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Rules for Interpretation of Contracts: Pre-Contractual Documents/Draft Agreements

Antecedent Agreements A concluded antecedent agreement may be relied upon in interpreting a later contract in pursuance of that agreement.  However, an antecedent agreement may be considered only on the basis of its particular facts and circumstances. Pre-Contractual Documents/Draft Agreements A concluded contract may be preceded by multiple drafts. Draft agreements may even be signed. Draft…

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GREEV vs. KETTLE

GREEV vs. KETTLE Key Words: mutual mistake in guarantee, estoppel, rectification Facts: Defendant Company (S), in consideration of Plaintiff Company’s (C) giving credit to principle debtor (D), guaranteed the payment of debt, which was stated in deed to be secured by ‘validly issued shares in Company’. Though both S and C believed this fact to…

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Gray vs. Lewis AND Parker vs. Lewis

Gray vs. Lewis AND Parker vs. Lewis (1873) 8 Ch App 1035 Facts: A shareholder, when initiated suit for damages against plaintiff-bank and defendant (who was the director of the plaintiff bank as well), director of a liquidated company for fraud and mala fide holding of accounts, got judgment against the bank and the defendant…

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State Bank of Saurashtra Vs. Chitranjan Rangnath Raja and Anr.

State Bank of Saurashtra vs. Chitranjan Rangnath Raja and Anr. Citation(s): 1980 AIR 1528, 1980 SCR (3) 915 Full Text here Facts: The appellant-bank allowed a cash credit facility limited to Rs. 75,000/- to the Principal Debtor (PD) on his pledging 5,000 tins of groundnut oil under the lock and key of the Bank and on…

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Charan Singh vs Security Finance (P) Ltd.

Charan Singh vs Security Finance (P) Ltd. Citation(s): AIR 1988 Delhi 130 Full Text here Facts: The creditor after obtaining the money decree against the two principal debtors (PDs) and the Surety, holding them liable severally as well as jointly, decided to pursue his cause of action against the Surety, after he arrived at an agreement…

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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…

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Samuel Pillai v. Anathan Pillai

Samuel Pillai v. Anathan Pillai [Section 25(3) of Indian Contract Act, Consideration] FACTS: Administratrix of the deceased whose property was inherited by the defendant entered into an agreement with the latter to convey the title in the property without deducting the debt, which was barred by the limitation, for the promissory note paid by the…

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Union of India & Ors. v. M/S. Bhim Sen Walaiti Ram

Union of India & Ors. v. M/S. Bhim Sen Walaiti Ram  1970 SCR (2) 594 (Section 7 of Indian Contract Act -Acceptance must be absolute) FACTS: In an auction held for the sale of license of liquor shop, defendant offered the highest bid which was provisionally accepted “…subject to the confirmation of Chief Commissioner who may…

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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…

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Nathu Lal and Ors. v. Mst. Gomti Kaur and Ors.

Nathu Lal and Ors. v. Mst. Gomti Kaur and Ors.  AIR 1940 PC 160 (Material Alteration) FACTS: Plaintiff executed a sale deed (A) in favour of defendants who in turn executed a deed (B) for conditional transfer of the properties sold to them both on 25th March 1844, condition being paying the stipulated consideration amount…

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Morris v. Baron & Co.

Morris v. Baron & Co. [1918] AC 1 (Section 62, discharge by agreement, substitution of new agreement, novation) FACTS: Morris entered into written contract (A) with Baron to supply him with certain no. of pieces of cloth: dispute arose between the parties as Morris demanded payment of supplied pieces of cloth while Baron claimed damages…

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V.L. Narasu v. P.S.V. Iyer

V.L. Narasu v. P.S.V. Iyer AIR 1953 Mad 300 (Section 56, Frustration, Section 39, breach) FACTS: Defendant contracted with plaintiff to screen latter’s film in his cinema house until the net collection fall below some stipulated amount. Later there were unprecedented heavy rains which made a wall of cinema house to collapse owing to some…