMENTS
19 T.L.R. 434 (1903)
As such, the contract was held void, rather
KING’S BENCH DIVISION
than voidable. This has introduced a
distinction from cases such as Phillips v
Brooks, where parties dealing face to face
FACTS
are presumed to contract with each other.
On June 24, 1902, Murray Griffith
Despite still being good law, commentators,
(plaintiff) agreed to rent a room from W.E.
as well as the courts, have been critical of
Brymer (defendant) in order to view the
this distinction. In Shogun Finance Ltd v
king’s coronation procession, which was
Hudson Lord Nicholls, dissenting, stated it
scheduled for June 26. Griffith paid Brymer
to be an "eroded" principle of law.
100 pounds. Approximately one hour prior
“The distinction in outcome thus drawn
to the parties’ agreement, unbeknownst to
between these two kinds of fraudulent
the parties at the time, it was determined
misrepresentation, one as to 'attributes' and
that the king would undergo surgery and
the other as to 'identity', is unconvincing. It
that the coronation procession would
has been described as a reproach to the law.
therefore be cancelled. Griffith sued
To a considerable extent the distinction has
Brymer to recover his payment.
now been eroded. Cundy v Lindsay was
At 11 a.m. on June 24, 1902, the plaintiff
decided over a century ago, and since then
entered into a verbal agreement with
there have been significant developments in
Messrs. Pope, Roach, and Co., the
this area of case law. Unfortunately these
defendant’s agents, to take the room for the
developments have left the law in a state of
purpose of viewing the procession on June (2) this mistaken belief goes “to the whole
26, and handed over his cheque for 100 root of the matter.”
pounds. It was admitted that the decision to
operate on the King, which rendered the
procession impossible, had been reached at INGRAM V LITTLE

about 10 a.m. that morning. But neither [1961] 1 QB 31

party was aware of this fact when the
agreement was entered into and the cheque
given; and it was contended for the plaintiff BENCH
that as both parties were under a
PEARCE LJ, DEVLIN LJ
misconception with regard to the existing
state of facts about which they were
contracting, the plaintiff was entitled to the FACTS
return of his money
The Plaintiffs were joint owners of a car. A
fraudster attempted to purchase the car by
cheque, which they initially refused. He
HELD
pretended to be a reputable businessman
Mr. Justice Wright held that the agreement
and the Plaintiffs then accepted payment by
was made on the supposition by both parties
cheque. The cheque dishonoured the next
that nothing had happened which made the
day. By then, the fraudster had sold the car
performance impossible. This was a mis-
to the defendants who were the bona fide
supposition on the state of the facts which
purchasers of the car. The Plaintiffs sought
went to the whole root of the matter. The
to recover the car or the value of the car
contract was therefore void, and the
from the defendants.
plaintiff was entitled to recover his 100
pounds. ISSUES

The issue here was whether the defendants

The court holds that the contract is void
could claim possessory title over the
because
vehicle based on a contract made by
(1) both parties thought, at the time they
mistaken identity.
entered the contract, that the parade would
take place, and HELD

The Plaintiffs claim was successful. The

court applied the general principle of the
process of forming a binding contract to the The Respondent had advanced money to
current facts. Where an offeror makes an the Appellant who was a married woman in
offer to the promisee, the offeror is making order to enable her to obtain a divorce from
such an offer only with the person identified her husband. He promised to marry her as
and no one else. The fraudster pretended to soon as she was divorced. He then sued to
be a well known business man and that was recover the advances he had made.
the only reason why the Plaintiffs accepted
JUDGEMENT
payment by cheque, as initially they had
refused. The contract for sale was therefore The object of the agreement with the wife

only made with the wealthy businessman to divorce her husband and marry the

and not the fraudster in his personal Respondent was immoral and, therefore,

capacity. Thus, the fact that the fraudster the agreement was void. Hence the

used someone else’s identity to make the Respondent could not recover the money he

contract prevented a contract from being had advanced.

formed. It also prevented the possessory

title from being passed to the fraudster and
SM. SUMITRA DEVI AGARWALLA
then on to the defendant.
VS

SM. SULEKHA KUNDU AND ANR.

BAI VIJILI
AIR 1976 CAL 196
V
(1976) 1 COMPLJ 333 CAL
NANSA NAGAR

BENCH
(1886) ILR 10 BOM 152
M DUTT, SHARMA

FACTS
SIR SARGENT, KT., CJ &
BIRDWOOD, J This appeal is at the instance of the plaintiff
and it is directed against the order dated
October 1, 1975 of the learned Judge, 8th
FACTS Bench, City Civil Court, Calcutta,
dismissing the plaintiff's application for
recording a compromise in adjustment of
the suit under Order 23, Rule 3 of the Code of the contract of lease by letting out the suit
of Civil Procedure. The suit was instituted premises to her at a monthly rental of Rs.
by the plaintiff for specific performance of 400.
a contract of lease dated November 2, 1973,
The plaintiff also filed an application for
for khas possession of the suit premises and
temporary injunction under Order 39, Rules
for a permanent injunction restraining the
1 and 2 of the Code of Civil Procedure
defendants from letting out the suit
praying for restraining the defendants from
premises to any person other than the
letting out or parting with the possession of
plaintiff. The suit premises is the first floor
the suit premises to any person other than
of premises No. 310, Rabindra Sarani,
the plaintiff till the disposal of the suit.
Calcutta. It is not, disputed that the
Before the application for temporary
defendant No. 1 Sm. Sulekha Kundu is the
injunction was disposed of, on January 14,
owner of the said premises. The defendant
1975, the plaintiff filed the application
No. 2 Kestodas Kundu is the husband's
under Order 23, Rule 3 inter alia alleging
elder brother of Sulekha Kundu. The
therein that on October 13, 1974, due to the
plaintiff's cape is that on November 2, 1973,
intervention of common friends, the parties
she entered into a contract of lease of the
settled the disputes between them in the
suit premises with the defendants on certain
presence of their respective lawyers. The
terms and conditions. Pursuant to the said
terms of settlement were recorded in
agreement, the plaintiff advanced to the
writing in the form of a letter addressed by
defendant No. 2 as the agent of the
the defendant No. 1 Sulekha Kundu to the
defendant No. 1, a total sum of Rs. 16,000
plaintiff. The original, and duplicate letters
on diverse dates between November 7,
bearing the signatures of the defendant
1973 and February 19, 1974 out of the sum
were detained by Shri Sunil Krishna Dutta,
of Rs. 20,000 agreed to be paid by the
Advocate, representing the defendants in
plaintiff under the contract, so as to enable
the matter. It is alleged that a true copy of
the defendants to complete the renovation
the said letter was handed over to the
of the suit premises. It is alleged that the
plaintiff through her husband Krishna
defendants failed and neglected to deliver
Kumar Agarwal (hereinafter referred to as
possession of the suit premises to the
Agarwal). A copy of the said letter
plaintiff even though the plaintiff offered to
incorporating the terms of settlement
pay the balance sum of Rs. 4,000. On the
agreed to by the parties has been annexed to
aforesaid allegations, the plaintiff has
the application. It is alleged that the
claimed a decree for specific performance
defendants deliberately and with an ulterior compelled to sign the said letter in duplicate
motive have backed out from the said terms containing the terms and conditions of the
and are not willing to perform their part of purported settlement.
the agreement, though the plaintiff at all
JUDGEMENT
material times was and is still ready and
willing to abide by the same. Accordingly, The learned Judge after considering the

it has been prayed by the plaintiff that the evidence and the facts and circumstances of

terms and conditions referred to in the letter the case has held that the said agreement is

dated October 13, 1974 should be recorded in the nature of an executory contract and

and the suit should be decreed on the said not a concluded one and, as such, does not

terms. come within the purview of Order 23, Rule

3; that the consideration for the agreement
The defendant No. 1 Sulekha Kundu and
was unlawful and opposed to public policy
the defendant No. 2 Kestodas Kundu both
and, consequently, the agreement was hit
opposed the said application under Order
by Section 23 of the Contract Act and that,
23, Rule 3 by petitions of objection. They
the agreement was not read over and
have denied the allegations made by the
explained to Sulekha Kundu before she put
plaintiff in the said application. It has been
her signature thereon. It has been held by
averred by Sulekha Kundu that she was
him that the plaintiff has failed to satisfy the
made to sign the said letter under duress and
Court that the suit has been wholly or partly
threat without the knowledge of the
adjusted by a lawful agreement or
contents thereof and without any
compromise. Upon the aforesaid findings,
independent legal advice. It is contended
he has dismissed the application under
that the said purported agreement is void
Order 23, Rule 3. Hence, this appeal,
and not legally enforceable. Further, it is
contended that the terms of the said alleged The first question that arises is whether the

agreement are not lawful. It is also her case documents, Exts. 1 and 1 (a) embodying the

that Sunil Krishna "Dutta, Advocate was purported terms of settlement have been

never engaged by her and she had no executed by the defendant No. 1 Sulekha

occasion to give any instruction to him. The Kundu under threat and coercion. It has,

said Sunil Krishna Dutta was acting on however, been strenuously urged by Mr.

behalf of and represented the defendant No. B.C. Dutt, learned Advocate appearing on

2 Kestodas Kundu. She has enumerated the behalf of the plaintiff-appellant that an

circumstances under which she was enquiry as to whether an agreement in

adjustment of the suit is vitiated by fraud, Act, merely avoidable and not absolutely
undue influence or coercion does not come illegal or unlawful. Section 23 of the Act
within the purview of the provision of indicates when the consideration or object
Order 23, Rule 3. In order to consider this of an agreement is unlawful. These are
contention, we may refer to the provision of cases where it is forbidden by law or is of
Order 23, Rule 3 which provides as follows: such a nature that, if permitted, it would
defeat the provisions of any law, or is
"Where it is proved to the satisfaction of the
fraudulent, or involves or implies injury to
Court that a suit has been adjusted wholly
any person or property, or where the court
or in part by any lawful agreement or
regards it as immoral or opposed to public
compromise, or where the defendant
policy. We think that the word "lawful" in
satisfies the plaintiff in respect of the whole
Order XXIII, Rule 3, refers to agreements
or any part of the subject-matter of the suit,
which in their very terms or nature are not
the Court shall order such agreement,
"unlawful", and may therefore include
compromise or satisfaction to be recorded,
agreements which are avoidable at the
and shall pass a decree in accordance
option of one of the parties thereto because
therewith so far as it relates to the suit."
they have been brought about by undue
Mr. Dutt has placed before us a number of influence, coercion or fraud."
decisions of different High Courts in
It has been further observed that it is
support of his contention. The first of such
possible to take the view that,
decisions on which reliance has been placed
independently of Order XXIII, Rule 3, the
by him is a Bench Decision of the
Court has inherent jurisdiction under
Allahabad High Court consisting of
Section 151 of the Cede to refuse to record
Sulaiman and Kendall JJ. in Quadri Jahen
a compromise which has been brought
Begum v. Fazal Ahmad, ILR 50 All 748 =
about by undue influence.
(AIR 1928 All 494). In that case, it has been
observed as follows; It is clear from Order 23, Rule 3 that before
the Court considers whether, or not an
"In our opinion the word "lawful" in Order
agreement is lawful, it must be satisfied that
XXIII, Rule 3, does not merely mean
there has been an agreement between the
binding or enforceable. A contract which is
parties. An agreement is brought into
brought about either by undue influence,
existence where one party makes an offer
misrepresentation or fraud is, under
and another accepts the same. It is the
Sections 19 and 19-A of the Indian Contract
consensus of minds of two persons in
regard to certain matter. Of these two are of the opinion that an enquiry by the
persons if one has not agreed to the term Court for such satisfaction will include also
proposed by the other, there is no an enquiry into the allegation of a party that
agreement between them. When the his consent to the terms of the agreement
consent of one to the term is obtained by the has been procured by fraud, undue
other by some illegal means, namely, by influence or coercion. It is true that fraud,
fraud, coercion or undue influence, it is undue influence or coercion makes a
difficult to hold that the person whose contract a avoidable one and not void. But
consent has been so obtained has agreed to as soon as a party complains about the
the term. practice upon him of fraud, undue influence
or coercion by another party, he avoids the
Is it that the satisfaction of the Court is
contract. If the party complains to Court
confined only to the proof of the signatures
that his signature to a document containing
of the parties on the document containing
the terms has been obtained by the other
the terms? Even in spite of the fact that the
party at the point of a revolver, would the
signature of a party or his consent to the
Court refuse to make an enquiry into the
agreement has been obtained by the other
same on the ground that the agreement is
party by some illegal means, namely, by
only avoidable and not void? With due
fraud, undue influence or coercion, would
respect, we are unable to subscribe to such
the Court be able to hold that there is an
a bold proposition and, in our opinion, to
agreement? With respect, we are unable to
consider whether or not an agreement has
understand the principle of law laid down in
been reached between the parties, the Court
those two decisions. It has been already
will of necessity embark upon an enquiry as
observed that if the consent of one party is
to the allegation of a party that his consent
obtained by fraud, undue influence or
to the "agreement or his signature on the
coercion, it cannot be said that he has
document containing the terms, has been
agreed to the term to which his consent has
obtained by fraud, undue influence or
been so obtained and consequently the
coercion. It is true that the party
Court has to come to the finding that there
complaining has his remedy by way of suit
is no agreement. If it is required under
He can obtain a declaration that the con-
Order 23, Rule 3 that the Court has to be
tract is vitiated by fraud, undue influence or
satisfied as to whether an agreement has in
coercion and, as such, is not binding upon
fact been reached as held by the Allahabad
him. In our opinion, to drive such a party to
High Court in the above two decisions, we
a separate suit will be against justice, equity (1865) LR 1 Ex 213
and good conscience.

It has been held by the learned Judge that

BENCH
the agreement is hit by Section 23 of the
Contract Act as one of the terms is opposed POLLOCK CB, PIGOTT,

to public policy. In our opinion, there are BRAMWELL, MARTIN BB

cogent reasons for the said finding of the FACTS

learned Judge.
The defendant was a prostitute who hired a
Under Section 23 of the Indian Contract carriage from the plaintiff, who was a
Act, every agreement of which the object or coachbuilder, on hire purchase terms to be
consideration is unlawful is void, it paid for in instalments. She wanted the
provides inter alia that the consideration or carriage to attract customers. The defendant
object of an agreement is unlawful when it did not pay the second instalment on the
is opposed to public policy It is now well carriage and returned it in a damaged
settled that where the consideration of an condition, in breach of the agreement. At
agreement is the withdrawal and non- first instance the jury found on the evidence
prosecution of a criminal case, the that the coachbuilder knew that she was a
agreement is opposed to public policy and prostitute at the time the contract was made.
is void. The coachbuilder sued for non-payment

For the reasons aforesaid, we affirm the and for the damage.

order of the learned Judge dismissing the ISSUES

plaintiff's application under Order 23, Rule
It was argued that, as the coachbuilder
3 of the Code of Civil Procedure and
knew the defendant was a prostitute, he
dismiss the appeal with costs. No separate
expected to be paid out of the profits of
order need be passed in the connected Rule,
prostitution. He, therefore, knew of the
which shall be deemed to have been
immoral purpose to which the carriage was
disposed of without any order as to costs,
to be put and should not be allowed to
Sharma, J.
recover on the contract.
PEARCE
JUDGEMENT
V
The court found for the defendant. It was
BROOKS immaterial that the immoral purpose was
not part of the contract or whether the make guns or ammunition anywhere in the
claimant was to be paid out of the proceeds. world, and would not compete with Maxim
Bramwell B distinguished between a in any way for a period of 25 years’.
contract to supply a prostitute with a
carriage to be used to attract customers and
a contract to supply her a pair of shoes, as JUDGMENT

shoes were one of the necessities of life. It The House of Lords held that the restraint
was part of the principle ex turpi causa non was reasonable in the interests of the
oritur actio that anyone who supplies parties. They placed emphasis on the
something for the performance an illegal £200,000 that Thomas Nordenfeldt had
act with knowledge that it was to be used received as full value for his sale.Restraint
for that purpose cannot sue for the price of of trade clauses were prima facie void at
it. An immoral purpose was the same thing common law, but they may be deemed valid
as an illegal purpose. Therefore, the if three conditions are met:
plaintiff could not recover.
- the terms seek to protect a legitimate
interest

NORDENFELT - the terms are reasonable in scope from the

V viewpoint of the parties involved

NORDENFELT - the terms are reasonable in scope from the

viewpoint of public policy.
1894 AC 535
The question on severability was whether
the reasonable restriction could be enforced
BENCH when it was in the same contract as an
unreasonable and unenforceable restriction.
LORD MACNAGHTEN, LORD
The court used the test of whether striking
WATSON LORD HERSCHELL,
out (with a blue pencil) words containing
LORD ASHBOURNE LORD MORRIS
unreasonable provisions would leave
FACTS behind a contractual obligation that still

Thorsten Nordenfelt, a manufacturer made sense. If it did, then the amended

specialising in armaments, had sold his contract would be enforced by the court.
business to Hiram Stevens Maxim. They
had agreed that Nordenfelt ‘would not
In this case, the unreasonable restraint was public policy, and is therefore capable of
severable, and the court enforced the being enforced.’
amended agreement that Nordenfelt "for
Lord MacNaughten discussed the doctrine
the next 25 years, would not make guns or
of restraint of trade: ‘In the age of Queen
ammunition anywhere in the world , thus
Elizabeth all restraints of trade, whatever
permitting him to trade in those very items
they were, general or partial, were thought
in direct competition with Maxim,
to be contrary to public policy, and
illustrating the limited practical utility of
therefore void.’ and ‘The true view at the
the rule under its strike-out only stricture.
present time I think, is this: The public have
At common law a restraint of trade is prima
an interest in every person’s carrying on his
facie contrary to public policy and void,
trade freely: so has the individual. All
unless it can be shown that the restraint is,
interference with individual liberty of
in the circumstances of the particular case,
action in trading, and all restraints of trade
reasonable.
of themselves, if there is nothing more, are
Lord Watson said: ‘I think it is now contrary to public policy, and therefore
generally conceded that it is to the void. That is the general rule. But there are
advantage of the public to allow a trader exceptions: restraints of trade and
who has established a lucrative business to interference with individual liberty of
dispose of it to a successor by whom it may action may be justified by the special
efficiently be carried on. That object could circumstances of a particular case. It is a
not be accomplished if, upon the score of sufficient justification, and indeed it is the
public policy, the law reserved to the seller only justification, if the restriction is
an absolute and indefeasible right to start a reasonable – reasonable, that is, in
rival business the day after he sold. reference to the interests of the parties
Accordingly it has been determined concerned and reasonable in reference to
judicially, that in cases where the the interests of the public, so framed and so
purchaser, for his own protection, obtains guarded as to afford adequate protection to
an obligation restraining the seller from the party in whose favour it is imposed,
competing with him, within bounds which while at the same time it is in no way
having regard to the nature of the business injurious to the public.’
are reasonable and are limited in respect of
RATIO
space, the obligation is not obnoxious to
he purchaser of the goodwill of a business created a monthly obligation to pay into and
sought to enforce a covenant in restraint of a corresponding right to receive from, a
trade given by the seller. general common fund the different if any,
between the profits actually received by the
parties and those to which they were, under
the agreement, entitled. On a suit being
instituted for breach of the agreement, in
which damages, sustained prior to and
S.B.FRASER AND COMPANY
pending the hearing of the suit, were
V claimed.

BOMBAY ICE MANUFACTURING JUDGEMENT

COMPANY
Held the fact that an agreement, if carried
out, would limited competition and keep np
prices, did not necessarily bring it within
(1905) ILR 29 BOM107
the terms of section 27 of the Indian
Contract Act (I X of 1872) : to succeed in
BENCH the defence under that section it was
necessary to establish that the agreement
SIR LAWRENCE JENKIM, K.C.I.E.
was one whereby a person was restrained
CHIEF JUSTICE AND JUSTICE
from exercising a lawful profession, trade,
BATCHELOR
or busiaoas of any kind. Meld, further, that
whether or not a High Court in India would

FACTS award damages, in respect of a continuing

cause of action, up to the date of its decree,
In March 1903, certain Ice Manufacturing
subsequent successive accruals of an
Companies in Bombay entered into an
obligation to contribute to a fund could not
agreement relating to the manufacture and
be treated as falling within that description,
sale by them of ice. The agreement fixed,
and could not be awarded in a suit where
inter alia, the minimum price at which ice
they had accrued due subsequently to its
was to be sold by the parties the proportion
institution. An order directing a Company
of the manufacture which earlier was to
to furnish an account would not extend
bear, and the proportion of the profits
beyond, or include contributions which
which, each was to receive. It farther
accrued later than, the date when the
business of such Company was transferred 4. Whether, if last two issues are decided in
to a limited Company. APPEAL from defendants’ favour, the defendants are
Russell J. bound by the agreement?

On the 15th of March 1902, the Bombay Ice 5. Whether the agreement in A and B is a
Manufacturing Company, Limited, Messrs. valid agreement in law and binding on
J. and J. Moir, Messrs. S. B. Fraser and defendants?
Company, and Chubildas Lulloobhoy
6. If not, whether the plaintiffs are entitled
entered into an agreement relating to the
to maintain this suit on the said agreement?
manufacturer and sale by them of ice,
which contained, inter alia, the following 7. Whether the plaintiffs have performed

provisions. their part of the agreement as alleged?

That the defendants S. B. Fraser and 8. Whether the plaintiffs are in any event

Company be decreed to pay the plaintiffs^ entitled to specific performance of the said

costs of this suit. agreement?

The defendants put in a written statement I therefore am of opinion that so far as

denying their liability on the grounds contributions are concerned relief must.

therein appearing, and ultimately the parties The restricted to those that accrued before

came on fur hearing’ before Russell, J., suit, and I further hold that no claim can be

when the following issues were raised: made in respect of the sale of frosted ice.
The plaintiffs cannot recover the whole of
each instalment, but only damages for the
1. Whether the agreement in A. and B to non-payment. In the view I take it is
plaint was ever an agreement binding on the unnecessary to discuss the transfer by
plaintiffs and the defendants? Frasers to the limited Company and the
development by the P, & O. Company of
2. Whether the defendants were not induced
their ice business, as both are subsequent to
to sign the said A and B to plaint by the
the suit.
representations of the plaintiffs or their
agents respecting as alleged in paragraphs From the course which the case took before
Russell,, no evidence of these damages, so
3. Whether the said representations or any
that unless the parties can come to some
of them were true in fact ?
agreement an enquiry must be directed.
 held by the High Court that the agreement
was void under section 27 of the Indian
MADHUB
contract act even though the restriction put
V on the plaintiff’s business was limited to a

RAJCOOMAR particular location. The plaintiff’s suit

failed on the ground that when the
14 BLR 76
agreement on the part of the plaintiff was
void, there was no consideration for the
agreement on the part of the defendants to
BENCH
pay the money and the whole contract was
to be treated as one which could not be
FACTS enforced.

In this case the parties to the contract

carried on business as braziers in a certain
part of Calcutta. As the mode of the
JUDGEMENT
business of the plaintiff was found by the
defendants to be detrimental to their The plaintiff sued the defendants, for that
business interest, an agreement was entered the plaintiff having opened a shop in
into between the plaintiff and the Kansareepara, in Simla, in the town of
defendants whereby the plaintiff agreed to Calcutta, for the sale of copper utensils, the
stop his business in that quarter and the defendants proposed to the plaintiff to cease
defendant promised in consideration of his carrying on the said business in the said
doing so to pay the plaintiff all the sums locality, on the ground of its being
which he had then distributed as advance to detrimental to their business, and offered
the workers. In terms of the agreement the and agreed in consideration of his doing so
plaintiff ceased carrying on the business in to pay to the plaintiff all sums which he had
that quarter, but the defendants failed to then disbursed as advances to workmen,
perform their part of the contract, namely, whereupon the plaintiff did agree and
to pay to the plaintiff all the sums which the consent to cease carrying on the said
plaintiff had advanced to their workmen. business, and did accordingly cease; and
that the defendants have neglected and
The plaintiff therefore sued to recover from
refused to perform their part of the contract,
the defendants Rs. 900 being the amount
to wit, to reimburse the plaintiff in all same
advanced by him to their workmen. It was
that he had advanced to workmen, whereby indirect restrictions, such as a financial
the plaintiff has sustained damages to the incentive not to compete with the employer.
amount stated, namely, Rs.900. Agreements in restraint of trade are
extremely common and it would be
Section 27- "Every agreement by which any
intolerable hindrance to business if they
one is restrained from exercising a lawful
were not allowed.
profession, trade or business of any kind, is
to that extent void."

Exception 1- One who sells the goodwill of S. B. FRASER AND COMPANY

a business may agree with the buyer to
V
refrain from carrying on a similar business,
within specified local limits, so long as the BOMBAY ICE MANUFACTURING

buyer, or any person deriving title to the COMPANY LIMITED

goodwill from him, carries on a like

business therein: Provided that such limits
BENCH
appear to the Court reasonable, regard
being had to the nature of the business. SIR LAWRENCE JENKIN, K.C.I.E.,
CHIEF JUSTICE AND MR. JUSTICE
As what constitutes restraint of trade is
BACHELOR
summarized in Halsbury’s Laws of England
, where it is opined that it is a general FACTS
principle of the Common Law that a man is
Agreement—Restraint of Trade— Sections
entitled to exercise any lawful trade or
23 and 8,- Indian Contract Act {IX of
calling as and when he wills and the law has
1873)-—Continuous cause of action—
always regarded jealously any interference
Damages—Transfer of business to a limited
with trade, even at the risk of interference
Company—effect. In March 1903, certain
with freedom of contract, as it is public
Ice Manufacturing Companies in Bombay
policy to oppose all restraints upon liberty
entered into an agreement relating to tlie
of individual action which are injurious to
manufacture and salo by them o f ice. The
the interests of the State. In deciding
agreement fixed, inter alia, the minimiim
whether a contractual term amounts to a
price at which ice was to bo sold hy the
restraint of trade, the Court looks not at the
parfciesj the proportion of the manufacture
form of the term but its effect. It was held
which eacli was to bear, and tlie propartion
that the doctrine can therefore apply to
of the profits which, each was to receive. It
farther created a monthly obligation to pay
liitoj and a correponding right to receive
GUNTHING
from, a general common fund the
differanoej if any, hob ween the profits V

actually raoexved by the parties and those LYNN

to which they were, under the agreement,
(1831) 2 B7 AD 232
entitled. On a suit being instifcnted for
breach o£ the agreement, in which
damages, sustained prior to and pending the
FACTS
hearing of the suit, were claimed, Eeld) the
The buyer of a horse, who was the plaintiff
fact that an agreement, if carried out, would
in this case, promised the seller that they
limifc competition and keep np prices, did
would pay $5 more for the horse, or buy
not necessarily bring it within the terms of
another horse from the seller if the horse
section 27 of the Indian Contract Act (I X
was lucky. The horse was not in the
of 1872) : to succeed in the defence nnder
condition that the plaintiff believed and a
that soetion it was necessai'y to establish
dispute arose between the parties as to
that the agreeuient was one wbereby a
whether the seller was owed the conditional
person was restrained from exercising a
payment mentioned by the buyer.
lawful i)rofession, trade, or busiaoas of any
kind. Meld, further, th at whether or n ot a ISSUE
High Court in India eoiild award damages,
The court had a number of issues to decide.
in respect of a continuing cause of action,
The most prominent issue was whether the
up to the date of its decree, subsequent
offer from the buyer, to pay more for the
successive accruals of an obligation to
horse if it was lucky, could be considered to
contribute to a fund could not be treated as
be a valid offer for the purposes of the sale.
falling within that description, and could
This would give an indication as to whether
not be awarded in a suit where they had
the seller could rely on the payment that had
accrued due subsequently to its institution.
been mentioned. Specifically, the court was
An order directing a Company to furnish an
required to understand whether the terms
account wiU not extend beyond, or include
‘lucky’ and ‘buy another horse’ could be
contributions which accrued later than, the
defined and considered legally binding on
date wten the business of such Company
the parties.
was transferred to a limited Company.
JUDGEMENT
The court held that the condition to pay $5 an article of commerce. There is no
extra for the horse if it was lucky, was uncertainty here to make the agreement
deemed to be too vague to create a binding void."
contract between the parties. The words
(c) A, who is a dealer in coconut-oil only,
contained in an agreement must be clear so
agrees to sell to B “one hundred tons of
that the parties can be sure of the terms
oil”. The nature of A’s trade affords an
upon they are contracting. As a result of
indication of the meaning of the words, and
this, the only part of the transaction that was
A has entered into a contract for the sale of
sufficient for the court was the purchase of
one hundred tons of coconut-oil. (c) A, who
the horse for the price of $63 and that was
is a dealer in coconut-oil only, agrees to
the vast majority of the legal agreement
sell to B “one hundred tons of oil”. The
between the parties.
nature of A’s trade affords an indication of
29. Agreements void for uncertainty.— the meaning of the words, and A has
Agreements, the meaning of which is not entered into a contract for the sale of one
certain, or capable of being made certain, hundred tons of coconut-oil."
are void. —Agreements, the meaning of
(d) A agrees to sell B “all the grain in my
which is not certain, or capable of being
granary at Ramnagar”. There is no
made certain, are void." Illustrations
uncertainty here to make the agreement
(a) A agrees to sell B “a hundred tons of void. (d) A agrees to sell B “all the grain in
oil”. There is nothing whatever to show my granary at Ramnagar”. There is no
what kind of oil was intended. The uncertainty here to make the agreement
agreement is void for uncertainty. (a) A void."
agrees to sell B “a hundred tons of oil”.
(e) A agrees to sell to B “one thousand
There is nothing whatever to show what
maunds of rice at a price to be fixed by C”.
kind of oil was intended. The agreement is
As the price is capable of being made
void for uncertainty."
certain, there is no uncertainty here to
(b) A agrees to sell B one hundred tons of make the agreement void. (e) A agrees to
oil of a specified description, known as an sell to B “one thousand maunds of rice at a
article of commerce. There is no price to be fixed by C”. As the price is
uncertainty here to make the agreement capable of being made certain, there is no
void. (b) A agrees to sell B one hundred tons uncertainty here to make the agreement
of oil of a specified description, known as void."
(f) A agrees to sell to B “my white horse for
rupees five hundred or rupees one
ISSUES:
thousand”. There is nothing to show which
of the two prices was to be given. The
agreement is void. (f) A agrees to sell to B 1) Whether S supplying the goods at such
“my white horse for rupees five hundred or period of time amounted to valid tender?
rupees one thousand”. There is nothing to
show which of the two prices was to be
given. The agreement is void." 2) Whether M by denying to take delivery
breached the contract?

DISCHARGE BY PERFORMANCE
HELD:
STARTUP

V.
1) The promisee must have a reasonable
MCDONALD
opportunity of ascertaining that the thing
offered by promisor is thing which latter is

(1843) 6 MANN & G 593 bound to deliver. (S.38-2)

(Section 38—tender) Though the time of delivery was

unreasonable due to lateness of the usual
business hours, yet there was full and
FACTS: sufficient time for M to weigh, examine and
receive into their possession the delivered
oil before midnight (in dissenting opinion,
Startup (S) contracted with McDonald (M) however, C.J. points out there ought to be
to supply specified quantity of linseed oil reasonable time as well as opportunity.
within the last fourteen days of the month Absence of all workers from the warehouse
of March. S tendered on the last of the or any other reason thereof due to the
fourteen days at 9’o clock at night. M lateness of the hour could be pleaded as
refused to accept owing to the lateness of factor negating the tender for it will not
hour.
provide reasonable opportunity to examine DOMINION OF INDIA
the product).
VS

GAYA PERSHAD
In contracts of sale of goods, if parties don’t
AIR 1957 ALL 193
stipulate the place and time for the
performance of the contract, then according
to law, “party who is to receive is bound to ALLAHABAD HIGH COURT
attend at a reasonable place, and wait till a
BENCH
reasonable time, for the purpose of
receiving what the other party is bound to AGARWALA, V BHARGAVA
deliver”. If the party bound to deliver
FACTS
doesn’t come at the reasonable place till the
These four appeals arise out of four
reasonable hour, other party isn’t bound to
different suits which were numbered as
wait any further and if former comes after
Suits Nos. 64/5 of 1947, 72/10 of 1947,
latter has departed, he by his own conduct
73/11 of 1947 and 74/12 of 1947 in the trial
has rendered tender to be made impossible.
Court. In all the four suits the plaintiffs and
the defendants were the same. The suits all
related to a claim made by the plaintiff-
respondent against the defendants-
REPORT THIS AD
appellants who are the two railway
administrations at present known as the

Since in present case, M was present at the Central Railway and the Northern Railway

warehouse and was in a position to and which, at the time of the suits were

reasonably ascertain the quality, quantity of known as the G. I. P. Railway and the E. I.

the product delivered, hence, there was a Railway; The claim was in respect of

valid tender even when made at damages to baskets of oranges which were

unreasonable time for it was made within sent from the railway station Katol on the

the time stipulated under the contract and Central Railway to Lucknow on the

thus rendered literal possibility of Northern Railway. The consignors of the

performance within the letter of contract. four consignments were different but the
consignee in each case was the plaintiff-
respondent. The first consignment in
question was booked from Katol on the 21st concerned and then instituted these four
of March, 1946 and the other three suits for recovery of damages incurred by
consignments were booked 011 the 22nd of the plaintiff by reason of the late delivery of
April, 1946. In each case it was mentioned the goods.
in the railway receipt that the wagon was to
Various defences were raised to the suits.
be carried by C. O. G. Special. We
All the four suits were tried together and
understand from learned counsel for the
decided by one single judgment. The Court
appellant that the correct term used is C. O.
rejected the pleas in defence and decreed
G. which letters connote trains known as
the suit for damages.
Coaching Specials. These trains are parcel
trains which run faster than goods trains Four different appeals have been filed in

like parcel express. The goods consigned on this Court but since all the suits were

the 21st of March 1946 were delivered at decided by one judgment and common

Lucknow to the plaintiff-respondent on the questions are involved, we are also deciding

30th of March, 1946 when it was found that these four appeals by one single judgment.

the oranges had considerably deteriorated. When these appeals came up for hearing
The amount of deterioration was estimated before us, learned counsel for the appellants
by the Station Superintendent, Lucknow at urged three points before us. The first point
75% which was noted down in the delivery urged was that the plaintiff-respondent,
book. The other three consignments were who was only the consignee and not the
offered for delivery at Lucknow to the owner of the goods of these four
plaintiff-respondent on 3rd May, 1946 consignments, had no right to bring suits for
when the plaintiff refused to take delivery damages to or loss of the goods. The second
on the ground that the goods had point urged was that it was incumbent upon
deteriorated completely and become unfit the plaintiff-respondent to establish that the
for consumption. damage to the goods was the result of

A note was made by the plaintiff- misconduct on the part of the railway

respondent In the delivery book that the administrations or their servants in view of

contents of these wagons were extremely the risk notes which had been executed by

rotten and unfit for human consumption so the consignors at the time when the goods

that he was refusing to take delivery. were booked and since the plaintiff-

Thereafter the plaintiff-respondent gave respondent failed to establish any such

notice to the two railway administrations misconduct, he was not entitled to a decree
in any of these suits. The third point, which goods was that of a bailee by virtue of the
learned counsel took up, was that the provisions of the Indian Railways Act, in
amount of damages awarded by the lower this particular case the appellants were
Court had not been properly assessed. No specially protected by the risk notes in
other points besides these three were Form B which had been executed by the
canvassed before us on behalf of the consignors when these four consignments
appellants. were booked. Under these risk notes the
consignors had, in consideration of lower
The first point raised an important question
charge, agreed and undertook to hold the
of law. In that question it had to be
railway administration harmless and free
determined whether the consignee had a
from all responsibility for any loss,
right to bring a suit for damage to the goods
destruction or deterioration of, or damage to
in respect of which he was entitled to take
the said consignments from any cause
delivery from the railway administration
whatever except upon proof that such loss,
even though he was not the owner of these
destruction, deterioration or damage arose
goods. It was found by us that in
from the misconduct on the part of the rail
considering this question it was necessary
way administration or its servants. There
to reconsider a Division Bench decision of
were also some provisos to this clause but
this Court. Consequently we framed a
they, need not be quoted as they are not
question and referred it for opinion to a Full
applicable and relevant to the case before
Bench. The decision of the Full Bench on
us. On behalf of the appellants stand was
that point was given on the 23rd of March,
taken on this condition in the risk notes and
1955 (Reported as (S) AIR 1956 All 338).
it was urged that, unless the plaintiff-
That decision of the Full Bench is against
respondent had proved that the damage to
the appellants and in favour of the plaintiff-
the goods was the result of misconduct on
respondent. The decision was that the
the part of the railway administration or
consignee in these cases had a right to bring
their servants, the plaintiff-respondent
the suits for damage to the goods even
could not claim damages from the
though he was not the owner of these goods.
appellants. In the lower Court, this point
That point is thus disposed of by the
was sought to be met on behalf of the
decision of the Full Bench.
respondent on the ground that the risk notes
The main contention on the second point on had been obtained from the consignors by
behalf of the appellants was that though the misrepresentation of facts by the servants of
position of the railway as carrier of the the railway administration concerned. This
plea of the plaintiff-respondent was not the parcel delivery siding on the 29th of
accepted by the lower Court, nor has it been March, 1946 at 5.00 p.m. So far as the other
pressed again before us. The position, that three consignments are concerned, they
has been taken up on behalf of the plaintiff- were carried by C. O. G. Special from
respondent before us, is that in this case the Jhansi up to Juhi where they arrived on the
facts admitted and proved showed that the 27th of April, 1946 at 7.15 a.m. From Juhi,
goods were not carried by the railway however, the wagons were attached to a
administrations in accordance, with the goods train which left Juhi on the 1st of
contracts entered into as evidenced by the May, 1946 at 11-20 p.m. The wagons then
parcel way bills and since the goods were arrived at Lucknow on the 2nd of May,
not carried in accordance with the contract 1946 at 6.30 a.m. and were placed for
and there was a breach of the contract on the delivery at the parcel delivery siding on the
part of the railway administrations, the 3rd of May, 1946, on which date delivery
railway administrations were not entitled to was refused by the plaintiff-respondent.
claim the protection of the risk notes. It This movement of the wagons containing
appears from a joint statement given by the goods shows that part of the way the
learned counsel for the parties in the lower goods were carried by the type of train
court that the wagons in respect of all the which was agreed upon between the
four consignments were despatched from consignors and the railway administration,
Katol railway station, where the goods were but for part of the way the wagons were
consigned, by C. O. G. Specials. In all cases carried by goods train which was contrary
the goods were carried up to Jhansi by C. O. to that contract. The reason in the case of
G. Specials. The first consignment, which Wagon No. 8126 given on behalf of the
was in Wagon No. 8126, was sent from railway administration is that though that
Jhansi by being attached to a goods train wagon could be attached to a passenger
which left Jhansi on the 26th of March, (No. 603 Down) which was to leave Jhansi
1946 at 4.00 a.m. It arrived at Juhi near at 3.00 a.m. on the 26th of March, 1946, this
Kanpur Central Station on the 26th of could not be done as that train was already
March, 1946 at 4.40 p.m. and from there it carrying an overload. According to the
was despatched by another goods train on evidence of defence witness S. D. Awasthi,
the 27th of March at 12.00 a.m. The wagon that train usually had a load of 10 bogies
arrived at Lucknow on the 28th of March, whereas on that day it was actually carrying
1946, at 11.50 a.m. when it was placed in 11 bogies. Further questioned, the witness
the goods yard. Thereafter it was placed at went on to say that the train was actually
carrying 10 passenger bogies, one military according to rules, had to be sent to the
motor van and one military stores wagon. goods yard. It actually reached the goods
The train ordinarily carried 8 passenger yard at 11.50 a.m. on the 28th of March,
bogies but there were 10 passenger bogies 1946 and thereafter there was a delay of
in the train that day. He has also stated that about 30 hours before it could be placed at
this excess in the number of bogies in the the delivery siding. There were thus two
train came about since two extra passenger long delays at Juhi and Lucknow which
bogies had come in the train from Bombay. were clearly very material delays in view of
This does show that the train was carrying the nature of the goods that were being
an overload that day so that this Wagon No. carried. The delays occurred because the
8126 could not be attached to that train. The goods were sent from Jhansi onwards by a
witness has also stated that in order to avoid goods train and not by the type of train
heavy detention, this Wagon No. 8126 was which had been agreed upon between the
then attached to the goods train No. D-5. It consignor and the railway administration. If
has been urged by the learned counsel for the wagon had not been sent by goods train
the appellants that this step which was taken from Jhansi on the 26th of March, 1946, but
at Jhansi was a prudent act of a bailee had been sent by the passenger train No.
inasmuch as the wagon was attached to the 603 Down on the 27th or 28th of March,
goods train to avoid further detention as far 1946 even then it could have been available
as possible in view of the fact that the for delivery at Lucknow earlier than the
wagon contained perishable goods. Having time when it became available on being
heard learned counsel on this point, we are attached to the goods train. Further, it
not satisfied that this step, which was taken appears that when that wagon was attached
on behalf of the railway administration, was to the goods train at Jhansi, no steps were
really a prudent act. The facts disclosed by taken to ensure that the railway servants,
the railway administration themselves show who had to deal with the wagon at later
that the result of the attachment of that stages, came to know that there had been a
wagon to the goods train at Jhansi was that contract to carry that wagon by C. O. G.
the wagon went to Juhi where there had to Special. If any such step had been taken, the
be a detention of about 17 hours. Even delays, which occur in the case of wagons
when it was sent from Juhi by another ordinarily sent by goods train, could have
goods train to Lucknow, there was a further been avoided. No such prudent step was
delay in delivery of the goods, the wagon taken either. Another aspect that has to be
having come by a goods train, which kept in view is that the failure to attach the
wagon to No. 603 Down passenger train and a breach of the contract in that respect
was also the result of the actions of the had been committed by the railway
railway administration itself. The two extra administration, the railway administration
coaches, that had been attached from could no longer seek the protection of the
Bombay, were attached by the same railway risk note in Form B as that risk note was
administration which accepted the hooking executed by the consignor on the clear
of these goods at Katol. It is true, as urged understanding that the goods would be
by learned counsel, that during those days carried by C. O. G. Special and not by
there was pressure of traffic on the railways goods train. In the case of perishable goods
and there was at the same time shortage of like oranges, the term of contract that the
rolling stock and engines but if the railway goods are to be carried by a special type of
administrations anticipated that the goods train which is faster than the ordinary goods
booked by C.O.G. Special from Katol could train, is clearly of the essence of the
not be carried by passenger train and had to contract. The arrival of the goods was
be carried by goods train, they should not delayed in consequence of the change of
have contracted to carry the goods by type in train and not because it was not
C.O.G. Special. Having, contracted with possible for the railway administration to
the consignors to carry the goods by C. O. carry the goods throughout by C. O. G.
G. Special, the equivalent of which is a Special.
passenger train, it was the duty of the
The railway administration need not have
railway administration to take steps that the
contracted to do so, but when they did
goods were carried in the expeditious
contract to do so, the risk note, which was
manner contracted between the parties and
executed by the consignor, could protect the
not by a slower train. For all these reasons,
railway administration only so long as they
we are unable to hold that the alteration of
carried out the transit of the goods in
the type of train from the C. O. G. Special
accordance with the terms of the contract.
to goods train was a prudent act on behalf
This view of ours is fully supported by a
of the railway administration. The result of
decision in Gunyon v. South Eastern &
this alteration by the railway administration
Chatham Rly. Co.'s Managing Committee,
was that the goods were no longer being
1915-2 KB 370 (A). In that case also an
carried in accordance with the terms of the
owner's risk note had been executed by the
contract between the parties. Once the
consignor under which the consignor had
carriage of the goods was no longer in
elected to book the goods at a reduced rate
accordance with the terms of the contract,
agreeing to relieve the Managing owner's risk. The Midland Railway
Committee and all other companies or Company shipped the goods upon a train to
persons over whose lines the merchandise which neither the contract nor the rate of
may pass, or in whose possession the same payment applied and consequently the
may be during any portion of the transit, ordinary incidents of carriage by carrier at
from all liability for loss, damage, once became applicable. The mere fact that
misdelivery, delay, or detention, except they were being carried over the line of rails
upon proof that such loss, damage, of the Midland Railway Company did not
misdelivery, delay, or detention arose from constitute the performance or an attempted
wilful misconduct on the part of the performance of that special contract. The
Managing Committee's servants. It was company never carried and never intended
held that the owner's risk clause could only to carry at owner's risk; for they must have
be effective in cases in which the railway known that the only valid owner's risk rate
afforded the consignor an alternative rate for fruit in force was oae for carriage by
below the general rate. The rate was passenger train. It will be noticed that the
alternative to a general rate "for the carriage above case was similar in facts to the cases
of fruit by passenger train or by other before us. In both cases owner's risk forms
similar service" which of course the had been executed under which the railway
Midland goods train (by which the goods administrations were exempted from
were actually carried for part of the way) liability for damage, etc., except upon proof
was not. To make the owner's risk operative of misconduct on the part of the railway
the contract had to be one for carriage by administrations or their servants. In the case
passenger or equivalent train. It was held of Gunyon v. South Eastern and Chatham
that it was during any portion of such transit Railway Companies' Managing Committee
only that the sender agreed to relieve the (A) the goods were to be carried by
company from liability. It was only during passenger train and were instead carried by
the performance by the railway company of goods train for part of the way. It was held
such transit that the sender could be called that the damage resulting from delay on that
upon to show that his loss had arisen from part of the transit could be claimed without
the wilful misconduct of the company's proof of misconduct. In our case also, the
servants. But when in London the cherries delay occurred materially in the transit
were shipped on a goods train, that contract between Jhansi and Lucknow when the
was no longer being performed and the goods were not being carried in accordance
goods were no longer being carried at with the terms of the contract under which
they had to be carried by C. O. G. Special. because, having been treated as wagons
They were being carried by goods train coming by goods train, they first went to the
which was slower than C. O. G. Special and goods yard and were later placed at the
to which the rates applicable must be lower. delivery siding, in these circumstances, no
This principle was applied in India by the question arises of the plaintiff-respondent
Bombay High Court in B. B. & C. I. being required to prove that the damage to
Railway v. Mahamadbhai Rahimbhai and the goods booked was due to any
Anr., AIR 1929 Bom 355 (B). In that case misconduct on the part of the railway
also the goods were being carried under a administrations or their servants and
risk note which was in Form H under which consequently we need not go into the
the railway administration was protected question whether there was any such
unless there was wilful neglect on. their misconduct in this case or not. Learned
part. It was held that the carriage of goods, counsel for the appellants also urged before
which were of a perishable nature, by us that there was no evidence that the
passenger or parcel train was the essence of deterioration in the goods was the result of
the contract and when that contract was delay in delivery occasioned by the
broken by carrying the goods by goods train carrying of the goods by goods train instead
the protection of the risk note was no longer of C. O. G. Specials. The nature of the
available to the railway administration. In goods itself indicates that detention of the
these circumstances, since we are unable to goods before delivery was likely to affect
hold that the railway administration was the quality of the goods. The longer they
justified in sending the Wagon No. 8126 were delayed, the more deterioration was
from Jhansi by goods train and in bound to occur. In the case of goods sent on
committing breach of contract, the railway the 21st of March, 1946, there was an
administration is not entitled to the assessment by the Station Superintendent,
protection of the risk note in Form B. The Lucknow, himself that the deterioration
facts with regard to the other three was to the extent of 75%. So far as the
consignments are very similar. In these goods of the other three consignments are
cases also the goods were sent from Juhi by concerned, there is evidence on behalf of
goods train. There was considerable delay the respondent that there was complete
at Juhi where the wagons were dealt with deterioration and the goods had become
like wagons being sent at ordinary rate by unfit for consumption. There is no evidence
goods train. Again at Lucknow, there was to the contrary on behalf of the appellants
delay in placing the wagons for delivery, to show that the goods were still in good
condition and fit for consumption. The the basis of the statement of Mr. G. Dan,
deterioration was due to delay in delivery as who was the Assistant Fruit Marketing and
no alternative cause for deterioration has Utilisation Officer and who had been in
been alleged or proved on behalf of the Government service. We see no reason to
appellants. The second point urged on differ from the views taken by the learned
behalf of the appellants must also, Judge of the lower Court that his evidence
therefore, be decided against them. is reliable.

So far as the question of the amount of Consequently we find that there is no force
damages is concerned, learned counsel has in these appeals and they are dismissed with
only pressed it before us with regard to the cost
amount of damages in one suit, No. 64/5 of
1947 out of which First Appeal No. 89 of
1948 has arisen. It was in that case that the CALTEX

amount of loss was estimated at 75%. V

Learned counsel's argument was that the
BHAGWAN DEVI MORODIA
value of the damage to the goods accepted
by the lower Court as Rs. 3,447-5-0 has not 969 AIR 405, 1969 SCR (2) 238
been properly proved by the plaintiff-
SUPREME COURT OF INDIA
respondent whose evidence on this point
was unsatisfactory. We, however, find that BENCH

the value of the damage was assessed by an BACHAWAT, R.S.

officer of the railway administration at
Lucknow who has also been produced in
this case as a witness on behalf of the FACTS
appellants. No attempt was made to show in Appeal from the judgment and decree,
his evidence that his assessment was wrong dated June 3, 1966 of the Calcutta High
or had been arrived at on some Court in Appeal No. 251 of 1965. M.C.
misrepresentation made by the plaintiff- Chagla and S.N. Mukherjee, for the
respondent. There is, therefore, no reason appellant. S. V. Gupte, M.G. Poddar and
for rejecting the figure of assessment of D.N. Mukherjee, for the respondent.
damage made by him. In the other three
The Judgment of the Court was delivered
cases, the rate per basket for the goods
by Bachawat,I. By an indenture of lease,
damaged was fixed by the lower Court on
dated February 17, 1954 the respondent
leased to the appellant a plot of land at of the Calcutta Thika Tenancy Act, 1949. In
premises No. 22, Jatindra Mohan Avenue, February 1964 the respondent filed an
Calcutta, for a term of 10 years application before the Controller asking for
commencing from February 1, 1954. eviction of the appellant under ss. 3(vi) and
Clause 3(c) of the deed provided for a 5 of the Calcutta Thika ,,Tenancy Act. The
renewal of the lease and was in the Controller allowed the application. An
following terms :-- appeal from this order was dismissed by the
appellate Authority. A revision petition
"3 (c). The lessor will on the written request
against the order was dismissed by the High
of the lessees made two calendar months
Court. While dismissing the revision
before the expiry of the term hereby created
petition, the High Court stayed the
and if there shall not at the time of such
execution of the order of eviction for a
request be any existing breach or non
month and observed that the authorities
observance of any of the covenants on the
under the Calcutta Thika Tenancy Act had
part of the lessees hereinabove contained
no power to decide whether the appellant
grant to it one renewal of 10 years from the
was entitled to a renewal of the lease.
expiry of the said term at the same rent and
Thereafter the appellant filed the present
containing the like convenants and provisos
suit on the Original Side of the Calcutta
as are herein contained except that as
High Court asking for a declaration that it
regards the clause for renewal for further
was entitled to a renewal of the lease,
period the rent shall be as may be agreed
specific performance of the covenant for
between the lessor and the lessees."
renewal, an injunction restraining execution
On December 1, 1963, the time fixed for of the order of eviction passed by the
applying for the renewal of the lease Controller and for other reliefs. In
expired. On December 13, the appellant paragraphs 13 and 14 of the plaint the
made a written request for the renewal. On appellant alleged that the delay in giving
December 23, 1963 the respondent's notice of renewal should be excused in view
solicitors replied stating that the request of the following special circumstances: (a)
being out of time was ineffective and asking the delay was due to oversight; (b) the
the appellant to, vacate the land on the respondent had not altered her position for
expiry of the lease. The appellant had the worse or to her detriment within the
erected structures on the land for the space of 12 days; (c) neither party had
purpose of running a petrol delivery station treated the matter of time as being as the
and was a Thika tenant within the meaning essence of the transaction; (d) the appellant
had constructed a service station for to do any such thing at or before the
petroleum products of immense utility to specified time, the contract, or so much of
the public of the locality; (e) the appellant it as has not been performed, becomes
was in possession of the land. The voidable at the option of the promisee, if the
respondent contended that the application intention of the (1) L.R. 43 I.A. 26.
for renewal being made out of time was
parties was that time should be of the
ineffective and that there was no ground for
essence of the contract." In Jemshed's
excusing the delay. S.P. Mitra, J. accepted
case(1) Viscount Haldane observed that the
the respondent's contention and dismissed
section did not lay down any principle as
the suit. An appeal under clause 15 of the
regards contracts to sell land in India
Letters Patent was dismissed by a
different from those which obtained under
Divisional Bench of the High Court. Both
the law of England. It is well known that in
the courts concurrently held that the letter,
the exercise of its jurisdiction to decree
dated December 13, 1963 was not a proper
specific performance of contracts the Court
exercise of the option by the ,appellant
of Chancery adopted the rule, especially in
under the lease, dated February 17, 1954
the case of contracts for the sale of land, that
and that there were no special
stipulations .as to time were not to be
circumstances for excusing the delay in
regarded as of the essence of the contract
,giving the notice. The appellant has filed
unless they were made so by express terms
the present appeal after obtaining a
or unless a clear indication of a contrary
certificate from the High Court under Art.
intention appeared from the nature of the
133 ( 1 ) (a) and (b) of the Constitution. The
contract or the surrounding circumstances.
appellant neglected to make the application
In his well considered judgment Viscount
for renewal of the lease within the
Haldane carefully refrained from saying
stipulated time. Mr. Chagla has submitted
that time was not to be regarded as of the
that the time is not of the essence of the
essence in all contracts relating to land.
contract having regard to sec. 55 of the
Indian Contract Act, 1877 as interpreted in
the case of Jamshed Khodaram Irani v. At common law stipulations as to time in a
Durjorji Dhunjibhai(1). Section 55 of the contract giving an option for renewal of a
Indian Contract Act provides that "when a lease of land were considered to be of the
party to a contract promises to do a certain essence of the contract even if they were not
thing at or before a specified time, or certain expressed to be so and were construed as
things at or before specified time, and fails
conditions precedent. Equity followed the give the renewal. The limits of the equitable
common law rule in respect of such interference in such cases were clearly
contracts and did not regard the stipulation stated by the Master of the Rolls (Sir
as to time as not of the essence of the R.P.Arden) in Eaton v. Lyon.(3) He
bargain. As stated in Halsbury's Laws of observed :- "At law a covenant must be
England, 3rd ed., vol. 3, art. 281, p. 165 "An strictly and literally performed; in equity it
option for the renewal of a lease, or for the must be really and substantially.
purchase or re-purchase of property, must
in all cases be exercised strictly within the
time limited for the purpose, otherwise it performed according to the true intent and

will lapse." This passage was quoted with meaning of the parties so far as

approval by Danckwerts L.J. in Hare v. circumstances will admit; but if

Nicoll(2). A similar statement of law is to unavoidable accident, if by fraud, by

be found in Foa's General Law of Landlord surprise or ignorance not wilful, parties

and Tenant, 8th Art. 453, p. 310, and in Hill may have been prevented from executing it

and Redman's Law of Landlord and Tenant, literally, a Court of Equity, will interfere;

14th ed., p. 54. The reason is that a renewal and upon compensation bei ng made, the

of a lease is a privilege and if the tenant party having done everything in his power,

wishes to claim the privilege he must do so and being prevented by means, I have

strictly within the time limited for the alluded to, will give relief ... I decide this

purpose. With regard to equitable relief case upon the principles on which, Lord

against the failure of the tenant to give Thurlow decided (Bayley v. The

notice of renewal within the stipulated time. Corporation of Leominster 1792, 1 Ves.

the law is accurately stated in Halsbury's 476), and I hope now, it will be known, that

Laws of England, 3rd ed.,vol. 23, p. 626, it is expected, these covenants shall be

Art. 1329, footnote (u) thus :--"Relief will literally performed where it can be done;

not be given in equity against failure to give and that Equity will interpose, and go

notice in time, save under special beyond the stipulations of the covenant at

circumstances. The decided cases show that law, only where a literal performance has

in such cases relief is not given in equity been prevented by the means,-I have

save upon the ground of unavoidable mentioned, and no injury is done to the

accident, fraud, surprise, ignorance not lessor?' We are of the opinion that the

wilful or inequitable conduct on the part of stipulation as to time in clause 3 (c) of the

the lessor precluding him from refusing to indenture of lease dated February 17, 1954
should be regarded as of the essence of the reasonable diligence, will entitle the
contract." The appellant not 'having plaintiff to a renewal in this Court."
exercised the option of renewal within the
We may add that where no time is fixed for
time limited by the 'clause is not entitled to
the purpose, an application for renewal for
a renewal.
the lease may be made within a reasonable
time before the expiry of the term (see Foa's
General Law of Landlord & Tenant, 8th ed.,
The appellant claims relief against the
article 455, pp. 311-12, Ram Lal (1) 9 L.J.
consequences of its default on the grounds
Ch, 245, 248.
enumerated in paragraphs 13 and 14 of the
plaint. Grounds (b) and (e) cannot be Dubey v. Secretary of State for India (1),
regarded as special circumstances. As. to Maharani Hemanta Kumari Devi v.
ground (d), it is. not shown that the service Safatulla Biswas & Ors.(2). In the present
station is of immense public utility. The fact case, the lease fixes a time within which the
that the appellant constructed a service application for renewal is to be made. The
station is an irrelevant consideration. time so fixed is of the essence of the
Ground (c) is not established and it is not bargain. The tenant loses his right unless he
'shown that the time is not of the essence of makes the application within the stipulated
the bargain. As to ground (a) there is some time. Equity will not relieve the tenant from
evidence to show that the delay in giving the consequences of his own neglect which
the notice of renewal was due to oversight. could well be avoided with reasonable
But it is not shown that the delay was due diligence.
to any unavoidable accident, excusable
The appeal is dismissed with costs.
ignorance, fraud or surprise. The delay
arose from mere neglect on the part of the
appellant and could have been avoided by
reasonable diligence. As observed 'by the
IMPOSSIBILITY EXISTING AT THE
Master of the Rolls in Reid & Anr. v. Grave
TIME OF CONTRACT
& Others(1): "The rule is now well
established, that no accident will entitle a
party to renew unless it be unavoidable. I
am of opinion, that nothing but accident,
which, could not have been avoided by COUTURIER

V
 HASTIE the Plaintiffs, or their assigns, "he or they
paying freight, as per charterparty, with
primage and average accustomed." On the
[1856] INT.COM.L.R. 06/26 23d February the ship sailed on the
homeward voyage. On the 1st May 1848,
Messrs. Bernouilli, the London agents of
BENCH
the Plaintiffs, and the persons to whom the
MR. BARON ALDERSON, MR. bill of lading had been indorsed, employed
JUSTICE WIGHTMAN, MR. the Defendants to sell the cargo, and sent
JUSTICE CRESWELL, MR. JUSTICE them the bill of lading, the charterparty, and
ERLE, MR. JUSTICE the policy of insurance, asking and
receiving thereon an advance of £600.

On the 15th May the Defendants sold the

FACTS
cargo to A. B. Callander, who signed a
The Plaintiffs were merchants at Smyrna; bought note, in the following terms:
the Defendants were cornfactors in London;
"Bought of Hastie and Hutchinson, a cargo
and this action was brought to recover from
of about 1180 (say eleven hundred and
them the price of a cargo of Indian corn,
eighty) quarters of Salonica Indian corn,
which had been shipped at Salonica, on
board a vessel chartered by the Plaintiffs for of fair average quality when shipped per the
a voyage to England, and had been sold in Kezia Page, Captain Page, from Salonica;
London by the Defendants in Error, upon a bill of lading dated twenty-second
del credere commission. The purchaser, February, at 27s. (say twenty-seven
under the circumstances hereafter stated, shillings) per quarter, free on board, and
had repudiated the contract. In January including freight and insurance, to a safe
1848, the Plaintiffs chartered a vessel at port in the United Kingdom, the vessel
Salonica, to bring a cargo of 1180 quarters calling at Cork or Falmouth for orders;
of corn to England. On the 8th of February measure to be calculated as customary;
a policy of insurance was effected on "corn, payment at two months from this date, or in
warranted free from average, unless cash, less discount, at the rate of five per
general, or the ship be stranded." On the cent per annum for the unexpired time,
22nd of that month, the master signed a bill upon handing shipping documents."
of lading, making the corn deliverable to
In the early part of the homeward voyage, contract, or to pay the price of the corn.
the cargo became so heated that the vessel Sixthly, that before the Defendants were
was obliged to put into, Tunis, where, after employed by the Plaintiffs, the corn had
a survey and other proceedings, regularly become heated and greatly damaged in the
and bona fide taken, the cargo was, on the vessel, and had been unloaded by reason
22d April, unloaded and sold. It did not thereof, and sold and disposed of by the
appear that either party knew of these captain of the said vessel on account of the
circumstances: at the time of the sale. The Plaintiffs at Tunis, and that Callander, for
contract having been made on the 15th of that reason, repudiated the sale, etc.
May, Mr. Callander, on the 23d of May,
The cause was tried before Mr. Baron
wrote to Hastie and Hutchinson: "I
Martin, when his Lordship ruled, that the
repudiate the contract of the cargo of
contract imported that at the time of the
Indian corn, per the Kezia Page, on the
sale, the corn was in existence as such, and
ground that the cargo did not exist at the
capable of delivery, and that as it had been
date of the contract, it appearing that the
sold and delivered by the captain before this
news of the condemnation and sale of this
contract was made, the Plaintiffs could not
cargo, at Tunis, on the 22d April, was
recover in the action. He therefore directed
published at Lloyd's, and other papers, on
a verdict for the Defendants. The case was
the 12th instant, being three to four days
afterwards argued in the Court of
prior to its being offered for sale to, me."
Exchequer before the Lord Chief Baron,
The Plaintiffs afterwards brought this Mr. Baron Parke, and Mr. Baron Alderson,
action. The declaration was in the usual when the learned Judges differed in
form. The Defendants pleaded several opinion, and a rule was drawn up directing
pleas, of which the first four are not now that the verdict found for the Defendants
material to be considered. The fifth plea should be set aside on all the pleas except
was that before the sale to Callander, and the sixth, and that on that plea judgment
whilst the vessel was on the voyage, the should be entered for the Plaintiffs, non
Plaintiffs sold and delivered the corn to obstante veredicto. That the Defendants
other persons, and that since such sale the should be at liberty to treat the decision of
Plaintiffs never had any property in the corn the Court as the ruling at Nisi Prius, and to
or any right to sell or dispose thereof, and put it on the record and bring a. bill of
that Callander on that account repudiated exceptions (8 Exch. 40). This was done, and
the sale, and refused to perform his the Lord Chief Baron sealed the bill of
exceptions, adding, however, a to cover not merely the price, but all
memorandum to the effect that he did so as expenses of shipment, freight, and
the ruling of the Court, but that his own insurance." In a contract for the sale of
opinion was in opposition to such ruling. goods afloat, there are two periods which
are important to be regarded, the time of
The case was argued on the bill of
sale and the time of arrival. If at the time of
exceptions in the Exchequer Chamber,
the sale there is anything on which the
before Justices Coleridge, Maule, Creswell,
contract can attach it is valid, and the
Wightman, Williams, Talfourd, and
vendee bound.
Crompton, who were unanimously of
opinion that the judgment of the Court of The goods are either shipped, as here, "free
Exchequer ought to be reversed (9 Exch. on board," when it is clear that they are
102). The present writ of error was then thenceforward at the risk of the vendee, or
brought. they are shipped "to arrive," which saves
the vendee from all risk till they are safely
The purchaser bought in fact the shipping
brought to port. The intention of the parties
documents, the rights and interests of the
is understood to be declared by different
vendor. A
terms of expression, and the judgment of
contract of such a kind is valid, Paine v. the Exchequer Chamber here really violates
Meller. The language of the contract that intention.
implies all this. The representation that the
As Lord Chief Baron Richards said, in
corn was shipped free on board at Salonica,
Hitchcock v. Giddings (4 Price, 135), " If a
means that the cargo, was the
man will make a purchase of a chance, he
property of, and at the risk of the shipper. must abide by the consequences." Here,
The Court of Exchequer proceeded on the however, the chance was only that of the
words of this contract and gave the correct arrival of the cargo, and that chance was
meaning to them. Mr. Baron Parke said, covered by the policy, for the cargo, itself,
"There is an express engagement that the as stated in the contract, had been actually
cargo was of average quality when shipped, shipped. Had the cargo been damaged at the
so that it is clear that the purchaser was to time of this contract, the loss thereby
run the risk of all subsequent deterioration arising must have been borne by the
by sea damage or otherwise, for which he purchaser. Suppose the corn had been
was to be indemnified by having the cargo landed at Tunis, and had remained in the
fully insured; for the 27s. per quarter were warehouse there, it would have ceased to be
a cargo in the strict and literal meaning of argued, that my strong impression in the
the word, but the purchaser would still have course of the argument has been, that the
been bound by his contract. judgment of the Court of Exchequer
Chamber is right. I
There was a total loss, and the Plaintiff
recovered on the policy, it is difficult to should therefore simply propose to ask the
understand how such an opinion could be learned Judges, whether they agree in
entertained. A technical objection arising thinking that that judgment was right. Mr.
on the form of the policy would not affect Baron Alderson said: My Lords, Her
this question. The contract here was, that Majesty's Judges are unanimously of
the cargo was shipped "free on board." To opinion that the judgment of the Exchequer
that extent the vendor was bound, but he Chamber was right, and that the judgment
was not bound by any farther and implied of the Court of Exchequer was wrong; and
warranty. The Lord Chancellor: My Lords, I am also of that opinion myself now,
this case has been very fully and ably having been one of the Judges before whom
argued on the part of the Plaintiffs in Error, the case came to be heard in the Court of
but I understand from an intimation which I Exchequer.
have received, that all the learned Judges
The Lord Chancellor: My Lords, that being
who are present, including the learned
so, I have no hesitation in advising your
Judge who was of a different opinion in the
Lordships, and at once moving that the
Court of Exchequer, before the case came
judgment of the Court below should be
to the Exchequer Chamber, are of opinion
affirmed. It is hardly necessary, and it has
that the judgment of the Court of Exchequer
not ordinarily been usual for your
Chamber sought to be reversed by this writ
Lordships to go much into the merits of a
of error was a correct judgment, and they
judgment which is thus unanimously
come to that opinion without the necessity
affirmed by the Judges who are called in to
of hearing the counsel for the Defendants in
consider it, and to assist the House in
Error.
forming its judgment. But I may state
If I am correct in this belief, I will not shortly that the whole question turns upon
trouble the learned counsel for the the construction of the contract, which was
Defendants in Error to address your entered into, between the parties. I do not
Lordships, because I confess, though I mean to deny that many plausible and
should endeavour to, keep my mind ingenious arguments have been pressed by
suspended till the case had been fully both the learned counsel who have
addressed your Lordships, showing that a cargo at that time existing, I think the
there might have been a meaning attached purchaser would have had the benefit of
to that contract different from that which insurance in respect of all damage
the words themselves impart. If this had previously occurring.
depended not merely upon the construction
of the contract but upon evidence, which, if
I recollect rightly, was rejected at the trial, TAYLOR

of what mercantile usage had been, I should V

not have been prepared to say that a long
CALDWELL
continued mercantile usage interpreting
such contracts might not have been [1863] EWHC QB J1
sufficient to warrant, or even to compel
your Lordships to adopt a different
construction. But in the absence of any such BENCH

evidence, looking to the contract itself BLACKBURN J

alone, it appears to me clearly that what the
FACTS
parties contemplated, those who bought and
those who sold, was that there was an Caldwell & Bishop owned Surrey Gardens
existing something to be sold and bought, & Music Hall, and agreed to rent it out to
and if sold and bought, then the benefit of Taylor & Lewis for £100 a day. Taylor had
insurance should go with it. I do not feel planned to use the music hall for four
pressed by the latter argument, which has concerts and day and evening fetes on
been brought forward very ably by Mr. Monday 17 June, Monday 15 July, Monday
Wilde, derived from the subject of 5 August, and Monday 19 August 1861.
insurance. I think the full benefit of the They were going to provide a variety of
insurance was meant to go as well to losses extravagant entertainments including a
and damage that occurred previously to the singing performance by Sims Reeves, a
15th of May, as to losses and damage that thirty-five to forty-piece military and
occurred subsequently, always assuming quadrille band, al fresco entertainments,
that something passed by the minstrels, fireworks and full illuminations,
a ballet or divertissement, a wizard and
contract of the 15th of May. If the contract
Grecian statues, tight rope performances,
of the 15th of May had been an operating
rifle galleries, air gun shooting, Chinese
contract, and there had been a valid sale of
and Parisian games, boats on the lake, and Blackburn J reasoned that the rule of
aquatic sports. absolute liability only applied to positive,
definite contracts, not to those in which
According to the contract the parties had
there was an express or implied condition
signed, the defendants were to provide most
underlying the contract.
of the British performers. Taylor & Lewis
agreed to pay one hundred pounds sterling Blackburn J further reasoned that the
in the evening of the day of each concert by continued existence of the Music Hall in
a crossed cheque, and also to find and Surrey Gardens was an implied condition
provide, at their own cost, all the necessary essential for the fulfilment of the contract.
artistes for the concerts, including Mr. Sims The destruction of the music hall was the
Reeves. Then, on 11 June 1861, a week fault of neither party, and rendered the
before the first concert was to be given, the performance of the contract by either party
music hall burned to the ground. The impossible. Blackburn J cited the civil code
plaintiffs sued the music hall owners for of France and the Roman law for the
breach of contract for failing to rent out the proposition that when the existence of a
music hall to them. There was no clause particular thing is essential to a contract,
within the contract itself which allocated and the thing is destroyed by no fault of the
the risk to the underlying facilities, except party selling it, the parties are freed from
for the phrase "God's will permitting" at the obligation to deliver the thing. He further
end of the contract. analogized to a situation in which a contract
requiring personal performance is made,
JUDGMENT
and the party to perform dies, the party's
Judge Blackburn began his opinion by executors are not held liable under English
stating that the agreement between the common law. Blackburn J thus held that
parties was a contract, despite their use of both parties were excused from their
the term "lease". Under the common law of obligations under their contract.
property in England at the time, under a
IMPORTANCE
lease the lessee would obtain legal
possession of the premises during the lease Until this case, parties in a contract were
period, while the contract at issue in this held to be absolutely bound and a failure to
case specified that legal possession would perform was not excused by radically
remain with the defendants. changed circumstances. Instead, the
contract was breached and gave rise to a
claim for damages. This ruling, though chambers on the third floor at 56A, Pall
quite narrow, opened the door for the Mall, which I have agreed to take for the
modern doctrine of contract avoidance by two days, the 26th and 27th instant, for the
impracticability. sum of 75l. For reasons given you I cannot
enter into the agreement, but as arranged
over the telephone I enclose herewith
KRELL cheque for 25l. as deposit, and will thank

V you to confirm to me that I shall have the

entire use of these rooms during the days
HENRY
(not the nights) of the 26th and 27th instant.
[1903] 2 KB 740 You may rely that every care will be taken
of the premises and their contents. On the
24th inst. I will pay the balance, viz., 50l.,
BENCH to complete the 75l. agreed upon.
VAUGHAN WILLIAMS LJ, ROMER The defendant received the following reply
LJ AND STIRLING LJ from the plaintiff's solicitor:
FACTS I am in receipt of your letter of to-day's date
The defendant, CS Henry, agreed by inclosing cheque for 25l. deposit on your
contract on 20 June 1902, to rent a flat at agreeing to take Mr. Krell's chambers on
56A Pall Mall from the plaintiff, Paul Krell, the third floor at 56A, Pall Mall for the two
for the purpose of watching the coronation days, the 26th and 27th June, and I confirm
procession of Edward VII scheduled for 26 the agreement that you are to have the
and 27 June. The housekeeper of the entire use of these rooms during the days
premises had informed Henry that he would (but not the nights), the balance, 50l., to be
have an excellent view of the procession paid to me on Tuesday next the 24th instant.
from the room.
The parties agreed on a price of £75, but
Desiring to secure the rental of Krell's flat nowhere in their written correspondence
for the purpose of observing the coronation mentioned the coronation ceremony
procession, Henry wrote the following explicitly. Henry paid a deposit of £25 to
letter to Krell's solicitor: Krell for the use of the flat, but when the
procession did not take place on the days
I am in receipt of yours of the 18th instant,
originally set, on the grounds of the King’s
inclosing form of agreement for the suite of
illness, Henry refused to pay the remaining the coronation proceeding) need not be
£50. Krell brought suit against Henry to explicitly mentioned in the contract itself
recover the remaining balance of £50, and but rather may be inferred from the
Henry countersued to recover his deposit in extrinsic circumstances surrounding the
the amount of £25. contract. Thus, the parol evidence rule was
inapplicable here.
JUDGMENT
Firstly, he examined the substance of the
Darling held in the initial case that there
contract, and then determined whether the
was an implied condition in the contract,
contract was founded on the assumption of
using Taylor v. Caldwell and The
the existence of a particular state of affairs.
Moorcock, and gave judgment for the
defendant on both the claim and the He then determined that given the affidavits
counterclaim. The Court of Appeal of the parties, Krell had granted Henry a
dismissed the plaintiff's appeal. licence to use the rooms for a particular
purpose: watching the coronation. He
Lord Justice Vaughan Williams framed the
analogized the situation to one in which a
legal question in this case as whether there
man hired a taxicab to take him to a race. If
was an implied condition to the contract:
the race did not occur on the particular day
whether or not while the contract was made,
the passenger had thought, he would not be
the two parties knew that the reason behind
discharged from paying the driver.
the contract was for Henry to watch the
However, unlike the situation in the case,
coronation procession.
the cab did not have any special
The principle that an implied condition that qualification, as the room did, its view of
ceases to exist voids the contract stems the street. Furthermore, the cancellation of
from the case of Taylor v Caldwell, which, the coronation could not reasonably have
in turn, was borrowed from Roman law. been anticipated by the parties at the time
The principle was extended, in later cases, the contract was made.
to situations in which an underlying
Romer LJ said,
condition that was essential to the
performance of the contract, rather than With some doubt I have also come to the
simply being a necessary condition, ceases conclusion that this case is governed by the
to exist. principle on which Taylor v Caldwell was
decided, and accordingly that the appeal
Vaughan Williams LJ held that such a
must be dismissed. The doubt I have felt was
condition (here, the timely occurrence of
whether the parties to the contract now DOCTRINE OF FRUSTRATION
before us could be said, under the
circumstances, not to have had at all in
their contemplation the risk that for some
reason or other the coronation processions SATYABRATA GHOSE
might not take place on the days fixed, or, if
VS
the processions took place, might not pass
so as to be capable of being viewed from the MUGNEERAM BANGUR
rooms mentioned in the contract; and
whether, under this contract, that risk was
not undertaken by the defendant. But on the 1954 AIR 44, 1954 SCR 310

question of fact as to what was in the

contemplation of the parties at the time, I
SUPREME COURT OF INDIA
do not think it right to differ from the
conclusion arrived at by Vaughan Williams
L.J., and (as I gather) also arrived at by my
brother Stirling. This being so, I concur in
the conclusions arrived at by Vaughan BENCH

Williams L.J. in his judgment, and I do not MUKHERJEA, B.K.

desire to add anything to what he has said
so fully and completely.
FACTS
Stirling LJ concurred.
The facts giving rise to this appeal are, for
the most part, uncontroverted and the
dispute between the parties centres round
the short point as to whether a contract for
sale of land to which this litigation relates,
was discharged and came to an end by
reason of certain supervening
circumstances which affected the
performance of a material part of it.

JUDGEMENT
To appreciate the merits of controversy, it granted by the vendor for this earnest
will be necessary to give a brief narrative of money, the terms of the agreement are thus
the material facts. The defendant company, set out --
which is the main respondent in this appeal,
"Received with thanks from Babu Bejoy
is the owner of a large tract of land situated,
Krishna Roy of 28 Tollygunge Circular
in the vicinity of the Dhakuria Lakes within
Road, Tollygunge, the sum of Rs. 101
Greater Calcutta. The company started a
(Rupees one hundred and one only) as
scheme for development of this land for
earnest money having agreed to sell to him
residential purposes which was described as
or his nominee 5 K. more or less in plot No.
Lake Colony Scheme No. I and in
76 on 20 and 30 ft. Road in Premises No.
furtherance of the scheme the entire area
Lake Colony Scheme No. 1, Southern Block
was divided into a large number of plots for
at the average rate of Rs. 1,000 (Rupees one
the sale of which offers were invited from
thousand only) per Cotta. The conveyance
intending purchasers. The company's plan
must be completed within one month from
of work seemed to be, to enter into agree-
the date of completion of roads on payment
ments with different purchasers for sale of
of the balance of the consideration money,
these plots of land and accept from them
time being deemed as the Essence of the
only a small portion of the con- sideration
Contract. In case of default this agreement
money by way of earnest at the time of the
will be considered as cancelled with
agreement. The company undertook to
forfeiture of earnest money. Mokarari
construct the roads and, drains necessary
Mourashi Terms of payment:One third to
for making the lands suitable for building
be paid at the time of registration and the
and residential purposes and as soon as they
balance within six years bearing Rs. 6 per
were completed. the purchaser would be
cent. interest per annum".
called upon to complete the conveyance by
payment of the balance of the consideration On 30th November, 1941, the plaintiff

money. Bejoy Krishna Roy, who was appellant was made a nominee by the

defendant in the suit and figures as a pro purchaser for purposes of the contract and

forma respondent in this appeal, was one of although he brought the present suit in the

such purchasers who entered into a contract character of a nominee, it has been held by

with the company for purchase of a plot of the trial judge as well as by the lower

land covered by the scheme. His contract is appellate court, that he was really an

dated the 5th of August, 1940, and he paid assignee of Bejoy Krishna Roy in respect to

Rs. 101 as earnest money. In the receipt the latter's rights under the contract. Some -
time before this date, there was an order within one month from the receipt of the
passed by the Collector, 24-Parganas, on letter by paying the balance of the
12th of November, 1941 under section 79 consideration money and take the land in
of the Defence of India Rules, on the the condition in which it existed at that
strength of which a portion of the land time, the company undertaking to construct
covered by the scheme was requisitioned the roads and the drains, as circumstances
for military purposes. Another part of the might permit, after the termination of the
land was requisitioned by the Government war.
on 20th of December 1941. while a third
The letter ended by saying that in the event
order of requisition, which related to the
of the addressee not accepting either of the
balance of the land comprised in the
two alternatives, the agreement would be
scheme, was passed sometime later. In
deemed to be cancelled and the earnest
November, 1943, the company addressed a
money would stand forfeited. This letter
letter to Bejoy Krishna Roy informing him
was handed over by Bejoy Krishna to his
of the requisitioning of the lands by the
nominee, the plaintiff, and there was some
Government and stating inter alia that a
correspondence after that, between the
considerable portion of the land-
plaintiff on the one hand and the company
appertaining to the scheme was taken
on the other through their respective
possession of by the Government and there
lawyers into the details of which it is not
was no knowing how long the Government
necessary to enter. It is enough to state that
would retain possession of the same. The
the plaintiff refused to accept either of the
constructs of the proposed roads and drains,
two alternatives offered by the company
therefore, could not be taken up during the
and stated categorically that the latter was
continuance of the war and possibly for
bound by the terms of the agreement from
many years after its termination. In these
which it could not, in law, resile. On 18th
circumstances, the company decided to
of January, 1946, the suit, out of which this
treat the agreement for sale with the
appeal arises, was commenced by the
addressee as cancelled and give him the
plaintiff against the defendant company, to
option of taking back the earnest money
which Bejoy Krishna Roy was made a party
within one month from the receipt of the
defendant and the prayers in the plaint were
letter. There was offer made in the
for a two-fold declaration, namely, -
alternative that in case the purchaser
refused to treat the contract as cancelled, he (1) that the contract dated the 5th of August

could, if he liked, complete the conveyance 1940, between the first and the second
defendant, or rather his nominee, the court was affirmed. The defendant
plaintiff, was still subsisting; and company thereupon preferred a second
appeal to the High Court which was heard
(2) that the plaintiff was entitled to get a
by a Division Bench consisting 'of Das
conveyance executed and registered by the
Gupta and Lahiri JJ. The only question
defendant on payment of the consideration
canvassed before the High Court was,
money mentioned in the agreement and in
whether the contract of sale was frustrated
the manner and under the conditions
by reason of the requisition orders issued by
specified therein.
the Government? The learned Judges
The suit was resisted by the defendant answered this question in the affirmative in
company who raised a large number of favour of the defendant and on that ground
defences in answer to the plaintiff's claim, alone dismissed the plaintiff's suit. The
most of which are not relevant for our plaintiff has now come before us on the
present purpose. The principal contentions strength of a certificate granted by the High
raised on behalf of the defendant were that Court under article 133(I)(c) of the
a suit of this description was not Constitution of India. The learned Attorney
maintainable under section 42 of the General, who appeared in support of the
Specific Relief Act and that the plaintiff had appeal, has put forward a three-fold
no locus standi to institute the suit. The contention on behalf of his client. He has
most material plea was that the contract of contended in the first place that the doctrine
sale stood discharged by frustration as it of English law relating to frustration of
became impossible by reason of the contract, upon which the learned Judges of
supervening events to perform a material the High Court based their Decision has no
part of it. Bejoy Krishna Roy did not file application to India in view of the statutory
any written statement and he was examined provision contained in section 56 of the
by the plaintiff as a witness on his behalf. Indian Contract Act. it is argued in the

The trial judge by his judgment dated 10th second place, that even if the English law

October, 1.947, overruled all the pleas Applies, it can have no application to

taken by the defendant and decreed the contracts for sale of land and that is in fact

plaintiff's suit. An appeal taken by the the opinion expressed by the English judges

defendant to the Court of the District Judge themselves. His third and the last argument

of 24-Parganas was dismissed on the 25th is that on the admitted faacts and
February 1949, and the judgment of the trial circumstances of this case there was no
frustrating event which could be said to
have taken away the basis of the contract or through the non-performance of the
tendered its performance impossible in any promise".
sense of the word.
The first_paragraph of the section lays
The first argument advanced by the learned down the law in the same way as in
AttorneyGeneral raises a somewhat England. It speaks of something which is
debatable point regarding the true scope impossible inherently or by its very nature,
and effect of section 56 of the Indian and no one can obviously be directed to an
Contract Act and to what extent, if any, it act. The second paragraph enunciates the
incorporates the English rule of frustration law relating to discharge of contract by
of contracts. reason of supervening impossibility or
illegality of the act agreed to be done. The
Section 56 occurs in Chapter IV of the
wording of this paragraph is quite general,
Indian Contract Act which relates to
and though the illustrations attached to it
performance of contracts and it purports to
are not at all happy, they cannotderogate
deal with one circumstances under which
from the general words used in the
performance of a, contract is excused or
enactment. This much is clear that the word
dispensed with on the ground of the
"impossible" has not been used here in the
contract being-void. The section stands as
sense of physical or literal impossibility.
follows: "An agreement to do an act
The performance of an act may not be
impossible in itself is void. A contract to do
literally impossible but it may be
an act which after the contract is made,
impracticbale and useless from the point of
becomes impossible, or, by reason of some
view of the object and purpose which the
event which the promiser could not prevent,
parties had in view and if an untoward event
unlawful, becomes void when the act
or change of circumstances totally upset the
becomes impossible or unlawful.
very foundation upon which the parties
Where one person has promised to do rested their bargain, it can very well be said
something which he knew, or, with that the promisor found it impossible to do
reasonable diligence, might have known, the act which he promised to do. Although
and which the promisee did not know to be various theories have been propounded by
impossible or unlawful, such promisor must the Judges and jurists in England regarding
make compensation to such promisee for the juridical basis of the doctrine of
any loss which such promise sustains frustration, yet the essential idea upon
which the doctrine is based is that of
impossibility of performance of the comes under section 56 of the Indian
contract: in fact impossibility and Contract Act.
frustration are often used as
Ali J., in speaking about frustration,
interchangeable expressions. The changed
observed in his judgment as follows:
circumstances, it is said, make the
performance of the contract impossible and "It seems necessary for us to emphasise that

the parties are absolved from the further so far as the courts in this country are

performance of it as they did not promise to concerned, they must loot primarily to the

perform an impossibility The parties shall law as embodied in sections 32 and 56 of

be excused, as Lord Loreburn says(1), "if the Indian Contract Act, 1872."

substantially the whole contract becomes We hold, therefore, that the doctrine of
impossible of performance or in other frustration is really an aspect or part of the
words impracticable by some cause for law of discharge of contract by reason of
which neither was responsible,." supervening impossibility or illegality of
the act agreed to be done and hence comes
within the purview of section 56 of the
In Joseph Constantine Steamship Line
Indian Contract Act. It would be incorrect
Limited v. Imperial Smelting Corporation
to say that section 56 of the Contract Act
Ltd., Viscount Maugham obseryed that the
applies only to cases of physical
"doctrine of frustration is only a special
impossibility and that where this section is
case of the discharge of contract by an
not applicable, recourse can be had to the
impossibility of performance arising after
principles of English law on the subject of
the contract was made." Lord Porter agreed
frustration. It must be held also that to the
with this view and rested the doctrine on the
extent that the Indian Contract Act deals
same basis. The question was considered
with a particular subject, it is exhaustive
and discussed by a Division Bench of the
upon the same and it is not permissible to
Nagpur High Court in Kesari Chand v.
import the principles of English law dehors
Governor- General in Council and it was
these statutory provisions. The decisions of
held that the doctrine of frustration comes
the English courts possess only a persuasive
into play when a contract becomes impossi-
value and may be helpful in showing how
ble of performance, after it is made, on
the courts in England have decided cases
account of circum- stances beyond the
under circumstances similar to those which
control of the parties. The doctrine is a
have come before our courts.
special case of impossibility and as such
It seems necessary however to clear up but conditional upon her being well enough
some misconception which is likely to arise to perform. Bramwell B. pointed out in
because of the complexities of the English course of his judgment that in holding that
law on the subject. The law of frustration in the illness of the defendant incapaciated her
England developed, as is well known, under from performing the agreement the court
the guise of reading implied terms into was not really engrafting a new term upon
contracts. The court implies a term or an express contract. It was not that the
exception and treats that as part of the obligation was absolute in the original
contract. In the case of Taylor v. Caldwell, agreement and a new condition was
Blackburn J. first formulated the doctrine in subsequently added to it; the whole
its modern form. The court there was question was whether the original contract
dealing with a case where a music hall in was absolute or conditional and having
which one of the contracting parties had regard to the terms of the bargain, it must
agreed to give concerts on certain specified be held to be conditional.
days was accidentally burnt by fire. It was
The English law passed through various
held that such a contract must be regarded
stages of development since then and the
"as subject to an implied condition that the
principles enunciated in the various decided
parties shall be excused, in case, before
authorities cannot be said to be in any way
breach, performance becomes impossible
uniform. In many of the pronouncements of
from perishing of the thing without default
the highest courts in England the doctrine
of. the contractor." Again in Robinson v.
of frustration was held "to be a device by
Davison there was a contract between the
which the rules as to absolute contracts are
plaintiff and the defendant's wife (as the
reconciled with a special exception which
agent of her husband) that she should play
justice demands". The court, it is said,
the piano at a concert to be given by the
cannot claim to exercise a dispensing power
plaintiff, on a specified day. On the day in
or to modify or alter contracts. But when an
question she was unable to perform through
unexpected event or change of
illness. The contract did not contain any
circumstance occurs, the possibility of
term as to what was to be done in case of
which the parties did not circumstance
her being too ill to perform. In an action
occurs, the possibility contract is taken to
against the defendant for breach of contract,
be not what the parties actual intended, but
it was held that the wife's illness and the
what they as fair and reasonable men would
consequent incapacity excused her and that
presumably have intended and agreed upon,
the contract was in its nature not absolute
if having such possibility in view they had Appeal took the view expressed by Lord
made express provsion as to their rights and Wright as stated above as meaning that "the
court really exercises a qualifying power-a
"In ascertaining the meaning of the contract
power to qualify the absolute., literal or
and its application to the actual
wide terms of the contract in order to do
occurrences, the court has to decide, not
what is just and reasonable in the new
what the parties actually intended but what
situation".
as reasonable men they should have
intended. The court personifies for this The learned Judge went on to say, "when
purpose the reasonable man.", where he we can excuse an unforeseen injustice by
made the following observations: saying to the sufferer 'it is your own folly,
you ought not to have passed that form of
"Though it has been constantly said by high
words. You ought to have put in a clause to
authority, including Lord Sumner, that the
protect yourself'. We no longer credit a
explanation of the rule is to be found in the
party with the foresight of a Prophet or his
theory that it depends on an implied con-
lawyer with the draftsmanship of a
dition of the contract, that is really no
Chalmers. We realise that they have their
explanation. It only pushes back the
limitations and make allowances accor-
problem a single stage. It leaves the
dingly. It is better thus. The old maxim
question what is the reason for implying a
reminds us that he who clings to the letter
term. Nor can I reconcile that theory with
clings to the dry and barren shell and misses
the view that the result does not depend on
the truth and substance of the matter. We
what the parties might, or would, as hard
have of late paid heed to this warning, and
bargainers, have agreed. The doctrine is
we must pay like heed now."
invented by the court in order to supplement
the defects of the actual contract...... To my This decision of the Court of Appeal was
mind the theory of the implied condition is reversed by the House of Lords and
not really consistent with the true theory of Viscount Simon in course of his judgment
frustration. It has never been acted on by the expressed disapproval of the way in which
court as a ground of decision but is merely the law was stated by Denning L.J. It was
stated as a theoretical explanation." held that there was no change in the law as
a result of which the courts could exercise a
In the recent case of British Movietonews
wider power in this regard than they used to
Ltd. v. London and District Cinemas
do previously. "The principle remains the
Ltd.(1), Denning L. J. in the Court of
same", thus observed his Lordship.
"Particular applications of it may greatly of the Parties themselves to release them
vary and theoretical lawyers may debate from their obligations; this would be a
whether the rule should be regarded as question of construction pure and simple
arising from implied term or because the and the ordinary rules of construction
basis of the contract no longer exists. In any would have to be applied to find out what
view, it is a question of construction as Lord the real intention of the parties was.
Wright pointed out in Constantine's case According to the Indian Contract Act, a
and as has been repeatedly asserted by other promise may be express or implied. In
masters of law." These differences in the cases, therefore, where the court gathers as
way of formulating legal theories really do a matter of construction that the contract
not concern us so long as we have a itself contained impliedly or expressly a
statutory provision in the Indian Contract term, according to which it would stand
Act. In deciding cases in India the only discharged on the happening of certain
doctrine that we have to go by is that of circumstances the dissolution on of the
supervening impossibility or illegality as contract would take place under the terms
laid down in section 56 of the Contract Act of the contract itself and such cases would
taking the word "Impossible" in its practical be outside the purview of section 56
and not literal sense. It must be borne in altogether. Although in English law these
mind, however, that section 56 lays down a cases are treated as cases of frustration, in
rule of positive law and does not leave the India they would be dealt with under
matter to be determined according to the section 32 of the Indian Contract Act which
intention of the parties. deals with contingent contracts or similar
other provisions contained in the Act. In the
In the latest decision of the House of Lords
large majority of cases however the
referred to above, the Lord Chancellor puts
doctrine of frustration is applied not on the
the whole doctrine upon the principle of
ground that the parties themselves agreed to
construction. But the question of
an implied term which operated to release
construction may manifest itself in two
them from the performance of the contract.
totally different ways. In one class of cases
The relief is given by the court on the
the question may simply be, as to what the
ground of subsequent impossibility when it
parties themselves had actually intended
finds that the whole purpose or basis of a
and whether or not there as a condition in
contract was frustrated by the intrusion or
the contract itself, express or implied,
occurrence of an unexpected event or
which operated, according to the agreement
change of circumstances which was beyond
what was contemplated by the parties at the expressly stipulate that the contract would
time when they entered into the agreement. stand despite such circumstances, there can
Here there is no question of finding out an be no case of frustration because the basis
implied term agreed to by the parties em- of the contract being to demand
bodying a provision for discharge, because performance despite the happening of a
the parties did not think about the matter at particular event, it cannot disappear when
all nor could possibly have any intention that event happens.
regarding it. When such an event or change
This being the legal position, a contention
of circumstance occurs which is so
in the extreme form that the doctrine of
fundamental as to be re- garded by law as
frustration as recognised in English law
striking at the root of the contract as a
does no come at all within the purview of
whole, it is the court which can pronounce
section 56 of the Indian Contract Act cannot
the contract to be frustrated and at an end.
be accepted.. The second contention raised
The court undoubtedly has to examine the
by the Attorney General can be disposed of
contract and the circumstances under which
in few words. It is true that in England the
it was made. The belief, knowledge and
judicial opinion generally expressed is, that
intention of the parties are evidence, but
the doctrine of frustration does not operate
evidence only on which the court has to
in the case of contracts for sale of land. But
form its own conclusion whether the
the reason underlying this view is that under
changed circumstances destroyed
the English law as soon as there is a
altogether the basis of the adventure and its
concluded contract by A to sell land to B at
underlying object. This may be called a rule
certain price, B becomes in equity, the
of construction by English Judges but it is
owner of the land, subject to his obligation
certainly not a, principle of giving effect to
to pay the purchase money'. On the other
the intention of the parties which underlies
hand, A in spite of his having the legal
all rules of construction. This is really a rule
estate holds the same in trust for the
of positive law and as such comes within
purchaser and whatever rights he still
the purview of section 56 of the Indian
retains in the land are referable to his right
Contract Act.
to recover and receive the purchase money.
It must be pointed out here that if the parties The rule of frustration can only put an end
do con- template the possibility of an to purely contractual obligations, but it
intervening circumstance which might cannot destroy an estate in land which has
affect the performance of the contract, but already accrued in favour of a contracting
party. According to the Indian law, which is of what has actually happened on the
embodied in section 54 of the Transfer of possibility of performing the contract. What
Property Act, a contract for sale of land happens generally in such cases and has
does not of itself create any interest in the happened here is that one party claims that
property which is the subject-matter of the the contract has been frustrated while the
contract. The obligations of the parties to a other party denies it. The issue has got to be
contract for sale of land are, therefore, the decided by the court "ex post facto, on the
same as in other ordinary contracts and actual circumstances of the case". We will
consequently there is no conceivable reason now proceed to examine the nature and
why the doctrine of frustration should not terms of the contract before us and the
be applicable to contracts for sale of land in circumstances under which it was entered
India. This contention of the Attorney into to determine whether or not the
General must, therefore, fail. disturbing element, which is allowed to
have happened here, has substantially
We now come to the last and most
prevented the performance of the contract
important point in this case which raises the
as a whole.
question as to whether, as a result of the
requisition orders, under which the lands It may be stated at the outset that the.
comprised in the development scheme of contract before us cannot be looked upon as
the defendant company were requisitioned an ordinary contract for sale and purchase
by Government, the contract of sale of a piece of land; it is an integral part of a
between the defendant company and the development scheme started by the
plaintiff's predecessor stood dissolved by defendant company and is one of the many
frustration or in other words became contracts that have been entered into by a
impossible of performance. large number of persons with the company.
The object of the company was
It is well settled and not disputed before us
undoubtedly to develop a fairly extensive
that if and when there is frustration the
area which was still undeveloped and make
dissolution of the contract occurs
it usable for residential purposes by making
automatically. It does not depend, as does
roads and constructing drains through it.
rescission of a contract on the ground of
The purchaser. on the other hand, wanted
repudiation or breach, or on the choice or
the land in regard to which he entered into
election of either party.
the contract to be developed and make
ready for building purposes before he could
be called upon to complete the purchase. convenience of the company and as at
The most material thing which deserves matter of fact the purchaser did not feel
notice is, that there is absolutely no time concerned about it. It is against this
limit within which. the roads and drains are background that we are to consider to what
to be made. The learned District Judge of extent the passing of the requisition orders
Alipore, who heard the appeal, from the affected the performance of the contract in
trial court's judgment found it as a fact, on the present case.
the evidence in the record, that there was
not an understanding between the parties on
this point. As a matter of fact, the first The company, it must be admitted, bad not

requisition order was passed nearly 15 commenced the development work when

months after the contract was made and the requisition order was passed in

apparently no work was done by the November, 1941. There was no question,

defendant company in the meantime. therefore, of any work or service being

interrupted for an indefinite period of time.
nection is that the war was already on, when
Undoubtedly the commencement of the
the parties entered into the contract.
work was delayed but was the delay going
Requisition orders for taking temporary
to be so great and of such a character that it
possession of lands for war purposes were
would totally upset the basis of the bargain
normal events during this period. Apart
and comercial object which the parties had
from requisition orders there were other
in view? The requisition orders, it must be
difficulties in doing construction work at
remembered, were' by their very nature, of
that time because of the scarcity of
a temporary character and the
materials and the various restrictions which
requisitioning authorities could, in law,
the Government had imposed in respect of
occupy the position of a licensee in regard
them. That there were certain risks and
to the requisitioned property. The order
difficulties involved in carrying on
might continue during the whole period of
operations like these, could not but be in the
the war and even for some time after that or
contemplation of the parties at the time
it could have been withdrawn before the
when they entered into the contract, and
war terminated. If there was a definite time
that is probably the reason why no definite
limit agreed to by the parties within which
time limit was mentioned in the contract
the construction work was to be finished, it
within which the roads and drains are to be
could be said with perfect propriety that
completed. This was left entirely to the
delay for an indefinite period would make
the performance of the contract impossible records his finding on the point in the
within the specified time and this would following words:
seriously affect the object and purpose of
"My conclusion on a consideration of the
the venture. But when there is no time limit
surrounding circumstances of the contract
whatsoever in the contract, nor even an
is that the parties contemplated that the
understanding bet- ween the parties on that
roads and drains would be constructed and
point and when during the war the parties
the conveyance would be completed in the
could naturally anticipate restrictions of
not distant future."
various kinds which would make the
carrying on of these operations more tardy
and difficult than in times of peace, we do This finding is inconclusive and goes
not think that the order of requisition contrary to what has been held by the
affected the fundamental basis upon which District Judge who was undoubtedly the
the agreement rested or struck at the roots last court of facts. In our opinion, having
of the adventure. regard to the nature and terms of the

The learned Judges of the High Court in contract, the actual existence of war

deciding the case against the plaintiff relied conditions at the time when it was entered

entirely on the time factor. It is true that the into, the extent of the work involved in the

parties could not contemplate an absolutely development scheme and last though not

unlimited period of time to fulfil their the least the total absence of any definite

contract. They might certainly have in mind period of time agreed to by the parties

a period of time which was reasonable within which the work was to be completed,

having regard to the nature and magnitude it cannot be said that the requisition order

of the work to be done as well as the vitally affected the contract or made its

conditions of war prevailing at that time. performance impossible.

Das Gupta, J., who delivered the judgment Mr. Gupta, who appeared for the
of the High Court, says first of all that the respondent company. put forward an
company had in contemplation a period of alternative argument that even if the
time not much exceeding 2 or 3 years as the performance of the contract was not made
time for performance of the contract; the impossible. it certainly became illegal as a
purchaser also had the same period of time result of the requisition order and con-
in contemplation. The learned Judge sequently the contract became void under
section 56 of the Indian Contract Act as
soon as the requisition order was made. In the judgment and decree of the High Court
support of his contention the learned of Calcutta are set aside and those of the
counsel placed reliance upon certain courts below restored. The plaintiff will
provisions of the Defence of India Rules have his costs in all the courts.
and also upon illustration (d) to section 56
of the Contract Act. All that the Defence
Regulations show is that the violation of a Appeal allowed.

requisition order could be punished as a

criminal offence. But no matter in
FROST
whichever way the requisition order could
be enforced, in substance it did nothing else V
but impose a prohibition on the use of the
KNIGHT
land during the period that it remained in
force. The effect of such prohibition on the
performance of the contract, we have
discussed above, and we do not think that
the mere fact that the requisition order was
capable of being enforced by a criminal
sanction made any difference in this
respect. In any view this question was not
raised in any of the courts below and has not
been indicated even in the respondent's
statement of the case. We do not think that
it would be proper to allow this question to
be raised for the first time before us, as it
requires consideration of the different
provisions of the Defence of India Act and
also of the implication of illustration (d)
appended to section 56 of the Contract Act.
In our opinion, the events which have
happened here cannot be said to have made
the performance of the contract impossible
and the contract has not been frustrated at
all. The result is that the appeal is allowed,
 Cutter died after seven weeks. It was a ten-
week voyage. The ship left on 2 August,
Cutter died on 20 September and the ship
arrived on 9 October. The ship captain
refused to pay any wages at all. Mrs Cutter
sued to recover the wages for the part of the
journey that the husband had survived.

It was apparent that the usual wages of a

second mate of a ship on such a voyage was
four pounds per month: but when seamen
CUTTER
are shipped by the run from Jamaica to
V England, a gross sum was usually given.
POWELL The usual length of a voyage from Jamaica
to Liverpool was about eight weeks.
(1795) 6 TR 320; 101 ER 573
SUBMISSIONS
BENCH
The arguments for the plaintiff, Mrs Cutter,
LORD KENYON CJ, ASHHURST J,
went as follows.
GROSE J, LAWRENCE J
“The plaintiff is entitled to recover a
FACTS
proportionable part of the wages on a
Cutter agreed he would sail with Powell quantum meruit for work and labour done
from Kingston, Jamaica to Liverpool, by the intestate during that part of the
England. The contractual note read as voyage that he lived and served the
follows. defendant; as in the ordinary case of a

“Ten days after the ship Governor Parry, contract of hiring for a year, if the servant

myself master, arrives at Liverpool, I die during the year, his representatives are

promise to pay to Mr. T. Cutter the sum of entitled to a proportionable part of his

thirty guineas, provided he proceeds, wages. If any defence can be set up against

continues and does his duty as second mate the present claim, it must arise either from

in the said ship from hence to the port of some known general rule of law respecting

Liverpool. Kingston, July 31st, 1793.” marine service, or from the particular terms
of the contract between these parties. But
there is no such rule applicable to marine
service in general as will prevent the tanto. Neither is there any thing in the terms
plaintiff's recovering, neither will it be of this contract to prevent the plaintiff's
found, on consideration, that there is any recovering on a quantum meruit. The note
thing in the terms of this contract to defeat is a security, and not an agreement; it is in
the present claim. It is indeed a general rule the form of a promissory note, and was
that freight is the mother of wages; and given by the master of the ship to the
therefore if the voyage be not performed, intestate to secure the payment of a gross
and the owners receive no freight, the sum of money, on condition that the
sailors lose their wages; though that has intestate should be able to, and should
some exceptions where the voyage is lost actually, perform a given duty. The
by the fault of the owners, as if the ship be condition was inserted to prevent the
seized for a debt of the owners, or on desertion of the intestate, and to ensure his
account of having contraband goods on good conduct during the voyage. And in
board; in either of which cases the sailors cases of this kind, the contract is to be
are entitled to their wages though the construed liberally.
voyage be not performed. Vin. Abr.
In Edwards v Child, where the mariners had
“Mariners,” 235. But here the rule itself
given bonds to the East India Company not
does not apply, the voyage having been
to demand their wages unless the ship
performed, and the owners having earned
returned to the port of London, it was held
their freight. There is also another general
that as the ship had sailed to India and had
rule, that if a sailor desert, he shall lose his
there delivered her outward bound cargo,
wages: but that is founded upon public
the mariners were entitled to their wages on
policy, and was introduced as a mean of
the outward bound voyage, though the ship
preserving the ship. But that rule cannot
was taken on her return to England. This
apply to this case; for there the sailor
note cannot be construed literally, for then
forfeits his wages by his own wrongful act,
the intestate would not have been entitled to
whereas here the canon was prevented
any thing though he had lived and
completing his contract by the act of God.
continued on board during the whole
So if a mariner be impressed, he does not voyage, if he had been disabled by sickness
forfeit his wages; for in Wiggins v Ingleton from performing his duty. But even if this
Lord Holt held that a seaman, who was is to be considered as a contract between the
impressed before the ship returned to the parties, and the words of it are to be
port of delivery, might recover wages pro construed strictly, still the plaintiff is
entitled to recover on a quantum meruit, expressed what their agreement was, the
because that contract does not apply to this law will not imply any agreement at all. In
case. The note was given for a specific sum this case the intestate and the defendant
to be paid in a given event; but that event reduced their agreement into writing, by the
has not happened, and the action is not terms of which they must now be bound:
brought on the note. The parties provided this is an entire and indivisible contract; the
for one particular case: but there was no defendant engaged to pay a certain sum of
express contract for the case that has money, provided the intestate continued to
happened; and therefore the plaintiff may perform his duty during the whole voyage;
resort to an undertaking which the law that proviso is a condition precedent to the
implies, on a quantum meruit for work and intestate or his representative claiming the
labour done by the intestate. For though, as money from the defendant, and that
the condition in the note, which may be condition not having been performed, the
taken to be a condition precedent, was not plaintiff cannot now recover any thing. If
complied with, the plaintiff cannot recover the parties had entered into no agreement
the sum which was to have been paid if the and the intestate had chosen to trust to the
condition had been performed by the wages that he would have earned and might
intestate, there is no reason why the have recovered on a quantum meruit, he
representative of the seaman, who would only have been entitled to 8l.; instead
performed certain services for the of which he expressly stipulated that he
defendant, should not recover something should receive thirty guineas if he
for the work and labour of the intestate in a continued to perform his duty for the whole
case to which the express contract does not voyage. He preferred taking the chance of
apply.” earning a large sum in the event of his
continuing on board during the whole
Arguments on behalf of the defendant.
voyage to receiving a certain, but smaller,
“Nothing can be more clearly established rate of wages for the time he should actually
than that where there is an express contract serve on board; and having made that
between the parties, they cannot resort to an election, his representative must be bound
implied one. It is only because the parties by it.
have not expressed what their agreement
In the common case of service, if a servant
was that the law implies what they would
who is hired for a year die in the middle of
have agreed to do had they entered into a
it, his executor may recover part of his
precise treaty: but when once they have
wages in proportion to the time of give up his lease, he should not be bound to
service:[3] but if the servant agreed to pay the rent.
receive a larger sum than the ordinary rate
With regard to the case cited from 2 Lord
of wages on the express condition of his
Raym.; the case of a mariner impressed is
serving the whole year, his executor would
an excepted case, and the reason of that
not be entitled to any part of such wages in
decision was founded on principles of
the event of the servant dying before the
public policy.”
expiration of the year. The title to marine
wages by no means depends on the owners JUDGMENT

being entitled to freight; for if the sailors The Court of King's Bench held that Cutter
desert, or do not perform their duty, they are was not entitled to wages because he had
not entitled to wages though the owner earn not completed the journey. Part
the freight. Nor is it conclusive against the performance was no performance at all.
defendant that the intestate was prevented Lord Kenyon CJ led with his judgment. I
fulfilling his contract by the act of God; for should be extremely sorry that in the
the same reason would apply to the loss of decision of this case we should determine
a ship, which may equally happen by the act against what had been the received opinion
of God, and without any default in the in the mercantile world on contracts of this
sailors; and yet in that case the sailors lose kind, because it is of great importance that
their wages. But there are other cases that the laws by which the contracts of so
bear equally hard upon contracting parties; numerous and so useful a body of men as
and in which an innocent person must suffer the sailors are supposed to be guided should
if the terms of his contract require it; e.g. the not be overturned. Whether these kind of
tenant of a house who covenants to pay rent notes are much in use among the seamen,
and who is bound to continue paying the we are not sufficiently informed; and the
rent, though the house be burned down. instances now stated to us from Liverpool

Lord Kenyon Ch.J are too recent to form anything like usage.
But it seems to me at present that the
But that must be taken with some
decision of this case may proceed on the
qualification; for where an action was
particular words of this contract and the
brought for rent after the house was burned
precise facts here stated, without touching
down, and the tenant applied to the Court of
marine contracts in general. That where the
Chancery for an injunction, Lord C.
parties have come to an express contract
Northington said that if the tenant would
none can be implied has prevailed so long Ashhurst J concurred, emphasising that the
as to be reduced to an axiom in the law. contract was entire and that completion was
Here the defendant expressly promised to a condition precedent to the obligation to
pay the intestate thirty guineas, provided he pay.
proceeded, continued and did his duty as
“We cannot collect that there is any custom
second mate in the ship from Jamaica to
prevailing among merchants on these
Liverpool; and the accompanying
contracts; and therefore we have nothing to
circumstances disclosed in the case are that
guide us but the terms of the contract itself.
the common rate of wages is four pounds
This is a written contract, and it speaks for
per month, when the party is paid in
itself. And as it is entire, and as the
proportion to the time he serves: and that
defendant's promise depends on a condition
this voyage is generally performed in two
precedent to be performed by the other
months. Therefore if there had been no
party, the condition must be performed
contract between these parties, all that the
before the other party is entitled to receive
intestate could have recovered on a
any thing under it. It has been argued
quantum meruit for the voyage would have
however that the plaintiff may now recover
been eight pounds; whereas here the
on a quantum meruit: but she has no right
defendant contracted to pay thirty guineas
to desert the agreement; for wherever there
provided the mate continued to do his duty
is an express contract the parties must be
as mate during the whole voyage, in which
guided by it; and one party cannot
case the latter would have received nearly
relinquish or abide by it as it may suit his
four times as much as if he were paid for the
advantage. Here the intestate was by the
number of months he served. He stipulated
terms of his contract to perform a given
to receive the larger sum if the whole duty
duty before he could call upon the
were performed, and nothing unless the
defendant to pay him anything; it was a
whole of that duty were performed: it was a
condition precedent, without performing
kind of insurance. On this particular
which the defendant is not liable. And that
contract my opinion is formed at present; at
seems to me to conclude the question: the
the same time I must say that if we were
intestate did not perform the contract on his
assured that these notes are in universal use,
part; he was not indeed to blame for not
and that the commercial world have
doing it; but still as this was a condition
received and acted upon them in a different
precedent, and as he did not perform it, his
sense, I should give up my own opinion.”
representative is not entitled to recover.”
Grose J concurred. continuing to do his duty on board during
the whole voyage; and the latter was to be
“In this case the plaintiff must either
entitled either to thirty guineas or to
recover on the particular stipulation
nothing, for such was the contract between
between the parties, or on some general
the parties. And when we recollect how
known rule of law, the latter of which has
large a price was to be given in the event of
not been much relied on. I have looked into
the mate continuing on board during the
the laws of Oleron; and I have seen a late
whole voyage instead of the small sum
case on this subject in the Court of Common
which is usually given per month, it may
Pleas, Chandler v Greaves. I have also
fairly be considered that the parties
inquired into the practice of the merchants
themselves understood that if the whole
in the city, and have been informed that
duty were performed, the mate was to
these contracts are not considered as
receive the whole sum, and that he was not
divisible, and that the seaman must perform
to receive anything unless he did continue
the voyage, otherwise he is not entitled to
on board during the whole voyage. That
his wages; though I must add that the result
seems to me to be the situation in which the
of my inquiries has not been perfectly
mate chose to put himself; and as the
satisfactory, and therefore I do not rely
condition was not complied with, his
upon it. The laws of Oleron are extremely
representative cannot now recover any
favourable to the seamen; so much so that
thing. I believe however that in point of fact
if a sailor, who has agreed for a voyage, be
these notes are in common use, and perhaps
taken ill and put on shore before the voyage
it may be prudent not to determine this case
is completed, he is nevertheless entitled to
until we have inquired whether or not there
his whole wages after deducting what has
has been any decision upon them.”
been laid out for him. In the case of
Chandler v Greaves, where the jury gave a Lawrence J concurred.
verdict for the whole wages to the plaintiff
“If we are to determine this case according
who was put on shore on account of a
to the terms of the instrument alone the
broken leg, the Court refused to grant a new
plaintiff is not entitled to recover, because
trial, though I do not know the precise
it is an entire contract. In Salk, there is a
grounds on which the Court proceeded.
strong case to that effect; there debt was
However in this case the agreement is
brought upon a writing, by which the
conclusive; the defendant only engaged to
defendant's testator had appointed the
pay the intestate on condition of his
plaintiff's testator to receive his rents and
promised to pay him 100l. per annum for of the impressed man during the voyage, so
his service; the plaintiff shewed that the that the service is still performed for the
defendant's testator died three quarters of a benefit of the owner of the ship.”
year after, during which time he served him,
and he demanded 75l. for three quarters;
after judgment for the plaintiff in the DOMINION OF INDIA

Common Pleas, the defendant brought a VS.

writ of error, and it was argued that without
ALL INDIA REPORTER LIMITED
a full year's service nothing could be due,
for that it was in nature of a condition
precedent; that it being one consideration
IN THE HIGH COURT OF NAGPUR
and one debt it could not be divided; and
this Court were of that opinion; and
reversed the judgment. With regard to the AIR 1952 NAG 32
common case of an hired servant, to which
this has been compared; such a servant,
though hired in a general way, is BENCH
considered to be hired with reference to the HON’BLE JUSTICE R.
general understanding upon the subject, KAUSHALENDRA RAO
that the servant shall be entitled to his
BACKGROUND
wages for the time he serves though he do
not continue in the service during the whole According to section 73 of the Indian
year. So, if the plaintiff in this case could Contract Act (1872), when a contract has
have proved any usage that persons in the been broken, the party who suffers by such
situation of this mate are entitled to wages breach is entitled to receive, from the party
in proportion to the time they served, the who has broken the contract, compensation
plaintiff might have recovered according to for any loss or damage caused to him
that usage. But if this is to depend thereby, which naturally arose in the usual
altogether on the terms of the contract course of things from such breach, or which
itself, she cannot recover any thing. As to the parties knew, when they made the
the case of the impressed man, perhaps it is contract, to be likely to result from the
an excepted case; and I believe that in such breach of it. This section defines the
cases the King's officers usually put liability of a party who breaches the terms
another person on board to supply the place of a contract. The question in this case was
whether the party can recover special The applicant is not liable to compensate
damages from the other party under this the respondent for the entire set as the fact
section. that the loss of the three volumes renders
the set useless was not brought to the
FACTS
attention of the applicant and there is no
The respondent lost three volumes of Indian proof as the same.
Digest in transit through railways. The
Contentions By The Respondent
volumes were booked by the respondent at
Nagpur for being carried and delivered at The lost three volumes were part of a set
Delhi railway Station. The consigned was and their loss renders the entire set useless.
addressed to the respondent by himself. The Hence, the applicant is liable to compensate
respondent brought a suit against the the respondent for the entire set.
applicant for compensation for the loss of
JUDGMENT
the three volumes. The respondent
contended that the lost volumes were the According to section 73 of the Indian

part of a series and their loss rendered the Contract Act (1872), when a contract has

remaining books unusable. Hence, they been broken, the party who suffers by such

sought the price of the entire set of eight breach is entitled to receive, from the party

volumes as compensation. The trial court who has broken the contract, compensation

accepted the respondent’s contention and for any loss or damage caused to him

held the applicant liable to compensate the thereby, which naturally arose in the usual

respondent for the entire set. The applicant course of things from such breach, or which

filed a revision application from this the parties knew, when they made the

judgment. contract, to be likely to result from the

breach of it. The same was applied in this
case to hold the applicant liable only for the
ISSUE value of the three lost volumes.

Whether the applicant is liable for the loss In the instant case, the consignment
of three volumes or the entire set? consisted of three volumes and any loss
arising during the usual course of things can
ARGUMENTS ADVANCED
only include the value of those three
Contentions by the applicant volumes. The respondent had failed to
mention that the three volumes were the
part of a set and that the loss of those
volumes would render the set useless. The
applicant had also not undertaken to
The respondent was awarded interest from
compensate the respondent for the value of
1-9-1948 to 1-5-1949. The court relied on
the entire set if the consignment was lost.
the cases Arjunsa Raghusa v. Mohanlal
Since, the respondent had himself furnished
Harakchand [ILR (1938) Nag 308] and Brij
the value of the three lost volumes as
Nath v. Lakshmi Narain [8 Luck. 35] where
Rs.42/- the Hon’ble court found it
it was held that interest could be given
unnecessary to determine the cost of the
either by way of damages or under some
missing volumes.
statute or under some contract but damages
could not be awarded upon damages.
Hence, the claim for the interest prior to the
In the case of British Columbia Saw-Mill
suit was disallowed.
Co. v. Nettleship [(1868) L R 3 C P 499],
the plaintiffs delivered to the defendant for
carriage to Vancouver Island several cases
CASE COMMENTARY
of machinery intended for a saw-mill. The
defendant knew generally that the cases In this case, the application of section 73 of

contained machinery. Upon the arrival of the Indian Contract Act (1872) was in

the vessel, one of the cases which contained question. The Hon’ble Court while

parts of the machinery without which the deciding what amounts to loss arising in the

mill could not be erected, was missing. The usual course due to breach of contract, held

plaintiffs were obliged to replace those that such loss would only include the loss

parts from England. So, there was a delay which was contemplated in the contract and

of twelve months. The plaintiffs claimed by of which both the parties were aware and

way of compensation not only the value of nothing beyond that. Special damages can

the lost case, but also the loss incurred by be recovered only when the special purpose

the stoppage of their works during the time of the contract is known to the other party.

the rest of the machinery remained useless Otherwise, the loss incurred could only be

owing to the absence of the lost parts. Here, confined to the terms of the contract.

Bovill C.J held that since the defendant had

no knowledge of the significance of the lost
parts, awarding damages for the delay in
construction of the mill would be
speculative.
 Hadley contracted with defendants
Baxendale and Ors, who were operating
BREACH OF CONTRACT
together as common carriers under the
name Pickford & Co., to deliver the
crankshaft to engineers for repair by a
HADLEY
certain date at a cost of £2 sterling and 4
V
shillings.
BAXENDALE

[1854] EWHC J70

Baxendale failed to deliver on the date in
question, causing Hadley to lose business.
Hadley sued for the profits he lost due to
EXCHEQUER COURT
Baxendale's late delivery, and the jury
PARKE B, ALDERSON B, awarded Hadley damages of £25.

PLATT B, MARTIN B Baxendale appealed, contending that he did

not know that Hadley would suffer any
FACTS
particular damage by reason of the late
The claimants, Mr Hadley and another, delivery.
were millers and mealmen and worked
The question raised by the appeal in this
together in a partnership as proprietors of
case was whether a defendant in a breach of
the City Steam-Mills in Gloucester. They
contract case could be held liable for
cleaned grain, ground it into meal and
damages that the defendant was not aware
processed it into flour, sharps, and bran. A
would be incurred from a breach of the
crankshaft of a steam engine at the mill had
contract Judgment
broken and Hadley arranged to have a new
one made by W. Joyce & Co. in Greenwich. BARON ALDERSON

Before the new crankshaft could be made, The Court of Exchequer, led by Baron Sir
W. Joyce & Co. required that the broken Edward Hall Alderson, declined to allow
crankshaft be sent to them in order to ensure Hadley to recover lost profits, in this case,
that the new crankshaft would fit together holding that Baxendale could only be held
properly with the other parts of the steam liable for losses that were generally
engine. foreseeable, or if Hadley had mentioned his
special circumstances in advance. The mere
fact that a party is sending something to be
repaired does not indicate that the party these special circumstances so known and
would lose profits if it is not delivered on communicated. But, on the other hand, if
time. The court suggested various other these special circumstances were wholly
circumstances under which Hadley could unknown to the party breaking the contract,
have entered into this contract that would he, at the most, could only be supposed to
not have presented such dire circumstances, have had in his contemplation the amount
and noted that where special circumstances of injury which would arise generally, and
exist, provisions can be made in the in the great multitude of cases not affected
contract voluntarily entered into by the by any special circumstances, from such a
parties to impose extra damages for a breach of contract. For, had the special
breach. Alderson B said the following. circumstances been known, the parties
might have specially provided for the
Now we think the proper rule in such a case
breach of contract by special terms as to the
as the present is this: Where two parties
damages in that case, and of this advantage
have made a contract which one of them has
it would be very unjust to deprive them.
broken, the damages which the other party
Now the above principles are those by
ought to receive in respect of such breach of
which we think the jury ought to be guided
contract should be such as may fairly and
in estimating the damages arising out of any
reasonably be considered either arising
breach of contract.
naturally, i.e., according to the usual course
of things, from such breach of contract But it is obvious that, in the great multitude
itself, or such as may reasonably be of cases of millers sending off broken shafts
supposed to have been in the contemplation to third persons by a carrier under ordinary
of both parties, at the time they made the circumstances, such consequences would
contract, as the probable result of the breach not, in all probability, have occurred, and
of it. Now, if the special circumstances these special circumstances were here never
under which the contract was actually made communicated by the plaintiffs to the
were communicated by the plaintiffs to the defendants. It follows, therefore, that the
defendants, and thus known to both parties, loss of profits here cannot reasonably be
the damages resulting from the breach of considered such a consequence of the
such a contract, which they would breach of contract as could have been fairly
reasonably contemplate, would be the and reasonably contemplated by both the
amount of injury which would ordinarily parties when they made this contract.
follow from a breach of contract under
SIGNIFICANCE
Lon L. Fuller and WR Perdue evaluated the which the court feels he ought to pay." The
idea of reducing contractual remoteness to test of foreseeability is therefore subject to
a foreseeability triumph in this way: manipulation by the simple device of
defining the characteristics of the
In its second aspect Hadley v Baxendale
hypothetical man who is doing the
may be regarded as giving a grossly
foreseeing. By a gradual process of judicial
simplified answer to the question which its
inclusion and exclusion this "man" acquires
first aspect presents. To the question, how
a complex personality; we begin to know
far shall we go in charging to the defaulting
just what "he" can "foresee" in this and that
promisor the consequences of his breach, it
situation, and we end, not with one test but
answers with what purports to be a single
with a whole set of tests. This has obviously
test, that of foreseeability. The simplicity
happened in the law of negligence, and it is
and comprehensiveness of this test are
happening, although less obviously, to the
largely a matter of illusion. In the first
reasonable man postulated by Hadley v.
place, it is openly branded as inappropriate
Baxendale.
in certain situations where the line is drawn
much more closely in favor of the As early as 1894, the U.S. Supreme Court
defaulting promisor than the test of recognized the influence of Hadley upon
foreseeability as normally understood American law:
would draw it. There are, therefore,
The Hadley holding was later incorporated
exceptions to the test, to say nothing of
into Section 351 of the Restatement
authorities which reject it altogether as too
(Second) of Contracts. A 1994 law review
burdensome to the defaulter. In the second
article noted that as of that year, Hadley had
place, it is clear that the test of
been cited with approval by the state
foreseeability is less a definite test itself
supreme courts of 43 U.S. states; three state
than a cover for a developing set of tests. As
supreme courts had adopted the Hadley
in the case of all "reasonable man"
holding without citing Hadley itself; and
standards there is an element of circularity
intermediate appellate courts in the four
about the test of foreseeability. "For what
other states had also favorably cited
items of damage should the court hold the
Hadley.
defaulting promisor? Those which he
should as a reasonable man have foreseen. Where two parties have made a contract

But what should he have foreseen as a which one of them has broken, the damages

reasonable man? Those items of damage for which the other party ought to receive in
respect of such breach of contract should be mistress of a solicitor. Upfill sued Miss
such as may fairly and reasonably be Wright for arrears of rent.
considered either arising naturally, i.e.,
JUDGEMENT
according to the usual course of things,
from such breach of contract itself, or such It was held that as the landlord knew that

as may reasonably be supposed to have the flat was to be used for an immortal

been in the contemplation of both parties, at purpose the lease was tainted with

the time they made the contract, as the immorality and the landlord could not

probable result of the breach of it. recover. The plaintiff's claim was
dismissed.

Darling J. said:
IMMORAL CONTRACTS
The flat was let to the defendant for the
purpose of enabling her to receive the visits
UPFILL of the man whose mistress she was and to

V commit fornication with him there. I do not

think that it makes any difference whether
WRIGHT
the defendant is a common prostitute or
(1911) 1 KB 506 whether she is merely the mistress of one
man, if the house is let to her for the purpose
of committing the sin of fornication there.
FACTS
That fornication is sinful and immoral is
There Upfill let a flat to the Miss wright, a
clear. The Litany speaks of 'fornication and
spinster. Upfill knew that Miss Wright was
all other deadly sin', and the Litany is
the mistress of a certain man and that the
contained in the Book of Common Prayer
man would be giving her money to pay the
which is in use in the Church of England
rent. The defendant said that she was a
under the authority of an Act of Parliament.'
prostitute and that she took the flat for the
On these facts, showing a prostitute
purpose of receiving gentlemen there. The
receiving visits from a man who is keeping
plaintiff's agent, who let the flat, said that
her as his mistress, the decision would be
he did not know that the defendant was a
the
prostitute until later, but that at the time of
same even after Stable J.'s decision. But
letting he knew that she was the kept
there are various kinds of extra-marital
cohabitation. Some, Stable J.'s judgment remainders over: provided that, if Lord
shows, are not immoral. Stable J. referred Alford should die not having acquired the
to the action of the legislature. This, title of Duke or Marquis of Bridgewater, the
however, is not a universal test. It is trite estate directed to be limited to the heirs
law that some things may be legal, yet male of his body should cease, and the
immoral. estates should thereupon go over and be
enjoyed according to the subsequent uses
and limitations directed by his will. Lord
Alford died leaving a son, but without

TRUSTS, WILLS, PROBATE having acquired the title.

AGAINST PUBLIC POLICY The House considered a challenge to the

terms of a trust on the basis that it offended
public policy. The House therefore
EGERTON
considered the nature and importance of
V public policy.

BROWNLOW JUDGEMENT

[1853] 4 HLC 484 Public policy ‘has been confounded with

what may be called political policy; such as
whether it is politically wise to have a
BENCH sinking fund or a paper circulation, or the

LORD TRURO, PARKE B degree and nature of interference with

foreign States; with all which, as applied to
FACTS
the present subject, it has nothing whatever
John WilIiam Earl of Bridgewater devised to do.’ For these reasons, in our view, the
his freehold estates to trustees, in trust to defendants’ point on public policy is wholly
convey them to the use of Lord Alford, his unfounded.’ (Lord Truro)
great-nephew, for ninety-nine years, if he
Parke B: ‘Public policy is a vague and
should so long live ; remainder to trustees
unsatisfactory term, and calculated to lead
and their heirs doing the life of Lord Alford,
to uncertainty and error, when applied to
in trust to preserve contingent remainders ;
the decision of legal rights; it is capable of
remainder to the use of the heirs male of the
being understood in different senses; it
body of Lord Alford, with diverse
may, and does, in its ordinary sense, mean
‘political expedience,’ or that which is best
for the common good of the community;
and in that sense there may be every variety
of opinion, according to education, habits, REMEDIES
talents, and dispositions of each person,
who is to decide whether an act is against
public policy or not. It is the province of the
statesman, and not the lawyer, to discuss, PREMA
and of the Legislature to determine, what is
V
best for the public good, and to provide for
it by proper enactments. It is the province AHMED
of the judge to expound the law only; the
written from the statutes: the unwritten or
AIR 1987 GUJ 106, (1987) 1 GLR 462
common law from the decisions of our
predecessors and of our existing courts,
from the text writers of acknowledged
BENCH
authority, and upon principles to be clearly
deduced from them by sound reason and R MANKAD, R MEHTA

just inference; not to speculate upon what is FACTS

best, in his opinion, for the advantage of the
his appeal by the original-plaintiff is against
community. Some of these decisions may
the judgment and decree dismissing her suit
have no doubt been founded upon the
for damages of Rs. One lac based on the
prevailing and just opinions of the public
ground of breach of promise of marriage.
good; for instance, the illegality of
covenants in restraint of marriage or trade. The case of the appellant is that she is
They have become part of the established Goanese Brahmin coming from poor
law, and we are therefore bound by them, family. In 1978, she had started working as
but we are not thereby authorised to a part time typist in a typing institution
establish as law everything which we may Good luck Typing Centre in Santacruz
think for the public good, and prohibit (East) Bombay which was run by the
everything which we think otherwise.’ respondent-defendant. The defendant was
also working as a Stenotypist in Indian Oil
Corporation at Bombay. The respondent-
defendant developed friendly relations with
the appellant-plaintiff. In 1980, the was put into a very awkward position. She
defendant was transferred from Bombay to was not even able to go to her relations. She
Rajkot office of Indian Oil Corporation. had, therefore, sought help of the Social
The appellant-plaintiff accompanied the Security Branch of Rajkot police.
respondent-defendant to Rajkot on promise Ultimately, she was deserted by the
to find out a job for her. Relying on him, she respondent at Rajkot a far away place from
came to Rajkot on 23-3-1981 and stayed her relations. She submitted that she had
with the respondent-defendant in Ashok lost everything in her life and all chances of
Hotel for three days. The respondent- happiness in life and of finding out a
defendant being a Muslim, although suitable life partner in her caste or society
married, stated to the appellant-plaintiff and that the respondent has ruined her by
that his wife was unable to conceive and committing, breach of promise to marry her
bear a child and, therefore, he had to adopt and she claimed compensation for the same
the child of his sister-in-law. But the amounting to Rs. One lac with interest at
respondent-defendant was very much 18% from the date of the suit.
desirous of having his own child and,
JUDGEMENT
therefore, the defendant who could have
another wife under his personal law, The respondent-defendant denied all the

proposed and promised to marry her and material averments of the appellant-

give her the status of wife. On such promise plaintiff. He denied that they had stayed

by the respondent-defendant and in together for three days in Ashok Hotel at

expectation of married life, the appellant- Rajkot. He denied that his wife was unable

plaintiff was induced to surrender herself to to conceive or that he wanted to have a child

the respondent-defendant. The respondent- of his own. He denied that the appellant-

defendant also changed the name of the plaintiff had surrendered herself in the

appellant-plaintiff from Prema respondent-defendant and that they had

Koregaonkar to Parvin Ahmad. The lived together in 'Rafik Manzil' and at

respondent-defendant took her to a building various other places in Rajkot as husband

'Rafik Manzil' from Ashok Hotel in Rajkot and wife. It is submitted that the appellant

and thereafter, live with the appellant- had come to Rajkot and was residing in the

plaintiff as husband and wife. However, family of the respondent-defendant as it

when the appellant-plaintiff insisted on friend and during the Course of the time, it

marriage, the respondent-defendant started was found that she was not of good moral

harassing has and the appellant-plaintiff character and she could not be kept with the
cultured family of the respondent- The learned counsel for the appellant
defendant and ultimately she was asked to submitted that the judgment of the trial
leave the house of the respondent-defendant Court is clearly contrary to the evidence on
and as a result she contacted the Social record and even contrary to its own
Security Branch of Rajkot police. It was findings. The learned counsel for the
denied that the respondent-defendant had appellant has referred to para 5 of the
any illicit relations with the appellant- Judgment wherein the learned trial Judge
plaintiff. It was submitted that as per the has observed as follows : -
writing before the Social Security Branch
"The defendant has denied every thing in
of Rajkot police, the respondent-defendant
his written statement. But in his evidence,
was only liable to pay the maintenance for
he has admitted his photographs with the
the period from 9-1-1982 till April, 1982
plaintiff. He also admitted that they have
and, therefore, 'Novatio' was pleaded. It
resided together as husband and wife and
was also submitted that the suit was filed
existence of illicit relation. But according to
with a view to extort money from the
him, it all were without any promise on his
respondent-defendant.
part. It cannot be said true that she was
The learned trial Judge, after recording the staying with him as friend and
evidence and considering the matter, subsequently, she was turned out to bad
dismissed the suit holding that the plaintiff character and, therefore, she was made
had failed to prove that the defendant had shelterless. They were in love with each
given a promise and played fraud and other and, therefore, they were staying as
misrepresentation regarding marriage. The friend of the defendant with him. There is
trial Court also held that the defendant had no question of harassment or to blemish the
failed to prove that the plaintiff was staying defendant. It is admitted on the part of the
with the family of the defendant as his defendant that they were staying as husband
friend and also failed to prove that she was and wife in Ashok Hotel, in Sadhna Guest
not of a good moral character and, House, in the house of Mohmadbhai and in
therefore, she had to leave the house of the Mehta house at Rajkot."
defendant, that the defendant also failed to
A telegram of the defendant from Bombay
prove that false allegations were made by
to the plaintiff that he was coming. A letter
the plaintiff to harass and blemish the
dated 22-6-1981 from Bombay purported to
defendant.
have been signed by the defendant and
addressed 'My darling' and produced by the
appellant. In that letter, the respondent has that the respondent had come for the
stated that he has extended his leave for a photograph.
week and he would be coming to Rajkot by
Shivlal is the Accountant of Sadhana Hotel
next Sunday and at present he did not have
who has proved the entry of 2-5-1981 of
money and would pay the rent after coming
two persons, and the witness has stated that
there. This letter is proved by the evidence
Ahmad was accompanied by one lady and
of the plaintiff and there is no cross-
both of them were staying alone and he had
examination on this point by the defendant.
not enquired about their relations. That part
Even in his examination-in-chief, he has not
has come out in the cross-examination of
even said a word of denial. In that view of
the witness.
the matter, there is no reason to doubt that
the defendant had written this letter to the The Manager of Ashok Hotel who has

plaintiff. proved the hotel entry which is in the name

of Ahmad M. Indian Oil Corporation from
The certified copy of the writing before
Bombay with family and total member of
Social Security Officer. In that application,
persons being two. In the cross-
she had stated that the respondent was after
examination the witness has stated that if
her since last 3 years and pressing for
the Hotel Management comes to know that
marriage. However, she had been delaying
the man and woman do not have the
the proposal and when she accepted the
relations of husband and wife, they would
proposal and agreed for marriage, the
not give accommodation to such persons.
respondent played some drama and called
He had not thought that plaintiff and
his wife from Bombay.
defendant were not husband and wife.
Ramniklal is the neighbor and landlord of
house 'Mehta Nivas' who has deposed that
the appellant and the respondent lived as The appellant-plaintiff has also relied on

husband and wife in the house for about two the falsity of the written statement and the

months. two line examination-in-chief of the

respondent-with a view to corroborate her
The Photographer who has proved tile
case of promise to marry and breach of such
photograph Exs. 22 and 23 and also proved
promise of marriage. The respondent-
the negatives Exs. 36 and 37. He has also
defendant in his evidence has stated in all
produced the bill for the same. He has stated
only two lines in his examination-in-chief
which read as follows : -
"I know the plaintiff. I had not promised to At that time, there was no reason to give a
marry her. There is no sexual intercourse false name unless the appellant-plaintiff
with her by me without her consent." and the respondent-defendant had been
living as a husband and wife and the
This is all he had said in his examination-
appellant plaintiff was living under that
in-chief. He has not denied on oath several
name. This circumstance very strongly
circumstances and the evidence of promise
corroborates the say of the appellant that
of marriage led. by the appellant-plaintiff.
there was the promise to marry and,
As far as the promise of marriage is
therefore, they were living as husband and
concerned, only the parties would have
wife and describing themselves as such.
personal knowledge. The appellant-
Even the independent witness like landlord
plaintiff has stated on oath that the
and neighbour Ex. 34 who has seen the two
respondent-defendant had given the
living together for three months in his house
promise of marriage and the respondent-
has also stated that they were living as
defendant has denied it. There is word
husband and wife. In the cross-
against word. However, there are several
examination, the respondent has admitted
important circumstances which lend
that he stayed with her as she insisted to
credence and support to the word of the
stay in the hotel and they had stayed
appellant plaintiff, and the respondent has
together for two days. He has also admitted
utterly failed to explain these circumstances
that he stayed with her at Rajkot for about 5
appearing against him and to show any
to 6 days. Regarding the photographs, the
circumstance in support of his say. He has
respondent had to say in the cross-
not examined any witness in his defence.
examination that they had gone to the
He has not examined even his close friends
photographer because of her insistence. The
with whom he had lived with the appellant-
averment in the written statement that the
plaintiff. A letter addressed to the appellant-
respondent became. aware of the bad
plaintiff as 'My darling' is a strong
character of the appellant and, therefore, he
circumstance to show that what the
thought that it was unbecoming of the
appellant-plaintiff says is true. There is no
cultured family of the respondent-
cross-examination of the appellant
defendant. However, nothing whatsoever
regarding this letter. There is no attempt by
has been shown as to what was that bad
the respondent to explain and deny this
character except that she had submitted
letter in his examination-in-chief.
herself fully to him. If that was the bad
character, that equally applied to himself.
She had submitted herself on the promise of extort money and her evidence cannot be
marriage. However, it appears that so far as taken at its face value. If it was a matter of
the respondent-defendant is concerned, he her word only, this contention would have
had exploited her by the false promise of some merit. But her word is supported by
marriage. If there is anything bad in either many circumstances. She has submitted
of them, it is in !the character of the that the photographs do not prove any
respondent-defendant rather than that of the promise of marriage nor does the letter.
appellant-plaintiff. It appears that this false
The photographs and the letter merely show
excuse of bad character of the appellant as
that the two were having some intimate
against the "cultured" family of the
relations and nothing more and certainly no
respondent has been merely given to get
promise of marriage.
away from the promise of marriage.
It is not possible to accept this contention
The learned counsel for the respondent Mrs.
also because one has to look to the entire
Chinubhai has strongly submitted that there
conduct for all the time. It is clear that there
was no promise to marry and it was a
was not only a promise, but a continuing
voluntary and free relationship between the
understanding between the two that they
two; the respondent was already married
would get married and only the timing of
and the close intimacy between a man and
the marriage was to be agreed and fixed and
woman does not necessarily mean promise
ultimately when she insisted for the
of marriage. If there was merely word
marriage, the respondent-defendant went
against word, such argument may have
back on his promise and committed breach
some force. But having regard to the
of the promise. Mrs. Chinubhai has also
circumstances mentioned above, the word
submitted that if really she had a promise of
of the appellant-plaintiff seems to be more
marriage, she would have certainly talked
probable, natural and acceptable as against
to some friend or relative. However, she has
the word of the respondent-defendant
not examined anyone. It is to be noted that
which is less probable and absolutely
she is a Brahmin girl from Goa and the
unacceptable. Mrs. Chinubhai submitted
appellant-plaintiff and the respondent-
that so far as so-called promise to marry is
defendant are in Rajkot. The respondent is
concerned, there is no evidence except bare
already married and Muslim, belonging to
word of the appellant-plaintiff who is
totally a different religion. In such
highly interested in making false
circumstances, it would be natural that she
allegations and it is clearly an attempt to
would not inform any of the relatives or
friends. It is not shown that she had any case, it cannot be said that she surrendered
friend or relative in Rajkot. Where they herself due to the promise."
were living were the friends of the
"Their, love affairs ended into bodily
respondent and not of the appellant. Really
happiness. Mere residing as husband and
speaking, this argument should apply to the
wife for some period cannot establish that
respondent who has examined no witness
she only surrendered herself to the
on his behalf. He has not examined his own
defendant as she was promised by the
wife who had visited the place twice. He
defendant to marry her. Circumstance
has not examined any friend with whom
shows that they were in love since long but
they were living. In the cross-examination
when they got opportunity to live together,
of the appellant, it was suggested to her by
both have taken it. Before surrendering
the respondent-defendant that she was not
herself, she could have insisted to perform
ready to marry with the respondent before
the marriage first. That she had not done.
he takes divorce from his wife. She has
Therefore, I am of a view that the facts
denied this suggestion. But this suggestion
regarding promise to marry her is
clearly implies that the respondent wanted
subsequently got up fact for the institution
to marry the appellant-plaintiff without
of this suit."
getting divorce from his first wife.
Such conclusion of "no promise to marry"
In view of the above discussion, the finding
cannot be sustained and is contrary to
of the lower Court that there was no
evidence. Therefore, there is no escape
promise of marriage cannot be sustained
from the conclusion that the respondent-
has to be reversed. The learned trial Judge
defendant had promised to marry the
has observed that :
plaintiff. On that finding, there is no further
"considering the whole evidence and its dispute that if there is such promise, the
cumulative effect, I am of a view that parties respondent has committed breach thereof.
were in love since long with each other and Even otherwise, there is clear evidence to
she surrendered (to) the defendant for that show that the respondent-defendant has not
reason only and not of the so-called been willing to keep and fulfil his promise.
promise as stated by her."
The next question that arises is whether the
"no doubt they remained as husband and appellant-plaintiff is entitled to any
wife, but only for that reason, in the instant damages or compensation and if yes, how
much. On this question, we had requested
the learned Advocate Mr. M. D. Pandya to tendencies and it would be against public
render his assistance as amicus curiae and policies. In support of this contention, the
we have heard him also. learned Counsel for the respondent has also
relied upon a judgment in the case of Istak
The learned counsel for the respondent-
Kamu Musalman v. Ranchod Zipru Bhate,
defendant has submitted that award of
AIR 1947 Bom 198 wherein it was held that
compensation in such a case would be
if the consideration is immoral, transaction
against the public policy and morality. If a
is void.
woman lives in illicit cohabitation with a
man and thereafter comes out with a case of In the case of Manicka Gounder v.
damages, such claim would not be Muniammal, AIR 1968 Mad 392 which is
countenanced by any Court of Law and strongly relied upon by the respondent, it is
justice and, therefore, the Court should observed as under : -
refuse any compensation. She has relied on
"Where due consideration relates strictly to
the decision in the case of Gherulal Parakh
past cohabitation, which is illicit, in the
v. Mahadeodas Maiya, AIR 1959 SC 781
sense that it is outside matrimony, but
wherein the Supreme Court has observed as
which otherwise does not constitute any
follows:-
offence, it would be conceivably held, on
the circumstances, that the promise to pay
is supported by good consideration. But
"The primary duty of a Court of Law is to
even so, though this consideration is not
enforce a promise which the parties have
forbidden by any law, nevertheless it falls
made and to uphold the sanctity of contracts
under the interdict that it may be 'immoral
which form the basis of society, but in
or opposed to public policy'. For the Courts
certain cases, the Court may relieve them of
must, by every means in their power,
their duty on a rule founded on public
promote matrimony, and the incurring of
policy; the doctrine of public policy is
lawful sexual relationship alone and ought
extended not only to harmful cases but also
not to give sanction or approval, even in an
to harmful tendencies."
implied form, to irregular sexual relations
Relying on the aforesaid decision, the outside the bond of matrimony, even where
learned counsel for the respondent has they may constitute no offence of
submitted that if the Court were to award infringement of the Penal law."
damages in the present case, it would be
harmful and it would encourage harmful
None of these cases would be applicable in month. As he is insolvent it appears to me
the present case. It is true that there was improbable that the plaintiff would realize
cohabitation between the parties and it was any considerable sum from the defendant
illicit cohabitation without matrimony. himself but as pointed out, his step father
However, the damages are not claimed on holds a well paid Government appointment
the basis of illicit cohabitation or for any and the defendant's position does not alone
immoral consideration. It is only a side justify a reduction of the damages. He has
effect or a by-product and the cause of treated the plaintiff in a shameful and hard-
action is not based on such cohabitation. hearted manner and if, as was stated in this
Court and not denied, he has since married
The case is based on the promise of
another girl, he has put it out of his power
marriage and breach of such promise. If the
to make even tardy amends to the plaintiff
appellant-plaintiff proves that case, a clear
by offering her the status of a chief wife. On
actionable wrong is proved for which claim
the other hand, Rs. 2000/- is a handsome
for damages or compensation is
sum to a girl in the plaintiffs position and
maintainable. Merely because the parties
is, I consider, a reasonable compensation
had also illicit cohabitation would not make
under the circumstances."
the legal and valid cause of action illegal
and immoral. It is a well settle law that In Anson's Law Contract, it is observed as
breach of promise to marry is actionable follows under the head 'Compensatory
and damages and compensation for such Nature of Damages' in Chapter 17 of
breach can be awarded. 'Remedies for Breach of Contract',
"damages for breach of contract are given
The case of Maung Sein Kyi v. Maung Sein
by way of compensation for suffered, and
Kyi, AIR 1916 Lower Burma 45 is a case of
not by way of punishment for wrong
breach of promise of marriage and damages
inflicted. Hence the 'vindictive' or
in such case and it was held as follows : -
"exemplary' damages of the law of tort have
"Under S. 74 of the Contract Act, it is open no place in the law of contract. To this rule,
to the Court to award such compensation however, the action for breach of promise
not exceeding the amount so named as of marriage is an exception; in that case
appears to it to be reasonable. The injury to the feelings of the disappointed
defendant urges that Rs. 2000/- is an party may be taken into account in the
excessive amount to award against a assessment of damages."
person in his position of a clerk on Rs.75 a
This is the well settled common law in contract, damages cannot be given for
England which applies in India also. Thus, mental distress and that damages cannot be
the breach of promise of marriage is not given for disappointment of mind
only actionable and there is no bar of public occasioned by breach of contract. Lord
policy operating against the same but even Denning observed as follows : -
exemplary damages apart from the normal
"I think that those limitations are out of
damages would be awarded.
date. In a proper case damages for mental
distress can be recovered in contract, just as
damages for shock can be recovered in tort.
In the case of Jarvis v. Swans Tours Ltd.,
One such case is a contract for a holiday, or
(1973) 1 QB 233, the Court of Appeal held
any other contract to provide entertainment
that the plaintiff is entitled to compensation
and enjoyment. If the contracting party
for his disappointment and distress at the
breaks his contract, damages can be given
loss of the entertainment and facilities for
for the disappointment, the distress the
enjoyment which he had been promised in
upset and frustration caused by the breach.
the defendant's brochure and his damages
I know that, it is difficult to assess in terms
should be increased to 125. In that case, the
of money, but it is no more difficult than the
charges for the fortnight holiday were 63.45
assessment which the Courts have to make
and it was proved that he did not get the
every day in personal injury cases for loss
promised facilities, entertainment and
of amenities."
enjoyment and had inconvenience and loss
of benefit. It was found that in the first What is said to be applicable in a case of
week, he got a holiday which was inferior breach of promise of a happy holiday would
and for the second week, a holiday he got must strongly and appropriately apply in
was very largely inferior to what he had the case of breach of promise of marriage
been led to expect. The Court at the first and happy family life.
instance took the difference in value
The next question that arises is about the
between what he paid for and what he got
quantum of damages to be awarded. In a
and it was thought that the plaintiff had got
case of this nature, there is no ready
half of what he had paid for and so the trial
measure of damages unlike commercial
Court gave him half the amount which he
contracts. There could be several relevant
had paid namely 131.72. The Court of
circumstances to be taken into account.
Appeal enhanced the damaged to 125 and
Such as social and financial position of the
negatived the argument that on a breach of
parties (even though inability to pay In a case decided 70 years ago, reported in
damages may not result into denial or AIR 1916 Lower Burma 45 (supra) an
dimination of damages if otherwise the amount of Rs. 2000/- was awarded against
plaintiff is entitled to larger quantum of a person in a position of Clerk earning Rs.
damages). The respondent-defendant is 75/- per month. Having regard to the
working as a Stenographer in a well reputed comparative money value of Rs. 2000/- in
public sector corporation like Indian Oil 1916 and Rs. 60,000/- in 1986, it appears,
Corporation. If the promise had been that the damages can reasonably be
fulfilled, the appellant-plaintiff would have assessed in the present case at Rs. 60,000/-.
shared his life as a family member and The appellant plaintiff will also be entitled
would have enjoyed all the facilities of the to interest at the rate of 6% per annum from
family life including the earnings of the the date of the suit till realisation. The
husband. In the event of desertion by the appellant-plaintiff would also be entitled to
husband, she would be entitled to costs of both the Courts.
maintenance commensurate with the social
In the result, the appeal succeeds. The
and economic status of the husband and
judgment and decree of the trial Court are
wife. In the present case, it would not have
quashed and set aside and the suit of the
been less than Rs. 500/- per month. It would
appellant-plaintiff is decreed and it is
probably be somewhere between Rs. 750/-
directed that the respondent-defendant do
and Rs. 1000/-per month. Another measure,
pay to the appellant-plaintiff a sum of Rs.
is suggested, to compare with the case
60,000/- with 6% interest per annum from
where a wife loses her husband in a fatal
the date of the suit till realisation and also
motor accident and to come to annual loss
the costs of both the Courts.
and apply a multiplier of 15 to arrive at a
lump sum figure. Even if a conservative
amount of Rs. 500/- per month is taken as a 22. We put on record our appreciation of
datum figure in this case, that would be Rs. Mr. M. D. Pandya for having assisted the
6000/- per year. If a multiplier of 10 is Court as amicus curiae at the request of the
applied, it would be Rs. 60,000/-. Such Court. His assistance was disinterested and
amount would give a reasonable useful and was sought on the question
maintenance per month for lifetime. That whether damages could be awarded in a
would also take care of all the aspects of case like the present one and what would be
damages including compensatory, the measure for such damages.
aggravated or exemplary damages.