TAMIL NADU NATIONAL LAW UNIVERSITY, TIRUCHIRAPPALLI FIRST
YEAR SECOND SEMESTER B.A. LL.B. (HONS), B.COM. LL.B. (HONS.)
DEGREE PROGRAMME - ACADEMIC YEAR 2024-25
LAW OF CONTRACTS - I
SOLVED EXAMINATIONS PROBLEM
Problem 1
Ramesh, a merchant remitted to the government Rs.1000 as sales
tax by mistake. Ramesh wants to recover the amount, can he
succeed?
(june 1983, june 82, Bh.U)
Issue involved: Whether the money paid by mistake can be
recovered.
Solution :
Ramesh can succeed: The reason being that one can't unjustly
enrich himself at the cost of another as per the law relating to
Quasi contracts. In this problem, the money that has been paid by
Ramesh is no doubt a mistake. But the government can't take
advantage of this mistake as it would amount to unjust enrichment.
It therefore follows that the amount to which a person is not
entitled to legally should return the same without taking advantage
of the other party's position. These circumstances are known to law
as giving rise to Quasi contractual obligation.
Problem 2:
A's nephew absconded from home. He sent his servant in search of
the boy. When the servant had left, 'A' by issuing hand bills offered
to pay RS.500 to anyone finding the boy.
The servant came to know of this offer only when he had already
traced the missing child. He brought on an action to recover the
reward. Decide.
Issue involved.
Whether the servant is entitled to claim the reward from A.
Answer :
To answer the problem, it must be decided as to whether the
servant had knowledge of the offer of the reward before he actually
complied with the request of A. Since in law if there is no
communication of the offer, it is not open to a person to rely on ill
communicated information and raise an action therein. The answer
to this question is available in the problem itself viz. That the offer
of reward has not been communicated to A's servant, the plaintiff in
this suit can be seen from the statement that A had sent hand bills
commencing reward after the servant had left. Hence it can be said
that A's servant is not entitled to claim the reward.
Note: the facts of the problem are similar to the facts in the case of
Lalman vs GauriDutt (1930 ALL L.J. 489)
Problem 3 :
'A' agrees to pay a sum of money for a certain ship that does not
return. The ship has sunk. Examine the validity if the contract.
(April '88 (Bh.U))
Issue involved:
Whether the contract is an enforceable one. Is A liable to pay B the
amount?
Solution:
The facts of the problem pose a contingent contract, as an 'event
not happening'. Hence the enforcement of the contract is
dependent on the event as contemplated by the parties.
Looking at from this angle, the parties have contemplated an event
viz., the non-return of the ship and which has also happened. Hence
the contract can be enforced viz., holding A liable to pay money to
B.
Note: The facts of the problem are the same to the illustration
attached to the section 330f the Indian Contract Act 1872.
Problem 4 :
A makes an offer to B by post. B posts an letter of acceptance. The
letter never reached A. Is there a valid contract? Decide.
(June '83 ( MKU))
Issue involved:
Whether a concluded contract has taken place between the parties
in spite of the letter of acceptance having been lost in transit.
Answer :
A valid contract is said to have arisen between the parties.
The reasons are as follows :
1) The law of contract speaks about communication of offer and
acceptance and also the stages at which they became complete. In
this context, it may be said, that when parties are separated by
distance and adopt the postal medium as mode of communication,
the post office is deemed to be the agent of both the parties, and as
such neither can avoid the validity by taking advantage alapoes of
their agent viz. post office. Hence in the instant problem, although
the letter of acceptance posted by B has been lost in transit and
consequently not having reached "A' both parties are said to be
bound by the contract. In other words, rights and liabilities accrue
to both A and B.
Note : The facts of this problem are similar as in Household fire and
carriage accident insurance Com. VS GRANT (1979 Ex. D. 216).
Problem 5 :
David agrees to take a lease of fishing from John. David later
discovered that it already belongs to him. David wants to set aside
the contract. Decide. (June '83 (MKU))
Issue involved:
Whether a contract arising out of mistake resulting in the legal
impressibility is valid or not.
Solution:
A contract between the parties resulting in a legal impossibility is
void and this holds well even if mistake of fact has arisen between
the parties. In the instant problem, David agreed to take a lease of
fishing from John on the purported belief that John is the owner and
from whom the lease is taken. But David has discovered
subsequently to the contract with John that he himself is the owner.
Hence, the cause that was responsible for the contract to arise was
the purported belief, of David thinking that he was not the owner
while John thinking that he was the owner. In other words, parties
viz. David and John have entered into a contract under a mistaken
impression. As a result the performance of the contract has been
legally impossible i.e David can't take on lease the right of fishing
(as he is already the owner) while John can't give on lease the same
since he isn't the owner thereof. Therefore the contract entered
with John in void under law.
Problem 6:
A and B agreed that A shall sell B a house for RS 10000 but that, if
B uses it as a gambling house he shall pay A Rs. 50,000 for it.
Examine the validity. (Nov'83)
Issue involved:
Whether both contracts are valid or only one.
Solution:
One of the essential features of a valid contract is that the object of
the contract should be legal. Therefore in the instant problem, the
use of the house for gambling purpose is illegal and void while the
sale of house is a valid contract. In other words, the problem is
based on the principle of reciprocal promises. The first set of
reciprocal promises viz., to sell the house and pay RS.10,000 is a
valid contract, while the set of reciprocal promises is based on an
unlawful object, the same is a void agreement.
Note: the fact of the problem are same as in the illustration
attached to section 57 of the Indian contract act 1872.
Problem 7 :
"A' posted a letter of acceptance of B's offer to enter her service.
The next day she posted a second letter cancelling the acceptance.
Both letters were delivered to B at the same time.
Has any contract arisen between the parties? (May 1984 (MK.U)
April 77 (MK.U))
Issue involved :
Whether the letter of acceptance concludes a contract or whether
the letter of cancellation decides the non-conclusion of the
contract.
Solution:
The facts of the problem shows the piquant situation and it is
resolved by pointing at the letter which is seen first to decide the
issue. Viz., if the letter of acceptance has been seen first by the
person offering, the contract is said to have been concluded and if
the letter cancelling the acceptance has been seen the contract is
said to have been not concluded. This is the rule that is applied
when both the letter of acceptance and cancellation are received at
the same time.
Note : The fact of the instant problem and the fact of the problem
asked in the 1977 are similarly worded
Problem 8:
A notice was published offering a reward for information leading to
the arrest of the offender. The plaintiff gave information to case her
conscience and not for the sake of the reward. But later on a suit
was filed for claiming the reward.
Decide.
Issue involved:
Whether the person knowing about the reward can claim the
rewards when at the time the information was given, the payment
of reward was not insisted upon.
Solution :
The plaintiff is entitled to succeed viz., she can claim the reward. As
per law a person knowing the offer doing an act is entitled to the
reward mentioned in the offer even if at the time when the terms of
the offer are complied with. With some reasons being adduced for
compliance. This is because of the fact that the reason adduced
may at best refer to the motive of the person in doing the act and
for such motives there is no place in law of contract. Therefore, it
could be said, the important although to case a conscience provided
the information, the same attributed to the motives alone, she is
entitled to claim the reward.
Problem 9:
A offered to B to sell his car for Rs 5000. B inquired whether A was
willing to accept on hire -purchase terms. On receiving a negative
reply, B accepted the original offer and agreed to pay cash down. A
Refuses to sell. Is the refusal valid?
Issue involved:
Whether the refusal of A to sell the car is justified in the
circumstances stated in the problem.
Solution:
The refusal is valid. If an offer has been made it must be straight
away accepted or rejected. In other words, the acceptance maybe
absolute and unconditional.
But in the instant case, what happened is, B instead of accepting
the offer directly, he asked about the sale of the car in the hire-
purchase terms and it is only after a negative reply having been
received thereof the offer he (original) has been accepted. Hence,
no valid acceptance has arisen and consequently no promise has
resulted between the parties hence the refusal is in order.
Problem 10 :
A musician agrees to sing in a theatre owned by B on a particular
day. A requires to be excused owing to his inability to sing that day
because of a severe cold. Is A liable to damages to B.
(May 83 MK.)
Issue involved:
Has A committed any breach of contract, so as to make himself
liable to B
Solution:
A is not liable. A contract may be valid at time of entering into a
contract, but the same may become void. The contract which
becomes void has been dealt within the section 65 of the contract
act which speaks about the contract discovered to be void. One of
the circumstances under which the contract may become void is
when the performance of the contract becomes impossible. In the
instant problem, the performance of the musician is dependent on
the health of the person. On the date of performance he couldn't
perform the contract due to severe cold. Hence the musician is
excused. Therefore, A is not liable to B especially for damages
which maybe loss of profits for B.
Hence although a breach maybe said to have been committed by A
it shouldn't be considered as breach known to law.
