Wednesday, October 10, 2007

attitude

The longer I live, the more I realize the impact of attitude on life. Attitude, to me, is more important than facts. It is more important than the past, than education, than money, than circumstances, than failures, than success, than what other people or say or do.

Contract Act_Practical Problems_40

A offers to sell a cannon to B. A knows that the cannon has a defect in it and puts a metal plug to conceal the defect. B accepts the cannon without examining it. The cannon bursts before it is paid for. Is B liable to pay the price ?

The facts of the given problem are similar to those of Horsefall v. Thomas, in which case it was held that a fraud that actually does not deceive is not fraud. The court held that there was no fraud because B would have bought it even if no deceptive plug had been put. He was in fact not deceived by it since he did not even care to examine the cannon. The decision seems to be based upon the feeling that law shall not protect those who are negligent about their interests.

Contract Act_Practical Problems_39

An artist offers to sell a painting to an industrialist for Rs. 10,000. The industrialist offers to buy it for Rs. 8,000, which is not accepted. The industrialist then sends a cheque for Rs. 10,000 and asks the artist to sell the painting to him. Comment on the legal position.

Section 7 of the Indian Contract Act requires that an acceptance to be valid must be absolute and unqualified. In other words, an offer should be accepted "as it is without any 'ifs' and 'buts'." An acceptance with a variation, however slight, is no acceptance, and amounts to a mere counter-offer which the offer or may or may not accept. Even where the offeree subsequently changes his mind and is prepared to accept the offer as per original terms, it shall be deemed as a fresh offer from him which may or may not be acceptable to the original offerer. Thus, in the given case, the artist shall have the option to accept or refuse the cheque for Rs. 10,000 since the sending of cheque for the original offer amount shall be deemed as a fresh proposal from the industrialist.

Contract Act_Practical Problems_38

A, in Bombay, bets with B and loses. A applies to C for a loan in order to pay B. C gives the loan to A to enable him to pay B. Can C recover the amount of loan from A? Would it make any difference if this transaction takes place in Hyderabad?

No- C cannot recover the amount of loan from A. The contract between the two is void being a collateral transaction to an illegal agreement. In Bombay, wagering agreements are not merely void; they are illegal. The consequence of an agreement being illegal is that if any collateral transaction is made by a person knowing the illegal object of the main transaction, the collateral transaction also becomes unenforceable.

If the aforesaid transaction had taken place in Hyderabad, it would have been a valid and enforceable contract since in Hyderabad betting transactions are only void and not illegal. Transactions collateral to a void agreement are valid.

Contract Act_Practical Problems_37

A, a minor, borrows Rs. 10,000 and executes a pronote for the amount in favour of B. After attaining the majority, A executes another pronote in settlement of the first pronote. Will B succeed in recovering money from A? Give reasons in support of your answer.

No-B will not succeed in recovering money from A. Although Section 2(d) recognises the concept of past consideration, but it must be something to which law attaches a value. A contract with a minor is void ab initio. The consideration for the second pronote is a void agreement and hence of no value. Besides, ratification by a minor of a contract, on attaining majority is not allowed.

Contract Act_Practical Problems_36

Peter Feraro offered to pay Rs. 10,000 to any person, who would swim a hundred yards on Bombay's sea coast on the New Year's Day of 1983. A fisherman, without any information about the offer, claimed Rs. 10,000 on swimming the distance to save his life after he was accidently thrown overboard by the rough sea waves. Can the fisherman claim the money ?

No- the fisherman or servant cannot claim the money. They acted without any information as to the offer. How can a person accept an offer unless he is aware of it ?

Therefore, the offer cannot be said to have been accepted thereby resulting in a contract. Similar decision was given in Lalman Shukla v. Gauri Dutt.