Contract Law Case Laws

Upton Rural District Council v Powell (1942) 1 All ER 220.
legality of implied contracts.
Facts of the case
In the case of Upton Rural District Council vs Powell, a fire broke out
on the farm of Powell. He called upon the fire brigade as soon as
possible to suppress the fire and to prevent any damage from being
occurred. The fire was extinguished by the Upton fire brigade.
Even though Powell’s farm did not come under the service zone, he
believed it to be so. Not being under the service zone of the District
Council, he was charged for the services of the Upton fire brigade.
Issues raised
whether Powell was liable to pay for the services rendered by the
Upton fire brigade.
Judgement of the Court in Upton Rural District Council

vs Powell
The Court held that Powell was liable to pay for the services rendered
by the Upton fire brigade. There was an implied promise to pay in this
case.
Some contracts may not be expressed, yet they put the parties under
an obligation to fulfill their promise. Such contracts are called implied
contracts as they are made otherwise by words spoken or written.
The Court concluded that the defendant wanted to obtain the services
of Upton, asked to provide them and in response to the request,
Upton offered the services. Hence, the services were rendered on an
implied promise to pay for them. Thus, the defendant was liable to pay
the plaintiff for the services rendered.
⮚ Lalman Shukla v Gauri Datt (1913) 11 All LJ 489 at p.492.
validity of the contract
Facts: the defendant Gauri Dutt’s Nephew had absconded and was nowhere to be
found. After the defendant became aware of the same, Dutt had sent all the
servants in search of the missing nephew. The plaintiff Lalman Shukla was one of
the servants who had gone out in search of the nephew. The plaintiff eventually
found him and brought him back.
When Lalman Shukla had left the house to leave for Haridwar from Kanpur he was
handed some money for his railway fare and other expenses. As soon as Lalman
Shukla had left the house, the defendant announced a reward of Rs. 501 for
whosoever found Dutt’s nephew. Shukla had no idea that such an announcement
was made. The plaintiff found the missing nephew and brought him back to his
home in Kanpur. Six months after the said incident occurred, Dutt sacked the
plaintiff.
After being removed from the job, the plaintiff claimed the money from the
defendant and the latter denied to pay the said remuneration. As a result the
plaintiff Lalman Shukla filed a case against Gauri Dutt, his master, for not
rewarding him as he was entitled to.
Issues:
 Whether Lalman Shukla was entitled to get the reward from Gauri
Dutt for tracing the missing boy.
 Whether there was a valid acceptance of the offer made by the
plaintiff.
 Whether there exists a contract or whether the situation amounts to a
contract between the two.
The Judgement
In the said case, the petitioners’ appeal against the respondent Gauri Dutt was
dismissed by the court.
After analyzing all the facts of the case, the honourable high court held that for
creating or entering into a valid contract there has to be knowledge and assent to
the offeree made by the proposer.
Here, the plaintiff did not know the reward before performing his act. He only
came to know about it later, in which case there was no possibility of accepting the
offer.
Hence, there was no contract. Therefore, Lalman Shukla was not entitled to get or
claim the reward.
The judge reiterated that the plaintiff was fulfilling his obligations as a servant of
tracing the missing boy which was a part of his duty. Therefore, the plaintiff’s suit
against the defendant was completely dismissed by the court.
Ratio Decidendi:-
In the present case of Lalman Shukla vs Gauri Dutt, it is derived that in order to
enter into a contract, two critical aspects should be considered,
1. To have complete knowledge of the facts of the offer or proposal
2. Acceptance of the offer
A person to whom the offer is made, the offeree, must accept the proposal. The
communication regarding the offer is also very important as mentioned in section
(4) of the ICA. It states that communication can only be complete when it comes to
the knowledge of the person to whom it is made.
To convert a proposal into an agreement both knowledge and assent must be
present. Here, in the given instance, both were missing.
As the plaintiff had no knowledge and hadn’t given his approval or accepted the
proposal there did not exist a valid contract between the two.
At the time when the plaintiff was searching for the boy, his obligations and duties
were as a servant. Therefore the plaintiff Lalman Shukla was not entitled to get the
award.
Williams v Carwardine
Walter Carwardine was murdered between when he was last seen on March 24th
1831, and when his body was found on April 12, 1831. He was seen on the night that
he was supposedly murdered with Mary Anne Williams who was questioned but
gave no information to the magistrates of worth. William, Walter's brother, posted a
handbill for information as should lead to the discovery of the murderer with a reward
of £20. Mary Anne Williams was beaten by her husband and believing she was going
to die made a statement which led to the conviction of her husband for Walter's
death.
Issue
1. Has the plaintiff formed a contract with the defendant in spite of the fact
that she was not motivated by the reward when the information was
given?
Ratio
 The motive of an individual in accepting the contract offered has nothing
to do with his right to recover under the contract.
 Neither mutual consent nor communication of assent is important in case
of reward.
Judgement
The court held that Mary Anne Williams had clearly performed the terms of the offer
(giving information that lead to the conviction of the murderer) and the handbill,
which she must have known of given that it was posted all over Hereford, promised
to give money for that information. As a result, a contract was formed with any
person who performed the condition, without considering the motivations of the
individual.

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Upton Rural District Council v Powell (1942) 1 All ER 220.

legality of implied contracts.

Facts of the case

Judgement of the Court in Upton Rural District Council

validity of the contract

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