Contract Act_Practical Problems_52

fraudulently informs B that A's estate is free from encumbrance. B there- upon buys the estate. The estate is subject to a mortgage. Is it a void or voidable contract? State reasons.

The contract in question shall be voidable at the option of B. As per the given facts, the fact of the estate being subject to mortgage was actively concealed by A. Such an active concealment amount to fraud as per Section 17 state and Section 19 of the Indian Contract Act declares contract affected by fraud voidable at the option of the aggrieved party. Hence, contract in question is not void but voidable at the option of B.

Contract Act_Practical Problems_51

A tailor, expecting to make good profits at a place on the occasion of a festival there, sent through a railway company, a sewing machine and some cloth for carriage to the place of the festival. Due to the fault of the servants of the railway company, the machine and the cloth could not be delivered till the termination of the festival. Discuss the rights of the tailor.

In the given problem, it is apparent that the delay in delivering the machine and cloth was caused because of the fault of the servants of the Railway. Therefore, there is no doubt that the Railway company shall be subject to damages for the fault of its employees.

But the question is Which kind of damages. Can the tailor claim loss of profit or say only his fare, stay expenses, return fare for the goods, etc.? Loss of profit is a special loss, whereas other loses are ordinary damages. Ordinary damages shall no doubt be claimable. Regarding special damages, i.e., loss of profit, claim shall be acceptable only and only if the facts and the likely loss had been communicated to the Railway company.

This rule regarding special damages was laid down in the case of Hadley v. Baxendale and has been duly incorporated in Section 73 of the Indian Contract Act. Thus, communication of the special circumstances is a pre-requisite to the claim for special damages. Since in the facts given, there is no mention of the peculiar circumstances, i.e., of using the machine and cloth for the festival, having been communicated, the tailor may only claim ordinary damages.

Contract Act_Practical Problems_50

A Mohammedan lady asks for your advice whether she can sue her own father-in-taw to recover arrears of allowance payable to her by the father-in-law under an agreement between her own father and her father-in-law in consideration of her marriage. Give reasons for your answer.

Although the general rule of law is that a stranger to a contract cannot sue, it has been widely accepted that a beneficiary of a contract may do so. Similar facts appeared before the Court in the case of Kwaja Muhammad v. Haisaini Begum and the court allowed the lady, the daughter-in-law, to claim the arrears to allowance agreed to be payable under an agreement with his father in consideration of her marriage. Thus, in the present case, lady shall succeed in her case.

Contract Act_Practical Problems_49

A contract to purchase certain immovable properties had been made by a guardian on behalf of a minor and the minor sued the other party for a decree of specific performance to recover possession. State whether the suit will succeed.

Yes- Although the general rule of law is that a stranger to a contract cannot maintain a valid suit, it was recognised in Kwaja Mohd. v. Haisaini Begum, that a beneficiary can always claim the benefits and bring a suit directly against the promisor.

Moreover, the beneficiary being a minor, it shall make no difference because under the Indian Contract Act, a minor can always be beneficiary under the contract and validly enforce such benefits. Thus, minor, in the present case, shall succeed in his suit for specific performance.