Assignment

On
Business Law

Submitted to,
Prof. Arup Mukherjee

Submitted By,
Shivam Bhardwaj (37)
Manjusha Jha (38)
Deepak Kumar (39)
Rashmi Sinha (40)
Aditi Agarwal (41)

Case 1. LAPSE AND REVOCATION OF OFFER:

Theory:
An offer lapses after stipulated or reasonable time:
An offer lapses if acceptance is not communicated within the time prescribed in the offer or if no
time is prescribed within a reasonable time. What is a reasonable time is a question of fact
depending upon the circumstances of each case. For example, an offer made by telegram
suggests that a reply is required urgently. And if the offeree delays his or her reply even by a day
or two, the offer will be considered to have lapsed.
Case:
Ramsgate Victoria Hotel Co. vs. Montefiore:
An application for allotment of shares was made on 8th June. The applicant was informed on the
23rd November that the shares were allotted to him. He refused to accept them and because of
this the company filed a suit against him. The court decided the following.
Courts Decision:
It was held that the offer had lapsed by reason of the delay of the company in notifying their
acceptance and thus he was not bound to accept the shares.
Application:
In todays world the customers are well informed. So the companies should always make sure
that there is timely communication because if that is not there the applicant may think that his
application is rejected and might plan something else. And the company will thing that the
applicant is still waiting. So a timely communication is very important otherwise the company
will have to face consequences.

Case 2. MISTAKE AS TO THE NATURE AND CHARACTER OF

WRITTEN DOCUMENT:

Theory:
A Unilateral mistake can make the contract completely void is where the consent is given by the
party under a mistake as to the nature and character of written document. The rule of the law is
where the mind of the signer did not accompany the signature. i.e. he did not intend to sign, in
contemplation of law, he never did sign the contract to which his name is appended and the
agreement is void.
Case:
Bala Devi vs. Santi Mazumdar
An old illiterate women executed a deed under the impression that she was executing the power
of attorney authorizing her nephew to manage her estate, while in face it was a deed of gift in
favor of her nephew. There was a case filed. And following was the decision:
Courts Decision:
It was agreed that the women never intended to execute such a deed to execute such a deed of
gift in favor of her nephew nor was the deed read or explained to her. The document was held to
be void as her mind did not go with her signature.
Application:
In business application it is very important that a particular contract is read properly and
understood. So that you know what you are signing on. If that is discovered later such a
possibility may come up and the other party have to face the consequences.

Case 3. COMMUNICATION OF ACCEPTANCE:

Theory:A contract does not result from a mere state of mind or even a mental resolve to accept an offer.
There must be some external manifestation of that intent by speech, writing or other act. There
has to be an authorized communication between the two parties. In case of an informal or
unauthorized communication the contract will not be considered valid. Also the communication
should be from the person who has the authority.
Case:
Powell vs Lee:
Powell was a candidate for the post of headmaster in a school. The managing committee of the
school passed a resolution selecting him for the post. A member of the management committee
acting in his individual capacity, informed Powell that he had been selected, but Powell received
no information. Subsequently the resolution was cancelled and Powell was not appointed. Powell
filed a suit against the committee for the breach of contract.
Courts Decision:
The court held that in the absence of any authorized communication from the committee there
was no binding contract.
Application:
In todays business scenario when one is applying for any post or thing, till the time a formal
communication is not received and if a person who has some clue tell u something do not accept
till you get information through a formal source. This is possible for applying for a job,
acceptance of a project, a particular ide or budget etc.

Case4. Contract consideration

Theory:
In contract law consideration is concerned with the bargain of the contract. A contract is based on
an exchange of promises. Each party to a contract must be both a promisor and a promisee. They
must each receive a benefit and each suffer a detriment. This benefit or detriment is referred to
as consideration. A one sided promise which is not supported by consideration is a gift. The law
does not enforce gifts unless they are made by deed.

An existing contractual duty will not amount to valid consideration

If a party has an existing contractual duty to do an act, this act can not be used as consideration
for a new promise.
Case:
Stilk v Myrick
Stilk (P) was to be paid 5 pounds per month during a voyage at sea. Two seamen deserted and
the Captain agreed that the wages of the two deserters would be divided equally among the
remaining hands if the two seamen could not be replaced at Gottenburgh. Myrick (D) refused to
honor the agreement and Stilk sued.
Courts Decision:The court held that a desertion is considered to be an emergency the same as a death among the
crew. The court found in favor of Myrick on the grounds that there were not changed
circumstances sufficient to compel a change in the contract.
Application:
In todays business scenario when one party is entering into a contractual duty with another party
applying for any act or business, this act can not be used as consideration for a new new promise
or extension in business through same contract .For the new promise or act a new contractual
duty should be made. If someone is entering into new promise through same contractual duty it
will be void.

Case5. Contract consideration

In contract law consideration is concerned with the bargain of the contract. A contract is based on
an exchange of promises. Each party to a contract must be both a promisor and a promisee. They
must each receive a benefit and each suffer a detriment. This benefit or detriment is referred to
as consideration. A one sided promise which is not supported by consideration is a gift. The law
does not enforce gifts unless they are made by deed.
Theory:
Where a party has a public duty to act, this can not be used as consideration for a new promise:
Case:
Collins vs Godefrey
The claimant, Collins, had been subpoenaed to attend court as a witness in separate court case
involving the defendant, Godefrey. Godefrey had sued his attorney for malpractice and Collins
was required by the court to attend as an expert witness. In fact Collins never gave evidence but
was required to be on standby for six days in case he was called. After the trial Collins gave
Godefrey an invoice to cover his time spent at court and demanded payment by the next day.
Without giving him the full day to pay, Collins commenced an action to enforce payment.
Courts Decision:Collins was under a public duty to attend court due to the subpoena. Where there exists an
existing public duty this can not be used as consideration for a new promise. Godefrey was not
required to pay him.
Application:In todays business scenario when a party has a public duty to abide by law or act as witness
somewhere, he must not enter in any kind of new promise with someone for any benefit for
himself. If he indulge himself in such activity, this can not be used as a consideration. He wont