Business law

Contract act case study

1. Business law Contract act . By Ezilvizhi.S

2. DURGA PRASAD VS. BALDEO (1880) Facts: Durga Prasad – plaintiff of the case- a contractor Baldeo – shopkeeper – defender Durga Prasad requested the DISTRICT COLLECTOR to build up market for local vendors. Baldeo - stated to Durga Prasad if market was build I will pay you 5% commission on turnover. After the market was build baldeo refused to pay commission. DURGA PRASAD filed a case against BALDEO.

3. Issues Whether the agreement between defendant and plaintiff is valid? Whether the agreement enforceable by law?

4. Rules As per sec 25 of Contract act 1872 an agreement which is made without any specifications about the consideration is VOID . On the other hand as per interpretation of sec 2(d), consideration of a contract is fixed by the promisor. Therefore promisor fixes the consideration and without it contract is void.

5. Conclusion The consideration must move at the desire of the promisor . The court declared that the Agreement is void as consideration is not fixed by the promisor. Therefore Baldeo has no liability to pay Durga Prasad Commission in lieu of construction of shops. Consideration is a essential part of a contract and without specifying it a contract is void.

6. Kadarnath vs. gorie mohammad ( 1886) Kadarnath Bhattacharji - plaintiff – municipal Commissioner – Trustee of Howrah townhall fund He wanted to build a Town hall in Howrah so he collected funds from public and he, public subscribers including defender ( Gorie mohammad ) are in a contract. Kadarnath make a contract with a contractor to construct a townhall And during the process the amount was increased from ₹25000- ₹40000 . Therefore every one in the contract with contracter agreed to pay the additional amount but the agreed to pay ₹100 and wrote his name in subscription book but didn’t pay. KADARNATH filed a suit against MOHAMMED for recovery of amount.

7. Issues Is the case maintainable? Is the defendant bound to indemnify the Sum of money? Was there a valid contract between two parties?

8. Rules Section ( 25) of INDIAN CONTACT ACT (1872) says that Agreement without consideration is void unless it is in writing and registered or a promise to compensate for something done Or in a promise to pay a time bared debt by limitation law And it is made in the account of natural love and affection between parties Standing in near relation to each other ; or unless it is a promise to compensate Wholly or a part,who has already voluntarily done something For the promisor Or something which the promisor was legally compellable to do; or unless It is a promise made in writing and signed by the person to be charged therewith, or By his agent generally and specially authorised in its behalf To pay wholly or part of the debt Of which creditor may enforced payment .But for the law For limitation of suits. In any cases such an agreement is a contract.

9. Conclusion He defendant GORIE MOHAMMAD know the purpose for which He paying while he was opted for subscription . He was very well aware of the Fact that he was putting his money towards A charitable cause When he opted of the subscription,so that is a enough consideration. The court ruled that ,based on the subscription Chosen by people like GORIE MOHAMMAD ,the commissioner was liable to pay the contract work. So for the commissioner,the faith of the subscribers was the consideration ,and the consideration for GORRIE MOHAMMAD ,he willingly agreed to contribute his money for the purpose . Therefore there is a valid contract The decision Was given in favour of kadarnath ,that GORIE MOHAMMAD Cannot opt out of subscribers list after Making a promise. Therefore he was liable for the promise he made.