NATIONAL LAW UNIVERSITY ODISHA, CUTTACK

COURSE OUTLINE
LAW OF CONTRACT-I
GENERAL PRINCIPLES OF LAW OF CONTRACT

Course Designed by:

Mr. Mayank Tiwari, Assistant Professor of Law
Ms. Sonal Singh, Assistant Professor of Law

B.A.L.LB/ B.B.A.L.LB
(2nd Semester) 2020-2025
 I. Course Introduction
All of us have been exposed to exchange of promises in our day today life, either consciously or
subconsciously. The Contract Law is based on this premise of exchange of promises which takes
place in a legal context. It is a branch of law which deals with regulation of all types of promises
which are meant to be enforced through law. Contract law is one of the most important civil law
dealings with rights and obligations which parties create for themselves, to be governed within in
a legal framework. This law forms the basis of commercial transactions and thus lays down the
foundation of other commercial and mercantile laws. In India, the general principles of contract
laws are codified under the Indian Contract Act, 1872. It aims to ensure that the rights and
obligations arising out of a contract are honoured and that legal remedies are provided to
aggrieved party. This course is designed to introduce the various general principles governing the
law of contract.

II. Course Objectives

• To acquaint the students with fundamental understanding of various general principles

relating to contract law.

• To make the students able to identify relevant legal issues arising on a given set of facts
in the field of contract law.

• To equipthe students with the basics of contract law so as to enable them to deal
effectively with disputes related to contracts.

• To enable the students to identify suitable remedies in contract law related disputes.

III. Course Pedagogy

The course instructor aims to explain various concepts through online lectures, case study,
discussions & presentations. Special emphasis would be given on the relevant statutes as well as
cases and problems. Each student will be expected to prepare thoroughly and to participate
actively in class discussion.

MODULES: The syllabus has been divided into 10 modules.

MODULE 1: INTRODUCTION

➢ Contract: meaning and nature

➢ Historical background of contract law
Henry Maine:
- The movement of progressive societies has hitherto been from status to contract
- The positive duty resulting from one man’s reliance on the word of another is
among the slowest conquests of advancing civilization
➢ Major definitions under the Indian Contract Act, 1872
➢ Elements of contract

MODULE 2: AGREEMENT [Section 3-10]

➢ Proposal and Acceptance- their forms; essential elements
- Offer and invitation to offer
- Standard form of contract
➢ Communication
➢ Revocation
➢ Intention to create legal relations

Case laws:

• Balfour v. Balfour (1918-19) ALL ER 860 (C.A.)

• Rose & Frank Co. v. J.R. Crompton (1923) 2 KB 261
• Taylor v. Portington (1855) 44 ET 128
• Thanvardas Perumal v.UOI (1955) SC 468
• Carlill v. Carbolic Smoke Ball Co. [1891-4] All ER 127
• Lalman Shukla v. Gauri Datt (1913) XL ALJR 489
• Bhagwandas Goverdhandas Kedia v. M/S. Girdharilal Parshottamdas & Co. A.I.R. 1966
SC 543
• Harvey v. Facey [1893] AC 552
• Felthouse v. Bindley (1862) 11 CB 869
• Global Asset Capital & anr v. Aabar Block S.A.R.L & others [2017] EWCA Civ 37
MODULE 3: CAPACITY TO CONTRACT [Section. 10, 11, 12, 65, 68]
➢ What agreements are contract
➢ Legal disability to enter into contract:
- Minors
- Persons of unsound mind
- Persons disqualified by law
➢ Effect of minor’s agreement; Liability for necessaries supplied to minor; Specific Relief
Act, 1963, (Section.33)

Case laws:

• Khan Gull v. Lakha Singh (1928) 9 Lah 701

• Ajudhia Prasad v. ChandanLal (1937) All 860
• Jagar Nath Singh v. Lalta Prasad (1908) 31 All 21
• Jennings v. Rundall (1799) 9 TR 335
• Raj Rani v. Prem Adib (1949) 51 Bom LR 256
• Roberts v. Gray (1913) 1 KB 520
• Mohiri Bibi v. Dharmodas Ghose (1903) 30 IA 114
• Nash v. Inman (1908) 2 KB 1
• Chappel v. Cooper (1844) 153 ER 105
• The Law Debenture Trust Corporation v. Ukraine [2017] EWHC 655 –

MODULE 4: CONSIDERATION [Section. 2(d), 2 (f), 25]

➢ Meaning, nature and essentials of consideration

➢ Exceptions to consideration
➢ Doctrine of Privity of Contract and its exceptions
➢ Privity of consideration

Case laws:

• Durga Prasad v. Baldeo (1881) 3 All 221

• Errington v. Errington (1952) 1 KB 290
• Venkata Chinnaya Rau v. Venkataramaya Garu (1881) 1 I.J. 137 (Mad.)
• White v. Bluett (1853) 23 LJ Ex 36
• Collins v. Godfray (1831) 1 B & Ad 956
• Rajlukhy Dabee v. Bootnath Mukherjee (1900) 4 CWN 488
• Bhiva v. Shivaram (1899) 1 Bom. L.R. 495
• Kedarnath Bhattacharji v. Gorie Mahomed (1886) 7 I.D. 64 Cal.
 • DoraiswamiIyer v.Arunachala Ayyar (1935) 43 L.W. 259 (Mad.)
• Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge &Co. Ltd. [1915] UKHL 1
• Smith &Snipes Hall Farms Ltd v. River Douglas Catchment Board (1949) 2 KB 500
• Tweedle v. Atkinson [1861] EWHC J57 (QB)

MODULE 5: FREE CONSENT AND FACTORS VITIAITNG FREE

CONSENT [Section 13-22]

➢ Consent – Definition
➢ Free Consent and factors vitiating consent
- Coercion
- Undue Influence
- Fraud
- Misrepresentation
- Mistake of fact and mistake of law
➢ Effect of vitiating factors: voidable contract and void agreement

Case Laws:

• Cikham Amiraju v. Chikam Seshamma AIR 1917 Mad 288

• Rangnayakamma v. Alwar Seti(1890) I.L.R. 13 Mad. 214
• MutiahChettiar v. KaruppanChetti (1927) 50 Mad 786
• Askari Mirza v. Bibi Jai Kishori (1912) 16 IC 344
• Sheikh Ismail v. Amir Bibi (1902) Bom LR 146 and 148
• Ranee Annapurni Nachiar v. Swaminatha Chettiar (1910) 34 Mad 7
• Wajd Khan v. Raja Ewaz Ali Khan (1891)18 IA 144
• Derry v. Peek (1889) 14 App Cas 337A
• Peek v. Gurney [1873] LR 6 HL 377
• Phillips v. Brooks [1919] 2 KB 24
• Cundy v. Lindsay (1877-78) LR 3 App Case 459
• Smith v. Chandwick (1884) 9 A.C. 184
• Raffles v. Witchelhaus (1864) 2 H & C 906
MODULE 6: LIMITATIONS ON FREEDOM OF CONTRACT [Section. 23,
24, 26 – 36]

➢ Unlawful Object and consideration

➢ Void agreements
- Agreements against Public Policy
- Agreements with Unlawful Consideration
- Agreements without Consideration
- Agreements in Restraint of Marriage
- Agreements in Restraint of Trade
- Agreements in Restraint of Legal Proceedings
- Ambiguous and Uncertain Agreements
- Wagering Agreements – Its exceptions
➢ Contingent Contracts

Case Laws:

• Lowee v. Peers (1768) 4 Burr. 225

• Rao Rani v. Gulab Rani AIR 1942 All 351
• Madhub Chunder v. Raj Coomer Doss (1874) 14 BLR 76
• Nordenfelt v. Maxim Nordenfelt Guns & Ammunittion Co. Ltd. (1894) AC 535
• S.B. Fraser v. Bombay Ice Mfg. Co. (1905) 29 BLR 107
• Guthyng v. Lynn (1831) 2 B7 Ad 232
• Gherulal Parekh v. Mahadeo Das AIR 1959 SC 781
• Frost v. Knight (1872) 7 Exch 111
• Pym v. Campbell (1856) 6 E & B 370
• Brown v. Knowlsey BC [1986] I.R.L.R. 102

MODULE 7: DISCHARGE OF CONTRACT [Section 37-72]

➢ Discharge by performance
- Clayton’s Rule
➢ Discharge by agreement or consent- Novation, alteration, recission
➢ Lapse of time
➢ Operation of law
➢ Discharge by impossibility of performance- Doctrine of Frustration
➢ Discharge by breach of contract- actual and anticipatory
 Case laws:
• Krell v. Henry [1903] 2 KB 740
• Taylor v. Caldwell [1861-73] All ER Rep 24
• Robinson v. Davison (1871) LR 6 Ex 269
• Satyabrata Ghose v. Mugneeram Bangur & Co. AIR 1954 SC 44
• F.A. Tamplin Steamship Co. Ltd. v. Anglo Mexican Petroleum Products Co. Ltd.
[1916] 2 AC 397
• British Movietonews Ltd v. London & District Cinemas Ltd. [1950] 2 All E.R.
390 (C.A.)
• Bhudra Chand v. Betts(1915) 22 Cal LJ 566
• Frost v. Knight (1872) 7 Exch 111
• Hochesterv. De La Tour (1853) 2 E & B 678
• Devaynesv. Noble (1816) 35 ER 781
• Avery v.Bowden (1856) 5 E & B 714
• Energy Watchdog v CERC (SCI) [(2017) 14 SCC 80]
• M/s Halliburton Offshore Services Inc. v. Vedanta Limited, (O.M.P. (I) (COMM)
& I.A. 3697/2020)
• Standard Retail Pvt. Ltd v. Gs Global Corp, Commercial Arbitration Petition
(Lodging) No. 404 of 2020
• Ramanand & Ors. v. Dr. Girish Soni & Anr., CM APPL. 10848/ 2020 & CM
APPL. 10847/2020 in RC. REV. 447/2017
• Indrajit Power Private Limited v. Union of India, W.P.(C) 2957/2020 & CM
Nos.10268-70/2020

MODULE 8: REMEDIES FOR BREACH OF CONTRACT [Section 73,74,

75; Specific Relief Act, 1963 – Section 9-24; 27; 36-41]

➢ Suit for damages: Types of damages; Remoteness of damages; Ascertainment of damages

➢ Doctrine of quantum meruit
➢ Suit for specific performance
➢ Suit for injunction
➢ Suit for recession of contract
Case Laws:

• Hadley v. Baxendale (1843-60) All ER Rep.460

• Simpson v. London & North Western Railway Co. (1876) 1 QBD 274
• Warner Bros v. Nelson [1937] 1 KB 20
• Cutter v. Powell (1795) 6 TR 320
• Pricket v. Badger (1856) 1 C.B. (N.S.) 296
 • Indu Mehta v. State of U.P. AIR 1987 All 309
• Nair Service Society Ltd. v. Rev. Father K.C. Alexander & Ors, AIR 1968 SC 1165
• A.G. Venkatanarasiah v. Smt. Vijayalakshmi & Ors, AIR 1982 Mad. 329
• Union of India v. Ibrahim Uddin & Another, (2012) 8 SCC 148
• Kanchan Udyog Ltd. v. United Spirits Ltd. (2017) 8 SCC 237

• Adarsh Food Products (P) Ltd vs State of Himachal Pradesh CWP No. 1198 of 2017
• Nagar Parishad, Ratnagiri v. Gangaram Narayan Ambekar, (2020) 7 SCC 275]
• South East Asia Marine Engg. & constructions Ltd. (SEAMEC Ltd.) v. Oil India
Ltd., (2020) 5 SCC 164
• C.S. Venkatesh v. A.S.C. Murthy, (2020) 3 SCC 280
• Energy Watchdog v. CERC (2017) 14 SCC
• Deccan Paper Mills Co. Ltd. v. Regency Mahavir Properties, 2020 SCC OnLine SC 655

MODULE 9: QUASI CONTRACTS[Section 68-72]

➢ Meaning
➢ Doctrine of unjust enrichment
➢ Types of quasi contract
- Supply of necessaries to person incapable of contracting
- Payment by an interested person
- Liability to pay for non-gratuitous act
- Responsibility of finder of goods
- Money paid or thing delivered under mistake or coercion

Case Laws:

• Govindram Gordhandas Seksaria v. State of Gondal AIR 1950 PC 99

• State of West Bengal v. B.K. Mondal and Sons AIR 1962 SC 779
• Damodar Mudaliar v. Secretary of State for India (1895) ILR 18 Mad 88

MODULE 10: e-CONTRACTS

➢ Definitions
➢ Formation of e-contract
➢ Importance of e-contract
➢ Section 10 (A) of Information Technology Act, 2000
➢ E-contract vis-a-vis traditional contracts

Case Laws:
• Bhagwandas Goverdhandas Kedia v. M/s. Girdharilal Parshottamdas & Co. A.I.R. 1966
SC 543
 • InterGlobe Aviation Ltd. v. N. Sachidanand, (2011) 7 SCC 463
• Trimex International v. Vedanta Aluminium Limited, 2010 (SC)
• World Wrestling entertainment v. Reshma Collections, Del (DB) 2014

ESSENTIAL READINGS:

• Pollock & Sir Dinshaw Fardunji Mulla (Revised by R Yashod Vardhan &Chitra
Narayan), The Indian Contract and Specific Relief Acts (LexisNexis), Vol. I & II
(15thEdn.- 2017)
• Chitty on Contracts, Sweet & Maxwell, London, Vol. I & II, (33rdEdn. – 2018).
• J. Beatson, Anson’s Law of Contract, Clarendon Press, Oxford, (30thEdn. -2016).
• C. Moitra, Law of Contract and Specific Relief, Universal Law Publishing Co. (7th Edn.-
2016)
• Avtar Singh, Law of Contract& Specific Relief, EBC, Lucknow (12th Edn. – 2017)
• V. Kesava Rao, Contracts I: Cases and Materials, Lexis Nexis (2nd Edn. 2014)
• Akhileshwar Pathak, Contact Law in India: Test and Cases, Oxford (2011)

RECOMMENDED READINGS:

• Andrew Burrows, A Casebook on Contract, Mohan Law House, New Delhi (Second
Edition, 2010) (Indian Print).
• Stephen A. Smith, Atiyah’s Introduction to the Law of Contract, International Student
Oxford University Press, London (Sixth Edition, 2006).
• H.K. Saharay, Dutt on Contract, Eastern Law House, Kolkata (Tenth Edition, 2006).
• Charles Mitchell & Mitchell Paul, Landmark Cases in the Law of Contract, Hart
Publishing Oregon (2008).
• Ritu Gupta, Law of Contract, Lexis Nexis, New Delhi (First Edition, 2015).
• Edwin Peel, The Law of Contract, Sweet & Maxwell, London, (Twelfth Edition, 2007).
• D S Chopra, Cases and Materials on Contract Law & Specific Relief, Thomson Reuters,
New Delhi, (Second Edition, 2015).

*The list of cases is not exhaustive.

MOOCS and EDX Courses

• Contract Law: From Trust to Promise to Contract, Harvard University

• Structuring Business Agreements for Success, Cornell University
• Fundamentals of Contract Law https://mylaw.net/corporate/fundamental-contract-law-
course
Credit Hours

Module Module Name Credit Hours

No.
1. Introduction 4

2. Agreements 5

3. Capacity to contract 5

4. Free consent and factors vitiating free consent 11

5. Consideration 5

6. Limitation on freedom of contract 11

7. Discharge of Contract 7

8. Remedies for breach of contract 6

9. Quasi Contracts 3

10. e-Contracts 3