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FRESHERS’S INDUCTION MOOT 2024

CAMPUS LAW CENTRE

Before
THE COURT OF HON’BLE HIGH JUDGE, STATE OF VYATHA, VAIMANASYA

SHELDON................................................................................................................ Plaintiff
v.
CLAIRE AND GLORIA..................................................................................... Defendant

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

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TABLE OF CONTENTS

INDEX OF AUTHORITIES ................................................................................................. 3

LIST OF ABBREVIATIONS .............................................................................................. 4
STATEMENT OF JURISDICTION ..................................................................................... 5
STATEMENT OF FACTS ................................................................................................... 6
ISSUES RAISED ................................................................................................................ 8
SUMMARY OF ARGUMENTS ......................................................................................... 9
WRITTEN PLEADINGS ......................................................................................................
I. ISSUE 1: WHETHER THE CONTRACT IN QUESTION WAS SIGNED
WITHOUT CONSENT? ................................................................................ 11
II. ISSUE 2: WHETHER THERE WAS UNDUE INFLUENCE ON THE
DEFENDANT?................................................................................................ 13
III. ISSUE 3: WHETHER THERE WAS FRAUD OR MISREPRESENTATION
CAUSING FRAUD ON THE DEFENDANT?................................................... 15
PRAYER ............................................................................................................................ 17

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

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INDEX OF AUTHORITIES

STATUTES
1. Indian Contract Act 1872
2. Code of Civil Procedure, 1908
3. Delhi High Courts Act, 1966
CASES
1. Tarsem Singh v. Sukhminder Singh (1998)
2. Satyabrata Ghose v. Mugneeram Bangur & Co. (1954)
3. Bharat Sanchar Nigam Limited v. Motorola Inc. (2009)
4. Mohd.Abdul Kadir v.Ms. Salima (1929)
5. Smith v. Kay
6. Nursery Spg v. WVG Co. Ltd.

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

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LIST OF ABBREVIATIONS

& And
ICA Indian Contract Act
CPC Code of Civil Procedure
Hon’ble Honourable
Def Defendant
r/w Read with
Sec. Section
SC Supreme Court
SCC Supreme Court Cases
V. Versus

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

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STATEMENT OF JURISDICTION

The hon’ble court has the jurisdiction to try the instant matter under r/w sec 6, sec 9 of the
CPC. 1908 r/w sec. 5(2) of the Delhi High Court Act, 1966.

Sec 6 of CPC, 1908 reads:

Save in so far as is otherwise expressly provided, nothing herein contained shall operate to
give any court jurisdiction over suits the amount or value of the subject-matter of which
exceeds the pecuniary limits (if any) of its ordinary jurisdiction.

Sec 9 of CPC, 1908 reads:

The court shall (subject to the provisions herein contained) have jurisdiction to try all the suits
of civil nature excepting suits of which their cognizance is either expressly or impliedly
barred.

Sec 5 sub sec 2 of Delhi High Court Act, 1966 reads:

Notwithstanding anything contained in any law for the time being in force, the High Court of
Delhi shall also have in respect of the said territories’ ordinary original civil jurisdiction in
every suit of value which exceeds rupees two crores.

The notification published in Delhi gazette dated 4 july, 2018 regarding the pecuniary
jurisdiction of commercial courts at district level specifies that, ‘The pecuniary value of the
commercial courtsat district level shall be above three lakh rupees and not more than two
crore rupees.

The Counsel for the defendant most respectfully submits to this jurisdiction of the hon’ble
court.

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

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STATEMENT OF FACTS

1. Vaimanasya is a country in the continent of Vidwesh, with a democratic government

for the last 99 years. The country has good prospectus for entrepreneurial ventures,
leading to flourishment of start-up ecosystem.

2. Ms. Gloria, who was lawyer by education and worked in a law firm and Ms. Claire,
who is a prominent fashion designer (hereinafter Def 1 and Def 2), living in the
Vedana city of Vyatha state run a successful clothing business together as partners.

3. Mr. Sheldon, the first cousin of Claire (hereinafter Plaintiff) is a stock broker and has
several lands to his name. He had lent Rs. 3,00,00,000 (Three crore rupees) to Claire’s
husband in 2017 when he faced major losses in a new business that he had started at
that time. Def 2 was very thankful and respected him a lot which eventually led her to
develop immense trust towards him. The Defendants approached the plaintiff for
identifying new properties for their business expansion.

4. On March 10, 2024 Plaintiff showed the Defendants the property which fulfilled all
the requirements of the defendants including the main plot, front yard having the
building and empty land adjacent to the northern side of main plot and he said that,
“We have been lending this property for years to people having ceremonies such as
marriages, engagements, retirement parties and so on and the smaller land adjacent to
the northern side was often used for cooking purposes by the people who rented the
property for their functions. I shall sell this property to both of you.”

5. Next day, Plaintiff in Holi party after consumption of Thandai,casually revealed to

Def 2 that the property was not inclusive of empty plot. Def 2 was listening without
blinking an eye but no definite acknowledgement was given to the revealed fact.

6. Unfortunately, Def 1 had to travel abroad for 1 week to take care of her aunt. On the
other hand, plaintiff grew impatient to close the deal and pressurized Def 2 to sign the
contract and agreed to close it upon payment of the partial amount. During this entire
period, Def 1 was unreachable.

7. Despite not having the expertise, Def 2 signed the agreement on account of her
proximate relationship with Plaintiff and his persuasion and trust without discussing
the prevailing market price. She paid the part of the amount of Rs. 7,00,00,000 and
rest was to be paid when the possession of the property would be handed over to
Defendants. Def 1 was under the impression that the property was inclusive of the
empty plot.

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

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8. Later, Def 1 came to know that the empty plot which they were planning to use for
was not part of the agreement for sale. The defendants refused to make payment for
the rest of the amount citing fraud.

9. Claiming that he had already mentioned clearly to Def 2 that the empty plot was not
part of the property, the plaintiff approached the relevant court for the enforcement of
the Contract of Sale and wanted Rs. 1,00,00,000 (One Crore Rupees) as damages due
to the delay of the payment. Defendants contest the suit on the grounds of fraud and
undue influence.

Hence, the present matter.

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

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ISSUES RAISED

I.
WHETHER THE CONTRACT IN QUESTION WAS SIGNED WITHOUT CONSENT?

II.
WHETHER THERE WAS UNDUE INFLUENCE ON THE DEFENDANT?

III.
WHETHER THERE WAS FRAUD OR MISREPRESENTATION CAUSING FRAUD ON
THE DEFENDANT?

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

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SUMMARY OF ARGUMENTS

1. WHETHER THE CONTRACT IN QUESTION WAS SIGNED WITHOUT

CONSENT?

a) Whether the contract was formed without the parties having meeting of minds or
consensus ad idem?

It is respectfully submitted that consent or mutual meeting of minds as defined under

section 13 of the ICA was absent in the agreement. The facts of the case support the
argument.

The defendants signed the contract under the impression that the property included the
empty land on the northern side of the main plot which they could use for making the
assembling and packaging unit while the plaintiff was not selling the empty land
adjacent to the northern side of the main plot and thus, did not include it into
consideration.

Thus, we argue that there was no consensus ad idem between the parties and we
thereby request the court to set aside the contract.

2. WHETHER THERE WAS UNDUE INFLUENCE ON THE DEFENDANT?

a) Whether there was any real or apparent authority of fiduciary relationship between the
parties where the plaintiff was in a position to dominate the will of the defendant?

We hereby submit that there existed a fiduciary relationship between the plaintiff and
the defendant. The facts of the case establish the same. Plaintiff had lent
Rs.3,00,00,000 (Three crore rupees) to Defendant 2 husband in 2017 when he faced
major losses in a new business. The defendant 2 in turn was very thankful and had
huge respect for the plaintiff. Furthermore, Def.2 while signing the contract was
unaware of material fact and lacked expertise in the arena which gave plaintiff an
upper hand in the contract.

Therefore, we argue that plaintiff was in a position to dominate the will of the
defendant which renders the contract voidable.

b) Whether fiduciary relationship created a position of trust and confidence which was
abused by the plaintiff having fiduciary duties?

We submit that there was an abuse of fiduciary relationship on part of plaintiff. The
facts of the case support the argument. My client, Claire put immense trust and

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

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confidence in the plaintiff, who used the same to pressurize her to get the contract
signed in haste.

We thereby argue that plaintiff abused and used his fiduciary relationship to put
himself in a dominant position in the contract.

3. WHETHER THERE WAS FRAUD OR MISREPRESENTATION CAUSING

FRAUD ON THE DEFENDANT?

a) Whether there was intent to deceive another party and induce the defendant to enter
into a contract?

We submit that the plaintiff had an intention to deceive another party under section
17(2) of ICA which amounts to fraud. According to the facts, while showing the
property plaintiff said, “We have been lending this property for years to people having
ceremonies such as marriages, engagements, retirement parties and so on and the
smaller land adjacent to the northern side was often used for cooking purposes by the
people who rented the property for their functions. I shall sell this property to both of
you.” There was no formal statement regarding the empty land. Later, he mentioned
about the exclusion under an informal setting without clear indications, when the Def2
was under the influence of “Thandai”.

Thereby, we submit that there was active concealment of material fact which makes
the contract voidable.

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

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WRITTEN PLEADINGS

Issue 1. Whether the contract in question was signed without consent?

1. It is humbly submitted that as per Section 10 of the Indian Contract Act, 1872,
“all agreements are contracts if they are made by the free consent of the parties
competent to contract, for a lawful consideration and with a lawful object, and are
not hereby expressly declared to be void.” In the present case, whether the
c2ontract in question can be said to have been signed with free consent is in
dispute, as the Defendants contend that their consent was vitiated by undue
influence, misrepresentation, and absence of consensus ad idem.

a) Whether the contract was formed without the parties having meeting of
minds or consensus ad idem?

2. According to section 13 of the ICA, “—Two or more persons are said to consent
when they agree upon the same thing in the same sense.”1. This means that the
parties must have a clear understanding of the terms of agreement and must
intend to be bound by those terms.

3. Sec 14, gives a negative definition as to consent is said to be free when it is not
caused by coercion, undue influence, fraud, misrepresentation and mistake.

4. Consensus ad idem is an essential element of a valid contract and if there is no

agreement between the parties then, there is no contract. There must be
communication between the parties for consensus ad idem to be reached. If there
is misunderstanding between the parties them consensus ad idem cannot be said to
have been reached.

5. The Supreme Court held, “If a thing is not understood by the parties in the
same sense, the agreement would be invalidated at the inception stage itself
even if the communication gap is discovered at a later stage.”2
Looking at the facts, we can assess that there was no clear and mutual
understanding of the terms of the contract between the parties at the time of
signing the contract.
6. First, the material fact that property for sale was exclusive of the empty plot was
communicated recklessly to Def 2 when both were under the influence of
‘thandai’ which is considered to intoxicate the parties because it contained
‘Bhang’. So, it cannot be presumed that Def 2 had the necessary mental capacity
to understand the terms and implications of the contract. The material fact was
not communicated to her in a manner that she could comprehend and appreciate it
and there was no definite acknowledgement of the material fact by Def. 2. While
the fact was being communicated, she was listening without blinking an eye and it
cannot be implied to be definite acknowledgment of the revealed fact.

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

1
The Indian Contract Act, 1872
2
Tarsem Singh v. Sukhminder Singh(1998)
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7. The Supreme Court held,” Unless the parties really agreed, there is no contract.
There may be an apparent contract in the sense that the words or outward
expressions used by one party give the other party reason to believe that the first
party has duly agreed to the proposal put forward by the other party. But if in fact
there was no such agreement or accord between the parties, the apparent contract
falls to the ground.”3

8. According to Section 20 of ICA, where both parties to an agreement or under a

mistake as to the matter of fact essential to the agreement, the agreement is void.
This means that the parties to the contract should have clear understanding as to
the material fact of the contract.

9. Here, in this scenario there is a bilateral mistake where the mistake was mutual.
The empty land adjacent to the northern side of the main plot was the fundamental
aspect of the deal and the basis of the purchase because the defendants intended to
use it for making the assembling and packaging unit.

10. The plaintiff failed to disclose this material fact to defendants in a formal setting
and in efficient manner, thereby causing them to mistake the property to be
inclusive of the empty plot. It is well presumed that my client would not have
signed the contract if she would have been aware of the material facts. Therefore,
the agreement is void.

11. The Delhi High Court held,” A valid contract is based on a meeting of the minds
of the parties to the contract, which is indicated by the mutual consent or
consensus ad idem. It requires the parties to have a common understanding of
the terms and conditions of the contract, which includes the nature and scope of
the contract. If the parties had different understanding of the terms and conditions
of the contract, which includes nature and scope of the contract and material
terms of the contract, there is no consensus at idem and the contract is voidable
at the option of the aggrieved parties.”4

12. In conclusion, the relied position of the high courts has been that as per section 13
of the ICA, consensus ad idem is an essential principle for a contract to be valid
and if there is no true meeting of minds of the parties, the contract will be deemed
invalid and unforeseeable.

Issue 2. Whether there was undue influence on the defendant?

13. Section 16 of ICA defines Undue Influence as a “situation where the relations
subsisting between the parties are such that one of the parties is in position to
dominate the will of the other and uses that position to obtain and unfair
advantage over the other”. It is the violation of free consent defined under section
14 of ICA thus, making the contract voidable under section 19A of ICA at the
option of the party whose consent was so caused. .

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

3
Satyabrata Ghose v. Mugneeram Bangur & Co. (1954)
4
Bharat Sanchar Nigam Limited v. Motorola Inc. (2009)
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For a contract to fall under the case of being in induced by undue influence, either
of the three conditions mentioned under section 16 of the ICA must be fulfilled.

We may examine the same as follows:

a) Whether there was any real or apparent authority of fiduciary relationship
between the parties where the plaintiff was in a position to dominate the
will of the defendant?
14. A fiduciary relationship is characterized by trust and confidence and an
arrangement where one party places trust in the other party to act in their best
interest. The plaintiff is the first cousin of Def.2 who helped Def.2 husband
financially in the initial years of his business by lending an amount of Rs.
3,00,00,000. Def. 2 was extremely thankful to the plaintiff for the gesture and
held him in high regards. On account of the trust and confidence she had in the
plaintiff, she suggested Def.1 to contact the plaintiff, while looking for a property
to expand the business.

15. It was rightly evident that she held him in high regards and had trust and
confidence in him that she did not even check the prevailing market prices while
signing the contract. These facts establish that there existed, a fiduciary
relationship between the plaintiff and defendant.

16. Furthermore, the material fact was communicated to Def.2 in a state of

intoxication. My client contends that in that particular state she was not capable
to understand the implications of the revealed fact thereby giving unfair
advantage to the plaintiff.

17. Moreover when defendant to sign the contract he was unaware of the material
fact and did not have the expertise regarding the same. The circumstances also
did not allow her to contact her partner for the same.

18. In a particular case, where the plaintiff had executed a sale deed in Favor of
the defendant and the undue influence the honourable court noted that the
plaintiff been in a state of intoxication when he executed the sale deal, which
further impaired his capacity to understand the nature of the transaction. 5

19. The counsel submits that Def.2 being unaware of the material fact while signing
the contract and her incapacity to understand the nature of the revealed fact in that
particular situation put the plaintiff in a superior position where he could dominate
the will of the defendant therefore, we request the court to set aside the contract
on the ground of undue influence.

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

5 Mohd.Abdul Kadir v.Ms. Salima(1929)

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(b) Whether fiduciary relationship created a position of trust and confidence

which was abused by the plaintiff having fiduciary duties?

20. Following the facts, it is well implied that the Plaintiff used his fiduciary
relationship with Def.2 to put her under constant pressure and get her to sign the
contract hurriedly.

21. He made claims that the villa that he intended to buy from the money after selling
the property to Defendants, was put up under auction and he would lose it if he did
not make the advance payment to book it. He also out of desperateness to sell the
property, personally visited Claire at her home and reminded her that he had
helped her husband financially in his business earlier and it was her chance now to
help him when we needed it.

22. He breached his fiduciary duty by not disclosing the material facts in a formal
setting clearly and also did not wait for Def.2 to contact Def.1 who was
unreachable because of being in another country. Def. 2. felt indebted to the
plaintiff for the financial help he had offered her husband previously and it can be
presumed that due to familial ties she was under pressure to sign the contract.

23. The honourable court held,” When a person reposes confidence in the other, it is
expected that he will not be betrayed. If a person betrays the confidence and
trust reposed in him and gains an unfair advantage over the other party in any
contract, the suffering party has an option to avoid the contract. The principle of
undue influence applies to every case where influences acquired and abused
where confidence is reposed and betrayed.”6

24. According to Sec. 19A of ICA, “When consent to an agreement is caused by

undue influence former the agreement is a contract voidable at the option of the
party whose consent was so caused. Any such contract may be set aside either
absolutely or, if the party who was entitled to avoid it had received any benefit
thereunder, upon such terms and conditions as to the court may seem just.”

25. The counsel submits that in the present case, the plaintiff thereby, caused
Def.2 to place her confidence in him and abused it to his own advantage.
Thus, contract is voidable.

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

6. Smith v. kay
Kay
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Issue 3. Whether there was fraud or misrepresentation causing fraud on

the defendant?

26. Fraud is defined under section 17 of ICA which means and includes any of the
following acts committed by a party to a contract, or with his connivance or by
his agent, with intent to deceive another party there to office agent or to induce
him to enter into the contract-
1) The suggestion as a fact of that which is not true by one who does not believe
it to be true
2) The active concealment of a fact by 1 having knowledge or belief of the fact
3) A promise made without an intention of performing it
4) Any other act fitted to deceive
5) Any such actor omission as the law specifically declares to be fraudulent

27. It also amounts to Fraudulent misrepresentation which is the deliberate use of

misleading information to deceive someone into signing a contract or other
agreement. It is defined under Sec 18 of ICA and includes positive assertion of
unwarranted statements, breach of duty and including mistake about the subject
matter.

28. Furthermore, it is a violation of free consent under Sec.14 of ICA thus, making
the contract voidable under Section 19 of ICA at the option of the party whose
consent was so caused.

29. It can be noted, that in this specific scenario clause 17(2), the active
concealment of a fact by one having knowledge or belief of the fact was done
which is evaluated as follows:

(a) Whether there was intent to deceive another party and induce the
defendant to enter into a contract?

30. According to the facts, while showing the property plaintiff did not explicitly
mention that he was not going to sell the empty land and he claimed that he shall
sell the property to both of them. This amounts to active concealment of the fact
which was basis of the contract.

31. There was no formal statement regarding the empty land. Later, he mentioned
about the exclusion under an informal setting when the Def2 was under the
influence of “Thandai” without clear indications.

32. The timing at which the plaintiff revealed the fact about non-inclusion of the
empty land can be considered suspect. It can be noted that plaintiff in order to
deceive Def 2 revealed such a key information in an informal setting because he
intended to conceal the fact and maintain the ambiguity. The ambiguous
statement was relied upon by my client given the fiduciary relationship between
the parties. Plaintiff also did not wait for Def 2 to contact Def 1 which can be
matter of suspect because he would have the knowledge that Def 1 had expertise
regarding legal matters and Def 2 did not. So, in order to deceive defendants, he
rushed the process.
-MEMORANDUM ON BEHALF OF THE DEFENDANT-
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33. This also amounts to fraudulent misrepresentation or misrepresentation leading to

fraud because the facts of the case states so. Plaintiff deliberately concealed the
facts and failed to disclose the material fact to both the partners in efficient manner,
thereby causing mistake of property to be inclusive of the empty plot.

34. The honourable court held that, “The subject matter of every agreement is
supposed by the parties to possess certain value or quality. If one of the parties,
leads the other, however innocently, to make a mistake as to the nature or quality
of the subject matter there is misrepresentation.”7

35. My client contends that they entered into the contract based on the false
representation of the land made by the Plaintiff, and as a result, they did not truly
consent to the terms of the contract.

36. If the Defendants had known the truth, they would have known the terms of the
contract then they would have not signed the contract.

37. Thus, there was a Breach of duty on the part of the Plaintiff as he failed to disclose
or rather withheld the material fact which induced the other party to sign the
contract. Therefore, the contract is voidable.

-MEMORANDUM ON BEHALF OF THE DEFENDANT-

7
Nursery Spg v. WVG Co. Ltd.
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PRAYER

In the light of the issue raised, arguments advanced, authorities cited and the pleadings
made before this Hon’ble Court, the defendant respectfully prays that the plaintiff should
return the partial payment which defendant had done with appropriate interest amount
on account of fraud and undue influence and demand of plaintiff be dismissed.

The hon’ble court may pass further such order that it may deem to be fit in the
matter of current facts and circumstances.

-MEMORANDUM ON BEHALF OF THE DEFENDANT-