1. Define acceptance. Discuss the rules regarding a valid acceptance with leading cases.

Definition of Acceptance
In contract law, acceptance is the definite agreement to the terms of an offer
made by another party. It signifies the offeree’s willingness to be bound by the
terms of the offer. Acceptance, when combined with an offer and consideration,
forms a legally binding contract.
Rules Regarding a Valid Acceptance
1. Acceptance Must Be Unconditional and Unqualified
o Acceptance must match the terms of the offer exactly (the "mirror
image rule"). Any variation in terms constitutes a counteroffer, not
an acceptance.
o Leading Case: Hyde v. Wrench (1840)
In this case, Wrench offered to sell his farm to Hyde for £1,000.
Hyde counter-offered £950, which Wrench rejected. When Hyde
later tried to accept the original £1,000 offer, the court held that no
contract existed because the original offer was terminated by the
counter-offer.
2. Acceptance Must Be Communicated
o Acceptance must be conveyed to the offeror unless communication
is waived or specified otherwise. Silence cannot generally constitute
acceptance unless agreed upon by the parties.
o Leading Case: Felthouse v. Bindley (1862)
In this case, an uncle assumed silence by his nephew amounted to
acceptance of his offer to buy a horse. The court held that
acceptance must be communicated openly or absolutely, and
silence was not enough.
3. Acceptance Must Be Made in the Prescribed Mode
o If the offer specifies a mode of acceptance, the offeree mu9st follow
it. If no mode is prescribed, acceptance can be communicated in
any reasonable manner.
o Leading Case: Eliason v. Henshaw (1819)
An offer required acceptance via wagon delivery. The offeree used a
different method, and the court ruled that the acceptance was
invalid because it deviated from the specified mode.
4. Acceptance Must Be Made by the Offeree
o Only the person to whom the offer is made can accept it.

o Leading Case: Boulton v. Jones (1857)

In this case, Jones made an offer to a specific individual, but another
party accepted it. The court held that there was no valid acceptance
because the offeree was not the person addressed in the offer.
 5. Acceptance Must Be Given Within a Reasonable Time
o Offers are not open forever ; acceptance must be made within the
time specified or, if no time is agreed`, within a reasonable period.
o Leading Case: Ramsgate Victoria Hotel Co. v. Montefiore (1866)
Montefiore offered to purchase shares in June but received
acceptance in November. The court held that the delay rendered
the offer invalid.
6. Acceptance Must Be Intention to Create Legal Relations
o The offeree must intend to be legally bound by the terms of the
offer. Social agreements are typically not enforceable.
o Leading Case: Balfour v. Balfour (1919)
A husband’s promise to pay his wife was deemed a domestic
agreement without legal intent.
7. Acceptance by Conduct
o Acceptance can be indicated by actions or conduct, provided it
indicates agreement to the terms.
o Leading Case: Brogden v. Metropolitan Railway Co. (1877)
The court held that parties accepted a contract by acting on its
terms, even without formal written acceptance.
Conclusion
The rules of valid acceptance ensure clarity and mutual agreement between
parties, preventing disputes and misunderstandings in contractual dealings.

2.An agreement without consideration is void. Discuss.

The principle that an agreement without consideration is void is a foundation of contract law,
highlighting the need for a valid consideration to make a promise legally enforceable.
Consideration refers to something of value exchanged between the parties to a contract,
whether a benefit to one party or a disadvantage to the other. This requirement is codified in
Section 25 of the Indian Contract Act, 1872, and similar provisions exist in common law
jurisdictions.
Key Elements of Consideration
1. Must Move at the Desire of the Promisor
Consideration must be provided at the request of the promisor, not voluntarily or at
the request of a third party.
o Case: Durga Prasad v. Baldeo (1880)
In this case, the plaintiff constructed a market at the request of the defendant.
The defendant promised to pay a commission for sales in the market but later
refused. The court held that the promise was void since the consideration did
not move at the defendant's request.
 2. May Move from the Promisee or Any Other Person
Consideration can flow from the promisee or any third party, as long as it is valid.
o Case: Chinnaya v. Ramaya (1882)
A donor transferred property to her daughter, with a condition that the
daughter pay an annuity to the donor's brother. The court held that the brother,
though a third party, could enforce the agreement since consideration had been
provided.
3. Must Be Real and Not Illusory
Consideration must have some value in the eyes of the law and must not be vague or
illusory.
o Case: White v. Bluett (1853)
A son’s promise to stop complaining about his father's distribution of property
was held to be an insufficient consideration as it lacked tangible value.
4. Need Not Be Adequate
Consideration does not need to be equal to the value of the promise, but it must exist.
o Case: Thomas v. Thomas (1842)
A widow agreed to pay £1 annually for her late husband's house. The court
upheld the agreement, as the consideration, though nominal, was valid.

Exceptions to the Rule

Certain agreements without consideration are enforceable, as outlined in Section 25 of the
Indian Contract Act:
1. Natural Love and Affection
o Case: Rajlukhy Dabee v. Bhootnath Mukerjee (1900)
A written agreement to pay maintenance to a wife due to love and affection
was held unenforceable as it lacked proper consideration.
2. Promise to Compensate for Past Voluntary Services
o Case: Sindha v. Abraham (1887)
A promise to compensate someone for past voluntary services is enforceable if
the services were provided at the promisor's request.
 The plaintiff had voluntarily rendered services to the defendant without any prior
agreement or promise of remuneration.
 Later, the defendant made a promise to compensate the plaintiff for the services
rendered.
 When the defendant failed to honor the promise, the plaintiff sought to enforce the
agreement.
 3. Promise to Pay a Time-Barred Debt
A written promise to pay a debt barred by limitation is enforceable, even without
consideration
A time-barred debt is a debt for which the creditor has lost the legal right to sue due
to the expiration of the limitation period (typically 3 years under the Limitation Act,
1963 in India). Although the debt is no longer legally enforceable, the moral
obligation to pay may still exi

Conclusion
While consideration is fundamental to enforce a contract, exceptions exist where agreements
without consideration may still be binding. Courts often analyze whether the consideration
meets legal requirements and interpret exceptions narrowly to prevent misuse.

3)Ram's son was missing. His servant went in search of the boy. Subsequently
Ram declared a reward of Rs. 1,00,000 to anyone who finds his son. His servant
though not aware of the reward finds his son. Can the servant claim the reward?
Ans: No, the servant cannot claim the reward. The principle of contractual
obligation applies here. To claim a reward for finding the missing boy, the
person must meet the following conditions:
1. Knowledge of the Reward: The person must have been aware of the
reward when performing the act (finding the boy). In this case, the servant
was unaware of the reward when he found the boy.
2. Voluntary Performance of the Act: The act must be performed
voluntarily and not as part of an existing duty or obligation. As a servant,
it is likely that searching for the boy was part of his duties toward Ram, his
employer.
Since the servant was unaware of the reward and was fulfilling his duty as an
employee, he cannot claim the reward.

4,Ajay sold his electric car worth Rs. 7,00,000 for Rs. 70,000 to Vijay. Can this sale be
questioned? Discuss.

Yes, this sale can potentially be questioned under contract law, depending on the
circumstances of the transaction. Key points to consider include:

1. Free Consent (Section 14 of the Indian Contract Act, 1872):

For a contract to be valid, it must be entered into with free consent. Consent is considered
free if it is not influenced by:
  Coercion (Section 15)
 Undue Influence (Section 16)
 Fraud (Section 17)
 Misrepresentation (Section 18)
 Mistake (Section 20-22)
If Ajay sold the car under coercion, undue influence, fraud, or misrepresentation, or if there
was a mistake about the value of the car, the sale can be challenged and potentially voided.

2. Inadequacy of Consideration (Explanation 2 to Section 25):

 General Rule: As per Indian Contract Law, mere inadequacy of consideration does
not make a contract void. However, inadequacy of consideration can be used as
evidence to question the free consent of the parties.
 In this case, selling a car worth ₹7,00,000 for ₹70,000 could raise suspicion of undue
influence, fraud, or mistake.

3. Good Faith and Reasonableness:

The substantial undervaluation of the car suggests the possibility that Ajay:
 May not have understood the true value of the car.
 Might have been tricked or pressured into the sale.

4. Burden of Proof:
If the transaction is challenged, the burden of proof would lie on Ajay (or his legal
representative) to establish that the contract was not entered into with free consent.

Conclusion:
While inadequacy of consideration alone does not void a contract, this sale can be questioned
if it can be shown that the consent of Ajay was obtained through coercion, undue influence,
fraud, or mistake. Courts will examine the circumstances surrounding the transaction to
determine its validity.

5)Explain the essentials of a valid contract.

A valid contract is an agreement enforceable by law. According to Section 10 of
the Indian Contract Act, 1872, the essentials of a valid contract are:
1. Offer and Acceptance
 A valid contract begins with a lawful offer by one party and a lawful
acceptance by the other. Both must correspond with each other.
 Case Law: Carlill v. Carbolic Smoke Ball Co. (1893)
In this case, the company advertised a reward for anyone who used their
product and still contracted influenza. Carlill used it and claimed the
reward when she fell ill. The court held that a valid contract was formed
due to a clear offer and acceptance.

2. Intention to Create Legal Relationship

 Parties must intend for their agreement to create legal obligations, not
mere social or domestic arrangements.
 Case Law: Balfour v. Balfour (1919)
An agreement between a husband and wife for maintenance was held not
to constitute a valid contract as there was no intention to create a legal
relationship.

3. Lawful Consideration
 There must be consideration (something in return) for an agreement to be
enforceable, and it must be lawful.
 Case Law: Currie v. Misa (1875)
Consideration was defined as a benefit to one party or a detriment
suffered by the other. Without it, a contract cannot be valid.

4. Capacity of Parties
 Parties must be competent to contract. Section 11 specifies that a person
is competent if they are:
o Of sound mind.

o Of the age of majority (18 years or more).

o Not disqualified by law.

 Case Law: Mohori Bibee v. Dharmodas Ghose (1903)

A minor’s agreement was held void as minors are incompetent to contract
under the law.

5. Free Consent
 Consent of the parties must be free and not influenced by:
o Coercion (Section 15)
 o Undue Influence (Section 16)

o Fraud (Section 17)

o Misrepresentation (Section 18)

o Mistake (Sections 20–22)

 Case Law: Ranganayakamma v. Alwar Setti (1889)

A contract executed under coercion (by forcing a widow to adopt a boy)
was declared void.

6. Lawful Object
 The object of the agreement must not be illegal, immoral, or opposed to
public policy.
 Case Law: Gherulal Parakh v. Mahadeodas Maiya (1959)
A wagering (Gambling) agreement was held void as its object was
unlawful.

7. Certainty and Possibility of Performance

 The terms of the contract must be certain and not vague or ambiguous.
The agreement must also be capable of being performed.
 Case Law: Taylor v. Caldwell (1863)
If the performance of the contract becomes impossible due to unforeseen
circumstances (doctrine of frustration), the contract is void.
 Facts:
 The plaintiffs, Taylor & Lewis, entered into a contract with the defendants,
Caldwell & Bishop, to rent a music hall (Surrey Gardens and Music Hall) for
four days to host concerts.
 Before the first event could take place, the music hall was accidentally
destroyed by fire.
 Taylor & Lewis sued Caldwell for damages, alleging a breach of contract.
 Issue:
 Could the defendants be held liable for breach of contract despite the
destruction of the music hall, which made performance of the contract
impossible?
 Judgment:
 The court ruled in favor of Caldwell (the defendants).
 Justice Blackburn held that the contract was frustrated because the
existence of the music hall was essential to the performance of the
contract. Its accidental destruction, through no fault of either party,
rendered the contract impossible to perform
8. Agreement Not Declared Void
 The agreement must not fall under agreements expressly declared void by
law, such as:
o Agreements in restraint of trade (Section 27).

Section 27 of the Indian Contract Act, 1872, deals with agreements that
impose restrictions on a person’s ability to trade, practice a profession, or
conduct business. It declares such agreements as generally void
 Agreements in restraint of marriage (Section 26).
Section 26 of the Indian Contract Act, 1872, addresses agreements that impose
restrictions on an individual’s freedom to marry. It declares such agreements as
void, as they are considered contrary to public policy and personal liberty.

Conclusion:
A contract becomes valid and enforceable only if it satisfies all the above
essentials. Courts assess these conditions before determining enforceability,
relying on both statutory provisions and precedents.

6)'A' a customer, picks up an article in a departmental store and takes it to the cash counter.
B, a clerk at cash counter refuses to sell as it is only a sample, but not for sale. 'A' wants to
institute a suit against the owner of the store for breach of contract. Advise 'A'.

This scenario involves the principles of contract law, particularly the concepts of offer and
acceptance, which are fundamental to forming a binding contract.
Key Legal Principles:
1. Offer and Invitation to Treat:
o Displaying goods in a store or on shelves is generally considered an invitation
to treat (not an offer to sell). An invitation to treat invites customers to make
an offer to buy the goods, which the seller can then accept or reject.
o In the classic English case of Pharmaceutical Society of Great Britain v. Boots
Cash Chemists Ltd. (1953), it was held that goods displayed on shelves
constitute an invitation to treat, and the offer occurs when the customer brings
the goods to the cashier.
2. Acceptance:
 o For a contract to exist, there must be a clear acceptance of the offer. In this
case, the clerk (B) refused to sell the article, indicating that there was no
acceptance of A's offer to purchase.
3. Sample or Non-Saleable Item:
o If the article was clearly marked as "not for sale" or labeled as a "sample," it
would strengthen the store's defence t hat the item was not intended for sale.
Application to the Case:
 When A picked up the article and brought it to the cash counter, this action constituted
an offer to purchase the article.
 The refusal by B (the cashier) to sell it indicates that the store did not accept the offer.
Without acceptance, no contract was formed.
 Since a contract requires both an offer and an acceptance, there is no legally
enforceable agreement in this case. A cannot claim a breach of contract because no
contract existed in the first place.
Advice to A:
 Legal Claim: A's claim for breach of contract is unlikely to succeed, as no contract
was formed between A and the store.
 Consumer Protection: If the store misled A into believing the item was for sale, A
might have a claim under consumer protection laws for misleading practices.
However, this would depend on specific facts, such as how the item was displayed
and labeled.
In summary, A does not have a valid breach of contract claim. However, if A feels misled, a
complaint under applicable consumer protection laws might be explored.
7) Explain the doctrine of Privity of Contract with exceptions, if any.

The doctrine (Principles) of Privity of Contract is a fundamental principle in contract law that
specifies only the parties to a contract can enforce its terms or be bound by it. This means a
third party, even if they benefit from the contract, has no right to sue or enforce the terms of
the contract.
Key Features
1. Mutual Obligation: Only the contracting parties have reciprocal rights and
obligations under the agreement.
2. Exclusion of Third Parties: A person who is not a party to the contract cannot be
made liable or claim rights under it.
Exceptions to the Doctrine
Over time, several exceptions to the rule of privity have evolved, allowing third parties to
enforce certain rights or benefit from a contract:
 1. Trust or Beneficiary Contracts
If a contract is made for the benefit of a third party, such as a trust, the beneficiary can
enforce it.
o Landmark Case: Khwaja Muhammad Khan v. Husaini Begum (1910)
In this case, a father promised to pay a fixed amount to his son-in-law's wife.
The court held that the wife, as the beneficiary, could sue to enforce the
contract.
2. Agency
An agent acting on behalf of a principal can bind the principal in contracts, and the
principal can enforce or be liable for them.
3. Collateral Contracts
A third party may enforce a collateral(surety) contract closely connected to the
primary contract.
o Example Case: Shanklin Pier Ltd. v. Detel Products Ltd. (1951)
A pier company was allowed to sue a paint manufacturer based on assurances
given in a collateral agreement.
4. Assignment of Rights
Rights under a contract can be assigned to a third party unless the contract prohibits
assignment.
5. Family Arrangements or Marriage Settlements
Agreements within family contexts often create enforceable rights for third parties.
o Landmark Case: Chellaram v. Chellaram (1957)
Courts recognized a third party's right in a family arrangement.
6. Statutory Exceptions
Certain laws override the doctrine, allowing third-party enforcement. For example,
under the Himalaya Clause in maritime law, third parties (like stevedores) can benefit
from contractual terms.
7. Contracts that Impact Public Policy
A third party may enforce a contract where non-enforcement would contradict public
policy.
8. Covenants Running with the Land
In property law, certain obligations tied to the land (e.g., maintenance or restrictions)
bind successive owners, even if they were not original contracting parties.
Judicial Reforms and the Modern Approach
Many jurisdictions have modified the strict application of the doctrine. For example:
 England: The Contracts (Rights of Third Parties) Act 1999 allows third parties to
enforce contract terms if they are expressly identified or the contract intends to confer
a benefit upon them.
  India: Indian courts, guided by principles of equity, have allowed exceptions in
appropriate cases.
Criticism and Importance
 Criticism: The doctrine is often criticized for being overly rigid and not
accommodating practical realities.
 Importance: It upholds contractual autonomy, ensuring that only the parties to an
agreement are bound.
Conclusion
While the doctrine of Privity of Contract remains a cornerstone of contract law, exceptions
ensure fairness and flexibility, reflecting evolving societal and commercial needs.

OR

Exceptions to the Doctrine of Privity of Contract

A stranger or a person who is not a party to a contract can sue on a contract in the following
cases:
1. Trust
2. Family Settlement
3. Assignment of a Contract
4. Acknowledgement or Estoppel
5. A covenant running with the land
6. Contract through an agent
Essentials of a Contract
Let’s look at each of them in details:
Trust
If a contract is made between the trustee of a trust and another party, then the beneficiary of
the trust can sue by enforcing his right under the trust, even if he is a stranger to the contract.
Arjun’s father had an illegitimate son, Ravi. Before he died, he put Arjun in possession of his
estate with a condition that Arjun would pay Ravi an amount of Rs 500,000 and transfer half
of the estate in Ravi’s name, once he becomes 21 years old.
After attaining that age when Ravi didn’t receive the money and asked Arjun about it, he
denied giving him his share. Ravi filed a suit for recovery. The Court held that a trust was
formed with Ravi as the beneficiary for a certain amount and share of the estate. Hence, Ravi
had the right to sue upon the contract between Arjun and his father, even though he was not a
party to it.
Family Settlement
If a contract is made under a family arrangement to benefit a stranger (person not a party to
the contract), then the stranger can sue in his own right as a beneficiary of the contract.
Peter promised Nancy’s father that he would marry Nancy else would pay Rs 50,000 as
damages. Eventually, he married someone else, thereby breaching the contract. Nancy filed a
case against Peter which was held by the Court since the contract was a family arrangement
with Nancy as the beneficiary.
Ritika was living in a Hindu Undivided Family (HUF). The family had made a provision for
her marriage. Eventually, the family went through a partition and Ritika filed a suit to claim
her marriage expenses. The Court held the case because Ritika was the beneficiary of the
provision despite being a stranger to the contract.
What is a Contract?
Assignment of a Contract
If a contract is made for the benefit of a person, then he can sue upon the contract even
though he is not a party to the agreement. It is important to note here that nominees of a
life insurance policy do not have this right.
Acknowledgment or Estoppel
If a contract requires that a party pays a certain amount to a third-party and he/she
acknowledges it, then it becomes a binding obligation for the party to pay the third-party. The
acknowledgment can also be implied.
Peter gives Rs 1,000 to John to pay Arjun. John acknowledges the receipt of funds to be paid
to Arjun. However, he fails to pay him. Arjun can sue John for recovery of the amount.
Rita sold her house to Seema. A real estate broker, Pankaj, facilitated the deal. Out of the sale
price, Pankaj was to be paid Rs 25,000 as his professional charges. Seema promised to pay
Pankaj the amount before taking possession of the property. She made three payments of Rs
5,000 each and then stopped paying him. Pankaj filed a suit against Seema which was held by
the Court because Seema had acknowledged her liability by conduct.
A Covenant Running with the Land
When a person purchases a piece of land with the notice that the owner of the land will be
bound by all duties and liabilities affecting the land, then he can sue upon a contract between
the previous landowner and a settler even if he was not a party to the contract.
Peter owned a piece of land which he sold to John under a covenant that a certain part of the
land will be maintained as a public park. John abided by the covenant and eventually sold the
land to Arjun. Though Arjun was aware of the covenant, he built a house in the specific plot.
When Peter came to know of it, he filed a suit against Arjun. Although Arjun denied liability
since he was not a party to the contract, the Court held him responsible for violating the
covenant.
Contract through an Agent
If a person enters into a contract through an agent, where the agent acts within the scope of
his authority and in the name of the person (principal).
Solved Example for You
Q1. Vidya purchases a property from Krishna. Rajiv is already living in the property on a
three-year lease. As a part of the purchase agreement, Vidya takes over the lease. There are
some leakages in the house that Krishna promises to fix, as a part of the contract. A few
months go by and the leakages are still not fixed. Rajiv calls Vidya, the new owner, and she
says that it is Krishna’s responsibility. Can Rajiv file a suit for repairs against Krishna?
Ans.
Since there is no contract between Rajiv and Krishna about repairing the leakage, if he files a
suit, it will probably be dismissed by the Court. Krishna had agreed to carry out the repairs in
his purchase contract with Vidya. Hence, she can file a suit against Krishna to get the work
done.
Rajiv, on the other hand, can sue Vidya for not performing her obligations according to the
lease contract.
8)Ramu invited his friends for dinner. His friends agreed to attend the dinner. Ramu and his
wife prepared the food by spending Rs. 10,000/-. But Ramu's friends failed to attend the
dinner. Ramu wants to institute a suit against his friend for breach of contract. Can he do so?

No, Ramu cannot successfully institute a suit against his friends for breach of contract. For a
valid contract to exist under the Indian Contract Act, 1872, the following essential elements
must be satisfied:
1. Offer and Acceptance: Ramu invited his friends for dinner, and his friends agreed.
However, this constitutes a social agreement, not a legal agreement.
2. Intention to Create Legal Relations: For a contract to be enforceable, the parties
must intend to create legal obligations. In the case of social or domestic agreements,
such as inviting friends for dinner, the law presumes there is no intention to create
legal obligations. These agreements are based on goodwill and social bonding, not
enforceable legal contracts.
3. Consideration: A contract requires consideration (something of value exchanged
between the parties). In this scenario, there is no consideration provided by Ramu's
friends; they neither paid for the dinner nor agreed to any legal obligation.
Since the arrangement was a social agreement without any intention to create legal
obligations, Ramu's friends failing to attend the dinner does not constitute a breach of
contract. Hence, Ramu cannot sue them. This principle was established in cases like Balfour
v. Balfour (1919), which clarified the distinction between social agreements and legally
binding contracts.
9)Define acceptance and what Is the effect of acceptance?
n the context of contract law, acceptance is a crucial element in forming a legally binding
agreement. It occurs when the offeree (the person to whom an offer is made) agrees to the
terms of the offer without modification. The effect of acceptance in a contract can be
summarized as follows:
Effect of Acceptance Under the Indian Contract Act, 1872
1. Formation of a Contract
Once acceptance is communicated and all necessary conditions are fulfilled, a legally
enforceable contract is formed. This binds both parties to the agreed terms.
2. Legal Obligations
Both the offeror and the offeree are obligated to perform their respective promises
under the contract. Non-performance may result in legal consequences.
3. Irrevocability of Offer
Upon acceptance, the offer ceases to exist independently and transforms into a
binding promise, which cannot be revoked unilaterally.
4. Transfer of Risk and Responsibility
Depending on the nature of the contract, acceptance may shift certain responsibilities
or risks (e.g., delivery, payment obligations) to the respective parties.
5. Enforceability in Court
After acceptance, the contract is enforceable in a court of law, provided it satisfies all
the essential elements of a valid contract as per the Indian Contract Act.