FACTS: Defendant when lunatic signed a promissory note as surety upon which plaintiff brought an action and defendant

took the defence of insanity ISSUE: Whether defendant can successfully claim insanity as a defence? HELD: To successfully take the defence of insanity as breach of contract, defendant must show not only that he was so insane at the time of executing the deed such that he was incapable of understanding the implications of the agreement; but also that at the time of the contract his insanity was known to the plaintiff. The burden of proof must lie on the defendant. Since the jury didnt find on the second question, hence there must be new trial. Filed under Competence of Parties, Contract Law, Fundamentals Tagged with competence of parties, contract law, Indian Contract Act 1872, mental capacity, Validity of contract

Bengal Coal Co. v. Homee Wadia & Co.

February 9, 2013 1 Comment Citation: (1899) ILR 24 Bom 97 A agreed in writing to supply coal to B at certain prices and up to a stated quantity, or in any quantity which may be required for a period of twelve months, is not a contract unless B binds himself to take some certain quantity, but a mere continuing offer which may be accepted by B from time to time by ordering goods upon the terms of the offer. In such a case, each order given by B is an acceptance of the offer and A can withdraw the offer, or, to use the phraseology of the Act revoke the proposal, at any time before its acceptance by an order from B. Such a transaction may be reduced to a statement by the intending vendor in this form If you will send me orders for coal, I shall supply it to you for a period of twelve months at a particular rate. This is merely a proposal from A to B. If in reply to such a proposal, B says to A I agree, it does not constitute an acceptance of the proposal. An acceptance can take place only by B sending an order to A. Taken from Mrs. Chand Kunwar and Ors. v. State of Rajasthan

Filed under Contract Law, Fundamentals, Offer

Perclval Ltd. v. London County Council Asylums and Mental Deficiency Committee
February 9, 2013 1 Comment

Citation: (1918) 87 L.JKB 677 FACTS: The plaintiffs advertised for tenders for the supply of stores. The defendant made a tender to the effect that he undertook to supply the company for twelve months with such quantities of special articles as the company may order from time to time. The Company, by a letter accepted the tender and subsequently gave various orders which were executed by the defendant. Ultimately the Company gave an order for goods within the schedule, which the defendant refused to supply. HELD: The Company succeeded in an action for breach of contract. The tender was a standing offer, to be converted into a series of contracts by the subsequent acts of the company and that an order prevented pro tanto tha possibility of revocation, and the defendant, though he might regain his liberty of action for the future, was meanwhile bound to supply the goods actually ordered. Referred in Mrs. Chand Kunwar and Ors. v. State of Rajasthan Filed under Contract Law, Fundamentals, Offer Tagged with English contract law, Standing Offer

State of West Bengal v. M/S. B. K. Mondal and Sons

February 6, 2013 Leave a comment State of West Bengal v. M/S. B. K. Mondal and Sons 1962 SCR Supl. (1) 876 (Section 70 of Indian Contract Act) FACTS: In addition to the construction work as stipulated under the contract, plaintiff did some more construction work as requested by an officer of State of W.B. Government though started using the constructed warehouse, yet on account of the work not being recorded in form of contract as provided under Article 299 of Constitution, denied any liability to pay for it. ISSUES: 1. Whether there was any contract between the State of W.B. and plaintiff? 2. Whether the rule of Promissory Estoppel can be evoked? 3. Whether plaintiff can claim under S.70 of Indian Contract Act (ICA)?

HELD: Since the officers making such requests were unauthorized by the government to do so, hence, there was neither any agreement between the parties nor the rule of Promissory Estoppel could be invoked (See Motilal Padampat Sugar Mills) Three conditions must be satisfied before S.70 could be invoked: First, person should lawfully do something for another person or deliver something to him; Second, in doing so, he must not intend to act gratuitously; Third, other person for whom something is done or to whom something is delivered must voluntarily enjoy the benefit thereof. Such other person must have the option not to accept the thing and to return it. It is only when he voluntary accepts the thing or enjoys the work done, that the liability u/s 70 arises. The person must not be incompetent to exercise his volition u/s 11. S.70 does not deal with rights and liberties arising from contracts rather from relations which resemble those created by contracts. Therefore, person offering benefit to another could not compel for specific performance thereof nor could ask for any damages for breach for there was never a contract between the persons. But if the other person voluntarily enjoys the benefit there from, former may claim either compensation or restoration u/s 70; though such a claim for compensation is in no way to be treated as borne contractually. Further, lawfully u/s 70 must be read in accordance with S.23 of ICA. In alternative it indicates that after something is done or delivered by one person to other who enjoys the benefit there from, a lawful relation is borne which u/s 70 gives rise to a claim for compensation. A MINOR cannot be sued for compensation u/s 70 of ICA: Incidentally, minor is excluded from S.70 for his case is specifically dealt with u/s 68 in same chapter; Secondly, voluntary acceptance of benefit of work done or thing delivered which is the foundation for any claim u/s 70 will not be present for he is incompetent to exercise his volition u/s 11. After the plaintiff constructed the warehouse it was open to the State of W.B. to have the benefit of it or to demolish it and instruct the plaintiff to take the materials used therein. The government, by voluntarily enjoying the benefit accruing from the constructed warehouses, became liable u/s 70. However, it is urged by the defendant that allowing this cause of action would amount to enforcing a contract in infringement of mandatory provisions of A.299 of the constitution, rendering it invalid. But, the contention is not well founded for the plaintiff did not allege any contract at all while claiming u/s 70. The cause of action u/s 70 is independent of any contract; the cause of action is based not upon the delivery of the thing or doing of the work as such but upon the acceptance and enjoyment of the said goods or the said work. A.299 may forbid a government to take work under a contract rendered invalid on account of its not being in compliance with its terms, but does not make it unlawful for the government to take the benefit of work done for it under no contract at all. Request made by the officers not authorized on behalf of government was not a request at all and did amount to nothing.