UNIVERSITY OF PETROLEUM & ENERGY STUDIES

COLLEGE OF LEGAL STUDIES

B.TECH (E.T)+LLB(IPR)

SEMESTER 4TH

ACADEMIC YEAR: 2013-2014 SESSION: JANUARY-MAY

CASE STUDY

FOR

Law of Contracts

LLBL 101

Under the Supervision of: Sujith P Surendran

NAME: ISHAN TIWARI

SAP NO: 500023684
ROLL NO R840212012
 Lalman Shukla v. Gauri Datt

Citation-(1913) 11 ALJ 489

Parties name- Lalman shukla (P) and Gauri Datt (D)

Name of judges-

Facts-In this case, Gauri (D) sent his servant Lalman (P)in search of his missing nephew. Gauri
afterwards announced a reward for information concerning the missing boy. It traced the boy in
ignorance of any such announcement. subsequently when he came to know of this reward, he
claimed it.

Issues-

Judgment- It was said that Lalman Shukla has no right in the reward because he has no
knowledge of the proposal.

Reason for judgment-

Since, the plaintiff was ignorant of the offer of reward, his Act of bringing the lost boy didnt
amount to the acceptance of offer and therefore he was not entitled to claim the reward.Hence, an
action without the knowledge of the proposal is no acceptance.

Carlill v. Carbolic Smoke Ball Co.

[1893] Q.B. 256 (C.A.)

Procedural History:

Appeal from decision of Hawkins J. wherein he held that the plaintiff, Ms. Carlill was

Entitled to recover 100.

Parties to the Action:

Appellant: Carbolic Smoke Ball Co. [defendants at trial level]

Respondent: Ms. Carlill [plaintiff at trial level]

Facts:

The Defendants manufactured and sold the Carbolic Smoke Ball and advertised in the

Newspaper that they would pay 100 to anyone who uses the medicine as directed and

Nevertheless contracts a cold, influenza, or other cold disease. The advertisement also

Claimed that 1000 was being deposited into the bank to demonstrate their sincerity. The

Plaintiff used the ball as directed but contracted influenza. She sued to recover the money

Promised in the advertisement.

Issue:

Does an advertisement to the general public promising to pay money to anyone who does

Something create a binding contract between the parties?

Arguments:

The Defendant argued that:

Contract was too vague to be enforced;

o No way to check the conditions were met;

o You cannot contract with everybody (i.e. the whole world);

o Timeframe not specified;

Acceptance had not been communicated to the offeror;

 There was no consideration: nudum pactum;

Analysis:

Bowen L.J.: How would an ordinary person construe this document? Was it intended that

the 100 should, if the conditions were fulfilled, be paid? The advertisement says that

1000 is lodged at the bank for this purpose. Therefore the statement was not a mere puff,

I think it was intended to be understood by the public as an offer which was to be acted

Upon.

Balfour v. Balfour.

[1919] 2 K.B. 571 Balfour v. Balfour. In the Court of Appeal. 1919 June 24, 25

Warrington LJ, Duke LJ and Atkin LJ

Facts
Mr. Balfour (D) and Mrs. Balfour (P) lived in Ceylon and visited England on a vacation. The
plaintiff remained in England for medical treatment and the defendant agreed to send her a
specific amount of money each month until she could return. The defendant later asked to remain
separated and Mrs. Balfour sued for restitution of her conjugal rights and for alimony equal to
the amount her husband had agreed to send.

Mrs. Balfour obtained a decree nisi and five months later was granted an order for alimony. The
lower court entered judgment in favor of the plaintiff and held that the defendants promise to
send money was enforceable. The court held that Mrs. Balfours consent was sufficient
consideration to render the contract enforceable and the defendant appealed.

Issues
1. Must both parties intend that an agreement be legally binding in order to be an
enforceable contract?
2. Under what circumstances will a court decline to enforce an agreement between spouses?
Holding and Rule
1. Yes. Both parties must intend that an agreement be legally binding in order to be an
enforceable contract.
2. The court will not enforce agreements between spouses that involve daily life.
Agreements between husband and wife over matters that affect their daily lives are not subject to
contractual interpretation, even when consideration is present. Spouses normally intend that the
terms of their agreements can be varied as situations develop. The court held that it was
presumed that the parties made the agreement as husband and wife and did not intend that it
could be sued upon. The court held that as a matter of public policy it could not resolve disputes
between spouses.

Disposition
Judgment for plaintiff Mrs. Balfour reversed.

Reason
Contracts related to the social aspect of marriage will not be enforced by the courts. Contracts
between spouses related to business relationships can be enforced, however. Courts are willing to
support negotiated divorce settlements and written statements of support.

Ratio Decidendi

That in matters of family, social and other domestic disputes the presumption is that no contract
would exist. In other words what two people, be they friends, husband and wife etc agree
between them was not intended to be legally enforceable if one party did not fulfil their
obligation to the other.

In a nutshell according to Atkin, one of the Lords who adjudicated "there was no intention to
create legal relations".

This principle however does not extend to commercial transactions, where the presumption is
that a legally binding contract does exist even if there is nothing specific in writing.