Summary | Session -3 | CONTRACT LAW

This post contains summaries of following case laws –

  1. Kedarnath Bhattacharjee v. Gorie Mohamed [ILR (1886) 14 Cal. 64]
  2. Tweddle v. Atkinson (1861) 1 B&S 393
  3. Dunlop Pnuematic Tyres v. Selfridge & Co. Ltd. [1915 AC 847]
  4. Beswick v. Beswick [1968] AC 58
  5. Stilk v. Meyrick [(1809) 2 Camp 317]
  6. Central London Property Trust Ltd. V. High Tress House Ltd.  [(1947) 1 KB 130]

1. Kedarnath Bhattacharjee v. Gorie Mohamed (1886)

A person promised to donate for constructing a town hall. The committee relied on it and entered contracts for construction. Later, he refused to pay.
Held: The promise was enforceable because the plaintiff acted upon it and incurred liabilities — valid consideration existed through reliance.
Principle: Past voluntary acts, if done at the promisor’s request or inducing reliance, form valid consideration under Indian law.

2. Tweddle v. Atkinson (1861)

Two fathers agreed to pay money to a groom, who was not a party to the contract. When one father died, the groom sued the executor.
Held: He couldn’t sue — there was no privity of contract and no consideration from him.
Principle: Only parties to a contract can enforce it; consideration must move from the promisee.

3. Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge & Co. (1915)

A resale price maintenance agreement was violated by Selfridge. Dunlop, not a direct party, sued for breach.
Held: Dunlop couldn’t sue — no privity of contract and no consideration moved from it.
Principle: A contract cannot be enforced by a third party, reaffirming Tweddle v. Atkinson.

4. Beswick v. Beswick (1968)

A nephew promised his uncle to pay a pension to the uncle and, after his death, to his widow. After the uncle’s death, payments stopped.
Held: The widow couldn’t sue personally but could enforce it as administratrix of the estate.
Principle: Third parties can’t enforce contracts, but representatives can — highlighting the rigidity of the privity doctrine.

5. Stilk v. Myrick (1809)

Two sailors deserted. The captain promised extra pay to remaining crew if they sailed home. He later refused to pay.
Held: No new consideration — sailors were already bound to perform their duties.
Principle: Performance of an existing contractual obligation is not valid consideration for a new promise.

6. Central London Property Trust Ltd. v. High Trees House Ltd. (1947)

During WWII, the landlord reduced rent; after the war, demanded arrears.
Held (Denning J): The landlord couldn’t recover wartime arrears as the tenant relied on the promise.
Principle: Established the doctrine of promissory estoppel — a promise intended to be relied upon is binding even without consideration.

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