Contracts Case Laws given by Maam

1. Balfour vs Balfour

Case Name and Citation:

- Balfour v Balfour [1919] 2 KB 571

Court and Judges:

- Court of Appeal, comprised of Warrington LJ, Duke LJ, and Atkin LJ.

Facts:
- Mr. Balfour, a civil engineer, was working in Ceylon (now Sri Lanka) while Mrs.
Balfour resided with him. Due to Mrs. Balfour's health issues, they returned to
England temporarily in 1915. Mr. Balfour orally promised to provide £30 a month
until Mrs. Balfour returned to Ceylon. However, they later separated, and Mrs.
Balfour sued Mr. Balfour for non-payment.

Issue:
- Whether the oral agreement between Mr. and Mrs. Balfour constituted a legally
enforceable contract.

Decision and Reasoning:

- The Court of Appeal unanimously held that there was no enforceable contract.
However, the reasoning varied among the judges:
- Warrington LJ: Stated that the parties never intended to create a legally
enforceable agreement. Mr. Balfour expressed his intention to make payments out of
moral obligation, and Mrs. Balfour did not make any bargains. Thus, there was no
enforceable contract.
- Duke LJ: Emphasized that there was no separation agreement between the parties.
Agreements between spouses, especially in the context of maintenance allowances, do
not necessarily result in legally binding contracts unless there is clear evidence of
intent to create legal relations, which was absent in this case.
- Atkin LJ: Highlighted the absence of an intention to create legal relations. He
argued that agreements between spouses are often based on natural affection rather
than legal obligations. Thus, the onus was on Mrs. Balfour to prove the existence of a
contract, which she failed to do.

Analysis:
- The case illustrates the distinction between domestic agreements and legally
enforceable contracts. It reaffirms the principle that agreements between spouses,
particularly regarding maintenance allowances, are presumed not to be legally binding
unless there is clear evidence of intent to create legal relations.
- The judges' reasoning reflects the complexity of determining the enforceability of
agreements in domestic relationships, balancing legal principles with the realities of
family life.
- The case underscores the importance of clear and unequivocal evidence of intent to
create legal relations when assessing the enforceability of agreements between
spouses.

Conclusion:
- Balfour v Balfour establishes that not all agreements between spouses are legally
enforceable contracts. The decision provides clarity on the factors courts consider
when determining the enforceability of such agreements, emphasizing the importance
of clear evidence of intent to create legal relations.
2. Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1

Case Name and Citation:

- Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1

Court and Judges:

- Court of Appeal, consisting of Lindley LJ, Bowen LJ, and AL Smith LJ.

Facts:
- The Carbolic Smoke Ball Company advertised its product, claiming it as a cure for
influenza and other diseases. The advertisement stated that the company would pay
£100 to anyone who contracted influenza after using the smoke ball according to
provided instructions. Mrs. Carlill purchased and used the smoke ball as instructed but
still contracted influenza. She demanded the £100 reward from the company, which
initially ignored her request and later responded with conditions for claiming the
reward.

Issue:
- Whether the advertisement constituted a legally binding contract between Mrs.
Carlill and the Carbolic Smoke Ball Company.

Decision and Reasoning:

- The Court of Appeal unanimously held that there was a fully binding contract
between Mrs. Carlill and the company. The judges provided several reasons for their
decision:
- Lindley LJ: Dismissed arguments that the contract was a form of insurance or a
bet. Emphasized the clear promise in the advertisement and the seriousness of the
offer, evidenced by the deposit of £1000 in the bank. Stated that the advertisement
was an offer made specifically to anyone who fulfilled its conditions, and the
acceptance was evidenced by conduct. Noted that Mrs. Carlill provided good
consideration by using the product, resulting in additional sales for the company.
- Bowen LJ: Asserted that the contract was not too vague to be enforced, as it could
be interpreted according to ordinary understanding. Agreed with Lindley LJ regarding
the seriousness of the offer and the intention to bind those who used the product.
Stated that communication of acceptance was unnecessary, and conduct sufficed to
indicate acceptance. Emphasized that Mrs. Carlill's inconvenience in using the product
constituted good consideration, benefiting the company with additional sales.

Analysis:
- The case establishes the principle that advertisements can constitute legally
binding contracts if they contain clear and specific terms capable of acceptance.
- It clarifies that communication of acceptance may not always be necessary, and
conduct can suffice to indicate acceptance of an offer.
- The court's emphasis on the seriousness of the offer, supported by evidence such as
the deposit in the bank, highlights the importance of demonstrating intent to be legally
bound.
- The case underscores the significance of providing valuable consideration in
exchange for the promise, even if it involves inconvenience to the party fulfilling the
terms of the offer.

Conclusion:
- Carlill v Carbolic Smoke Ball Company is a landmark case in contract law,
establishing the principles of offer, acceptance, consideration, and intention to create
legal relations in the context of advertisements. It provides clarity on the
enforceability of contracts formed through advertisements and sets a precedent for
similar cases in the future.
 3. Jones Vs Paddavaton

Case Analysis: Violet Lalgee Jones v. Ruby Padavatton

Case Overview:
This case revolves around a dispute between a mother, Mrs. Violet Lalgee Jones, and her
daughter, Ruby Padavatton, regarding financial support and housing arrangements. Mrs.
Jones, the plaintiff, sought possession of a property owned by her where her daughter and
family were residing. The daughter, Ms. Padavatton, counterclaimed seeking
reimbursement for expenses incurred in relation to the property.

Background and Family Dynamics(Facts of the case):

- The case involves a family dispute between a mother and daughter from Trinidad, both
of East Indian descent.
- Mrs. Jones persuaded Ms. Padavatton to leave her job in Washington D.C. and study law
in England, with the promise of financial support.
- Mrs. Jones promised to provide financial support to Ms. Padavatton at a rate of $200 per
month while she studied for the Bar in England.
- The daughter accepted this arrangement and began her studies, albeit with some
ambiguity regarding the currency of the promised amount.
- The court deliberated whether this agreement constituted a legally binding contract or a
mere family arrangement.

Reasoning and analysis:

(Existence of Legally Binding Contract)
- The court examined whether the parties intended to create a legally enforceable contract.
- Mr. Sparrow, representing Mrs. Jones, argued that the arrangement was a family
agreement without legal consequences, citing the case of Balfour v. Balfour.
- Mr. Dillon, representing Ms. Padavatton, contended that there was a binding contract,
emphasizing the daughter's reliance on her mother's promise and the mother's ability to
fulfill it.

(Objective Test of Intention)

- The court applied an objective test to determine the parties' intention, considering what
an ordinary person would infer from their actions and statements.
 - The daughter's sacrifice of her job and relocation to England supported the argument for
a legally binding agreement.

(Certainty of Terms)
- Despite some ambiguity regarding the currency of the promised amount, both parties
adhered to the arrangement for two years, suggesting an implicit understanding.
- The court deemed the terms sufficiently certain, as the daughter gave up her job and
committed to pursuing legal studies.

(Variation of Agreement)
- In 1964, Mrs. Jones purchased a property in London for Ms. Padavatton's residence,
intending to alleviate her financial burden.
- However, the court found no evidence of a new contract or a variation of the original
agreement regarding financial support.

Outcome and Judgment:

- The court concluded that the original agreement did not amount to a legally binding
contract, as it was a family arrangement based on trust and mutual understanding.
- Mrs. Jones was granted possession of the property, and the counterclaim for
reimbursement was subject to further examination by the registrar.
- The judgment highlights the importance of clarity and mutual understanding in family
arrangements involving financial support and property ownership.
- Both parties may seek a compromise to avoid further legal proceedings and resolve the
counterclaim issue amicably.

Conclusion:
The case underscores the complexities of family arrangements and the challenges in
determining the existence of legally binding contracts. Despite the daughter's reliance on
her mother's promise of financial support, the court ruled in favor of the mother,
emphasizing the informal nature of the agreement and the absence of clear contractual
terms.
 4. Henderson vs Stevenson

Case: Henderson v Stevenson [1873] SLR 1198

Facts:
The plaintiff purchased a steamer ticket from the defendant company. The ticket displayed
the destination as "Dublin to Whitehaven" on the front but contained certain terms on the
back, including an exclusion clause that absolved the company of liability for loss, injury,
or delay to passengers or their luggage. The plaintiff neither saw the back of the ticket nor
was there any indication on the front about the conditions on the back. Subsequently, the
plaintiff's luggage was lost due to a shipwreck caused by the fault of the company's
servants.

Issues:
1. Can the plaintiff recover from the company despite the exclusion clause?
2. Did the conditions on the ticket provide sufficient protection for the plaintiff against
potential losses?

Plaintiff's Claims:
- The plaintiff argued that the company failed to fulfill its part of the contract.
- They contended that the conditions on the ticket were inadequate to shield them from the
consequences of potential future losses.

Held:
The court ruled in favor of the plaintiff, holding that they were entitled to recover their loss
from the company despite the existence of the exemption clause.

Judgement:
The court reasoned that the plaintiff could not be deemed to have accepted a term which
they had not seen, knew nothing about, and was not ostensibly connected with what was
printed and written on the face of the contract presented to them. The court suggested that
the outcome might have been different if the ticket had included words like "for conditions
see back" to draw the passengers' attention to where the conditions were printed.

Principle:
The principle established in this case is that when a written document is presented to a party
for acceptance, reasonably sufficient notice must be given of the presence of terms and
conditions. Notice will be deemed sufficient if it would convey to the minds of people in
general that the ticket contains conditions.

Reasonable Notice:
It is the duty of the person delivering the document to provide adequate notice to the offeree
of the printed terms and conditions. Failure to do so means that the acceptor is not bound by
those terms.

Analysis:
This case underscores the importance of providing clear and conspicuous notice of
contractual terms and conditions to ensure that parties fully understand and accept them. It
also highlights the significance of fairness and transparency in contractual agreements,
particularly concerning exemption clauses that seek to limit liability. The court's decision
reflects a commitment to protecting the rights of consumers and ensuring that they are not
unfairly disadvantaged by obscure or hidden terms in contracts.
 5. Case: Mohori Bibee v. Dharmodas Ghose

Introduction:
This case revolves around the legal capacity of minors to enter into contracts. In India,
individuals under the age of 18 are considered minors and are not legally competent to enter
into contracts. Any contract entered into by a minor is void ab initio, meaning it is void
from the outset and cannot be enforced in a court of law. The Privy Council held that
contracts made by minors are "absolutely void," and this principle has been strictly
followed and continues to be upheld.

Brief Facts:
- The plaintiff, Dharmodas Ghose, a minor, mortgaged his property to the defendant, a
moneylender, and borrowed Rs. 20,000.
- The plaintiff later claimed that the actual loan amount was less than Rs. 20,000.
- The mortgage transaction was executed by the defendant's attorney, Kedar Nath, who was
aware of the plaintiff's minority status.
- The plaintiff filed a suit arguing that the mortgage was void and ineffective because he
was a minor at the time of execution.
- During the appeal process, the defendant passed away, and the appeal was pursued by his
executors.
- The defendant alleged that the plaintiff fraudulently misrepresented his age and sought
repayment of the advanced sum if the mortgage was invalidated.

Issues Before the Court:

1. Whether a minor is legally capable of entering into a contract.
2. Whether the mortgage deed was void under Sections 2, 10(5), and 11(6) of the Indian
Contract Act, 1872.
3. Whether the mortgage executed by the minor is voidable.

Contentions of Petitioner (Defendant's Executors):

- The plaintiff dishonestly misrepresented his age.
- The plaintiff had reached the age of majority at the time of the mortgage.
- The plaintiff's age was not disclosed to the defendant or his agents.
- The defendant's agents were not required to be informed of the plaintiff's age.
- The plaintiff was estopped from claiming minority status under Section 115 of the Indian
Evidence Act, 1872.

Contention of Respondent (Plaintiff):

- The defendant and his agents were aware of the plaintiff's true age.
- The plaintiff was a minor at the time of the mortgage, rendering the contract void.

Ratio of the Case:

- The judgment was based on Section 11 of the Indian Contract Act, 1872, which declares
that minors lack contractual capacity.
- Contracts entered into by minors are not voidable but void ab initio.
- Section 64 of the Indian Contract Act, 1872, applies only to valid contracts and is not
applicable when no contract has been formed.
- Legal actions performed by agents are imputed to their principals.
- The court declined to interfere with the lower court's decision not to order the plaintiff to
repay the advanced sum.

Decision Held:
- Minors lack the capacity to enter into contracts under Section 11 of the Indian Contract
Act, 1872.
- Contracts with minors are void ab initio.
- The mortgage executed by the minor was invalid, and the minor cannot be compelled to
repay the loan.
- The doctrine of estoppel does not apply to minors.

Reference Judgments:
The court relied on Thurston v. Nottingham Permanent Benefit Building Society, which
held that equity cannot enforce contracts deemed void by law.

Conclusion:
- Contracts entered into by minors are void from the outset.
- Minors cannot be compelled to fulfill contractual obligations.
- Parents or guardians are not liable for the minor's transactions without their consent.
- Minors are legally incompetent to give consent, and their interactions with others must be
safeguarded.
- Section 115 of the Indian Evidence Act, 1872, was deemed inapplicable as both parties
were aware of the facts.
- The case established the principle that contracts with minors are void ab initio under the
Indian Contract Act, 1872.
 6. Case Analysis: Powell v. Lee

Introduction:
The case of Powell v. Lee deals with the fundamental principle of contract law regarding
the validity of acceptance and communication of acceptance. According to the Indian
Contract Act, 1872, for a contract to be enforceable, it must have a valid offer and
acceptance, communicated by both parties.

Facts:
- Mr. Powell applied for the position of headmaster at a school.
- The school's management internally discussed appointing him, but no formal acceptance
was communicated to Powell.
- A board member informally notified Powell of his appointment, leading Powell to believe
he was appointed.
- However, the board later rescinded the decision, and Powell filed a lawsuit for breach of
contract.

Issues:
1. Whether the school was liable for breach of contract.
2. Whether the communication of acceptance by an unauthorized person is valid.

Plaintiff's Arguments:
- The plaintiff argued that acceptance must be properly communicated and made by an
authorized person.
- Since the acceptance was not communicated by an authorized representative, there was no
valid contract.

Defendant's Arguments:
- The defendant contended that Powell never formally received acceptance.
- The board's rejection of Powell's application was the final communication, and it was
legitimate.
- The board had the authority to accept or reject offers, and their decision was within their
legal rights.

Observations:
- The court considered whether an unauthorized person's communication of acceptance is
valid.
- It emphasized the necessity of communication by an authorized person or the offeree
himself for a valid acceptance.
- The board member lacked the authority to communicate acceptance on behalf of the
school.

Judgment:
- The court ruled in favor of the defendant, stating that there was no breach of contract.
- Since the acceptance was never formally conveyed to Powell by an authorized person, no
valid contract was formed.

Critical Analysis:
- The court's decision aligns with the principles of contract law, emphasizing the importance
of communication and authorization.
- The case underscores the significance of due diligence on the part of the plaintiff to verify
communications and formalities.
- It highlights the competency required for a person to act on behalf of an organization in
contractual matters.
- The ruling reinforces the legal doctrine that acceptance must be communicated by an
authorized party to form a valid contract.

Conclusion:
The case of Powell v. Lee elucidates key principles of contract law, particularly regarding
acceptance and communication. It underscores the necessity of communication by
authorized parties and the duty of diligence on the part of individuals entering into
contracts. Ultimately, the judgment upholds the foundational requirements for the formation
of a valid contract.
 7. Case Analysis: Durga Prasad vs. Baldev

Introduction:
The case of Durga Prasad vs. Baldev revolves around the fundamental principle of contract
law, specifically the requirement of consideration for a valid contract. Under the Indian
Contract Act, 1872, consideration is essential for a contract to be legally enforceable.

Facts:
- The plaintiff, Durga Prasad, was approached by the District Authority of Etawah to build a
market in the local area.
- Prasad invested a significant amount of money to build two grain markets, Hume Ganj and
Ram Ganj, as per the proposal.
- In 1875, by mutual consent, a commission of 6 annas was agreed upon between the
parties, and an agreement was executed to that effect.
- Prasad insisted on registering the agreement with the Municipal Corporation to secure his
rights.
- However, when Prasad requested Baldev to consent to the registration of the agreement,
Baldev either refused or denied executing it.

Issues:
1. Whether the agreement constitutes a valid contract.
2. Whether the agreement can be enforced by law.

Judgment:
- The plaintiff's claims were dismissed by the court.
- The agreement was deemed invalid as a contract due to the absence of significant
consideration, as per Section 2(d) of the Indian Contract Act, 1872.
- Since there was no consideration, the transaction was considered defective under Section
25 of the Act.
- The court rejected the appeal, emphasizing the significance of consideration as a necessary
component for a valid contract.

Analysis:
- The case highlights the importance of consideration in contract law, as it forms the basis
of mutual exchange and obligation.
- Consideration is essential for the enforceability of a contract, as it reflects the parties'
intention to be bound by their promises.
- Prasad's investment in building the markets was considered by him as consideration for
the commission promised by Baldev.
- However, Baldev argued that there was no connection between the construction of the
market and the commission, indicating a lack of mutual assent regarding consideration.
- The court's decision underscores the principle that for a contract to be valid, there must be
a genuine exchange of value between the parties.
- In this case, the failure to establish a clear nexus between the construction of the market
and the promised commission led to the dismissal of the plaintiff's claims.

Conclusion:
The case of Durga Prasad vs. Baldev underscores the significance of consideration in
contract law. It elucidates that for a contract to be enforceable, there must be a valid
exchange of value between the parties involved. In the absence of consideration, the
agreement cannot be deemed a legally binding contract. This case serves as a reminder of
the fundamental principles governing the formation and enforceability of contracts in Indian
law.
 8. Case Analysis: Chinnaya vs. Ramayya

Introduction:
The case of Chinnaya vs. Ramayya delves into the concept of privity of consideration, a
fundamental principle in contract law. It elucidates that a stranger to consideration can
enforce a contract if they are a beneficiary, even if they were not directly involved in
providing consideration.

Facts:
- The case involves an elderly lady who gifted her entire property to her daughter, the
respondent.
- As a condition of the gift, the daughter agreed to pay an annuity to her aunt, the appellant.
- After the death of the elderly lady, the daughter ceased making payments to the aunt,
leading to a lawsuit.

Issues:
1. Can the appellant sue the respondent for non-payment of the annuity if the consideration
came from a third party?
2. Is the notion of "Privity of Consideration" applicable in the Indian context?

Arguments:
- Appellant's Side: The appellant argued that the consideration for the promise made by the
respondent was the gift of the property by the elderly lady. They contended that under
Indian Contract Law, the appellant had the right to sue the respondent for the promised
amount.
- Respondent's Side: The respondent argued that the property was received as a gift and,
therefore, there was no obligation to pay any annuity. They further argued that the contract
was between the respondent and her mother, not the appellant, and thus the appellant had no
right to interfere.

Judgment:
- The court ruled in favor of the appellant, stating that consideration does not have to come
directly from a party to the contract to be valid.
- The judges interpreted Section 2(d) of the Indian Contract Act, 1872, to allow
consideration to be provided by a third party.
- The gift of the property by the elderly lady was considered valid consideration, even
though the appellant was not directly involved.
- The court held that the respondent's promise to pay the annuity constituted a breach of
contract, entitling the appellant to sue for the promised amount.

Analysis:
- The case clarifies the concept of privity of consideration in the Indian context,
emphasizing that consideration need not come directly from a party to the contract.
- It underscores the principle that a beneficiary of a contract can enforce it, even if they
were not involved in providing consideration.
- The judgment aligns with the equitable principles of contract law, ensuring fairness and
justice in contractual relationships.
- By recognizing the appellant's right to sue for the promised annuity, the court upholds the
integrity of contracts and protects the interests of beneficiaries.
- This case sets a precedent for cases involving third-party beneficiaries and reinforces the
enforceability of contracts where consideration is provided by a third party.

Conclusion:
The case of Chinnaya vs. Ramayya elucidates the principle of privity of consideration in
Indian contract law. It establishes that a stranger to consideration can enforce a contract if
they are a beneficiary, even if they were not directly involved in providing consideration.
The judgment underscores the importance of fairness and equity in contractual relationships
and sets a precedent for similar cases in the future.
 9. Case Analysis: Walton vs. Jones

Introduction:
The case of Walton vs. Jones revolves around the concept of offers in contract law,
specifically focusing on the distinction between general offers and specific offers. It
highlights the importance of communication in the formation of contracts and the
significance of making offers to specific individuals.

Facts:
- Jones, the defendant, regularly purchased construction materials from Brocklehurst's store.
- One day, Jones sent a written order to Brocklehurst's store for construction supplies,
unaware that Brocklehurst had sold the business to Boulton.
- Boulton, having taken over Brocklehurst's business, fulfilled the order without informing
Jones of the change in ownership.
- Jones accepted and used the supplied items, believing they were from Brocklehurst.

Issues:
1. Was Jones liable to pay Boulton for the goods supplied?
2. Did Boulton have a duty to inform Jones about the change in ownership?

Judgment:
The court ruled that Jones was not liable to pay Boulton for the goods supplied. Since the
original contract was formed between Jones and Brocklehurst, and Jones was unaware of
the change in ownership to Boulton, there was no contract between Jones and Boulton.
Therefore, Jones had no obligation to pay for the goods supplied by Boulton.

Legal Principle Involved:

The fundamental principle of contract law is that an offer must be communicated and
accepted to form a valid contract. Section 2(h) of the Indian Contract Act, 1872 defines a
contract as an agreement enforceable by law. A proposal, as defined in Section 2(a),
signifies one person's willingness to do or abstain from doing something, with the intention
of obtaining the assent of another.

Analysis:
- The case underscores the importance of clear communication in contract formation. In this
scenario, Jones was unaware of the change in ownership of Brocklehurst's store to Boulton.
Therefore, there was no offer communicated to Jones by Boulton, and hence no contract
was formed between them.
- It distinguishes between general offers, which are made to the public at large and can be
accepted by anyone, and specific offers, which are made to specific individuals and can
only be accepted by those individuals.
- Boulton's failure to inform Jones about the change in ownership deprived him of the
opportunity to accept or reject the offer made by Boulton. As a result, no contract was
established between Jones and Boulton.
- The judgment aligns with the legal principle that contracts must be formed with the
intention of creating legal obligations, and parties must have full knowledge and
understanding of the terms of the contract.
- Overall, the case highlights the significance of offer and acceptance in contract law and
emphasizes the need for parties to be aware of any changes that may affect their contractual
obligations.

Conclusion:
The case of Walton vs. Jones illustrates the importance of clear communication and
awareness of contractual terms in contract law. It reinforces the principle that contracts
must be formed with mutual consent and understanding between the parties involved. The
judgment in this case protects the rights of individuals by ensuring that contracts are not
formed without their knowledge or consent.
10 . Case Analysis: Olley v. Marlborough Court Hotel

Introduction:
The case of Olley v. Marlborough Court Hotel delves into the realm of exclusion clauses in
contract law, particularly focusing on whether a notice displayed on the back of a hotel door
can be considered part of the contract and if it absolves the hotel from liability for guest
belongings' loss.

Facts:
- Mr. and Mrs. Olley stayed at the Marlborough Court Hotel in London, where they paid at
the reception desk to reserve a room, constituting the contract of their stay.
- Upon check-in, there was no mention of any exclusion clause.
- A notice was displayed in their hotel room, stating that the proprietors would not be liable
for any lost or stolen articles unless handed to the reception desk for safekeeping.
- During their stay, the claimants' room was accessed with their key taken from the
reception desk, resulting in the theft of their belongings.
- The claimants sued the hotel for damages for the loss incurred.

Issue:
Whether the hotel could rely on the exclusion clause to absolve themselves from liability
under common law, and if they were responsible for the loss suffered by the claimants?

Contention by Claimant:
The claimants argued that the hotel staff negligently handled the room key, leading to the
theft of their belongings, and thus the hotel should be held liable for the loss.

Contention by Defendant:
The defendant argued that the exclusion clause, prominently displayed in the room,
disclaimed their liability even in cases of negligence regarding the handling of room keys.

Judgment:
The court ruled in favor of the claimants, holding the hotel responsible for the loss suffered.
The exclusion clause was not effectively incorporated into the contract, as the claimants
were not made aware of it during the contract formation process. Therefore, the hotel could
not rely on the exclusion clause to escape liability for negligence in handling the room key.
Ratio:
- Exclusion clauses must be introduced before or at the time of contract formation to be
effective.
- Notice of the exclusion clause must be reasonable and provided to the other party before
or during contract formation for it to be valid.
- Statements made after the contract is formed cannot be incorporated into the agreement.

Analysis:
- The case underscores the importance of ensuring that exclusion clauses are effectively
communicated to the other party before or during contract formation.
- It highlights the principle that a party cannot rely on exclusion clauses if they were not
made aware of them during the contract-making process.
- The court emphasizes the need for reasonableness in providing notice of exclusion clauses
and ensures that parties have full knowledge of the terms they are agreeing to.
- By ruling in favor of the claimants, the court upholds the principle of fairness and ensures
that parties are not unfairly bound by terms they were not aware of or did not agree to.

Conclusion:
The case of Olley v. Marlborough Court Hotel sets a precedent regarding the effectiveness
of exclusion clauses in contract law. It establishes that such clauses must be introduced
before or at the time of contract formation and must be communicated reasonably to the
other party. Failure to do so renders the exclusion clause ineffective, and the party cannot
rely on it to escape liability. Overall, the case underscores the importance of transparency
and fairness in contractual agreements.
11. Case Analysis: Harvey v. Facey

Introduction:
Harvey v. Facey is a significant case in Contract Law that elucidates the distinction between
an offer and an invitation to treat. It emphasizes the importance of clear communication and
mutual agreement for the formation of a valid contract. The case was heard by the Lords of
the Judicial Committee of the Privy Council and arose from the Supreme Court of
Judicature of Jamaica.

Facts:
The defendants, owners of a property known as Bumper Hall Pen, received a telegram from
the plaintiffs expressing interest in purchasing the land. The telegram inquired, "Will you
sell us Bumper Hall Pen? Telegraph lowest price." In response, the defendants telegraphed
back quoting the lowest price for the property as 900. Subsequently, the plaintiffs sent
another telegram expressing their agreement to purchase the property for the quoted price
and requested the title deeds. However, the defendants refused to sell the land.

Issues:
1. Whether the defendants' telegram quoting the lowest price constituted an offer to sell the
land for 900?
2. Whether the plaintiffs' acceptance of the quoted price formed a valid contract?
3. Whether there was a valid and concluded contract between the parties?

Rule Applied:
The case established the concept of an invitation to treat, where a party invites others to
make offers rather than making an offer themselves. An invitation to treat does not
constitute a binding offer but merely indicates a willingness to negotiate. For a contract to
be valid, there must be a clear offer, acceptance, and communication of acceptance to the
offeror.

Judgment:
The Privy Council held that the exchange of telegrams between the parties did not result in
a binding contract. The defendants' telegram quoting the lowest price was deemed an
invitation to treat rather than a definitive offer. It lacked an explicit expression of
willingness to sell the property. Therefore, the plaintiffs' acceptance of the quoted price did
not constitute a valid contract, as there was no offer to accept. Even if the defendants'
statement was considered an implied offer, it did not meet the requirements for a valid offer.
Thus, there was no binding contract between the parties.

Conclusion:
Harvey v. Facey underscores the importance of distinguishing between an offer and an
invitation to treat in contract formation. It emphasizes the necessity of mutual agreement
and communication for a valid contract to exist. The case clarified the concept of invitation
to treat and its implications for contract law, serving as a foundational precedent in
contractual principles.
12 : Case Analysis: Leslie Ltd. v. Sheill

Overview:
Leslie Ltd. v. Sheill is a significant case that deals with the legal principles surrounding
contracts entered into by minors. It delves into the complexities of equitable restitution and
the enforceability of contracts when minors are involved. The case elucidates the fine
balance between protecting minors from undue liability and safeguarding the rights of
creditors.

Facts:
The defendant, a minor, obtained a loan from the plaintiff under fraudulent pretenses by
misrepresenting his age. Subsequently, the defendant spent the borrowed money. The
plaintiff sought to recover the loan amount through legal action.

Issues:
1. Whether the defendant, being a minor, is entitled to equitable restitution against the loan
obtained by fraudulent misrepresentation.
2. Whether the defendant could claim restitution under an action for tort arising out of the
contract or a quasi-contractual claim.

Legal Analysis:
The court addressed the fundamental principle that minors are generally not held liable for
contracts they enter into. This principle stems from the idea of protecting minors from being
bound by agreements they may not fully comprehend or may have entered into under
duress.

1. Equitable Restitution: The court recognized the equitable doctrine of restitution, which
allows for the recovery of property obtained by fraud or misrepresentation. However, in this
case, since the borrowed money had already been spent by the defendant, it was not feasible
to trace or recover it. Ordering the defendant to repay the loan amount would essentially
enforce a void contract, which equity does not permit against a minor.

2. Liability for Wrongs: The court clarified that while minors cannot be held directly liable
for contractual obligations, they may be held liable for independent wrongs not directly
connected to the contract itself. However, allowing an action for tort or quasi-contractual
claim against the minor in this case would effectively circumvent the prohibition against
enforcing the contract against a minor.

Judgment:
The court ruled that since the money borrowed by the minor had been spent, restitution was
not feasible. Ordering repayment would amount to enforcing a void contract, which equity
does not allow against minors. Additionally, no action for tort or quasi-contractual claim
could be maintained against the minor, as it would indirectly enforce the unenforceable
contract.

Significance:
Leslie Ltd. v. Sheill is significant for several reasons:

1. Protection of Minors: The case underscores the legal principle of protecting minors
from being held accountable for contracts they enter into, especially when obtained under
fraudulent circumstances.

2. Equitable Restitution: It elucidates the limitations of equitable restitution when dealing

with contracts involving minors. The court's decision reflects the balance between fairness
to creditors and the need to safeguard the rights of minors.

3. Development of Equity Law: The case contributed to the development of equity law by
clarifying the application of equitable principles in contracts with minors. It exemplifies
how judicial decisions shape legal principles and influence subsequent legislation.

In conclusion,

Leslie Ltd. v. Sheill serves as a seminal case in contract law, particularly concerning
contracts with minors. It provides valuable insights into the complexities of equitable
restitution and the balance of interests involved in such contractual relationships.
13 : Case Analysis: Nash v. Inman

Overview:
Nash v. Inman is a landmark case in contract law that deals with the enforceability of
contracts for necessaries made with minors. It establishes the legal principles surrounding
contracts entered into by minors for goods or services necessary for their support and
station in life.

Facts:
A tailor supplied 13 waistcoats and other similar items to an undergraduate student, who
was a minor at the time. The student refused to pay for the goods, leading the tailor to bring
a suit against him for the recovery of the price of the goods supplied.

Issues:
1. Whether the goods supplied to the minor fall into the category of necessaries.
2. If the goods are not considered necessaries, whether the contract is enforceable at law.
3. On whom does the burden of proof lie to establish or disprove the necessity of the goods
supplied.

Held:
The court defined "necessaries" as goods or services suitable to the condition in life of the
minor, taking into account their actual requirements at the time of sale and delivery. To be
considered necessaries, the goods must not only be suitable to the minor's condition but also
be genuinely needed by the minor, meaning they do not already possess an adequate supply
of such goods.

Key Points from the Judgment:

1. Burden of Proof: The onus to prove that the goods supplied were necessaries lies on the
plaintiff, even if it is difficult to establish that they were genuinely needed by the minor.
2. Enforceability of Contract: While minors are generally incapable of forming contracts,
English law allows for the enforcement of contracts for necessaries made with minors.
However, two conditions must be satisfied: (1) the goods must be reasonably necessary for
the minor's support in their station in life, and (2) the minor must not already possess a
sufficient supply of such necessaries.
3. Obligation to Repay: If a person satisfies the needs of a minor by supplying necessaries,
the law implies an obligation on the part of the minor to repay for those services. This
obligation can be enforced against the estate of the minor.

Judicial Remarks:
- Fletcher-Moulton LJ: Compared the incapacity of minors to make contracts to that of
lunatics. Emphasized that while minors cannot enter into contracts in the strict sense, they
can be obligated to repay for necessaries supplied to them.
- Buckley LJ: Stressed the two conditions necessary for a minor's contract for necessaries to
be enforceable: the necessity of the goods and the lack of a sufficient supply thereof.

Conclusion:
The court ruled in favor of the defendant, as the plaintiff failed to provide sufficient
evidence to establish that the goods supplied were necessaries for the minor. Without
meeting the criteria for necessaries, the contract was deemed void ab initio. This case sets a
precedent for determining the enforceability of contracts made with minors for goods or
services deemed necessary for their support and station in life.
14 : Case Analysis: Harris v. Nickerson

Facts:
In Harris v. Nickerson, the defendant advertised an auction in London papers, including
various items like brewing equipment and office furniture. The plaintiff, Harris, intending to
bid on office furniture, traveled to Bury St. Edmunds. However, the office furniture lots
were withdrawn on the third day of the auction, leading Harris to sue for the incurred loss of
time and expenses.

Key Issues:
1. Whether the advertisement constituted an offer or an invitation to offer?
2. Whether the defendant could be held responsible for withdrawing the goods from the
auction sale?

Plaintiff’s Contention (Harris):

Harris's lawyer argued that the advertisement amounted to an offer for sale. Harris believed
his travel expenses were acceptance, forming a contract with the defendant. The withdrawal
of goods was considered a breach of this contract, entitling Harris to compensation.

Defendant’s Contention (Nickerson):

Nickerson's lawyer argued that the advertisement was an invitation to offer, not a contract.
Therefore, the defendant should not be held responsible for withdrawing the goods.
Nickerson believed there was no obligation to compensate attendees.

Judgment:
The court unanimously ruled that the advertisement was not an offer but a declaration of
intent. Blackburn, J. based the judgment on public policy, stating it would be unreasonable
to hold advertisers responsible for attendees' expenses. Quain and Archibald, JJ. also
highlighted public policy considerations, finding no legal basis to hold the defendant liable.
The appeal was upheld, confirming that the withdrawal of goods did not breach a contract.
Analysis:

1. Offer vs. Invitation to Offer: The case clarified the distinction between an offer and an
invitation to offer. An advertisement for an auction is generally considered an invitation to
offer, not an offer itself. This distinction is crucial in determining contractual obligations.

2. Public Policy Considerations: The court’s reliance on public policy underscores the
importance of fairness and reasonableness in contract law. Holding advertisers responsible
for attendees' expenses would have far-reaching implications and could discourage
legitimate business practices.

3. Precedent for Auction-related Principles: Harris v. Nickerson set a precedent for legal
principles related to auctions. It established that the withdrawal of goods from an auction
does not constitute a breach of contract, reinforcing the importance of clear communication
and understanding in contractual agreements.

Conclusion:
Harris v. Nickerson is a significant case that clarifies the contractual implications of auction
advertisements. By distinguishing between an offer and an invitation to offer, the court
upheld public policy considerations and set a precedent for auction-related legal principles.
The case highlights the importance of clear communication and fairness in contractual
agreements.
15: Case Analysis: Lalman Shukla v. Gauri Datt

Background:
In Lalman Shukla v. Gauri Datt, the plaintiff, a servant of the defendant, was sent to find the
defendant's missing nephew. He successfully located the child and was rewarded with two
sovereigns and Rs. 20. Later, after being dismissed from his job, the plaintiff claimed Rs.
499 as a reward promised by the defendant through handbills issued during the search.

Key Issues:
1. Whether the plaintiff was entitled to the claimed reward.
2. Whether the subordinate court's decision aligned with general legal principles.

Statutes and Provisions Involved:

The case involved sections 2(h) and 8 of the Indian Contracts Act, 1872.

Facts:
The defendant's nephew went missing in January 1913, prompting the defendant to dispatch
his servants, including the plaintiff, to search for the child. The plaintiff found the missing
boy in Hardwar and was rewarded upon his return to Cawnpore. Unbeknownst to the
plaintiff, the defendant had issued a handbill offering a reward of Rs. 501 for tracing the
child.

Contentions of Both Parties:

Petitioners (Plaintiffs):
- The plaintiffs argued that performing the act of finding the missing child was sufficient to
claim the reward, regardless of their knowledge of the reward.
- They relied on Section 8 of the Indian Contracts Act, stating that performance of a
condition of a proposal constitutes acceptance, entitling them to claim the reward.

Respondents (Defendants):
- The defendants contended that knowledge and assent to the proposal were essential for a
valid contract.
- They argued that the plaintiff was unaware of the reward offer while searching for the
child and was merely fulfilling his duties as a servant.
Judgment:
The court held that knowledge and assent to a proposal are necessary to form a valid
contract. Since the plaintiff was unaware of the reward offer while performing the act, he
could not claim the reward. Additionally, the court noted that the plaintiff was fulfilling his
duties as a servant, which did not entail knowledge of the reward offer. Thus, the appeal
was dismissed, and the plaintiff was not entitled to the claimed reward.

Conclusion:
Lalman Shukla v. Gauri Datt underscores the importance of knowledge and assent in
forming a valid contract. The case establishes that mere performance of an act, without
awareness of the associated terms, does not entitle one to claim rewards. It highlights the
necessity for mutual understanding and agreement between parties for a contract to be
enforceable.
16 : Case Analysis: Har Bhajan Lal vs. Har Charan Lal and Anr.

Court: Allahabad High Court

Citation: AIR 1925 All 539

Legal Provision: Section 10 of the Indian Contract Act, 1872

Bench: Mears, CJ

Facts:
- A young boy, Ram Kishen, ran away from his father's home in Baheri on June 9, 1924.
- The father issued a pamphlet offering a reward of Rs. 500 for anyone who found and
brought the boy home.
- The plaintiff, Har Bhajan Lal, found the boy at Bareilly Junction railway station and took
him to the police. He also informed the father through a telegram.

Issue:
1. Whether there existed a general offer on the part of the Defendant.
2. Whether the Plaintiff fulfilled the terms of the contract.

Defendant’s Contentions:
- The Defendant argued that the Plaintiff did not bring the boy to him and therefore was not
entitled to the reward.

Judgment:
- The court held that the Plaintiff substantially fulfilled the terms of the contract.
- It determined that there was an open offer to the whole world on behalf of the Defendant
through the handbill, capable of acceptance by anyone fulfilling the stipulated conditions.
- The court disagreed with the findings of the Small Cause Court, deeming them artificial.
- Consequently, a decree was passed in favor of the Plaintiff, with costs.
Analysis:
- This case revolves around the concept of offer and acceptance in contract law. The
Defendant's issuance of a pamphlet offering a reward constituted a general offer to the
public.
- The Plaintiff, by finding the boy and taking necessary steps to inform the authorities and
the father, fulfilled the conditions of the contract.
- The court emphasized the importance of substantial performance of contract terms and
rejected the Defendant's argument based on technicalities.
- The judgment highlights the principle that a contract can be formed through conduct, such
as the performance of a specified action in response to a general offer.
- Overall, the case demonstrates the court's adherence to the principles of contract law,
ensuring fairness and equity in enforcing agreements between parties.