Skip to main content

Performance of Contractual Obligation

Performance of Contractual Obligation

A. Pre-existing contract with promisor

Secondly, compliance with legal obligation imposed by a contract with the promisor can be no consideration for a promise. An illustration is supplied by the facts of Ramchandra v Kalu Raju: 

The plaintiff accepted a Vakalatnama from the defendant to act for him in a certain suit on receiving his usual fee. Subsequently the defendant agreed to pay him a certain sum as a special reward (inam), if the suit was decided in his favour. The suit was decided in favour of the defendant, who, however, did not pay the amount. The plaintiff, therefore, brought the present suit against him. 

In a Canadian case, a contractor was carrying out construction work for the completion of which the plaintiff was to supply steel at a fixed price. The plaintiff then found out that the steel prices were rising and, therefore, asked the contractor for an upward revision of the price for future supplies. The contractor orally accepted the revision and also accepted deliveries against invoices reflecting the increased price. The contractor, however, did not pay and the supplier sued for the difference. It was held that the price revision being without consideration, the contractor was not bound. The fact that he continued to accept supplies without repudiating invoices did not create any promissory Estoppel against him.

Promise to pay less than the amount due

On the same principle, a promise to pay less than what is due under a contract cannot be regarded as a consideration. 

Position under Indian Contract act different

In India, section 63 of the Indian Contract act clearly provides that “Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit.” There was a development-agreement between an Improvement Trust and a land owner. A clause in the agreement provided that the owner is to transfer the plot earmarked for a primary school to the Trust free of cost. It was held to be not void for being without consideration or being opposed to public policy. The land owner had under the agreement derived huge benefit by getting his land freed from acquisition and also getting permission to develop the land and put it to commercial use. 

B. Pre-existing contract with third party

Where a person has contracted to do an act and a third party promises to pay him a sum of money if he would go ahead with the performance, is there a consideration for the promise? A situation like this arose in Shadwell v Shadwell. 

The plaintiff was already engaged to be married to a girl, named Ellen Nicholl. His uncle, the defendant, sent him the following letter : ‘I am glad to hear of your intended marriage with Ellen Nicholl ; and, as I promised to assist you at starting, I am happy to tell you that I will pay to you $ 150 yearly during my life, and until your annual income derived from your profession of a Chancery barrister shall amount to 600 guineas. ’

The question was what the consideration for the uncle’s promise was. The court found sufficient consideration to sustain the promise.

Comments

Popular posts from this blog

Section 58B of The Advocates Act - Special provision relating to certain disciplinary proceedings

 Section 58B The Advocates Act Description (1) As from the 1st day of September, 1963, every proceeding in respect of any disciplinary matter in relation to an existing advocate of a High Court shall, save as provided in the first proviso to sub-section (2), be disposed of by the State Bar Council in relation to that High Court, as if the existing advocate had been enrolled as an advocate on its roll. (2) If immediately before the said date, there is any proceeding in respect of any disciplinary matter in relation to an existing advocate pending before any High Court under the Indian Bar Councils Act, 1926 (38 of 1926), such proceeding shall stand transferred to the State Bar Council in relation to that High Court, as if it were a proceeding pending before the corresponding Bar Council under clause (c) of sub-section (1) of section 56: Provided that where in respect of any such proceeding the High Court has received the finding of a Tribunal constituted under section 11 of the Indian B

Case Laws related to Defamation in favour of ClaimantCase Laws related to Defamation in favour of Claimant. TOLLEY Vs, J.S FRY & SONS LTD – (1931) Facts The defendants were owners of chocolate manufacturing company. They advertised their products with a caricature of the claimant, who was a prominent amateur golfer, showing him with the defendants’ chocolate in his pocket while playing golf. The advertisement compared the excellence of the chocolate to the excellence of the claimant’s drive. The claimant did not consent to or knew about the advertisement. Issue The claimant alleged that the advertisement suggested that he agreed to his portrait being used for commercial purposes and for financial gain. He further claimed that the use of his image made him look like someone who prostituted his reputation for advertising purposes and was thus unworthy of his status. At trial, several golfers gave evidence to the effect that if an amateur sold himself for advertisement, he no longer maintained his amateur status and might be asked to resign from his respective club. Furthermore, there was evidence that the possible adverse effects of the caricature on the claimant’s reputation were brought to the defendants’ attention. The trial judge found that the caricature could have a defamatory meaning. The jury then found in favor of the claimant. Held The House of Lords held that in the circumstances of this case – as explained by the facts – the caricature was capable of constituting defamation. In other words, the publication could have the meaning alleged by the claimant. The Lords also ordered a new trial limited to the assessment of damages. NEWSTEAD V LANDON EXPRESS NEWSPAPER LTD, (1939) Facts: A newspaper published a defamatory article about Harold Newstead. However, another person with this name brought an action in libel. He claimed that the article had been misunderstood as leading to him. The defendant newspaper recognised that they published the article. Also, they denied that they had the intention of being defamatory of him. Consequently, the claimant argued that the newspaper was under a duty. The duty was to give a clear and complete description of the correct person. Moreover, the claimant argued that the defendants were in breach of the duty. Issues: The issue in Newstead v London Express Newspaper, was if the reasonable persons would have understood the words complained of to refer to the plaintiff. Held: The Court of Appeal stated that in accordance with the current law on libel, liability for libel does not depend on the intention of the defamer; but on the fact of the defamation. Accordingly, a reasonable man, in this case a newspaper publisher, must be aware of the possibility of individuals with the same name and must assume that the words published will be read by a reasonable man with reasonable care.

  Case Laws related to Defamation in favour of Claimant.  TOLLEY  Vs,  J.S FRY & SONS LTD – (1931) Facts The defendants were owners of chocolate manufacturing company. They advertised their products with a caricature of the claimant, who was a prominent amateur golfer, showing him with the defendants’ chocolate in his pocket while playing golf. The advertisement compared the excellence of the chocolate to the excellence of the claimant’s drive. The claimant did not consent to or knew about the advertisement.   Issue The claimant alleged that the advertisement suggested that he agreed to his portrait being used for commercial purposes and for financial gain. He further claimed that the use of his image made him look like someone who prostituted his reputation for advertising purposes and was thus unworthy of his status. At trial, several golfers gave evidence to the effect that if an amateur sold himself for advertisement, he no longer maintained his amateur status and might be aske

Rules as to delivery of goods

                             Rules as to delivery of goods Section 2(2) of Sale of Goods Act defines ‘delivery’ as a ‘voluntary transfer of possession from one person to another.’ Thus, if the transfer of goods is not voluntary and is taken by theft, by fraud, or by force, then there is no ‘delivery. Moreover, the ‘delivery’ should have the effect of putting the goods in possession of the buyer. The essence of the delivery is a voluntary transfer of possession of goods from one person to another. There is no delivery of goods where they are obtained at pistol point or theft. 1. Mode of Delivery: According to Section 33, delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorized to hold them on his behalf. Delivery of goods may be actual, symbolic or constructive. 2. Expenses of Delivery: According to Section 36(5), unless otherwise agree