Basic Principles of Contract | Contract Law

Imperial Loan Co. Ltd. v. Stone

Imperial Loan Co. Ltd. v. Stone [1892] 1 Q.B. 599 (competence of parties, mental capacity) FACTS: Defendant when lunatic signed a promissory note as surety upon which plaintiff brought an action and defendant took the defence of insanity ISSUE: Whether defendant can successfully claim insanity as a defence? HELD: To successfully take the defence of insanity as…

Basic Principles of Contract | Contract Law

Bolton v. Mahadeva

Bolton v. Mahadeva  [1972] 2 All ER 1322 (Substantial Performance of an obligation) FACTS: Defendant engaged plaintiff to install central heating system under a lump sum contract. However, the work was completed with many defects like: fumes from the boilers, inadequacy of warmth, etc. such that the total cost of repairing would have to be…

Basic Principles of Contract | Contract Law

The State of Bihar v. Ram Ballabh Das Jalan and Anr.

The State of Bihar v. Ram Ballabh Das Jalan and Anr. AIR 1960 Pat 400 Also See Morris v. Baron  (Novation=Substitution) FACTS: Defendant had a debt of certain amount due to plaintiff along with certain credit due from latter. Plaintiff, by its letter acknowledged the credit and made claim for remaining debt due. Defendant acknowledged…

Basic Principles of Contract | Contract Law

Saradamani Kandappan v. S. Rajalakshmi & Ors.

Saradamani Kandappan v. S. Rajalakshmi & Ors. (Performance of Reciprocal promises, S.51 to 55) FACTS: Plaintiff entered into contract for purchase of certain mortgaged properties with defendant on following terms: first, that the execution of sale deed shall be at the convenience and desire of plaintiff; subject to her satisfaction of title to the land…

Basic Principles of Contract | Contract Law

Derry v. Peek

Derry v. Peek (1889) LR 14 App Cas 337 (Misrepresentation or Fraud—Collateral Warranty) FACTS: A tramway company’s prospectus stated that it had the right to use steam power for moving carriages as an absolute right, though in actuality it was subject to condition of Board of Trade (BoT). Plaintiff, on faith of that statement, took…

Basic Principles of Contract | Contract Law

M/s Motilal Padampat Sugar Mills v. State of Uttar Pradesh & Ors.

M/s Motilal Padampat Sugar Mills v. State of Uttar Pradesh & Ors. 1979 SCR (2) 641 (Promissory Estoppel) FACTS: Government of UP announced to give tax exemption from sales tax for three years to all new industrial units of the state. Based on this, plaintiff sought confirmation from Director of Industries who reiterated the decision…