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Civil Law

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1. Legal Principle: The act of using influence on another and taking undue advantage of that person is called undue influence.
Factual Situation: A poor Hindu widow who was in dire need of money, was forced by a money lender to agree to pay 100% rate of interest.
Issue: Is it a case of using undue influence?
Decision:

The money lender can ask for the specific performance of contract as there is no indication of any undue influence because lady herself had approached the money lender and voluntarily agreed to pay 100% interest.It is a case of exerting undue influence upon a person of mental distress. So the contract is not valid and the money lender cannot plead for the specific performance of the contract.None

2. Legal Principle: Where both parties to an agreement are under a mistake as to matter of fact essential to the agreement, the agreement is void.
Factual Situation: A agrees to buy certain horse from B for ' 10,000 and pays ' 5,000 as advances. It turns out that the horse was dead at the time of bargain, though neither party knew this fact.
Issue: Can A recover the advance money given?
Decision:

NoneNo, A cannot get the money back because money advanced is not returnable.A cannot get the money back because the rule of caveat emptor applies on him.Yes, A can get the money paid in advance because in this case there is bilateral mistake as to the subject matter.

3. Legal Principle: A contract obtained by misrepresentation is voidable at the option of the buyer.
Factual Situation: A lady by falsely representing herself to be wife of a millionaire obtains costly necklaces from a jeweler on the pretext of showing them to her husband before buying. She later on pledges them with a broker, who in good faith gives ' 5 lac to the lady. The jeweler on knowing this, files a suit against the broker.
Issue: What will be the legal position in this case?
Decision:

The jewelers cannot get back the necklace because there is no privity of contract between the jeweler and the broker.The broker does not get good title over the jewelery, so jeweler can get back the necklace from the broker.NoneThe jeweler can sue the lady.

4. Legal Principle: A minor is not competent to enter into a contract and the law will assume that the contract never happened and everything is returned to as it was.
Factual Situation: S, a minor by fraudulently representing himself to be a major, enters into an agreement with L, for selling his (S's) property. Under the agreement, S receives the full amount of ' 5 lakhs in advance from L and uses it for purchasing a new car worth ' 3 lac and spends the balance on a world tour. Later on, S tries to avoid the contract on the plea of his minority. Can he do so?
Issue: What are the options available to L?
Decision:

An agreement with minor is void. But a minor can't defraud a person on the pretext of his minority. In this case, court may direct the minor to restore the car to L.NoneAn agreement with minor is void so minor does not have any liability.An agreement is voidable.

5. Legal Principle: The act of using influence on another and taking undue advantage of that person is called undue influence.
Factual Situation: A, a money lender, advances ' 100 to B, an agriculturist and by undue influence induces to B to execute a bond for ' 200 with interest at 6% per month.
Issue: Is it a case of undue influence?
Decision:

It is not a case of undue influence because it is purely and technically a business deal, and the motive of business is to earn profit.It is a case of undue influence because it is a mere exploitation of one's conditions and a clear cut case of inducement of undue influence.None.None

6. Legal Principle: Once the letter for offer and letter for acceptance are posted the contract is complete and the parties are bound and liable.
Factual Situation: A offers, by a letter, to sell certain article to B who receives the letter the next day. B immediately posts his letter of acceptance. The same evening, A posts another letter revoking his offer. A's letter of revocation and B's letter of acceptance cross in the post.
Issue: Is there any contract between A and B?
Decision:

NoneNo, B cannot because there is no contract as there is no receipt of offer and acceptance by A and B.It is an agreement voidable at the option of B.Yes, a contract comes into existence.

7. Factual Situation: Mr Mukesh invites Mr Vijay to a dinner at a hotel. Mr Vijay accepts the invitation. It is purely a social agreement. Mr Vijay fails to arrive at the dinner and finds out that Mr Mukesh has to go out and is not available at his place at the dinner time due to some important work.
Issue: Is Mr Vijay liable for the non-performance of contract with Mr Mukesh.
Decision:

Mr Vijay's liable because he has not performed the contract.NoneIt will be the discretion of the court.Mr Vijay is not liable because there was no contract; it was just a social agreement.

8. Legal Principle: Where both parties to an agreement are under a mistake as to matter of fact essential to the agreement, the agreement is void.
Factual Situation: A man and a woman made a separation deed under which the man agreed to pay a weekly allowance to the woman under a mistaken assumption that they were lawfully married.
Issue: Is it a valid contract and enforceable in the court of law?
Decision:

Yes, it is a valid contract and enforceable in the court of law.NoneIt is a void agreement as there was a common mistake on the point of fact which was material to the existence of agreement.It is a voidable contract.

9. Legal Principle: The act of using influence on another and taking undue advantage of that person is called undue influence.
Factual Situation: An arrangement was made between the fathers of a groom and a bride before their marriage that each would pay a certain sum of money to the husband. Father of the boy paid the promised amount but his wife's father failed to pay the amount. The boy sued his father-in-law for the recovery of the promised amount of money.
Issue: Whether the boy can recover the money.
Decision:

NoneHe cannot recover the amount, because no stranger to the consideration can take advantage of a contract made even for his benefit.He can recover because they had entered into a contract before the marriage.

10. Legal Principle: A minor is not permitted by law to enter into a contract. Hence, where a minor enters into a contract with a major person, the contract is not enforceable. This effectively means that neither the minor nor the other party can make any claim on the basis of the contract.
Factual Situation: As a minor borrowed ' 20,000 from B and as a security for the same executed a mortgage in his favor. He became a major a few months later and filed a suit for declaration that the mortgage executed by him during his minority was void and should be cancelled.
Issue: Is the agreement void or valid?
Decision:

NoneIt is the discretion of the court.The agreement is valid and the minor is not entitled to the repayment of money.A mortgage by a minor was void and B was not entitled to repayment of money.

11. Legal Principle: 'When, at the desire of the promisor, the promisee or, any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise, is called a consideration for the promise'.
Factual Situation: An old lady Laxmi Rani gifted her property to her own daughter Ramayya, with the direction to pay a certain sum of money annually to Chinayya, her maternal uncle. On the same day, Ramayya executed an agreement with Chinayya agreeing to pay the amount annually. Later on, Ramayya refused to honor the agreement on the ground that there is no consideration. Chinayya sued for the recovery of the annuity.
Issue: What is the nature of contract?
Decision:

There is no contract.NoneThere was sufficient consideration, that is, the property was given to her by the sister of Chinayya so Ramayya was liable to pay.There was no agreement between Chinayya and Ramayya so Ramayya is not liable.

12. Legal Principle: The object of an agreement is lawful unless it is forbidden by law; is of such a nature that, if permitted, it would defeat the provisions of any law; is fraudulent; involves or implies injury to the person or property of another person; the court regards it as immoral; it is opposed to public policy.
Factual Situation: P advanced money to D a married woman to enable her to obtain a divorce from her husband and D agreed to marry her as soon as she obtained a divorce.
Issue: Can P sue D for the recovery of money?
Decision:

NoneP was not entitled to recover back the amount as the agreement had for its object the divorce of D from her husband which is unlawful and against morality and public policy.P can sue D for the recovery of money.None.

13. Legal Principle: Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, to that extent is void.
Factual Situation: A contracts to sell to B the goodwill of a business. A then sets up a similar business close-by B's shop and solicits his customers. This is contrary to the contract.
Issue: Can B obtain an injunction to restrain A from soliciting customers?
Decision:

B cannot obtain an injunction.NoneB can obtain an injunction.

14. Legal Principle: Where both parties to an agreement are under a mistake as to matter of fact essential to the agreement, the agreement is void.
Factual Situation: A, contracts with B to buy a necklace, believing it to be made of very costly rare pearls, while in reality, the pearls are only an imitation having very little value. B knows that A is mistaken but does not disclose the facts.
Issue: Is A bound by the contract?
Decision:

Yes, because the rule of caveat emptor will apply.No, A is not bound by the contract because the rule of caveat venditor applies on B.NoneNo, A is not bound by the contract because it is not a unilateral mistake.

15. Legal Principle: A contract procured by coercion is bad under Indian Contract Act. Coercion is defined as committing or threatening to commit any act forbidden by Indian Penal Code. Attempt to commit suicide is an offence under Indian Penal Code.
Factual Situation: A girl of 13, lost her husband and her husband's relatives refused to have the husband's corpse removed unless she adopted one child of their choice. It was held that the adoption was not binding on her as her consent was obtained under coercion within the meaning of Section 15 since any person who obstructed a dead body from being removed would be guilty of an offence under Section 297 of the Indian Penal Code.
Issue: Is the adoption valid?
Decision:

No, the adoption is not valid as it was imposed through coercion.The adoption is valid.NoneThe adoption is voidable at the option of the girl.

16. Legal Principle: A minor is not competent to enter into a contract and the law will assume that the contract never happened and everything is returned to as it was.
Factual Situation: A, a minor, borrowed ' 50,000 from B by executing a mortgage of his property in favor of B. Subsequently, the minor sued for setting aside the mortgage.
Issue: Do you think that the mortgage is valid? Can B recover the amount advanced to A?
Decision:

B can recover the amount once the minor will attain majority.NoneA minor is not competent to a contract, so the minor's contract is void. Thus, the mortgage executed by A is not valid and B can't recover the money lent to A. It is a voidable contract at the option of the minor.

17. Legal Principle: A contract obtained by misrepresentation is voidable at the option of the buyer.
Factual Situation: X falsely representing herself as the wife of a well-known millionaire and takes a ring from a jewelers shop for the approval of her husband. She pledges it with a pawn broker, who is in good faith and without notice of the first transaction pays her ' 10,000.
Issue: Can the jeweler recover his ring?
Decision:

The jeweler can sue the lady.The jeweler could not recover the ring from the pawn brokerNoneThe jeweler could recover the ring from the pawn broker as there was no contract between the jeweler and the lady.

18. Legal Principle: A contract obtained by misrepresentation is voidable at the option of the buyer.
Factual Situation: The director of a company issued a prospectus containing false representation, on the faith of which Z agreed to buy some shares from the company.
Issue: Can the Z avoid the contract?
Decision:

There is no contract as such so company is not liable.Z cannot avoid the contract.Z may avoid the contract because generally directors are deemed to be agents of a company.None

19. Legal Principle: An agreement becomes a contract when it is entered into between two or more people with each other's free consent. Two or more people are said to consent when they agree to the same thing in the same sense. Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation, or mistake.
Factual Situation: A fraudulently informs B that A's house is free from encumbrances. B thereupon buys the house. The house is subject to a mortgage.
Issue: What are the rights of B?
Decision:

None.B cannot recover back the money nor can rescind the contract nor can ask the seller to redeem the mortgage because the rule of caveat emptor applies on him.NoneB can either rescind the contract or he can ask for restitution and insist that the contract shall be performed. B can ask the seller to redeem the mortgage and carry out the contract because according to Section 17 'fraud' means and includes any act or omission as the law specially declares to be fraudulent. Under Section 55 of Transfer of Property Act, the seller of immovable property is bound to disclose to the buyer all material defects in the property or in seller's title (e.g. the property is mortgaged).

20. Legal Principle: A counter offer doesn't give rise to contractual binding.
Factual Situation: D wrote to P on November 28, 1971, offering to sell 800 tons of iron at ' 6,900 per ton. On the same day, P wrote to D offering to buy 800 tons of iron at ' 6,900 per ton. The two letters crossed in post and neither of them knew any thing about the offer to the other. P contended that there was a good contract.
Issue: What is the nature of contract and liabilities of the parties?
Decision:

It is a voidable contract at the option of D because D had offered to sell the product.NoneThere was no valid contract because an agreement results into a contract when there is an offer from one side and its acceptance from the other side so no question of any liability rises.It is a voidable contract at the option of P because P had offered to buy the product.

21. Legal Principle: Agreements purely social and domestic in nature are not enforceable at law.
Factual Situation: A invites B to dinner. B accepts the invitation but does not turn up at the dinner.
Issue: Can A sue B for the loss he has suffered?
Decision:

It is a contract voidable at the option of A. it will be option available to A to sue B or not to sue B.A can sue because once A has offered and B has accepted, then B is legally bound, if he doesn't turn up it amounts to breach of contract.No, A cannot sue B because the agreement was purely social in nature and there was no intention to create legal relationship.None

22. Legal Principle: A counter offer doesn't give rise to contractual binding.
Factual Situation: A offered to sell a farm for £1,000, X said he would give £950. A refused and X then said he would give £1,000, and when A declined to adhere to his original offer tried to obtain specific performance.
Issue: Is there a valid contract between A and X?
Decision:

There is a valid contract and A is liable for specific performance.There is not valid contract as X's offer to pay £950 is a refusal of the offer and a counteroffer.It is voidable contract at the option of X.None

23. Legal Principle: The act of using influence on another and taking undue advantage of that person is called undue influence.
Factual Situation: A youth of 18 years of age, spend thrift and a drunkard, borrowed ' 900 on a bond bearing compound interest at 2% per mensem.
Issue: Is it a case of undue influence?
Decision:

It is a contract voidable at the option of the youth.NoneNo, it is not a case of undue influence.It is a case of undue influence.

24. Legal Principle: A contract requires a proposal and an acceptance of the proposal. It is necessary to make a binding contract, not only that the proposal be accepted, but also that the acceptance is notified to the proposer.
Factual Situation: Harvey sent a telegram to Facey stating 'Will you sell us the estate of Bumber Hall Pen for £900' Harvey sent another telegram to fancy stating 'We agree to buy Bumper Hall Pen for a sum of £900 asked by you. Please send us your title deeds in order that we may get early of possession'. But Facie did not send any reply to the last telegram sent by Harvey. Hence Harvey filed a case against Facie claiming Bumber Hall Pen estate.
Issue: Is there valid contract between Harvey and Facie?
Decision:

There is not valid contract because there is no acceptance of the offer.NoneYes there is a valid contract because Harvey made an offer for three times and Facie didn't respond which amounts to his acceptance.It is voidable contract at the option of Harvey because Harvey had made repeated offers.

25. Legal Principle: The object of an agreement is lawful unless it is forbidden by law; is of such a nature that, if permitted, it would defeat the provisions of any law; is fraudulent; involves or implies injury to the person or property of another person; the court regards it as immoral; it is opposed to public policy.
Factual Situation: A paid B, a public servant a certain amount inducing him to retire from service, thus paving the way for A to be appointed in his place.
Issue: Is the agreement valid?
Decision:

The agreement is voidable.Agreement is valid.The agreement is void.None

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