Contract Law | Interpretation of Contracts

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…

Contract Law | Indemnity and Guarantee

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…

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

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…

Basic Principles of Contract | Contract Law

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…

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…