INDIAN CONTRACT ACT CASE STUDIES QUESTIONS
Q. Shambhu Dayal stated “self service” system in his shop. Smt. Prakash entered the shop, took a basket and after taking articles of her choice into the basket reached the cashier for payments. The cashier refuses to accept the price. Can Shambhu Dayal be compelled to sell the said articles to Smt. Prakash?
Decide.
Ans. Invitation to Offer : The offer should be differentiated from an invitation to offer. An offer is the last expression of willingness by the offeror to be bound by his offer when the party decided to accept it. In this case the party fails to express his last willingness proposes certain terms on which he is ready to negotiate, in this he does make an offer, but invites. Only the other party to make the offer on those terms. Thus this is the difference between the two. In the above problem, the display of articles with a price in it in a self-service shop is simply an invitation to offer. It is in no sense an offer for sale, the acceptance of which constitutes the contract. In this case, Smt.Prakash has selected some articles and approaches the cashier for payment, simply made an offer to buy the articles selected by her, If the cashier refuses to accept the price, the interested buyer cannot force him to sell. [Fisher V. Bell (1961)]
Q. Father promised to pay his son a sum of Rs. 1 lakh if the son passed C.A. examination in the first attempt. The son passed the examination in the first attempt, but father failed to pay the amount as promised. Son files a suit for recovery of the amount. State along with reasons whether son can recover the amount under the Indian Contract Act, 1872.
Ans. According to the provisions of the Indian Contract Act, 1872 the problem asked in the question is based on Section 10 of the Act. As per the provision, the parties must intend their agreement to result in legal relations. Agreements of a social or domestic nature do not contemplate legal relationship and, as such are not contract and it cannot be enforced by the law. The leading case on this point is Balfour vs. Balfour (1912 - 2KB.571). Thus by applying the above provisions in the case it was held that the son cannot recover the amount of Rs. 1 lakh from the father, because of the reason explained above.
Q. Ramaswami proposed to sell his house to Ramanathan. Ramanathan sent his acceptance by post. Next day, Ramanathan sends a telegram withdrawing his acceptance. Examine the validity of the acceptance in the light of the following:
i. the telegram of revocation of acceptance was received by Ramaswami before the letter of acceptance.
ii. The telegram of revocation and letter of acceptance both reached together.
Ans. Communication of an acceptance is complete:–
i. As against the proposer, when it is put in course of transmission to him so as to be out of the power
the acceptor to withdraw the same.
ii. As against the acceptor, when it comes to the knowledge of the proposer.
When a proposal is accepted by a letter sent by post, the communication of acceptance will be complete as against the proposer when the letter of acceptance is posted as against the acceptor when the letter reaches the proposer.
i. In this case, the revocation of acceptance will be valid as the telegram of revocation reaches before the letter of acceptance. The acceptance as such will not be valid.
ii. If the telegram of revocation and letter of acceptance both reach together then its validity will be judged by the letter whichever is first read.
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