11 - Cases On Contract

CHECK
YOUR
MEMORY
True/False
1. All contracts are agreements but all agreements are not contracts.
2. There can be a contract even without consensus ad idem.
3. An agreement which is enforceable at the option of either party is
a voidable contract.
4. A void contract is one which is void ab initio.
5. A void agreement does not create any legal obligations.
6. An illegal agreement is not only void as between the immediate
parties but even the collateral transactions to it become tainted
with illegality.
7. All void agreements are illegal.
8. In some cases, even though a contract may appear to be
completed at once, its effects may continue.
9. In an executed contract both the parties have yet to fulfill their
obligations.
Problem 1
A engages B for a certain work and promises to pay
such remuneration as shall be fixed by C. B does the
work. Can there be a contract?
Solution
There is a contract between A
and B and A is bound to pay
the remuneration as shall be
fixed by C. If C does not fix, or
refuses to fix the remuneration,
A is bound to pay the
reasonable remuneration.
Problem 2
Over a cup of coffee in a restaurant, A invites B to a
dinner at his house on a Sunday. B hires a taxi and
reaches A’s house at the appointed time, but A fails to
perform his promise.
Can B recover any damages from A?
Solution
No, B cannot recover the damages from A as both the
parties share a social relationship and there is no
intention to create a legal relationship.
So, it was just an agreement which is not enforceable at
law.
Problem 3
A takes a seat in a vehicle. Is there any contract?
Answer
Yes as occupying the seat is an implied gesture to take
the services of a vehicle. This is an implied contract.
Problem 4
A invites B to a Pajama party. B accepts the invitation.
Can there be a contract?
Answer
No, there cant be a contract as the friends share a social
relation. So, it is just an agreement.
Problem 5
A forced B to enter into a contract
at the point of pistol. What remedy
is available to B if he does not want
to bound by the contract ?
Answer
B can set the contract to be voidable and rescind it as
his consent was not free. The essential of a valid
contract is violated here.
Problem 6
Amar had two visitors in his office one evening,
Bharat and Ram. Bharat ran an event mgmt
service. Amar had hosted a party the previous
evening to celebrate his son’s birthday. Bharat had
done the mgmt for the party. Bharat had come to
Amar’s office that evening, to collect Rs20000 for
having done the work.
Contd...
Ram was the son of an ex- colleague of Amar. Ram’s
family had fallen into bad times. They had
accumulated a lot of debts. Ram was studying in the
final year of college. He was going around meeting
people his father had known and soliciting money as
donation, so as to be able to finish his education. Amar
was a kind person. He told Ram that he would give him
Rs5000. Ram pleaded and said that if Amar could give
him Rs10000, he would not have to go any further to
collect money. Amar agreed to give him Rs10000
Contd...
While Amar was in the process of obtaining the
money to give to Bharat and Ram, the phone rang. It
was Amar’s stock broker. He informed Amar that on a
particular purchase and sale order Amar had a loss of
huge amount of money. He had to pay to the broker
Rs9 lakh, within a week. Amar was very upset. In result
he refused to pay the money agreed to Ram and
Bharat.
Questions :
Was there an agreement between Amar and Bharat?
Was there an agreement between Amar and Ram?
 Should agreements be fulfilled?
Problem 7
M mowes L’s lawn without being asked by L to do so.. L
watches M do the work but does not attempt to stop
him. Is L bound to pay any charges to M?
Solution
Yes, L is bound to pay the remuneration as he didn’t stop
him from mowing the ground so his implied silence is
equivalent to speech here.
Problem 8
A promises to pay Rs.500 if he (B) beats C. B beats C
but A refuses to pay.
Can B recover the amount?
Solution
No, as the agreement is illegal
Problem 9
D lived as a PG with a family. He agreed with the
members of the family to share prize money of a
newspaper competition. The entry sent by D won a
prize of $750.He refused to share the amount won.
Can the members of the family recover their share?
Solution
Yes, as it was mutually decided and the parties intended
to bound by.
Problem 10
C orally offered to pay A, an auto mechanic, Rs.50 for
testing a used car which C was about to purchase from
D.A agreed and tested the car. C paid A Rs.50 in cash
for his services. Is the agreement between C and A
(a) express or implied,
(b) executory or executed,
(c) valid, void, voidable or unenforceable ?
Solution
The agreement is
(a) Express
(b) Executed
(c) Valid
Problem 11
Arun enters into a contract to sell a smuggled item to
X. The import of such type of goods is illegal under the
laws of the country. Arun refuses to deliver the item as
promised.
What are the rights of X?
Solution
There are no rights available to either of the parties as
the contract is void ab initio and illegal.
Problem 12
A agrees to buy from a jeweller a ring to be delivered to
A after two months. In the meantime, the Government
enacts a law on gold control and prohibit its dealings
in gold. When the time for delivery of the jewellery
comes, the jeweller refuses to deliver the same.
What can A do?
Solution
A can exercise no option and holds no rights as the
prohibition laid by the government has made the
contract void and the contract is against the law to
perform.

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