Name-Vanshika

Subject-Contracts

Semester-1

Examination-Mid term

Answer 1- In the case of Pinnel v. Cole, the defendant owes the Plaintiff £8 10s. On the

Plaintiff's request, the defendant paid a portion of the claim, which she had accepted. The
Pinnel case established the notion that "the promise to pay less than what is due cannot be
regarded as consideration."

In other cases, Jessel MR and Earl of Selborne LC challenged this decision, claiming that
under the common law system, a creditor might take any sum less than the amount owed by
the debtor.

Foakes v. Beer (1884) 9 AC 605 (Earl of Selborne LC): Doctor Foakes fails to pay his
monthly bill. Mrs. Beer threatened him to take him to court if he did not pay the sum of
£2090. She included in the interest, which raised the total. She stated that if you pay the entire
sum, she will not file a lawsuit. Dr. Foakes gave her the money in full, with no interest. She
agreed and subsequently filed a lawsuit for interest. The court ruled that she is allowed to
litigate for what she is owed. She has a legal right to the interest. According to the court, if
the creditor takes a portion of the consideration, the debtor is obligated to pay the entire
amount plus interest.

Several exceptions to the principle have been acknowledged by the courts:

1) Part payment by a third party:

Case: D & C Builders v Rees [1966] 2 QB 617

The employees demanded payment from Rees for the job that had been completed, but he
refused, and the work proceeded. After the workers submitted a second bill, Rees offered
them a lower quantity of money and told them that if they didn't accept it, they wouldn't get
anything. The

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Workers took the money and then filed a lawsuit against Rees. Rees denied that the workers
had signed a legally enforceable contract.

The agreement was deemed invalid by the court since there was no regard for the builders in
lowering the sum. In this instance, the Foakes v Beer case was used.

Case: Hirachand Punamchand v. Temple (1911) 2 KB 330

It was a loan transaction in which the debtor's father gave a draught to the creditor for an
amount less than the creditor's obligations due. The creditor accepts the drafts and then goes
after the debtor for the balance. The creditor loses the right to litigate for full consideration if
he has no hope and would be assumed to accept the new conditions, according to the court.

2) Promissory Estoppel:

If the promisor conveys the appearance of an alternate method and the promisee does not
provide consideration, this exception applies. As a result, the promisor cannot ask for
consideration out of the blue.

Case: Thomas Hughes v. Metropolitan Railway Co. (1877) 2 AC 439

The landlord and tenant had a contract in which the landlord permitted the renter to stay in
exchange for rent and maintenance work. After a month, the landlord began negotiating for
the sale of the property, but when that failed, the landlord issued a notice of forfeiture. It was
decided that six months would run from the failure of discussions, and that going into
negotiations included the landlord suspending notice, which the tenant accepted by refusing
to make repairs.

LJ Bowen stated in Brigham and distinct land co. v LNW Railway Co. 1888 40 Chancery
division 268 that if persons who have contractual rights against others induce those against
whom they have such rights to believe that such rights will either not be enforced or will be
kept in suspense for some period of time, those persons will not be allowed by a court of
enquiry to enforce the rights until the rights are either not enforced or are kept in suspense for
some period of time.

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Central London Property Trust Ltd. v. High Trees House Ltd. was another similar case

(1947) 130 KB 1

In this case, the plaintiff rented a block of flats to the defendant for 2500 pounds; however,
owing to World War II, the price was reduced by half, and the defendant continued to pay
half of the rent after the war ended in 1945. Plaintiff was seeking reimbursement for rent that
had been lost during the conflict. The Plaintiffs were successful in recovering lost rent during
the conflict, but not in recovering the arrears. In a situation like this, when a promise is not
put up as a cause of action, but simply as a defence, LJ Dennings stated that there was no
need to find consideration.

As a result, Dennings stated in this instance that “a promise intended to be binding, intended
to be acted on, and really acted on, is binding so far as its terms properly apply.”

In the case of Combe v Combe 1951 2 KB 215, LJ Dennings gave a Statement of Principle
that he implemented. In this instance, a wife sued her husband for failing to follow through
on a commitment made to her in a letter included in the divorce order. The court determined
that there was no promissory estoppel or consideration against the spouse, and that her
abstinence was not the consequence of any commitment by the husband. The underlying
concept was that the promissory stopper theory did not establish a new cause of action. It
only prohibits a party from insisting on his stringent legal rights where it would be unfair to
enable him to enforce them in light of the transactions in question.

3) Composition: Compromise with creditor

The debtor agrees to a compromise with the creditor in this situation.

4) Payment before time or Changes in terms and conditions:

If the terms and circumstances change often, a lower payment or payment in a different
manner is acceptable.

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Answer 2- In the following case, X is not obligated to support Y perpetually.

This scenario can be seen in a similar case: Jones vs Padavatton (1969)

In this case, a divorced lady resided in Washington with her son and worked at the Indian
embassy, while her mother stayed in Trinidad and wished for her to pursue a law degree in
England. So, her mother purchased her a house in England, which she divided into two parts,
one of which was rented to someone else and the other of which was used by the divorced
woman. The lady failed the LLB, but because she was receiving an income from her mother,
she opted to live in England for the rest of her life, despite the fact that her mother wanted her
to finish her studies and return to Trinidad. As a result, she cut off her allowance and filed an
eviction lawsuit against her daughter. The Mother pleaded, claiming that this was a family
agreement and not a legal contract.

Judgement:

- According to LJ Danckwets, it was a familial arrangement that relied on goodwill and

faith that the other would follow his commitment. Because it was not a legally
enforceable agreement, the mother could not be held liable to maintain her daughter
indefinitely.
- On the other hand, LJ Salmond believes that this was a family arrangement from the
start, as the daughter considered leaving her job to come to England. He went on to
say that this was similar to a formal contract and that it would only be valid for 5
years.

It was established that the mother did not have to support her daughter indefinitely and that
there would be no enforceable commitment.

Conclusion: As a result of implementing this case to the current circumstance, we may

deduce that the mother will not be bound by the contract indefinitely, and the daughter will
be forced to vacate the property.

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Answer 3- The following is an example of communication of acceptance. P conveyed the
offer, but owing to external factors, was unable to hear the acceptance and signed into a new
contract. As a result, the issue in this situation is one of communication

The case of Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas in Indian

law demonstrates this idea:

- The plaintiffs made an offer to the defendants in Khamgaon to acquire specific

products from Ahmedabad, and the defendants accepted the offer. The question was
whether the discussion culminated in a contract being signed in Khamgaon or
Ahmedabad.
- In this case, Justice Shah held that Section 4 did not bind the proposer and acceptor at
separate times, and that the contract was completed when the offeror was informed of
the acceptance of the offer. He goes on to suggest that because the Indian contract
act's framers could not have imagined communication through telephone, the section's
interpretation should be confined to post.
- Justice Hidayatullah, on the other hand, claimed that the section's language was
flexible enough to encompass telephonic and instantaneous conversations. He further
claims that when words of acceptance are uttered into the phone, they are inserted into
the transmission path to the offeror, putting them beyond the acceptor's control. They
are lost in the acceptor's mind. Because the communication is instantaneous, the
contract is formed right away. Only when the line is dead due to external factors does
the problem arise.

- The court also said in this judgment that

a) agreement is not only a state of mind.

b) intention to accept or simple mental determination are insufficient.

c) There must be an external manifestation of intent in the form of speech, writing

or some other action.

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Entores Ltd. V. Miles Far East Corporation (1955) 2 QB 327- Lord Justice Dennings
was a similar case in English law.

- The proposer in this case was unable to hear the acceptance over the phone and
instead entered into a contract with someone else.

- According to Lord Dennings, the integrity of the proposal was harmed owing to
external influences, therefore only the proposer was bound. He also used the scenario
of two persons standing on opposing riverbanks. When B yells his approval, an
airplane flies overhead, drowning out his voice. B claims that acceptance occurred
during transmission, thus A should be bound. Would A be held accountable?
According to LJ Dennings, just as A is not responsible in this situation, the proposer
cannot be held guilty in the case of immediate communication.

- In this instance, he concluded that the postal rule could not apply to instantaneous
communications such as telephone or telex: it would be ridiculous to suppose that the
contract was established and the parties would not have to contact each other back if a
phone line "went dead" just before the offeree answered "yes."

As a result of applying the above-mentioned decisions to the issue at hand, we may infer that
Q will not be bound by the contract because his acceptance was delayed owing to external
reasons. As a result, P's claim of breach of contract will be dismissed.

Answer 4 - Past Consideration is an old English legal concept. The act occurs before the
promise is made in this case.

Past consideration can occur in one of two ways:

i) as a result of a voluntary service.

ii) a service provided at the request of the customer but without any promise

The Indian laws deal with each of these separately:

1) Cases of voluntary service

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Section 25(2) states that "a promise to recompense, completely or in part, a person who has
already willingly done something for the promisor" is enforceable.

A voluntary act of service is typically performed without request or promise; but, if a future
promise is made, it is actionable under Indian law.

This act depicts the following: a) X discovers Y's bag and offers to give him Rs 100. This is a
legal contract.

2) Cases of Past service at request

Section 25(d) and Section 25 do not entirely address it (b). The act must be performed at the
promisor's request, according to Section 2(d). This requires the presence of a commitment to
pay for the conduct, and even if interpreted literally, the provision cannot apply to an act
performed at the request of a third party without a promise to pay. However, the provision
can be interpreted to encompass an act performed at the request of another party and for
which a promise to pay is made later. Even if no future promise is made, the courts can infer
an implicit promise based on the concept established in Upton-on-Severn RDC v Powell.
Every act request comes with an implicit commitment to pay. re, Stewart v Casey, in the
words of LJ Bowenin Casey's patents.

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